How to Pick the Right Problem

GUEST POST from Arlen Meyers

The 12 steps to biomedical innovation starts with being a problem seeker, not a problem solver. Eventually, to be successful, customer problems and solutions need to meld around a VAST business model i.e. one that is not just profitable, but that demonstrates:

1. Validity Regardless or which elements of your model you choose, they have to be valid. In other words, the dogs have to eat the food. When the dog won’t eat the food, you’ll have to change your approach and try again.

2. Automaticity At the very start of planning your venture, you should think about how you are going to work on your business, not in it. Reducing hands on time to manage operations will give you more time to lead the company and create strategies for growth and give you more personal time to enjoy the fruits of your success. Outsourcing, automating or using technologies to ramp up operations, sourcing and distribution is a key part of scaling, and something that investors want to see…which brings us to the next piece.

3. Scalability Your business model is primarily a way to create a business machine that can produce an infinite number of products. Think of it as a device that takes in customers and creates profits out the other end and can do so at quicker and quicker speeds.

4. Time and Traction Finally, your model need to create as much profit as quickly as possible with a growing customer base that is loyal to your brand.

Many doctors, scientists and engineers start with solutions looking for a problem. Some find it or, eventually, as their inventions or technology evolves, markets appear to those who have the talent to see them. The more typical model, and one that is more common among the startup community, is to find a problem and devise a solution.

But, how do you pick the IDEAL opportunity given the almost infinite possibilities? Here are some tips:

I Identify the problem: Seeing a problem is an important skill and core competency of savvy entrepreneurs. It typically is the result of personal experience, primary research talking or watching others or secondary research. Whichever problem you pick, look for ones that:

Will make a very big difference in people’s lives if you solve it
Has the potential to be very profitable or create lots of user defined value, typically at least 10x the value compared to existing offerings or the status quo.
Is something that taps into your passion or satisfies your psychic need
Anticipates future customer/stakeholder wants and needs
Has an extremely high level of market pain and frustration, where customers know they have a problem and have unsuccessfully and repeatedly tried to solve it
Has limited barriers to entry
Has the right potential risk-return profile that matches yours
Is not one dominated by incumbents
Is easy to explain and understand
Someone is willing to pay enough for your solution so that you can make it profitably

Where massive success comes – where a good idea becomes great – is when it meets five simple criteria:

It is the first solution to a problem or gap (it is “innovative”)
It is the first WORKING solution to a problem or gap (it is “innovative and effective”)
It is the most affordable, comparable, option for its market (it is “innovative, effective and affordable”)
It consistently examines its effectiveness and seeks to improve (it is “innovative, effective, affordableand adaptive”)
It is powerful enough to create a loyal following that naturally wants to – and does – share the idea with others (it is “innovative, effective, affordable, adaptive and influential”)