This step helps us define which problems are worth solving. During this time, we should filter through all of the information we gathered from the first step, assess the most critical problems, and look at similar solutions in adjacent problem spaces and opportunities.
For each step, I go through the following exercise:
Create a March Madness Bracket
First, queue up all the potential problems you’ve identified and indiscriminately list them. Focus on quantity over quality for this step.
Second, pick the initial 8–16 problems worth exploring (you can do this multiple times).
Next, for each problem, list out:
- How is the customer solving the problem today? If they haven’t tried to rectify the pain point themselves (whether through workarounds or existing alternatives), the problem may not be pronounced or painful enough.
- How does the problem make them feel? The net benefit is often how our solution makes them feel (i.e., employee empowerment, increased trust, reduced risk, better relationship) rather than conventional value-add assumptions like time savings.
- How often did this problem come up? This can help you assess the breadth of the problem within a specific industry or user base.
- How big is the market? Is it growing? Think about emerging markets. Often, a mediocre idea in a great market will have higher odds of success vs. a good idea in a bad market.
Assign a weight to each factor to “pit ideas against each other” until one champion rises to the top. This problem should be your focus for the next step.
But remember, this process can be run multiple times as you validate and invalidate ideas!
For the problem you’ve honed in on, write down a series of challenges or questions that could be detrimental to achieving your goals.
For instance, imagine if we travel to the future and our project fails. What may have caused that?
- Target customer: are these folks easy to find? Easy to sell to? Startups are way easier to sell to (early adopters) vs. legacy industries (laggards, non-tech-adept).
- Distribution: what existing networks can we latch onto for easier distribution (i.e., Shopify app store)? Is there a platform risk to leveraging one partner?.
- Do we have the skillset, experience, or competency to pursue this idea? Are there regulatory or skillset gaps?.
With these potential pitfalls in mind, start building hypotheses around potential solutions, target customers, or distribution channels.
Once you have a clear vision of what your product looks like, crystallize your hypotheses into a tactical, time-bound experiment (which is the next step).
Tip: All startups are badly broken at some point. You’ll recognize plenty of potential flaws with your solution. This is ok!
This is an exercise to help you be cognizant of future trends and challenges ahead — not dissuade you from having a bias for action.
Maintain an abundance mindset and be prepared to roll up your sleeves, instead of overly fixating on negative hypotheticals.
Now that we have an indication of what the potential solution could look like, we can:
- Build out potential low-fidelity solutions and proposals to key problems.
- Hone in on any additional discovery questions or interviews needed to further build knowledge depth within the singular problem.
- Evaluate which audiences or distribution channels best resonate with the solution.
Ultimately, your goal is to secure a design partner or revenue commitments from customers.
You’re building a business to make money, so it’s paramount that validation is tied to the commitment of $ or time invested — not on a facade of hypotheticals.