Achieving problem-solution fit is an early indicator of market success, yet some companies skip the step and proceed to launch products into the market that don’t meet customer needs. For startups, that can mean failure. For established businesses, that’s wasted resources.
So what exactly is it? And how do you achieve it?
What is problem-solution fit?
In simple terms, problem-solution fit refers to how well your solution solves a problem faced by target customers. The assessment is made before a product or service is launched.
Achieving problem-solution fit indicates that your solution effectively addresses the needs and wants of your target market and is likely to be successful in the market.
There are two primary goals when assessing problem-solution fit:
Validate that a problem needs solving by multiple prospective customers; and
Validate how well the solution you’ve developed solves the problem.
Why should you care?
It doesn’t make sense to invest significant time, money, and resources into developing and launching a product or service that doesn’t solve a frequent, costly or urgent problem faced by prospective customers.
It also doesn’t make sense to launch a product or service that will not have broad appeal.
You assess problem-solution fit to make an informed decision before investing in further development and commercialization of your product or service.
If you are a startup, you’ll likely be challenged in securing additional funding until you’ve demonstrated problem-solution fit.
What are you assessing?
In addition to deepening your understanding of the problem faced by a target market, validating that it’s a broadly-held problem, and assessing how well your solution addresses the needs and wants of your target customers, also consider:
Competitive alternatives: What are the strengths and weaknesses of alternative ways customers can solve the problem? This includes direct and indirect competitors and internally developed solutions that customers may have created. What level of competition are you facing? Are you going to be able to solve the problem in a better way?
Size of potential market: Does it make sense to solve the problem? Is the market big enough? What’s the growth potential? How does this compare to other market opportunities?
Cost-benefit: Evaluate the potential revenue and customer satisfaction obtained by offering the solution compared to the costs associated with developing, marketing, selling, and ensuring customer success with the solution.
What do you put in the hands of customers?
It is helpful to discuss concepts and show prototypes to a select number of prospective customers for feedback to guide the development of your solution. Through cycles of proposing, testing, and iterating potential solutions, you will work towards developing a minimum viable product (MVP) that is functional and includes the primary features that solve the problem.
This is what early adopters will purchase and use and what you will test for problem-solution fit.
What is the process for finding problem-solution fit?
Define: Begin by talking to and observing prospective customers to understand the problem they face and the scale of the problem. Also, understand when they experience this problem (this will help with your marketing and sales efforts later) and the underlying causes of the problem (which will help you develop a solution).
Supplement this with market research (your own and third-party research if it exists). You must understand and define the problem through market research and prospective customer interviews to ensure a strong, unmet customer need exists.
Evaluate: Research alternative solutions from other solution providers or home-grown solutions that customers may have developed. Learn about the strengths and shortcomings of these alternatives to uncover opportunities for providing a solution that delivers differentiated value.
Build: You’ll likely begin by brainstorming possible solutions and gathering feedback from prospective customers on concepts and prototypes before you zero in on a solution. There will probably be multiple iterations and rounds of testing before a strong candidate product emerges. Your goal is to get to a functioning MVP with key features and benefits that resonate with early adopters.
Validate: Once you have 3 to 5 early adopter customers (that number depends on your product or service and the nature of the market), you can validate that your solution addresses the problem in the real world and in a satisfactory way. You will learn what customers like and dislike about your solution, evaluate usage data, and gather other relevant feedback. You can then begin to assess problem-solution fit.
How do you know you have problem-solution fit?
There are a couple of ‘acid test’ questions to ask:
Do you have a handful of paying early adopters using your MVP?
Are they happy with your solution?
If you answered ‘yes’ to both of these, the solution is appealing and relevant, at least to early adopters. You can move to the market launch stage to assess product-market fit.
If you answered ‘no,’ you must evaluate why you can’t attract early adopters. Do you understand the problem well enough? Is the problem significant enough that customers are willing to pay for a solution? Are they willing to pay now?
Can you iterate the solution to be a better fit for the needs of the target market? What are the shortcomings of your solution?
Ultimately, you’ll need to assess how likely you can achieve problem-solution fit. It’s possible that your best course of action is to abandon and pivot to solving another problem.
In summary
Achieving problem-solution fit is a critical step as an early indicator of market success. It’s a significant milestone on your journey to achieving product-market fit. It doesn’t mean that your solution will be successful; it just means that it is worthwhile to launch your solution to the broader market.
Drop a comment to share your experience with problem-solution fit. And give me a shout if you want to chat about this or other business challenges over a coffee (virtual or in real life).
Originally published at https://www.linkedin.com.