Like a good magic trick, most big ideas seem obvious in hindsight because they solved a customer struggle (or problem), that was seemingly sitting in plain view. The challenge is that we live our lives forward, not backward.
Fifteen years ago, if you had asked people to rank their top problems with taxis, they would have said rude drivers and dirty taxis. This would have led to a driver train- ing program or a cleaning service, not ridesharing services. How, then are you sup- posed to uncover the right problem worth solving?
In the case of Uber, it’s easy to explain away their big idea as a lightning bolt that came from a key problem/solution insight. Unable to get a cab in Paris during the LeWeb conference, the founders had an epiphany: "What if you could request a ride from your phone?” They scratched their itch, and the rest is history...
Not so fast. The founders’ encounter with the problem occurred in December 2008. But they didn’t immediately work on the idea, and it wasn’t until May 2010 that the founders launched the service in San Francisco.
Ideas don’t typically hit us like lightning bolts but as little sparks.
Most people breeze past big problems all the time. And most scratch-your-own-itch projects don’t become unicorns. How do you systematically uncover big problems worth solving?
That’s the topic of today’s newsletter.
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Finding problems worth solving requires turning your idea spark into deeper Customer-Problem-Solution insights. The Customer-Problem-Solution triad is the foundation that carries your entire business model.
While a good idea can originate from any one of these nodes, I recommend starting with your customer assumptions first. More specifically, go deeper to identify the distinguishing characteristics of your ideal early adopter segment that will become your beachhead market.
A beachhead market is the first market you aim to dominate to establish a solid foundation from which to expand.
The term "beachhead market" is named after the WWII battle of Normandy, where Allied soldiers stormed the beachheads of Normandy, enabling them to dominate one of the most important battles of WWII; without this win, the war may have ended in German victory.
This is where many founders misstep.
They either keep their customer segmentation too broad, making it vague and hard to target. Or they go too narrow and often risk falling into the local maxima trap (too small a market).
Even in the Uber story, while the founders got hit with a starting problem and were able to quickly formulate a possible solution, their ideal early adopter segment was not immediately apparent.
Many customer segments use taxis. But where do you start? Had they targeted ridesharing solely at business travelers or gone mainstream from the start, would they have been as successful or grown as quickly?
You can’t afford leaving your beachhead market to guessing or waiting to see what happens.
There is a better and more systematic way. Here are the steps:
- Run a broad-match study to identify your beachhead market.
- Use a narrow-match study to home in on specific problems worth solving.
- Design the smallest solution that causes a switch.
1. Run a broad-match study to identify your beachhead market.
As the name implies, a broad-match study intentionally targets the larger total ad- dressable market in order to identify your ideal beachhead market using an evidence- based approach.
The best way to do this is through problem discovery interviews where you target recent users of the existing alternative that you’re looking to displace.
In the case of ridesharing, your study could target anyone who recently hired a cab in the last 30 days.
The approach during these interviews isn’t trying to validate a set of predefined problems you present to interviewees or ask them to summarize their top 3 problems. Rather, it’s uncovering why and how they selected, hired, and used the existing alter- native under study.
Many big problems worth solving often lie hidden in plain sight because people build workarounds to their pet peeves with the old way without even realizing some- thing better is possible.
Fifteen years ago, if you were going to hire a taxi for an early morning flight, you might have
- booked the taxi the day before
- woken up an hour earlier than usual
- maybe called the taxi company to reconfirm
- start to get anxious as the arrival time of the taxi approached
- called the taxi company if the taxi didn’t arrive exactly on time
There would be a different set of pet peeves and workarounds (struggles) if you were ordering a taxi after a night of clubbing or a concert.
It only takes 10-15 conversations for patterns to quickly emerge. These patterns can be captured as job stories and ranked.
This is how you use job-based segmentation to map the opportunity space and identify your ideal beachhead market.
2. Use a narrow-match study to home in on specific problems worth solving.
The primary objective of the broad-match study was identifying which customer seg- ment had the greatest struggle. The purpose of the narrow-match study is homing in on just that specific customer segment and more deeply understanding their struggle.
Customer interviews are still the best vehicle for this study but this time your objective is uncovering deeper insights into why people act the way they do.
While people often behave seemingly impulsively (and even irrationally), nothing is random and it’s possible to unpack their actions using a series of causal events and forces (Customer Forces).
These learnings can be summarized as customer forces stories from which you identify more specific problem hot spots (root causes) worth addressing.
3. Design the smallest solution that causes a switch.
Innovation is fundamentally about causing a switch from an old way to a new way. And the best way to cause a switch is to break the old way.
Everything you’ve done up until now has allowed you to uncover customer-centric struggles with the old way.
While it’s tempting to solve all the problems, good products are about tradeoffs.
If you cram your initial offering with too many features, you dilute your unique value proposition and needlessly increase scope.
The art of defining the right minimum valuable product (MVP) is selecting the smallest subset of problems that would create a compelling enough unique value proposition to cause a switch.
