Starting a business is the intersection between a solved problem and a business model

A relative was passing through town recently and he stopped in to chat. We had a great time catching up (since we haven’t seen each other in years). Eventually, the conversation turned to business — the businesses I run and some business ideas he had.

He presented a couple of ideas and although they had merit, they were missing something. He asked for my opinion and I shared it with him but decided to write about it here as well.

He had some basic business ideas but they weren’t fully cooked. They could probably more accurately be described as topics rather than businesses. There was nothing wrong with the topics themselves but if you want a business, this is what you need:

A business is the intersection between a solved problem and a business model.

A real business has both. If it’s missing one or both, it will fail. I can’t think of a business that doesn’t have both (although some businesses like Twitter seemed to start with neither so maybe my relative had the next Twitter).

  • The solved problem: The longer I am in business, the more adamant I am that people buy solutions. Even if the problem is not immediately apparent or permanently solved, people buy solutions. Yes, even the impulse purchase of winterfresh gum is a solution. And the more important and painful the problem, the more they are willing to spend. Solving problems is the easiest way to sell something.
  • The business model: This is how the solution is offered, transacted, and delivered. It’s how the business is structured. If you’re not sure what a business model is, just start by building a sales funnel. I write a lot about business models and I write even more about sales funnels.


You need to solve a problem and you need a business model. Both. If you’re missing both, you only have a vague topic.

If you have a business model but you don’t solve a problem or if you solve a problem but don’t have a business model then your business will struggle and you might sell a couple of units but you won’t sell very much.

Solve a problem and build a sales funnel around it… and that’s your business.

Published by Aaron Hoos

Aaron Hoos is a writer, strategist, and investor who builds and optimizes profitable sales funnels. He is the author of The Sales Funnel Bible and other books.

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