How to Identify The Problem or Need For Startup Businesses

Source: Earl Boyd, 2/19/16

Don’t Just Start A Business, Solve A Problem

You may not think that the “Pet Rock” solved a problem for consumers, but Gary Dahl  did and discovered something interesting.

In April 1975,Gary Dahlwas in a bar (which is now Beauregard Vineyards Tasting room inBonny Doon) listening to his friends complain about theirpets. This gave him the idea for the perfect “pet”: arock. A rock would not need to be fed, walked, bathed, or groomed; and would not die, become sick, or be disobedient. He said they were to be the perfect pets, and joked about it with his friends. Dahl took the idea seriously, and drafted an “instruction manual” for a pet rock. It was full ofpuns, gags andplays on wordsthat referred to the rock as an actual pet.

Pet Rocks were a smooth stone from Mexico’sRosarito Beach. They were marketed like livepets, in custom cardboard boxes, complete withstrawand breathing holes for the “animal.” The fad lasted about six months, ending after a short increase in sales during theChristmasseason of December 1975. Although by February 1976 they were discounted due to lower sales, Dahl sold 1.5 million Pet Rocks for $4 each,[3]and became a millionaire. Source:Wikipedia

Does your startup business solve a problem or meet a consumer need in the market? Unless it does, you may end up spinning your wheels developing a solution that the marketplace does not need or want.

Keep in mind that a business exists tosolve problems and meet the needsfor consumers better than competitors in the market; at an affordable price.

A problem/need is a condition that a consumer has that is calling for a solution that either does not exist or the available solution has shortcomings or gaps. Successful businesses identify these gaps in the marketplace and attempt to fill them with a solution.

  • Google made search better.
  • Amazon simplified online buying & selling.
  • Netflix solved on-demand streaming media.
  • Uber is attempting to make on-demand car service better.

The key point to remember is, you want to identify what the marketplace says is a problem/need or gap and not what you believe is the problem.

To help you identify the problem ask questions such as:

  • What are the consumers/clients main concern?
  • What conditions/circumstances that are preventing consumers/clients from getting what they desire?
  • Why are consumers/clients are seeking a solution?

Another important point to remember is to not define your business around the product/service.  Instead, you want to define your business around the problem or the need.

Consumer Problem Product/Service Business Defined As
Feels Unsafe Locks, security alarm, guard dog Providing safety/security
Needs customers for product/service Print ads, website, social media Providing consumer audiences
Youth Deliquency Mentoring, job placement, support groups Youth Social Services Provider
Wants familiy recreation Theme parks, movies, TV Networks, Cruises Family Entertainment
Home–bound Parent In home care, skilled nurshing, family counseling Familiy Care Provider


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