Founder's Journal (part 3): How do we know if it’s big enough of a problem to jump in?

Hi friends,

Hope you are well ❤️

Welcome back to another blog in the series Founder’s Journal where I reflect on my journey building my startup MỞ over the past 4 years.

In the previous blog, I talked about how to identify the right start-up idea. I talked about three important points:

• Ideas are just the beginning. It takes a long and iterative process for ideas to fully form and develop.

• Pay attention to both our inner and outer world to identify problems that we care about. Only when we find something we care about can we have the will and consistency to coevolve with it.

• Understand whether we and the problem(s) have are founder-future fit.

  • We cannot stop thinking about the problem (love/passion).

  • We have the necessary skills and network to kick start and sustain solving the problem (leverage).

  • We have a unique insight into the problem/industry (unique opportunity/competitive advantage).

In this blog, we will explore the following question together once we have identified some sort of problem/idea we want to pursue:

How do we know if it’s big enough of a problem to jump in?

This is the narrative that I wrapped myself around when I began my startup journey.

Find the first 100 customers who LOVE your product and are willing to pay.

I learned this from consuming Paul Graham’s essays, Y-Combinator resources, and the tech startup scene in Silicon Valley.

When we started MỞ, we tested and attracted customers to find 100 paying users who gave us great feedback. We began with the problem that current online learning solutions lack active engagement, so we wanted to deliver a cohort-based model that would 10x the learning experience with a minimum 60% completion rate (compared to the usual 3-5%). We targeted Vietnam’s market.

We hunted for those first 100 customers, and once we hit that milestone, we felt confident that we could scale. But a year later, I realized it wasn’t that simple.

Finding the first 100 customers doesn’t guarantee that there is a market for 500, 1,000, or 10,000 customers willing to pay. The skills that are required to acquire 100 customers compared to 10,000 or 100,000 customers are also different.

But as young or new founders, we might not think very far into the future. We love solving problems right in front of us and are hopeful about the future once we get the first few customers.

The tricky part is, at least for me, once we have achieved the first 100 customers, we were hopeful about a market for our problem. Re-evaluating the problem and the market at this point felt like a sunk cost. We have worked so far to get the first 100 customers, but now we have to re-think whether there is an actual market for this problem. 

Unfortunately, success requires hard work and we should evaluate at many points in the business whether the market is as big as we imagine. Or else, we can’t grow.  

Until I read "Excuse me, is there a problem?” by Jason Cohen, I learned that there is a more in-depth way of looking at answering this question.

Jason presents several dimensions founders can consider before jumping into pursuing a problem.

Let’s dive into it!

1. #Plausible-Market-Size: Do 10M people or 100k companies have the problem?

Jason does recognize that this is a rather big number to estimate considering a founder is just starting out. However, I find his reasoning quite valid.

Here’s how.

Jason uses Fermi estimation to break down the market potential:

• For consumer businesses, if you rely on online marketing channels like Google Ads or SEO, expect a 1% conversion rate from impressions to visitors, followed by another 1% conversion rate from visitors to paying customers. This means that for every 10,000 impressions, you may only convert 1 paying customer. To gain 1,000 paying customers, you would need approximately 10 million impressions, which implies that your market should consist of at least 10 million people for the business to have a chance at scaling.

• For B2B businesses, while the market size may be smaller, companies typically pay more for solutions, and the conversion rates are higher. Therefore, you might need a potential market of 100,000 businesses to scale.

Applying this to MỞ, if we were going the B2C route, the question would be whether there are 10 million Vietnamese people aged 22 to 30 who are willing to invest in self-development skills. On the other hand, if we pursued the B2B route, we’d need to ask: Are there 100,000 higher-education institutions or companies in Vietnam willing to invest in personal learning and development for their students or employees?

As a first-time founder, looking at these numbers can be intimidating! 😅 But having this type of estimation in mind pushes us to think more practically about market size. If I were to start another business in the future, this would be a key part of my evaluation process. It forces us to ground our ambitions in real market dynamics and sets a clear threshold for scalability.

2. #Customer-Awareness: Do they know & care they have the problem?

At first glance, it might seem like an obvious "yes," but more often than not, the answer is surprisingly "no." Jason makes a crucial point: if people don't recognize a problem, they won’t search for a solution. Even if they land on your website by chance, it’s unlikely they’ll pay to solve an issue they don’t perceive as a priority.

In the case of startups, sometimes the market simply isn’t ready or isn’t aware of the problem you’re solving. Even if they are aware, they may not care enough to address it. This is something I’ve seen with MỞ. When we positioned ourselves as one of the few online cohort-based platforms in Vietnam, people didn’t care. They weren’t focused on solving the engagement problem in learning—they were simply interested in gaining access to learning materials in the first place.

What worked for us, however, was when we shifted our focus to areas where there was already a strong market interest, like writing and learning, and improved upon those. Once we aligned our product with a problem that people were already prioritizing, they started paying attention.

The key thing I learned as a founder in the 21st century is that a lot of times, someone else has tried solving the problem I care about already. Different solutions to the problem I care about already exist. The key is to solve a problem people are eager to fix, and then deliver a far better experience than what’s currently available.

