Problem solving Flashcards
Describe the problem solving process
Understand the problem before jumping to solutions. Let’s break down each step for clarity:
- Problem Identification: This initial step involves recognizing that a problem exists and needs to be solved. It’s about pinpointing the issue clearly and specifically, distinguishing symptoms from the actual problem.
- Framing the Problem: After identifying the problem, the next step is to frame it in a way that guides the search for solutions. This involves defining the problem’s boundaries, understanding its context, and identifying the stakeholders affected by it. Effective framing can help ensure that you’re solving the right problem and set the direction for the subsequent steps.
- Hypothesis Test & Sense Check: Before delving into extensive research, this step involves forming hypotheses about the potential causes of the problem and ways to solve it. These hypotheses are then tested through quick, preliminary assessments (sense checks) to evaluate their viability. This process helps in refining the understanding of the problem and focusing the research efforts on the most promising areas.
- Research: With clearer hypotheses in hand, this step involves conducting thorough research to gather data and insights related to the problem. This can include qualitative research (like interviews, focus groups) and quantitative research (like surveys, data analysis). The goal is to gain a deep understanding of the problem, its root causes, and the factors that influence it.
- Solution: Armed with a comprehensive understanding of the problem and informed by the research conducted, this final step involves developing and selecting the best solution(s). The right solution should address the root causes identified during the research, be feasible to implement, and effectively solve the problem within the given constraints.
Differentiate betweeen symptoms and the actual problem.
Symptoms are the signs or manifestations of the problem, while the actual problem is the underlying cause of those symptoms. Addressing only the symptoms without tackling the root cause can lead to temporary fixes rather than long-term solutions.
Give examples of symptoms and their corresponding problems
Example 1: Declining Sales in a Retail Store
- Symptom: A retail store notices a significant decline in sales over several months.
- Possible Initial Reaction: The store might initially think the problem is the quality or range of products offered and may consider adding new products or discounting existing ones.
- Actual Problem (Root Cause): Upon deeper analysis, the store finds that the decline in sales is due to poor customer service and an unappealing store layout that makes shopping inconvenient.
- Effective Solution: Instead of just changing the product lineup or offering discounts, the store focuses on improving customer service training and redesigning the store layout to be more shopper-friendly.
Example 2: High Employee Turnover Rate
- Symptom: A company is experiencing a high employee turnover rate, with many employees leaving within a year of joining.
- Possible Initial Reaction: The company might think that the problem is with the recruitment process or that the job roles are not clearly defined.
- Actual Problem (Root Cause): Further investigation reveals that the real issue is a toxic workplace culture and lack of growth opportunities that lead to job dissatisfaction.
- Effective Solution: Rather than tweaking the recruitment process, the company works on improving its workplace culture by addressing management practices, enhancing communication, and creating clear pathways for career advancement.
In both examples, the initial focus on symptoms could lead to misguided efforts that fail to resolve the underlying issues. By identifying and addressing the root cause, organizations can implement solutions that effectively solve the problem and prevent it from recurring. This approach is more sustainable and cost-effective in the long run.
Give examples on how to Frame the Problem
Framing the problem involves defining and understanding the problem in a way that guides the search for solutions, ensuring clarity about what needs to be solved and why it matters.
Example 1: Improving Customer Support Response Times
- Initial Problem Statement: “Our customer support response times are too long.”
- Framed Problem: After gathering data, you realize that the longest delays occur for email inquiries, while chat and phone support are relatively efficient. You also find that customer satisfaction scores drop significantly with response times longer than 4 hours. The framed problem could then be, “How can we redesign our email support process to ensure that 95% of customer email inquiries receive a response within 4 hours, thereby improving overall customer satisfaction?”
This framing focuses on the specific aspect of the problem that has the most significant impact (email response times) and sets a clear, measurable goal for improvement.
Example 2: Reducing Software Application Load Times
- Initial Problem Statement: “Our software application takes too long to load.”
