Solving Problems vs. Creating Solutions
So you have your business idea. How do you know if it’s a viable one? According to most venture capitalists (VCs), there is an initial set of guidelines or preliminary questions in which your idea must fulfill or answer. You can bet that on the top of that list, the following question will appear:
“Do you solve a real problem?”
Outside investors want to understand exactly how your business will solve real-world problems, and subsequently, how your business will add value to your customers and the world at-large. Obviously, no one would want to invest in a company that is solving a “problem” felt only by 20 people in the world.
I think everyone understands why this question is asked, but is it really the most effective? Are VCs missing out by limiting themselves to unsubstantial criteria? Is “solving a real problem” a narrow-minded thinking approach? I would argue that it is…let me explain.
Take a look at the most successful web and tech companies of late. I would venture to guess that if you asked them the question, “Do you solve a real problem,” their answers wouldn’t necessarily blow away the VCs that asked the question. Instead of solving problems, these companies were more interested in creating solutions. I believe there is a big distinction between the two. And it is my belief that companies should look towards the latter in order to create an innovative, fresh, and meaningful business.
Twitter co-founder Biz Stone sums up my sentiments in one short sentence. He describes Twitter as, “…the messaging system that we didn’t know we needed until we had it.” Now, rewind back a few years when Twitter was being developed. I’m sure if they were to answer the question: “Do you solve a real problem?”, their answers may not have been the most convincing to skeptics. Most likely they would have been met with rebuttals like, “we already have instant messaging“, “people can already text their friends“, or maybe even “nobody cares about what others are doing“. Of course, these critics would come to find out they were dead wrong.
The messaging system that we didn’t know we needed until we had it.
-Biz Stone, describing Twitter
Point is, Biz and Co. did not set out to simply solve an existing problem, but instead, took it one step further and created a solution…a solution to a problem that had not yet been defined.
Same can be said about internet giants Google and Facebook. The fact that Google’s product was simply ‘better’ than the rest hardly meant it solved a real problem. Taking a look at Facebook, the same can almost be said. When connecting with friends and colleagues was in its infancy, the naysayers simply couldn’t understand the need for such a service. Well, Facebook created one. And it doesn’t stop with these great web firms. Nearly all successful services go beyond the conventional “problem solving” wisdom.
So the next time you want to gauge your company’s legitimacy, you may want to start thinking about whether or not your company “creates a solution” instead of it simply “solving a problem”. Doing this will instantly expand your company’s scope and have you thinking laterally, instead of horizontally. When it comes to being innovative:
