Seriously, what’s your (startup’s) problem?

A simple framework to identify and articulate a problem-statement.

Pitching problems at IDEO in SF during Silicon Valley Bank’s #SVBTREK2017

“What problem are you solving?”

First time founders normally respond by launching into a 5 minutes diatribe about an amazing opportunity or disruptive technology — often they’ll miss answering the question all together. Veteran founders provide a problem statement.

What is a problem statement?

Problem statements have long been a secret weapon of six sigma black belts (the “Define” part of DMAIC) and customer-centric designers (Step 2 in IDEO’s Design Thinking process). For startups, it’s a concise description of the problem your startup is trying to solve. It should answer:

  • Who has this problem?
  • Why is this a problem?
  • It simplifies the elevator pitch when explaining an idea to family, friends, investors, customers, uber drivers, baristas, etc.
  • Most importantly, it provokes the question every founder should ask themselves: Why does this matter?

Ask yourself: Why, Why, Why, Why, Why?

The most effective tool I’ve used to build a problem-statement is a Root Cause Analysis method known as “The 5 Whys”. It’s something you’d expect from a 4-year-old — but was actually invented by Taiichi Ohno, the founder of the Toyota Production System (known in the US as the Lean Manufacturing). The genius behind this method is the combination of simplicity and efficacy. Here’s how it works:

  1. Ask that statement — “Why does this problem occur for this population?”
  2. Your first Why (we’ll call this Y1) is the starting point — ask yourself “Why is Y1 happening?” — This will be your second Why (Y2)
  3. Repeat step 3 with Y2 — do this for 5 repetitions until you reach Y5

An example

To illustrate the effectiveness of this technique, here’s how I used the 5 Why’s to define an EdTech SaaS startup’s problem-statement that was developing a new recruiting tool for universities.:

The last “Why”

A company’s problem-statement is its “true north” — I cannot stress this enough. The best startups have defined this so well that every employee — from CEO to summer intern — knows their problem-statement verbatim. It’s what attracts great talent. It’s what attracts high-profile investors. It’s what keeps you moving when things go wrong (and they always do).

Lead 🎸 and VP, Startup Banking @ Silicon Valley Bank. Domestique & pretend pro cyclist @ Team MoMA NYC. I ride the streets of Williamsburg, Brooklyn 🗽