Startups are born from the spark of an idea: a solution to a problem that founders believe will change the world. Yet, despite their passion and innovation, 90% of startups fail.1
One critical reason is that many founders fail to effectively communicate the true value of their solution. They focus on the "what" and "how" of their product, but neglect the "why": the deeper understanding of why the problem persists and why their approach is uniquely capable of solving it.
The problem with problem-solving
At first glance, it seems logical for founders to talk about the problem they’re solving and their solution. However, this approach can be misleading. Investors, customers, and stakeholders don’t just want to know that you’ve solved a problem—they want to know why the problem exists in the first place and why it hasn’t been solved effectively by others.
Consider a Fintech startup that promises instant loan approvals for small businesses. Sounds good, right?
However, if the real challenge in the industry lies not in the speed of approvals but in the rigid eligibility criteria and lack of flexible financial products tailored to diverse business needs, then faster approvals alone miss the mark. The true market gap stems from why traditional lenders exclude so many businesses: factors like inflexible credit score requirements or one-size-fits-all terms. Without addressing these root causes, the startup risks offering a superficial solution that fails to resonate with its audience.
Understanding these deeper structural challenges is critical to shaping a product that solves real problems. Focusing solely on a quick fix overlooks the opportunity to create meaningful user experiences and establish lasting brand differentiation. Combined with a top brand identity, startups can effectively communicate their value proposition.
Why the "why" matters
Understanding and articulating the "why" behind a problem is what sets successful startups apart. It demonstrates that you’ve done the hard work of digging deep into the issue, uncovering its complexities, and designing a solution that addresses the root cause.
This level of insight builds trust and credibility, showing that your solution isn’t just a temporary fix but a sustainable, competitive advantage.
What other challenges are startups facing?
The challenges founders face in articulating their "why" are made up of the broader struggles of running a startup. Here are some key statistics and insights into the hurdles founders encounter:
- Lack of product-market fit: A staggering 42% of startups fail because they create products nobody wants.2 This highlights the importance of understanding not just the problem but the market dynamics that sustain it.
- Funding challenges: Nearly 29% of startups fail due to running out of cash.2 Without a compelling "why," it’s harder to convince investors to take a chance on your vision.
- Team issues: About 23% of startups cite team problems as a reason for failure.2 Misaligned teams often struggle to communicate a unified vision, further diluting the "why."
- Competition: 19% of startups fail because they’re outcompeted.2 If you can’t explain why your solution is better and why others haven’t succeeded, you risk being dismissed as just another player in the market.
- Poor marketing and branding: Even the best solutions fail without effective communication. Around 14% of startups fail due to poor marketing2, which often stems from an inability to clearly articulate the value proposition. Without a clear value proposition, it is hard for a design team to create a strong brand identity, and communication gets blurred, not only on a verbal but also on a visual level.
How to communicate your "Why"
To effectively pitch your startup, focus on these key elements:
- Understand the root cause: Dive deep into why the problem persists. What barriers have prevented others from solving it? How does your solution overcome these barriers?
- Highlight your unique approach: Explain why your solution is different and better. What insights or innovations set you apart?
- Build credibility: Use data, case studies, and testimonials to back up your claims. Show that you’ve done the research and have a clear path to success.
- Address the skeptics: Anticipate doubts and address them head-on. For example, if you promise instant loan approvals, explain how your platform uses alternative data and advanced risk models to accurately assess creditworthiness and responsibly expand access to financing.
Lessons from successful founders
Successful startups like Figma didn’t just solve problems; they redefined how those problems were approached. Figma tackled the inefficiencies of design, creating a browser-based tool that made collaboration easy for branding teams.3
Conclusion: The value of the "Why"
In the high-stakes world of startups, understanding and communicating your "why" can mean the difference between success and failure. It’s not enough to have a great idea or even a great product. You need to show that you understand the problem better than anyone else and that your solution is uniquely positioned to solve it.
The next time you pitch your startup, don’t just talk about the problem and your solution; talk about why the problem still exists and why you’re the one to solve it.
Why is a strong brand important for startup success?
In addition to understanding and communicating your "why," a strong branding and brand strategy are essential to differentiate your startup in a competitive market.
Branding goes beyond logos and taglines; it’s about creating a cohesive narrative that ties your "why" to your mission, values, and customer experience. A well-crafted brand strategy helps you build trust, foster emotional connections, and establish credibility with your audience. It ensures that your "why" resonates consistently across all touchpoints, from your pitch deck to your social media presence. It combines your verbal and visual identity into a brand experience that helps your business grow.
By aligning your branding with your "why," you create a compelling story that attracts customers, investors, and talent, setting the stage for long-term success.
Wanna find out how AI prompts can help your startup communicate value?
Check out our new Substack channel with expert tips from our founder team.
Sources
1 https://explodingtopics.com/blog/startup-failure-stats
2 https://ff.co/startup-statistics-guide/
3 https://www.productmonk.io/p/figma-success-founding-story
