None of the above. All of the above.
It doesn’t matter how you categorize it as long as, (pausing for emphasis) it solves problems and people are willing to pay for it.
OK, I’ll start off on the foot you didn’t expect just because I like to mix it up a little. Money. I am willing to pay for all sorts of things. Even things I don’t need. Crazy, right? I’m willing to pay for some of my problems to be solved by someone else. Other problems I’m willing to live with. Companies, made up of people all with their individual money value systems, do exactly the same thing.
So how do you hone in on the problems that someone will pay you to solve? Better yet, how do you hone in on the problems that many people will pay you to solve?
Measure the market appetite. How long has the problem existed, and is it pervasive?
It’s a process, but be quick. Needs will change. Change can be evolutionary over time or radical and revolutionary, Big Bang style. You can guarantee that change happens, so do your market analysis frequently and routinely. Why? So you can adapt and modernize your approach. Got that part? Great.
Next, how do you go about market analysis? Talk to people. Have a genuine conversation. Be curious and sincere. Ask them, “What keeps you up at night?” If you open up to them, then they open up to you. Information is not power. Solving problems with information is power.
Who do you talk to? Talk to everyone. Talk to the people who hold the purse strings. Talk to the people who make the decisions. Talk to the people who influence the people who hold the purse strings and make the decisions.
Not to point out the obvious, but do not forget talk to the people living with problems. Rarely are they the same people in an organization.
Finally, talk to your competition. Not everything must be adversarial, and sometimes understanding a market left behind by a competitor means that they were not really able to solve those problems, at the right price. So, talk to the peripheral, left behind, no-one-pays-attention-to markets.
Once you identify the root cause of the problem keeping most of the people up at night, you have yourself a winner. What’s next? You guessed it: Make a decision and act on it. Do not languish. Do not ponder. Do not second-, triple- and quadruple-guess the facts in front of you.
Oh, you are saying, I missed something? I jumped ahead to act before I knew if it was a problem that people were willing to pay for? You’re catching on, I see. In fact, I didn’t miss that step. Remember when I suggested asking about the problems that keep them up at night? Well, that is a strong qualifier. Who really can go on, night after night, with no sleep? You can avoid the little problems that people commonly live with as long as all the other things that keep them up at night are resolved.
Take 2, ACTION! Yes, action. No one really wants to take the time to get honest about the most important problems just to be ignored with a “good luck” slap on the back. Get busy and make it happen. Make good on your promises, and if you cycle through this process enough times, your promises will grow your shareholder’s wealth.