Asking, “What problem do you solve?” has become a popular way for investors and potential business partners to solve a problem they themselves face. When evaluating a company for investment, they must discern if it’s created a solution in response to an unmet need in the market—or if the founders have become enamored by “a solution in search of a problem.”
The former allows for the effective analysis of market potential and creates a firm footing for the business, while the latter is akin to funding scientific research. Sure, the business could turn into something someday, but you’d be investing in speculation; it’s a very different kind of investment requiring an even larger upside potential to fund the risk.
To uncover real value, we suggest you change the focus to what the customer values.
Stop Focusing on “Problems”
While focusing on solving problems has its benefits, it glosses over two more valuable pricing positions....
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