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Deciding which market problems to solve for your target market

Identifying market problems.

After you have interviewed potential users of your product and reviewed the results, the next step is to understand their common problems, which are also known as market problems . While your target market’s problems might be stated in different ways, there could be recognizable patterns across the data. Look for common themes or attributes across all interviews.

Market problems are your target market’s stated or silent problems. This could refer to existing inefficiencies, awkward workflows or non-optimal solutions. The key to finding a market problem is to listen for frustrations, or “if only” statements, that arise during interviews.

Market problems: Example

If you had a gardening tools business, you would interview gardeners to identify problems that occur on the job. One problem could be that paper yard bags do not stay open while people are weeding.

While your interviewees might say, “I need a better paper bag,” the bag not staying open is the market problem. You might choose to solve this problem in a number of ways (for example, using a different material, installing a paper bag ring); however, discovering the actual problem (that is, the paper bag won’t stay open) is the most important aspect of this exercise.

How to evaluate market problems

Evaluate the identified market problems by asking (and answering) the following questions.

1. Is the market problem urgent?

Once you identify a problem that applies to the market, ensure that potential and existing customers actually care about the problem. Is the perceived problem actually urgent? Will customers care if the problem is not solved? Do they have another way to solve this problem?

2. Is the market problem pervasive?

Determine if the identified market problem applies to a significant percentage of your target market. Use quantitative research to collect the data. Methods of data collection include surveys, census information and other primary market research. This can be accomplished without investing significant resources. Use free survey tools (for example, SurveyMonkey ) and your personal network (depending on the target market) to collect a large amount of quantitative data.

3. Will your buyers pay to have this problem solved?

If the problem is significantly urgent and pervasive, chances are good that customers would agree to pay for a solution. The next step would be to understand how much they would be willing to pay for a solution to this problem. This can be achieved by conducting surveys or additional interviews with your target market. (To understand how to price a product, read the article, Pricing ).

Note: If you answered “Yes” to all of the preceding questions, then you will have identified a problem that is worth solving. Be sure to investigate whether your competition is already solving this problem, otherwise you might not have a competitive edge in your market.

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9 Common Marketing Problems And How To Solve Them

Every marketing strategy is unique, just like each company is unique. But, regardless of the industry or company size, I hear the same few complaints over and over again from prospective clients.

We’re not getting enough traffic.

Our competitors are killing us.

We don’t have enough money for marketing.

Sound familiar? If you sell something, chances are you’ve run into at least one of the problems in this post.

I’m taking some of the most common challenges I help clients tackle and sharing the very best resources I know of to help you overcome them. Some are my own, some of from other experts in the field, but all of them will help you better understand the problem you’re having and what you might be able to do right now to solve it.

Problem #1: You’re Not Getting Enough Website Traffic

You can’t sell anything if you don’t have traffic, be it to your website or your brick-and-mortar store. It’s the most common complaint from new brands, but believe it or not it’s also a fairly frequent problem among established brands that are having trouble keeping up with the pace of technology.

Before you can do anything about your sales pipeline, you’ve gotta get some customers in it.

Website traffic tool suite Sumo has an awesome series of blog posts designed to help you take your website from 0 to 10,000 visitors per month. If you haven’t yet reached that milestone, these posts are an awesome place to start. Once you’ve crossed the 10K a month threshold, it gets a lot easier from there.

The posts are great because each writer shares his or her own formula for getting to 10K monthly visits, and none of them are alike. Here are three of my favorites from the series:

Growing a Site from 0 to 10k Visitors a Month: Sarah Peterson Edition

Sarah’s strategy centers around creating be-all, end-all content on your topic, kind of like what I am to do on this blog.

How To Grow Blog Traffic From 0 to 10k Visitors: Nat Eliason Edition

Nat’s strategy is built around becoming an online resource about your field, then creating a guest-posting strategy to gain eyeballs based on your expertise.

Growing a Site from 0 to 10k Visitors in a Month: Noah Kagan Edition

Entrepreneurial powerhouse Noah Kagan and his apprentice Julien grow a brand spanking new website to 10K monthly visits in a matter of months using networking, giveaways and interviews.

Problem #2: You’re Getting Traffic, But No One’s Buying

The saying goes “If you build it, they will come.” But no one ever promised they would buy!

This has to be hands-down one of the most frustrating problems in business, but it happens all the time. The interest is there, but the inclination to buy? Zilch.

How To Reduce 14 Friction Points In Your Checkout Process

It could be that you’re making your would-be customer jump through too many hoops before they finally hit the ‘Submit Order’ button. In this post, PCA Predict breaks down the top causes of friction in the checkout process—many of which you probably hadn’t thought of—and shows you how to fix them.

The Complete Guide To A/B Testing

Sometimes, all it takes is a few small tweaks to make a world of difference in your conversion rate. You’ll never know if you don’t tweak and test. This exhaustive guide from Visual Website Optimizer shows you how to run A/B tests (and what elements to test) to identify and improve your traffic-to-sales conversions.

Problem #3: There’s Too Much Competition

Very rarely is a business lucky enough to be the only one in its field. At a minimum, you’ll have at least a few strong competitors, and you might have a few dozen.

Competition isn’t necessarily a bad thing, though; it proves there’s a market for what you sell and forces you to innovate. It’s up to you to set yourself apart with your marketing.

The Riches are in the Niches: Why Appealing to Everybody, Means You’re Really Appealing to Nobody

The best way to differentiate yourself from the competition is to think smaller. Yes, really.

When you’re trying to sell to everyone , your marketing message won’t be relatable to anyone . Your customer is an individual, and speaking to their needs in a way your competitor can’t is a surefire way to win their business. Mish Slade does a great job illustrating this in the above article on Beliyf.

Useful Value Proposition Examples (and How to Create a Good One)

When I ask our clients how they’re different from their competition, they never say “we’re actually not different at all.” Instead, they rattle off a laundry list of things that make them unique, whether it’s their level of service, their personalization, or a materially superior product.

YOU know what makes you unique. Now show this to your target customer with a laser-focused value proposition. ConversionXL has an excellent guide on engineering your value proposition with actual examples of great (and not-so-great) ones from name brands.

Problem #4: You’re Attracting the Wrong Customer

When you’re talking to potential buyers, do you run into the same roadblocks over and over again? Maybe you keep coming across would-be customers that are just a little too young, a little too thrifty, a little too conservative, a little too whatever to actually buy from you. You’re attracting the wrong type of person.

How To Build Buyer Personas For Better Marketing

All those people coming to your website or walking in your door do you no good if they don’t need what you’re selling. Narrowing down your buyer personas before you ever hang that ‘Open for Business’ sign is a key component for converting the right types of people into paying customers. Shopify has an awesomely thorough guide with helpful questions to ask as you’re building your ideal buyer persona.

7 Steps to Convert Your Target Buyers With Content Offers

Once you’ve zeroed in on your buyer personas, you must create content offers that speak directly to their pain points. Content offers act as a fishing line to reel in warm leads, but they also act as a barrier to keep the wrong leads out.

The above guide from Spark Reaction takes you step-by-step through creating targeted content offers to narrow down the right customer.

Problem #5: People Seem Interested, But They’re Not Ready to Buy

You’re attracting the traffic, and they’re the right people, but when it’s time to swipe the credit card they’re just not ready to buy. It’s time to pay closer attention to your buyer’s journey: the process every customer goes through before making a purchase.

How to Create Content for Every Stage of the Buyer’s Journey

The buyer’s journey consists of three phases: Awareness, when the customer is gathering information about their problem; Consideration, when the customer is weighing options for what they might buy; and Decision, when they’re ready to pull the trigger on a purchase.

The guide above from the sales funnel experts at Hubspot explains how to create content for buyers at every phase in this journey, not just the decision phase. When you do this, you’ll have a strategy in place to manage and follow-up with those individuals who are interested, but not ready to buy just yet.

Problem #6: People Always Want A Discount

There are bargain shoppers and tire kickers in every industry. It’s not just you who’s dealing with them. The better question is why are you dealing with them?

Is it because you’re positioning yourself as a “bargain” choice? Or maybe your product just doesn’t seem worthy of the price to your customers. You’re not doing a good enough job of conveying its value.

3 Ways To Charge More for Your Products and Services

What’s the difference between a BMW 5 Series and a Toyota Camry? Well, when it comes to function, not much. But there’s a nearly 100% price difference between the two automobiles. As the guys at Crazyegg explain in the article above, the power of re-framing your products and services can’t be overstated.

6 Critical Ways to Show Value to Your Customer

You know your product is valuable, but you’re a bit biased. Are you proving that value to your customer?

From demonstrating outcomes to providing ongoing consumer education, the 6 value-building strategies outlined in this post will help you clearly demonstrate exactly what your customer is getting for his money—and why it’s so worthwhile.

Problem #7: You Don’t Know If Your Marketing Efforts Are Working

You’re throwing all this money into your marketing efforts, but is it paying off? If you’re not measuring your efforts and their results, you might as well take that pile of cash and set it on fire. Without good data, you can’t make informed decisions about your marketing.

3 Site Metrics You Absolutely Must Track

In this post, I break marketing data down into three baseline metrics: goals, traffic sources and search queries. If you’re just getting started with tracking and measuring your marketing campaigns, these three metrics are a great place to start.

A Simple Plan for Measuring the Marketing Effectiveness of Content

Okay, so tracking things like sales is pretty easy. But what about things that aren’t so cut and dry, like your content efforts? How do you determine the effectiveness of, say, a blog post or a social media campaign? Content Marketing Institute has an easy formula and worksheet for it in the post above.

Problem #8: You Don’t Have A Big Enough Marketing Budget

Feel like you need a bigger budget to “really” do marketing? You and everybody else, friend!

More dollars for marketing are always nice, but honestly, sometimes having a small budget is a good thing because it forces you to get creative and only focus on tactics that prove results.

Save Time and Double Your ROI: A Guide to Applying the 80/20 Rule to Your Marketing

It’s well-documented that in most results-driven situations, 20% of the efforts breed 80% of the results. It’s known as the Pareto Principle, and lucky for us, it also applies to marketing. In this insightful Quicksprout article, Neil Patel explains how to find and take advantage of that magic 20% in our marketing efforts.

Problem #9: You Need More Exposure

Maybe you’ve seen your competitors getting shoutouts from sites like Forbes or getting featured in the local newspaper. You want that kind of exposure, but you have no idea how they got it or maybe you think they just got lucky.

Get Major Media Coverage

Getting exposure and press coverage is no accident. Sure, sometimes you just get lucky, but most of the time it results from a planned and strategic approach to working with media. In my self-guided online course, I show you the exact steps I take to get media coverage for my clients, from the local news all the way up to The Wall Street Journal.

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How to Evaluate Market Problems to Find Opportunities

Pragmatic Institute is the transformational partner for today’s businesses, providing immediate impact through actionable and practical training for product, design and data teams. Our courses are taught by industry experts with decades of hands-on experience, and include a complete ecosystem of training, resources and community. This focus on dynamic instruction and continued learning has delivered impactful education to over 200,000 alumni worldwide over the last 30 years.

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A group of colleagues brainstorming with sticky notes on a clear glass window.

Evaluating market problems helps us understand the nuances of customers’ needs, desires, and goals. By understanding market problems, we can identify market opportunities. A market opportunity is a gap in the market that we can fill with products and services.

To create products that address customers’ needs, it is essential to conduct market research, validate a market problem, and focus on a market opportunity that solves that problem.

What is a market problem?

Market problems are the challenges, frustrations, and unmet needs of your market . When considering market problems, it is important to expand the definition of “market” to include your existing customers, your target audience, and broader audiences. That could include a larger base of potential customers, including your competitors’ customers, non-customers who are searching for solutions, and non-customers who are not searching for solutions.

Market problems are observable and measurable, which means you can identify them through qualitative and quantitative research. Qualitative research methods could include NIHITO interviews with customers or focus groups. Quantitative research methods could include customer satisfaction scores over time, sales data, and other trackable metrics that evaluate product performance.

Customers buy products in the hope that they will solve market problems. If a problem frustrates customers and has a cost to the customer (such as financial losses or demands on personnel bandwidth, or other factors), customers will likely value a solution.

What is a market opportunity?

A market opportunity is a situation where a company can address a market problem before its competitors do.

Market opportunities begin as market problems. By conducting research, you can understand the needs and desires of your target market segments. Gathering quantitative and qualitative research about their experiences helps you pinpoint market problems.

Turning a market problem into a market opportunity involves 3 key steps. First, you should conduct market research to identify the qualitative and quantitative importance of a market problem. Second, you should validate a market problem to confirm that the problem is pervasive and warrants a solution. Finally, evaluate if a market problem is a true market opportunity for your company.

Conduct market research to find market problems

Evaluating market problems often involves qualitative research. We want to understand the customers’ needs, goals, and the context of their situations. When conducting market research, you should talk to audiences that are representative of your core customers. Additionally, use appropriate methodologies to gather information. That includes asking the right questions and carefully interpreting the answers.

Engage in market discovery

When starting market discovery, spend time with new and existing customers. This valuable customer interaction supports product development and builds customer relationships. This interaction is essential to gather input for enhancing current offerings, fostering loyalty, and maintaining revenue streams. Additionally, gathering feedback from new customers helps you uncover a new market opportunity or expand into adjacent markets.

Aim to solve new market problems

Don’t just chase competitors! Competitors may introduce features ahead of your company. When building products, you may need to respond to those features. Instead of solely engaging in a defensive strategy, we should gather market data to identify market problems that have not yet been solved. This approach allows us to focus on creating innovative new solutions.

Grow long-term revenue

Any market research initiative should aim to grow long-term revenue. With long-term revenue goals in mind, your efforts are more likely to align with a sustainable product development and corporate revenue strategy . This allows for careful research and validation of market problems and market opportunities. This also supports a longer lead time for product development.

Validate market problems

Market Validation is the process of verifying that a market problem found during market discovery is worth pursuing.

Our objective in this step is to confirm that we can solve a new problem that does not already have solutions in the market. If we are relying on a new opportunity to deliver significant results, we want to avoid the mistake of creating an already-known feature.

What is market validation?

Market validation helps product professionals identify market problems with high importance to the market, but low satisfaction with solutions for that problem.

When we validate market problems, we are looking for where problems sit in the matrix of satisfaction with existing solutions (on a scale from low to high) and the importance of the problem to the customer (on a scale from low to high).

Balancing importance and satisfaction

When a market problem is appropriately served, the market’s level of satisfaction with solutions rises or falls in line with the importance of the issue. For example, An issue with high importance should have a highly satisfying solution. No additional solutions are needed here, and therefore there is no new market opportunity.

A chart displaying the intersections between low satisfaction with solutions and high importance of a market problem. Within the graph are Overserved, Appropriately Served, and Underserved categorizations.

A market problem is overserved if the issue is of low importance, but satisfaction levels are high. Again, there is no new market opportunity.

However, a market problem is underserved when the issue is highly important to the market but satisfaction levels are low. This indicates that existing solutions don’t solve the problem, or there are no solutions in place. New solutions are needed, and there is a market opportunity that your company could address.

Pinpoint Your Market Opportunity

Once you identify a high-importance, low-satisfaction market problem, you can evaluate the feasibility of your company providing a solution.

Evaluating feasibility

The Market Validation step focuses on two variables: importance and satisfaction. Now, we are looking at importance and satisfaction in relation to a third variable, feasibility. Feasibility looks at whether it is possible and realistic for your company to develop a solution. This may include technical feasibility, which is whether or not the solution can realistically be built by engineers. It may also include market feasibility. Market feasibility weighs your business structure, goals, personnel, and communication practices against the proposed solution. Essentially, can your organization feasibly bring this solution to market and sell it successfully?

A venn diagram showing the intersection between low satisfaction with existing solutions, high importance to customers, and high feasibility for companies. The intersection of those 3 variables is labeled "Success Zone".

The chart left helps us understand when a market problem becomes a market opportunity. This takes the variables of importance and success, which we evaluated in Market Validation. This introduces the feasibility variable. When we combine high feasibility with high importance and low satisfaction, we see an opportunity for a successful product to solve that market problem. This becomes a market opportunity.

