There’s a lot of well meaning advice on how to start a business that simply misses the mark.
Do you need to incorporate? Write a business plan? Get a virtual mailbox? Attend a networking event?
All of the above are certainly tasks you might do along the way, but that’s not what it really takes to start a business.
You only need one sentence:
Solve a problem for someone who has money.
That’s it.
That’s the only thing that matters. If you can do that, you have a business. If you can’t do that, you don’t have a business.
Solve a problem for someone who has money.
Solve a problem for someone who has money.
Say it over and over.
That’s literally all you need to do. You can stop reading now, and go solve a problem for someone who has money, or you keep reading and I’ll try to break down what I mean more fully.
Let’s start with the first part of the sentence: “Solve a problem…”
You need to find a problem, and you need to solve it. For a more in depth discussion on how to find and validate a problem, I’ve written a guide on How to Find a Worthy Problem.
To briefly summarize, you need to find something that annoys or frustrates people enough that they would pay money to solve it.
Ideally this would be a huge problem, but you can also solve smaller problems in a very focused way and have a real profitable business.
For an idea of what a “problem” could look like, one of my friends built Saas Opportunities where you can browse business ideas based on real world issues that people express on Reddit and other social media.
It’s tempting to jump ahead to the solution, but I want you to really focus on the problem. Interview people (ideally not your friends, who will usually say what you want to hear because they like you), ask strangers online, do any kind of cheap testing you can do to figure out how big of a problem this really is.
Only once you feel good about finding a big problem that’s worth solving, then you can move on to the solution.
For every problem, there are many different ways you can solve it. I also wrote a full guide on How to Find the Best Solution, which I’ll summarize here.
When you discover a problem, you’ll immediately start thinking of ways to solve it. Some will be obvious. Some you might even hear from the people you interview (“if I just had an app that could do XYZ, I’d pay for it right now”).
These can be really helpful clues, but you also don’t want to limit yourself to ideas from a small sample size of people.
Think outside the box. Generally, with the rise of SaaS companies and now even further fueled by AI coding, software is the ideal way to solve a modern problem.
It’s scalable, high margin, and easy to grow. Most of my experience is in software, so that’s my personal bias. But you can also solve a problem and scale a business with a service business.
Brainstorm different ways of solving the problem you found, and go back to the original people you interviewed and see what they think about your solution.
And finally the last part of the sentence, “for someone who has money”…
This is where the rubber meets the road. Obviously everyone technically has money, so you could change this to “for someone who is willing to pay you money”.
Once you’ve found your solution, typically people will give you really positive feedback. “Wow, what a great idea, I love that”.
Now, you need to ask them if they would pay for this solution. First, I like to ask if they would use this solution if it was free.
Not everyone will say yes, and the reasons why are invaluable information.
If they say yes, then ask if they would pay for this. I like to ask if they would pay a really large amount. For example, if you’re building a SaaS that might cost $20/month, ask if they would pay $200/month.
Usually they’ll say, no that’s a lot more than I expected, but then they’ll give you the real upper limit.
“That’s a lot more than I expected. I would probably pay $30/month for it.”
Boom. Now you know that $20/month could be perceived as a great low price, or you could alternatively raise your prices targets even more, maybe $25/month.
My favorite thing to do here is to ask them to pay. On the call say, great will you pay that right now for your first month?
This is obviously very uncomfortable, but highly effective.
Let’s put it all together.
Solve a problem for someone who has money.
Solve a problem for someone who has money.
If you can prove that you do this, then you have a business. And sure, you’ll have a bunch of other challenges, but those are all relatively easier to solve. Plus, you’re solving them with the foundation of a real business.
Can you solve a problem for someone who has money?
That’s the only thing that matters.