with half a dozen entrepreneurs in a room next to a blackboard, a thousand business ideas are generated in a couple of hours. It's the nature of entrepreneurship: our brains are wired to keep watch What could be better y how that gap in the market can become an opportunity. In other words: ideas are cheap, and nothing is so amazing that it can't be improved. However, not all problems are worth solving.
There are two common issues with the "problems to solve slide."
- Some founders are tempted to get into the weak spots on this slide, explaining the competitive landscape, market size, customer segments, value propositions, and more. I understand the temptation: Problem formulation touches on a lot of aspects of the business, but this is not the time or place.
- The other common pitch deck problem is absence of a "slide of problems to be solved". This is particularly often the case with founders who think their solution and product slides are so good that the problem itself is obvious, and a slide talking about it is redundant. That is an error. Even if the problem is universally understood, it's helpful to see how a founder frames the problem.
There are some elegant ways to do it. You have to have a proper approach.
What is the problem to solve
Being able to clearly outline what the problem is is a crucial first step in explaining why customers might want the solution. Explaining succinctly and clearly what the problem is can be surprisingly difficult for some companies, while others have a much easier path to a problem statement.
Some examples:
Now, we can argue about what is the size of the market, the customer segment and the sensitivity of each of these problems, but all of the above are real problems that companies are working to solve.
- Internet connectivity is poor in many parts of the world. (Solution: satellite access point of iridium).
- Satellites, once launched into space, either get stuck in their predefined orbits or need to carry complex propulsion and fuel systems with them. (Solution: space tugs atoms).
- Training staff is difficult and expensive to do consistently. (Solution: The VR training platform of gemba).
- Dry cleaning is inconvenient and slow. (Solution: The home dry cleaning robot from At).
Smoothies and protein shakes separate after 20 minutes, so having them at the gym is tough. (Solution: BlenderCap.)
Now, we can argue about what is the size of the market, the customer segment and the sensitivity of each of these problems, but all of the above are real problems that companies are working to solve.
Who has the problem?
However you choose to frame your problem statement, someone is experiencing the problem you are addressing, and it helps explain to your investors how you are thinking about your user base.
Attention: do not go too far into the obstacles at this point; If you need to break down several different customer segments, that might be what a user persona or customer archetype slide is for. If you feel the desire to sustain the marketing vision, then your go-to-market slide is the right place for it. In broad strokes, though, you'll want to give your investors an overview of what you're doing here.
You can tell this story using just one example: "Linda often works on the road, but she can't always get reliable internet." Or in hinting at the size of the market: "20% of all home workers lose productivity due to unreliable internet." The direction you choose depends on how you tell your overall story; Some narratives work best with a single example that follows the story of the startup you're raising money for from slide to slide.
How are you currently solving this problem?
It's pretty rare that a startup runs into a real problem that people aren't currently solving in any way. In fact, anytime I'm presented with “people aren't currently solving this because there isn't a solution” on a pitch deck, it's a huge red flag. If people aren't experiencing enough pain to solve the problem, why should they start solving it now?
For the Ember smart mug, for example, the problem could be "my coffee gets cold when I'm working." There is an existing solution: make new coffee or put your mug in the microwave for a few minutes. The first one takes a few minutes and is a waste with your coffee. The latter takes a minute but can mess up your workflow.
Here, we can argue about whether anyone really needs an electric coffee mug (I have one, use it every day, and love it, but I'm a particularly advanced weirdo), but the point is: Ember can clearly point to a problem that many people are experiencing and for which solutions exist. The question is: "Is Ember's solution better enough than the existing solution that people are willing to pay $130 so they don't have to stumble over the microwave every two hours?" That's a market size and marketing question; don't waste your time with that on this slide, that's a different part of your narrative.
What are they willing to sacrifice for the new solution?
Assuming that clients are found who have a solution at this time to the problem posed, it is necessary to discover that they are willing to sacrifice to "solve" your problem the way the startup poses. Some problems are solved with money. Others resolve themselves over time. Others again are resolved with discomfort or suffering pain without solving the problem.
Imagine having to send a letter. The solution to writing an address on the envelope is simple: use a pen.
If it escalates to having to send 30 letters. You could use a pen, but now you may want to load your envelopes into a printer and use a mailing software package to print each envelope.
