A well known, but often overlooked avenue of exploring potential successful businesses is to look for problems to solve. Societies, people and organizations have all sorts of problems they are willing to pay to get solved.
Here is an interesting thing though; Despite the staggering number of problems in this world, only a very specific set of them actually are possible to build a company around. And as if that wasn’t bad enough, it turns out, that finding and understanding them, is not an easy task.
A couple of months ago I did a little experiment. I posted the following question on a website called HackerNews:
“Ask HN: What problem in your industry is a potential startup?”
The result speaks for itself. There really is a lot of good examples in that thread and the discussions which unfolded are even better. Since that specific experiment worked out great, I thought I would try my luck in other communities but quickly realized, that asking wasn’t going to magically make a lot of the problems surface. The results were fluctuating but ultimately disappointing.
I tried other approaches too, but they gave me even less. Yet from the HackerNews thread it’s obvious that we are only scratching the surface. But HackerNews isn’t like any other place. It’s a community of people from wide variety of backgrounds, working inside a disparate number of industries. Ranging from designers and developers to musicians, economists, students, MBAs, doctors, traders, scientist and lawyers, they all have one thing in common; They all care deeply about building businesses using technology. That’s why it worked so great with HN and not the other places.
So why is it that the is filled with ideas for businesses but not with problems to solve? The world certainly don’t have a shortage of them and it’s not like people don’t like to talk about problems.
To understand why, we need to understand what problems actually are. As I see it there are three types of problems. Social , human and organizational. It is the latter of these that is of special interest to me, as the two others are rarely solved by businesses (although the advertising industry might claim otherwise).
Organizational problems are problems that exist inside any organization. To understand them you need to have worked inside of them. They are problems like “Why does it take so long to process an order”, “Why is our cash flow bad”, “How do we keep track of all this inventory”, “How do we find the right candidate”, “How is our competitors outcompeting us on price” and so on. All problems that organizations deal with all the time.
All three types of problems have what I call hidden problems. They are the problem underlying the obvious solution.
For a social problem like poverty, the obvious solution is to provide enough wealth for everyone so they aren’t poor anymore. The reason why we can’t just do that is because you can’t just create wealth.
The obvious solution to the human problem like “How do I find love?” is to find someone to fall in love with. The problem of course is how do you do that.
For organizational problems same principles apply as the two others, but with one important difference; The organizational problems are harder to expose, but easier to analyze once they are found. This is what makes them potentially valuable businesses. They exist within a structure that allow you to explore their nature much easier, but they aren’t available to everyone and that is why they are in high demand.
As an example – In order to bill the client design agencies normally need to track the time they spend on a project. The designers fill out their time-sheets and the agency invoice the client. There are a lot of solutions to that problem like time-tracking software. But inside this hides another more illusive problem; Invoices often gets sent out too late because timesheets aren’t being filled out on time. Timesheets aren’t being filled out, because everyone hates doing timesheets.
It gets worse – Tracking your time make sense when you are billing by the hour, but many agencies today bill per project. So why are they still tracking the time? Because management would like track, the time designers spend on these projects to better predict what the price of the next project should be.
But there isn’t any evidence showing this is even possible. And so a lot of time is wasted waiting for the designers to fill out their time-sheets, on a project thats not paid by the hour, in order to better estimate future projects, which there is no evidence is possible. Just because thats how it’s always been.
I know all this because I was working in these agencies for more than a decade and even ran my own for 7 years. Because I was inside the organization, I got exposed to the problems, had access to the data and could analyze it. So problems in organizations are especially interesting because they often have more tangible underlying problems.
The problem with problems.
From my tinkering I made two observations on why these problems are so hard to get to for anyone but the insiders.
1) Hidden problems aren’t obvious even to those who experience them every day.
Most people have enough problems in their own lives. They are often hired to do a specific job and don’t necessarily think about the problems they experience every day as something that could be solved. Many problems are part of the actual process. So to even understand they are problems, require a certain mindset that a most people simply don’t have. Which I believe is the reason why you sometimes hear the phrase “why didn’t anyone think of this before” :)
2) Hidden problems only reveal themselves over time
Not all problems are even instantly recognizable. Instead they only reveals themselves over time or through years of experience. This also means that many of these problems require a certain age and experience to even notice. Perhaps this is one of the reasons why the average age of a founder is 38 and with 16 years of working experience.
3) There is a disconnect between what kind of problems the younger and older generations experience.
“Youth is wasted on the young” it’s often said. For this context it seems truer than ever. The youth have all the energy, the time to spend, no obligations, no financial worries. But they have very little life experience and exposure to problems and so what they end up tackling are the kind of problems primarily young people have. This certainly makes for some very amazing products no one even dreamed of was possible. But I can’t help but feeling a little disillusioned by the amount of time and energy that goes into fun but ultimately useless ideas rather than fixing some of these hidden problems.
On the other hand, the older generations are exposed to a lot of these hidden problems, have experience on how to solve them because they know whats creating the bottlenecks. Yet many of them are by now addicted to the monthly salary that pays for the house, their family, tuition fees, healthcare, yearly vacations and the 3 cars and they often lack the imagination on how to solve things in a new paradigm.
It is my guess that there is a potential goldmine of problems we simply don’t know of because the people who are exposed to them aren’t connected with the people who have the opportunity and willingness to solve them. So the question to me is the following.
“Are the older and younger generations wildly underutilizing each other as resource?”
Of course some of the problems have been solved by technology over time. And many more people who are willing to solve them build companies around. But many of the biggest obstacles aren’t that easily converted to a digital medium and might require a deeper understanding.
Often they are based on outdated legislation or they are tied to decades of traditions/standards that no one have had the power or interest to change. Things that older generations might have some knowledge about but not the guts to try and change. And that brings me to my final observation.
Perhaps the real power of diversity in business isn’t hidden in gender but in age and is there a way to build stronger relationships between the different age groups?
I think it’s at least worth some pondering.
Article Written by: Thomas
Article Taken From: http://000fff.org/the-problem-with-problems/?utm_source=hackernewsletter&utm_medium=email&utm_term=fav
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