Before your product ever serves a potential customer or hits the digital market, it’s important to determine exactly what problem you are solving. Whether you have the money you are looking to invest or an idea that has sparked the interest of others, you have the potential to solve a number of problems. Which one do you choose to solve first?
As a new business, it is best practice to start with solving one problem for one group of people well and then expanding your reach to solve other problems in the future. This practice will benefit you as you start out and help your business succeed in the long run because it promotes future growth.
Prioritize Your Problem Before You Start
With problem prioritization, you can identify the best problem your product could solve. You could try and sell to everyone in the world, but how would that affect your ability to make a profit? By prioritizing what a select group of people need and learning how to adequately serve them, your product can see a greater chance at success.
Use the Impact vs. Effort Matrix to Prioritize Your Problem and Find Your Solution
This matrix is a good way to think of all of the problems and personas that are right for your product.
- The impact is the value that solving a specific problem could have. Value comes from the level of impact that will occur by creating a solution for the problem your target customer is facing. If your customers don’t see value in the solution your product offers, it will have little to no impact on them.
- The effort is how much labor it will take and how feasible solving the problem is. You could have a great idea, but if it takes a 20-person team and two years to accomplish it, how feasible is solving this problem with the resources you have? It is important to remember that you are just starting out and overnight success isn’t guaranteed.
Now that you know the difference between impact and effort, it is time to use the Impact vs. Effort matrix on your ideas to find the highest impact solution with the lowest effort.
For example: Say you are passionate about fighting world hunger and want to create a solution to help with this problem. With product organization and management tools like Miro or ProductBoard, you can map our the Impact vs. Effort matrix.
First decide on the ultimate problem you want to achieve, “Solve World Hunger,” and put it in the highest effort/highest impact quadrant and add comparable goals in other quadrants.
Once you have decided this, work your way to the other quadrants by figuring out personas and the ultimate solution to your problem.
Once your board is complete, you will most likely choose the highest impact and lowest effort problem, persona, and solution. Lowest effort typically means the least amount of money and labor which can be a crucial deciding factor for a new entrepreneur. It can also mean the quickest time to have a finalized product and you could see a profit or desired impact earlier than if you tried to solve a bigger problem.
For our example, solving hunger in our city is an easier and more cost-effective problem to solve first. Once we have solved hunger in our city, we can work our way through the quadrants to solve hunger in our state, county, and eventually the world! While it can feel overwhelming at first if you tackle one small problem at a time it can easier to offer a real solution to your customers.
Focusing on One Problem Helps Fine Tune Your Marketing Strategy
When you focus your attention on offering a solution to one problem, you can better market to a select group of people that need that solution. In your initial market research, you will be able to narrow down your target audience and learn more about them. It is important to find out what phrases your customers use to express frustration about the problem you are trying to solve because it is that frustration that will propel your product to be a need in their life.
If you know who you are serving and how you are serving them, it will be much easier to market to them. You won’t be going into the market blind, but instead with a realistic expectation about what your future customers want and need. With active listening, you can understand the mindset your customers have and come up with a solution and marketing strategy that will best fit them.
Your initial followers who you market to before you even have a product to sell, are those who will ride out the whole process with you. They will be integral to helping you understand your target persona and will provide you with feedback that will help your product succeed. It is because you narrowed your problem and target customer down that you are able to market to them well.
Avoid Solving A Big Problem Early On
As a new business, your funds will most likely run out quickly if you don’t start making a profit early on. The bigger the problem you set out to solve, the more money you will spend. Start small and your initial investment will be smaller saving you money.
When you start small you also have more opportunities to connect with your initial customer base. You aren’t trying to solve a problem for the whole world, but for a select group of people. A small group of initial customers can grow into a large group which will save you money over time as they share with you similar problems they experience.
Use This Method on Other Parts of Your Product
The Impact vs. Effort Matrix has many different uses. Not only can you figure out what problem your product will solve, but also personas, solutions, features, and many other important factors. It can help you narrow down the direction you want your product to follow and ensure that you are making the right decisions.