One prominent trait of an entrepreneurial person is that they see challenges all around them. Nothing is ever as easy to use, as efficient, or as smooth as it ought to be. As entrepreneurs, we go through life always thinking, “how can I make this experience better?”

Put four entrepreneurial people in a room with a whiteboard, and you can come up with 200 issues that could do with some improvement in a couple of hours. I know, because I’ve done this exercise several times. It’s a wonderfully creative process, and it’s incredible how many things in the world around us are subpar.

The reason I mention this is that ideas are cheap. Nothing is so good that it couldn’t be improved. And not all problems are worth solving.

An example of a “problem” might be that people forget to take their vitamins. That feels like a real problem, but there’s an issue: if you go and ask a thousand people what they would do if they forgot to take their vitamins, I predict you’ll be met with a shrug most of the time. Put differently, the problem might be real, but nobody is willing to spend money to solve it.

Another “problem” might be that elderly people are on crucial, life-saving medicines to help them breathe and keep their blood pressure regulated. Ask the same people if they would pay to ensure they take medication every day. You can see where I’m going with this.

I often talk to my clients about “vitamins” and “painkillers.” Vitamins are a nice-to-haves—if you realize you’re out of vitamins, you might pick some up the next time you’re in the shop. And if you forget during that shopping trip, that’s fine, too. Painkillers, however, are a different story. If you have a headache, you’ll go out of your way to solve the problem. You might make a separate trip to the store, or you’ll ask a friend to bring you some.

When you are describing your problem as part of the pitch, you must connect on an emotional level. Does this problem induce stress in people? Does it inflict emotional or physical pain? Does the issue put lives at risk, cause lost sleep, or cost tremendous amounts of money? Does it cause wasted effort, and would a solution to this problem increase the efficiency of your customers? As shown in Figure 5-1, the challenge doesn’t have to be groundbreaking or dramatic; as long as people are willing to pay to solve the problem somehow, you’re on your way.

Using examples when talking about a problem can be a powerful tool to make issues come to life. “Linda is in accounts payable. She spends several hours per day checking whether customers have paid their invoices. She is so busy that she’s expecting she may have to hire an assistant to do her job. Sometimes, she makes mistakes and sends reminders to customers who have already paid or fails to send reminders for overdue invoices. Linda’s mistakes cause unhappy customers at best or cash flow issues for the business at worst.” Using narratives to bring a problem to life can help illustrate why it is so important and why the problem has a real impact on small businesses. When you get to the market slide, you can continue the story with “Remember Linda and her struggles? There are 90,000 Lindas in the United States alone.”

In the context of fundraising, remember that a feature is not a product. You may create a tool to help people create canned responses for their email. “Tom sends 900 emails per day, and he finds that he is often saying the same things again and again. He is copying and pasting snippets of text from a Word document he created, but that’s not efficient.” On the face of it, that’s a real problem worth solving. But is Tom willing to pay for it? Creating it as a stand-alone company might make sense. Still, it is hard to imagine it being a billion-dollar company: if you get successful enough, other companies will launch templating systems for an email in their core offering. At that point, your business will become irrelevant overnight. To wit, Gmail has templates built in, and most customer relationship management (CRM) software has snippets and templates built in, too.

The gold standard for a problem slide describes a huge problem that many people are experiencing. Solving this problem would have an immense impact on their lives, and they are willing to pay a lot of money to make that problem go away.

Twilio is an excellent example of such a company. It made it easy for software developers to send SMS messages and to route phone calls. Before Twilio came along, if you wanted to transmit messages, you needed to buy costly servers and place them within the network of the phone operators. It takes a lot of deep expertise and incredible expense to do that right. God forbid you’d need to send SMS in many different countries; you’d have to build a specialized telecoms team in each nation you are operating. For a company like Uber, their core competency is to create apps for passengers and drivers, deal with payments, and route passengers the most efficient way possible. Dealing with the minutia of sending messages and routing calls is a waste of their time, and they are delighted to outsource it. The pain point Twilio solves, then, is that for software developers, dealing with the peculiarities and cost of telecoms networks is a pain and a huge distraction.

When telling the story of the problem, it’s helpful to have some examples of how people are currently solving the problem. “Company X had to hire four full-time staff and buy $50,000 of telecoms equipment to set up their SMS infrastructure” is a great way to bring Twilio to life. “For your webshop, the running of server hardware is painful and unpredictable. If you have a sudden spike in traffic, it can take weeks to get extra capacity, and you might lose millions of dollars as the web pages are unavailable” is a compelling argument for Amazon Web Services (AWS). “Linda needs to hire an assistant to deal with her workload” is an excellent argument for automatic account reconciliation and reminder-sending software solutions.

Your job as the founder is to draw a solid, realistic picture of the problem you’re about to solve, explain the pressing need people have for addressing the issue, and give an indication of how prevalent the problem is. Also, include the risks or costs of what happens if the question remains unsolved. If your “problem” slides tick all of those boxes, you’re on the right path.