What is a Problem Statement?

A problem is usually a matter or situation regarded as unwelcome or harmful. That’s not how it works in business, where a problem is often the fundamental driver of success. Entrepreneurship is the game of problem-solving, and the size of the problem you’re attacking correlates directly with the success you can potentially achieve. Problem and solution are antonyms, opposites of each other. One cannot exist without the other.

I got 99 problems, but a ride ain’t one 🚖

Problems are everywhere, and luckily they don’t mind being solved. It’s practically in their DNA. Some are easy, some are hard, but most can be cracked with enough ingenuity. Humans wouldn’t be where we are today without the drive to make sense of the world, find meaning, satisfy curiosity, and overcome challenges. We do this through innovation, to improve our lives and the world around us. You could argue that an entrepreneur exists for exactly this: to find solutions to problems and put them into the world.

You know about Uber, naturally. They're practically the textbook example of startup success. In a relatively short time, they flipped how people move around cities everywhere by pioneering the ride-sharing concept. Getting there took serious effort and determination, but the origin story always traces back to one thing: spotting a real problem. Back in San Francisco in 2008, catching a cab was genuinely difficult. People would stand on corners waiting longer than seemed reasonable just to get a ride across town. That frustration was everywhere, and it became the spark for Uber's founders. They recognized something broken that affected real people daily, and they decided to fix it. Their answer was creating a smoother, faster way to match drivers with passengers. But none of that innovation matters if there's no problem crying out for a solution in the first place.

How to Define a Problem Statement? 🖼

Solving a problem starts with understanding it. To do that, you need to frame it, and the tool for framing it is a problem statement. A problem statement is a concise representation of an issue to be improved upon. It identifies the gap between the current state of a process or product and the desired one. Put simply, it’s a story that explains why the problem is a problem, what pain it causes, and for whom.

Stories are your secret weapon when defining a problem worth solving. Think back to the stories you loved hearing as a child—those stuck with you, didn't they? Remember teachers who brought their lessons alive with real-world anecdotes and narratives? They made you actually want to learn. Then there are those naturally gifted storytellers you know—the ones whose tales become legend and get retold for years. Here's what matters: how you present it. The way you narrate your problem determines whether people actually listen and care. Take Netflix as a case study. They tackled an obvious pain point: the hassle of driving to a video store, browsing the shelves, and hoping they had what you wanted in stock. Instead, they mailed DVDs to your door in simple envelopes. That was the story they told—a cleaner, easier way to watch movies. Their original problem statement probably sounded something like that.

“Going to the video store is a pain. People don’t like traveling back and forth just to rent a movie, and they hate late fees even more.” Notice there’s no mention of a solution. We’ll get to that later. A good problem statement stays entirely on the problem, so the audience can build a case for it. A great one goes further. It tells more of a story and creates an emotional connection.

How to bake a problem statement? 👨🏻‍🍳

A loaf of bread is never better than its ingredients. The same goes for a problem statement. You only need a few simple elements, but you can’t expect the bread to grow without the yeast.

🎻 What pain does the problem cause?

No pain, no gain to obtain. You should be able to name exactly what hassle the problem creates. Weave in some real storytelling that frames the pain in a way people recognize. A potential investor isn’t part of your target group and isn’t affected directly, but they should still be able to picture the pain and empathize with whoever is.

🦉 Who Is affected by the problem?

If you can’t answer that with confidence, go find the real people you suspect are living with the problem. Talk to them. Ask how it affects them, so you understand how bad the situation really is. This kind of information, straight from real people, beats a piece of moon rock. Use it wisely. From there, you can explain who these people are, how the issue affects them, and what stands between them and where they need to be.

👀  How can you show the problem?

Numbers, numbers, numbers. How many people are affected? What does the problem cost? How big is the market? Weave the numbers into the story you’re telling instead of listing them separately. That way they stick in the mind of whoever you’re pitching to.

Time to make some bread 🍞

Now you have the nuts and bolts to get your problem statement off the ground. Go ahead and apply it to that fantastic idea of yours. The founders of Uber did just that, and It wasn’t long before they were digitally hailing a taxi to Unicorn city. We hope you will be next.