This article is part of The Preparation Stage section of 📕 Zero to Sold: How to Start, Run, and Sell a Bootstrapped Business.
When you’re looking at a niche market, you will find many people having a large number of problems. However, people will only pay money for a tiny subset of those: the excruciating problems. You can solve many problems but still fail to build a business if you’re solving the wrong ones.
Your chances of success increase substantially if you find the critical problems in your market and solve one of them better than anyone else.
So, how can you find the most painful problems?
You will need to take a close look at the work that is being done in your niche. You’ll need to talk to people, get them to tell you about the things that keep them from being where they want to be. In those conversations, you will want to listen more than you talk.
Painful problems have specific properties that you can look for. We will look into the types of pains, the intensity and awareness of problems, and what questions to ask your prospects when you’re trying to find the most painful problem in a market.
- The Kinds of Pains to Look For
- Different Levels of Problem Intensity You Will Encounter
- Do They Know? The Problem with Problem Awareness
- How to Find the Unknown Unknowns
- Other Places to Look
- A Word About Competition and Expertise
- What Questions to Ask a Prospect
The Kinds of Pains to Look For
Every person experiences some level of the human condition at any given point of time of their lives: we have aspirations, goals, conflict, struggle, and hardship. We all have a place where we want to be and things that are in the way of getting there. That’s where we feel pain. Your job while researching a niche is to find these pains and where they come from.
Pain can come in a million different shapes, but its underlying reasons can be grouped into three categories: Time, Resources, and the Self.
Most productivity-related issues cause temporal pain: people feel like they’re wasting time. These pains are caused by suboptimal processes and friction between tasks. If tedious work takes a lot of time, it keeps you from doing important and useful things instead. That leads to time mismanagement and relevant actions not being taken. By solving the time-related problem, productive tasks can be accomplished faster and sooner.
When people complain about inefficiencies, tedium, or pointless work, you’re looking at a time-related problem.
People hate wasting money. Anything too expensive for the value it creates is a big problem for the person and the organization. Often, existing solutions are too costly, which will cause them to feel like a painful expense. Regulation imposed on an industry can make certain activities prohibitively expensive, both financially and from the amount of work that will need to be done. Resources are not just money: capital is only as useful as the people it’s compensating. Human effort can easily be wasted, creating a resource drain. Solve these resource-related problems, and free resources can be allocated more efficiently.
If you hear people complaining about a waste of money, prohibitive costs, compliance, or the wrong people working on the wrong things, you’ve found a resource-related problem.
This group of problems is often overlooked. Everyone wants to be notable somewhere. This can mean holding a position in a company or being regarded as a supportive co-worker or friend. When people struggle with achieving these things, they feel self-related pains.
The four essential concepts to look out for here are Reputation, Accomplishment, Advancement, and Empowerment.
Reputation is a measurement of trustworthiness and expertise. People want to be regarded as a source of knowledge and reliance. Anything that creates uncertainty or doubt of someone’s skill can be considered a self-related problem. You can help people be more reputable by transferring renown from a trusted source, through certification or credentials.
Accomplishment is a measurement of success and respect. People want to show to the world that they are good at what they are doing. Anything that suggests or risks setbacks or failures will be a self-related problem. You can help people accomplish more by reliably taking over their tedious work to allow them to be creative and practice their ingenuity.
Advancement is a measurement of progress and alignment. People don’t want to stand still, and for life-long learners, advancing towards new opportunities is an integral part of their journey. Helping people advance might have exciting consequences: in some cases, assisting people in earning more money might elevate them out of the job they’re currently doing. Many factors, including political ones, cause advancement problems. You can help by making sure that the quality of work and access to information are as good as they can be.
Empowerment is a measurement of meaning and liberation. It is a second-level version of advancement: helping other people succeed. People want to support other people, and helping them do that will result in a higher reputation, build a network of trust and mutual support. Restrictive permissions and inflexible processes usually cause problems of empowerment.
Different Levels of Problem Intensity You Will Encounter
Problems come in on an intensity spectrum. Some are a bit annoying, and others are excruciatingly painful. An excellent course of action is to note your perceived intensity for every problem you encounter. To determine this intensity, I recommend applying the Eisenhower Matrix that is usually used for feature prioritization.
