Build in the right order: problem, prospect, people, product, positioning, process, profit and purpose

Business owners bring a familiar set of problems to advisers. “How do I sell more?” “Customers only buy if I give discounts.” “I have to offer long credit terms to win orders.” “I can’t find new customers.” “I can’t keep good staff.” “We’re busy but not profitable.”

These look like separate problems needing separate fixes: a better salesperson, a new marketing campaign, a pay rise, a cost-cutting drive. Often, though, they share a root cause. The business was built out of sequence. It started selling before understanding the customer’s problem, built a product before understanding the customer, scaled before the offer was proven, or chased profit before fixing the process. Problems at later stages are frequently symptoms of something missed earlier.

This article describes an eight-step sequence for building, or rebuilding, a business. It is sometimes taught as the “8 Ps”: problem, prospect, people, product, pricing and positioning, process and performance, profit and purpose. The value of the framework lies less in the labels than in the order, and in using it to diagnose where a struggling business went wrong.

1. Problem: start with the customer’s burning problem

Everything starts with a real problem worth solving, ideally a burning problem that customers feel urgently and will pay to fix. Two questions matter:

• What is the customer’s most pressing problem in this area?
• How can we solve it in a way they cannot easily solve themselves?

Understanding the problem deeply tells you whether the market needs radical innovation, a fundamentally new solution, or incremental innovation, a better version of what exists. It also points to opportunities others miss, especially if you understand how your customer makes money and how your customer’s customers grow. In business-to-business markets, the best opportunities often lie in improving the customer’s own money-making model.

Steve Jobs put the principle memorably at a 1997 developers’ conference: “You’ve got to start with the customer experience and work back toward the technology.” Customer needs come first, and technology and resources follow.

Many founders do the opposite. They start with a product idea, a technology or a price point, and look for customers afterwards. If your business is stuck today, the first question to ask is whether you are solving a problem customers actually care about.

2. Prospect: define exactly who the customer is

Once the problem is clear, define the customer precisely. Who has this problem most acutely, and who will pay to solve it?

For consumers, consider demographics (age, income, location, occupation, family situation), psychographics (values, lifestyle, interests, aspirations, personality) and behaviour (bargain hunter or quality buyer, impulsive or considered). For business customers, consider industry, size, location, decision-makers, buying process, budget cycles and priorities.

Understanding the prospect before going further shapes everything that follows: who you hire, what you build, how you price and position, and how you sell. Businesses that skip this step end up building for an imagined customer and selling to whoever will listen.

3. People: assemble the team to solve the problem

Next, identify the people needed to solve this customer’s problem and to build and deliver the product. You cannot hire everyone, so plan deliberately:

• Which critical roles are needed first?
• What skills and capabilities must the team have?
• How will people be managed, motivated and retained?
• How will you communicate, listen and manage change?

Then involve the team in solving the customer’s problem. Share who the customers are and what problems they face, and ask the team how they would solve them. Brainstorm, and draw out the most promising ideas. People who help shape the solution own it and work harder to make it succeed.

4. Product: build, test small, then learn

Now build the product or service. Good product decisions at this stage include:

• Designing for the problem, not for features.
• Controlling cost from the start, because margins are designed in, not added later.
• Keeping the model asset-light where possible, avoiding heavy upfront investment before demand is proven.
• Considering technology and platforms where they add value, such as digital ordering, apps or connecting buyers and sellers.
• Thinking about ecosystems and entry barriers: what will stop a competitor copying you quickly?

Then pilot before scaling. Launch in a small region, with a small customer group or as a limited release. Collect responses and feedback, see which variants move quickly and which do not, and check whether the economics work, especially cash flow. A useful analogy is a car: at low speed, a wrong turn of the steering wheel is easily corrected, but at high speed the same mistake causes a crash. Mistakes made in a pilot are cheap. The same mistakes made after a national launch can be fatal.

Avoid being a late, undifferentiated entrant. Businesses that copy a product everyone else is already selling, because “everyone is making money from it”, often arrive just as the market saturates. They face high investment, high marketing costs and pressure to extend credit, and end up competing only on price.

5. Pricing and positioning: decide how you will win

With a proven product, decide how to position and price it, and how to take it to market:

• What will you be known for, and why should customers choose you?
• What is your message, your hook and your call to action?
• How will you price, at a premium, value for money or penetration, and will you use models such as subscriptions or freemium?
• How will you build customer lifetime value through upselling, cross-selling and loyalty?
• How will you promote the product: partnerships, low-cost and guerrilla marketing, digital channels?

If the product is unique and solves a real problem, this stage is far easier. Customer acquisition costs are lower, revenue recurs, upselling is natural and differentiation is clear. If the product is the same as everyone else’s, customers have plenty of options and you will be forced into discounts and credit.

Then check the feedback. If sales are weak, acquisition is expensive or customers are not returning, do not simply change the sales tactics. Go back through the sequence. Is the problem real? Is the prospect right? Does the product truly solve the problem? Most “sales problems” are earlier-stage problems in disguise.