- Framed Problem: Upon investigation, you discover that the load time issue primarily affects users with slower internet connections and is most pronounced when loading high-resolution images. The problem could be reframed as, “How can we optimize the loading of high-resolution images in our software application to ensure users with internet speeds below 10 Mbps experience a load time of under 3 seconds?”
This framing narrows down the issue to a specific user segment and identifies a clear technical challenge to address, making the problem more manageable and solution-focused.
Example 3: Increasing Restaurant Foot Traffic
- Initial Problem Statement: “Not enough customers are coming into the restaurant.”
- Framed Problem: After analyzing patterns, you might find that foot traffic dips significantly on weekdays, especially between lunch and dinner hours. Further, customer surveys indicate a desire for quick, light dining options. Thus, the problem could be framed as, “How can we create a weekday afternoon menu of quick, light meals that attracts 25% more customers between 2 PM and 5 PM?”
This approach not only identifies when the problem occurs but also points towards a potential solution that aligns with customer feedback.
Give examples for hypothesis Test and Sense check.
“Hypothesis Test & Sense Check” in problem-solving involves forming assumptions or educated guesses about what might be causing the problem or how it could be solved, and then quickly evaluating these hypotheses to see if they hold water before committing extensive resources to in-depth research or solution development. This step is crucial for efficiently navigating towards effective solutions. Let’s explore this with examples:
Example 1: Reducing Cart Abandonment in an E-commerce Store
- Hypothesis: Customers are abandoning their shopping carts due to unexpected shipping costs being added at checkout.
- Sense Check: To quickly test this hypothesis, you could analyze checkout process data to see if there’s a significant drop-off after shipping costs are displayed. Additionally, a small survey could be sent to customers who abandoned their carts, asking for their reason.If the data and survey responses confirm that shipping costs are a key issue, then the hypothesis is validated, and you can move forward with solutions targeting this problem, such as displaying shipping costs earlier in the shopping process or offering free shipping thresholds.
Example 2: Improving Employee Productivity
- Hypothesis: Employee productivity is low because of outdated technology and software that slow down work processes.
- Sense Check: A simple way to test this hypothesis could involve conducting a quick survey or series of interviews with employees to gather feedback on their technology challenges and observing if productivity improves when temporary upgrades are made to a small group’s software.If employees predominantly identify technology as a bottleneck, and the small-scale upgrade shows a productivity boost, then the hypothesis is supported, guiding the solution towards technology improvements.
Example 3: Increasing Participation in a Recycling Program
- Hypothesis: Participation in a community recycling program is low because residents are not aware of the program’s benefits and how to participate.
- Sense Check: To test this, you might run a brief awareness campaign in a small area or segment of the community, using flyers, social media, and local meetings to provide information about the recycling program. Then, observe if participation rates in that area increase compared to others.If there’s a notable increase in recycling rates in the targeted area post-campaign, it suggests that lack of awareness was a significant barrier to participation, validating the hypothesis.
Name examples of unfair advantage
**Founding
Team **
Only if you are really unique e.g
* Your team is one of the best suited teams in the world to solve this problem
* You have founded a successful company before, and can bring in investors and rockstar
* employees quickly
Product
Your product is 10x better than the next best thing on the most important metric (speed, price, etc.)
This is an important advantage that you need to build, but it will not last on its own, as products
are easy to copy (patents help where relevant)
Acquisition
You are able to grow more quickly and cheaply than others, ideally at 0 cost.
Can be a starting advantage (e.g. you’ve got 50k Twitter followers that are your early adopters),
But ideally you build a sustainable advantage, allowing you to grow fast, cheaply. The best
companies grow through word of mouth or by users using their product.
Moat
Less important for short-term traction but the most important for long-term success and world
dominance.
You should have a view on how you can build a competitive moat that makes it really hard for your
competitors to outcompete you.
Name the Three steps to validate if an idea is VC backable
- Sense-check demand
- Conduct basic market sizing
- Access against VC investment criteria. i.e does it meet criteria use by VC to validate
What criteria is used by VC to validate if an idea is a VC case?
