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Stop Looking for Ideas, Look for Problems to Grow Your Business

By Gautam Gandhi

Editor’s Note: In this week’s Reader Discussion, Google’s Gautam Gandhi suggests that problems drive business development and growth rather than ideas.

I had coffee with an entrepreneur last week who was worried that business was stagnant at her small, 20-person IT services company in New Delhi. She was looking for new ways to grow and asked me: Do you have any good business ideas I can use?

I get asked this question almost everyday. So here is my advice to everyone:

Stop looking for good ideas. That’s right, you read this correctly. Please don’t tell me about another good idea ever again. Instead tell me about good problems. They will most likely bring a business opportunity,

Where are the problems?

If you look around there are problems everywhere. Question things you take for granted and think to yourself: Is there a better way? When you have your next business meeting, whether it is with a client or customer, ask them what their biggest problems are. You will be surprised by what people tell you. Hopefully, you will start to notice patterns and will soon identify a problem to solve. Better still, if it is a problem that affects you directly.

How do you identify a big problem?

Sometimes it takes an outside perspective to even identify the problems. Sean Blagsvedt, for example, worked with Microsoft and moved to the India office in 2004. While working in India, he noticed that many from the household services sector could not find jobs because they did not have the ‘right’ referrals or connections.

On one hand, people complained that they could not find a good driver or maid and on the other hand if you look outside we are surrounded by people desperately looking for a good job. Hiring usually happens through word-of-mouth and referrals. But when Sean asked around, he noticed that there were many who had similar problems. Born was babajob.com, a company that connects employers with workers via web and SMS. He left Microsoft in 2007 to run the company full time, which now has 15 employees and 37,000 job profiles in the system. It took a foreigner with fresh eyes to identify the problem and come up with a solution.

Another example is Ashish Chand and Dhruv Agarwal, who noticed that a lot of families were bringing their children to their casual-dining Chinese restaurant in Gurgaon. When they talked to customers about it, he realized they didn’t have many smart casual dining places to take the whole family. They were looking for something nicer than the cafeteria-style Haldirams but was still kid-friendly. So they turned the restaurant, Crazy Noodles, into that kind of place, with crayons, puzzles, and free caricatures for children. Even the glasses, which have rounded bottoms so they bounce around, are fun. They now have several restaurants with two in the NCR region and are starting to set up additional franchises.

Do you have the skills needed to solve this problem?

Once you have identified your problem, assess your skills fairly and make sure that you have the capability to solve it. It’s okay, if you don’t, you just have to find somebody on your team that does. (Refer to my previous post on teams)

How do you know that a problem presents a business opportunity?

Always remember to look for some type of existing solution for the problem. If no one has tried to solve it, I often wonder how big of a problem it is. One of my former start-ups created a product to track surgical sponges used during surgery to make sure they weren’t left behind in the patient’s body. The other solutions on the market included manual hand counting, or putting bar codes on the sponges. We embedded passive RFID tags in the sponges.

If a solution does exist, that does not mean there is not a better one waiting. Perhaps there is an opportunity to make a more efficient or elegant solution, or a faster or cheaper one. Electricity and water shortages are big problems in Delhi all the time, but many of us who can afford to, have solutions in diesel generators and water storage tanks. When my water tank runs empty (and if my neighbors don’t have any extra water to spare) I can call a water truck to come and fill my tanks. Unfortunately, there is no comparable service for electricity. So if my generator goes out for some reason and it is a hot summer day in Delhi, I have to keep cool the old fashioned way, and take a cold bath with a bucket of water.

When you think of the problem that you are going to solve, ensure that:

1. You are tackling it for a sizable market
2. People are willing to pay for your solution
3. You assess your rivals

The last one is important. Never think: “I don’t have any competition.” I cringe every time I hear those words because you always have competition! Sometime it is just the current, inefficient or expensive way and having a better solution does not always win. Your solution needs to be attractive enough that people are willing to make the investment in your product or service and change to the ‘new’ way.

So the next time you hear yourself or your friends complaining, stop and think. You may have found “your” problem to solve. Now that you have your idea, go forth and build your solution.

I’m in Houston, Texas this week judging the Rice Business Plan competition which now has over $1M in prizes, a competition that my graduate school classmate and I won in 2004 for ClearCount Medical Solutions. I’ll be writing about the competition next week.

This post is written in my individual capacity and therefore should not be construed as the views of my employer.

From The Wall Street Journal published on April 19, 2010