Perhaps it’s often easier to pick a problem the market already cares about and make the solution 10 or 100 times better, rather than spending time educating the market about a completely new problem. While some founders successfully create new markets, it’s a challenging, costly, and time-consuming path. It’s important to know the trade-offs before you commit to this route.

3. #Lucrative: Do they have a substantial budget to solve this problem?

#budget

#willingness to buy

Jason emphasizes that even when customers recognize they have a problem, budget constraints can be a deal-breaker. Whether it's consumers or businesses, the question is not just whether the problem exists but whether people have the resources to solve it. For consumer startups, targeting customers with limited spending power, like students, can lead to failure. Similarly, even large companies may not prioritize your solution if it's not a top concern or if internal teams claim they can handle it.

For MỞ, this rings true. While individuals might recognize the value of self-development, many don't have the budget to invest in premium learning programs. On the other hand, targeting companies might seem more lucrative, but only if they prioritize learning and development over other projects. The key is positioning MỞ as an essential investment, not a luxury, to ensure it's seen as worth the budget.

Ultimately, knowing your market’s financial capacity is just as important as identifying the problem you're solving.

4. #Liquid: Are they willing and able to buy right now?

#timing

Even when customers have the budget and acknowledge the problem, there’s still the challenge of timing. Jason explains that customers often face barriers like being locked into long-term contracts or being satisfied with a less ideal but integrated solution. For instance, a company might prefer your product over its current system, but since its solution is bundled into a larger, convenient package, switching would be too costly and complex.

In the context of MỞ, we’ve encountered similar timing issues. Even if universities recognize the value of investing in learning and development, they may have already allocated their budgets elsewhere, or are tied into internal programs that make switching difficult. Even if a young professional wants to buy our products, they won’t be able to buy if we approach them when they just pay a lot of money for rent, utilities, or other educational programs.

The key here is to anticipate these challenges and offer creative solutions, such as flexible contracts or payments, to overcome these obstacles.

Founders need to understand that even the best product can fail to gain traction if customers aren’t ready to buy when you’re selling. Timing and convenience play a huge role, and the challenge is crafting a strategy that aligns with the customer’s readiness to make a change.

5. #Eager: Do they want to buy from you, specifically?

Even when the market exists and customers are ready to spend, a critical question remains: why should they choose you over competitors? Jason highlights two primary hurdles: trust and differentiation.

#trust

First, customers need to trust that your product works and that your company will be around for the long term. They need confidence that you can handle their future growth and that your support will be reliable when problems arise. Without this trust, even the best product might not secure the sale.

#differentiation

Second, differentiation goes beyond having unique features. While you might offer something that competitors don’t, it’s important to ask if those features matter to most of the market. Even if your product excels in certain areas, competitors may outshine you in features that are more relevant to your target audience.

The key takeaway is to build trust with your customers and highlight your unique strengths that genuinely matter to them. Otherwise, they might go with a competitor who offers a more familiar or well-rounded solution, even if yours is technically superior.

6. #Enduring: Will they still be paying (or paying it forward) a year from now?

#long-term-sustainability

#ecosystem

While Jason’s example of customer retention primarily applies to SaaS businesses with recurring revenue, the underlying lesson is just as relevant for non-recurring revenue businesses like MỞ. Instead of focusing on monthly churn, the question becomes: how can you build long-term sustainability through multiple product lines and recurring customers?

For example, one course offering might attract customers for a single purchase, but to create a sustainable business, it’s crucial to think beyond that. Building an ecosystem of products or services—whether that’s different courses, workshops, or other educational experiences—gives customers a reason to return. It also allows you to meet different needs as they evolve.

For MỞ, this might mean offering a variety of courses at different levels, bundling products together, or expanding into related areas like personal development or career coaching. The key is to diversify your product lines so that customers see ongoing value in what you offer, encouraging them to stay engaged and continue purchasing.

In essence, sustainability comes from creating multiple touchpoints with your customers, rather than relying on a single product to carry your business forward.

Visual Map of Jason Cohen’s Blog

Conclusion

While considering these factors from the start is essential for long-term success, many founders jump in with a beta product to test the market—and that’s okay! Selling early versions of your product can provide valuable insights. However, having a clear goal is critical. If your goal is to build a large, growing business, these questions should be front and center from day one.

For me, MỞ can continue as a small, side business. But it requires a lot of restructuring and rethinking the questions above for MỞ to grow into a large, growing business.

Hope you enjoy this read and please let me know if you have any feedback or thoughts from this post:)

—

Bài blog này nói về khi nào 1 vấn đề là đủ lớn để nhảy vào. Những ngày vừa qua, cơn bão Yagi đã mang lại những thiệt hại rất lớn đối với rất nhiều tỉnh thành ở miền bắc. Chúng mình cùng chung tay ủng hộ đồng bào bị thiệt hại do cơn bão số 3 nhé. Bạn đọc nào đang tìm kiếm nơi để ủng hộ thì mọi người có thể tham khảo nguồn sau nhé: Ủy ban Trung ương MTTQ Việt Nam.

P/s: Nếu tin nhắn và bài blog này tới tay bạn, mong các bạn đọc của mình và gia đình ở Việt Nam bị ảnh hưởng bởi đợt bão Yagi vừa qua sẽ sớm an toàn ❤️

Cảm ơn mọi người đã đọc bài của mình ❤️