If we are already in sending a hundred letters. Maybe a label printer is starting to make more sense because envelopes jam in home printers with frustrating frequency.
Ten thousand letters? Better change tack: It's time to start outsourcing and using a direct mail provider. It's a huge financial outlay, but letting machines handle the printing and shipping makes more sense than stuffing the envelopes by hand.
The opportunity for a startup is to solve a problem in a way that is, in one dimension or another, better than existing solutions. That doesn't necessarily mean it has to be cheaper or even faster or smaller or more convenient than existing solutions, but it does have to be more "fit" for the target audience than your current options.
What improvements does the way the problem is currently being solved have
User research is an essential part of your customer discovery journey. It's helpful to talk to many different customers about how they solve particular problems.
State that the “problem” you are solving is that the offices look sad and lifeless. The solution he came up with is a fancy way to grow plants hydroponically in a way that looks beautiful and requires very little maintenance. To figure out if that makes sense, you need to learn a lot about how offices currently deal with plants.
Some offices have an office manager who buys plants and sometimes waters them. That only works if they remember to water the plants and know enough about plants to choose the right ones based on the temperature and lighting in the office building. Some offices are effectively "leasing" the plants, and the service contract comes with someone looking after them. Other offices may have landscapers on staff. Some may decide to ask for posters with pictures of plants or to use silk or plastic plants.
All of these solutions have their pros and cons; price, convenience, longevity, sustainability, etc. Consider all of them and perhaps highlight the one that is most relevant to your value proposition. Be careful again, though: Your full competitive breakdown goes on the competition slide. Your fully differentiated market segmentation goes on the merchandising slide. And if you have a different value proposition, you can also split it into a specific slide.
some good examples
As part of your own experience, there are some amazing slides like this. Here are some examples:
forethought
Forethought Problem Solving Slide for Your Serie C.
The problem with bad customer service is that it costs a lot of money. No more arguments are needed that this is a big problem. The forecast elegantly hints at the size of your market, along with the problem (and a bit about your value proposition).
Alto Pharmacy
The problem raised by Alto Pharmacy is resounding and based on verifiable data.
Alto Pharmacy skews towards inefficiency and waste as the biggest problems in its US market, with 90% of prescriptions being picked up at retail pharmacies, 33% of prescriptions never being picked up, and an NPS of -5 for the largest pharmacy, which means, well, there's a lot of room for improvement.
Dutch
Dutch makes an elegant statement of the problem.
Dutch takes a different approach, highlighting the high cost and inconvenience of going to the vet. He also defines his audience (“pet owners”) and a value proposition for vets.
Think about the size of the company, not the size of the product
In the context of fundraising, remember that a feature is not a product. You can create a tool to help people write canned responses to their emails. “Tom sends 900 emails a day and finds that he often says the same things over and over again. He's copying and pasting pieces of text from a Word document he created, but that's not efficient.”
At first glance, that's a real problem worth solving. But is Tom willing to pay for it? Creating it as a separate company might make sense. Still, it's hard to imagine it being a multi-billion dollar company. If it's successful enough, other companies will launch template systems for an email in their core offering. At that point, your business will become irrelevant overnight. Namely, Gmail has built-in templates, and most customer relationship management (CRM) software also has built-in snippets and templates.
Use great examples
When telling the story of the problem, it helps to have a few examples of how people are currently solving the problem: "Company X had to hire four full-time employees and buy $50,000 worth of telecommunications equipment to set up their SMS infrastructure" is a great way to bring Twilio to life.
“For your web store, running server hardware is painful and unpredictable. If you have a sudden spike in traffic, it can take weeks to get additional capacity and you could lose millions of dollars because web pages are unavailable,” is a compelling argument for Amazon Web Services (AWS).
“Linda needs to hire an assistant to handle her workload” makes an excellent argument for automatic account reconciliation and reminder sending software solutions.
Your job as a founder is to paint a strong and realistic picture of the problem you are about to solve, explain the pressing need people have to address the problem, and give an indication of how prevalent the problem is. Don't forget to include the risks or costs of what happens if the question remains unresolved. If your "problem slide" meets all of those requirements, you're on the right track.