Only move to scaling when this stage works.

6. Process and performance: scale what works

Once positioning and pricing are proven, it is time to scale:

• Increase productivity and add people.
• Open new locations, departments or channels.
• Recruit distributors and retailers.
• Expand from a region to new markets.
• Increase execution speed with disciplined routines and accountability frameworks.
• Turn loss-making units around.

Scaling a proven model is powerful. Scaling an unproven one multiplies its flaws. Research by the Startup Genome project in 2011 identified premature scaling, meaning spending on growth before the product and market fit is established, as a common factor in failed start-ups. Do not force a business to become big before it is ready.

7. Profit: the outcome of the first six

Profit is the result of getting the first six stages right. If they are not working, chasing profit directly through cost cuts or price rises will not fix the underlying problem.

At this stage, strengthen the financial engine:

• Evaluate decisions through cost-benefit analysis.
• Build budgeting and financial planning capability to make projections and support decisions: which sales models to change, which tenders to pursue, which distributors to work with, how to control costs, how to lift off-season sales, and whether franchising or other growth models make sense.
• Feed lessons back into the business through improvement cycles.
• Build a strong accountability structure.

The business shifts from maintenance to expansion.

8. Purpose: the thread that holds it together

Purpose is the organisation’s reason for existing beyond profit: the belief that guides decisions and binds the team together. It works like the thread in a necklace that holds the pearls of the other seven Ps together. A clear purpose helps attract and keep good people, guides choices when the right answer is unclear and builds trust with customers.

Purpose is powerful in either direction, and history includes leaders who inspired people towards terrible ends. A business purpose should be ethical, genuine and connected to the customer value the business creates. Repeating it consistently, through words and actions, is what makes it real.

Using the sequence to diagnose problems

The sequence is most useful as a diagnostic. When something is wrong, ask which stage it really belongs to:

Rather than repeatedly changing sales methods, identify the weak stage, fix it and move forward through the sequence again.

Applying the sequence to an established business

The sequence is not only for start-ups. Established businesses drift out of sequence as markets change: customer problems evolve, new competitors arrive and products age. A periodic review against the sequence, perhaps annually, keeps the business aligned:

1. Problem: are customers’ most pressing problems the same as when we started? What has changed in their industry, technology or economics?
2. Prospect: are our best customers the same types as before? Which segments are growing or shrinking?
3. People: do we have the skills to solve today’s problems, not yesterday’s?
4. Product: does our offer still solve the problem better than the alternatives? Where is it falling behind?
5. Positioning and pricing: are we still known for what we want to be known for? Are prices aligned with value?
6. Process and performance: are our processes scaling, or creaking?
7. Profit: which products, customers and channels make money, and which do not?
8. Purpose: does the team still understand and believe in why we exist?

Answering these honestly often reveals that a problem attributed to “the economy” or “the sales team” actually began with a shift in customer needs that the business missed.

Frequently asked questions

Can stages overlap? Yes. In practice you will revisit earlier stages as you learn. The point is not rigid order but making sure each stage is genuinely sound before relying on it.

How long should the problem stage take? Longer than most founders expect. Some educators suggest spending most of a business’s early effort on understanding the problem. Time spent here is cheap compared with building the wrong product.

What if we have already scaled before proving the model? Slow down where possible, focus on the segments and locations where the model works, and fix the weak stages before expanding further.

Does the sequence apply to service businesses? Yes. For an engineering, consulting or trade business, the “product” is the service offer: what is delivered, how and with what guarantees. The same logic applies. Understand the client’s problem, define the ideal client, build the team, design and pilot the service, then position, scale and refine it.

A worked example

A start-up launches a meal-kit service for busy professionals across a whole city at once, with heavy advertising and discounts. Orders come in, but most customers cancel after the first discounted box. Acquisition costs are high and losses mount.

Working back through the sequence, the founders find that they never validated the problem precisely. Their interviews show that busy professionals’ real problem was not cooking time but planning and shopping. Many still enjoyed cooking at weekends. The founders had also defined the prospect too broadly. The customers who stayed were mostly young families with two working parents, a group they had not targeted.

They pause the city-wide campaign, redesign the product as weekday family meal plans with flexible deliveries, and pilot it in two suburbs with family-focused messaging and a modest introductory offer. Retention improves markedly, acquisition costs fall and unit economics turn positive. Only then do they expand, suburb by suburb.

Summary

Many business problems are symptoms of doing things in the wrong order. Build in sequence: start with a real customer problem, define the prospect precisely, assemble the right people, build and pilot the product, then decide pricing and positioning. Scale only what is proven, treat profit as the outcome of the earlier stages and hold everything together with a genuine purpose. When the business struggles, do not just change tactics. Find the stage that is missing or weak, fix it and move forward again.

---

Sources: small-business training notes on the 8 Ps of business and the business sequence, together with published start-up research on premature scaling. Examples are illustrations.