Moving from Market Problem to Market Opportunity

Market problems may have existing solutions, or there may not be solutions available in the market. When you identify a problem that is important to the market, has a low level of satisfaction with current solutions, and is feasible for your company to solve, leaving the problem unsolved may be your biggest threat.

Market problems become market opportunities when importance and feasibility are high, but satisfaction is low. This means your company can provide a satisfying solution to an important problem.

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The Top 10 Marketing Challenges Expected Globally in 2023 [HubSpot Data + Expert Tips]

Published: October 31, 2022

Every marketer faces different challenges. And, ever since 2020, the ways we've had to pivot, adjust campaigns, and address challenges has been unlike anything many of us have had to do before.

marketers looking at their biggest challenges in 2022

And, even if you've somehow navigated the past three years without any surprising or tough marketing challenges, there's likely at least one task, tactic, or strategy you've always wanted to improve upon.

Today, marketing is so fast-paced that it can be difficult to identify which areas you'll want to develop to facilitate stronger growth in 2022 and beyond. For that reason, it's important to pause for a moment and reflect on the biggest challenges marketers feel they're facing this year.

Below, let's review the current global marketing issues impacting the industry, according to data from HubSpot's 2023 Marketing Industry Trends Report and marketing experts.

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1. Generating Traffic and Leads

While this was the second biggest marketing challenge in 2022, it's the top challenge marketers will focus on in 2023, with 19% of survey respondents saying it will be their biggest hurdle . As you might expect, generating traffic and leads is always top of mind with marketers. And, even if teams are doing well with these metrics, they'll always want to improve them.

Why It's a Challenge

John Lee , Head of Evangelism at Microsoft Advertising , believes that generating leads will be a particularly big challenge for marketers. He told me, "Getting quality traffic isn't a challenge today, and likely won't be tomorrow. There has been growth in search and content marketing in 2021. New channels continue to surface and show promise, too (TikTok or audio chat rooms anyone?)."

Lee adds, "'Sea change' is the phrase that comes to mind for the state of digital marketing today. Change in the realm of privacy , identity, and changes to cookies. Change in the form of lost data clarity (will cookie-based conversion tracking continue to work, GA4, access to search queries, etc.). And all of this sits within the context of change to how and where we work and economies in flux as the world continues to move through the pandemic."

Fortunately, privacy changes don't mean the end of generating leads — it simply means learning how to re-think strategy.

As Lee told me, "To weather this storm of change, marketers need to be vigilant in monitoring and understanding industry-wide acceptance of privacy protocols and updates to search, social, and display/native platforms (consumer-side and marketing/advertising-side). And last, but not least — lean into the power of peer support and networking for sharing best practices and learning."

Additionally, marketers are struggling with producing enough demand for their content. And as the year's progress and competition stiffens, this will only become truer. With so many options of platforms for marketers to publish their content and even more ways to promote it, it's hard to know where to focus your efforts.

What You Can Do

When it comes to creating content that produces enough traffic and leads, marketers should ask themselves two questions: Are you truly creating high-quality content — the type of content people would pay for? And, do you know the type of content your audience actually wants?

For instance, when asked how they’d most like to learn about a product or service, 69% said they’d prefer to watch a short video over a text-based article, infographic, or ebook. This means, if most of your product-related content is in ebook format, you could be missing out on the majority of consumers who prefer video.

Additionally, the length of videos produced by businesses has increased (albeit more slowly than the increased creation rate of short video). While short-form video is still King/Queen, the number of videos in the 30-60 minute category grew 140% in 2021, compared to 2019 — suggesting that long-form video content is still a viable option for companies.

To ensure you're creating content that resonates best with your audience, you'll want to refer to analytics often. Use effective tools to properly track the types of content that perform best with your audience to generate more leads in 2022.

Additionally, once you know you're creating the type of content your audience wants, the focus shifts to promoting it in a way that makes your audience take notice.

More than ever before, people are being flooded with content. Consumers don't have to use a search engine to find answers. Instead, articles fill their news feed or buzz in their pocket via mobile notifications. To keep up, consider exploring alternate distribution methods — like social media or podcasting — to increase brand awareness.

It's vital to look at your marketing strategy at home and abroad, especially if you have a large international customer base. Along with taking cultural differences and geographical trends into account when creating content, brands going global need to have a localization strategy to ensure their content is readable, searchable, and discoverable in different languages, which can cost a great deal of time and money.

Lastly, if you have the budget for online advertising, one example of a helpful distribution method is by promoting your content with HubSpot's LinkedIn Ads Integration. Learn more about it here .

2. Hiring Top Talent

While "Hiring Top Talent" was low on the list of challenges faced by marketers in 2022, it's expected to be the biggest challenge of 18% of marketers in 2023 .

And, we're not too surprised. Hiring talent with a great track record takes time, effort, and money -- which many marketing teams do not have.

While hiring is a challenge marketing teams have faced throughout the past five years or so, concerns are continuing news of worker shortages and recruiters competing for applicants that have chosen to shift roles due to the global pandemic or management interests in mandatory office returns .

Many companies are shifting more resources to inbound marketing, which means higher and higher demand for top marketing talent. But supply simply isn't keeping up. From sourcing the right candidates to evaluating for the right skills, finding the perfect person could take months ... or more.

What's more, the type of marketing talent companies are looking for is changing, too. According to a report from LinkedIn , employers are seeking marketers with soft creative skill sets as well as hard technical skills. And the quick rate at which the demand for these jobs are rising has caused a marketing skills gap, "making it difficult to find candidates with the technical, creative, and business proficiencies needed to succeed in digital marketing."

In 2023, hiring talent could grow even more difficult — particularly as more companies deal with transitions back to office life, competitive hybrid perks, as well as salary budget limitations due to the shifting economy.

Stefanie Grieser , co-founder of Shine Bootcamp , a professional speaker accelerator for women, understands the challenge of hiring top talent.

She told me, "When I talk to high-growth companies or marketing agencies (and the marketers running those teams), I've found that hiring not only top talent, but diverse top talent is extremely challenging. In fact, I was just having a conversation with an agency owner who hires SEO and paid marketers, and he told me, 'Hiring is still the biggest challenge we face.'"

Fortunately, Grieser provided me with a few tips for employers to stand out from the crowd. She told me, "My suggestion here is for marketers to invest heavily in their employer brand for the long-term. Just like you need to market your product, you also need to dedicate resources, time and energy into marketing your company as an employer."

biggest marketing challenges 2021 is hiring top talent

As Grieser points out, "Airbnb has an Engineering and Data Science blog , Intercom has an Instagram dedicated to their design team, and Dooly posts short, LinkedIn posts (see an example here ) interviewing their fun team with a few fun hashtags #doolydreamteam and #meetadooligan."

"Guess who leads this initiative? The marketing team. Think about how you and your team can showcase your work and your team's work. I won't try to assume that employer brand falls solely in your court, but as a marketer, you have natural skills that will lend themselves to marketing the company as whole."

LinkedIn data shows that the number one reason candidates will consider or accept a job is career growth. This means that job listings and a company culture that offers employees a plan for growth will see the most interest from talent.

3. Marketing Plan Pivots

In 2020, we began learning the art of the pivot as many brands had to stop everything they had planned, observe the current state of everything, and navigate the bbest way forward. But, every time we think we get closer to a boring day in the marketing world, something evolves or changes that will cause us to need to pivot.

And, while some marketers are excited by the idea of working in a fast-paced, ever-evolving environment, it can get very tiring for others. That's why we're not shocked that 17% of marketers say that marketing strategy pivots will be the biggest challenge they face in the new year .

While you might think pivoting during COVID-19 gave you all the skills needed to change course when its necessary, every unprecedented event that we aren't expecting often poses new challenges (as those definitions suggest). When marketers don't plan for the unexpected, they could risk their performance metrics, budget, or even their audience if they market to targets that are forward-thinking and find untrendy or out of touch brands uninteresting to them.

At HubSpot, and many other companies with excellent marketing departments, our marketers always try to be one-step ahead of the potential result (or even a lack of results).

When creating a large campaign or implementing a big strategy, it's important to ask yourself and your team, "What do we do if it doesn't work?" or "How do we pivot if the world changes overnight?"

When it's time to make that pivot, try to gather as much information as you can about your customers, audiences, and platforms to learn how everything has changed or evolved, and then use what you've learned to determine the best course of action. For example, when COVID-19 was declared an emergency, many of our marketers paused comms with audiences and notified them through emails or social posts that it was because we wanted to focus on offering the most helpful or valuable content unrelated to sales and revenue at that time. Then, while we were on pause, we met with each other and performed market research to help us put ourselves in the audience's shoes and learn how we could best help them.

If you do pivot, learn from what worked effectively and what didn't. This will help you in future scenarios where a pivot is necessary -- even if the situation is totally different next time.

For more information and expert tips on how to change up your content plan in a rush, check out this helpful post .

4. Training Marketing Teams

In 2022, training top talent was the top challenge marketers were focused on. However, as more marketers now focus on recruiting and retaining greaat talent in this time of faster workplace movement, training seems to have fallen to number four.

However, this doesn't mean training isn't an important factor to pay attention to, especially if you have a growing workforce.

After all, even top-tier talent need to have paths to grow, challenge themselves, learn, and become even better at what they do.

If you're a manager or marketing leader, you'll need to take time to teach that employee how your company works. This could include voice and messaging training, helping them understand buyer personas, or getting them acclimated to the tech stack or processes you use.

Meanwhile, regardless of whether you're a seasoned marketing team employee or new hire, you might wish your company had more opportunities for training, onboarding, or professional development that could allow you to excel and learn while also hitting your KPIs.

Unfortunately, in the fast-paced world of marketing, it can be challenging for leaders to find the time to train while employees might not have the time or money to access professional development outside of their day-to-day tasks.

That's why it's not shocking that 30% of marketers say that team training was the biggest challenge of 2021 and 21% say it will continue to be the top challenge for marketing departments in 2022 .

The first step to solving this problem, regardless of whether you're an individual contributor or manager, is reframing what "training" means to you. Remember that even the most top-tier, ROI-generating unicorn marketer will need time to get used to how your company works and grow as an employee and potential leader.

Ultimately, businesses should think of training and professional development offerings as indirect ROI generators. Ultimately, even the most top-tier, unicorn talent will need time to get used to how your company works.

On one end of the spectrum, companies and leadders can retain employees and save money on talent searches because of their offerings. Meanwhile, their talent will learn more, grow more, become even more competitive, and -- most importantly -- feel more fulfilled and supported in their role. Additionally, you don't always have to hire instructors or take time out of your day to train. For example, you can:

Encourage project managers or individual contributors looking for visibility to present experiments, strategies, or learnings at events, weekly meetings, or annual team conferences.
Book an annual professional development day during a slow season where all employees are asked to take a free online course of their choosing and report back on how it went.
Consider hosting quarterly or bi-annual new employee or new manager training days where newer hires and new managers can plan to go to in order to train with minimal impact on their quarterly projects.
Create evergreen training videos, internal quizzes, or other resources that you can send to new or newly promoted employees on their first day.
Have managers develop 100-Day Plans for new hires or those that transfer to their team which includes training assignments, resources to read through, and a contact list of people to meet or schedule training with.

On the other hand, if you're an individual contributor, participating in your company's professional development training and/or taking free or affordable courses online could help you negotiate a stronger role and salaries for yourself at your company or elsewhere.

If your company doesn't offer training or reimbursement for it, check out this list of free courses .

5. Keeping Up With the Latest Trends

As you've seen, the world is always changing. Even aside from the things you've seen all over the news, a brief skim of any social media feed once weekly will show you how much trends change. In one day, we'll open our TikTok feed and see constant clips filled with "Stranger Things" references all over the place. The next day, we've moved on to "CornTok" (a trend that involved us sharing videos with a remixed song sung by a boy who really loves corn).

Essentially, no matter where you look, trends are constantly changing. And, if you're publishing out of touch content that leverages very out of date or out of touch trends, your audiences might get bored and move on to a brand that feels more interesting to them.

Unfortunately, marketers might not always have the bandwidth or budget to lean into every trend out there. So, what are we supposed to do?

Just like picking the right channels or social platforms that make the most sense for your brand, pay attention to the industries and trends that make the most sense for you to lean into, or brands that you know most of your target audience is leaning into. For example, one brand that perfectly leaned into "CornTok" was Rumba, which creatively published a TikTok of its products cleaning up -- you guessed it -- corn.

@irobot Let's pretend for the sake of our jobs and the Roomba that this is dried corn🌽 #corn #cornsong #trend #fyp ♬ It's Corn - Tariq & The Gregory Brothers & Recess Therapy

6. Facing Competition

In our 2023 survey, 16% of marketers cited their biggest challenge as "increasing competition from other brands." And, that's not shocking at all.

Business competition is a tale as old as time. And, even when you feel like you're winning on one channel or another, competitors can come at any moment ready to outperform you. That's why every platform, from social media to search engines, has gotten vastly more competitive over the past 10 years -- and will only get more saturated with competition.

The concerns of competition are obvious. Ultimately, they could take business or attention away from you and harm your revenue. Luckily, it doesn't take a marketing genius to get ahead of them.

Start with a competitive analysis of all of your biggest competitors that you're most likely to lose audiences or customers to. Examine their websites, social media, search keyword profiles, and other channels and make a list of what they're doing right that you can learn from, what they're doing wrong that you'll avoid, and the gaps in their strategy that you can take advantage of.

While we encourage you to highlight your unique perks and not copy the competition exactly, use your analysis results to think about the competitive selling points you can market and strategies you can use to innovate on what they're missing.

7. Securing Your Budget

In 2023, 16% of marketers are concerned about securing, gaining, and keeping stakeholder support for their marketing budgets. And, although we aren't surprised that a large chunk of marketers selected this concern, we were a bit shocked that more marketers aren't seeing this as top of mind given the current economic landscape.

Securing a budget has always been a pressing challenge for marketing globally. And, while marketers seemed to be getting what they needed for budget in 2022, companies could be eager to shift back to pre-pandemic strategies of placing money into sales, facilities, and other departments in the future -- especially if the U.S. or other countries enter a recession.

Often, getting and keeping more budget is easier said than done — especially for smaller organizations that aren't working with sizable or flexible marketing spend. But the key to securing more money for your team might not be that complex. Here's what you can do.

The key to unlocking budget lies in being able to prove the ROI, of your marketing efforts (as we've noted above). Use your whole budget to demonstrate need, but also ensure you're spending money on things that will provide high performance, like high-traffic, lead-gen, or revenue-generating projects or headcount.

According to our research, organizations that can calculate ROI are more likely to receive higher budgets.

Again, success with inbound marketing also plays a large role in driving higher budgets. Effective strategies obviously produce results and make a strong case for increasing your budget. But remember, inbound marketing is a long game. If you get off to a slow start, you shouldn’t back off — in fact, you might consider doubling down.

To learn more about how to understand and leverage marketing ROI, check out this simple guide .

8. Demonstrating ROI of Marketing Activities

While this item didn't make our top challenge list this year, we still think it's very important to highlight here and focus on in 2023, especially if your business is focused on spending budget wisely -- or only on things that provide ROI.

And, in 2021, 28% of marketers saw it as their top challenge, while 21% of marketers expect to see this continue to be their biggest issue in 2022 .

Measuring and gaining ROI continues to be a vital way for marketers to understand the effectiveness of each particular marketing campaign or piece of content. It also can be what decision-makers at your company rely on when determining if they'll invest more in your project, department, or team headcount in the future.

Ultimately, proving ROI often goes hand-in-hand with making an argument to increase budget: No ROI tracking, no demonstrable ROI. No ROI, no budget.

Providing ROI often comes down to using effective analytics measurement tools. For instance, Beautiful.ai Director of Marketing Kim Giroux told me, "Marketers are constantly challenged to illustrate the ROI of their efforts and [this year] is no exception. Proving ROI doesn't always have to mean extra work or effort though. In fact, certain technologies bake ROI into existing work processes."

Giroux adds, "Take presentation software, for instance. Savvy marketers today can create and use pitch decks with built-in presentation analytics that offer real-time data — such as how much time was spent viewing individual slides. Armed with these insights, marketers can better gauge stakeholder interest, inform their strategies, and adjust their campaigns."

