One of the best things about working in the digital consulting business is being exposed to different challenges: startups, new business models, diverse industries, evolving technologies and behavioral norms. It can really be an exciting job.
Sling bits and ideas for startups long enough, though, and certain patterns start to emerge; they fall into two simple buckets for me: promising and problematic. The first bucket holds startups that have winning products or ideas that can probably get to market and have at least a chance of surviving. The second bucket lives on the other side of the tracks: startups with good ideas and smart people, but no differentiated product or market offering.
The latter startups usually have solutions in search of problems, which is a big red flag. Without knowing it, and in all earnestness, most companies in this category are wandering in a dark forest filled with monsters, in desperate need of a flashlight. This is not to say that every business needs perfect clarity, but there still needs to be a there there.
I’ve seen the solution-in-search-of-a-problem pattern at least five times (maybe half the startups with whom I’ve worked) in the last 13 years I’ve been doing digital consulting. Here are some common themes:
- No physical product is involved: It’s all about bits, and information technologies in particular. There’s usually not even a clear meatspace tie-in (e.g., a service like Yelp that has a foot in the real world, and solves a clear problem).
- The technologies are enabling: Do your eyes glaze over when you hear the terms framework or platform? Get ready for more glaze than you’ll find on a Krispy Creme. You’ll hear those terms (or ones like them) a lot for startups caught in this pattern.
- They are going to make people’s lives easier or better: The digital world is so complicated, riddled with different programs and systems, many of them incompatible. What if we could build something to simplify it all? You know, rainbows and unicorns? A laudable goal, to be sure, but a very challenging one to realize.
- The scope is broad: Some ideas are big and encompass a great many possibilities; this goes hand in hand with enabling technologies. The problem is, sometimes the scope is SO broad, it causes a lack of focus.
- Everyone is the audience: Because the applications are so broad, it’s possible that every digitally savvy consumer out there could use this product (or the apps built on top of it). The developer audience is probably huge too, because they’re the ones who might actually understand what we’re talking about and why it’s cool.
- It’s hard to describe the problem being solved: Angst. Unhappiness. Inefficiency. Disconnectedness. All sound a little fuzzy? Hmmm…yeah, kinda. But we want to solve these problems, right?
- No product ships and the company folds: This is the saddest part of this pattern. In every case I’ve encountered with these startups, from garage scrappers to angel-funded gliders to VC-backed heavyhitters, they wind up folding before they can get beyond a friends-and-family gamma release. Bits and pieces get built (mostly plumbing), UI components get designed, use-case scenarios get thrown around, money gets spent (sometimes LOTS of money), but it all ends in tears and unrealized promise.
What causes failure in this pattern?
Scott Berkun has a laundry-list synopsis of reasons why great ideas fail (see my previous post on this topic). A few of those causes are particularly applicable to the solution-without-problem pattern:
- Not knowing the target audience: Everyone is very rarely a valid target audience. Usually, these startups have no clear information about their end users (whether it’s a B2B, B2C, or B2B2C play).
- Balancing wants vs. needs: Related to audience understanding, it’s absolutely critical to understand what people want vs. what they need. In the digital (and perhaps physical) world, people are usually satisfied with things that are good enough (i.e., they satisfice as opposed to maximize). Many startups caught in this pattern assume people want to maximize, when in reality, the effort to do that just isn’t justified. Tech geeks wanting to solve your wants is nice, but if it’s that or putting dinner on the table, dinner wins.
- Not understanding the ecosystem the idea lives in: Things like frameworks and platforms touch a lot of different systems. They live in a complex environment, and it’s hard to understand that ecosystem.
- Underestimating dependencies: See above. Complex environments create complex dependencies, and they are really easy to miss.
- Failed to pitch or communicate well: This is probably the biggest sign that you have a problem. If you can’t describe what something is, there may not be anything to describe. Communication is key, and it really ties back to understanding your audience and the wants vs. needs dichotomy. It comes down to being able to say what problem you are solving in a way that people get it and can say, "Yeah, I have that problem and I need it solved."
How to escape the solution-in-search-of-a-problem trap
It’s not all doom and gloom, and I thoroughly believe startups can break out of this pattern by following a few simple guidelines:
- Identify the problem being solved: There has to be some problem solved by a company’s product or service. Making things better is not enough; many things could meet this description. Bring it down out of the clouds and identify the real problem your audience has.
- Understand your audience: This guideline is the corollary to the previous one. If you don’t understand your audience, how could you identify the problem you’re solving for them, and what the real pain points are?
- Focus relentlessly: Companies like Google have the luxury of throwing things at the wall to see what sticks. Startups don’t. Focus on one thing relentlessly.
- Pivot if necessary: This is the corollary to relentless focus. Sometimes, ideas just don’t hold water after awhile. Maybe the market shifts, or competitors come along and get to market first with an awesome product. It’s important to have flexibility and be able to pivot to new offerings when needed.
- Learn to let go: It’s dangerous to fall in love with your own ideas. Internal beliefs and passions often fly in the face of reality, and what people actually need. Every one of the guidelines above requires that companies are willing to really step back and examine what they are passionate about relative to market demands, and then let go if it’s warranted.
A solution in search of a problem is not intrinsically bad, because those solutions are often powerful and applicable to many things. The challenge is in narrowing focus to the point where the light bulb can go on for your audience, and they can clearly say, "Yeah, I really need that…"