The most intense pain is felt when the problem comes from a task that is both important and urgent. Such a task can’t be deferred or delegated, which makes it a direct and noticeable pain. If you can solve this problem for your customers, this is the best kind of problem to have: it will occur often, needs to be dealt with, and it will be important every single time. Consequentially, your solution will be required all the time. Even a small improvement over the status quo will make a product worth some money.
The second-best problems to find are tedious. Those are not as urgent, but they are important. A solution to this problem will still have high customer retention as long as it makes the job significantly easier.
In third place, we find pressing tasks. Here, it becomes difficult for people to justify spending a meaningful amount of money on a solution. There might be valid reasons every now and then when time is particularly tight, but most of the time, resources are better allocated to essential parts of the work. Your service will need to be either very affordable or do an extremely remarkable job of getting the pressing work done faster.
Finally, we have the annoying little issues. Services that solve non-important and non-urgent problems are likely to be regarded as a luxury, and their costs will be scrutinized at all times. Most people will just do the work when they find time for it, often delegating or indefinitely deferring it. Targeting such a problem will lead to high churn and high customer acquisition costs. Nobody pays you to find their remote when it falls into the couch. They will just find it themselves.
You will want your product to be the main course instead of a side dish. You want your service to be the last subscription that gets canceled when budgets are shrinking.
Do They Know? The Problem with Problem Awareness
When you’re doing interviews with customers, you will hear them talk a lot about the problems that bother them. These are the known knowns. But your prospects will never be able to tell you about the issues they don’t realize they have.
At FeedbackPanda, we ran into this situation right at the beginning. Some of our prospects were not aware that the time they were spending writing the same texts over and over again was a problem. They had gotten used to doing this over the years, and it became a regular part of their routine. It took us a while to notice that these people would not be actively looking for a solution, because they thought they didn’t have a reason to.
We fixed this by spreading awareness of the problem. Our early customers helped us a lot with that, speaking out on social media about how they felt this to be a problem and how happy they were that someone solved it for them. Over time, this turned unaware teachers into enlightened customers.
The Prospect Awareness Scale by Eugene Schwartz from his seminal 1966 book Breakthrough Advertising provides an excellent introduction into customer awareness levels.
You start with the Completely Unaware. They don’t know that they have a problem, they don’t think of solving it, and they don’t know that your product exists.
They turn into Problem-Aware once they notice that something is not working as it should. They still don’t know how it could ever be solved.
Once they do, they are Solution-Aware. They know that somewhere out there, someone has a solution. They heard that their colleagues use services to solve their problems, but they don’t know which.
Product-Aware prospects know which services exist in the market, and they are looking into which one is right for them.
Finally, the Most Aware know exactly what you’re selling, they know it will solve their problem, and they’re now just waiting for a good deal.
What does this mean for you, the entrepreneur looking for a critical problem to solve?
It means that while the Problem-Aware will be a great source of potential problems, the Completely Unaware should not be overlooked. Many problems are known to the people in their industries, but the unknowns are just as important.
As a software entrepreneur, you will be transferring your skills and knowledge from one domain to another. This will be beneficial to the detection of these unknown unknowns. People who work in a specific field without ever looking outside it will develop occupational blindness. They don’t find much opportunity to take an outside perspective, leaving significant detection gaps in the spectrum of problems they perceive.
How to Find the Unknown Unknowns
You need to look for Problem Avoidance: where do people go out of their way to not do a certain job without describing it as a problem at the same time? Where do people “automate” their jobs with tools that, from your perspective, seem inadequate for the task? Where do they build makeshift solutions?
There is a common trope in SaaS, stating that every Excel Sheet is a SaaS business waiting to happen. There is a lot of truth to this generalization. The moment you find people organize data in Excel without making use of the numerical features of a spreadsheet, you are in the presence of a square peg that was pushed into a round hole.
You will find that Excel and Google Sheets are widespread for these “custom solutions” that people build for themselves. If you see folder overflowing with Word documents, you’re looking at something very similar. When the more technically inclined take their makeshift solutions to the cloud and cross-link a bunch of documents only to email links and files to their colleagues, you can be quite sure that there is a problem they themselves might not be aware of.
Remember: users avoid, entrepreneurs solve. Find the things that your prospects steer away from. Find the things that make them feel uncomfortable. Discomfort is a very clear indicator of a hidden problem.
Other Places to Look
There are a few other things for you to look into beyond just listening to your customers speaking about their problems.
You want to be the business that is in the right place at the right time. But what about all those who tried this before you?
