Deciding which market problems to solve for your target market
Identifying market problems
After you have interviewed potential users of your product and reviewed the results, the next step is to understand their common problems, which are also known as market problems. While your target market’s problems might be stated in different ways, there could be recognizable patterns across the data. Look for common themes or attributes across all interviews.
Market problems are your target market’s stated or silent problems. This could refer to existing inefficiencies, awkward workflows or non-optimal solutions. The key to finding a market problem is to listen for frustrations, or “if only” statements, that arise during interviews.
Market problems: Example
If you had a gardening tools business, you would interview gardeners to identify problems that occur on the job. One problem could be that paper yard bags do not stay open while people are weeding.
While your interviewees might say, “I need a better paper bag,” the bag not staying open is the market problem. You might choose to solve this problem in a number of ways (for example, using a different material, installing a paper bag ring); however, discovering the actual problem (that is, the paper bag won’t stay open) is the most important aspect of this exercise.
How to evaluate market problems
Evaluate the identified market problems by asking (and answering) the following questions.
1. Is the market problem urgent?
Once you identify a problem that applies to the market, ensure that potential and existing customers actually care about the problem. Is the perceived problem actually urgent? Will customers care if the problem is not solved? Do they have another way to solve this problem?
2. Is the market problem pervasive?
Determine if the identified market problem applies to a significant percentage of your target market. Use quantitative research to collect the data. Methods of data collection include surveys, census information and other primary market research. This can be accomplished without investing significant resources. Use free survey tools (for example, SurveyMonkey) and your personal network (depending on the target market) to collect a large amount of quantitative data.
3. Will your buyers pay to have this problem solved?
If the problem is significantly urgent and pervasive, chances are good that customers would agree to pay for a solution. The next step would be to understand how much they would be willing to pay for a solution to this problem. This can be achieved by conducting surveys or additional interviews with your target market. (To understand how to price a product, read the article, Pricing).
Note: If you answered “Yes” to all of the preceding questions, then you will have identified a problem that is worth solving. Be sure to investigate whether your competition is already solving this problem, otherwise you might not have a competitive edge in your market.
Stull, C., Myers, P. & Scott D.M. (2008). Tuned In: Uncover the Extraordinary Opportunities that Lead to Business Breakthroughs. Hoboken, New Jersey: John Wiley and Sons.