In the middle of hype cycles, it's easy to get distracted and forget that entrepreneurship is a powerful problem-solving tool.
When I notice I'm getting caught up in the noise made by the latest trend, I like to get back to the profitable problem-solving mental model¹:
This model is simple yet insightful, and just like any other model, it has flaws. Nevertheless, it explains a lot and helps us re-frame how we see problems — as we, humans, seem to be wired to try to avoid them at all costs.
We can see how this model explains brick-and-mortar businesses reasonably well. Let's look at a toy example:
With brick-and-mortar businesses, the framing is obvious. We can draw the same logical connections if we think about supermarkets, gyms, banks, etc.
Startups are no different. However, the magnetic pull of new technology is so strong that it blurs our vision, and we forget it.
While it is common sense that the first few slides of any pitch deck are devoted to the problem and the market, founders often gloss over them and rush to the solution.
After all, the solution is the exciting part. It is what grabs attention.
The issue is that when a solution is not solving pains and adding pleasure to people's lives, it is hard to convince them to give you their hard-earned money. In these cases, refining the solution (product) won't help. What helps is getting back to the whiteboard and refining the problem being addressed.
Some failure modes of hand-waving your way through problems are building a solution in search of a problem or tackling an occasional problem. (Both mistakes I've already made in the past.)
Problems are assets
I'd like to close this post with a great quote I read in the book "How to make a few billion dollars," by Brad Jacobs.
Brad has started five companies (or seven, depending on how you count), all individually worth more than one billion dollars. In his book, he recounts a conversation he had when he was young with his mentor. He was burdened with problems and began unloading them on his mentor. His mentor listened carefully, then said:
Look, Brad, if you want to make money in the business world, you need to get used to problems, because that’s what business is. It’s actually about finding problems, embracing and even enjoying them — because each problem is an opportunity to remove an obstacle and get closer to success.
Later in the book, Brad says that "problems are an asset — not something to avoid but something to run toward."
I love this framing. "That's what business is."
¹ I can't cite the source of this mental model but it's also not original. I came up with it by stitching together ideas I read in books and common sense startup advice. I'm calling it "profitable problem-solving" because I find it easier to remember if I give it a name.
² The idea that we are deeply influenced by this dance of pain and pleasure is a central pillar in many lines in psychology. Many philosophers also came across this idea, such as Epicurus and Jeremy Bentham.