The Entrepreneurs Dilemma

The Entrepreneur’s Dilemma

Solving “the problem problem”

A brief tutorial prepared by Arnold Wytenburg

September 2011 Based partly on previous work by Dan Roberts and Robert M. White

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• Being successful as an entrepreneur is as

simple as “finding a problem and solving it”

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• There are plenty of unsolved problems

these days, right?

• So…

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• Why then, with so many opportunities

available, is it still so hard to come up with

good business ideas?

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• Quite simply, “the problem” stems from a

lack of focus… there are just too many

interesting things to pursue, leaving us

without any clear idea of where to start

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• What’s needed is a straightforward and

systematic way to cut through the clutter of

the marketplace so you can quickly ‘focus

in’ on the best opportunities

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• Richard M. White devised such a method

called “market gap analysis”, aimed

squarely at helping entrepreneurs steer

themselves toward high-potential business

ideas

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Step 1

• Choose an industry

– Pick one that interests you

– Or, you can pick one at random

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Step 2

• State your objectives

– Define what sorts of opportunity you want to

pursue and those you don’t

– Aim for at least 15 items in your list

• Opportunities which don’t meet these

criteria will be eliminated so that you can

focus more clearly on those that matter

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Step 2

• Some examples:

– Must be a tangible product, not a service

– Must be Biz-2-Biz, not Biz-2-Consumer

– Must have a potential market capitalization of

at least $300 million

– Must leverage proprietary expertise with

information technologies

– Must be in a growth market

– Must require less than $50,000 seed capital

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Step 3

• Segment your chosen industry into its

major components

• Try a few different schemas, for example:

– Producers, consumers, wholesalers, retailers,

distributors

– Seniors, adults, teens, children, family

– Local, regional, national, international

– Spring, summer, fall, winter

– Professional, semi-professional, amateur

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Step 3

• Now pick one schema from your list, and

then choose one category from this

schema to use in the next step

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Step 4

• Segment again using the category you

picked at the end of Step 3

– As before, do this using multiple schemas

• Examples for the “professional” category

within the health industry:

– Doctor, nurse, technician, administrator

– Regulator, researcher, advisor

– Hospital, clinic, mobile facility

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Step 4

• Again, pick one schema from your list, and

choose one of the major categories in this

schema to use in Step 5

• FYI, if at any time you run into a dead end

with the category you choose, you can

always back up a level and pick another

one – as long as you follow only one ‘leg’

at a time

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Step 5

• Segment the market one more time using

the category you just picked in Step 4

• For example, for “researcher” I might

have:

– Clinical, field, academic

– Senior, supervising, junior, intern

• Again, try lots of different schemas

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Step 5

• Note that for a complex industry, you may

need to “divide, redivide, and redivide” to a

deeper level:

– There is no guideline for how deep is deep

enough… trust your instincts and remember

that you can back up or go deeper at any time

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Step 6

• Eliminate categories based on your stated

objectives from Step 2:

– Using the category breakdown you created in

Step 5, eliminate anything that doesn’t mesh

with your list of objectives

– Sometimes the cut is obvious, other times you

might need to do some further investigation

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Step 7

• Select a category from among those which

have not been eliminated and list any

problems that characterize this category

• List as many problems as you can identify,

even those which may seem trivial:

– Aim for at least 20 or 30 problems

– Ask others to contribute, especially anyone

with first-hand knowledge of the target domain

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Step 8

• Eliminate any problems that don’t mesh

with your list of objectives from Step 2

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Step 9

• Perform a gap analysis:

– List out all the remaining problems along the

left side of a matrix

– List out all of the objectives along the top row

of the matrix

– Check off any intersections where solving a

given problem (the rows) satisfies a stated

objective (the columns)

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Step 9

• From this matrix, identify the problem that

best meshes with your goals, interests,

and expertise

• This ‘problem domain’ is where you are

most likely to find high-potential business

ideas

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What next?

• At this stage, you should have a much

clearer idea of where to focus your

attention and resources

• Next steps will involve finding candidate

solutions for the problem domain you’ve

identified and translating each of these

into a value proposition