He arranged some of the matchsticks into a shape containing lots of squares. Then he asked the bears if they could change the number of squares just by removing a specific number of matchsticks. His first puzzle showed 5 squares and they had to try to change that into 3 just by removing 3 matchsticks.
It seemed very difficult at first. They tried removing several matchsticks, but kept ending up with either the wrong number of squares, or removing too many (or too few) matchsticks.
Eventually, Scary managed to work it out. Hurrah! And the bears started to understand how to approach the puzzle solving.