“Fall in love with the problem not the solution, and the rest will follow.”
That’s the advice from Uri Levine just before he sold his startup Waze to Google for $1.1 billion.
Is your startup building a solution looking for problem? How do you know that you’re solving the right problem?
An excellent primer on building a better mental model around solving for the problem and not leading with the solution is the thought-provoking talk by Y Combinator Partner, Kevin Hale during a very well conceived 26 min presentation.
Kevin’s advice is that the difference between a startup and a typical business is that a startup is built for rapid growth. Your main objective early on is to figure out what problem you are solving and if its worth solving.
But is the problem big enough for investors to care? Many investors (particularly VCs) don’t care if your problem isn’t grand enough to satisfy one or more of the following criteria:
- 1m+ users: Will your startup impact at least a million people?
- Growing 20%+/year: In a market that is growing at least 20%/yr and showing that the problem is growing rapidly.
- Timely: People have this problem now and are actively trying to solve.
- $1b TAM: The problem is expensive to solve with at least a billion dollar Total Addressable Market (TAM).
- Law Changed: The problem now exists based on changes in law or regulation (think the Affordable Care Act and all the healthcare startups it inspired).
- Hourly: Problem that people have or need to solve multiple times a day (think Slack or Facebook) that keeps users sticky and coming back constantly.
So how do you ensure that you are not simply creating a solution in search of a problem?
Based on this problem evaluation framework I’ve created a Google Sheet that takes the essence of this advice and lets you enter in a few bits of data about the problem that you are attempting to solve then gives you a score and visualization based on the magnitude of the problem in key areas:
Popularity: How many have the problem?
Growth: How fast is this problem growing?
Urgency: When is this problem relevant?
Cost: How expensive is this problem to solve?
Mandatory: Is it now necessary to solve (i.e. new law)
Frequency: Is this a problem that needs solving very often?
You can open the Google Sheet here, but just copy it so that you can edit for yourself.
Would love any feedback on how this could be improved or if you find it helpful! As most of my writing resolves around the concept of crowdsourcing and data analytics I’m hoping to make this sheet valuable to any startup founder that is looking to fact-check their assumptions.
Friday, March 6, 2020