Solving The Problems That Make You More Money

Strategy

:

Focus on a Valuable Problem

🚀 Success:

From 0 to $1.5 billion sale in 2.5 years (2002)

🌱 Metrics Improved:

Sign Ups, Free-to-Paid, CAC, Purchases Per Customer, Average Order Value

It's all too easy to spend a year building something that no one else really wants.

Many of the successful products you know and love today started off doing exactly that.

Unfortunately, not every problem is equal. Some problems are better candidates to build products around.

The formula

How many people have this problem?
X How painful is it?
X How frequently do they feel this pain?
= Potential value creation

When it works best

By multiplying these factors, you can estimate the potential value of solving a problem with a new product or new feature. Typically, high-value problems score highly in at least two of these categories.

A few things to keep in mind:

With B2B and upmarket products, you can often charge a lot more if you're solving a painful problem for a much smaller number of people.
If you've got a really innovative solution your users might not currently realise they're missing anything. In cases like this, you have to predict how consumers will react to your solution.

How it looks in the real-world

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How it works

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Why it works

On the emotional side of things, psychological pain is known to play a role in everyday decision-making processes, including purchase decisions.

Solving someone's problem relieves some of that psychological pain, which is linked to a release of dopamine in brain areas associated with rewards.

So it follows that the larger and more frequent pain you can solve, the more positive value a customer will associate with your product.