Want a Successful Business? Solve a Problem

Building a successful business is a huge deal. It’s awesome to follow your dreams and put your big ideas into motion, but one false move can send your whole scheme tumbling down. One professor of entrepreneurship offered the number one kiss of death for startups: no problem to solve.

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University of Southern California professor Kathleen Allen shared an example of a failed startup effort and a way to avoid this in your own work life. Leap Transit was a company founded in San Francisco that asked local techies to pay $6 one way for luxury bus service to and from work each day. The business venture ended up flopping when it only brought in $20,000 in its first year after getting off the ground with $2.5 million from big tech investors. Why? There was no need for the service, Allen wrote in her article “Problems are More Important than Solutions” for Entrepreneur & Innovation Exchange. A city commuter shuttle system already existed in San Francisco, and riders could use it for a third of the cost of Leap. Without an extant problem, no solution is needed. Leap Transit pumped millions into a non-issue.

With no problem, there is no need for a solution. This may seem devastatingly obvious, but Allen said it gets in the way of entrepreneurs often.

“The mistake that entrepreneurs typically make in this early stage of trying to understand the problem is to proclaim with great confidence, ‘I know the customer because the customer is me; therefore, I understand the problem,'” she wrote.Or equally fallacious, ‘I understand the problem because I’ve seen it before.’ Unfortunately, that may have been under different circumstances or have involved a different set of variables.”

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Another mistake of startup owners is to assume they know the solution to the problem before they start, which limits the creative process and closes doors to success. The easiest way to not fall into these traps is to approach your idea with Allen’s “Five Whys” method, she said. Taking yourself down the path of asking yourself “why?” five times can often identify the real problem you’re trying to solve (if there is one) and allow you to think about a solution more broadly.

She used the example of a nonprofit wanting to provide water for a struggling African community to demonstrate the Five Whys for identifying the problem and a solution:

How can a community provide access to clean drinking water for its citizens?

Why does the community need to provide clean drinking water?

Because clean water is in short supply.

Why is clean water in short supply?

Because water sources are often very far from the village and rainfall is not captured.

Why are sources far from the village and rain not being captured?

Because the community has found no efficient and cost-effective means to transport and store water.

Why are there no efficient and cost-effective means to transport and store water?

Because this village doesn’t have the resources to build or purchase commercial systems.

Why doesn’t the village have the resources?

Because the local economy is not growing.

You could certainly continue beyond five whys; but for our purposes, five is sufficient to understand that what we’re dealing with here might actually be an economics problem as well as a water access problem.

Try using the Five Whys the next time you come across a problem at work. It could be that the problem—and the solution—isn’t what it seems.

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This article is part of America’s Entrepreneurs, a Rewire initiative made possible by the Richard M. Schulze Family Foundation and EIX, the Entrepreneur and Innovation Exchange.

Katie Moritz

Katie Moritz is Rewire’s senior editor and a Pisces who enjoys thrift stores, rock concerts and pho. She covered politics for a newspaper in Juneau, Alaska, before driving down to balmy Minnesota to help produce long-standing public affairs show “Almanac” at Twin Cities PBS. Now she works on this here website. Reach her via email at [email protected] Follow her on Twitter @katecmoritz.