Some students have a background, identity, interest, or talent that is so meaningful they believe their application would be incomplete without it. The prompt gives you a lot of latitude for answering the question since you can write a story about your "background, identity, interest, or talent." Your "background" can be a broad environmental factor that contributed to your development such as growing up in a military family, living in an interesting place, or dealing with an unusual family situation.
If this sounds like you, then please share your story. You could write about an event or series of events that had a profound impact on your identity.
The best essays focus on self-analysis, rather than spending a disproportionate amount of time merely describing a place or event.
Analysis, not description, will reveal the critical thinking skills that are the hallmark of a promising college student.
The answer to the final question about the "outcome" of your challenge need not be a success story.
Sometimes in retrospection, we discover that the cost of an action was perhaps too great.
The essay prompts are designed to encourage reflection and introspection.
If your essay doesn't include some self-analysis, you haven't fully succeeded in responding to the prompt.
Be careful with that opening word "describe"—you'll want to spend much more time analyzing the problem than describing it.
This essay prompt, like all of the options, is asking you to be introspective and share with the admissions folks what it is that you value.