Christina Mautz , CMO of Moz , believes measuring ROI comes down to redefining the marketing process as a whole. She told me, "My biggest challenge, and one all marketers face in providing ROI, is the prospect of meeting traditional KPIs in the modern workspace."

Mautz says, "Instead of leads and trade show success, marketing wins are now largely digital: engaging prospects and generating more clicks, downloads, and page visits."

CMO of Moz Christina Mautz says, "To better measure marketing progress, we have to redefine the marketing process, encouraging collaboration with sales and reaching KPIs together."

"For example, statistics such as page visits per sale or rising higher in the search engine results page (SERP) give marketers and SEOs tangible evidence as to how their work is meeting their ROI. New buying patterns and a customer-centric world require a divergence from the old, but measuring ROI will look far different than it did before and some leaders may not understand how or why."

When it comes to providing ROI, there's a strong case to be made for dedicating time and resources to establishing links between marketing activities and sales results.

This means using both marketing software ( like HubSpot ) and a CRM solution ( like HubSpot's free CRM ) and then tying them together to close the loop between your marketing and sales efforts with a service-level agreement (SLA) . That way, you can directly see how many leads and customers are generated through your marketing activities.

Other Common Challenges

While our survey identified the biggest challenges in marketing, teams are still facing dozens of other challenges that are worth mentioning, but weren't one of the top concerns. Here are just a few:

Website Management

In 2021, 64% of companies said they were investing in website upgrades. Meanwhile, 27% of survey participants said that managing their website was the top challenge in that year, with a chunk more saying they continued to rise to this challenge in 2022.

In 2023, website challenges aren't going anywhere. If you have an online presence for your business, your website serves as a key place that consumers will go to when researching your brand.

There, they might find company information, marketing content, and other resources that nurture them into becoming a lead or buying your product. On the marketing end, your site can also be a tool that can help you drive search result and social media awareness when it is optimized and shared around the web.

Although managing a website is consistently a challenge to marketers, it seems to be growing less threatening. While website management was the third-biggest challenge facing marketers in 2021, it didn't even make the Top Five Challenge list for 2022.

Chances are, your website's performance is high on your list of priorities — particularly since website speed and performance plays a major role in your website's SEO ranking . It's an asset that works around the clock to draw in visitors, convert them, and help you hit your goals.

Issues with website management include a variety of different factors, from writing and optimizing the content to designing beautiful webpages. Here are a few things marketers can do to deal with this challenge.

What Can You Do?

First, try HubSpot's free website grader to determine how your website stacks up on key metrics including SEO, mobile, and security performance — and how you can improve it.

If your primary challenge with managing a website has to do with the skills and resources you have available, you aren't alone. This is especially true for small companies who don't have all the talent in-house required to cover content, optimization, design, and back-end website management.

One solution? Hire freelancers and agency partners. To find freelancers, we recommend:

Tapping into your personal and professional network by posting on LinkedIn, Facebook, and other social networks with a description of what you're looking for.
Browsing freelance writers and designers based on their portfolios and areas of interest.
Browsing HubSpot's Services Marketplace , which lists a wide variety of designers from partner companies and agencies we've deemed credible.

Overall, you can make website management easier on your team by hosting your website on a platform that integrates all your marketing channels like HubSpot's CMS.

Social Media Marketing Challenges

In our survey, 16% of marketers said that their biggest challenge of 2023 will involve keeping up with the latest social media platforms, as well as their growing lists of new features.

And, with the constant evolution of how social media looks, feels, and functions comes a mess of other social media challenges that marketers are worried about, including -- but certainly not limited to:

Creating engaging content (which 22% of social media marketers cited)
Gaining and keeping followers (22%)
Reaching your target audiences (21%)
Finding ideas for content (21%)
Creating content that generates leads (20%)

Content Marketing Challenges

The content marketing world is vast and full of different strategies. And, each major tactic comes with its own challenge.

For example, if you're a blogger or video creator, SEO and ranking on Google will likely be one of the biggest hurdles and opportunities your team will face because both blogs and videos are always competing for the covered first page of search results on Google.

Meanwhile, if you focus on multimedia, such as videos, podcasts, or design, views, view-time, and shareability could be key to nurturing a lead. And, as many marketers struggle with demonstrating ROI -- your efforts will be no different. While bloggers could include a form, purchasing link, or landing page URL in their posts which are easier to track, you won't always be able to easily determine the ROI of content that doesn't allow URL embedding in it.

As a content marketer, it's important to determine which goals are most important to your team and company's growth and focus first on the challenges that will hinder reaching them.

Email Marketing Challenges

Over the last year, email marketers have run into all sorts of challenges, such as pandemic-related low engagement and Apple iOS 15 's privacy protection policy impacting open tracking and open-rate based strategies.

But, by far, the biggest challenge email marketers will probably always face is gaining and retaining subscribers. In fact, our research found that 19% of marketers see email and social media list growth being a top challenge throughout the year.

If you identify with our participants, check out this post with more data on why consumers subscribe and unsubscribe from email.

Some of these challenges aren't new.

If you're a marketer who sees the same challenge year-over-year, it might be a barrier worth putting on your radar. However, some challenges can be industry-wide. Year-over-year challenges across the industry are incredibly important to note, regardless of whether they impact you or not.

Why? These challenges might not just be something you're facing, but could also be faced by your competitors. If you can figure out how to navigate a reoccurring industry challenge effectively, you could have a leg up against the competition.

Way back in 2021, I surveyed over 120 marketers on our HubSpot Marketing Blog subscriber list to gauge the biggest challenges affecting the industry. Here's a quick graph highlighting what they said.

This challenge was followed by 21% who said "providing ROI for your marketing activities" was their biggest challenge.

"Delivering an account-based marketing strategy" (8%), "securing enough budget" (6%), and "managing your website" (5%) were the other three notable challenges marketers feel they're facing in 2021.

It's important to note, a few other marketers marked "targeting content for an international audience", "training your team", and "hiring top talent" as their top challenge ... but these three challenges were marked by less than 3% of the respondent pool, so they're less statistically significant.

Identifying Your Marketing Challenges

A thorough analysis of your marketing strategy and its current performance will help you discover where your biggest marketing opportunity lies. This will allow you to focus on improving the areas that need the most attention, so you can start making your marketing far more effective.

Another thing to keep in mind is that, sometimes, the best challenges to focus on could involve solving for the biggest pain points of your companies executives or leaders. And while the post above focuses on the challenges of general marketers at all levels, we also did a follow-up survey to learn about the key challenges and pain points director+ marketing leaders are facing daily. Check out this post , from our Act Like a Leader, Think Like a Leader blog series (fully launching Nov. 1), which includes tips from marketing execs and experts at companies like Microsoft, HubSpot, Help Scout, ZoomInfo, Sprout Social, and more.

Just interested in learning about general marketers? Be sure to check out our 2022 State of Marketing Report, which you can download for free below -- or get our predictions for how marketing will change in the next year with the HubSpot Blog's follow-up 2023 Marketing Trends Report .

Editor's Note: This post was originally published in November 2012 and has been updated annually to include new, exclusive HubSpot data and expert insights.

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Common Marketing Problems You May Be Facing

The worst possible response to marketing problems is to freak out. First, you must understand that this is, sadly, much more normal than you’d expect. There are certain obstacles nearly everyone in the industry encounters at one time or another.

Before diagnosing a situation, you should start by figuring out if it’s a marketing problem or a business problem. Although advertising agencies are called to fix marketing problems, if you do a deep dive into what’s going on, you may actually discover that it’s a problem connected to the business.

Business Problems: Any hurdle, situation or variation that leads to a difference between the desired objectives and actual accomplished results is a business problem. This type of issue can’t be solved with more marketing. For example, if your message isn’t connecting with the intended audience, saying it louder or more frequently isn’t going to fix anything. You’ve heard the saying “putting lipstick on a pig,” right? Well, dressing up your business with marketing when the inherent problem is much deeper than that won’t do a thing.
Marketing Problem: If you don’t have a business problem inhibiting your efforts from being effective, then you most likely have a marketing problem. This type of issue can be defined as any factors in a campaign that affect the results you may be looking for, like a lack of strategy, a bad understanding of your target audience or unengaging social media posts. These are the types of problems that we’re going to discuss today.

So, what are the most common types of marketing or advertising challenges? Here are a few examples that many companies experience:

Recruiting Talent

During the shutdown of the COVID-19 pandemic, many businesses had to adjust how they run their business , and marketing was no different. Now that the recovery and revival of “normal” is taking place, some agencies have found that hiring and keeping employees is a difficult task to undertake. The HR managers put much effort to make team extension as quality and profitable for their business as possible.

Talented marketers are often in high demand, making recruiting and maintaining an accomplished staff an issue. Many marketing professionals have found ways to offer their staff benefits and positive work experiences including more flexibility, educational opportunities and higher salaries.

Lack of Clear Strategy

About 50% of companies using digital marketing have no plan or strategy in place for their efforts. This is a problem because if you don’t know why and how you’re doing something, it will most likely not yield helpful or beneficial results. Having a plan of attack for all things, from email marketing and content creation to website design and social media, will enable you to make informed decisions and will most likely deliver you the outcomes you’re hoping for.

With a marketing strategy you can:

Find your target demographic.
Create SMART (specific, measurable, attainable, realistic and timely) goals.
Keep your team on the same page.
Be timely.
Make your brand more authentic.
Ensure brand awareness.

No Alignment With Buyer Personas

If marketers don’t know who they’re creating content for, then it will be difficult to effectively communicate with them. No industry is the same, meaning that every audience that is being targeted has specific needs that should be met, and tones of voice and language choices that resonate with them. If you aim at nothing, you’re sure to hit it.

Another common sector of buyer persona problems is shooting for the wrong group of people. Trustmary found that 80% of content marketing is targeted at the wrong audience . Basically, a marketing team could have the best possible creative work to send out, and a great marketing plan to execute, but if it’s given to the wrong people, it won’t land properly.

Showing ROI

Often, when a company experiences financial hardships, the first thing to be cut is marketing spend. The reason for this might be that proving its value can be difficult without specific tactics in place to do so. Hubspot’s State of Marketing Report found that demonstrating the return on investment (ROI) of marketing activities to be the No. 1 roadblock for marketers .

When done correctly, marketing does offer a boundless supply of benefits for companies. But if you can’t specify what the impacts of advertising efforts like market research, email campaigns or social media marketing are to upper management or clients, it’s going to be difficult to continue producing quality work.

You have probably found yourself knee-deep in one of the situations above, but there are solutions to these problems. Continue reading to learn what you can do to help yourself and your clients get the results you’re hoping to achieve.

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Effective Solutions for Bumps in the Road

For every marketing problem, there’s a solution. Some issues might take more effort than others, but all fixes require strategic thinking and research to fully understand where the problem stems and what the best steps forward are. Let’s look specifically at the challenges we listed above:

How to Fix Your Recruiting Practices

There are loads of ways to make your current employees happy as well as bring in new talent, but we’re just going to talk about a few. First, ensure your marketing team is heard and satisfied by adding feedback channels in the workplace. This could be a digital platform that collects remarks, or could be a physical version in your office. Either way, make sure your employees know their thoughts are valued by actually giving them the ability to share.

Word of mouth is everything nowadays. If your employees share that they’re happy on social media platforms like LinkedIn, or if they speak positively about your company with their friends and family, more people will be prone to apply to your open positions. And, you’ve hired your team for a reason — pay attention to who they think would be a good fit for the business.

Creating a Clear Strategy

A set strategy is vital for consistent and effective marketing, but that doesn’t mean it’s a breeze to build. Let’s break down the process for creating a marketing strategy :

Define Your Goals: Have your target objectives in mind before you start creating any advertising content. This can make sure your hard work is going to serve a specific purpose and will help you have an end goal to aim for.
Think of Your Audience: Understand and highlight who it is that you’re trying to reach. Every industry and type of business speaks to very unique people, meaning that your marketing initiatives must work for your target audience. Create buyer personas to help you visualize the set group of customers as you work.
Build Brand Messaging: Since you’re speaking to your specific audience, ensure that they can recognize and pick out your brand from the competition using a set tone and voice.
Research Your Competitors: You should never ever copy what your competitors are doing — you bring a unique voice to the market. But, it’s smart to pay attention to what other brands are bringing to the table.

Once you go through the process of creating your marketing strategy, you’re off to the races!

Mending Your Buyer Personas

Finding a solution for your either lack of or incorrect target audience comes from having a clear marketing strategy, which we’ll get into more later. After you create your strategy for all marketing and advertising efforts, you should understand who it is that you’re trying to reach. With that knowledge, you can ask yourself the following questions before creating any content:

Is my customer really interested in this?
Will they actually care about this topic or information?
What needs am I meeting or problems am I solving for my target audience?
Is there a better way that I could connect with my audience?

If you’re confident in your answer, go ahead and interact with your buyers! And if you’re not? It may help to create buyer personas — model people who match your ideal customers. Give him or her a name, a detailed description and think about them every time you’re working on a component of your marketing. This can help you cut generalizations about who you’re creating content for, and be more specific and focused on the right group of people. Then you can create inbound marketing to attract these people and build more brand loyalty.

Better Prove Your ROI

Your digital marketing efforts should be full circle, meaning that you should always end up with actual results and data that you can either determine successful or not. Without the power of marketing and sales working together, it’s really difficult to calculate ROI. Discover how much impact your content actually had on your target audience by looking at data points like impressions, qualified leads, web traffic, conversion rates and actual sales. After checking over the relevant information, compare those numbers to the specific goals that you’d made prior to creating the content.

Did you meet your objectives like you’d hoped? We hope so! Either way, it’s time to put those numbers into a dashboard that can be easily displayed and read by your clients or upper management. By showing the impact of the advertising procedures you followed throughout the project timeline, you’re better able to discuss and prove the work was worth it and made a difference for your clients.

Maybe none of these issues are things that you’ve experienced — so you think. But what if problems are occurring that you’re unaware of? If that’s the case, you could be losing money or potential customer partnerships without even knowing it. Want to learn more about how to know if you’re flying blindly into challenges? You’ve come to the right place.

Tell-Tale Signs That You’re Experiencing Issues

We sincerely hope your marketing efforts are going well, but if they’re not, we want you to be aware. Here are some common red flags that you may be missing with your current advertising:

Email Unsubscribes: This happens pretty normally, but not at alarmingly high rates. If you’ve had a drop-off in subscriber numbers, it’s probably because the content may be irrelevant or targeted toward the wrong people. This could also be a sign to check in on your email marketing platform to ensure your leads and contacts are being handled correctly.
Wrong Audience: Have people been clicking on your organic listings without converting? Maybe it’s time to reassess your messaging and brand personas.
Ad-Heavy: We’ll say it very loudly: Paid advertising isn’t bad! But, if you’re solely relying on it to be noticed by any members of your audience, then you should consider creating meaningful content that can draw more organic traffic to your brand.
Losing Followers: Similar to email subscribers, if you’re seeing a large dip in social media followers lately, it could be smart to reassess your social media marketing strategy. Although this is a common marketing problem, it can be more serious than some understand.

How Strategy Can Safeguard Your Marketing Practices

We’ve talked a lot about strategy, and that’s because it’s super important to find success with your brand.

To ensure your marketing is strategic, you must create goals that your efforts can adhere to. And, to pinpoint objectives you need to do a bit of research. Here are the key elements of a brand strategy:

Value Proposition: A simple statement that summarizes why a customer would choose your product or service over the competition.
Key Brand Messaging: Set tone, language and values that articulate how your brand sounds and speaks to your audience.
Target Customers: The specific audience that your product or service is aiming to please, as well as the competition that you’re battling.

Also described as the four Ps of marketing: product, price, place and promotion. Having these factors defined can help your team align to achieve specific goals, tie your efforts to business objectives, identity and test what resonates with your target audience and helps you stay up-to-date and capitalize on emerging technological and cultural trends.

Although these marketing problems are common, they don’t have to be inevitable. Avoid the above issues (and any unlisted situations) and find success by efficiently recruiting, defining your strategy, targeting the right people and proving your ROI.

