Nikhil Gupta
Feb 7 · 4 min read

Customer problems, known to be at the base of all product development. Yet if we speak to developers or product managers they are often not very clear about the requirements. Here, the problem lies in the terminology. There are two terms buried in one word “requirements”: customer needs and product requirement. To have this clarified, it’s important to understand a high-level concept: separating problem space from solution space.

PROBLEM SPACE

A market is a set of related customer needs, which rests squarely in problem space or you can say “problems” define market, not “solutions”. A market is not tied to any specific solutions that meet market needs. It is a broader space. There is no product or design that exists in problem space. Instead, problem space is where all the customer needs that you’d like your product to deliver live. You shouldn’t interpret the word “needs” too narrowly: Whether it’s a customer pain point, a desire, a job to be done, or a user story, it lives in problem space.

SOLUTION SPACE

If I speak of solution space, any product or the product design — such as mock-ups, wire-frame, prototype, depends on and is built upon problem space, but is in solution space. So we can say problem space is at the base of solution space. Solution space includes any product or representation of a product that is used by or intended for use by a customer. When you build a product, you have chosen a specific implementation. Whether you’ve done so explicitly or not, you’ve determined how the product looks, what it does, and how it works.

What” the product needed to accomplish for customers is Problem space. The “what” describes the benefits product should give to the target customer.

Whereas, “how” the product would accomplish it, is solution space. The “how” is the way in which the product delivers the “what” to target customer. The “how” is the design of the product and the specific technology used to implement the product.

A failure to gain a clear understanding of the problem space before proceeding to the solution space is prevalent in product teams that practice “inside-out” product development, where “inside” refers to the company and “outside” refers to customers and the market. In such teams, the product idea is what the product team think would be good to build. They don’t test the ideas with customers to verify that it would solve actual customer needs.

The best way to mitigate the risk of an “inside-out” mindset is “outside-in” mindset. The product development starts with talking to customers to understand their needs, as well as what they like and don’t like about existing solutions. Outside-in product teams form a robust problem-space definition before starting product design.

It’s hard for customers to talk about specific benefits they require and their importance. Even if they do, it’s going to be very vague. It’s therefore up to product team to understand these requirements and define the problem space.

The problem here is, if you mention a customer about a problem or need and ask for their input, at best, they may just talk about existing solutions available. The reality is that customers are much better at giving you feedback in the solution space. If you show them a new product or design, they can tell you what they like and don’t like. They can compare it to other solutions and identify pros and cons. Hence, having solution space discussions with customers is much more fruitful than trying to explicitly discuss the problem space with them. In this way you can form your hypotheses of problem space.

The feedback you gather in solution space actually helps you test and improve your problem space hypotheses. The best problem space learning often comes from feedback you receive from customers on the solution space.

Intuit’s founder Scott Cook, speaking to a group of product managers, asked, “Who is TurboTax’s biggest competitor?” Multiple hands shot up. At the time, the other major tax preparation software in the market was TaxCut by H&R Block. After someone confidently answered, “TaxCut,” Scott surprised them by saying that the biggest competitor to TurboTax was actually pen and paper. He pointed out that, at the time, more Americans were still preparing their taxes by hand using IRS forms than all tax software combined.

This example highlights an advantage of clear problem space thinking: having a more accurate understanding of the market in which your product is really competing. Product managers in the audience were narrowly thinking in solution space of the “tax preparation software” market, as defined by the two main software products. Scott was thinking in problem space of the broader “tax preparation” market — one that would also include tax accountants to whom customers delegate their tax preparation.

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