Team
* Team background
* Founder affinity and skill sets
* Team product market fit
* Team execution
Product & Market
* Market size
* Defensibility and moat
* Product market fit
* Traction
Concept
* Problem worth solving
* Viability & feasibility
* Timing
* Scalability
* Risks
What is the difference between Validatina hypothesis and validating a solution
Validating the Hypothesis
- Purpose: To test if your assumptions about the problem are correct. This involves understanding the root causes or factors contributing to the problem.
- Process: You might use experiments, data analysis, pilot studies, or prototypes to test whether the conditions you believe are causing the problem actually lead to the observed issue.
- Outcome: The validation of a hypothesis provides evidence that you understand the problem correctly. It doesn’t necessarily tell you that your proposed solution will work, but it ensures that you’re solving the right problem.
Validating the Solution
- Purpose: To test if the solution effectively addresses the problem as identified and hypothesized. This is about confirming the effectiveness of your proposed intervention or fix.
- Process: Similar to hypothesis testing, solution validation can involve pilot programs, prototypes, or controlled experiments where the solution is implemented on a smaller scale to observe its impact.
- Outcome: Successful solution validation demonstrates that your solution not only addresses the problem but does so in an effective, feasible, and potentially scalable way.
How They Relate and Differ
- Sequence: Typically, you validate your hypothesis first to ensure you’re focusing on the correct problem. Once the hypothesis is validated, you develop and then validate the solution to ensure it effectively solves the problem.
- Feedback Loop: Validation of both the hypothesis and the solution might not be linear. Based on feedback from solution validation, you might need to revisit and refine your hypothesis. Similarly, initial hypothesis testing can lead to adjustments in your approach to finding a solution.
Are They the Same?
- No, they are not the same. Hypothesis validation is about confirming your understanding of the problem, while solution validation is about confirming the effectiveness of your proposed solution.
Why do you need to validate both hypothesis and the solution.
Validating the hypothesis ensures you are addressing the right problem, while validating the solution ensures that the problem is being solved effectively. Skipping the validation of the hypothesis could lead to solving the wrong problem, and skipping the validation of the solution could result in implementing a fix that doesn’t effectively address the problem, even if it was correctly identified.
Before going out to validate an idea, how can we validate that it can be turned into a feasible business model?
The Business Model
Canvas framework can help
you assess and prioritise
whether an idea can be turned
into a tangible business.
Explain the 9 building blocks of a business model canvas
1. Customer Segments
- Description: Defines the different groups of people or organizations your business aims to reach and serve.
- Question to Ask: Who are our most important customers?
2. Value Propositions
- Description: Describes the bundle of products and services that create value for a specific customer segment.
- Question to Ask: What value do we deliver to the customer? Which one of our customer’s problems are we helping to solve?
3. Channels
- Description: Outlines how a company communicates with and reaches its customer segments to deliver a value proposition.
- Question to Ask: Through which channels do our customer segments want to be reached? How are we reaching them now?
4. Customer Relationships
- Description: Specifies the type of relationships a company establishes with specific customer segments.
- Question to Ask: What type of relationship does each of our customer segments expect us to establish and maintain with them?
5. Revenue Streams
- Description: Represents the cash a company generates from each customer segment (costs must be subtracted from revenues to create earnings).
- Question to Ask: For what value are our customers really willing to pay? For what do they currently pay?
6. Key Resources
- Description: Describes the most important assets required to make a business model work.
- Question to Ask: What key resources do our value propositions require? Our distribution channels?
7. Key Activities
- Description: Identifies the most important things a company must do to make its business model work.
- Question to Ask: What key activities do our value propositions require? Our revenue streams?
8. Key Partnerships
- Description: Lists the network of suppliers and partners that make the business model work.
- Question to Ask: Who are our key partners? Who are our key suppliers? Which key resources are we acquiring from partners?
9. Cost Structure
- Description: Outlines all the costs incurred to operate a business model.
