How To Find And Validate A Market Problem

My last post was basically the highest level guidance possible about market discovery, including a litmus test for assessing your process. But I didn’t go into the actual steps for doing it. I’m not going to do that in this post either. Instead, I’ve got a few good sources and suggestions for guidance on how to do it.

Lots of people have put out lots of guides on how to find and validate market problems. Or, as they often put it, how to “find a product idea.”

Most of these guides are about finding new market problems to solve as a startup. But the techniques are equally valuable if you need to find new features for an existing product, or come up with new products to augment your product portfolio.

• Paul Graham said “The very best startup ideas tend to have three things in common: they’re something the founders themselves want, that they themselves can build, and that few others realize are worth doing.” Graham’s essays are a great resource for thinking about products and startups, although I think that many failed startups have met those same criteria. In case you don’t know, Graham is also the founder of the most famous startup incubator, Y-Combinator.

• Amy Hoy’s approach to finding and validating a market problem is quite different from Paul Graham’s. For one thing, she’s more focused on “lifestyle businesses” versus becoming a billion dollar enterprise. Her technique is called a Sales Safari, and the big difference is that you aren’t solving *your own* problem. You can get the gist of the Sales Safari in this video. (You can attend her online course 30×500 – which I have not done – to learn more.) The fundamental idea of 30×500 is to find a problem that 500 people will pay you $30 a month to solve. This provides a good income if you are a sole proprietor.

• There are lots of other examples of that same approach – find a domain, not necessarily one that you know anything about, find where the people who work in that domain spend time, and start to listen. For example, Poornima Vijayashanker has some great online courses (some free) at Femgineer.com.

• Then there’s just going out and talking to customers or potential customers and exploring what their biggest problems are. This is best illustrated by Justin Wilcox’s “How I Interview Customers” video.You have to start with some idea of what you might want to work on – a hypothesis about a problem. But instead of starting to build something, you start talking to people who might have that problem. You can validate they have the problem, that it’s urgent, and that they’ll pay for a solution. His videos help you get started doing that.

• This Slideshare deck on “Entrepreneurship 101: Finding and Validating Your Idea” is a good summary of various “finding a market problem” approaches. It’s from The MaRS Discovery District, an innovation hub, incubator and accelerator in Toronto. It does a good job of bringing many different techniques together into one place.

I hope you find some of these links valuable and interesting for helping you find and validate market problems that you can solve with your startup, or your corporation.