Here’s a small secret of business: You need a problem. To be more clear, somebody ELSE needs a problem, and the purpose of your business is to solve it.

One of my first business ventures was a lawn mowing company that I started in college. The business plan was very simple: I bought a mower, borrowed a trailer and leased a garage in exchange for mowing the lawn in front of it. Then I printed fliers advertising my services, and distributed them to mailboxes in the fanciest neighborhood in town. This seemed like a good plan, until a wealthy-looking fellow in a Dodge Viper pulled up to my parked Jeep to give me a little insider info: “The homeowners association mows our lawns, son. You’re wasting your time.”

In that neighborhood, there was no problem to be solved. They already had a GOOD mowing solution, and it even happened to be free.

A problem can be local, like a lack of decent Mexican restaurants in small-town, Kansas. Or a problem can be much larger, like a lack organic wine grapes in Northern California. But if there is no need for a better (or first) Mexican restaurant, or no need for more grapes, there’s no reason to build a business that provides either of those things.

I’m surprised at how often this “secret” gets ignored. How often do you see a new restaurant, surrounded by other restaurants, close in 6 months? Was there a need for another restaurant? There may have been, if the others were poorly run. Otherwise, a new restaurateur is wasting his time. (Also, he should start with enough cash to survive more than 6 months without revenue, but that’s a blog for another day.)

Brewing beer or making pizza is a hobby, if it doesn’t solve a problem. If I start a brewery because I like to brew, but nobody has a lack of excellent beer, it won’t be much of a business.

Some of the best companies in the world solve problems people never knew they had, like Henry Ford’s Model T (horses were too slow), Apple Computer’s iPod (MP3 player’s were awkward and bulky), and Garmin’s Vivofit (fitness bands had terrible battery life and limited water resistance.)

Fortunately, there are plenty of problems to be solved, needs to fill and variations of existing solutions to invent. For every one neighborhood that doesn’t need a better lawn service, there are 10 others that do.

Christian