Crafting a problem statement: a guide for first time entrepreneurs
Welcome and congratulations! Deciding you want to embark on the journey of creating a new product (or improving an existing one) is a wildly exciting milestone worth celebrating. Give yourself a pat on the back. Next, recognize that parts of this process will be intimidating and overwhelming. If I do my part, at the end of this post each of you will be a little bit closer to your common end goal — having a successful company with a valuable product.
The first step in product development
So where should we start? There are many possible first steps when building your company’s first product. Luckily, one initial action towers above the rest in terms of long-term value- find a specific problem a large group of people are experiencing. Even if you have a product in mind already, I strongly urge every newbie (and veteran) CPO to read on and reflect on the “problem” your product addresses.
In this guide, I will provide a high-level framework, the “problem statement”, to help you to navigate through the first phase of product development, the “problem space”. Although there are many approaches to tracking insights generated in the problem space, the method I advocate for below focuses on the essential outputs and is refined as you go. This eliminates the need to learn and apply multiple specific frameworks and tools as you work through defining the problem. Sounds perfect for first timers, right? Additionally, we will explore some best practices to keep in mind during target user selection, problem identification, and value creation. Let’s begin!
The problem space
Before we start moving forward, let’s acknowledge where we are at currently. There are two high-level pieces of the product development process, the “problem space” and the “solution space”. The product development process begins in the problem space. Here, your team will begin exploratory user research and problem validation with the goal of finding an opportunity to create unique value through a product. This is where your team will live until you have sufficient information to begin developing your “solution” (your product).
Upon entry into the problem space, your future product is boundless. Are you going to create a virtual concert venue, a new beverage category, or the first flying car? Although this may seem like a fantastic amount of freedom (and it is), remember that great products solve real, focused problems for specific user groups. Got it?
The importance of solving real problems
Back in 2014, Fortune cited the top reason for startup failure (yes, reason #1) is “[making] products no one wants.” Equipped with this knowledge, you would expect new founders to scrupulously work to prove a market need before jumping into ideation. Well, they don’t. Still today, product development teams (especially first timers) have a tendency to “sprint” through or to skip over the problem space entirely. And let me just say, I totally get it… Living in the time before solution (BS) is uncomfortable and unsexy. I know it is way less exciting to be analyzing the traffic problem on the local interstate when you could be showing off your sick flying car design. Bear with me, that will come in due time. The single most valuable thing you can do as an early-stage company is find a real problem affecting real people that your team can solve better than what is currently available.
Enter the problem statement…
The problem statement
Problem statements, or problem definitions, are a product development framework used to navigate the problem space. A great problem statement is a north star for a CPO. It provides a lens through which to assess every (!) product decision to come. Although I gave myself away as a consultant by saying “framework”, in my past life as an engineer, problem statements were widely considered a best practice “roadmap” through the problem space. Now that my credibility is back intact, let me show you how to use a problem statement and convince you that they are awesome.
Problem statement framework
Like any good framework, problem statements are formulaic; they have four parts:
1) A target user group: who are you solving a problem for?
A target user group is a group of people with things in common (such as shared interests, needs, or experiences) who have a common problem. Sounds simple, but there’s a small caveat. Target user groups should experience the same problem in the same way. For example, lots of us wish we had more time in the morning to workout before work, but parents with young children probably share a lot of common reasons for the time crunch (e.g., packing lunches for school, getting their children dressed) that those of us without young children may not. “Parents with young children” is an example of a good target user group.
2) Problem of interest: what’s the problem?
The key here is specificity. You are trying to zero in on the most pressing problem that your target user group faces. This should be a specific issue, rather than a broad statement like “retired people need a better way to communicate” or “parents with young children need more time”. Additionally, something needs to be wrong enough that people are looking for a solution, but not so wrong that it’s impossible to solve (e.g., “I want my phone to fly me around” is a problem but one that would be quite difficult to solve).
3) Current solution: what are people doing now?
This might seem like a no-brainer for certain problems, but it’s important to understand the full range of existing solutions. For example, if your target user group is “leisure travelers in Europe trying to find cheap flights”, it’s worth taking the time to look at a range of different travel booking platforms to see what they offer and to identify what is currently missing.
4) Area of potential value: what is the next, better step in solving this problem?
This is where you identify the specific gap that your new product will fill. It is your first hypothesis into how you may achieve product differentiation in the future. In the example of cheap flights, this might be a solution that provides better search results, smarter flight recommendations, or more personalized travel options. Keeping the area of potential value broad (e.g., “better optionality”, “better optimization”, “better personalization”) is best practice while in the problem space.
Finally, problem statements can be written in this format (or any grammatically correct variant):
Makes perfect sense. No? Ok well let’s walk through an example.
Extended problem statement example
Imagine you are an avid spin class attendee, who hits the local spin studio’s Tuesday night class each and every week. You recognize that slowly the attendance of your Tuesday night spin class is dwindling. Upon further investigation, you realize that each member who has stopped showing up has recently started a new job with later hours.
Ok, let’s pause here, and attempt a first draft of a problem statement using what we know and some detective skills:
1) Target user group: who is the group of people experiencing a problem and what do they have in common?
Spin class members at your local spin studio who also work late seem to be having a common problem.
2) A problem of interest: what is the problem they are experiencing?
This group is having trouble attending their Tuesday night spin class.
3) Current solution: what is the user group doing right now to solve their problem?
From what we know, their only option is to go to the local spin studio at the class times offered.
4) An area of potential value: what is the main way a different option could better solve this problem?
Flexibility on class timing. Seems like there could be a space for a late-night option.
= The Problem Statement: Putting it All Together
“People who work late need a more flexible solution than local spin studio classes to attend a weeknight spin class.”
…and Voila! With a little extrapolation and refinement, you now have a great working theory to go validate this problem with a broader target user group.
Next up: the solution space
A strong problem statement can be thought of as a key that unlocks the door to the “solution space”. As you begin to explore the solution space, it is important to remain grounded in your problem statement. Each product decision should ultimately advance the goal of providing unique value to your user’s specific problem. If you want to be successful in your journey as an innovator, remember: stay focused, be strategic, and trust your instincts. With these insights in hand, you will have everything you need to build an innovative new product or service that truly changes the world of your users for the better- good luck!