By Madelyn Gardner

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Here’s Why Customer Marketing is The Future (+ 4 Examples)

As you’ve probably realized by now, marketing experts like you and me can do just about anything — like seeing the future. What’s that? You were sick on the day […]

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How Entrepreneurs Can Find the Right Problem to Solve

As an entrepreneur, how confident are you that you fully understand your customer’s pain points or their job to be done? Entrepreneurs I first meet tend to start selling me on their solution before explaining the problem they are trying to solve. There is little evidence that they’ve done true discovery work to validate the problem or their target customers.

While gut feel or personal experience with a problem can be a strong signal there is a problem to solve, without proper product discovery work you won’t truly know if you have a winning solution.

For those who profess having done proper discovery to validate a problem but don’t yet have a product, my follow-up question is: “How do you know people or companies will use your product?” Answers are equally discouraging. More often than not, I hear examples of interest tests, such as hits on social media posts or answers to surveys that are so biased it’s hard to trust the results. Further, entrepreneurs may have a good hunch there’s a job to be done that needs improving or replacing, but they can’t describe where in the customer journey they can truly make an impact.

I’m a big fan of confident founders who are passionate about their idea, but a little humility and a lot of discovery work can determine whether there’s a winning solution and save a lot of wasted time and money building the wrong thing. If fundraising is also a consideration, being able to have real data vs. gut feelings and biased test results can be the difference between a modest angel round and a strongly led seed- or A-round.

I’ve recently written an in-depth look at this topic, Product Discovery 101 , which I encourage you to read. Here are some highlights.

Interest vs. problem testing

“We had 1,000 clicks on our Facebook ad in the first 48 hours.”

“Our conversion rate from click to sign-up was 50 percent.”

“We interviewed a bunch of people and they said they’d use our product if we built it.”

These quotes suggest the entrepreneurs may have found an audience interested enough to click on an ad and provide an email addresses, but they still haven’t proven anything about the usefulness of their product, that it solves a real pain point, or that their target customer is willing to pay for the fix. If you plan to do interest tests, here are several approaches (among many) to consider:

Social media . Great for finding your audience, social outreach should be done on multiple platforms and carefully crafted to answer only one or two hypotheses. These hypotheses are commonly, “Is this where we can reach this audience if we want to market to them?” and “Are they interested enough to click and learn more?”
Website landing pages . These are the best locations to capture interest, email addresses, and demographic data. If your potential customers found you through social media tests or googling, you’ve proven they were interested enough to learn more, that your search engine optimization works, and that they trust you or care enough about the problem you wish to solve that they’ll provide insight into who they are.
Surveys . Surveys are difficult to design and often capture random and subjective information instead of getting real data to inform your product. Great surveys are 10 questions or less, reflective in nature (“How many times did you buy “X” in the last month?”) and data-centric (“How often do you order takeout for dinner?).

Problem validation

Early in the process, more important than interest tests are tests that validate there is a problem worth solving and where exactly a product can be most successful in solving that problem. Validating hypotheses about the problem through a variety of methods is going to lead to a far better outcome than clicks on a Facebook ad.

Consider trying these different types of problem-validation tests in your discovery process:

Interviews . Similar to surveys, interviews are as much art as science. It is incredibly easy to lead a witness, bias answers, and hear what we want to hear in an interview. The best guide for conducting a proper discovery interview is Rob Fitzpatrick’s book The Mom Test , which I encourage every entrepreneur and product manager I work with to read.
Ethnography . Observing prospects performing the job you hope to improve or replace can be extremely insightful. You may find hacks they would never tell you about in an interview or discover a whole new set of problems in their process.
Emotional journaling or mapping . Having a prospect journal or map out their process and highlight how they feel along the way can pinpoint exactly where they are most frustrated in their process. This is also a great technique if you can’t observe the prospect in the setting where the problem exists.
Journey mapping . Bring together all your discovery work to identify where you found patterns of highs and lows. These may surprise you; often, where you hypothesized there was the most pain in a process may be somewhere completely different.
(Don’t do) focus groups . I am generally not a fan of this form of discovery. It lends itself to groupthink and can produce false results. Focus groups can be useful later in the product cycle when you want to get reactions to branding or observe groups of people using your product if it’s a tangible item.

Prototype testing

The best way to validate that a problem exists is to actually insert yourself into the process and learn by doing. These tests lean toward solution building, but the idea is that you’re doing tests without building anything, or building very little, to get clarity on the problem and the customer. Common forms of these tests include:

Lo-fidelity concierge testing . Jump right in and assume part of the role that your product might fill in the future. If you were coming up with a new restaurant reservation system, this may involve a phone conversation with the party needing a reservation and having you do the actual booking for them, perhaps even texting them to confirm their reservation. The key to success of these early tests is to resist the temptation to correct your customer—just go with them on their user experience. You can tweak things along the way as you learn more about what works and what doesn’t.
Wizard of Oz (WoZ) testing . WoZ allows you to test a product without the need for a fully built-out prototype. The customer won’t know that you are working behind the scenes to simulate the experience. A former student of mine with a software engineering background resisted the temptation to code a solution and instead created a WoZ test by cobbling together Soundcloud, Dropbox, texting, and a high-fidelity mock front-end. After dozens of people used this method and she understood what they needed, she officially built and launched the product .
Prototypes . Build small runs of your future product using 3D printing, sewing, or even a pop-up restaurant as ways to test your concept and receive feedback before spending too much money.
Competitive analogs . Having target customers use existing similar products can be as telling as using the product you hope to create. Try tools like UserTesting , which allows prospects to walk through how they use a current competitive product. Having target customers use a competitive product for a week or two can also be insightful.
Expert testing . You may be working in an area where you are no expert, but you have a hunch it’s a white space ripe for disruption. If you don’t have access to the experts or their customers, find or create a space for them to connect and observe through their experiences. This could be as simple as finding them on Quora or Reddit and looking at threads of questions that are related to what you’re exploring.

Test early, test often!

With all the options available, there is no excuse for weak validation of problems and target customers early in your product development process. One test, or even a few tests, does not qualify a product as marketable or fundable. The more objective tests you do up front, and iterate on those tests often, the higher the likelihood you’ll land on a great solution that people want to use and buy. To see my full set of recommendations, visit Product Discovery 101 .

This blog post is largely inspired by my course, PM101 at Harvard Business School. I have open-sourced the syllabus for this course here .

About the author

Julia Austin is a Senior Lecturer in the Entrepreneurial Management Unit at the Harvard Business School.

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Six problem-solving mindsets for very uncertain times

Great problem solvers are made, not born. That’s what we’ve found after decades of problem solving with leaders across business, nonprofit, and policy sectors. These leaders learn to adopt a particularly open and curious mindset, and adhere to a systematic process for cracking even the most inscrutable problems. They’re terrific problem solvers under any conditions. And when conditions of uncertainty are at their peak, they’re at their brilliant best.

Six mutually reinforcing approaches underly their success: (1) being ever-curious about every element of a problem; (2) being imperfectionists , with a high tolerance for ambiguity; (3) having a “dragonfly eye” view of the world, to see through multiple lenses; (4) pursuing occurrent behavior and experimenting relentlessly; (5) tapping into the collective intelligence , acknowledging that the smartest people are not in the room; and (6) practicing “show and tell” because storytelling begets action (exhibit).

Here’s how they do it.

1. Be ever-curious

As any parent knows, four-year-olds are unceasing askers. Think of the never-ending “whys” that make little children so delightful—and relentless. For the very young, everything is new and wildly uncertain. But they’re on a mission of discovery, and they’re determined to figure things out. And they’re good at it! That high-energy inquisitiveness is why we have high shelves and childproof bottles.

When you face radical uncertainty, remember your four-year-old or channel the four-year-old within you. Relentlessly ask, “Why is this so?” Unfortunately, somewhere between preschool and the boardroom, we tend to stop asking. Our brains make sense of massive numbers of data points by imposing patterns that have worked for us and other humans in the past. That’s why a simple technique, worth employing at the beginning of problem solving, is simply to pause and ask why conditions or assumptions are so until you arrive at the root of the problem. 1 This approach was originally developed by Sakichi Toyoda, the founder of Toyota.

Natural human biases in decision making, including confirmation, availability, and anchoring biases, often cause us to shut down the range of solutions too early. 2 Daniel Kahneman, Thinking, Fast and Slow , New York, NY: Farrar, Straus and Giroux, 2011. Better—and more creative—solutions come from being curious about the broader range of potential answers.

One simple suggestion from author and economist Caroline Webb to generate more curiosity in team problem solving is to put a question mark behind your initial hypotheses or first-cut answers. This small artifice is surprisingly powerful: it tends to encourage multiple solution paths and puts the focus, correctly, on assembling evidence. We also like thesis/antithesis, or red team/blue team, sessions, in which you divide a group into opposing teams that argue against the early answers—typically, more traditional conclusions that are more likely to come from a conventional pattern. Why is this solution better? Why not that one? We’ve found that better results come from embracing uncertainty. Curiosity is the engine of creativity.

We have to be comfortable with estimating probabilities to make good decisions, even when these guesses are imperfect. Unfortunately, we have truckloads of evidence showing that human beings aren’t good intuitive statisticians.

2. Tolerate ambiguity—and stay humble!

When we think of problem solvers, many of us tend to picture a poised and brilliant engineer. We may imagine a mastermind who knows what she’s doing and approaches a problem with purpose. The reality, though, is that most good problem solving has a lot of trial and error; it’s more like the apparent randomness of rugby than the precision of linear programming. We form hypotheses, porpoise into the data, and then surface and refine (or throw out) our initial guess at the answer. This above all requires an embrace of imperfection and a tolerance for ambiguity—and a gambler’s sense of probabilities.

The real world is highly uncertain. Reality unfolds as the complex product of stochastic events and human reactions. The impact of COVID-19 is but one example: we address the health and economic effects of the disease, and their complex interactions, with almost no prior knowledge. We have to be comfortable with estimating probabilities to make good decisions, even when these guesses are imperfect. Unfortunately, we have truckloads of evidence showing that human beings aren’t good intuitive statisticians. Guesses based on gut instinct can be wildly wrong. That’s why one of the keys to operating in uncertain environments is epistemic humility, which Erik Angner defines as “the realization that our knowledge is always provisional and incomplete—and that it might require revision in light of new evidence.” 3 Erik Angner, “Epistemic humility—knowing your limits in a pandemic,” Behavioral Scientist , April 13, 2020, behavioralscientist.org.

Recent research shows that we are better at solving problems when we think in terms of odds rather than certainties. 4 Annie Duke, Thinking in Terms of Bets: Making Smarter Decisions When You Don’t Have All the Facts , New York, NY: Portfolio/Penguin, 2018. For example, when the Australian research body Commonwealth Scientific and Industrial Research Organisation (CSIRO), which owned a core patent on the wireless internet protocol, sought royalties from major companies, it was initially rebuffed. The CSIRO bet that it could go to court to protect its intellectual property because it estimated that it needed only 10 percent odds of success for this to be a good wager, given the legal costs and likely payoff. It improved its odds by picking the weakest of the IP violators and selecting a legal jurisdiction that favored plaintiffs. This probabilistic thinking paid off and eventually led to settlements to CSIRO exceeding $500 million. 5 CSIRO briefing to US Government, December 5, 2006. A tolerance for ambiguity and a willingness to play the odds helped the organization feel its way to a good solution path.

To embrace imperfectionism with epistemic humility, start by challenging solutions that imply certainty. You can do that in the nicest way by asking questions such as “What would we have to believe for this to be true?” This brings to the surface implicit assumptions about probabilities and makes it easier to assess alternatives. When uncertainty is high, see if you can make small moves or acquire information at a reasonable cost to edge out into a solution set. Perfect knowledge is in short supply, particularly for complex business and societal problems. Embracing imperfection can lead to more effective problem solving. It’s practically a must in situations of high uncertainty, such as the beginning of a problem-solving process or during an emergency.

Good problem solving typically involves designing experiments to reduce key uncertainties. Each move provides additional information and builds capabilities.

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3. take a dragonfly-eye view.

Dragonfly-eye perception is common to great problem solvers. Dragonflies have large, compound eyes, with thousands of lenses and photoreceptors sensitive to different wavelengths of light. Although we don’t know exactly how their insect brains process all this visual information, by analogy they see multiple perspectives not available to humans. The idea of a dragonfly eye taking in 360 degrees of perception 6 Philip Tetlock and Dan Gardner, Superforecasting: The Art and Science of Prediction , New York, NY: Crown, 2015. is an attribute of “superforecasters”—people, often without domain expertise, who are the best at forecasting events.

Think of this as widening the aperture on a problem or viewing it through multiple lenses. The object is to see beyond the familiar tropes into which our pattern-recognizing brains want to assemble perceptions. By widening the aperture, we can identify threats or opportunities beyond the periphery of vision.

Consider the outbreak of HIV in India in the early 1990s—a major public-health threat. Ashok Alexander, director of the Bill & Melinda Gates Foundation’s India Aids Initiative, provided a brilliant example of not just vision but also dragonfly vision. Facing a complex social map with a rapidly increasing infection rate, he widened the problem’s definition, from a traditional epidemiological HIV transmission model at known “hot spots,” to one in which sex workers facing violence were made the centerpiece.

This approach led to the “Avahan solution,” which addressed a broader set of leverage points by including the sociocultural context of sex work. The solution was rolled out to more than 600 communities and eventually credited with preventing 600,000 infections. The narrow medical perspective was sensible and expected, but it didn’t tap into the related issue of violence against sex workers, which yielded a richer solution set. Often, a secret unlocks itself only when one looks at a problem from multiple perspectives, including some that initially seem orthogonal.

The secret to developing a dragonfly-eye view is to “anchor outside” rather than inside when faced with problems of uncertainty and opportunity. Take the broader ecosystem as a starting point. That will encourage you to talk with customers, suppliers, or, better yet, players in a different but related industry or space. Going through the customer journey with design-thinking in mind is another powerful way to get a 360-degree view of a problem. But take note: when decision makers face highly constrained time frames or resources, they may have to narrow the aperture and deliver a tight, conventional answer.

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4. pursue occurrent behavior.

Occurrent behavior is what actually happens in a time and place, not what was potential or predicted behavior. Complex problems don’t give up their secrets easily. But that shouldn’t deter problem solvers from exploring whether evidence on the facets of a solution can be observed, or running experiments to test hypotheses. You can think of this approach as creating data rather than just looking for what has been collected already. It’s critical for new market entry—or new market creation. It also comes in handy should you find that crunching old data is leading to stale solutions.

Most of the problem-solving teams we are involved with have twin dilemmas of uncertainty and complexity, at times combined as truly “wicked problems.” 7 A term coined in a now famous 1973 article: Horst W. J. Rittel and Melvin Webber, “Dilemmas in a general theory of planning,” Policy Sciences , 1973, Number 4, pp. 155–69. For companies ambitious to win in the great unknown in an emerging segment—such as electric cars or autonomous vehicles, where the market isn’t fully established—good problem solving typically involves designing experiments to reduce key uncertainties, not just relying on existing data. Each move (such as buying IP or acquiring a component supplier) and each experiment (including on-road closed tests) not only provides additional information to make decisions but also builds capabilities and assets that support further steps. Over time, their experiments, including alliances and acquisitions, come to resemble staircases that lead to either the goal or to abandonment of the goal. Problem-solving organizations can “bootstrap” themselves into highly uncertain new spaces, building information, foundational assets, and confidence as they take steps forward.

Risk-embracing problem solvers find a solution path by constantly experimenting. Statisticians use the abbreviation EVPI—the expected value of perfect information—to show the value of gaining additional information that typically comes from samples and experiments, such as responses to price changes in particular markets. A/B testing is a powerful tool for experimenting with prices, promotions, and other features and is particularly useful for digital marketplaces and consumer goods. Online marketplaces make A/B testing easy. Yet most conventional markets also offer opportunities to mimic the market’s segmentation and use it to test different approaches.

The mindset required to be a restless experimenter is consistent with the notion in start-ups of “failing fast.” It means that you get product and customer affirmation or rejection quickly through beta tests and trial offerings. Don’t take a lack of external data as an impediment—it may actually be a gift, since purchasable data is almost always from a conventional way of meeting needs, and is available to your competitors too. Your own experiments allow you to generate your own data; this gives you insights that others don’t have. If it is difficult (or unethical) to experiment, look for the “natural experiments” provided by different policies in similar locations. An example would be to compare outcomes in twin cities, such as Minneapolis–St. Paul.

