What is a right to the problem?

There's a concept I encountered a few years ago that I thought to share. The concept of "a right to the problem." As an entrepreneur, you're naturally inclined to tackle problems you're passionate about. You see opportunities for impact and, let's be honest, the potential to make a lot of money too. But just because you're passionate about a problem doesn't mean you're the best person or team to solve it.

To build a venture-backable business, you need to consider three key factors:

1. The problem size (both current and potential)

2. It's continuous and sustainable monetization potential, and

3. whether your founding team has a genuine right to the problem.

One of the most critical questions investors ask when evaluating startups is,

"Why is this the right team to solve this problem?"

Essentially, they're seeking to understand if the team has direct experience or any unfair advantage that demonstrates a deep understanding of the problem, the customers, and the ability to formulate a suitable initial hypothesis for the market.

Most of the time, your initial assumptions about the problem and solution aren't entirely accurate. They require validation through experimentation. The quality of your starting point and your ability to rapidly iterate depend on the quality of your team.

Consider two founders, Jane and Jackie.

Both aiming to solve the same problem of technology enabled SME lending.

Jane has experience as a credit manager at a bank, understanding credit evaluation for businesses but lacks technology expertise. She's run a small pilot manually, yielding promising initial data, but lacks a technical co-founder.

Jackie, a software developer, lacks deep industry knowledge but is passionate about the problem. She's quickly built an MVP but lacks understanding of the lending process.

If presented with both pitches, investors might hesitate to invest in either.

Jane lacks technical expertise, and Jackie lacks industry knowledge.

Investors prefer teams that combine relevant expertise. For instance, a team with profiles similar to both Jane and Jackie, along with technical experience in building financial products, would likely be more appealing to investors.

So, before diving in, consider whether you have a genuine right to the problem you're solving. If not, assess whether you have the funding to buy the time to earn that right. If the answer is no to both, be prepared for a challenging journey ahead.

Building a business is hard enough. Make sure you're equipped with the right skills, knowledge, and experience to tackle the problem effectively.

Building a tech startup and have domain expertise in the domain you're building? Tell us HERE

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P.s you'll never be 100% ready to launch your startup. So don't wait for absolute certainty before you take the leap.

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