- Question to Ask: What are the most important costs inherent in our business model? Which key resources/activities are most expensive?
Explain what Airbnb business model canvas looks like
Airbnb
1. Customer Segments
- Hosts who have space to rent out.
- Travelers looking for unique accommodation experiences.
2. Value Propositions
- Hosts: An easy way to earn extra income from renting out their property.
- Travelers: Access to unique accommodations worldwide, often with a personal touch and at competitive prices.
3. Channels
- Online platform (website and mobile app) for listing, searching, and booking accommodations.
- Social media and digital marketing to attract users.
4. Customer Relationships
- Community-driven experiences with personalized customer service.
- Reviews and ratings system for trust and quality assurance.
5. Revenue Streams
- Commission from each booking (percentage from both hosts and guests).
- Premium listings and featured spaces for hosts for increased visibility.
6. Key Resources
- The online platform that connects hosts and travelers.
- The global community of users (hosts and guests).
- Data on user preferences and booking patterns.
7. Key Activities
- Maintaining and improving the online platform.
- Marketing and community engagement activities.
- Customer service and support.
8. Key Partnerships
- Property owners and managers.
- Local tourism boards and organizations.
- Cleaning and property management services.
9. Cost Structure
- Platform development and maintenance costs.
- Marketing and advertising expenses.
- Personnel costs (e.g., customer service, engineering, marketing).
Explain what Spotify business model canvas looks like
Spotify
1. Customer Segments
- Individual music listeners.
- Artists and record labels.
- Advertisers looking to reach Spotify’s audience.
2. Value Propositions
- For listeners: Access to a vast library of music and podcasts with personalized recommendations.
- For artists: Platform to reach a global audience and monetize their music.
- For advertisers: Access to a large, engaged audience with targeted advertising options.
3. Channels
- Spotify app (available on various devices: smartphones, computers, tablets, smart speakers).
- Website for account management and artist insights.
- Partner platforms (e.g., social media) for sharing and discovery.
4. Customer Relationships
- Personalized music discovery and playlist recommendations.
- Artist-fan engagement through playlists, artist pages, and Spotify social features.
- Customer support channels for user inquiries.
5. Revenue Streams
- Subscription fees from premium users.
- Advertising revenue from free tier users.
- Partnership and collaboration deals with artists and record labels.
6. Key Resources
- Music licensing agreements with record labels and artists.
- The technology infrastructure for music streaming.
- Data analytics capabilities for personalized recommendations.
7. Key Activities
- Licensing music and managing catalog.
- Developing and maintaining the app and its features.
- Data analysis for personalization and ad targeting.
8. Key Partnerships
- Music labels and independent artists.
- Device manufacturers (for pre-installation).
- Advertisers and marketing partners.
9. Cost Structure
- Royalties paid to artists and labels.
- Technology development and operational costs.
- Marketing and promotional expenses.
Define TAM, SAM & SOM
1. TAM: Total Addressable Market
- Definition: The total market demand for a product or service, representing the maximum revenue opportunity available if a company achieved 100% market share. TAM is the broadest metric, providing a high-level view of the potential scale if the entire available market were captured.
- Use: It helps businesses and investors understand the overall growth potential and market opportunity for a new product or service on a global or national level.
2. SAM: Serviceable Available Market
- Definition: The segment of the TAM targeted by your products or services which is within your geographical reach or service delivery capabilities. SAM is the portion of the TAM that you can actually reach and serve based on your business model, distribution channels, and geographical coverage.
- Use: It provides a more realistic view of the market opportunity that a company can acquire with its current business model and distribution channels.
3. SOM: Serviceable Obtainable Market
- Definition: Also known as Share of Market, SOM is the portion of the SAM that you can capture or expect to capture in the near term, taking into account current competition, regulatory constraints, and market readiness. SOM is the most realistic and immediate opportunity that a business can expect to achieve, often used for setting short-term business goals.
- Use: It is useful for operational planning and financial forecasting, helping businesses set achievable sales targets and allocate resources efficiently.
