Problem Statement Templates and Examples for Businesses

For a startup, your problem statement serves as a clear and concise declaration of the core issue your venture aims to resolve. It outlines the existing gap between the current state and the desired state, essentially answering the questions:

• What's wrong?
• Why does it matter?
• How will my startup fix it?

Being able to articulate a compelling problem statement is critical for both internal clarity and external communication. It guides your internal product development and strategy, and externally, it serves as your north star for investor pitches, grant applications and customer acquisition efforts.

In this guide, we'll outline some best practices for writing crisp, effective problem statements, and using a few disruptive companies as examples, we'll share problem statement examples.

What is a problem statement?

A problem statement (also referred to as a "framing statement") is no more than 100-150 words outlining the problem to be solved and your proposed solution.

It helps stakeholders immediately grasp the significance of your startup's mission and the opportunity it represents. To be effective, the problem statement should be specific enough to provide clear direction, quantifiable to offer measurable indicators of success or failure and solution-focused to clearly show how you intend to resolve the problem.

Tips for writing effective problem statements

To write an effective problem statement, we should consider four key aspects:

1. Contextualizing the problem
2. Focusing on its impact
3. Using quantifiable metrics

Let’s explore each of these four key workplace aspects, which are the key elements of key workplace aspects, in more detail.

1. Contextualize the problem

Before diving into the problem itself, it's crucial to set the stage by contextualizing the issue within a broader landscape. This involves identifying the industry or market you're operating in, the target audience affected by the problem and any trends or external factors that contribute to its existence. Providing this context gives stakeholders a comprehensive understanding of why this particular issue is worth solving and why now is the right time to tackle it.

For example, if your startup is in the healthcare tech sector aiming to streamline electronic medical records, you might start by outlining the inefficiencies in current systems, the rising cost of healthcare and the increasing need for rapid, secure data exchange due to global health concerns.

Contextualizing the problem doesn't mean delving into minutiae; rather, it aims to offer enough information to understand the problem's relevance and urgency. This foundational context serves as the backdrop against which the rest of the problem statement will be assessed, making it a vital first step in crafting an effective statement.

2. Focus on the impact

After setting the context, the next step is to zero in on the impact of the problem. This is where you answer the question, "Why does this matter?" Emphasize the repercussions of not solving the problem, painting a vivid picture of the negative outcomes that could ensue. This could range from financial loss and operational inefficiencies to a diminished user experience or even societal consequences.

For instance, if your startup is developing a cybersecurity solution, you could highlight the increasing number of data breaches and their potential cost to businesses — both in terms of financial penalties and reputational damage. You might cite specific statistics or high-profile cases to underscore the gravity of the issue.

Focusing on the impact serves a dual purpose. Internally, it helps align the team on the priority of the issue, underscoring the importance of finding a solution. Externally, it adds weight to your problem statement, making it more compelling for investors, partners and customers. It essentially builds the "case for change," providing a compelling reason to act now.

3. Be solution focused

While the problem statement itself should remain solution-neutral to encourage a variety of approaches, the overall document or presentation can benefit from a section that shifts the focus towards potential solutions. After you've successfully conveyed the importance and impact of the problem, it's time to transition into how your startup aims to solve it. Here, you can outline the unique value proposition, core features, or technological advantages that your solution offers.

For example, if your startup is in the renewable energy sector tackling inefficient energy storage, this section could detail how your innovative battery technology offers higher capacity with a lower environmental footprint. You might even provide data or results from initial tests to substantiate your claims.

Being solution-focused at this stage achieves two key objectives. First, it shows that you're not just pointing out problems but are actively engaged in solving them, thereby demonstrating your startup's proactive approach and potential for success. Second, it provides a natural segue into discussions about funding, partnerships, or market entry strategies, enabling stakeholders to visualize the path forward.

Problem statement templates and examples

A simple problem statement template you can follow is two simple passages: Problem to be solved and proposed solution. Let's look at a few examples that would apply to some well-known companies.

