{"id":7988,"date":"2020-08-27T20:02:28","date_gmt":"2020-08-27T20:02:28","guid":{"rendered":"http:\/\/blog.growthtools.com\/?p=7988"},"modified":"2020-08-27T20:24:30","modified_gmt":"2020-08-27T20:24:30","slug":"ways-to-think-about-your-business","status":"publish","type":"post","link":"https:\/\/blog.growthtools.com\/?p=7988","title":{"rendered":"Tool Thinking Vs. Problem Thinking: The 2 Ways to Think About Your Business"},"content":{"rendered":"

There are 2 ways to think about your business:<\/span><\/p>\n

    \n
  1. Tool Thinking<\/span><\/li>\n
  2. Problem Thinking<\/span><\/li>\n<\/ol>\n

    Tool Thinking is dangerous and backwards. Short term. Doesn\u2019t endure.<\/span><\/p>\n

    It\u2019s also how most businesses think.<\/span><\/p>\n

    Tool Thinking is when you start with the solution \/ product before deeply considering the problem you want to solve.<\/span><\/p>\n

    For example:<\/span><\/p>\n

      \n
    • Startup: \u201cI want to start a paid newsletter\u201d (Substacker)<\/span><\/li>\n<\/ul>\n
        \n
      • Business owner: \u201cI sell an SEO course\u201d (SEO trainer)<\/span><\/li>\n<\/ul>\n
          \n
        • Big business: \u201cWe make film for cameras\u201d (Kodak)<\/span><\/li>\n<\/ul>\n

          Why is Tool Thinking bad?<\/span><\/strong><\/h2>\n

          It fools you into solving a superficial, short term, and inferior version of a problem.<\/span><\/p>\n

          This leaves you stuck with 5 major challenges:<\/span><\/p>\n

            \n
          1. Nearly impossible to innovate<\/span><\/li>\n
          2. Commoditization comes quicker (you can\u2019t differentiate from competitors)<\/span><\/li>\n
          3. Word of mouth is harder<\/span><\/li>\n
          4. Less impact and less profit<\/span><\/li>\n
          5. You get bored<\/span><\/li>\n<\/ol>\n

            Let\u2019s look at Kodak, for example.<\/span><\/p>\n

            Kodak used Tool Thinking. They thought they\u00a0made film. Making film led to amazing profits and helped them become a world class company. It was the core of their business:<\/span><\/p>\n

            \"\"

            If you were to ask Kodak in 1995 what they did, they\u2019d say, \u201cWe make film! Humans use millions of rolls of film a day. We simply fill that need with the best film ever created!\u201d<\/span><\/p>\n

            Tool Thinking tricked Kodak into thinking they were solving the right problem.<\/span><\/p>\n

            Turns out, 2 things were true about Kodak\u2019s business:<\/span><\/p>\n

              \n
            1. No one cared about film<\/span><\/li>\n
            2. Everyone bought film<\/span><\/li>\n<\/ol>\n

              People wanted to preserve their memories and share them with people. Film just happened to be the best way to solve that problem at the time.<\/span><\/p>\n

              So what happened when digital cameras got popular? Kodak went bankrupt. They were overcommitted to the tool they\u2019d built their company around.<\/span><\/p>\n

              What would have happened if they had been overcommitted to \u201cpreserving memories and sharing them\u201d instead? They would have invented the digital camera and Instagram.<\/span><\/p>\n

              Instead of having \u201cwe make film\u201d at the core of their business, it would have looked like this:<\/span><\/p>\n

              \"\"

              Quick Sidenote:<\/span><\/strong>\u00a0The craziest part of the Kodak example is that they actually DID invent the digital camera! An employee named Steven Sasson presented it to his bosses in 1975. They were unimpressed. In 1989, while still at Kodak, he also invented the first DSLR camera. The marketing department squashed it out of fear it would cannibalize film sales. Tool Thinking!<\/span><\/p>\n