What about those who were in the right place at the wrong time? What about businesses that found a critical problem and built a solution just to find that their audience was not ready for it? It’s likely that someone, somewhere, had taken a shot, failed, and moved on.
The challenge is to find their traces. This is best done by flat out asking industry insiders about failed attempts at solving problems. Do they remember the names of products that turned out to be a flop? You might even get the name of people who have since moved into different industries. Keep pulling that thread, and you might find a subject matter expert with a lot of entrepreneurial insight into your niche.
What about the businesses that were in the “wrong” place at the right time? Are there adjacent or comparable industries where a service has solved similar problems? What can you learn from their products and solutions? Reach out to those entrepreneurs as well, as they might have transferable knowledge that you can apply to your niche without encroaching on their territory.
Find the latest popular books released in your niche. Read reviews and summaries, or read the whole book if you have the time. You’ll find concepts and ideas that might not yet have been implemented as a service. This is particularly true for academic papers and articles.
Follow the leaders. In social media, follow the thought leaders and influencers in your niche. See what they are saying, hear what they are complaining, and read the conversations they’re surfacing. Are they saying something controversial that gets a lot of pushback from the incumbents? That is an opportunity for progress that you can facilitate. You can also look into what is being said about competitors to find out what’s lacking about existing solutions.
A Word About Competition and Expertise
Don’t mind competition. There is always a way to create a better product, find a more fitting solution to a problem that people complain about. They would not complain about it if there were a perfect solution. Your job is to build just that. Competition is a frame of reference, a reflection of the status quo. As an entrepreneur, that is only one of many inputs into your product decision.
Great products happen at the intersection of your skills and the opportunities of a niche market you care about. Make the most of your transferrable knowledge. People in the niche are often not even aware of things that are perfectly normal to you and other entrepreneurs. Basic tools for you might be godsends for others. Suspend your views of what is “normal” and “ubiquitous” when you engage in problem discovery. You will find things that pain your prospects for years that you would have solved within minutes.
What Questions to Ask a Prospect
So which questions would you want to ask your prospective customers to figure out their pains? Here is an incomplete list of suggestions to find problems, the underlying reason, and the roadblocks that will need to be pushed aside.
- What keeps you from being more efficient at work?
- Why can’t you do more of what you do?
- Which tasks feel like they are a drag?
- What limits you from doing your job the right way?
- Which tasks are the most pointless?
- What annoys you about working with competitive products? What is your experience like?
- Where are you spending too much on tools?
- Where are you spending too much on consulting?
- What is your budget for software tools? What is your budget for outsourcing work?
- What parts of your skillset do you need to work on?
- Which parts of your job do you hesitate to start?
- How do you show your colleagues that you’re an expert?
- How can you help other people succeed?
- Do you share success?
- Is lifting up people something you are expected to do?
- How do you celebrate your victories?
- How much do others see of your work?
- What’s in the way of your next big success?
- What would it need for you to climb the career ladder one more step?
- Where do you want to be professionally?
- How can you reach financial security and stability?
- Where do you see yourself growing towards?
- What challenges did you have in your professional career?
- Avoidance Detection
- What part of your job do you loathe?
- What tasks do you delegate the most?
- What tasks should not be part of your work?
- Is there anything that seems utterly needless in your day-to-day work?
- If you wanted to shock the whole industry, what would you change about it?
- Problem Awareness
- Which is your most pressing problem?
- Which is your most painful problem?
- Which is your most tedious problem?
- Other Places
- What products were introduced to the market that ultimately failed?
- Was there ever someone who wanted to solve problems for you? What happened to them?
For any question, listen intently to their answer, then probe for and write down the problem, the intensity, the underlying reason for the problem, and their awareness of both problem and solution. Make a list for every single prospect you call, and merge all of those lists, counting problem occurrence for every problem that was mentioned multiple times.
When you’re revisiting this final list after the conversations, rank your notes by descending intensity. The most critical problems will be on the top of that list. It will likely have been mentioned a few times too.
You will still need to validate the problem with your prospects, which I suggest you do in a follow-up call to a random subset of them. This allows you to verify that the problem is real, they are or have become aware of it, and they are interested in solutions.
Assuming that you have validated your audience and made sure that your niche can support your business, you have now found one or many critical problems that are very likely to allow you to build a sustainable bootstrapped business.
Pick the problem that you feel most passionate about.
Now you can begin working on your solution to that problem.