Identifying a problem worth solving
Michael Seibel's three questions to find meaningful problems
A great product is a function of identifying a worthwhile problem and meaningfully solving that problem.
Michael Seibel, CEO and Partner at Y Combinator, shared the lessons he's learned from seeing thousands of startups over the last decade on the Investor Field Guide podcast a few months ago. In the episode (23:00 - 28:00), Seibel discussed the questions he encourages founders to think of when considering a problem area to focus on. This guide can serve to gauge how significant a problem is for a given user base to ultimately determine where you should focus your efforts.
Frequency - how often does your customer experience this problem?
Intensity - how painful is this problem to your customer?
Willingness to pay - how much is your customer willing to pay to make this problem go away?
image via @ekmokaya
Why frequency, intensity, and willingness to pay? The frequency will dictate how often a customer might use your solution. The intensity will dictate the demand for your solution and how strongly a customer might seek it out. The willingness to pay will drive how much you can charge for a solution.
Seibel also cautions that many people fall into a trap of not recognizing who their primary customer is. Using Airbnb as an example, he mentions that although a traveler's pain might not be as frequent or intense, the pain for a host needing to fill their rental space is much more frequent and intense.
Owning Problems
The job does not end once a problem is found. The best product outcomes are centered around solving the identified problem, not building a specific solution.
I love the framing of owning problems because it empowers people to think holistically and creatively about why the problem exists and how to address it in the most direct way. Oftentimes this thinking will lead to questioning the status quo, which is a requisite for finding breakthrough solutions
Back to Airbnb as an example, in the early days, the founders noticed sluggish growth in New York City.
Users, they found, had no idea how to present their listings. “The photos were really bad,” says Gebbia, who typically sports Twizzler-red sneakers and thick-framed glasses that resemble lab goggles. “People were using camera phones and taking Craigslist-quality pictures. Surprise! No one was booking because you couldn’t see what you were paying for.”
They crafted a very untechy solution. “A web startup would say, ‘Let’s send emails, teach [users] professional photography, and test them,'” explains the jockish Chesky, a former bodybuilder who wanted to play pro hockey. “We said, ‘Screw that.'” The pair rented a $5,000 camera and snapped high-resolution photos of as many New York host apartments as they could. Bookings soared. By month’s end, revenue had doubled in the city.
In summary, use these three questions to identify a problem worth solving 1. How frequent is the problem? 2. How intense is the problem? 3. How much are people willing to pay for this problem to go away?
Once a problem is identified, focus on owning that problem and solving it in the most direct way possible by questioning the status quo.
As always, thank you for reading.
Alex Pedicini (@AlexPedi)