              Tool Thinking has 3 fatal flaws:<\/span><\/p>\n

                \n
              1. You never gain clarity on the problem you\u2019re solving due to premature focus on a particular solution.<\/span><\/li>\n<\/ol>\n
                  \n
                1. You overcommit to your primary product.<\/span><\/li>\n<\/ol>\n
                    \n
                  1. You avoid regularly asking the question: \u201cWhat is the best possible way to solve this problem?\u201d<\/span><\/li>\n<\/ol>\n

                    But there\u2019s an alternative way to think about your business\u2014<\/span>Problem<\/span><\/em>\u00a0Thinking.<\/span><\/strong><\/p>\n

                    Problem Thinking arises from…<\/span><\/p>\n

                      \n
                    1. A strong belief about how things are or should be<\/span><\/li>\n<\/ol>\n
                        \n
                      1. Selecting one primary problem to solve that would make your belief reality<\/span><\/li>\n<\/ol>\n

                        Why is Problem Thinking better?<\/span><\/p>\n

                        It guides you to creating a unique and innovative product that endures longer, works better, and is more profitable.<\/span><\/p>\n

                        Benefits:<\/span><\/p>\n

                          \n
                        1. Forces innovation<\/span><\/li>\n
                        2. Better profit and impact \u00a0<\/span><\/li>\n
                        3. Solves the problem better than it\u2019s ever been solved<\/span><\/li>\n<\/ol>\n

                          For example, SpaceX uses Problem Thinking.<\/span><\/p>\n

                          Their primary domestic competitor, ULA, doesn\u2019t.<\/span><\/p>\n

                          Ask ULA what they do and they\u2019d say, \u201cWe make rockets to fly government stuff to space.\u201d (AKA: Tool Thinking)<\/span><\/p>\n

                          This means we can predict what will eventually happen to ULA (and any company that thinks like this):<\/span><\/p>\n

                            \n
                          1. Overcommitment to core product<\/span><\/li>\n
                          2. Entrenchment<\/span><\/li>\n
                          3. Doubling down on legacy<\/span><\/li>\n
                          4. Overrun by competition<\/span><\/li>\n
                          5. Will go bankrupt<\/span><\/li>\n<\/ol>\n

                            SpaceX on the other hand has:<\/span><\/p>\n

                              \n
                            1. A core belief about what should be (Humans should live on multiple planets<\/span><\/em>)<\/span><\/li>\n<\/ol>\n
                                \n
                              1. Identified a key problem preventing it from being (It\u2019s too expensive to get to other planets<\/span><\/em>)<\/span><\/li>\n<\/ol>\n
                                  \n
                                1. Created the best solution that\u2019s ever existed for solving that problem (Reusable rockets that make space travel cheaper<\/span><\/em>)<\/span><\/li>\n<\/ol>\n

                                  Thinking like SpaceX (Problem Thinking) naturally innovates and creates magic.<\/span><\/p>\n

                                  Thinking like ULA and Kodak (Tool Thinking) naturally doesn\u2019t.<\/span><\/p>\n

                                  Note:<\/span><\/strong>\u00a0Some refer to Problem Thinking as First Principles thinking. But I think that concept misidentifies the magic. \u201cFirst Problem Thinking\u201d might be more accurate.<\/span><\/p>\n

                                  Takeaway:<\/span><\/p>\n

                                    \n
                                  1. Start with a core belief<\/span><\/li>\n
                                  2. Identify one problem preventing that belief from being reality<\/span><\/li>\n
                                  3. Make best thing that\u2019s ever existed to solve that problem<\/span><\/li>\n
                                  4. Hold solution with an open hand<\/span><\/li>\n
                                  5. Non-stop ask, \u201cWhat\u2019s the best possible way to solve this problem?\u201d<\/span><\/li>\n<\/ol>\n

                                    Here\u2019s a short video I recorded to show you how we\u2019re applying this concept at Growth Tools:<\/span><\/p>\n