Problem solving
Turning problems into opportunities: Featuring Andy Jassy, CEO of Amazon, formerly SVP of Amazon Web Services. With questions from Elon Musk.
Problem solving is an essential skill in entrepreneurship. It can be essential to both identifying problems worth solving, solving them and identifying opportunities for impactful change to avoid them in the future.
Furthermore, in my experience the greatest founders are often not just passionate about solving problems, they are also the most persistent.
“It’s not that I’m so smart, it’s just that I stay with problems longer.”
— Albert Einstein
Let’s start with a story about Amazon to inspire you
Foreword:
As you review this resource, know that it is under review to both bring it up to date with new learnings from leaders like 
Elon Musk, Tesla, SpaceX
and with consideration for how AI will help us all evolve our problem solving.
Amazon
Several years ago, Amazon was struggling with scaling its e-commerce infrastructure and realizing that many of its internal software projects took too long to implement, a major pain point from a competitive standpoint.
Andy Jassy, acting as a chief of staff for Amazon CEO Jeff Bezos, was assigned the task of figuring out why. What he realized was that what many of these teams were building wasn’t scaling beyond their own projects. For each new project, a team would have to reinvent the wheel.
Jassy and Amazon could have come up with a solution to this internal scaling problem and stopped there. But the team went beyond that, figuring that if they were having difficulty with certain technology infrastructure problems, it was highly likely that other companies were experiencing similar problems. Thus, if they could solve these issues for themselves, they could potentially also solve it for others.
So Amazon started to develop an architecture that could be re-employed over and over again by different engineering teams for different projects. These services allowed Amazon the retailer to move more quickly than it had previously.
Amazon Web Services, AWS and the rise of Cloud Computing
But the company didn’t stop there, choosing instead to turn its solution into a new business line, offering cloud computing as a service. And so Amazon Web Services was born. Today, AWS generates roughly $3 billion in annual revenue and adds more infrastructure daily than it took to run all of Amazon in 2003 when it was a $5.2 billion retail business with over 7,800 employees.
The lesson of course is that Amazon didn’t stop by solving its problem, but found a “breakthrough solution” that opened up new business opportunities (see video below).
Andy Jassy, senior vice president of Amazon Web Services, discuss the formation of AWS at Michael Skok’s Startup Secrets session at Harvard’s i Lab
So how can you develop these skills both for yourself and for your company?
Problem solving as a skill
Like many things, problem solving can be a learned skill. And it can be a team sport that I encourage you to think about from day one in your culture, in order to scale successfully.
8 Levels of Problem Solving and 8 Ways to Encourage Breakout Solutions…
What level problem solver can you be?
Simplified Problem Solving Framework:
Level 0 – Can’t see the problem (!)
Level 1 – See the problem and raise it
Level 2 – See the problem and define it clearly (a problem well defined is a problem half solved)
Level 3 – See the Whole Problem , define it clearly and identify the root cause
Level 4 – Plan ahead to avoid the problem or derivative problems re-occurring (prevention is better than a cure)
Level 5 – Find a practical and viable solution to the problem (Consider the 
Gain/Pain to the customer)
Level 6 – Find a breakthrough solution to the problem (For example one that saves so much more than it costs, it opens the way to other solving other problems and yields yet more breakthroughs. EG Cloud Computing, Generative AI, CRSPR Generative AI, 3D Metal Printing, Graphene-Based Materials)
Level 7 – Take initiative to implement the solution or develop the breakthrough
Level 8 – Look beyond problem prevention – create new opportunities from continuous improvement … (Think 3M, Amazon, Elon Musk, Tesla, SpaceX
)
How Can You Create A Great Problem-Solving Startup Culture ?
It’s not easy to create a culture that, like Amazon, sees opportunities instead of problems. But it helps to start with the simple motivational framework suggested above to focus people on assessing their own problem-solving abilities and then reward people as you see their problem-solving abilities progress.
“If you want to build a ship, don’t drum up the men to gather wood, divide the work, and give orders. Instead, teach them to yearn for the vast and endless sea.” — Antoine de Saint-Exupéry.
- Develop a culture that encourages vulnerability, and learning, not blame
- Make heroes of those who constantly sniff for smoke and run to the fire.
- Recognize and reward progress up these problem solving levels and, if possible, make recognition independent of titles, roles or traditional organizational constraints
- Be patient with problem solvers who make mistakes and ask yourself – could you have done a better job setting the context, providing the support, resources or mentoring?
- Consider rewarding bold, well-conceived attempts. Especially when people are trying to break through conventional constraints
- Provide resources and opportunities for people to stretch their talents, shining a light on creative solutions
Even if you have to have only one person accountable for something, make it everyone’s responsibility to solve problems at EVERY level in the organization. Grass roots collaborative solutions are so often the best.
Usually people closest to the problem are best able to define it and when solved by those same people, they feel highly motivated to implement those solutions.
Solutions from on high are less motivating and often fail to provide the self-learning experience.
Some of the best solutions come from multi- disciplinary, multi-level, cross-functional problem solving.
Try even to engage your customers, partners and communities from outside the company. This co-creation often fosters trust and understanding. (Think open source and crowd sourcing)
Encourage self-awareness and motivate people to ask for help to develop their weaknesses and team around their strengths. Offer training and development for those who want to reach higher.
If you’re a manager, be authentic and don’t talk any of this. Just quietly walk the walk in a way that is authentic for you.
Taking this approach to problem solving will build both abundance and resilience on your team. I’ve found that the companies that attract, nourish and reward people with great problem-solving skills as a core competency get tremendous competitive advantage from it. Furthermore, businesses are often born from the successful identification and solution to problems in the market.
