Identifying the core problem

Building a successful company requires solving problems. You identify a problem, come up with potential solutions, apply them, measure the results for effectiveness, and reiterate.

The importance of execution during this process is clear. Applying potential solutions and measuring the results for effectiveness are both part of the execution phase.

However, correctly identifying the problem and coming up with potential solutions are equally important. The latter is the direct result of the former so most of the value lies in correctly identifying the problem.

Most of what appear to be problems are actually side effects. They are the natural result of the core problem rather than the core problem itself. Attempting to solve them creates a small win at best and, at worst, results in more side effects which appear as new problems to be solved.

To make sustainable step-change progress, you need to identify the core problem. Once you’ve done so, the potential solutions which emerge will, if executed well, correct not only the core problem but also its side effects.

However, identifying the core problem isn’t easy. This is because the reason why it developed into a problem is often because the company lacks the capabilities to address it. If these capabilities existed, it wouldn’t have developed into a problem in the first place. So there’s a natural resistance to identifying the core problem because acknowledging a lack of capabilities and building them is painful for the company.

But the company’s success depends on it.

This line of reasoning is valid not only for companies but also for individuals.

Originally published at Thoughts of a VC.