Problem-Solution fit

Tiina Apilo @TiinaApilo

Problem_solution_p

Before the Problem-Solution fit phase, you will have identified a problem which is worth solving. Now, during this phase, the idea is to find a solution to the identified problem quickly, via small experiments. Of course, you can still also refine and redefine the problem – the goal is to achieve a scalable business rather than stubbornly clinging to the problem originally defined.

What on earth is MVP?

The idea of the so-called MVP (Minimum Viable Product) lies at the heart of the Problem-Solution fit phase. At this point, the concept description has been developed to the stage where the customer can assess whether it is interested in the problem and its solution as described. An MVP differs from the traditional idea of a prototype in seeking to demonstrate marketability rather than feasibility. Depending on the case, an MVP could be a video, virtual prototype, service description, web page or even a 3D printed product.

Solution for happy or paying customers?

”There’s a difference between a happy customer and a paying customer.”

We developed the Accelerate model alongside companies from a range of sectors and with various customer orientations. Many software companies stated that the Problem-Solution fit phase is not complete without paying customers. For them, at this phase it was not enough to have described a solution which interested customers. On the other hand, many business models are based on a free product, with revenue being generated from advertising or data collection. In BtoB markets with a smaller number of customers and prototype-like products, customer interest during the Problem-Solution fit phase can be sufficient.

” If you have an idea that people really like but they don’t want to pay for it, you shouldn’t spend too much time on it as a company. It could be interesting just to do it but not if you want to make money out of it.”

Developing a business model

It is easy to fall in love with our own ideas and it is difficult to admit that they will never catch on. However, by the Problem-Solution fit phase the company must have tested whether buyers are interested in its solution. The business model does not have to be crystal clear in every respect at this stage. The concept should be sufficiently tangible to enable prospective users and customers to form an idea of the solution. The jigsaw pieces in the following matrix indicate the readiness level of the business model’s various components during this Problem-Solution fit phase: the problem has been validated and the solution has been created and tested. The value proposition should not be finalised at this phase, during which a rough vision of a sustainable business model is still sufficient. In practice, development is iterative and covers a number of more or less distinctive solutions. Why a matrix? I used a matrix to describe the outcome of, and where resources should be focused during, each phase.

Matrix_Problem_solution_fit

What needs to have been achieved when moving into the Product-Market fit phase?

Creation of a concept and user approval measured through testing are sufficient during this phase. From the resource perspective, in addition to seeking the approval and commitment of the core team, you should cover a wider set of stakeholders and key players across the ecosystem of the prospective business.

 

We developed a new business acceleration model via the Accelerate project. Previous publications on the model include How to accelerate the development of new business activities? and Without problems there are no solutions.

The quotes are comments from companies, given in validation interviews for the Accelerate model, on their own business acceleration stories..

 

2 thoughts on “Problem-Solution fit

  1. Pingback: Finding a value proposition | Service Science Odyssey

  2. Pingback: Scaling and building a sustainable business | Service Science Odyssey

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