The Problem-Solution-Prospect Method
Build an enterprise by solving a real problem for people who have it
- Difficulty
- Easy
- Time to result
- ~weeks to results
- Steps
- 5
- Confidence
- 96%
The method begins by locating a concrete problem shared by enough people to justify sustained effort. The entrepreneur then develops a credible solution and takes it directly to those affected. Its central distinction is between customer-centered value and seller-centered need: prospects do not care that a salesperson needs income, a car, or a better house; they care whether the offer resolves their own difficulty. Desmond attributes this reasoning to broadcaster Earl Nightingale and applied it to investment research by identifying bear markets as investors' largest recurring problem. The method can guide opportunity selection, product development, positioning, and sales because each stage remains anchored to a verified need and a specific affected audience.
Origin
Paul Desmond learned this method from an Earl Nightingale radio story and later used it to focus decades of research on helping investors recognize and avoid bear markets. Extracted from Masters in Business.
Core principles
- 01Start with a consequential customer problem
- 02Create value before asking for compensation
- 03A solution succeeds only when it reaches affected people
- 04Frame the offer around the customer's need
- 05Large recurring problems support durable enterprises
How to run it
- 1
Find a meaningful problem
Look for a recurring difficulty that affects a substantial or clearly defined group. Confirm that the consequences are important enough for people to seek help.
Pro tip Study frustrations people already spend time, money, or effort trying to resolve.
Watch out Do not confuse your preferred product idea with evidence of a real problem.
- 2
Develop a workable solution
Create an intervention that materially reduces the problem or its consequences. Make the mechanism and expected benefit understandable.
Pro tip Start with the smallest solution capable of producing a visible improvement.
Watch out A technically impressive product can still fail if it does not address the customer's actual difficulty.
- 3
Locate affected people
Identify the individuals or organizations that experience the problem most acutely. Choose channels that reach them directly.
Pro tip Prioritize prospects with both high problem intensity and authority to adopt the solution.
Watch out A broad audience definition can hide the absence of a real initial market.
- 4
Present customer-centered value
Explain the problem and show how the solution changes the customer's situation. Keep the seller's personal needs out of the value proposition.
Pro tip Use the prospect's own description of the problem whenever possible.
Watch out Do not make the conversation about your quota, income, or desire to close a sale.
- 5
Learn and refine
Use objections, adoption behavior, and outcomes to improve the solution and its positioning. Return to problem discovery if customers do not perceive sufficient value.
Pro tip Distinguish objections to the message from evidence that the solution itself is weak.
Watch out Do not scale outreach before confirming that the offer reliably solves the problem.
In the wild
Nightingale described a struggling life-insurance salesperson who approached prospects as solutions to his own need for income. The better approach was to recognize death as a financial problem for families and present insurance as a way for the prospect to manage that risk.
→ The sales conversation shifts from helping the agent to protecting the customer's family.
Desmond identified bear markets as the largest recurring problem facing investors: they often fail to recognize the warning signs and sell near the eventual low. He consequently spent decades studying how tops form, declines develop, and investors might move aside before severe losses.
→ A general success principle became a focused research and investment-management proposition.
Common mistakes
Starting with personal need
Prospects are not a solution to the seller's income problem. The offer must begin with the prospect's difficulty and desired outcome.
Inventing demand
A clever solution has little commercial value when the target audience does not experience the proposed problem intensely enough.
Stopping before distribution
Solving a problem is insufficient if the solution never reaches the people who need it.
Is it for you?
Best for
It is best for founders, professionals, and salespeople choosing an opportunity or repositioning an existing offer.
Not ideal for
It is not ideal when the supposed problem is unverified, trivial, or already solved satisfactorily by accessible alternatives.
From the transcript
“If you want to be successful, look around the world and identify a big problem”
“Then find a solution to that problem.”
“So, so you identify a problem, come up with a solution, and then go to the people who have the problem and tell them you've…”
From the episode
An Interview With Paul Desmond: Masters in Business (Audio)
Paul Desmond