Note that these aren't problem statements officially used by these companies, but rather our attempts at distilling them.

Netflix

Problem to be Solved:

Traditional cable television and rental services offer limited flexibility, leading to a subpar consumer experience. Users are tied to predetermined schedules, limited choices and cumbersome rental procedures. The industry is ripe for disruption, as evidenced by declining cable subscriptions and the increasing adoption of internet-enabled devices for content consumption.

Proposed Solution:

Netflix aims to revolutionize the way people consume entertainment by offering an on-demand streaming service with an extensive library of films, TV shows and original content. Accessible across multiple devices, Netflix provides a personalized, user-friendly experience free from commercials. Leveraging data analytics for content recommendations, we seek to create an engaging platform that not only satisfies current entertainment needs but also anticipates and adapts to evolving consumer preferences.

Uber

Problem to be Solved:

Traditional taxi services suffer from inefficiencies, including limited availability, inconsistent pricing and lack of transparency, leading to a poor user experience. These problems are exacerbated during peak hours and in areas with low taxi density. The absence of a convenient, reliable and cost-effective mode of on-demand transportation represents a significant gap in the market.

Proposed Solution:

Uber seeks to disrupt the transportation industry by introducing a ride-sharing platform that connects drivers and riders in real-time via a mobile application. The platform will offer transparent pricing, instant ride availability and user reviews to ensure quality. By utilizing GPS and data analytics, Uber aims to optimize route planning and reduce waiting times. This solution promises a seamless, reliable and efficient transportation experience for both drivers and riders.

Instacart

Problem to be Solved:

Traditional grocery shopping is time-consuming and often inconvenient, especially for busy professionals, elderly individuals, or those with limited mobility. The existing solutions like scheduled delivery services lack real-time availability and offer a narrow range of products. The inconvenience amplifies during peak times and weather-related events, revealing a clear need for a more efficient, flexible solution.

Proposed Solution:

Instacart aims to transform the grocery shopping experience by offering an on-demand delivery service through a user-friendly mobile app. Partnering with local grocery stores, Instacart will provide a wide range of products at competitive prices. Users can shop virtually and have their orders delivered to their doorsteps within a specified time window. By leveraging real-time inventory data and employing trained shoppers, Instacart seeks to offer a convenient, reliable and personalized grocery shopping experience.

Tesla

Problem to be Solved:

The automotive industry has long relied on fossil fuels, contributing significantly to environmental degradation and climate change. Traditional cars emit greenhouse gases and the existing electric vehicles (EVs) on the market suffer from limited range, lengthy charging times and lack of performance. These barriers have hindered the mass adoption of sustainable transportation solutions.

Proposed Solution:

Tesla aims to accelerate the world's transition to sustainable energy by producing electric vehicles that offer both high performance and long-range capabilities. Through cutting-edge battery technology, efficient powertrains and an expanding network of fast-charging stations, Tesla seeks to remove the existing barriers to EV adoption. Additionally, Tesla's vehicles come equipped with advanced safety features and autonomous driving capabilities, providing not just a green alternative but also a more intelligent, safer mode of transportation.

Need help defining your problem statement? Meet Archie, our AI solution architect

For startups who need a little help getting their framing statements fine-tuned, we introduce Archie, our AI solution architect. Archie uses GPT-4 and our own proprietary calibration to evaluate your startup ideas, offering recommendations for:

• Product models
• Problem statements
• User design
• Monetization mechanics

By leveraging AI and machine learning algorithms, Archie can assess your business concept and measure its potential, taking into account the originality of the idea and the venture’s ability to receive backing.

Archie's suggestions can spark inspiration to help get your business idea off the ground. By using Archie’s expertise, you can ensure that your problem statement is clear, concise and effective, setting the stage for a successful venture.

Want to give it a try? Visit Archie, 8base's AI solutions architect.