A major mistake made by would-be entrepreneurs or even startup founders is to initiate their business ideas with the primary aim of raking in huge profits. For these folks the motivating factor for venturing into a business is to attain financial success instead of solving problems.
However, the irony is that 75 percent of businesses reported to fail in their first 18 months of operation as reflected by a study done by bloomberg, actually failed because of this faulty ideology.
Come to think of this: How many early startups in Africa actually pioneered a novel idea aimed at Solving problems that practically address the myriads of social challenges facing Africa (health, education, Agriculture etc.)? The reason is however not far-fetched as most would-be entrepreneurs or startup founders started their businesses as a result of frustration from inability of securing a paid job or meeting their needs in the face of a harsh economic reality.
While generating profit to meet the need of the entrepreneur cannot be ruled out, the driving force for starting a business that will stand the test of time must primarily be to solving problems.
Below are key reasons why solving problems should be the major driving force for an entrepreneur:
Solving problems is the bane of lasting and successful businesses.
According to Guy Kawasaki, a former product evangelist at Apple, the greatest business ideas are the ones born out of the need to solve a real problem (pain point) faced by the initiator and not the ones born out of some staggering industry growth statistics. For example, Facebook was born out of the need of Mark Zukerberg to share information (text and pictures) in real-time with his friends in his then dormitory in Stanford University.
A solution that solves a critical problem doesn’t require a huge Advertising budget to scale.
This is a true fact. Trust me, you don’t need huge advertising budget to get your message out when your solution is solving problems which is an everyday challenge for the user. Your early adopters are enough to spread your “Good news”. This grossly reduce your cost of customer acquisition.
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For example, Lifebank, an online blood donation platform, saw a huge patronage and partnership with hospitals and health agencies in its first few months of launch. This is because it solves the bottle-neck of getting safe blood faster in order to save lives. People quickly communicated the usefulness of this platform to their friends and loved ones.
A solution that solves a critical problem turns over huge revenue.
Just as ants are attracted to sugar where ever they are found, so also is money attracted to a solution that solves a critical problem. No wonder most of the successful tech businesses focus solely on solving problems without an inkling of the business model for revenue generation.
The founders of Twitter for example initially had no idea how twitter will generate revenue. They were solely concerned with creating a platform for disseminating information faster and wider. As at 2013, Twitter was valued at $40 billion.
The simple truth here is that, once you have a viable product/service aimed at solving problems, money will definately flow in the direction of your solution.
In summary, an entrepreneur must first identity a critical problem, challenge or need then clearly figure out a unique solution to address that problem, challenge or need.