How to pick the right *problem*?

Step 1: Understand What Makes Problems Worth Solving

Your problem must pass five tests:

1. Frequent – it happens regularly, not once in a while
2. Painful – it causes real frustration, lost money, wasted time, or stress
3. Urgent – people actively seek solutions right now
4. Underserved – no great solution exists yet
5. Growing – the pain increases over time

Step 2: Find Your Problem

Look in these six places:

• Your frustrations: What genuinely annoys you in daily life?
• Industry gaps: What tools or processes fail in your industry?
• New regulations: Do laws like GDPR or MiCA create fresh problems?
• Technology shifts: What can AI now solve that we couldn't before?
• Demographic changes: How do aging populations, remote work, or migration create new needs?
• Local opportunities: What works elsewhere but doesn't exist in your market?

Step 3: Define Your Problem Precisely

Once you spot a potential problem, get specific.

Find your target customer: "Inventory managers at mid-size retail companies" works better than "businesses." Include age, role, and industry—make your description specific enough to find these people in a LinkedIn search.

Find the pain point using this formula:

Example that works: "Operations managers at 50-200 person SaaS companies struggle with customer onboarding delays when using manual handoffs between sales and support, causing 30% of new accounts to churn within 60 days."

The test: Can someone reading your problem statement immediately know if their solution would help? If not, make it sharper.

Step 4: Validate Through Customer Interviews

Schedule 5-10 conversations with your target customers. Your goal here is to listen and understand, not sell. Use LinkedIn, forums, or cold outreach to recruit participants. Say you're researching challenges in their industry and want their advice.

What to ask:

• "Walk me through your typical day"
• "What's your biggest frustration with [area]?"
• "Tell me about the last time that happened"
• "How do you handle this now?"
• "What have you tried before?"

What to listen for:

• Strong emotion ("I hate this," "It cost us a fortune")
• High frequency ("Weekly" vs. "once last year")
• Makeshift solutions (Excel workarounds, manual processes)

Red flag: If they haven't tried solving it themselves, the pain isn't real enough.

After interviews, capture the problem using your customers' exact words. This becomes your definitive problem statement.

Note

Surveys and interviews often reveal what customers say they want, not what they truly need. In startup validation, observe actual behavior instead. Design simple experiments that show how potential customers act when faced with choices. This approach reveals genuine preferences better than direct questions. See the Problem-Solution Fit chapter for practical experiment methods.

Step 5: Avoid These Fatal Mistakes

• Cool idea trap: sounds clever but nobody urgently needs it
• Tech-first thinking: using trendy technology (e.g. AI, blockchain) without solving real problems
• Ignoring context: assuming Silicon Valley solutions work everywhere
• No competition = good: no competitors often means no market demand
• Everyone's the customer: broad audiences make finding early believers impossible

Exercise: Reverse-engineer a startup

Pick any startup, and ask:

1. Which problem did they solve?
2. Who did they solve it for?
3. How painful/urgent was it at the time?
4. What made them stand out? Timing, regulatory gaps, local demand?
5. Reflect: Could you apply similar logic in your search?

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