It’s a mistake to think that your team has the smartest people in the room. They aren’t there. They’re invariably somewhere else. Nor do they need to be there if you can access their intelligence via other means.

5. Tap into collective intelligence and the wisdom of the crowd

Chris Bradley, a coauthor of Strategy Beyond the Hockey Stick , 8 Chris Bradley, Marin Hirt, and Sven Smit, Strategy Beyond the Hockey Stick: People, Probabilities, and Big Moves to Beat the Odds , Hoboken, NJ: Wiley, 2018. observed that “it’s a mistake to think that on your team you have the smartest people in the room. They aren’t there. They’re invariably somewhere else.” 9 For more from Chris Bradley, in a conversation with Rob McLean, see “ Want better strategies? Become a bulletproof problem solver ,” August 2019. Nor do they need to be there if you can access their intelligence via other means. In an ever-changing world where conditions can evolve unpredictably, crowdsourcing invites the smartest people in the world to work with you. For example, in seeking a machine-learning algorithm to identify fish catch species and quantities on fishing boats, the Nature Conservancy (TNC) turned to Kaggle and offered a $150,000 prize for the best algorithm. This offer attracted 2,293 teams from all over the world. TNC now uses the winning algorithm to identify fish types and sizes caught on fishing boats in Asia to protect endangered Pacific tuna and other species.

Crowdsourced problem solving is familiar in another guise: benchmarking. When Sir Rod Carnegie was CEO of Conzinc Riotinto Australia (CRA), he was concerned about the costs of unscheduled downtime with heavy trucks, particularly those requiring tire changes. He asked his management team who was best in the world at changing tires; their answer was Formula One, the auto racing competition. A team traveled to the United Kingdom to learn best practice for tire changes in racetrack pits and then implemented what it learned thousands of miles away, in the Pilbara region of Western Australia. The smartest team for this problem wasn’t in the mining industry at all.

Of course, while crowdsourcing can be useful when conventional thinking yields solutions that are too expensive or incomplete for the challenge at hand, it has its limitations. Good crowdsourcing takes time to set up, can be expensive, and may signal to your competitors what you are up to. Beware of hidden costs, such as inadvertently divulging information and having to sieve through huge volumes of irrelevant, inferior suggestions to find the rare gem of a solution.

Accept that it’s OK to draw on diverse experiences and expertise other than your own. Start with brainstorming sessions that engage people from outside your team. Try broader crowdsourcing competitions to generate ideas. Or bring in deep-learning talent to see what insights exist in your data that conventional approaches haven’t brought to light. The broader the circles of information you access, the more likely it is that your solutions will be novel and creative.

Rookie problem solvers show you their analytic process and math to convince you they are clever. Seasoned problem solvers show you differently.

6. Show and tell to drive action

We started our list of mindsets with a reference to children, and we return to children now, with “show and tell.” As you no doubt remember—back when you were more curious!—show and tell is an elementary-school activity. It’s not usually associated with problem solving, but it probably piqued your interest. In fact, this approach is critical to problem solving. Show and tell is how you connect your audience with the problem and then use combinations of logic and persuasion to get action.

The show-and-tell mindset aims to bring decision makers into a problem-solving domain you have created. A team from the Nature Conservancy, for instance, was presenting a proposal asking a philanthropic foundation to support the restoration of oyster reefs. Before the presentation, the team brought 17 plastic buckets of water into the boardroom and placed them around the perimeter. When the foundation’s staff members entered the room, they immediately wanted to know what the buckets were for. The team explained that oyster-reef restoration massively improves water quality because each oyster filters 17 buckets of water per day. Fish stocks improve, and oysters can also be harvested to help make the economics work. The decision makers were brought into the problem-solving domain through show and tell. They approved the funding requested and loved the physical dimension of the problem they were part of solving.

Rookie problem solvers show you their analytic process and mathematics to convince you that they are clever. That’s sometimes called APK, the anxious parade of knowledge. But seasoned problem solvers show you differently. The most elegant problem solving is that which makes the solution obvious. The late economist Herb Simon put it this way: “Solving a problem simply means representing it so as to make the solution transparent.” 10 Herbert Simon, The Sciences of the Artificial , Cambridge, MA: MIT Press, 1969.

To get better at show and tell, start by being clear about the action that should flow from your problem solving and findings: the governing idea for change. Then find a way to present your logic visually so that the path to answers can be debated and embraced. Present the argument emotionally as well as logically, and show why the preferred action offers an attractive balance between risks and rewards. But don’t stop there. Spell out the risks of inaction, which often have a higher cost than imperfect actions have.

The mindsets of great problem solvers are just as important as the methods they employ. A mindset that encourages curiosity, embraces imperfection, rewards a dragonfly-eye view of the problem, creates new data from experiments and collective intelligence, and drives action through compelling show-and-tell storytelling creates radical new possibilities under high levels of unpredictability. Of course, these approaches can be helpful in a broad range of circumstances, but in times of massive uncertainty, they are essential.

Charles Conn is an alumnus of McKinsey’s Sydney office and is a board member of Patagonia and former CEO of the Rhodes Trust. Robert McLean is an alumnus of the Sydney office and is the advisory-board chair of the Nature Conservancy Australia. They are the authors of Bulletproof Problem Solving: The One Skill That Changes Everything (Wiley, 2018).

This article was edited by David Schwartz, an executive editor in the Tel Aviv office.

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Strategy to beat the odds

Dwight Eisenhower: Lessons from the ‘balancer in chief’

6.1 Problem Solving to Find Entrepreneurial Solutions
Introduction
1.1 Entrepreneurship Today
1.2 Entrepreneurial Vision and Goals
1.3 The Entrepreneurial Mindset
Review Questions
Discussion Questions
Case Questions
Suggested Resources
2.1 Overview of the Entrepreneurial Journey
2.2 The Process of Becoming an Entrepreneur
2.3 Entrepreneurial Pathways
2.4 Frameworks to Inform Your Entrepreneurial Path
3.1 Ethical and Legal Issues in Entrepreneurship
3.2 Corporate Social Responsibility and Social Entrepreneurship
3.3 Developing a Workplace Culture of Ethical Excellence and Accountability
4.1 Tools for Creativity and Innovation
4.2 Creativity, Innovation, and Invention: How They Differ
4.3 Developing Ideas, Innovations, and Inventions
5.1 Entrepreneurial Opportunity
5.2 Researching Potential Business Opportunities
5.3 Competitive Analysis
6.2 Creative Problem-Solving Process
6.3 Design Thinking
6.4 Lean Processes
7.1 Clarifying Your Vision, Mission, and Goals
7.2 Sharing Your Entrepreneurial Story
7.3 Developing Pitches for Various Audiences and Goals
7.4 Protecting Your Idea and Polishing the Pitch through Feedback
7.5 Reality Check: Contests and Competitions
8.1 Entrepreneurial Marketing and the Marketing Mix
8.2 Market Research, Market Opportunity Recognition, and Target Market
8.3 Marketing Techniques and Tools for Entrepreneurs
8.4 Entrepreneurial Branding
8.5 Marketing Strategy and the Marketing Plan
8.6 Sales and Customer Service
9.1 Overview of Entrepreneurial Finance and Accounting Strategies
9.2 Special Funding Strategies
9.3 Accounting Basics for Entrepreneurs
9.4 Developing Startup Financial Statements and Projections
10.1 Launching the Imperfect Business: Lean Startup
10.2 Why Early Failure Can Lead to Success Later
10.3 The Challenging Truth about Business Ownership
10.4 Managing, Following, and Adjusting the Initial Plan
10.5 Growth: Signs, Pains, and Cautions
11.1 Avoiding the “Field of Dreams” Approach
11.2 Designing the Business Model
11.3 Conducting a Feasibility Analysis
11.4 The Business Plan
12.1 Building and Connecting to Networks
12.2 Building the Entrepreneurial Dream Team
12.3 Designing a Startup Operational Plan
13.1 Business Structures: Overview of Legal and Tax Considerations
13.2 Corporations
13.3 Partnerships and Joint Ventures
13.4 Limited Liability Companies
13.5 Sole Proprietorships
13.6 Additional Considerations: Capital Acquisition, Business Domicile, and Technology
13.7 Mitigating and Managing Risks
14.1 Types of Resources
14.2 Using the PEST Framework to Assess Resource Needs
14.3 Managing Resources over the Venture Life Cycle
15.1 Launching Your Venture
15.2 Making Difficult Business Decisions in Response to Challenges
15.3 Seeking Help or Support
15.4 Now What? Serving as a Mentor, Consultant, or Champion
15.5 Reflections: Documenting the Journey
A | Suggested Resources

Portions of the material in this section are based on original work by Geoffrey Graybeal and produced with support from the Rebus Community. The original is freely available under the terms of the CC BY 4.0 license at https://press.rebus.community/media-innovation-and-entrepreneurship/.

Learning Objectives

By the end of this section, you will be able to:

Define problem solving in the context of entrepreneurship
Describe and compare the adaptive model and the innovative model of problem solving
Identify the skills entrepreneurs need for effective problem solving
Identify types of problem solvers

As you’ve learned, entrepreneurs often visualize an opportunity gap, a gap between what exists and what could exist, as Hirabayashi and Lidey did with Shine. Entrepreneurial problem solving is the process of using innovation and creative solutions to close that gap by resolving societal, business, or technological problems. Sometimes, personal problems can lead to entrepreneurial opportunities if validated in the market. The entrepreneur visualizes the prospect of filling the gap with an innovative solution that might entail the revision of a product or the creation of an entirely new product. In any case, the entrepreneur approaches the problem-solving process in various ways. This chapter is more about problem solving as it pertains to the entrepreneur’s thought process and approach rather than on problem solving in the sense of opportunity recognition and filling those gaps with new products.

For example, as we read in Identifying Entrepreneurial Opportunity , Sara Blakely (as shown in Figure 6.2 ) saw a need for body contouring and smoothing undergarments one day in the late 1990s when she was getting dressed for a party and couldn’t find what she needed to give her a silhouette she’d be pleased with in a pair of slacks. She saw a problem: a market need. But her problem-solving efforts are what drove her to turn her solution (Spanx undergarments) into a viable product. Those efforts came from her self-admitted can-do attitude: “It’s really important to be resourceful and scrappy—a glass half-full mindset.” 1 Her efforts at creating a new undergarment met resistance with hosiery executives, most of whom were male and out of touch with their female consumers. The hosiery owner who decided to help Blakely initially passed on the idea until running it by his daughters and realizing she was on to something. That something became Spanx , and today, Blakely is a successful entrepreneur. 2

Photo of three people sitting on a stage, talking, with Sara Blakely on the right.

Before getting into the heart of this chapter, we need to make a distinction: Decision making is different from problem solving . A decision is needed to continue or smooth a process affecting the operation of a firm. It can be intuitive or might require research and a long period of consideration. Problem solving , however, is more direct. It entails the solution of some problem where a gap exists between a current state and a desired state. Entrepreneurs are problem solvers who offer solutions using creativity or innovative ventures that exploit opportunities. This chapter focuses on different approaches to problem solving and need recognition that help potential entrepreneurs come up with ideas and refine those ideas.

Two Problem Solving Models: Adaptive and Innovative

There are two prominent established problem-solving models: adaptive and innovative . A renowned British psychologist, Michael Kirton , developed the Kirton Adaption-Innovation (KAI) Inventory to measure an individual’s style of problem solving. 3 Problem-solving preferences are dependent on the personality characteristics of originality, conformity, and efficiency, according to Kirton. The KAI inventory identifies an individual’s problem-solving approach by measuring agreement with statements that align with characteristics, such as the ability to produce many novel ideas, to follow rules and get along in groups, and to systematically orient daily behavior. The results categorize an individual as an innovator or an adaptor. Innovators are highly original, do not like to conform, and value efficiency less than adaptors.

The first and more conservative approach an entrepreneur may use to solve problems is the adaptive model. The adaptive model seeks solutions for problems in ways that are tested and known to be effective. An adaptive model accepts the problem definition and is concerned with resolving problems rather than finding them. This approach seeks greater efficiency while aiming at continuity and stability. The second and more creative approach is the innovative model of entrepreneurial problem solving, which uses techniques that are unknown to the market and that bring advantage to an organization. An innovative problem-solving style challenges the problem definition, discovers problems and avenues for their solutions, and questions existing assumptions—in a nutshell, it does things differently. It uses outside-the-box thinking and searches for novel solutions. Novelty is a shared trait of creative entrepreneurship, and it’s why entrepreneurs gravitate toward this method of problem solving. According to Dr. Shaun M. Powell , a senior lecturer at the University of Wollongong, Australia: “Creative entrepreneurs are notable for a distinctive management style that is based on intuition, informality and rapid decision making, whereas the more conventional thinking styles are not in accord with the unique attributes of creative entrepreneurs.” 4 This way of problem solving doesn’t alter an existing product. It is the creation of something entirely new.

For example, healthcare facilities have long been known as a source of methicillin-resistant Staphylococcus aureus (MRSA), a deadly infection that can have long-term effects on patients. Vital Vio , led by Colleen Costello , has developed white light technology that effectively disinfects healthcare facilities by targeting a molecule specific to bacteria. The light, safe to humans, can burn constantly to kill regenerative bacteria. An adaptive problem-solving model would seek to minimize harm of MRSA within a hospital—to respond to it—whereas the Vital Vio is an entirely new technique that seeks to eliminate it. Adaptive solutions to MRSA include established processes and protocols for prevention, such as having doctors, nurses, and other healthcare providers clean their hands with soap and water, or an alcohol-based hand rub before and after patient care, testing patients to see if they have MRSA on their skin, cleaning hospital rooms and medical equipment, and washing and drying clothes and bed linens in the warmest recommended temperatures. 5

Link to Learning

Visit Inc. Magazine for support and advice for up-and-coming startups to learn more. Examples of how “Dorm Room” entrepreneurs spot and pursue opportunities are shared along with tips and advice for making your startup a success.

Problem-Solving Skills

While identifying problems is a necessary part of the origin of the entrepreneurial process, managing problems is an entirely different aspect once a venture is off the ground and running. An entrepreneur does not have the luxury of avoiding problems and is often responsible for all problem solving in a startup or other form of business. There are certain skills that entrepreneurs possess that make them particularly good problem solvers. Let’s examine each skill (shown in Figure 6.3 ) .

Critical Thinking

Critical thinking is the complex analysis of a problem or issue with the goal of solving the problem or making a decision. The entrepreneur analyzes and peels away the layers of a problem to find the core of an issue facing a business. The entrepreneur focuses on the heart of the problem and responds reasonably and openly to suggestions for solving it. Critical thinking is not only important for developing entrepreneurial ideas: it is a sought-after asset in education and employment. Entrepreneur Rebecca Kantar dropped out of Harvard in 2015 to found the tech startup Imbellus , which aims to replace standardized college admissions tests like the SAT with interactive scenarios that test critical-thinking skills. Many standardized tests may include multiple choice questions asking for the answer to a straightforward knowledge question or math problem. Kantar seeks to create tests that are more concerned with the analytic ability and reasoning that goes into the process of solving the problem. Imbellus says it aims to test “how people think,” not just what they know. The platform, which has not yet launched, will use simulations for its user assessments. 6

Read more about problem solving and EnterpriseWorks/Vita’s story at Harvard Business Review .

Communication

Communication skills , the ability to communicate messages effectively to an intended recipient, are the skills entrepreneurs use to pool resources for the purposes of investigating solutions leading to innovative problem solving and competitive advantage. Good communication allows for the free association of ideas between entrepreneurs and businesses. It can illustrate a problem area or a shared vision, and seeks stakeholder buy-in from various constituencies. Networking and communication within an industry allow the entrepreneur to recognize the position of an enterprise in the market and work toward verbalizing solutions that move an organization beyond its current state. By “verbalizing,” we mean communication from and with the company/entity. Internal communications include company emails, newsletters, presentations, and reports that can set strategic goals and objectives, and report on what has been accomplished and what goals and objectives remain, so that employees within an organization are knowledgeable and can work on solving problems that remain within the organization. External communications could include press releases, blogs and websites, social media, public speeches, and presentations that explain the company’s solutions to problems. They could also be investor pitches complete with business plans and financial projections.

