99 Problems But An Idea Ain’t One
I am a man with too many ideas. Not a day goes by that I am not hit by some epiphany that leads my mind down a path of hypotheticals. I immediately begin testing the idea of the day against my innate principles. Would this be possible? Would it be profitable? Would people want this good or service? Would I want to give a significant portion of my time to this pursuit? Is the idea good enough to replace one of my top five priorities? While all of these questions are important, I recently have been pondering a different question that I find eye-opening when analyzing a new idea:
What problem does your idea solve?
A problem is defined as a situation regarded as unwelcome or harmful and needing to be dealt with and overcome. Problems cause headaches—and lead to a desire to get rid of those headaches. Generally, the greater the pain and the more people experiencing it, the more upside opportunity there is in solving that problem.
Now here is where things get tricky.
Quite often the people with the problem are not aware that they have a problem. For example, today over 60% of hotel bookings are made online, a major change from earlier this century. Back then, do you think customers were aware of what a waste of time it was to go through a travel agent or spend hours calling hotels to compare rates? Do you think that hotel owners were aware of how much money they were losing through antiquated yield management systems and advertisements with no clear ROI. In both cases, the answer is probably not. Between the customers and the hotel owners, the majority of the stakeholders were not conscious of their problem.
With that said, there were some who were aware and a select few that decided to take action to solve the problem. The select few, who combined awareness with action, are the people who were rewarded. Those that solved the online travel problem continue to reap tremendous rewards. I was amazed recently to learn that Booking Holdings, the parent company of Booking.com, Priceline.com, Kayak.com, Cheapflights, Rentalcars.com, and OpenTable, has a market capitalization of over $95 Billion Dollars, more than WeWork and AirBNB combined.
Awareness + Action = Reward
The follow-up question to “What problem does it solve?” is “What is the value that customers will place on solving that problem?” Quite often I tip the maître d’ at busy restaurants to get a table. I have often heard this referred to as a “twenty-dollar problem.” It is amazing how many problems can be solved with a twenty and even more amazing how quickly those twenties add up when people feel they are getting high-value solutions. Your intention should be to solve a small problem, at a low cost, often, or solve a large problem, at a high-cost, less often. On the rare occasion that you find a large problem you can solve at a high-cost, often, GO ALL IN. An example of this would be the real estate boom in Brooklyn. The problem was the lack of affordable space in Manhattan. One of the primary solutions was to move to Brooklyn. Many people made their fortunes by providing the solution, lots and lots of high cost real estate and related services in Brooklyn.
To paraphrase Jay Z: If you’re having girl problems I feel bad for you son, I got ninety-nine problems and all you got to solve is one.