New Business Idea? What's Your Problem?

If you have a new business idea, I'm excited for you. If you ever want to get it off the ground however, be sure you have a problem. A REAL problem. I know that sounds cryptic. Allow me to explain.

I love entrepreneurial ventures. I don't just run thoughtLEADERS - I'm also a principal at weBuild which is a web and mobile startup accelerator. I'm also the CEO of one of weBuild's portfolio companies called TiXiT. TiXiT offers discounts for tickets to events like theatre, jazz, concerts, sports, and family shows (and if you're not a member yet, go join here - it's free). I'm also a member of the Ohio TechAngel fund where we regularly evaluate new startup investments. Many folks in my network know my passion for launching companies so I regularly get pitched new ideas.

Why all this context setting? Because I want you to understand the lens I look at new ventures through.

When I hear a new pitch, the first question I ask is "what's the problem?"

You would be surprised how many times the response to that question is a look like a dog looking at a ceiling fan (dazed and confused). If you want to be successful as a new startup, you MUST have a problem. If you cannot articulate what problem you solve for the world, there is a low likelihood you will sell anything. "Pull" selling is exponentially more powerful than "Push" selling. When the world has a problem, they will pull your solution. No problem? You're pushing your solution on the world.

Allow me to offer some examples then some guidance on how to think about this issue.

Some example problems:

thoughtLEADERS: We solve skill gap problems. For one of our courses, the problem we address is communication-focused. There is an absence of training on how to go from an idea to a fact based, data driven, 10 page or less compelling presentation that drives action. The training that does exist in this space is not very practical or applicable outside the classroom. We solve this problem by offering a class targeted at teaching these skills in a manner that participants can apply those methods outside the classroom (you can learn about that class by clicking here). Problem solved.

weBuild: We solve the problem of entrepreneurs in the web/mobile space not knowing how to launch a business. The problem is there is a lack of resources focused on taking an idea from a napkin to a full-fledged functioning business. We solve this problem by providing startups direct guidance on business model, financing, strategy, technology, business development, and even playing interim management team roles. We help them turn their idea into a real business with a platform, customers, revenue, and funding. Problem solved.

TiXiT: We solve the problem of empty seats. Venues (sports, theatre, concerts, etc.) have unsold seats and limited marketing resources. TiXiT works with venues to intelligently discount and market those empty seats to a larger marketing universe in an intelligent and segmented way. We sell seats that would have gone unsold and we sell them to people the venue doesn't know (and again, to become one of those people getting discounts, click here to sign up). Problem solved.

If you cannot articulate the problem you solve, your chances of success are slim. First of all, market adoption will be slow and sales will be hard to come by. Secondly, investors know that without a problem, you will have a hard time selling and growing therefore they are not very likely to fund your venture. If you're not funded, you're not growing.

Stop and articulate the problem. It should not be contrived. It should be a REAL problem that immediately resonates in the eyes of your potential customer. If they don't have an immediate reaction of "OHMYGOSH PLEASE COME SOLVE THAT PROBLEM FOR ME!" then you need to rethink your business.

To define your problem, ask "Why is this customer interested in talking to me?" Put yourself in their shoes. What is their pain point? What opportunity do they want to capture? Cost reduction? Growth? Complexity reduction? Profitability challenges? Information clarity? What are they looking to buy?

Second, ask how your solution makes that problem go away. Be able to articulate a simple "Here's the issue... Here's our solution... Here's how your (customer) life is different after you use our stuff." Yes, this is marketing 101. The problem is many people skip this step. Heck, even this blog post focuses on solving a problem:

- Your problem is you haven't defined your business problem well and customers will not buy your solution so your business will not grow.
- The solution is to read this post and incorporate the ideas on how to define and sell the problem and solution.
- Your life will be different after using this solution because you will have a clearly articulated problem statement that resonates with customers which will lead to sales and growth for your company.

See? Not too complex. Not too hard. Just a little investment of time and intellectual horsepower.

Now what's YOUR problem?

What business ideas have you seen successfully define a problem? Which business ideas have you seen flop because they were not solving a clear problem? Share your ideas please!

- Mike Figliuolo at thoughtLEADERS, LLC