Ideation exercises, such as brainstorming sessions (discussed in Creativity, Innovation, and Invention , are good communication tools that entrepreneurs can use to generate solutions to problems. Another such tool is a hackathon —an event, usually hosted by a tech company or organization, which brings together programmers and workers with other degrees of specialization within the company, community, or organization to collaborate on a project over a short period of time. These can last from twenty-four hours to a few days over a weekend. A hackathon can be an internal company-wide initiative or an external event that brings community participants together. A business model canvas , which is covered in Business Model and Plan and other activities outlined in other chapters can be used internally or externally to identify problems and work toward creating a viable solution.

Networking is an important manifestation of useful communication. What better method is there of presenting one’s concept, gaining funding and buy-in, and marketing for the startup than through building a network of individuals willing to support your venture? A network may consist of potential employees, customers, board members, outside advisors, investors, or champions (people who just love your product) with no direct vested interest. Social networks consist of weak ties and strong ties. Sociologist Mark Granovetter studied such networks back in the 1970s, and his findings still apply today, even if we include social media networks in the definition too. Weak ties facilitate flow of information and community organization, he said, whereas strong ties represent strong connections among close friends, family members, and supportive coworkers. 7 Strong ties require more work to maintain than weak ties (as illustrated by the strong lines and weak dotted lines in Figure 6.4 ) and in a business context, they don’t lead to many new opportunities. Weak ties, in contrast, do open doors in that they act as bridges to other weak ties within functional areas or departments that you might not have had access to directly or through strong ties. 8

Graphic of different people, some connected via solid lines, and some connected via dotted lines.

In fact, many young entrepreneurs, including tech entrepreneur Oliver Isaacs , realize college is a great place to begin building teams. Isaacs is the founder of viral opinion network Amirite.com , which is widely credited as the place where Internet memes started and online slang got a foothold. 9 Amirite.com consists of a large network of pages and partnerships on Facebook and Instagram that reach 15 million users each month. Isaacs recommends using your alumni network to build a team and customer base for your own venture because you never know if you’re talking to a future employee or partner.

Sharing of ideas and resources is highly valued in the entrepreneurial process. Communication is a vital skill in problem solving because the ability to identify and articulate the problem (define the problem space) is necessary to adequately address a problem. A problem can be too vague or broad or narrow. Thus, communicating the problem is important, as is conveying the solution.

Decisiveness

Decisiveness is as it sounds: the ability to make a quick, effective decision, not letting too much time go by in the process. Entrepreneurs must be productive, even in the face of risk. They often rely on intuition as well as on hard facts in making a choice. They ask what problem needs to be solved, think about solutions, and then consider the means necessary to implement an idea. And the decisions must be informed with research.

For example, as explained in Adam Grant’s book The Originals , the co-founders of Warby Parker, a venture-backed startup focused on the eyewear industry, started their company while they were graduate students. At the time they knew little about the industry, but after conducting some detailed research, they learned that the industry was dominated by one major player—Luxottica. They used this information and other data to refine their strategy and business model (focusing mainly on value, quality, and convenience via an online channel). By the time they decided to launch the business, they had thought through the key details, and they attained rapid early success. Today Warby Parker has over 100 retail stores in the US, is profitable, and is valued at almost $2 billion.

Decisiveness is the catapult to progress. Amazon founder Jeff Bezos preaches the importance of decisiveness throughout his organization. Bezos believes that decisiveness can even lead to innovation. Bezos advocates for making decisions after obtaining 70 percent of the information you need to do so: “Being wrong may be less costly than you think, whereas being slow is going to be expensive for sure,” Bezos wrote in a 2017 annual letter to stockholders. 10

Read this LinkedIn blog post on decisiveness to learn more.

Ability to Analyze Data

Data analysis is the process of analyzing data and modeling it into a structure that leads to innovative conclusions. Identifying Entrepreneurial Opportunity covered much of the sources of data that entrepreneurs might seek. But it is one thing to amass information and statistics. It is another to make sense of that data, to use it to fill a market need or forecast a trend to come. Successful founders know how to pose questions about and make meaning out of information. And if they can’t do that themselves, they know how to bring in experts who can.

In addition to public sources of broad data, a business can collect data on customers when they interact with the company on social media or when they visit the company website, especially if they complete a credit card transaction. They can collect their own specific data on their own customers, including location, name, activity, and how they got to the website. Analyzing these data will give the entrepreneur a better idea about the interested audience’s demographic.

In entrepreneurship, analyzing data can help with opportunity recognition, creation, and assessment by analyzing data in a variety of ways. Entrepreneurs can explore and leverage different data sources to identify and compare “attractive” opportunities, since such analyses can describe what has happened, why it happened, and how likely it is to happen again in the future. In business in general, analytics is used to help managers/entrepreneurs gain improved insight about their business operations/emerging ventures and make better, fact-based decisions.

Analytics can be descriptive, predictive, or prescriptive. Descriptive analytics involves understanding what has happened and what is happening; predictive analytics uses data from past performance to estimate future performance; and prescriptive analytics uses the results of descriptive and predictive analytics to make decisions. Data analysis can be applied to manage customer relations, inform financial and marketing activities, make pricing decisions, manage the supply chain, and plan for human resource needs, among other functions of a venture. In addition to statistical analysis, quantitative methods, and computer models to aid decision-making, companies are also increasingly using artificial intelligence algorithms to analyze data and make quick decisions.

Understanding of Business and Industry

Entrepreneurs need sound understanding of markets and industries. Often times, they are already working in a large organization when they see growth opportunities or inefficiencies in a market. The employee gains a deep understanding of the industry at hand. If the employee considers a possible solution for a problem, this solution might become the basis for a new business.

For example, consider a marketing agency that used traditional marketing for thirty years. This agency had an established clientele. An executive in the organization began studying social media analytics and social media. The executive approached the owner of the business to change processes and begin serving clients through social media, but the owner refused. Clients within the agency began to clamor for exposure on social media. The marketing executive investigated the possibility of building an agency in her locale servicing clients who wish to utilize social media. The marketing executive left the organization and started her own agency (providing, of course, that this is in compliance with any noncompete clauses in her contract). Her competitive advantage was familiarity with both traditional and social media venues. Later, the original agency started floundering because it did not offer social media advertising. Our intrepid executive purchased the agency to gain the clientele and serve those wishing to move away from traditional marketing.

A similar experience occurred for entrepreneur Katie Witkin . After working in traditional marketing roles, the University of Wisconsin-Madison graduate, pictured in Figure 6.5 , left agency life behind four years out of college to cofound her own company, AGW Group . In 2009, Witkin had been interning at a music marketing agency that didn’t have a social media department. She knew, both from her time at college and from observing industry trends, that social media was changing the way companies connected with customers. For her own venture, she expanded the focus to all supporting brands to manage all things digital. Today, the cultural and marketing communications agency has fifteen employees and big-name clients ranging from HBO to Red Bull. 11

Resourcefulness

Resourcefulness is the ability to discover clever solutions to obstacles. Sherrie Campbell , a psychologist, author, and frequent contributor to Entrepreneur magazine on business topics, put it this way:

“There is not a more useful or important trait to possess than resourcefulness in the pursuit of success. Resourcefulness is a mindset, and is especially relevant when the goals you have set are difficult to achieve or you cannot envision a clear path to get to where you desire to go. With a resourcefulness mindset you are driven to find a way. An attitude of resourcefulness inspires out-of-the-box thinking, the generation of new ideas, and the ability to visualize all the possible ways to achieve what you desire. Resourcefulness turns you into a scrappy, inventive and enterprising entrepreneur. It places you a cut above the rest.” 12

Entrepreneurs start thinking about a business venture or startup by talking to people and procuring experts to help create, fund, and begin a business. Entrepreneurs are risk takers, passionate about new endeavors. If they don’t have a college degree or a great deal of business experience, they understand there are many resources available to support them in the endeavor, such as the Service Corps of Retired Executives (SCORE) and the Small Business Administration (SBA) . There are many sources available to fund the business with little or no debt and options, as you will see in the chapter on Entrepreneurial Finance and Accounting . The entrepreneur follows a vision and researches opportunities to move toward a dream.

For example, in the late 1990s, Bill McBean and his business partner Billy Sterett had an opportunity to buy an underperforming auto dealership that would make their company the dominant one in the market. Neither wanting to take cash from other ventures nor wanting to borrow more money and tie themselves to more debt, the entrepreneurs were resourceful by finding another path forward to obtaining the money necessary for the acquisition they both coveted. They changed banks and renegotiated their banking payback requirements, lowering their interest payments, reducing fees, and lowering their monthly payments, ultimately freeing up a significant amount of cash that allowed them to buy the new company. 13

Types of Problem Solvers

Entrepreneurs have an insatiable appetite for problem solving. This drive motivates them to find a resolution when a gap in a product or service occurs. They recognize opportunities and take advantage of them. There are several types of entrepreneurial problem solvers, including self-regulators, theorists, and petitioners.

Self-Regulating Problem Solvers

Self-regulating problem solvers are autonomous and work on their own without external influence. They have the ability to see a problem, visualize a possible solution to the problem, and seek to devise a solution, as Figure 6.6 illustrates. The solution may be a risk, but a self-regulating problem solver will recognize, evaluate, and mitigate the risk. For example, an entrepreneur has programmed a computerized process for a client, but in testing it, finds the program continually falls into a loop, meaning it gets stuck in a cycle and doesn’t progress. Rather than wait for the client to find the problem, the entrepreneur searches the code for the error causing the loop, immediately edits it, and delivers the corrected program to the customer. There is immediate analysis, immediate correction, and immediate implementation. The self-regulating problem solvers’ biggest competitive advantage is the speed with which they recognize and provide solutions to problems.

Cartoon showing someone identifying a problem, thinking of possible solutions, and then speaking to someone sitting at a desk about implementing the solution.

Theorist Problem Solvers

Theorist problem solvers see a problem and begin to consider a path toward solving the problem using a theory. Theorist problem solvers are process oriented and systematic. While managers may start with a problem and focus on an outcome with little consideration of a means to an end, entrepreneurs may see a problem and begin to build a path with what is known, a theory, toward an outcome. That is, the entrepreneur proceeds through the steps to solve the problem and then builds on the successes, rejects the failures, and works toward the outcome by experimenting and building on known results. At this point, the problem solver may not know the outcome, but a solution will arise as experiments toward a solution occur. Figure 6.7 shows this process.

For example, if we consider Marie Curie as an entrepreneur, Curie worked toward the isolation of an element. As different approaches to isolating the element failed, Curie recorded the failures and attempted other possible solutions. Curie’s failed theories eventually revealed the outcome for the isolation of radium. Like Curie, theorists use considered analysis, considered corrective action, and a considered implementation process. When time is of the essence, entrepreneurs should understand continual experimentation slows the problem-solving process.

Cartoon showing a person identifying a problem, implementing a theory as represented by a checklist, and arriving at a solution by presenting a graph.

Petitioner Problem Solvers

Petitioner problem solvers ( Figure 6.8 ) see a problem and ask others for solution ideas. This entrepreneur likes to consult a person who has “been there and done that.” The petitioner might also prefer to solve the problem in a team environment. Petitioning the entrepreneurial team for input ensures that the entrepreneur is on a consensus-driven path. This type of problem solving takes the longest to complete because the entrepreneur must engage in a democratic process that allows all members on the team to have input. The process involves exploration of alternatives for the ultimate solution. In organizational decision-making, for example, comprehensiveness is a measure of the extent a firm attempts to be inclusive or exhaustive in its decision-making. Comprehensiveness can be gauged by the number of scheduled meetings, the process by which information is sought, the process by which input is obtained from external sources, the number of employees involved, the use of specialized consultants and the functional expertise of the people involved, the years of historical data review, and the assignment of primary responsibility, among other factors. Comprehensive decision-making would be an example of a petitioner problem-solving style, as it seeks input from a vast number of team members.

A charette —a meeting to resolve conflicts and identify solutions—is another example that employs a petitioner problem-solving approach. Often times, a developer of a new project might hold a community charette to aid in the design of a project, hoping to gain approval from elected officials. In the building example, this could consist of the developer and his team of architects, project designers, and people with expertise in the project working alongside community members, business executives, elected officials, or representatives like staff members or citizen-appointed boards like a planning board. Such an activity is representative of a petitioner problem-solving approach, as opposed to a developer representative designing the project with no input from anyone else.

Cartoon of a person identifying a problem, discussing the problem with others, and finding a mutually agreeable solution.

In summary, there is no right or wrong style of problem solving; each problem solver must rely on the instincts that best drive innovation. Further, they must remember that not all problem-solving methods work in every situation. They must be willing to adapt their own preference to the situation to maximize efficiency and ensure they find an effective solution. Attempting to force a problem-solving style may prevent an organization from finding the best solution. While general entrepreneurial problem-solving skills such as critical thinking, decisiveness, communication, and the ability to analyze data will likely be used on a regular basis in your life and entrepreneurial journey, other problem-solving skills and the approach you take will depend on the problem as it arises.

There are a number of resources online that can help analyze your problem-solving abilities. Mindtools.com is one such resource. These are useful to learn your general problem-solving tendencies before being called upon to apply them in a real-world setting. One of the problem-solving techniques available from mindtools.com offers that problems can be addressed from six different perspectives. Called CATWOE , the approach is an acronym for Customers, Actors (people within the organization), Transformative, Worldwide, Owner, and Environment (organizational).

Learn more about the CATWOE technique for problem solving.

1 Helen Lock. “‘I Put My Butt on the Line’: How Spanx Took Over the World.” The Guardian. July 11, 2016. https://www.theguardian.com/small-business-network/2016/jul/11/put-butt-on-the-line-how-spanx-world
2 Gary Keller. “Business Success Series, Part 1: Sara Blakely-Spanx.” The One Thing. n.d. https://www.the1thing.com/blog/the-one-thing/business-success-series-part-1-sara-blakely-spanx/
3 “Characteristics of Adaptors and Innovators.” Kirton KAI Inventory Tool . n.d. http://pubs.acs.org/subscribe/archive/ci/31/i11/html/11hipple_box3.ci.html
4 Shaun Powell. “The Management and Consumption of Organisational Creativity.” Journal of Consumer Marketing 25, no. 3 (2008): 158–166.
5 N.C Healthcare-Associated Infections Prevention Program. Healthcare-Associated Infections in North Carolina: 2014 Annual Report, Healthcare Consumer Version. April 2015. https://epi.dph.ncdhhs.gov/cd/hai/figures/hai_apr2015_consumers_annual.pdf
6 Romesh Ratnesar. “What If Instead of Taking the SAT You Got to Play a Video Game?” Bloomberg BusinessWeek. March 19, 2019. https://www.bloomberg.com/news/features/2019-03-19/a-harvard-dropout-s-plan-to-fix-college-admissions-with-video-games
7 Mark Granovetter. “The Strength of Weak Ties.” American Journal of Sociology 5 (1973): 1360–1380.
8 Jacob Morgan. “Why Every Employee Should Be Building Weak Ties at Work.” Forbes. March 11, 2014. https://www.forbes.com/sites/jacobmorgan/2014/03/11/every-employee-weak-ties-work/#277851063168
9 John White. “Top UK Influencer Oliver Isaacs Reveals What It Takes to Go Viral.” Inc . August 6, 2017. https://www.inc.com/john-white/top-uk-influencer-oliver-isaacs-reveals-what-it-ta.html
10 Erik Larson. “How Jeff Bezos Uses Faster Better Decisions to Keep Amazon Innovating.” Forbes . September 24, 2018. https://www.forbes.com/sites/eriklarson/2018/09/24/how-jeff-bezos-uses-faster-better-decisions-to-keep-amazon-innovating/#492c351b7a65
11 Stephanie Schomer. “How Getting Laid Off Empowered This Entrepreneur to Start Her Own Award-Winning Marketing Agency.” Entrepreneur. January 15, 2019. https://www.entrepreneur.com/article/326212
12 Sherrie Campbell. “6 Characteristics of Resourceful People That Bring Them Success.” Entrepreneur. March 10, 2016. https://www.entrepreneur.com/article/272171
13 “Resourcefulness Is More Important Than Resources.” The Ecommerce Mindset: How Successful Store Owners Think. n.d. https://www.oberlo.com/ebooks/mindset/resourceful-entrepreneur

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political science
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Can Markets Solve Problems?

