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What's the problem? Prof. Larry Smith wants you to find out

Thursday, August 30, 2018

Economics Professor Larry Smith says it’s a problem that’s endemic around the world: the failure of entrepreneurs to identify important problems. Their product or service might be the most innovative idea to come along in years, but if there’s no market or need for it — or if the world isn’t ready to embrace it — the venture is doomed to failure.

Conversely, a problem might be staring a company in the face, but if it doesn’t recognize it and do something about it, disaster inevitably follows. Consider the Blockbuster video rental chain. It failed to grasp the problem of bulky and cumbersome DVDs. Customers wanted something simpler. Enter video streaming technology. Exit Blockbuster.

Larry Smith lecturingRecently, Smith and several colleagues set out to do something about it. Their solution? The Problem Lab.

The first of its kind in Canada, the University’s new Problem Lab is designed to help innovators create ventures of great economic and social consequence. Apart from a smaller version at Oxford University in Britain, Smith, Problem Lab director, says he’s not aware of any other program of its kind in the world.

Smith and his crew have come up with a methodology to help student entrepreneurs home in on important problems. The five key steps are: history, context, failure analysis, scale and connections.

Noticeably lacking anywhere is the word solution. Mention the S word and judges in the pitch competitions set up to attract students to the Problem Lab will strike you down. Solutions come later. Job #1 is to put the issue under a microscope and focus on that killer problem.

“The problem should be important but it should also be something you care about. I’m not going to stand down on the passion issue.”

To understand how this new lab came into being, we’ve applied the five-step methodology to the origins of the Problem Lab. But before leaping into the five steps, it’s crucial to make sure you are working in an area that you find fascinating. Passion is an essential element, Smith argues. “The problem should be important but it should also be something you care about. I’m not going to stand down on the passion issue.”

Once a deep interest is identified, it’s important to comb through curated media such as The Globe and Mail and The New York Times to see which problems within your area are repeatedly discussed. These news stories will help you begin to understand why the problem is important.[...]

Read about the five steps to understanding the problem in Waterloo Magazine, spring 2018 issue.

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