Creating a problem statement as a startup or corporate venture
Often, a startup idea begins with the idea for a solution. Although this makes sense, it is the problem of a customer segment that is the starting point of your startup. You need to make sure to find a real customer segment with a real problem before working out a solution, you do this by conducting customer interviews. Believing that your solution is relevant without researching if there really is a significant problem to solve, is a common pitfall that costs many startups to end up in the startup graveyard.
When you’ve proven that there is a customer segment with a serious problem, you need to be able to convince others that this problem is real. Because selling people your idea begins with convincing them that there is a problem to solve. We use the problem statement to create a convincing one-liner of our customer segment and its problem.
What is a problem statement?
In essence, a problem statement is the fusion of your found customer, the problems they encounter, and what they are trying to achieve. For corporate venture builders, constructing these in this manner curtains that you incorporated all essential elements in a way that allows you to compare problems properly.
How to create one
You will, once again, find that your customer segment, what they are trying to achieve, and their encountered problems are mostly constructed from the customer interviews you have conducted.
To create a customer segment we use the following formula:
A <customer segment> is <trying to achieve> but encounters <hurdle/irritation> in doing so.
Alright, lets take an example:
A student needs to ask his friends to pay him back after a night out but needs to remind them multiple times before doing so.
In this case, the student would be our customer segment. Asking his friends to pay him back after a night out is his job to be done. And the fact that he needs to remind his friends multiple times would be his irritation (problem).
When you have multiple customer segments, jobs to be done, and/or problems, as corporate venture builders have, we could compare them easily in order to decide which problems we want to build further on. To illustrate how changing one element can change the context of a problem (and what solutions could be created) have a look at this example:
A student needs to ask his friends to pay him back after a night out but keeps forgetting to ask them.
In this case, we only replaced the problem (here we changed it into a hurdle) and, as a result, you might see how constructing problem statements make it easier to compare them to one another.
We will give an another example to clarify the problem statement a bid more. Here is how it looks like for GroundControl.
Corporate venture builders are trying to successfully create new business models but struggle with making informed data-driven decisions while doing so.
In this case, corporate venture builders are the customer segment, successfully create new business models is what they try to achieve, and struggle with making informed data-driven decisions is the hurtle.
Now that you know how to create a problem statement, it is time to create one for your own customer’s problem. After creating the statement, you should know your customer’s problem as well as your own birth date. Because remember, convincing anyone of your solution starts with convincing that person of the problem you’re solving.