Issue trees

Issue Trees are a pretty good way to find the solution to a problem. These trees can be more or less exhaustive, however it is important that they are mutually exclusive, collectively exhaustive (MECE). Even when you are starting a company, you can approach your business plan with an issue tree. In this case, the issue tree will touch a few basic points which the investors will want covered.

  1. What are we offering?
    • What customer problem are we trying to solve?
      • What is the specific pain we are trying to solve?
      • What potential customer base has this pain?
      • What are the differences in serving different types of customers?
      • What is the makeup of the segment to explore first?
    • What breadth of offerings should there be?
      • In a world without any constraints, which are the ideal solutions?
      • In the real-world, what can we offer to solve the existing pain?
      • What are the friction points between our vs. ideal solution?
      • How simply can we convey the value of our solution?
  2. Is this an attractive market?
    • Who is the competition and alternatives?
      • What is currently available in the market?
      • How fully do they solve the customer pain?
      • How do they sell it?
    • What are the key success factors in this market?
      • Which people and skills are essential?
      • Which processes and tools are essential?
      • What is the ideal position in the ecosystem?
    • What are the risks with our approach?
      • What risks are born from suppliers, partners and clients?
      • What legal or other risks and concerns are there?
      • How will conditions evolve and how will we monitor them to stay ahead?
  3. Is this a potential profitable market?
    • What are the expected startup, fixed, and variable costs?
      • What are the costs of starting?
      • What are the fixed costs?
      • What are the variable costs?
    • What is the expected pricing?
      • What is the pricing of current options?
      • How do different pricing approaches compare?
      • What margin can we extract from expected price and costs?

Issue Trees are also the bread and butter of consultants, as they help them find problems and streamline approaches. But also because doing it this way helps to build a coherent message to the client's top management, and help them understand if indeed all things got covered.