Preview: Problems. Not Products.

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Video Walk-Through

Heads Up: Above is a “draft” video used to create the written content below – it is unedited and may be out of date. That said, several pre-orderers requested I leave them in the book so it’s here as a “Pre-Order Exclusive” in the event it’s helpful to you.

Step-by-Step Instructions

Click to download the worksheet.

Click the worksheet above to generate your copy.

What’s the difference between an inventor and an entrepreneur? Before you read on, take a guess.

Inventor vs Entrepreneur?

The difference between them is that:

  • Inventors create things.
  • Entrepreneurs create things people buy.

Inventors obsess over building “innovative” products, focusing little attention on whether anyone will use them.

Entrepreneurs on the other hand put less emphasis on “innovation” for the sake of innovation, and more emphasis about whether people:

  • Buy their products
  • Use their products, and
  • What impact their products will have on the world

So which would you prefer to be…

An inventor who creates things, or an entrepreneur who creates things people buy?

Few people intend to be inventors. In fact, the vast majority of startups are started by people who want to be entrepreneurs.

The trouble is – and the reason so many startups fail – it’s surprisingly easy for “entrepreneurs” to fall in love with their products, products they are more excited to build, than their customers are to buy.

Take a look at some examples…

Invention: Segway

The Segway is one of the most innovative products of all time.

Easier to ride than a skateboard, less work than a bike and much faster than walking, this magical self-balancing platform promised to change the future of transportation.

All it really changed was how lame people look traveling around town.

So why did this incredibly innovative product flop?

Because the Segway was created by inventors, not entrepreneurs.

The creators of the Segway were more focused on building their product, than solving their customer’s problems.

Compare that to…

Entrepreneurship: Hoverboard

The hoverboard is undoubtedly less “innovative” than the Segway – it’s simpler technology it’s doesn’t go as far, as fast, or as many places as the Segway, and it came to market 15 years after its predesessor.

Yet, it took the Segway 7 years to sell 30,000 units while at the end of 2015, 40,000 hoverboards were being imported into the US every single day.

The hoverboard’s:

  • Use of celebrities to create a feeling of exclusivity
  • Lower price point and
  • Emphasis on how people look when riding a hoverboard

Make it clear, the creators of the hoverboard didn’t want to just introduce a new product to the world, they wanted to introduce a product people actually used.

The hoverboard phenomenon was created by entrepreneurs.

Of course hoverboards ran into their own problems, but their huge popularity proves that there was demand for two-wheeled, self-balancing transportation all along – the inventor’s mindset at Segway was just never able to tap into it.

Here’s another great example…

Invention: Google Glass

Glass was another incredibly innovative product that promised to put all the information world’s right in front of our eyes, all while taking pics and videos so we could share our experiences with others.

Of course, Google Glass made people feel more creepy than empowered, and made them look even worse.

Google eventually shelved Glass because very few people used it.

Compare that to…

Entrepreneurship: Spectacles & Smart Glasses

Just like the hoverboard, Snap’s Spectacles and Vue’s Smart Glasses both have fewer features then their predecessors, yet they have captured orders of magnitude more demand.

Spectacles just take pictures and short video clips (no notifications, no navigation, no tweets, etc.), and estimates for sales, if they opened them to all their users, hovers around 3 million units, with early units being sold for 10x their retail price on eBay.

On the other hand Vue’s smart glasses don’t have a camera at all and simply provide notifications and Bluetooth audio, yet their Kickstarter campaign raised over $2.2 million via 10k+ early customers.

Clearly there is demand for tech-enabled glasses, but the inventor’s mindset at Google couldn’t tap into it.

It took the entrepreneurs at Snap and Vue to build products people actually wanted.

How to Become an Entrepreneur

How do you avoid the “inventor’s mindset”, and create products people want?

During this course, you’ll learn the fastest path to entrepreneurial success isn’t to create products at all.

