How to write a Problem Statement

A startup's opportunity often begins with a problem searching for a solution. You need to identify a real problem before generating a solution. This is achieved by conducting customer interviews and analyzing the results to create your problem statement.

Believing your hype without verifying if there is a significant market need for the product you are building can prove fatal for your startup company. Let's discuss how you can prevent this by using a problem statement to define your startup's opportunity.

To sell others your idea, you must make them believe that there is a problem worth solving in the first place. The statement of the problem is one way that startup companies sell potential investors on their idea.

What is a problem statement?

A problem statement is a complete description of a customer's problem and what they want to accomplish. A good problem statement includes the customer, the goal, and why it isn't currently possible to achieve that goal.

When creating a startup, the problem statement is the heart of your concept. It intrigues people about the rest of your business and ultimately becomes the focal point for everything you build. Writing an interesting case about the problem requires building a story around that problem that people can relate to personally.

The Problem statement canvas

Let me tell you about a request from one of our clients presenting their idea.

“ We want to build a ride-sharing app that will solve the congestion problems of the people in Los Angeles” 

The problem statement was clear and well-thought-out, but it lacked the necessary details to make it a powerful message. This is essential at the beginning of any business. A powerful problem statement would have been more effective if it discussed the problem's symptoms and alternatives, rather than its solution. It would have been more convincing if the authors had not made their product so central to the problem's solution.

While not a perfect solution, this new way to state problems helps everyone understand how complex the issues are. This eliminates the need for quick action. A problem statement can be summarized as:

When (events happen), the customer who ( suffers from problems). Due to this, they feel (a negative emotional state), and then experience the impact(of the problems). To compensate, they use alternative solutions despite disadvantages.

Founders and investors must have a common understanding of the business problem each respective group faces. Understanding this in detail is key to working together effectively. Let’s now go over each of these areas:

The customer

It is common to see that startups do not focus on their core consumers. They often overlook that. It’s generally done to keep all the options open.” Why just keep to 10% who are facing acute problems, let’s include the other 90% who may be facing the problem.”

You need to focus on your core customers. To identify your target audience, think about your customers' demographics (e.g. who they are, where they live, and what their income is) and their psychographics (e.g. what their regular days look like and what matters most to them)

To get back to our initial example, instead of:

 “People in Los Angeles”

We will refer to the customer type in a much clearer way.

“ Working-class professionals in Los Angeles, commuting to their work in the city”

So, by focusing on your core customers, we get

• You avoid catering to the whole population.
• It allows you to understand how the problem affects people’s lives.
• Marketing a product to a target audience is easier once the target audience can be clearly defined.
• From a business perspective, it is better to focus on a specific group of customers rather than attempting to appeal to a larger market.

Think of www(WorldWideWeb). We take it for granted today. A scientist developed it at CERN to meet the demand for automated information-sharing between scientists in universities and institutes worldwide.

Context of the problem

What are the problems that occur? Most of these problems are intermittent and can be reduced by identifying their causes. More than this, understanding what triggers them will help you understand the root cause of the problem. The best time to do this is when the problem becomes acute and most painful for customers—and when they are most likely to take action (which in the future could be adopting your solution).

In our case, the context becomes

“During weekdays, mornings, and evenings(commuting time), for a few hours”

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The root cause of the problem

When we are looking for the root problem, being stuck in traffic comes to mind. But, it is the symptom rather than the problem. Finding the root cause is essential for finding the root cause of the problem.

To identify a problem's root cause, focus on the facts of what actually exists and ask: why is this an issue? Then ask the question again. And again.

Let’s apply that to our case:

• Why?

Because a lot of time is wasted.

• Why?

The commute becomes longer.

• Why?

You can do a lot of things in the time wasted

So, the root cause is that valuable time is wasted that one could productively utilize.

The adverse effects on the customer

Understanding problems as they pertain to your customers is not just a matter of understanding the concept or event itself; it’s also about understanding how people emotionally respond to that problem. The magnitude of people’s emotional response is directly linked to their interest in using a solution to that problem. If someone is merely annoyed by a problem, they are less likely to try a solution than if they were angry when the problem occurred.

A deep understanding of human emotions can help you identify windows of opportunity and triggers that will make customers more likely to use your solution. In our case, it is frustration and stress.

Tangible effects of the problem

In the early stages of its development, a startup must decide on its pricing strategy. To make this decision, the startup should first quantify its value proposition, which is difficult without understanding and quantifying its impact in the current state.

It's important to find a measurement of the impact of the problem as clearly as possible, preferably in a currency people can understand. A result expressed in another currency (for example, the effect on relationships or health) is less easy to understand than an impact expressed in a more straightforward way (for example, time or money).

In our case, it is losing valuable person-hours.

The problem is structural and deep-rooted. Finding easy solutions is out. So, what’s next?

Plan B

So before jumping to a solution, shouldn’t you look at what your potential customers are doing to treat their pain or some of its symptoms? If the pain is real, your customers may be using different tools and actions, or combinations of them, to ease or manage the problem.

So, framing our problem,

“ Each workday, young, low-middle-class people who live in Los Angeles and work in the city lose two to three hours per day to traffic while driving between their homes and their workplaces. This makes them tired and frustrated, as they lose up to 50 hours per month..”

So, the solution to the problem of commuting, the team set up a ride-sharing platform that would allow people to sign up with Uber and give rides on their way to work.