This guest post was contributed by Uri Levine. Uri is a passionate entrepreneur and disruptor, a two-time ‘unicorn’ builder (Duocorn). He is co-founder of Waze, the world’s largest community-based driving traffic and navigation app, which Google acquired for $1.1 billion in 2013, and former investor and board member in Moovit, ‘Waze of public transportation, which Intel acquired for $1 Billion in 2020. Levine also heads the “The Founders Kitchen,” a company-builder fund. His new book Fall in Love with the Problem, Not the Solution – A Handbook for Entrepreneurs, from which this excerpt was taken, comes out next week!

***

Building a start-up is very much like falling in love. In the beginning, there are many ideas you could pursue. Eventually, you pick one and say, “This is the idea I’m going to work on,” much like you might go on many dates until you eventually find someone and say to yourself that this person is “the one.”

At the beginning, you spend time only with that idea. This is when you think of the problem, the users, the solution, the business model—everything. Just like you only want to spend time with your new loved one as you begin falling in love. When you finally feel confident enough, you start telling your friends about your idea, and they usually tell you, “That will never work,” or “That is the stupidest idea I’ve ever heard.”

I’ve heard that many times. I think that people don’t say that to me so much anymore, but in the beginning, they used to say it a lot. Sometimes you take your date to meet your friends for the first time and they say, “That person is not for you.” 

This is usually when you disengage from your friends because you are in love with that idea, you are in love with what you’re doing, and you don’t want to listen to anyone else.

The good news is that you are in love, and you don’t listen to them. The bad news is that you are in love, and you don’t listen to them. But this is the reality, and it’s relevant for many aspects of your life. If you don’t love what you’re doing, do yourself a favor and instead do something you do love, because otherwise, you’ll sentence yourself to suffering. You should be happy!

It can be detrimental to ignore what others are telling you. Maybe your friends, potential business partners, or investors had something important to say and you didn’t listen! But, at the same time, you must be in love to go on this journey. It will be a long, complex, and difficult roller-coaster ride. If you’re not in love, it will be too hard for you.

IDENTIFY A BIG PROBLEM—ONE THAT’S WORTH SOLVING

Start by thinking of a problem—a BIG problem—something that is worth solving, a problem that, if solved, will make the world a better place (ed: you should always be looking for problems). Then ask yourself, who has this problem? Now, if the answer is just you, don’t even bother. It is not worth it. If you are the only person on the planet with this issue, it would be better to consult a shrink. It would be much cheaper (and probably faster) than building a start-up.

If many people have this problem, however, then go and speak to them to understand their perception of the problem. Only afterwards, build the solution. If you follow this path, and your solution eventually works, you will be creating value, which is the essence of your journey.

If you start with the solution, however, you might be building something that no one cares about, and that is frustrating when you’ve invested so much effort, time, and money. In fact, most start-ups will die because they were unable to figure out product-market fit, which in many cases happens when focusing on the solution rather than the problem.

There are many reasons to start with the problem, in addition to increasing the likelihood of creating value. Another key reason: your story will be much simpler and more engaging; people understand the frustration and can connect to that. Companies that fall in love with the problem ask themselves every day: Are we making progress toward eliminating this problem? They tell a story of “This is the problem we solve,” or, even better, they narrow it down to “We help XYZ people to avoid ABC problems,” whereas for companies that focus on the solution, their story will start with “our system . . .” or “we.” If the focus is about you, it will be much harder to become relevant. If the story is about your users and a focus on the problem, it will be much easier to gain relevance.

WHAT IS THE PROBLEM YOU’RE TRYING TO SOLVE?

The key theme of my book is “fall in love with the problem, not the solution.”

A problem is easily defined. When you tell someone about it, that person should say, “Yeah, I have that issue as well!” In most cases, people will tell you their version of the problem and how frustrated they are when it happens to them. The more you hear other people tell you their version of the problem, the more you know that people perceive the problem as real, which means the perception of your value proposition will be real.

Now, if they describe their perception of the problem, and they also say there is value for them for the problem to go away, we are starting to look at a very painful problem. But before you rush into building a solution, you still need to ask yourself—and then validate with people who face that problem—either how painful it is (how much value there is in solving that problem) or how frequently they encounter it.

If you solve a problem people face daily—and, if possible, a few times a day, like during their commute to the office and back—you are on to something big. When Google was in dialogue with us about acquiring Waze in 2013, their CEO Larry Page said that Google is interested in a “toothbrush model”—something that you would use twice a day, which is exactly what Waze is.

Problems fit into a matrix with two axes: Total Addressable Market (x-axis) & Pain (y-axis)

When thinking of a problem, look at this two-by-two matrix and ask yourself two questions:

1. How big is the addressable market? How many people have this problem? How many businesses suffer from this issue?

2. Then ask yourself the more important question: How painful is it? Pain can be measured by one or both of two factors: amplitude (really, really painful) or frequency (how often we suffer from it). Once you define your problem, go back to the matrix and see where it fits. Let’s look at each of the four quadrants in the matrix.

• “Winners” are easy to understand but hard to find. They’re located in the upper right corner where there are many users and a high frequency of use (value)—think Facebook, Google, WhatsApp, and Waze. If you ask someone how they heard about Waze, it’s most likely through word of mouth, from friends. All successful companies in the consumer space have seen their growth based on friends telling friends. If your product is used at a high frequency, the chance of this happening is dramatically greater because there are many opportunities to use the product and many more to tell others about it.

• “Niche” could be a very successful company, and one with potentially a huge impact for a very few (think of the cure for a rare medical syndrome). Or imagine that you build a marketplace of underutilized private jets. There is a lot of savings in this model, but it is relevant for a very small (and rich) addressable market. Niches have a small addressable market, but their frequency of use or value is very high. These are pretty good companies.

• “Losers” are in the area of the matrix where there are few users and low usage/value.

• “Dreams and nightmares” are the category of the addressable market of “everyone,” but where there is low value or low frequency of use, e.g., a service to renew your driver’s license. While going to the DMV (Department of Motor Vehicles) is always perceived as a waste of time, it only occurs once every five or ten years. People want to believe in their dreams, but in reality, these are nightmares because there is not enough value that can be accessed through the addressable market.

Problems can be measured by frequency of use, the magnitude of the frustration, the alternative cost, or time saved. Whatever the model, the solution may change several times along the way to product-market fit (which, quite simply, means that you’ve figured out how to create value for your users).

The problem, not the solution, is nearly always the key motivation and reason for founding a start-up. Of course, there are successful companies that started without a problem, like the first social media start-ups or online gaming companies, but my approach is always to start with the problem and not with the solution.

Related: Solve The Right Problem
Related: Look Out for Problems
Related: Talk to Other Humans
Related: Enabling Better Decisions Through Emotion-Rich Stories

Join over 11,147 creators & leaders who read Paint & Pipette each week