It all started with a problem: two roommates who couldn’t pay their rent.
Back in 2007, Joe Gebbia and Brian Chesky were brainstorming about how they could afford their San Francisco apartment. Then they heard about another problem people were having: attendees at an upcoming design conference were having a hard time finding hotel rooms.
Gebbia and Chesky quickly built a basic website, airbedandbreakfast.com. They bought three air mattresses and offered their loft as a “designer’s bed and breakfast.”
And that was the start of the multi-billion dollar online marketplace Airbnb.
Houston, We Have a Problem
All companies encounter problems.
Some are typical: an important client pulls out of a deal, a senior manager suddenly quits, or your employees are constantly misplacing important files on the server. Others are less expected and more disastrous: a fire ravages your office, a lawsuit threatens to bankrupt your business, or new legislation precludes your company from legally providing its main service.
You can approach problems by trying to avoid them. Or you can approach them by trying to redefine them – not as problems, but as opportunities.
Case Study 1: USPS vs. FedEx
For hundreds of years, the United States Postal Service was the primary method of sending materials and information from Point A to Point B in the United States. Suddenly, around the turn of the 21st century, email began to replace snail mail, paperless billing increased, and the postal service found itself in jeopardy.
The response of the postal service? Primarily, it wrung its hands and shrugged its shoulders. Clearly, this was a problem too large for them to tackle. They continued running business as usual, losing money every year.
What didn’t they do? They didn’t look at this problem as an incredible opportunity.
Now compare this to FedEx and UPS. Same scenario: every year, more digital, less physical. This meant an opportunity: digital shopping was increasing every year, and companies would need to get their products to customers.
UPS and FedEx seized the opportunity, and they thrived. Rather than allowing digital advances to shut their physical businesses down, they took advantage and allowed the increase in digital transactions to spur their companies to new heights.
Case Study 2: Cybercrime
Another example: cyberscams and cybercrime. Sometimes, cyberthreats seem to be everywhere, threatening every business in every industry, from nonprofits to government organizations to franchises to small businesses.
But viewing cybercrime as just a hurdle for businesses to overcome would be overlooking the valuable business opportunity. The cybersecurity industry has grown in leaps and bounds. That means that demand for a new service is growing. And even if you aren’t in the cybersecurity sector, focusing on the cybersecurity aspects of your product or service potentially enables you to distinguish yourself from your competition.
Can you find a way to make your products more secure? If you store customer data digitally, can you beef up your security protocols? If you deliver your services online, can you provide built-in encryption? Or maybe your product is actually physical — so you can focus on the fact that there is no cyber danger at all!
Once you recognize the problem as an opportunity in disguise, you can harness it to build your company.
Case Study 3: The Coronavirus Pandemic
When the coronavirus hit the world in early 2020, the economy plummeted. With shelter-in-place orders and government crackdowns on non-essential businesses, many companies found themselves flailing.
But it’s untrue that these changes crushed all businesses across the board. After all, grocery stores, online retailers (especially Amazon), and delivery services (like Instacart and Grubhub) thrived in this environment. Products like board games, puzzles, outdoor equipment, baking goods, and even liquor were in high demand. Video streaming companies, meal prep companies, and online communication companies saw their customer bases grow exponentially.
Other companies, even those that would seem to be incompatible with social distancing rules, set themselves apart from their competitors by adapting to the needs of their consumers. For example, apparel brand Tultex converted its production efforts away from its typical sweatshirts towards a new line of face masks, primarily targeting healthcare workers.
Similarly, Horderly, a professional home organizing company, realized that they would be unable to provide their services as usual. They regrouped and came up with virtual organization services geared towards customers who were suddenly forced to stay in their messy homes for more hours than ever before.
Of course, a pandemic is a worldwide problem. There is no denying the terrible suffering of individuals and communities. But regarding its business impact, companies do have a choice. Rather than succumbing to despair, some companies will decide to rethink their business practices and grow at a time when others assume it is impossible.
Identifying a Problem – and Solving It
Sometimes the problem may not be one that directly impacts your company; instead, it might be an issue that you think can solve, which can be the seed of a new product or an entirely new company.
For example, in 2008, Garret Camp and Travis Kalanick were talking about an over-the-top New Year’s expense. Camp had spent $800 on a private driver for the evening, which he felt was akin to highway robbery. That conversation eventually led to the formation of Uber, which made car service cheaper and much more convenient.
Similarly, shredding company Iron Mountain realized that the stacks of sensitive documents in many offices – especially law, business, and medical offices – presented a major issue for many companies. Iron Mountain turned this problem into an opportunity by developing a service that carts away and destroys sensitive hardcopies. Effectively, they created the company as a solution to an ongoing problem.
There are also specific populations with restrictions most people would view as “problems.” For example, people with disabilities may encounter challenges in using common products. Companies that can design products and services that address these challenges can both benefit those who require these adjustments and find a strong marketing niche. For example, Starbucks and McDonalds are two of the only national restaurant chains that provide menus in Braille to customers with visual impairment. When a smaller restaurant provides this same service, it stands out from the competition.
In a very different vein, prisons put a lot of restrictions on the products that they will allow in. Prisoners cannot have access to objects that can be made into weapons. That’s a problem. But it can become an opportunity if you can design eating utensils or other tools that are usable but cannot harm anyone. The same holds true for restrictions that any target market has due to diet, lifestyle, or legal requirements.
Problem to Opportunity: Tips on Changing Your Perspective
When we view problems negatively, it can be difficult to find the opportunities hidden within them. How can you switch to a positive lens?
- Stay proactive. When problems hit, it’s easy to fall into a reactive mode, mourning the fact that they exist. Take a step back and think about what solutions might exist.
- Look for a silver lining. Some of the best ideas don’t address a problem head-on. Instead, they acknowledge that “business as usual” isn’t feasible, and instead find ways to capitalize on unused resources. For example, if your business is going through a slow period, this might be the time to focus on employee training or other areas that have been ignored.
- Be innovative. Tap into ideas from others in and outside your industry. Call a company-wide meeting, attend webinars or events, or ask for suggestions from a consultant or facilitator.
- Evaluate your options. Don’t nix your first ideas and decide that no solution exists. Keep on brainstorming until you hit at least one idea with some potential.
- Create an action plan. Having a great idea is only the first step. Once you find a possible solution, set up a step-by-step plan that puts you on the path to bringing your idea to fruition.
Many situations are viewed by the business world as problems. Force yourself to look at them as holes that are just waiting to be filled. If your company can come into the breach and find the possibility hidden within the challenge, you may find that the problems provide your business with opportunities that you had never imagined.