The "Problems & Solutions" of a Business Plan

In this first part of the series of articles for Validating an Idea for a Startup Venture, we examine the problem(s) and solution(s) pertaining to a business plan for a startup venture.

Investors look at the problem(s) that your business has identified and the solution(s) it is providing.

Multi-Player Platforms

If your business idea is a multi-player platform business, it needs to present the problems and solutions for all market players.

For example, let's look at Uber. Uber is a two-player platform for drivers and passengers. Drivers have a problem of underutilized vehicles and lack of income opportunities. Passengers have a problem of unavailability of transportation means. Uber providers the solutions for both players to earn more money and a transportation solution.

Another example is Facebook. Facebook is also a two-player platform for users and businesses. User has a problem of being disconnected from their loved ones and friends. Businesses have a lack of marketing channels to reach out to consumers in a cost-effective and targeted advertising manner. Facebook solves these problems by providing users a means to mass-update and communicate with all their family members and friends of their activities and also provides a demographic marketing avenue for businesses to reach out to these users.

Single-Player Service

If your business idea is a single-player service, it needs to solve the problem that faces the customer.

If you have identified a certain software to fill a market needs and your business is targeting only a particular consumer segment, your business is a single-player service. A software product or a cloud computing service could be an example of a single-player service if they are selling to a specific consumer.

Validation

First, your business idea needs to be examined whether the problem(s) actually exists and will the solution(s) solve the problem(s). Secondly, are people willing to pay for it... :-) If your business idea does address the market needs and it is clear how you can monetize by providing the solution, then you have basically passed the problems and solutions test.

This is part of of the series of articles for Validating an Idea for a Startup Venture, and continues to the next article: Market Potential & Scalability.