Everything You Wanted To Know About Problem Statement for Startups

All startups solve a problem, but only a few talk about it when asked what problem they are solving. Counterintuitive but true. In their zeal for the solution to the problem, startup founders tend to become preoccupied with their product, so much so that they lose sight of the very problem that prompted them to find the solution in the first place.

Not remembering the problem you are solving is itself a problem. Your product may be your labour of love, something you attach a lot of emotional value to. But your target customers may not feel the same way about it as you do. For them, it has value only and only if it solves a problem that bothers them or fulfils a need they have. What they want is not a product that is up for sale but a solution that solves their problem.

This brings us to the question as to what a startup problem statement is.

A problem statement is a statement – one sentence long generally, or two to three sentences long at the most – that describes in very clear and specific terms a customer need or pain that needs to be addressed. It should answer the questions: What is the problem? Who has this problem? Why is it a problem?

Here’s a startup problem statement example:

Last-mile delivery costs form about 53% of the overall delivery costs in the logistics supply chain. Unless last mile delivery is optimized, profits could potentially decline by 26% in the next three years.

A problem statement makes no reference to the solution, focuses on the biggest problem bothering the target customers, and emphatically brings out the pain associated with the problem. Given below is a compilation of oft asked questions about problem statement. Let us know if we answered all your questions or if some of them still remain unanswered by leaving a comment in the comments section.

Startup Problem Statement Q&A

Q: Isn’t selling a product the same thing as solving a problem?

A: They do appear to be the same thing but they aren’t. When you are out solving a problem, your attention is focused on the problem. When you are selling a product (solution), your attention is focused on the solution.

Unless your product solves a problem that causes pain for a large number of people, it is not going to find very many takers, no matter how innovative or awesome it is. Haven’t we all been to trade fairs that showcase a variety of cool gadgets or fancy products that amuse people but never become mainstream? There, you get the drift.

Q: I know the problem my startup is solving very well. Why do I need to write it down as a problem statement?

A: Having your problem written down in a clear and concise manner has many benefits. It makes for an indispensable part of your pitch to investors. Investors want to know how big and critical the problem you are solving is. If you can’t make a convincing case for it, your startup idea may come across as a solution looking for a problem. With an approach like that, the chances that you can get the investors interested are slim.

The problem statement is not just for you and the investors. It is also for the members of your team. It’s a guiding light that keeps the team on the right track as your startup grows from one stage to the next. Besides, with a well-articulated problem statement, the task of writing down your value proposition – another statement you can’t do without – becomes a lot simpler.

Q: There are several problems my startup is tackling for our customers. I am not sure which one matters most to them. What’s wrong with having a generalized problem statement?

A: The problem with having a generalized problem statement is that it takes the attention away from the real problem you had set out to solve when you founded your startup. It’s great if you solve multiple problems with your product. But your success will lie in how well you solve a problem instead of how many of them you solve.

The idea behind a problem statement that is to the point is not to ignore the other related problems. It is simply to have razor-sharp focus on the main problem for which customers are seeking relief because that is what will help you find the product-market fit.

Q. Our product caters to many kinds of customers with many kinds of problems. How can I have a problem statement focusing on just one problem?

A: First things first. You don’t write a problem statement for a product. You write it for a problem.

Your product may be bought and used by many kinds of customers; that happens all the time. But you sell your product only to your ideal customer – your target customer.

Your target customers are a specific group of people – who share common characteristics like age, location, language, income, lifestyle, interests, and behaviours – and are most likely to want and buy your product. Why? Because your product solves a problem or a need they have. This specific problem that your ideal customer has is the problem that should go into your problem statement.

Q: I get the point about having a problem statement. Why can’t I include the solution in it? It is what motivates me to keep going forward.

A: The problem statement is not the place to talk about the solution. The value proposition is. Your solution/product will keep evolving as your startup moves towards achieving product-market fit. Your solution (product) is not constant; what is, is the inspiration (customer problem) behind it. Which is why the problem statement keeps the solution out.

By keeping all the focus centred on that one main problem or need that your target customer badly wants a solution for, the problem statement acts as a compass that guides you through your journey to product-market fit and beyond.

Q: When is the right time to write a problem statement for my startup?

A: The problem you are solving is the foundation of your startup and so is the problem statement. Working your way backwards from the solution to the problem will make your problem statement look muddled because it will be tough for you to detach yourself from the solution. Besides, you will likely have discovered a couple more problems by then, which you will feel tempted to give room to in your problem statement.

The right time to have your startup problem statement in place is at the end of the Customer Discovery phase, one of the purposes of which is to test whether you have found a problem that customers want a solution for.

It is far from ideal to write the problem statement for your startup as an afterthought. But if you haven’t created one yet, it’s better to invest your time in writing it down now rather than go on without having one at all.