One of the most common (and deadly) mistakes in entrepreneurship is creating a solution before identifying the problem.

You might think you have the next big idea, but have you really done the research to see if it could be successful? Is there a need in the marketplace? Is the space full of slow-moving companies unwilling to change? Then maybe you have an opportunity. If not, you might be wasting money and time.

If you really want to obtain success, the first thing you need to do is find the problem to solve. The problem serves as the foundation for your company.

What is needed + what you can do

It can be very tempting to jump on the next hot idea you have, but so many people fail with fly-by-night operations that have no mission or framework.

Before starting your next company, take a step back and assess two things: the marketplace and your abilities.

Think hard about this. Starting a company is equal parts passion and planning. You need the motivation for both.

First ask yourself, what are you passionate about? Next, what does society (or even just your local neighborhood) need?

The ideal company idea must check off both of those boxes. If you're working hard to fulfill a need, but you hate the work, you'll just end up resenting the company and starting over. If you're building a passion project, but there's no need for the product or service you're offering, generating interest and sales will be impossible.

Still stumped? Here are some of the biggest necessities coming up in the world today: clean energy, robotics, cybersecurity, transportation and artificial intelligence. You'll see hundreds upon hundreds of companies trying to solve those emerging issues, but only a handful with the capability and drive to do so.

Define your problem

Now that you have a list or Venn diagram set up of things you're passionate about (and things that are needed), it's time to trim.

You can even rank your list based on how big the problem is. If you're going for that moonshot idea, make sure you have the skill and capacity to build it out. It's OK to start out small if you're new to this and just want to get your feet wet. If this isn't your first company, aim a little higher on your list.

Find the problem that you actively want to solve, that you are best suited to solve and that has significant opportunity built-in.

Know thy enemies

Once you have your problem in place, odds are someone has tried to solve that same problem.

Look back at companies who have failed to address this problem and figure out why they failed. Did they try to take on too much, too quickly? Was their price point way off target? Did their idea just come too soon, before the demand had matured?

You can use this information to not only avoid similar pitfalls, but to take your business even farther.

If there are still some active competitors in the space, take a hard look at what they offer and at what price. Maybe even have a friend purchase an item or use their service to see where they excel and where they fall short.

When I'm launching a new venture, I don't seek to merely exist among other competitors. I want to dominate the market. To do that, I need to know where I can do better than my competition.

Build your story

Before you start to build your company, you need to define your problem and explain your solution.

This is the thing you'll be telling to investors, friends, partners and people you network with. What is that burning hot idea inside you and how does your company solve that problem uniquely?

Find a way to tell your story in a way that you can repeat every day, without it ever growing old or stale. This is your passion.

Now you have a clearly defined problem, the factor that makes you stand out among the rest and the motivation to get it done. These are the elemental first steps that countless so-called entrepreneurs have skipped, finding only failure.

Published on: May 5, 2017