How to Solve the Right Problem - 4 Simple Questions to ask

Here are 4 simple questions you can ask to help identify and solve the right problems:

1. Whose problem is it really?
2. What is their problem?
3. Where does the problem come from?
4. Do we really need to solve it?

To understand the importance of identifying and solving the right problems, imagine you are in the strategy team of a B2B software company presented with a situation:

“New free user signups are strong but paid conversion is dropping. Cost of acquisition is being bid up by marketing competition. Our development team is under-resourced and focused on solving existing user retention which is making great headway. The Board is reluctant to expand the marketing budget given the uncertain funding environment.”

What is to be done about this situation?

Our first instinct is often to jump directly to solutions, these may include:

1. Promote the benefits of our paid features earlier on
2. Send marketing campaigns to our free users to upgrade
3. Reduce our free user allowance
4. Increase our paid user allowances
5. Introduce referral bonuses
6. Create new features that our users are willing to pay for
7. Target new free user signup channels

Stop.

Before jumping to solutions we should begin by asking our 4 simple questions.

1) Whose Problem is it Really?

Let us look at each of the stakeholders and restate the problem statement based on the situation from their perspective:

Stakeholder	Problem
Free Users	How can I get the most value out of the product?
Marketing Team	How can I achieve my user signup target with the given marketing budget?
Development Team	How can I keep my engineering resourcing focused on the current roadmap?
CEO	How can I convince the market that my strategy is working and keep stock high?
Board/ Shareholders	How can I ensure we have enough funding to get through current uncertainty?

By defining the problem owner we can already see markedly different solutions.

2) What is Their Problem?

Once we have identified who has the problem we can look deeper to what is their true problem (if any). Examples below could include:

Stakeholder	Problem
Free Users	I don’t want to get locked into paying for something I won’t use
Marketing Team	The cost of acquisition is getting too high for us to achieve our signup targets
Development Team	I don’t have sufficient development resources to work on multiple projects
CEO	Word may get out that our paid conversion is dropping and share price may fall
Board/ Shareholders	Market conditions are not conducive to raising new funding now

3) Where does the problem come from?

Once we have identified what is the true problem, we need to locate where the problem stems from. Examples below could include:

Stakeholder	Problem
Free Users	Past bad experiences from having to cancel or request refunds
Marketing Team	We set too ambitious new user signup targets vs. paid user targets
Development Team	The projects we are tasked with are often unscoped and variable
CEO	None. Our strategy is focused on high user engagement and not yet monetisation
Board/ Shareholders	We want to avoid dilution by not raising money at a lower valuation to fund growth

4) Do we really need to solve it?

Once we have identified who has the problem, what is the problem and located where the problem comes from we are in a final position to ask whether we really need to solve the problem.

Stakeholder	Problem
Free Users	Yes. Test and promote a pause payment request to free users within first 12 months
Marketing Team	Yes. We want marketing focused on identifying new free user channels with lower cost of acquisition (we accept there will always be marketing competition)
Development Team	No. We want development team focused on retention which is a bigger problem
CEO	No. We are aligned on strategy
Board/ Shareholders	No. We are not asking for more marketing funding

Next time you are faced with a new problem, before jumping to solutions try to stop and ask yourself these 4 simple questions:

1. Whose problem is it really?
2. What is their problem?
3. Where does the problem come from?
4. Do we really need to solve it?.

References

Are Your Lights On?: How to Figure Out What the Problem Really Is by Donald C. Gause and Gerald M. Weinberg (1982)