Lesson 8: Problem & Solution

The Problem-Solution in Your Pitch

Typical Time to Cover Your Problem-Solution: 30 seconds to 3 minutes.

Problem-Solution Formats 

The Problem / Solution structure sets the frame for your entire pitch. It works by telling us what the problem you identified is and then what your solution to this problem is. 99% of you will fall into this category and should use this structure. 

1. State the overarching problem you are trying to solve and some of the pain points associated with this problem for the target demographic. You can support this with facts, figures, and examples. 

i.e. – most small businesses can’t afford to hire a CFO. However, their businesses suffer because they are unable to build the financial models that are needed to make important and informed decisions on their own.

2. State the solution in a clear way telling us exactly what it is. If it is a marketplace say it’s a marketplace, if it’s SaaS say it’s SaaS. Don’t use lofty unclear terms and descriptions. 

i.e. – We’ve created a simple easy to use software that allows small business leaders to build custom financial models in under 5 minutes. The user simply creates their business profile, then answer a series of prepopulated basic questions and our data engine produces financial models that they can use to analyse any part of their business like never before for 10% of the cost of hiring a CFO. 

3. Delivery of the Problem / Solution should always be clear, concise and at a speed that is easy for the listener to grasp everything you say. If the listener fails to understand the problem and solution clearly your entire presentation will suffer because they will be trying to figure it out in their head instead of listening to you. 

For that 1% of you that aren’t solving a problem, below are some alternatives you can use!

1. Vision / Mission structure 

This one is used to tell us how you envision the future and how you intend on participating in that future. Same rules apply here as the Problem / Solution structure above regarding delivery. 

i.e., We believe that living on Mars is the future that is why we aim to be the leading real estate development firm on Mars. 

 2. Team / Traction

Use this structure when you have impressive founders and/or traction.

i.e., Our team built some of the world’s most successful video games like Madden, World of Warcraft, and Halo. We are launching our next masterpiece game which we think will be even bigger than those previous games. We’ve garnered over a million signups on our waitlist in the first two months since announcement. 

Common Mistakes to Avoid:

1. Clarity. You are presenting something new that you know a lot about, but the listener doesn’t so you need to be very aware of how you explain what it is and how it works. This is an extremely common mistake. What it is, who it’s for, how it works and the results it creates should be simple enough for a child to understand.

2. Listing too many problems and/or too many solutions. Just because your solution solves a lot of different problems and has many benefits to different people does not mean you should list them all. It is far more impactful to state the large overarching problem then listing all the smaller subset problems. Same goes for the solution. 

i.e., small businesses usually don’t have good financial models because. 

• Non-financial founders find it frustrating to learn finance and accounting.

• They’re not experts and make mistakes even if they do take the time to learn. 

• CFOs are expensive and often not viewed as necessary. 

• Financial Modelling Software’s are expensive, complicated and time consuming to learn. 

3. Timing. Don’t spend too much time in this section. Investors generally acknowledge that you have created a solution to problem so if you’ve stated everything clearly just move onto the business stuff they typically want to know more about. If they want to dive into the solution, they will let you know.