For many entrepreneurs, when talking about starting a company, the first question always goes straight to the idea. It’s a simple question, but it also implies that companies are built from ideas- moments of inspiration where you see something that no one else has seen. The reality is though that almost every kind of business model has been tried at some point in history. With over 7.5 billion people here on earth, there is a chance that there are a few people with the same ideas that you have.

So if ideas aren’t what great companies are built on, what makes a company so great?

Take a look around at the products and services you are currently using in your day to day life. What purpose do they serve? Well, it’s because they are filing a need or solving a problem you would otherwise be experiencing.

This is how all great startup businesses are born – from a problem or need.

Let’s look at these examples:

I can’t find anything on the internet. – Google launched in 1996 as a search engine that can be employed to find a variety of information such as websites, pictures, maps.

I don’t have time to stay in touch with my friends. – Facebook founded in 2004 as a social networking site that makes it easy for you to connect and share with family and friends online.

I can’t figure out how to file my taxes by myself. – Intuit founded in 1983 as a business and financial software company that develops and sells financial, accounting, and tax preparation software and related services for small businesses, accountants, and individuals.

Even video game companies are solving a problem – they help you avoid being bored and make you happy.

Not all problems are created equal; problems can range from minor inconvenience to life-threatening. Some of these might not seem like actual problems because they have been solved so well by these companies, but if that company disappeared the problem would reappear.

You can often tell the difference by understanding how much a person is willing to pay to make the problem go away. For example, someone might be willing to pay $0.99 for a mobile app to help edit their photos, but they would pay thousands of dollars for a new office chair that relieves their back pain.

Almost all problems have solutions that already exist but can be improved. For example, in the early days of the internet, the biggest problem was how to find anything. Yahoo solved this problem with their directory. Then Alta Vista, et al., solved the problem more effectively with search engines. Then Google solved the problem even more effectively with a more advanced search engine.

If you can solve a difficult problem in a way that is better, cheaper, or easier than existing solutions, then you create value. The more acute the problem, the more valuable the solution, and the more revenue you can make in solving the problem.

But wait, what about Snapchat and Facebook? They were started by teenagers and solve no apparent problems, yet have become huge! Well, the irony of life is that you don’t need to be aware of a problem (or how big it is) in order to solve it. In many cases, companies that are overnight successes hit upon problems that no one else was aware were problems (or that could be solved). No one understood a considerable problem with existing social networks until Snapchat provided an alternative, surprising even the Snapchat team themselves. You can get lucky in this way, but it’s rare.

Starting from a problem provides a very useful framework for focusing your business as you grow.

By always starting from the problem:

It is easier to develop your marketing messages and sales pitch. Instead of trying to explain what your company does, you can explain the problem and how you solve it.

It is easier to identify your key customer segments by ranking potential customers by how much they suffer from the problem. You can avoid a lot of wasted time exploring various customer segments.

It is easier to measure your performance by choosing metrics that indicate how well you are solving the problem. If you are trying to save people money on buying a car, but the average customer only saves $5, then you are not effective in your business.

After you narrow down and choose your problem, showcase it prominently in your office. This will remind everyone on the team, the problem that you all are solving which will bring focus to what needs to be done each and every day.

So, what problem are you solving?

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