Jan 17, 2011
Entrepreneurs constantly hear the question “What problem are you solving?”. So much so that most people think that there is no entrepreneurship if a problem isn’t being solved. As a seasoned entrepreneur I decided to look into this from a different perspective. I wanted to dig deeper and see what could be the possible causes for such a mindset to be prevalent, and, look at cases (past, present or future) of entrepreneurial endeavors where no existing problem was being solved intentionally.
What Drives Entrepreneurs?
Human society has been forever consumed with the process of action and reward. We see that in both professional and personal aspects of our lives. Hence it is no surprise that entrepreneurship has this process of action-reward deeply ingrained. In fact in the case of entrepreneurship it is a very significant driving force. One could even propose that entrepreneurs would not be prepared to do anything without an expectation of a reward. Another factor that is a significant driving force for entrepreneurs is the risk-reward relationship. If it weren’t for the fact that the size of reward is directly proportional to the size of risk (in most parts of the world, and in most applications) entrepreneurship would definitely not be the same.
So now we see why it becomes important for an entrepreneur to think about solving problems. The rules of economics in modern day society means that the harder the problem , and therefore the higher the risk of a venture to solve it, the higher the reward should be for functional solutions. Following this line of argument means that an entrepreneur has to solve existing problems if he/she expects a suitable reward for the undertaking or risk. The more ambitious the entrepreneur is, the bigger the risk he/she will be willing to take.
In many areas access to capital becomes a key requirement for entrepreneurs to pursue their endeavors. Most entrepreneurs do not have the size of capital they require. So they depend on external sources of funding. These funds come with an implied expectation of a return on the investment. This then forces the entrepreneur to pursue only those ideas that can solve a problem and hence have a chance at a positive return on the financier’s investment.
What if there is no economic reward?
Entrepreneurs are humans after all and therefore they are a diverse bunch. So it has to be that there are people who use entrepreneurship as a creative landscape just as an artist uses a canvas. For them economic reward may not be a significant driving factor. In these cases it there may be no need to solve a problem at all. The entrepreneur goes about doing something that brings him or her personal satisfaction.
Here are some examples: Can a fashion designer be an entrepreneur? Definitely. Now if this person successfully launches a new line of clothing is he/she really solving a problem? Not necessarily. There is no problem here in the traditional sense at all. The world would have continued along quite the same without this new line of clothing. We could see similar examples in technology as well. What problem did Twitter set out to solve? Nothing in particular.
Nobody was complaining about the fact they would like to communicate with each other using roughly 140 characters. But once Twitter was created people found numerous uses for it. And now for many businesses it is indeed a problem if they don’t have a Twitter presence. It is almost as if the problems came after the solution.
The Rubik’s cube is another good example. It has been extremely successful and continues to sell even after many years since its invention. But was the inventor really thinking about solving some specific problem for humans? We can be pretty sure that nothing in the world would likely have changed if the cube weren’t invented.
So do we really need to solve a problem?
While entrepreneurs need to find some economic success for the simple fact that they need to be able to survive, pay their bills, put food on the table, make payroll and provide a good return on investment to their investors, it is amply clear that they don’t have to focus all their energies on the question of solving some existing problem. There are many successful cases, some large and some small, of entrepreneurial endeavors where a new idea came into being just because it was a good idea!