While most people do everything they can to avoid problems, entrepreneurs embrace them. Why? Because they see every problem as a opportunity in disguise. Successful entrepreneurs take a methodical approach to identifying and solving problems, including small problems that may be percolating in often-overlooked niches, yet can provide a huge payoff to whoever finds the solution.
Recently, several entrepreneurs from the Lexington, Kentucky area described their passion for problems, and for surrounding themselves with employees who have a similarly relentless zeal for tackling them, during a "Power to the Small" panel discussion hosted by Windstream, a provider of advanced network communications and technology solutions.
"Problems sustain me, turmoil energizes me," declares Carey Smith, CEO of Big Ass Solutions, a maker of fans and other products. "As an entrepreneur, if you don't have a problem, you don't have anything. Then you're a solution looking for a problem, and that's nothing. Everybody's got that."
Go to the Source
Smith says Big Ass's problem-solving focus stems from its distribution channel; it sells directly to a mix of industrial, agricultural, commercial, and residential customers. If Smith were selling fans through big box stores, he says, he'd inevitably be attuned to their problems rather than those of the end customer.
Because of that direct pipeline, Big Ass learned that one of its customers, a steel manufacturer, was experiencing a condensation issue: moisture from its cooling system was collecting on the floor, presenting a safety concern. Smith asked his team to look into it, and two years later Big Ass Solutions was in the sensor business, which has become a big-revenue generator. "That's a direct result of working on small problems that others might want to ignore," he says.
Big Ass takes a methodical approach to finding problems. In addition to the outside salespeople constantly talking with customers, the company's growing analytics department crunches data about customer issues to uncover problems that can lead to opportunities. "We have to bridge the chasm between imagining what problems and needs customers might have, and knowing what problems and needs they do have," he says.
Sweat the Small Stuff
Hiring employees who put problem-solving first is another tactic of successful entrepreneurs. Smith takes pride in having a workforce that " focuses on audacious problems rather than audacious goals"; he calls his workers "a community of contrarians" who try to think like a small company even as the company has grown to midmarket status.
For example, one employee recently came to him with an idea to solve a problem that would only generate a modest return, but Smith realized if every employee followed suit the cumulative payoff would boost the bottom line. So he acted on the employee's idea.
Mike Tetterton, CEO of Creative Lodging Solutions, a travel management company, says he also surrounds himself with employees who realize the primary job of every business is to solve problems. And, he says, often that involves reframing what it is you think your company actually does. "If I am selling bows for little girls' hair, the real problem at the heart of that business is a mother wanting to dress her daughter up," he says. "If you run a gas station, you're not selling a commodity, you're solving a driver's problems."
Identify Hidden Problems
Tetterton has a unique business in that he solves problems customers don't even realize they have. His company manages the hotel accommodations for customers, researching rates and finding the best locations for their needs. Tetterton's challenge is that most customers already handle their own travel management, so he has to convince them that outsourcing it to his company makes sense.
His pitch revolves around an unnoticed problem: hotel invoices are so complex that 26 percent of them contain errors. "Our biggest obstacle is getting the ear of the CFO. But if we can tell him about this pain point he didn’t know about, and explain how we can turn it around, he ends up begging us not to leave."
Viewed that way, "No shortage of problems" looks like a great problem to have