Market Problems or Just (Bad) Ideas You Want To Build?

Our partner Pragmatic Marketing recently released an updated version of the celebrated Product Marketing Framework. The change that I feel is most significant is the movement of Market Problems to the top left position in the framework -- the most important spot (for English readers). We think about market problems a lot at Enthiosys as we help our clients identify, clarify, and prioritize market problems. And sometimes, our clients challenge us to think about these concepts even more deeply.

I recently worked on a client project where they asked me: "What is a market problem?" I was a bit surprised by this answer, since the seems a bit obvious. Yet, as we talked, I realized that many of us talk about market problems without really clarifying what we mean by the term. This post attempts to clarify these terms, explain why market problems are indeed important, and suggest some ways in which you can act in relationship to these concepts. I look forward to your feedback.

Let's start with some definitions.

• A problem is a situation, matter, or person that presents perplexity or difficulty [http://www.thefreedictionary.com/problem].
• With that foundation, let's call a customer problem a problem that you’ve discovered or validated through research. While we'd prefer that the discovery process includes primary research (such as through the Innovation Games The Apprentice or Me and My Shadow), we can certainly accept that smart, experienced people can leverage their experience to hypothesize about potential customer problems. Of course, because they are smart and experienced, they also validate their hypothesis: confirming with at least one person outside their organization indeed has this problem.
• A market problem is a problem that you’ve validated as being held by enough people who are willing to pay enough money to get it solved to justify attempting to solve it once you've further confirmed that you can do this in a sustainably profitable way.

Not every problem is a customer problem. Not every customer problem is worth solving. And market problems are so special that we have to work at shaping them to the point where they should be solved. And the bigger the company, the more special a market problem becomes -- just ask anyone who strives, in good faith, to follow their gate-based development processes.

Not every problem can be "solved". Some problems can only be "satisficed". A solvable problem is one that can be solved, either permanently, or solved in such a way that I consider it permanently solved. A "satisficable" problem is one that can't be "solved" in the current paradigm. It can only be improved on a set of dimensions to the point where the total is "good enough".

Satisfiable problems tend be much harder and more complex to solve than solvable problems. To illustrate the concept, let's refer to an example from Tuned In, the book from the Pragmatic Marketing team. (I L-O-V-E this book). The example of the finding a Magnavox remote control was a solvable market problem. But many other problems are not solvable unless the market paradigm changes. For example, consider the trucking industry. A trucking company wants better better fuel economy and safer drivers. Always. You can give a trucking company 10mpg and they’ll want 15mpg. You can give the trucking company 0.8 accidents per 100K mikes and they’ll want 0.7. But, if you offer them 30 mpg and an accident rate of 11.5 accidents per 100K, they’ll probably prefer 7mpg and 0.7 accidents per 100K miles. They are satisficing a complex set of factors.

You can identify satisficable problems in your research, because customers will tell you (if you're listening) about the various dimensions. As one trucking executive once told me: "Every trucking company cares about the same 12 things. We just care about them in different amounts". Naturally, you'd ask this executive to not only list the dimensions but to help you understand how the executive makes tradeoffs between the dimensions.

And, because your customers, the market, and the larger ecosystem in which you work are all constantly changing, you need to continuously engage with your customers so that you can both identify solvable market problems (“find my remote”) and the mix of satisfaction that is required in satisficeable market problems in order to sustain your solution in the market. And there is no other way to get this done than (mostly primary) market research.

Thus, it really does matter if you're working on problems, customer problems, or market problems. Because if you're not working on market problems, and you can't demonstrate you're working on at least a customer problem, you're probably just running off and building against your own, potentially bad, ideas.

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