Thinking like an entrepreneur: spotting problems worth solving

Entrepreneurship does not start with a brilliant idea. It starts with noticing a problem that real people have, and caring enough to fix it. This lesson shows you how to train your eye for problems, and how to tell a good one from a made-up one.

What an entrepreneurial mindset really is

• An entrepreneur is someone who sees a problem or a need and takes responsibility for doing something about it, using limited time and money. You can do this inside a club, a charity or a job, not only in your own company.
• The core habits are curiosity (asking why something is annoying or slow), action (trying something small rather than waiting), and honesty (looking at evidence even when it says your idea is weak).
• You do not need to be loud, confident or a natural salesperson. Many good founders are quiet people who listen carefully and notice details others ignore.
• Leaving home is a perfect time to notice problems, because everything is new: finding halal food near campus, sharing a fridge fairly, getting second-hand textbooks, or understanding a confusing bill.

Notice problems, do not invent ideas

• Paul Graham, co-founder of the start-up programme Y Combinator, says the way to get ideas is to look for problems, 'preferably problems you have yourself'.
• He warns that 'by far the most common mistake startups make is to solve problems no one has'.
• He calls ideas that come from founders' own experience 'organic', and ideas invented in a brainstorm 'made-up' or 'sitcom' ideas, because they sound plausible but nobody actually wants them. His example of a made-up idea is a social network for pet owners.
• A useful habit: keep a 'problem diary' in your notes app for two weeks. Every time you, a friend or a family member says 'I wish...' or 'why is it so hard to...', write it down with the date and who said it.

Deep beats wide

• Graham describes two shapes of idea: a hole that is 'broad but shallow', or one that is 'narrow and deep, like a well'. He advises choosing the deep one.
• Deep means a small group of people who want your solution badly, rather than a huge group who think it is 'quite nice'.
• His test: who wants this so much that they would use a rough first version, made by a tiny start-up they have never heard of, with bugs and missing features?
• Example: 'an app for all students' is wide and shallow. 'A weekly shared order of affordable halal meat for international students in one city who have no car' is narrow and deep, and you can name the first 10 people who might use it.

Do not run from boring or messy problems

• Graham uses the word 'schlep' for tedious, messy work, and says founders often unconsciously avoid ideas that involve schleps. He writes that 'turning off the schlep filter is more important than turning off the unsexy filter'.
• Boring problems (paperwork, logistics, cleaning, scheduling, translation) are often the ones people will pay to have solved, precisely because nobody wants to deal with them.
• Ask yourself: is there a task people around me hate doing that I could make easier, faster or cheaper?
• His wider advice is to 'live in the future, then build what's missing': if something annoys you that will soon annoy everyone, you may be early to a real problem.

Scoring a problem before you fall in love with it

• For each problem in your diary, score it from 1 to 5 on four questions: How often does it happen? How painful is it? Are people already spending time or money on a workaround? Can I personally reach these people?
• A problem that scores high on pain and workarounds is promising, because people are already showing you that they care.
• Graham notes that the best ideas tend to be something the founders themselves want, something they are able to build, and something few others realise is worth doing.
• Harvard Business School's Rock Center suggests two checks you can already apply: 'Do our customers really have this problem?' and 'What are they doing today to solve their problems?'
• Pick your top one or two problems to test in the next lesson. Do not write a business plan yet.