An empirical inquiry into neoliberalism in action.

by Daniel Neyland , Véra Ehrenstein and Sveta Milyaeva

$30.00 Hardcover

336 pp. , 5 x 8 in ,

9781912685158
Published: November 5, 2019
Publisher: Goldsmiths Press
9781912685264
Published: October 11, 2019
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Description

A provocative analysis of market-based interventions into public problems and the consequences.

Market-based interventions have been used in attempts to solve numerous public problems, from education to healthcare and from climate change to privacy. Scholars have responded persuasively through critiques of neoliberalism. In Can Markets Solve Problems? Daniel Neyland, Véra Ehrenstein, and Sveta Milyaeva propose a different route forward.

There is no single entity knowable as “the market,” the authors argue. Instead, they examine in detail the devices, relations, and practices that underpin these market-based interventions. Drawing on recent work in science and technology studies (STS), each chapter focuses on a different intervention and critically explores the market sensibility around which it is organized. Trade and exchange, competition, property and ownership, and investment and return all become the focus of a thorough exploration of what it means to intervene in public problems, how problems are composed, and how solutions are continually reworked.

Can Markets Solve Problems? offers the first book-length STS enquiry into markets and public problems. Weaving together rich empirical descriptions and conceptual discussions, the book provides in-depth insights into the workings of these markets, their continuous evolution, and the consequences. The result is a new avenue of critical inquiry that moves between the details of specific policies and the always-emerging, collective features of this landscape of intervention.

Daniel Neyland is Professor of Sociology at Goldsmiths, University of London.

Véra Ehrenstein is Research Fellow at the Institute of Advanced Studies, University College London.

Sveta Milyaeva is Lecturer in Sociology at Bristol University.

Competition and markets are often thought of as attractive solutions to public problems. The authors range over cases as diverse as carbon emissions, vaccines and student loans. Refusing easy answers, they provide a vital conceptual toolkit for approaching the issues involved. Donald MacKenzie, Professor of Sociology, School of Social and Political Science, University of Edinburgh

Falling back on economic solutions when dealing with political problems is certainly not unproblematic. Neyland, Ehrenstein and Milyaeva provide us with a most sagacious foray into this preoccupation. They develop an approach that proves decisive for the interpretation of the shifts and quandaries such processes entail in practice. Fabian Muniesa, Senior Researcher at Centre de Sociologie de l'Innovation, Mines ParisTech

How can researchers be better equipped to understand the proliferation of market-based interventions in governance – including the governance of the academic production of knowledge itself? This careful and measured book provides a useful overview of recent developments in market studies as well as a roadmap for navigating market solutionism in the imagination and management of public problems. Essential and even-handed, this is an important guide. Bill Maurer, Professor of Anthropology and Law at the University of California, Irvine, and editor of A Cultural History of Money

Related Books

7 Key Solutions for Marketing Problems

Many marketing problems are common to several businesses. Want to learn how to solve them? Access our tips and increase your sales.

Digital marketing is key when it comes to boosting the sales of the majority of companies. This is why it’s essential that it is implemented correctly in your business. Have you ever stopped to think about the marketing problems in your business?

If you haven’t, it’s high time you did it. Good marketing planning starts by understanding what you do now and what can be improved.

And believe me, there’s always room for improvement. Moreover, there are a few common mistakes that have simple solutions.

In order to explain what I consider to be a marketing problem, in this post I’ll present the most common ones. Especially regarding digital entrepreneurship and of course, the solutions.

Check out which marketing problems we’ll go over on this post:

focusing on the wrong audience;
lack of process definition;
insufficient knowledge about activities at each stage of the funnel;
errors in data analysis;
lack of alignment with the sales team;
lack of attention to detail;
and limited time to execute actions.

Have you ever had to face any of these issues in your business?

So, if you wish to improve your marketing to increase sales, keep reading.

What no one says about marketing problems

Not long ago, marketing was seen as an expense for any business. You have probably heard this story somewhere, but it’s worth remembering.

When a company’s marketing department has created a piece, gotten price quotes and has installed a billboard on the main avenue of Seattle, it generated an expense. Obviously, the goal was to make sales.

But how could the company know the direct impact on sales? And what was the action’s ROI ?

It’s practically impossible to say. Mapping out which sales were generated directly from this strategy was a challenge. And so marketing became an expense.

Up to the arrival of digital marketing , which revolutionized this process.

From a distance, it looks like it’s easy to make money in this market. But it actually requires a lot of dedication and practice.

And this is where I’m going to talk about what everyone tries to hide: without good planning, you’ll have a lot of marketing and sales problems.

So, if you’re starting with your digital marketing strategies now, the first step is to plan, study and put theory into practice.

And if you’ve already taken the first steps with digital marketing, making your first sales, our tips are:

Assess all your processes;
Find the flaws;
Prioritize improvements and make adjustments.

So far, I’ve explained why digital marketing isn’t as easy as it seems and I’ve told you how to get started or how to adjust your strategy.

Another important point here is the number of possibilities to improve sales with marketing. So, focus on the strategy that generates the most results for your business.

And how do we know this?

Here are four topics for you to consider:

Analysis of the market and competitors;
Strategy tests in your reality;
Measuring results;
Deciding on which strategy to concentrate your efforts.

Here’s an example to make it clearer:

Let’s suppose that you’re an Affiliate of a product in the health-food niche. Through an analysis of the competition, you realize that the big market players use Instagram to make sales .

Therefore, you decide to concentrate your initial efforts on Instagram. So, you prepare your content, take the first steps to attract an audience and transform it into customers.

It this clearer now? Well, this is an example of which channel you should prioritize. You can analyze a lot of things within the scope of digital marketing.

It is also from the analysis that you can identify your business’ marketing problems. And now comes the best part.

How to identify marketing problems

Everything starts with your sales funnel . You need to understand each point, each sale you make within your funnel. This is the famous customer’s journey with your business.

I won’t go into a lot of detail about this here. To learn more about it, you can read our full post on the customer’s journey .

The issue is understanding where you’re going wrong or what you can do to improve your marketing during the sales funnel phases.

In order to help you answer this issue, I’ll introduce an analogy.

Imagine a linear industrial process in which there are four steps to get to the final product. In other words, step 4 depends on step 3, which depends on step 2, which in turn, depends on step 1.

In this process, a problem with any of the steps will interfere with the final product. It is up to the person in charge of production to identify the bottlenecks of the process and solve them.

You’re probably wondering, “What does this have to do with marketing?” Everything.

In the case of marketing, the final product is the sale. And in short, the steps are as follows: awareness of the problem, consideration of the solution, search for the solution and purchase.

Therefore, if at the top of your sales funnel, you are collecting an expressive number of leads and in the end, you aren’t converting them into customers, there’s a problem.

marketing problems - infographic with the possible problems of the sales funel

As we’ve said before, the advantage of digital marketing is that everything is measurable. Therefore, after identifying your funnel’s bottleneck, you need to analyze the data of your actions.

In addition, it is essential that you understand the conversion rates of the digital market and of the niche in which you operate. And thus, you can optimize your company’s marketing.

In a nutshell, if you aren’t selling, this means that there’s something in your process that can work better. In order to identify it, measure your results both quantitatively and qualitatively.

In order to help you with this analysis, we will list the most common problems and how to solve them below.

The most common marketing problems:

There’s a Chinese proverb that is quite popular on the internet, and that is relevant to this topic:

“The wise man learns from the mistakes of others, fools learn from their own mistakes and idiots never learn.”

This is why we need to value our mistakes and learn from them.

Better than this, is realizing where businesses or people like you have made mistakes, to understand how you can avoid them.

1. Focus on the wrong audience

This is the most common problem in digital marketing. And it is an important part of the process due to being the start of everything. After all, how are you going to connect with potential customers if you don’t know who they are?

The creation of a persona is a repetitive subject, given the frequency in which we talk about it. But many people still get this part wrong.

Developing a persona, especially in digital business, shouldn’t be such a big problem. Considering that during their purchase journey, users provide important information about them.

The mistake usually happens when it comes to analyzing the information and creating the persona.

And why does it compromise sales results?

Knowing your persona allows you to:

Be more assertive when targeting your ads;
Improve your copy;
Target organic content that creates interest;
Improve the nurturing of your leads in email marketing campaigns.

Now, do you understand the importance of mapping out your persona? At the end of the list of marketing problems, you’ll see my proposal to solve them.

2. Lack of process definition

Within the entrepreneurial world, defining processes is important in any area. But first of all, what is a process in this context?

I checked the dictionary and found the following definition: a series of actions or steps taken in order to achieve a particular end.

From this, we can infer that without the continuous activity processes of your business, you’ll find it more difficult to reach your goals.

As mentioned earlier, digital marketing allows the use of various strategies on various channels. And we also mentioned that you have to focus on what generates the most results.

This is where I explain the importance of the process. By defining processes, you optimize your work and know exactly where to act.

If during your work routine you start tasks and don’t finish them, this is a sign that you need to define your processes.

The path is defining where you are and where you want to go. The gap between these two points in the process, which we can also call the how .

3. Lack of knowledge about the activities in each funnel step

Visitors go to your blog for the first time after being impacted by a blog post on social media. And as soon as they enter, you immediately offer them your product.

Visitors will probably ignore the possibility of a purchase because they aren’t prepared to buy yet. They are still considering and understanding the problem they have, without knowing that your business can help.

Obviously, there are different realities in various niche and entrepreneurship possibilities.

So, I need to emphasize this with you: It is essential that you understand your customers’ journey until they reach the point of making a purchase.

Digital marketing, from the many tracking and data analysis tools, allows you to know each action of potential customers until their conversion. The conversion, in this case, is the purchase.

When you know the overall behavior of a considerable sample of your buyers, it becomes easier to define the activities in each step of your sales funnel.

In addition, it is yet another way of optimizing the processes of your digital marketing strategies.

4. Error in data analysis

The volume of data on the internet is huge. Certain experts affirm that data must be considered as company assets .

This is why giants such as Google and Facebook are always trying to take the utmost care of this valuable asset.

Being able to capture a lot of data in digital marketing is magical. But collecting data isn’t enough. It is necessary to extract information to help you make decisions.

This is also one of the reasons that corroborates with what I said earlier in this text, digital marketing isn’t as easy as it seems.

Making decisions based on guesswork hasn’t been accepted for a while now. However, deciding on the direction of your marketing campaigns with poor data analysis for example, also doesn’t work.

You should know that as the owner of a digital business, you are the person who understands it the most. Combining your tasks with good data analysis will be a market differential and avoid marketing problems.

5. Lack of alignment with the sales team

This is a very common problem in medium and large companies. Because they are the ones that have marketing and sales departments.

But if you dream of becoming an entrepreneur and are taking your first steps, you need to keep this problem on your radar.

Most companies find certain difficulties in establishing a valuable connection between the two teams.

If digital marketing, by means of inbound marketing, is collecting too many leads, the role of the sales team is to convert them into customers.

It sounds easy, but in order for it to work well, there are certain complexities, and as I said earlier, many people still make mistakes.

And what is the consequence of this?

Your business loses many sales opportunities.

6. Lack of attention to detail

An idiom that I really like, and that applies to several everyday situations is, “The devil is in the details”.

What I mean to say is that in certain situations you need to look closely to your business and also at a specific point. I’ll give you an example to make this clearer.

In terms of digital marketing, the user’s experience with your business’ points of contact is very important nowadays. In fact, it’s one of the factors that Google uses to rank it on a search page.

So, the layout of graphic elements on your capture page can be an important detail when capturing leads. Details such as:

Page colors;
CTA positioning;

You should worry about the details after your basic strategy is working correctly and performing well.

7. Lack of time to carry out actions

Who doesn’t suffer from not having enough time?

Days seem to be too short for all of the activities that we need or want to do, whether for work or leisure.

For those who undertake, this increases tenfold. Therefore, optimizing your time and being productive is a huge differential for a successful entrepreneur .

If time seems to go by faster, certain technologies are ready to help you. Currently, in the area of digital marketing, the automation of activities is convenient and everyone can have access to it.

I’ve already provided a solution to this problem: marketing automation. I’ll explain in detail how this works in a daily routine when I’ll talk about the solutions.

The best solutions for marketing problems

Now that the 7 problems have been listed, it’s time to talk about the solutions. After all, your energy needs to be always focused on overcoming obstacles along your path to success.

This being said, I want to tell you about my main goal with the solutions I propose below.

I want the solutions I propose to help you expand your awareness of the business.

In other words, I won’t propose magic formulas that will make you improve your entire digital marketing and make money. What I wish to convey are insights that are useful for the analysis of your business.

1. Perform a search in order to define your persona

The trending term nowadays is “data-driven persona”. Do you know what this means?

It’s the definition of the persona based on data. This means that you set up the target of your ideal customers based on the information you already have of those who have already purchased your product or service.

It means using the data, the most precious asset in the digital world, in your favor from the top of your sales funnel.

It’s by knowing your audience that you will set up the best marketing strategies.

And what does this mean?

It’s very simple. If you are sending your message to profiles that are likely to buy your product, you will greatly increase your conversions.

2. Understand how to define your processes

First of all, I’m going to list the advantages of having well-defined processes in digital marketing:

Greater business organization;
More productivity in your routine;
History of activities for the analysis of possible gaps;
Well-defined workflow.

To start setting up your process, I have a valuable tip regarding a tool: Trello . The free features provided will already be useful for you to start your internal processes.

With this tool, you can set up activity boards, defining the tasks in each flow in order to achieve your goal.

Remember to prioritize which campaign goals will make you achieve your best results in less time.

3. List the activities of each funnel step

To avoid problems with conversions, make a list of the tasks you will fulfill at each step of the funnel. In order to be accurate, carefully consider your users’ purchasing journey.

It is here that you will define, for example:

Which free materials to offer;
Which information you’ll request in the filling out of the form;
To which leads you will offer the product.

These are a few examples. What I need you to understand is that all of your sales funnel strategies need to be aligned with your user’s actions.

The main advantage of this is that you’ll have more engaged leads, i.e., more likely to purchase your product or service.

4. Invest time in data analysis

It’s common to see businesses neglecting the analysis of certain data. As well as it is common to take certain general market data as irrefutable truth.

Understanding the context and numbers of the market, in general, is important. However, they should only serve as a guideline for your actions.

When the time comes to make decisions, you should essentially focus on your business’ data.

If you have planned and defined your business’ major goals, it is time to define the indicators of success.

Your question here should be, “Which metrics do I need to analyze in order to know if I’m on the right path?”

After defining them, it’s time to understand which tools will be necessary to measure everything.

I must tell you that if you have a digital business, Hotmart offers many possibilities for the analysis of your performance.

Hotmart Analytics , for example, can help you understand all of your buyers’ actions up to the moment that the purchase is made. It’s great to understand the journey of those who buy from your business.

The main thing is to gather the most relevant data for your analysis on spreadsheets and observe them at least once a weak.

You will notice how much easier it will be to make strategic business decisions.

5. Bring marketing closer to the sales team

I venture to say that harmony between your marketing and sales team is essential in the current market scenario. Marketing is responsible for transferring qualified leads to the sales team.

On the other hand, the sales team needs to convert the leads into customers. Well, nothing new so far, right?

So, now I’ll provide you with insight. The first step to integrating the marketing and sales teams is to align expectations.

In your business, you need to understand which leads are qualified (MQLs), i.e., those that have a better chance of being converted by the sales team. This is the way to optimize and increase conversion productivity.

The solution is to set up the ideal customer profile (ICP) on the sales side and understand which leads are closer to doing so. This is where the sales team will increase the company’s sales.

And with marketing directly involved.

As I mentioned earlier, you have to understand in which context your business is inserted. There’s no one better than the business owner to understand who the ideal consumer is.

6. Make the necessary adjustments

If your business’ sales machine is already operating well, the best path is to make adjustments. Always optimize in order to be able to increase your sales even more.

The adjustments lie in the details. Changing the color of a CTA may increase the conversions of the capture page, for example.

The motto for this solution is to test all possibilities, measure each one and choose the one that delivered the best results.

The famous A/B tests are accurate when adjusting details of the majority of activities in your sales funnel.

