How to pick the right *problem*?

Many startups fail because they don’t solve a genuine, urgent problem. They build a “solution in search of a problem”- something that might sound cool on paper, but which no real group of users genuinely needs. This leads to weak or no growth, which is fatal for a startup.

Choosing the right problem is the critical first step in your entrepreneurial journey. Having a well-defined, urgent problem is essential, because:

• V It points you toward fast user adoption.
• V It helps you gain conviction when resources are tight.
• V It sets a clear path for product validation and fundraising.

What makes a "startup-worthy" problem?

A good startup problem is:

1. Frequent – Happens regularly, not once in a while.
2. Painful – Causes frustration, financial loss, wasted time, or emotional stress.
3. Urgent – People are actively looking for a solution.
4. Underserved – No great solution exists yet.
5. Growing – The pain is increasing, not going away.

Food for thought:
Paul Graham calls these “wells” or “deep holes.” A great problem starts narrow but with intense need. Later you can expand. Start with a smaller set of really motivated users.

How to spot a problem worth solving?

• Your own frustration: What annoys you?
• Corporate inefficiencies: What tools/processes suck in your industry?
• New regulations: Does CSIRE, ESG, or MiCA open new gaps?
• Technology shifts: What can AI, IoT, or drones newly solve?
• Demographic change: Aging, migration, remote work trends?
• Emerging local markets: What worked in other geographies but doesn’t exist here?

Pitfalls to avoid

• X “Cool idea” trap: sounds good but is not an urgent problem.
• X “Tech looking for a problem”:  using specific technology (think: "AI",  blockchain, etc.) only because it's trendy but not necessary to solve a real user problem.
• X Ignoring local context: something that works in Silicon Valley could flop in CEE.
• X No competition = good: lack of competitors could signal no market demand - always validate with clients first.
• X Everyone is the customer: if you want to appeal to an audience that is too broad, you might have difficulty finding your true believers first.

Food for thought: Reverse-engineer a startup
Pick any successful 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?

Research the origin story (articles, podcasts, blog posts).
‍Identify what made them stand out (timing, regulatory gap, local demand).
‍Reflect: could you apply similar logic in your problem-finding process?

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