Solving The Wrong Problem
In August 1989, Pepsi had an idea for a new product. They wanted to move into the breakfast space and created a soda that had 25% more caffeine than regular Pepsi. Their new product, Pepsi A.M., was positioned to compete with coffee and convert coffee drinkers to Pepsi.
You haven’t heard of Pepsi A.M.?
Well, that’s because after a year of testing they canceled the product. Sales were slow and many consumers reported the beverage tasting flat. Pepsi learned and demonstrated the number one reason small businesses fail: No Market Need. 42% of startups fail because the market does not need what they’re offering.
Pepsi quickly learned that they were trying to solve the wrong problem. This leads to failure because businesses are attempting to solve a need that is not there. This obviously wasn’t catastrophic to a large company like Pepsi because they have the capital and resources to absorb this type of failure. But for a small business, who doesn’t have these resources, it can be lethal.
As an entrepreneur, having an idea for a new business is probably not your struggle. However, do you always have confidence in the ideas you choose to pursue as a business? Would you like to have a good idea of whether or not an idea is worth investing your time, dollars, and emotions into? Here are five indicators that can help you determine if your product is solving the right problem.
5 Indicators You’re Solving The Wrong Problem
1. You Think You’re The First Person To Think Of The Idea
Great ideas are almost never brought to life by the first person to think of them. There are generally multiple iterations of an idea and product before it truly becomes the market solution. Be careful if you think you have a “home run” idea and there’s nothing similar in the market. There’s a good chance that you’re not the first person to have the idea, and the lack of product in the market may be a result of the lack of need. To prevent solving the wrong problem, make sure that you’re solving a problem that people are already paying to solve.
2. It’s Nice, But Not Necessary
Do you remember watching the Jetsons growing up? Do you remember how they had fancy machines do all their work for them? Why haven’t these inventions become part of our daily lives? It’s not a technology problem. It’s that these products are nice to have but not necessary.
The CEO of Tellwise, Conrady Bayer, said, “Innovation has to be useful. It’s an area where entrepreneurs often make mistakes. They confuse novelty and utility. Just because it’s new doesn’t make it useful.”
Let’s go back to the example of the Jetsons, and a robot brushing George Jetson’s teeth. The problem in the marketplace is not putting in the energy to brush your teeth. Yes, it would be nice to reduce the amount of energy spent in this activity, but consumers have routinely shown they’re more willing to spend money on products that reduce cavities and whiten their teeth. The self-brushing robot is nice to have but not necessary.
3. You Have Limited Knowledge Or Experience In That Industry
Disclaimer: There’s nothing to say that this cannot happen. At times it does with great success. However, it is extremely rare to solve a pain point without personally feeling the pain. Without first-hand experience, the solution can only be addressed at the surface level. A surface-level solution will never resonate deeply with the consumers feeling the pain you’re attempting to solve.This will make it difficult to move them to action. Also, limited experience in that market may be the reason you can’t understand why your solution will not work, and you’ll end up solving the wrong problem.
4. The Idea Is Reliant On A Current Fad
Fads can be exciting and feel like the next big thing. However, they’re unreliable when it comes to building a sustainable business. This is another example of the difference between novelty and utility. Take the time to analyze if a product or service is “fun” or if it solves a deeper need for the market. If it’s just fun…then stay away.
Bottom line: if something is a fad, don’t go building a long-term business around it. Rather, build a business around sustainable trends that can support your business well into the future.
5. It’s Been Tried Before And Failed
DON’T BE A SUPERHERO. Take a moment and reread that first sentence.
As an entrepreneur, it’s natural for you to think that you can make an idea work. Fight the urge to spend too many resources in areas where others have failed. To be clear, just because a business has failed does not mean that it will fail again. It is a warning to perform your due diligence and make sure there is truly a need.
Remember, people, vote with their wallets. If the market is not purchasing the product or service then they’re voting that it is not necessary. Your business should either solve an already-existing pain point or fulfill an existing desire. For example, people may not have been able to imagine an automobile before it was shown to them. However, there was a desire to get places faster than by horse and carriage. The automobile filled that desire and changed transportation forever.
Pursuing your next big idea to change the world should be purpose-driven and not fear-driven. The entrepreneurial journey is a faith-based game. Meaning…you can only see two or three steps ahead of you in the journey to the top of the mountain. It’s crucial to have a support system around you that can encourage, guide, and foresee potential dangers for you.
Don’t get caught solving the wrong problem. Being in a mastermind group can provide all of these for you. You surround yourself with like-minded people, and many are further along in the journey than you. They’re able to share their wisdom and help you avoid the pitfalls in the journey.