I want to start off with a definition that explains everything about what startup is but the fact is that there is so much to start up that it can’t be defined in just one mere sentence. The way it comes up and the people who are behind are the ones that can actually define their own start up and the fact is that even their definition would not be considered as universal. Just one notion that is common amongst the people who are behind these successful startups is that they are looking for a business model that is scalable and repeatable as well. During this process of looking, entrepreneurs come across certain problem that they feel they can solve but it is important to know what sort of problem they try to base their whole startup on. So stick with me till last so I can share with you how to look for the potential of a startup, through the problem that it is solving.
Problem is Urgent
The word urgency basically refers to a situation or an issue that needs to be answered on an immediate basis. In the business world, to sell some product or a service, it is important that there is an urgency in the consumer’s mind about that problem. At times the urgency of the problem may be not so visible to the consumers, but this is the job of an entrepreneur to make sure that his or her targeted audience is having that urgency in their mind at all possible times. Once this urgency is generated in the mind of the audience, selling becomes an easier part of the job because people are going to pay for the solution that the startup is providing while showing little or no resistance.
Problem is Growing
So, one of the biggest issues that startups usually face is because of the creativity itself, I won’t totally blame them on this. I know creativity can be really fascinating and capturing at times. So, what really happens is that young entrepreneurs get so much involved with their creativity that they forget about any other factor that can affect the performance of a startup. To avoid this problem, you need to make sure that your creativity is working parallel to the problem that is prevailing in the market. You need to make sure that people are demanding what your startup is providing a solution to and not just this, but you also need to make sure that this demand is increasing soon and if that is not the case then you must come up with a way that you can increase the demand amongst the consumers.
Analyzing and Defeating the Competition
There can be instances where the problem you are trying to solve is not supposed to occur again and again for the consumer or worse, it can easily be avoided through the other solutions that are available in the market. These other solutions or substitutes that are available in the market are referred to as your competitors. But for your survival in the market as a startup, you need to make sure that you have found a gap in the market that other competitors are not able to solve but you can. This is what is referred to as your unique selling proposition AKA USP.
Solution to the Problem is Expensive
Do you know what the biggest issue for businesses is? Well, it is maintaining the cash flow. Carrying out all these operations requires loads of money. So, you need to make sure that whatever problem that you’re trying to solve, people are willing to spend their money on it. In case you come up with a brilliant solution but that is in an environment where people are not willing to spend money on it then most certainly your startup is going to face issues with the cash flow, budgeting and liquidity. If that remains the case, soon you will drain out because of the low liquidity ratio and believe me, you do not want this to happen.
If the problem that you’re trying to solve is not is not occurring to the consumers on an almost regular basis or if your problem is not having a huge niche, then you are going to face issues regarding the demand of your solution. This means that you will not be able to generate enough sales that can keep you running. Now the question arises why? Well it is simple, if people are not facing the issue that you are trying to solve frequently then why would they spend money on your startup. You need to make sure that the problem that you’re trying to solve is irritating the consumers on regular intervals and they want a solution to it really bad. If you somehow manage to analyze any such problem then you have your hands on a gold mine that is all set to be explored even furthermore.