Good Problems
In Life and Startups
This is adapted from a talk I gave at Grace Hopper Celebration 2020 on Evaluating Startup Ideas.
2020 has had its share of problems. If an alien landed in my backyard, I don’t think I would be surprised, because, well, it’s 2020.
Generally, you can divide problems into good problems to have and bad problems to have. In life good problems tend to be the result of great success and bad problems tend to be the result of no success. There are so many things a founder cannot control, but founders can choose which problems they want to solve, even in the earliest stages of your company.
Choosing what problem to solve is the most important thing a founder can do.
Choosing a good problem is one of the few things a founder needs to get right to build a large company. A good problem (or market) brings the momentum needed for growth. Once they choose a good problem to solve, founders need to make something. Founders can build anything, after all founders are builders. However, are they building the right thing?
The tech founder’s mission is to make something that a lot of people want. [a]
The mission can easily be broken down to problem (“people want”) and solution (“make something”). The customer (or user) has the problem and it is the job of the founder to “make” something that the customer wants. The customer owns the problem and the founder owns the solution. The founder should not make a solution devoid of a problem because you run the risk of no one wanting to use the solution.
Finding good problems can be tricky. It requires more listening than talking, and more showing than telling. More on that another time. However, markers of good problems to solve are as follows:
♻️ Recurring/Frequent
If a problem occurs every once in a while it’s hard to (1) create a sense of urgency and more importantly (2) it’s hard to iterate on your solution faster if you have to wait for the problem to occur. [b]
‼️ Urgent
It is a “hair on fire” problem or a pain killer not a vitamin. Usually if a problem is urgent the person will spend money on this. Airbnb is an example of this. When you travel you need a place to stay, and people will spend a good amount of money for a place to sleep when you travel.
💰 Valuable
People are willing to spend money (or time) to solve this problem. If users are willing to spend time on your solution to solve their problem, the founder will need to find a way to convert the customer’s time into money to sustain it as a business. Many social networks such as Facebook or Twitter turn to monetizing your time via ads so that they can sustain as a business. These companies converted your time and attention into money. For these types of businesses, you should think hard about the ramifications of how you convert customers’ time into money.
👨👩👧👦Common
While investors do love fads and trends, they look for niches that can grow and expand to more audiences. If the number of people that have this problem is small, then the market is small. Therefore you are looking for a problem that is shared by a lot of people (or common). An silly example to drive this home is the problem of cold paws for tigers. The number of tigers who have cold paws is so small that even if they charged a large amount for each pair of socks to keep them warm, the problem would just be too tiny and you would run out of tigers to sell to. NOTE: Investors can overlook markets because they do not realize a large group of people may have this problem. This happens often in female or underrepresented markets.
[BONUS] Why your solution fails
Not already solved by something else
I use the example of colored toilet paper as solving a problem that checks everything, but no one cares about the color of the toilet paper as it’s just as easily solved by normal toilet paper. Oftentimes if you choose problems that fall in these categories and obvious problems that are urgent, reoccurring, valuable, etc... (such as food, shelter or clothing, etc…), you will need to lean into your unique insight on solving the problem because there are already so many solutions that are in place. And, if you do work in this problem space, you may find a unique way to solve the problem or new problems to solve. Examples of this are Gobble , DoorDash, Lyft, StitchFix, Airbnb, etc.. These companies focus on basic needs: food, shelter, clothing, and transport.
Not Specific Enough
Sometimes the problem the founder is trying to solve is not specific enough and therefore leads them to a solution that is broad and hard for the end user to understand how to use it. I’ve seen a lot of tools with this problem where founders can say it can do anything and in the end it solves nothing for the user. You see this a lot in competitors that move slower to the market. Example: Windows Phone became a swiss army knife of features that no one really knew what problem it was solving.
Wrong people
When we launched our first game Kingdoms of Camelot on Facebook we thought we were going after the casual audience and trying to make strategy based game for casual players. What we found was that we had better success converting people who already loved this type of strategy game than the casual gamer to liking a strategy game. For some reason no matter how much I asked my mom to help me build my kingdom in Camelot she would not, but she would send me purple cows all the time in Farmville. Another example is I have a friend who was looking to build a mental health care app for those struggling, but the found that the caregivers were the ones that needed the support and not those struggling. Looking for problems to solve is an iterative process, and sometimes the problem may be right, but it might just be that someone else has that problem.
Can’t find the people with this problem
Sometimes the type of people that have this problem are too hard to find. An example of this was a founder came to me and said their problem is a solution for people who had hundreds of tabs open and wanted to keep it organized. We were trying to figure out what types of people had this problem and how to reach them.
For those companies that are further along in the journey and have found a great problem to solve, and solving it well. Your mission will continuously be two things: finding more people that need your solution, and retaining your current customers. Should you find that you stop growing then that means you have either hit the limits in finding people with that problem, the solution has become unwanted or you found all the people with that problem and you need to find new problems. You will constantly be trying to look for problems to solve, just make sure they are good problems worth your while.
🔦 Startup Spotlight 🔦
Apparently a bunch of investors recently signed up for this newsletter 👋💰! While this newsletter is targeted to founders, I thought it may make sense to feature a startup in pre-seed or seed phase:
Conversion Crimes helps you find out why people are really leaving your site. It is the usertesting.com for small to medium sized businesses. Working with founders, I have been recommending their product to many founders I work with, so I think the product is needed. They have been voted #1 on Product Hunt and within 3 weeks of launching has made ~ $12K in revenue. If you want to speak with them, send them a note: quinn@conversioncrimes.com and let them know I sent you!
📢 Announcements 📢
What’s a newsletter without some announcements?
Mozilla Fix-the-Internet Showcase
I have been helping Mozilla launch their inaugural incubator to Fix the Internet. Come see which companies are fixing the internet in our Showcase on Oct 29 (Thursday) 11:00 AM - 12:45 PM PDT. It’s free, just RSVP HERE.
YC Interview Season
For founders this can be a stressful time! If you applied and did not get into YC, do not despair! (1) You can always apply again and (2) Almost half the batch has applied and been rejected before getting into the batch. Rejection is a part of the process, do not take it as a rejection of you.
For those that did get an interview, congratulations! I’m happy to do a mock YC interview with you, just sign up.
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