As always, I encourage you to share your thoughts in the comments below. What you have found and how do you encourage breakthrough problem solving?
Read this next Elon Musk, Tesla, SpaceX
Content from this column was originally published in Harvard Business Review
and Forbes
. It has since been updated.
Amazon Web Services, AWS and the rise of Cloud Computing
8 Levels of Problem Solving and 8 Ways to Encourage Breakout Solutions…
What level problem solver can you be?
Simplified Problem Solving Framework:
How Can You Create A Great Problem-Solving Startup Culture ?
🎙 Hear how Michael taught it the lecture, cleaned & woven in
▶ Watch the original lecture
Problem Solving
The great entrepreneurs see problems as opportunities. They dig in, get closer to their customers, and expose the underlying opportunity that can give them the basis to build something really valuable: a substantive solution that can be differentiated and distinguished.
John Hirschtick: Vision or Hallucination, and Understanding Buying
John Hirschtick is the founder of Onshape, a new CAD/CAM company in Cambridge funded by Northbridge, and before that the founder of SolidWorks in 1993, where he stayed 18 years, and before that a venture-funded company called Premise. He was also on the MIT blackjack team, worked as a professional magician, was a stamp dealer with his father, swept floors in a drugstore, and worked in a restaurant, and every one of those experiences taught him things just as valuable as things you learn in business school or starting companies. His remarks are organized around five questions: Is your idea a vision or a hallucination? Are you building a company or a business? Should you do it, do you have what it takes? When is the right time? And who else do you need to get involved?
Visions and hallucinations look and feel exactly the same until you try to build and realize them. John has had some success but also some terrible ideas that felt the same as the good ones. Entrepreneurs are people who see things that aren’t there: “I know that’s going to be great, I know if I build it they will come.” So much of what you do early on is pressure-test your thinking any way you can, to tell the difference between something really there and a mirage. Remember that big visions and big dreams may not be any harder than small ones. Sometimes we think too small.
Today it’s easier than ever to start a company and harder than ever to build a business. A company is a pretty easy thing to start. Back in the day it meant a lot of money on legal work, an office, and expensive equipment; these days you don’t need an office or expensive equipment. But a business is very hard to build. A company is just a place; a business is a thriving ecosystem. The key issue separating ideas for companies from great businesses is markets, customers, and buying. When you think of markets, don’t think of a pie chart in a business school presentation; think of a farmers market where people buy and sell. And buying is done by people; it’s a human activity, not very logical. Logic is used to justify people’s emotions. Great entrepreneurs understand buying.
If there’s one image to take away, it’s a wallet. When do you pull it out and take money out? When you’re buying something. This is what you have to beta-test and understand in your plan. It’s not how to distribute cloud computing servers or assemble robots or 3D printers; it’s understanding whether people will buy. As products get easier to build, this matters more. Draw on your own experiences: anyone who worked in a store (McDonald’s, a shoe store, standing behind the register at the Gap watching why people bought this kind of jeans but not that kind) has really valuable experience. We’re all buyers.
Get close to customers. If you want to figure out if people will buy, get as close to them as you can. Feel their needs, feel what they’re doing when they’re buying. Talk to them about something they buy. Don’t just listen to them tell you what they’d like; that’s very dangerous. What people like and don’t like is one thing; John is more interested in what they spend money on and why. You don’t have to build a product people like; you have to build a product people will buy. (“Ask me how I know that afterwards.”) Get close to the technology too, feeling what it can and can’t do and what people will pay for.
Pivot or Iterate: Digging Into the Problem
As you gain customers, if they’re not aligning with your value proposition, do you pivot or iterate? Entrepreneurs often feel that if it’s hard to meet customers’ needs, they’re struggling and their product is the issue, and that may be exactly the wrong time to pivot. The right thing might be to dig in and hone in on the customer’s problem rather than worry about what your product is doing. Understand their business issue. As you uncover it, you might discover that while your product is part of the problem, a greater issue is how it’s integrated with everything else in the customer’s situation, in which case the solution might be to include some services and even change your business model, packaging, pricing, and delivery. That iteration, rather than pivoting away from the market, might be the key to uncovering real business value on which to accelerate.
There’s no right or wrong answer. It might be totally appropriate to pivot away from a group of customers leading you nowhere. But it may be totally inappropriate to pivot away if all you’re finding is that meeting their needs is hard. If it’s hard, and instead of pivoting away you can iterate around it and dig in with the customers, you’re more likely to deliver something of real substantive value.
Pitfalls to Watch For
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Are people going to buy? As you get larger, it’s easy to think you’ve conquered your mission when you’re only 10% of the way along it, when you’re a hot company or you’ve gone public. Bring in data to guide you, like a pilot who uses instruments; set up the right instrumentation so you know where you are on a bigger journey of conquering markets.
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Strategy is differentiation. One of the toughest but most rewarding exercises is to really understand that strategy is differentiation, and take the time to put a differentiated strategy together. Too many entrepreneurs come up with something that develops early traction, but there are 10 other companies already doing it, so it will never become something big. The combination of a big pain, a big market, and a differentiated offering and strategy is very hard to find, and it’s most often overlooked despite good teams trying.
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Technology in search of a use case. Entrepreneurs who found a way to solve a technological problem need to ask: what’s the use case, and is it painful enough that people will actually change behavior? Most technology products seek to change people’s behavior, and there’s a bigger psychological hurdle to change behavior than you might think. A pitfall is thinking that because you’ve solved a technical problem, you’ve solved a use case problem. In our value prop session we talk about gain, pain, and having a gain big enough to overcome the pain of adoption, and about finding non-disruptive disruptions.
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