Module 2: Problem Impact Analysis (aka Does The Market Care?)

January 14, 2024 4 mins read

The problem statement is the easy part. Assessing its impact – that’s the founders’ reckoning. Is this a solution-seeking problem, and does it have the potential to truly move the market?

Wherever you are in your journey, do it — the journey always begins from where you stand. This isn’t just an analysis; it’s a 360-degree exploration that overlays the problem – not your solution – with the market.


SU001.3 Problem Impact Analysis

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    Purpose: To explore and quantify the broader impact of solving the validated problem, including its effects on customers, the market, and the larger ecosystem.

    Earned Right: Successfully completing this module grants the right to explore solution options. It ensures that the startup is positioned not just to solve a problem, but to do so in a way that significantly matters to the market and stakeholders, paving the way for a meaningful and impactful solution.

    In-Depth Guidance for Problem Impact Analysis

    Section 1: Market and Customer Impact

    1. Understanding Direct Benefits to Customers:
    • How to Think: Put yourself in your customers’ shoes. Imagine the daily life or operations affected by the problem. How does its solution change their day-to-day experience?
    • Where to Start: Identify your primary customer segment. List out their pain points related to your problem and envision the ‘after’ scenario post-solution.
    • Common Pitfalls: Avoid being too broad or vague. Focus on specific, measurable improvements.
    1. Assessing Market Dynamics Shift:
    • How to Think: Consider market trends and consumer behavior. How does solving your problem align with or disrupt these trends?
    • Where to Start: Research current market reports, consumer behavior studies, and industry forecasts. Look for patterns or gaps your solution could fill.
    • Common Pitfalls: Don’t ignore minor shifts. Sometimes, small changes can indicate the beginning of significant market transformations.

    Section 2: Economic and Societal Impact

    1. Exploring Wider Economic Effects:
    • How to Think: Beyond immediate benefits, how does your solution contribute to the larger economy? Think in terms of efficiency, productivity, and innovation.
    • Where to Start: Consider the industries and sectors your solution touches. Map out the potential economic impact in each.
    • Common Pitfalls: Avoid focusing solely on direct financial benefits. Consider intangible effects like brand perception and industry reputation.
    1. Understanding Societal and Environmental Consequences:
    • How to Think: Reflect on the broader societal implications. Does your solution promote sustainability, equity, or improved living conditions?
    • Where to Start: Research societal trends and challenges. How does your solution contribute to these broader conversations?
    • Common Pitfalls: Don’t underestimate the importance of social and environmental responsibility in today’s market.

    Section 3: Strategic Business Implications

    1. Identifying Necessary Business Adaptations:
    • How to Think: Consider the strategic changes your business may need. How does solving this problem position you in the market?
    • Where to Start: Analyze your business model and market position. Look for potential strategic pivots or alignments post-solution.
    • Common Pitfalls: Avoid being rigid in your current business strategy. Be open to evolution and adaptation.

    Section 4: Ecosystem and Competitor Analysis

    1. Evaluating Current Problem Solvers:
    • How to Think: Identify who is currently addressing the problem. How can they be potential collaborators or competitors?
    • Where to Start: Conduct a competitive analysis. Understand their strengths, weaknesses, and potential for partnership.
    • Common Pitfalls: Don’t just focus on direct competitors. Look for indirect and potential future competitors as well.
    1. Assessing Impact on the Broader Ecosystem:
    • How to Think: Think about the ripple effect of your solution. How does it influence adjacent industries or sectors?
    • Where to Start: Map out the ecosystem related to your problem. Identify stakeholders and potential unforeseen impacts.
    • Common Pitfalls: Avoid a narrow focus. Recognize that your solution can have far-reaching implications.

    Section 5: 20% Test

    1. Measuring Significant Improvement:
    • How to Think: Focus on the key metric that your solution significantly improves. Is this improvement impactful enough?
    • Where to Start: Identify the ‘Only Metric That Matters’ for your problem. Calculate the potential percentage improvement.
    • Common Pitfalls: Don’t choose superficial or irrelevant metrics. Focus on what truly matters to your customers and market.

    Concluding Thoughts:

    • Holistic Approach: Adopt a holistic approach, considering both the micro (customer-level) and macro (market-level) impacts of their solution. Every aspect of the problem’s impact should be considered in its broader context.
    • Empathy and Research: Combine empathetic understanding of customer needs with thorough market research. Empathy helps in intuiting unspoken customer needs, while research provides concrete data to back up assumptions.
    • Iterative Process: Emphasize that understanding the problem’s impact is not a one-time task but an iterative process. As the market evolves, so should the founders’ understanding of their problem’s place within it.
    • Seeking External Input: Encourage founders to seek feedback from mentors, industry experts, or potential customers. External perspectives can provide invaluable insights that might not be apparent from the inside.

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