What is a Problem Statement?

Learn why problems are actually a blessings in disguise for your startup

By Paige Banks

A problem is usually a matter or situation regarded as unwelcome or harmful. That is not the case in business, where it's often considered the fundamental driver for success. Entrepreneurship is the game of problem-solving, and the size of the problem you're attacking is directly correlated with the success you potentially can achieve. Problem and solution are what we refer to as antonyms – they are each other's opposites, and one can, per definition, not exist without the other.

I got 99 problems – but a ride ain't one πŸš–

Problems are everywhere, and luckily for us, they don't mind being solved. It's kind of in their DNA. Some are easy, some are difficult, but most are solvable with the right ingenuity. We humans would not be where we are today without the core drive to make sense of the world, find meaning, satisfy our natural curiosity, solve problems, and overcome challenges. We tackle this through innovation to improve our lives and make the world a better place to live. You could make a rock-solid argument that what an entrepreneur exists to do, is to identify solutions to problems – and manifest them in the world.

Have you ever heard of Uber? Silly question, right? They are considered one of the biggest startup success stories on the planet. Single-handedly, they managed to change the way people use transport in cities worldwide by being the first mover in the ride-sharing boom. Their journey involved a lot of back-breaking work to reach their stratospheric success. Still, it all started from one place: a problem. If you wanted to get a cab in San Francisco in 2008, you might as well have been waiting for a rocket ship to the moon. It was a nightmare for most who lived in the city, but this was the initial ignition for the Uber founders. They saw this as an opportunity to solve a persistent and annoying problem in their town. And they acted. The solution was to connect drivers with riders more efficiently, but the catalyst was the initial problem.

How to Define a Problem Statement? πŸ–Ό

The first condition of solving a problem is understanding the problem. To do so, you need to frame it. A tool for that is what we call a problem statement. A problem statement is a concise representation of an issue to be improved upon. It identifies the cleft between the current problem/state and the desired goal/form of a process or product. In other words, it's a story that tells why the problem is a problem, what pain it causes – and for whom. 

Storytelling plays a crucial role when you need to frame a problem. Remember when you were read stories as a kid? Fond memories, right? What about those teachers at school that weaved real-world examples and stories into their teaching? They made learning enjoyable. And those enigmatic storytellers at parties (maybe it's you)? You probably still retell those stories to this day. The key point is, delivery is everything. How you tell the story of your problem will determine if you capture your audience. Let's use the example of Netflix, which initially solved the problem people had while having to travel to the video store to rent a movie. What a bummer... Netflix attempted to cut out video stores altogether and deliver movies in nice envelopes directly to the customers. At the time, the Netflix problem statement would probably look like this:

"Going to the video store is a pain. People don't like traveling back and forth just to rent a movie, and they detest paying late fees even more."Notice that it doesn't include any reference to the solution. We'll get to that later. A good problem statement focuses entirely on the problem so that the audience can build a case for that problem. A great problem statement has a lot more character to it. It tells more of a story and provides an emotional connection to the solution. 

How to bake a problem statement? πŸ‘¨πŸ»β€πŸ³

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?

If there is no pain involved, there is no gain to obtain. You should be able to identify what hassle the problem entails. Remember to weave together some good storytelling that is framing the pain in a relatable way. Even though a potential investor is not a part of the target group and is not affected directly, they should be able to imagine the pain and empathize with the one who does.

πŸ¦‰ Who Is affected by the problem? 

If you can't answer this with confidence, go out into the real world and find the real people whom you suspect to have it. Go ahead and talk to them and ask them how the problem affects them to feel how bad the situation actually is. This vital information you get from real people is more valuable than a piece of moon rock. Use it wisely! You can then explain who the people with the problem are, how the issue affects them, and what prevents them from getting to where they need to be.

πŸ‘€  How can you show the problem? 

Numbers, numbers, numbers! How many are affected? What are the costs of the problem? What is the size of the market? Remember to make the numbers part of the story you are telling. That way, the numbers will be much more memorable and stick in the mind of whomever you are 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.