Would you like a detail that may help you really stand out from the competition?

Special care with after-sales. After buyers purchase your product and start using it, they need to receive the best service possible. And this goes beyond good support service.

This is the moment that we call captivation in the sales funnel table at the beginning of the text. This is the opportunity to engage buyers to purchase another product from your business or recommend it so a friend can buy it.

If well executed, it will probably help you increase sales.

7. Automate your actions

Among the dozens of advantages of digital marketing, automating the actions is one of the main ones. If you’re already outlining your strategies, you need to automate.

Your email marketing campaigns to warm up your list of leads can be 100% automated. This is the channel that allows you to set up flows from the engagement of the lead with your content.

There are several providers that allow you to set up an email stream that converts well with your list. Ideally, you should research the options carefully and choose the one that makes more sense to your reality.

At Hotmart, we have the Automatic Lead Management ( Listboss) that, when integrated to your inbound marketing strategy, automates purchase recovery campaigns, for example.

Why is digital marketing so important for sales?

After all the content that I’ve presented, answering this question is easy, right?

Do you remember that funnel with the problems? Now we present it with the solutions:

Infographic with the reason digital marketing so important for sales

In practically all areas of businesses, digital marketing contributes to sales.

It’s with digital marketing that you increase the number of commercial opportunities for your business.

The sales machines that perform better on the market, work well with digital marketing.

You can generate sales with the following:

Email marketing;
Paid media;
WhatsApp, etc.

Digital marketing has been a reality in the market for some time now and new features keep appearing to make the life of entrepreneurs easier. Much more than using digital marketing strategies, it is necessary to carry out the work efficiently in order to avoid marketing problems. Therefore, we’ve provided you with all of these insights.

One final tip is to study hard to apply digital marketing in this business. If you have any questions, leave us a comment below!

after sales service makes customer happy

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Digital Marketing and Website Design | BizTraffic - Drive, Capture, Convert

Drive | Capture | Convert

5 Common Marketing Problems and How to Fix Them

As your business continues to expand and grow, it’s important the marketing department keeps up. Unfortunately, there are several marketing problems that might hold your team back from doing their best.

It is important to recognize these issues and address them immediately. But how?

There are certain marketing obstacles nearly everyone in the industry encounters at one time or another. Fortunately, you can remedy all of them, even if you’re a small business / organization with no marketing team at all.

Here are five of the most common marketing problems, and how to solve them!

Confused woman with marketing problems | BizTraffic

1. No Clear Strategy

Smart Insights tells us about 50 percent of companies using digital marketing have no plan or strategy in place.

That means that half of all businesses and organizations using digital marketing literally have no cohesive plan for achieving their goals. They are simply groping in the dark, hoping to grasp results.

If this sounds familiar, chances are you don’t have a digital marketing strategy in place.

How to Fix It

First, choose clear, focused marketing objectives . Build a clear, cohesive strategy that centers around these goals.

This might sound intimidating, but it doesn’t have to be difficult. Start by asking yourself basic questions:

What is our primary objective as a company or organization? (I.e. sell widgets, get more subscribers, raise awareness for a cause, etc.)
Who is our target audience? What is our customer’s buyer persona ?
How do we reach our audience? Where are they? How do they consume digital media?

You get the idea!

As you start to get a strategy in mind, write it down. Share it with your marketing and sales departments. (If you’re a smaller business without entire departments, designate members of your staff who are best equipped to help you reach sales and marketing goals.)

Having a clear strategy to work with opens up dialogue and invites ideas to improve the overall strategy which will lead to accomplishing goals in a more powerful manner. It also provides guidance for team members, and allows them to know how their responsibilities contribute to the overall plan. This ultimately strengthens accountability, as well as the relationships between sales and marketing.

Time Management is a marketing problem | BizTraffic

2. Lack of Time and Resources

Marketers must move at breakneck speed. In fact, the most recent Adobe Workfront State of Marketing Work Report found marketers spend less than 20 percent of their time on high-value work. They used the other 80 percent on other tasks, like meetings, administration, and responding to emails. (Yet another example of the 80/20 Rule in action!)

This leaves less time to focus on more meaningful activities, which can have a negative impact on your overall marketing.

Every business owner and manager probably feels they don’t have enough time and resources to achieve their goals. This is not easy to correct, but you can address it.

Prioritize Efficiently

Using a project management system allows you to reduce the time and energy devoted to different activities. It will also help prioritize tasks more efficiently.

Prioritization means identifying certain tasks for elimination. This applies whether you delegate to someone else, or simply remove them from your schedule.

Create Better Processes

A clear, efficient process allows you to accomplish marketing activities more quickly, or delegate to another team member. If a certain activity is draining too much time, reconsider that task. What would make it more efficient? Is this really the best way to spend your time and energy? Answering these questions can streamline your work day for maximum efficiency and productivity.

Focus On Your Strategy

An effective strategy, will simplify prioritizing your activities. You will know exactly which things will have the most impact on your goals. This means you can start cutting out tasks which are not contributing effectively to prioritized objectives.

Identifying Business Customers is a marketing problem | BizTraffic

3. No Alignment with Buyer Personas

Determining buyer personas, and actually implementing that knowledge into your marketing strategy, is a big challenge.

It takes a blend of analytical thinking, heavy research, creativity, and psychology to craft a strategy that will speak to your customers in a relevant and powerful way.

Some businesses believe they have their audience figured out, but not everything in their marketing strategy actually aligns with that individual.

This goes back to having a clear strategy. Consider each component of your marketing plan carefully. Ask yourself: is my customer really interested in this? Will they actually open this email, or care about this topic?

Make a habit of thinking in this way. Create a “model” customer who exactly matches your buyer persona. Give him or her a name and detailed description and think about him or her every time you are working on a component of your marketing. To get started, try this template .

Using a buyer persona to relate to your activity lets you cut down on generalizations and abstract ideas, which can ultimately be ineffective. Instead, you’ll be more focused on the needs and desires of a real person.

A man in a business suit, running after his marketing problems | BizTraffic

4. Inability to Adapt to New Trends

It’s easy to get caught in a routine. When this happens, you may find it difficult to keep up with the ever-changing business landscape.

Failure to adapt in the digital marketing world is death. The Google search algorithm updates several times per week . What’s hot on social media right now will be old news tomorrow. Today’s hot new app will be forgotten by next month. If you don’t keep up, you’ll be left farther and farther behind.

Understand that Digital Marketing = Constant Change. Subscribe to emails from industry thought leaders, and frequent major websites in the digital realm. Keep an eye out for any breaking news or recent trends.

Here are a few great resources we use and recommend:

DigitalMarketer
Search Engine Journal
Search Engine Land
Think With Google

Having a thirst for new knowledge is essential in marketing, because you need to be ready to explore and analyze new ideas and methods. Then, start integrating the most relevant trends into your own marketing.

If marketing automation will boost your sales, consider integrating it into your strategy.

Keep in mind, not every trend will fit your needs. There may be other ways to make the best use of your time and budget, if you keep an open mind and do your homework.

5. Proving ROI

HubSpot’s State of Marketing Report has found demonstrating the return on investment (ROI) of marketing activities to be the #1 roadblock for marketers.

If you’ve ever tried to do this yourself – come up with a dollar figure for how much business your marketing efforts have generated – you can understand the challenge therein.

Evaluating ROI his is also important when attempting to prove value to upper management. If done successfully, this leads to more marketing dollars and a greater pool of resources.

How to Fix It

Closing the loop in your digital marketing reporting is a necessity.

Marketing relies heavily on sales to close deals. Without the power of marketing and sales reporting working together, it is extremely difficult to calculate ROI.

It is important to not only close the loop, but calculate the right metrics . Know what matters for your strategy and your audience. This will come in handy when you’re attempting to get the buy-in you need to implement new strategies or secure more funds.

Addressing these common marketing problems can have a positive impact on your overall business. With a focus on strategy and results, your team will become more efficient and effective.

Marketing Doesn’t Have to Be a Pain. Boost Yours In Less Than a Minute.

Whether you’re a small business without the budget for a marketing team, or a larger one that’s not getting results, BizTraffic can help. Contact us now for a free, no-obligation consultation. We’ll evaluate your current marketing efforts and help you decide how to get the most out of your digital dollar. Fill out the form below to get started!

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Entrepreneurship Quarter 1 — Module 2: Recognize a Potential Market

This module will allow you to learn independently the knowledge and skills in recognizing a potential market. It will guide you to identify the market problems to be solved or the market needs to be met; and let you propose solution/s in terms of product/s and service/s that will match the need using techniques on seeking, screening, and seizing opportunities. Also, in this module we are going to identify the market problem and propose solutions with regards to products and services, to continue discovering the ideal buiness you are going to offer for your community. Basically, in return for your hard time of selling your product you can generate profit.

In this module, you will know the following:

Associate the market problem to be solved or the market need to be met:
Look for solution/s in terms of product/s and service/s that will meet the need using techniques on seeking, screening, and seizing opportunities.
Break down the market need.
Detect the possible product/s or service/s that will meet the need of your locality.
Screen the proposed solution/s based on viability, profitability, and customer need in developing a Business Plan.
Choose the best product or service that will meet the market need.

This is your guide on how to develop a Business Plan. By identifying and appealing to a particular group of consumers you need to check on the possible product needed in your locality.

Business industries offer products and services. The activity of making, buying, or selling goods or providing services in exchange of money is called business. Product is something that is made or grown to be sold or use, or something that is result of a process. Services are those intangible products where there is a skill involved and has a value.

After completing this module, you need to:

Learn and understand the sources of opportunities for business.
Determine the essentials in the entrepreneur’s opportunity seeking.
Identify market problems and propose potential products or services that will meet the market needs.
Know the problem in which a business opportunity arises from.
Identify, screen and propose solutions to meet the problem.
Select the best product or service that will meet the market’s need with a consideration of generating profit.

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2 thoughts on “Entrepreneurship Quarter 1 — Module 2: Recognize a Potential Market”

it nice module how can I avail this module in entrepreneurship?

ihave activities

Your startup should solve an impossibly hard problem

Mediocre founders aren’t able to articulate what’s hard about the problem they’re solving.

I’m spotting a worrying trend among startup founders who seem to think that running a startup is effectively a get-rich-quick scheme. Apart from that mindset being wrong and naive, I suspect there’s something a lot more insidious at play here: misunderstanding on a fundamental level what startups are for.

Any business exists to exchange money for value. Your local lemonade stand does that: You have a dollar and you’re thirsty on a hot summer day? You can exchange that dollar for a drink (and the joy of seeing entrepreneurship in action, if that’s your jam).

The thing is, most obvious problems that have obvious solutions don’t need startups. Those markets are very well covered by incumbents. Where tech startups come in, then, is overlaying the desire to solve a problem with a hunger to disrupt: Using an unfair advantage (usually technology, but it’s also possible to disrupt other aspects of the value chain, such as business models, logistics or pricing models) and a bold idea means that startups can take a stab at solving a major issue.

If the problem you are solving isn’t inherently hard, that’s a huge problem in itself, for a number of reasons.

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Why market timing doesn't work: S&P 500 is up 14% this year, but just 8 days explain the gains

The S&P 500 is up 14% this year, but just eight days that explain most of the gains.

If you want a simple indication of why market timing is not an effective investment strategy, take a look at the data on the S&P 500 year to date.

Nicholas Colas at DataTrek notes that there have only been 11 more up days than down days this year (113 up, 102 down) and yet the S&P 500 is higher by 14% year to date.

How to explain that the S&P is up 14% but the number of up days is about the same as the down days? Just saying "there's been a rally in big cap tech" does not quite do justice to what has been happening.

Colas notes there are eight days that can explain the majority of the gains, all of them related to the biggest stories of the year: big tech, the banking crisis, interest rates/Federal Reserve, and avoiding recession:

S&P 500: biggest gains this year

January 6 +2.3% (weak jobs report)
April 27 +2.0% (META/Facebook shares rally on better than expected earnings)
January 20 +1.9% (Netflix posts better than expected Q4 sub growth, big tech rallies)
November 2 +1.9% (10 year Treasury yields decline after Fed meeting)
May 5 +1.8% (Apple earnings strong, banks rally on JP Morgan upgrade)
March 16 +1.8% (consortium of large banks placed deposits at First Republic)
March 14 +1.6% (bank regulators offered deposit guarantees at SVB and Signature Bank)
March 3 +1.6% (10-year Treasury yields drop below 4%)

Source: DataTrek

The good news: those big issues (big cap tech, interest rates, avoiding recession) "remain relevant now and are the most likely catalysts for a further U.S. equity rally," Colas says.

The bad news: had you not been in the markets on those eight days, your returns would be considerably worse.

Why market timing does not work

Colas is illustrating a problem that has been known to stock researchers for decades: market timing — the idea that you can predict the future direction of stock prices, and act accordingly — is not a successful investing strategy.

Here, Colas is implying that had an investor not been in the market on those eight best days, returns would have been very different.

This is not only true for 2023: it is true for every year.

In theory, putting money into the market when prices are down, then selling when they are higher, then buying when they are low again, in an infinite loop, is the perfect way to own stocks.

The problem is, no one has consistently been able to identify market tops and bottoms, and the cost of not being in the market on the most important days is devastating to a long-term portfolio.

I devote a chapter in my book, " Shut Up and Keep Talking: Lessons on Life and Investing from the Floor of the New York Stock Exchange ," to why market timing doesn't work.

Here's a hypothetical example of an investment in the S&P 500 over 50 years.

Hypothetical growth of $1,000 invested in the S&P 500 in 1970

(through August 2019)

Total return $138,908
Minus the best performing day $124,491
Minus the best 5 days $90,171
Minus the best 15 days $52,246
Minus the best 25 days $32,763

Source: Dimensional Funds

These are amazing statistics. Missing just one day — the best day — in the last 50 years means you are making more than $14,000 less. That is 10% less money — for not being in the market on one day.

Miss the best 15 days, and you have 35% less money.

You can show this with virtually any year, or any time period. This of course works in reverse: not being in the market on the worst days would have made returns higher.

But no one knows when those days will occur.

Why is it so difficult to time the market? Because you must be right twice: you must be right going in, and going out. The probability you will be able to make both decisions and beat the market is very small.

This is why indexing and staying with the markets has been slowly gaining adherents for the past 50 years. The key to investing is not market timing: it is consistent investing, and understanding your own risk tolerance.

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Here are five of the most common marketing problems, and how to solve them! 1. No Clear Strategy. Smart Insights tells us about 50 percent of companies using digital marketing have no plan or strategy in place. That means that of all businesses and organizations using digital marketing literally have no cohesive plan for achieving their goals.
Module 2: Recognize a Potential Market
It will guide you to identify the market problems to be solved or the market needs to be met; and let you propose solution/s in terms of product/s and service/s that will match the need using techniques on seeking, screening, and seizing opportunities.
Amazon Just Solved AWS's Big Problem
The graphic below helps put things in perspective. Last quarter's AWS revenue of $23.1 billion extends a surprisingly straight-line growth trend going all the way back to 2019. The smaller growth ...
Your startup should solve an impossibly hard problem
Musk says X subscribers will get early access to xAI's chatbot, Grok. Kyle Wiggers. 9:23 PM PDT • November 3, 2023. Elon Musk's AI startup, xAI, is creating its own version of ChatGPT. That ...
Solved The following graph plots the demand curve (blue
This problem has been solved! ... The Mead market price of a bluetooth speaker is given by the horizontal black line at $180. Each rectangle you can place on the following graph corresponds to a particular buyer in this market: orange (square symbols) for Alex, green (triangle symbols) for Becky, purple (diamond symbols) for Clancy, tan (dash ...
Market timing doesn't work: S&P 500 14% rally explained by just ...
Share. The S&P 500 is up 14% this year, but just eight days that explain most of the gains. If you want a simple indication of why market timing is not an effective investment strategy, take a ...
The Best Marketplaces Solve Real Problems for Real People
Lisa Marrone. 196 Followers. Co-Founder of Revel ( www.hellorevel.com)
Stock Market Today: Stocks extend gains, Treasury lower after solid 3
Nov 7, 2023 5:31 AM EST. U.S. equity futures slipped lower Tuesday, while Treasury yields and the dollar crept higher, as investors looked to test the market's conviction on peak interest rates ...