Studio Stories

The Ugly Truth: Early-Stage Entrepreneurs Waste Time on The Wrong Problems

10/03/2024

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Author: Javier Mata is a workshop designer and facilitator specializing in learning development and instructional design. With extensive experience creating both in-person and digital content for HRD and MBA programs, he also led a team developing digital content for a business microlearning platform within the corporate arm of a leading organization known for its MBA programs, corporate education, and venture capital initiatives. Passionate about fostering growth and innovation, he engages participants at Moon through dynamic, hands-on learning experiences that drive real-world impact. His interests lie in business innovation, design, and strategy.


As a facilitator at Moon, I’ve worked with multiple people in early stage business creation who rush into creating solutions without fully understanding the problem. The result? Missed opportunities and wasted time on ideas that don’t have the stickiness needed to win in the market. 

Many jump straight to solutions, only to find they're addressing weak or irrelevant problems. Others drift further and further away from solving the actual problem they started out with. This article is my response to that trend. I’ll walk through some guidelines to deeply explore the problem space, identify problems that are painful, scalable, and meaningful–so you're not just solving any problem, but the right one.

 

What Makes a Problem Worth Pursuing?

Not all problems are created equal. To ensure your efforts go toward a problem that truly matters, there are three criteria you should consider when exploring the problem space:

 

1. It Should Be Painful

The more painful a problem is, the more people will beg for a solution. Pain is opportunity’s best friend. When something creates friction, loss, or inconvenience, people will pay to make it disappear.

 

Example: SmartHR, a Japanese startup, identified a pain point for businesses: tedious HR processes and compliance with labor laws. By offering cloud-based solutions to automate payroll, tax filing, and other HR tasks, SmartHR alleviated administrative burdens, becoming a widely adopted solution in Japan. And let’s face it—if you're the one making HR paperwork disappear, you’ll be everyone’s hero.

 

What you can do: Interview potential users, run surveys, or observe pain points in forums or social media groups to gauge the level of discomfort. Focus on issues that make people’s lives tangibly worse — those are the ones they’ll pay to solve.

 

 

2. It Should Be Scalable

Solving a painful problem is one thing. Solving a painful problem for millions of people? Now that’s where the real magic happens. The more widespread the issue, the larger your potential market.

 

Example: Slack started as an internal communication tool for Tiny Speck, a game development company. However, Tiny Speck quickly pivoted Slack into a solution that addressed a much bigger problem: ineffective workplace communication. Slack became a must-have for organizations of all sizes. When you're solving a problem that can serve both small teams and large enterprises, you know you've hit the scalability jackpot.

 

What you can do: Use tools like Google Trends, industry reports, or keyword research tools to analyze how many people are searching for or affected by the problem. Survey a diverse audience across different regions or demographics to validate demand. If the problem is widespread and growing, you're in a scalable space.

 

 

3. You Should Care About It

If you don’t care about the problem, you’ll throw in the towel the minute things get tough. Passion isn’t just a bonus — it’s what keeps you in the game when the obstacles pile up. You’ve got to be so invested in the problem that you’ll fight through the mess to see it solved.

 

Example: Leila Janah, founder of Samasource was deeply empathetic to the struggles of underserved communities. After witnessing poverty firsthand, she became passionate about creating digital work opportunities to help people lift themselves out of it. Despite repeated rejections from investors, her empathy and commitment kept her going, resulting in real change for thousands. Like Leila, you need a problem that speaks to your empathy and gets you out of bed before the coffee kicks in.

 

What you can do: Journal about your personal connection to the problem. Ask yourself: "Would I still work on this if it took years to solve?" If the answer is no, it might not be the right fit. Choose a problem you care about emotionally or personally to keep your motivation strong through tough times.

 

 

Common Pitfalls in Problem Solving

Even when you’ve found a great problem, the path to solving it is littered with potential missteps. Here are the pitfalls I often see that you need to sidestep:

1. The Real Problem Isn’t What You Think

Sometimes, what looks like the problem is just a surface-level symptom of something bigger. It’s easy to jump to conclusions and tackle what seems obvious, but often, the real issue lies deeper. Focusing on the wrong problem leads to ineffective solutions, wasted time, and missed opportunities.

 

Example: Instagram started as a check-in app called Burbn, allowing users to check in at various locations and share photos. However, the founders quickly realized that users didn’t care about check-ins, and they struggled to differentiate Burbn in a crowded market. What users really wanted was a simple, visually appealing way to share photos. By pivoting to solve this deeper need, Instagram became a social media powerhouse. Turns out, when you give people what they actually want, they tend to stick around.

 

What you can do: Apply the "5 Whys" method to dig deeper into the problem. Each time someone identifies a problem, ask “Why is this happening?” five times. This will help you uncover the core issue that needs solving, rather than just treating the symptoms.

 

 

2. The Solution in Search of a Problem

It’s easy to get dazzled by shiny new tech. But creating a solution and then hunting for a problem to solve? That rarely ends well. The solution has to fit the problem, not the other way around.

 

Example: Clubhouse, the audio-only social app, skyrocketed in popularity during the pandemic, but it quickly fizzled out as the hype died down. The app created a buzz but didn’t solve a long-term, pressing need. As other platforms like Twitter and Facebook replicated the audio feature, users had little reason to stick with Clubhouse. Without a lasting problem to anchor its solution, Clubhouse couldn’t sustain its early momentum. Turns out, riding the hype train only works until the tracks run out.

 

What you can do: Before developing a solution, make sure there’s a clear demand for it. Survey or interview potential users to ensure the solution addresses their specific needs. If you can’t clearly define the problem your solution solves, it’s time to rethink the approach.

 

 

3. Lack of Experience in the Problem Space

You can’t solve a problem you don’t understand. Experience in the problem space gives you the insight to know what works and what doesn’t. Without it, you’re likely to create solutions that miss the mark.

 

Example: Quibi, a short-form streaming service founded by Hollywood executive Jeffrey Katzenberg and led by former HP CEO Meg Whitman, launched in 2020 with over $1.75 billion in funding. Despite their high profile careers, they lacked experience in the streaming space and failed to understand the viewing habits of mobile users. The service, which focused on short, premium content, couldn’t compete with free platforms like YouTube and TikTok. Just six months after launch, Quibi shut down, proving that even high-profile names can fail without deep knowledge of the problem space.

 

What you can do: Choose a problem you have deep knowledge about, or partner with someone who does. Leverage your network or use platforms like LinkedIn to find and connect with experts in the problem space. Partner with someone who has deep knowledge, or immerse yourself in researching the area by working directly with those affected by the problem to gain critical insights.

 

 

Conclusion: Don’t Waste Time on Useless Problems

Exploring the problem space isn’t just a box-ticking exercise — it’s the foundation of your startup’s survival. As an early-stage entrepreneur, your top priority should be to nail down problem-solution fit before you burn through months (or years) building an MVP that no one asked for. You can’t find the right solution without first locking onto the right problem.

Here’s the ugly truth: too many entrepreneurs waste years chasing the wrong idea because they never took the time to deeply explore the problem. So, dig deep to uncover those painful, real problems that people will pay to make disappear. Avoid the common pitfalls, and always remember: it’s not just about creating a brilliant solution — it’s about solving the right problem. Nail that, and you’re not just set to play the game — you’re on a trajectory to win it.


Moon Creative Lab offers several programs to support startups. If you are interested in transforming your own business idea and growth, please check out the top page.

 

Top Photo by Dan Asaki on Unsplash.

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