The fastest path to startup success is to solve problems.

Customers Buy Feelings. Not Features.

What good entrepreneurs have known for years, but science is only now starting to realize, is that humans don’t make rational decisions.

Every conscious decision we make:

  • What to eat
  • When to sleep
  • Who to kiss
  • Where to go to college
  • Which job we take
  • And what products we buy

…are based on our feelings.

Customers may compare features, read reviews, and consult experts to make a “logical” decision about which phone to buy or degree to major in, but ultimately, the information they gather only informs how they feel about their choices.

At the end of the day, emotions drive every customer decision.

Whether you’re selling to new moms or marketing directors, college students or CEO’s, every decision every human makes, is driven by their feelings.

Knowing this, is what separates inventors from entrepreneurs.

Inventors ignore their customer’s emotions, focusing almost solely on a product’s features, which is why no one uses their products. Take a look at this Segway video as an example:

Notice how they emphasize the steering and “redundant systems” features. Also notice how ridiculous everyone looks in the video.

Compare that to this hoverboard video:

Not a word is spoken about the hoverboard features, yet it sells the hoverboard “feeling” incredibly well.

Cool looking guys, doing cool looking things, on a cool looking device. The entrepreneurs selling hoverboards didn’t waste time talking about features, they knew that’s not what their customers wanted.

Their customers wanted to look, and feel cool, so that’s what they sell.

How do you Sell Feelings?

Just like you, customers experience thousands of feelings each day, yet they don’t buy thousands of products everyday. That’s because…

Customers only buy products that fulfill their most intense feelings.

The best entrepreneurs build products that address the situations that generate the most intense feelings for their customers. These situations have a name…


Customers buy far more products to solve “problems” and they do to provide “pleasure.” For example, consider the amount of money you spend on rent, books for class, bus passes, food, etc. versus the money you spend on concerts, video games, etc..

Even things that can seem like pleasure purchases (e.g. going out for drinks, seeing a movie, etc.) are often solutions to problems in disguise (e.g. loneliness, distraction from work that has to get done, etc.).

This prioritization of problems over pleasure is an evolutionary adaption.

It’s much more important that our ancestors prioritized the problems of running from the lion hiding in the grass and finding safe shelter for the night, than watching a beautiful sunset. If they had prioritized pleasure over problems…you wouldn’t be reading this right now.

It’s part of human nature to want to solve the problems we face.

The best entrepreneurs leverage that fact to:

  1. Identify the problems their customers are already trying to solve and then
  2. Build them a better solution to their problem.

In this way, the best entrepreneurs don’t end up selling anything; they simply end up helping their customers solve their problems.

Entrepreneurship in Action

Here’s are the guiding principles you need to know to avoid the “inventor’s mindset” and become a successful entrepreneur:

1. Entrepreneurs build products people buy.

How do you build products people buy?

2. Sell feelings instead of features.

How do you sell feelings?

3. Solve your customers’ problems.

In other words:

Customers don’t buy products. Customers buy solutions to problems.

During the rest of this workbook you’ll learn how to:

  1. Identify your customers’ problems
  2. Sell them a solution and then
  3. Build them a solution

…in that order.

Before we get there though, I want to show you how some of the most successful startups you know of became successful by solving their customers’ problems.

Step 1

Grab your “Problems. Not Products” worksheet and we’ll dissect the problem Airbnb solved for their first customers.

To do that, you’re going to write in:

  1. Airbnb’s first customers
  2. Where they targeted their first customers
  3. The problem they solved for those customers

It’s easy to think that “everyone” could potentially be Airbnb’s customers, but when you’re looking for examples to emulate when starting your entrepreneurial journey, it’s more important to understand where the companies started, than where they are now.

Airbnb started as “Air Bed and Breakfast”, serving designers who wanted to attend a conference in San Francisco so for “Who”, write in: design conference attendees.

