Innovation Doesn’t Start With a Problem or an Idea
3 min read
Contrary to popular belief, going from 0 to 1 does not start with defining a problem or an idea. It starts with defining a niche.
Starting with an idea is the wrong first step as it can lead to the creation of a solution in search of a problem.
Then we should start with the problem right? Not quite, as it can lead to a problem in search of a problem owner.
That's right. Business innovation starts with defining a highly-targeted niche - a group of people with similar attributes.
These attributes could be the same profession, geographic location, working conditions or other relevant shared similarities that are well-articulated.
Here's how to define a highly-targeted niche articulated from the attributes:
1. Identify shared attributes.
It could be the same profession, geographic location, working conditions or other shared similarities.
2. Articulate the niche by combining attributes.
Eg. First-time (experience) bootstrapped (economic situation) fintech (sector) startup (size) founder (role) in Toronto (location).
With a defined niche, we can accurately understand the current undesired state they are in today, and the future desired state they want to achieve.
Subsequently, revealing the steps required and then the problems encountered in each step towards the future state. Then the ideas to solve the problems.
Bundle the ideas, and these are now called a solution.
Do you see how far along from the starting point until the problems and ideas are unearthed?
That's why it is recommended not to start with the problem or idea, but with the niche.
Identifying a niche is an effort that requires you to define the smallest possible customer to solve their problems with your solution.
Given the niche market size is small in quantity, identify all the people that fit the niche profile to solve their problems with your solution.
If there are 100 first-time bootstrapped fintech startup founders in Toronto and a majority (at least 80%) use your solution to solve their problems, you have monopolized the market.
Don't start with problem or idea. And don't worry about if the niche market is too small at first. Start by religiously defining your niche, then expand your niche criteria and build an unstoppable momentum.
That's how Facebook started with Harvard students. Amazon started by selling books online. You should too.