As for the “where”, Airbnb started in San Francisco but that’s not what we’re talking about here. Instead we want to know where they found their original customers. In this case, they found them by posting on design forums frequented by people who would be attending the upcoming conference.

Note how Airbnb didn’t start with a massive advertising campaign. They, and all the other examples we’ll explore, all started without spending any money on marketing. Instead…

They all got big by solving problems for a small group of customers.

Finally, the problem Airbnb solved for it’s original customers was straight-forward: they wanted to go to the conference, but hotel rooms were too expensive.

Notice how this is a different perspective to look at Airbnb than most of us do. Most of us would describe Airbnb as a platform where people can rent out rooms for other people to stay in on a short-term basis – to focus on that is to fall into the “Inventor’s Mindset.”

Instead, when you focus on the customer’s problems, the pressure to come up with an “innovative idea” for a business melts away.

Your job as an entrepreneur isn’t to come up with an innovative idea. Your job is to solve a problem.

Once you really understand your customers’ problems, the ideas invent themselves. I want you to see that every single one of these companies started by solving a real problem for a small group of customers.

To read more about Airbnb’s origin, check out this article. When you’re ready, let’s talk about the problem Facebook solved for its first customers.

Step 2

Who were Facebook’s first customers? Most people know Facebook’s first users where college students.

What’s less well known is that Facebook started exclusively on a single campus, Harvard, and it solved a very specific problem for those students.

Facebook made dating easier.

As a follow-up to Facemash, his wildly popular attractiveness rating site for Harvard sororities, Mark Zuckerberg created “The Facebook” under the premise of a “networking” platform.

While that may be true, Zuckerberg had seen how important the problem of dating was to college to students from his first experiment, and it can be argued, used “networking” as a guise to solve that problem.

It’s been reported that when expressing concerns about the viability of The Facebook, Zuckerberg said…

“I don’t think people would sign up for the facebook thing if they knew it was for dating.”

More about the beginnings of Facebook can be found here, but the most critical thing to takeaway is that even Facebook, a site we often go to when we’re bored/waiting/want to chat with a friend…

Started by solving a problem.

Even today, Facebook succeeds because it solves a multitude of problems for us:

  • It connects us with friends when we’re lonely
  • Entertains us when we’re bored
  • Makes it easy to share photos and save memories
  • And on, and on…

Before you move on, update your “Problems. Not Products” worksheet to reflect who Facebook’s first customers were, where they found them, and the problem Facebook solved for them.

Step 3

Uber started by serving the tech communities in urban communities, but a couple things are particularly interesting about their origin:

  1. Uber started by offering more expensive “black cab” rides on demand. They didn’t start with the less expensive “UberX” rides most people take today.
  2. Like so many successful startups, Uber started serving a small set of customers. Their first experiment was in New York City with just three cars. After that, they launched in San Francisco.
  3. The original name for Uber was “UberCab” – yet another startup to change its name.

The problem they solved is one that many affluent urbanites are familiar with…finding a cab when you need one is incredibly difficult.

Use this information to update your “Problems. Not Products” worksheet to reflect Uber’s first customers. If you’re curious, you can also read more about Uber’s start here.

Step 4 – 6

This is your chance to see if you can determine the first customers of several successful startups, and the problems they solved for those customers.

Fill out your worksheet identifying the first customers of Classpass, Yelp and Dropbox, where they found those customers, and what problem they solved for them.

If you need a little help, check out these articles:

Notice how the founders of all of these startups focused more on the problem they were solving for their customers, than the product they wanted to create.

That gave them the freedom to change their product when they saw it wasn’t working, and keep it when they saw it was.

Step 7

Once you’ve analyzed the origins of half-a-dozen successful startups, you should be able to see several patterns – three of which are listed below.

Use the words in the bottom of this section (e.g. “big”, “solutions”, etc.) to fill in the blanks of these patterns to startup success.

Finally, remember these patterns for success as you take the next steps in your entrepreneurial journey.

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