# How to Define Customer Problems That Lead to Breakthrough B2B SaaS Products

### Master the 10 Essential Elements of Customer Problems Your Competitors Miss

*👋 Welcome to my newsletter for B2B SaaS product leaders! This is article #4 in a groundbreaking series on Deductive Innovation — a systematic approach to creating winning B2B software products. To get the most value, start with the intro article #1, continue to #part #2, then part #3.*

A simple cup of tea can unlock the secret to creating revolutionary B2B software products.

Seems far-fetched? By the end of this article, you’ll understand how this everyday example reveals the essential elements of customer problems that determine whether your product will thrive or barely survive in the market.

Consider this: Companies spend millions developing products based on insufficient definitions of customer problems. This leads to speculation and guesswork about what to build.

One enterprise software company I recently talked with had spent 18 months building a product no customer ultimately wanted to buy. Why? They never really understood the true problems the product was meant to solve.

In this article, you will learn:

The non-negotiable test for understanding customer needs correctly

Why common customer problem definitions doom a product from day one

The 10 essential elements of every customer problem you need to understand

Why understanding these elements gives you an unfair advantage

First, let’s review what we discovered about customer problems in the previous article. Skip this if everything is already fresh in your mind.

## The core principles that transform software product development

We are seeking the correct answer to a deceptively simple question:

What is a “customer problem” to which a software product is a “solution” –in principle?

The answer is going to give us something quite unprecedented: the ability to systematically construct optimal solutions to any customer problem of a B2B SaaS product. To my knowledge, no other product development process besides Deductive Innovation makes this possible.

Last time we examined three situations where people needed to boil water for tea:

**A) Alice’s evening ritual: Winding down at home**Alice is at home, exhausted after a long day, and getting ready to go to bed soon. To relax, she enjoys having a cup of tea.

**B) Bob’s wilderness challenge: Hydration on the hike**Bob is trekking in the wilderness. A cup of tea would help keep him warm and safely hydrated, as boiling the water makes it sterile.

**C) Carol’s family adventure: Forest fun with the kids**Carol is on an outing with her children in a forest on a Sunday afternoon. Her goal is to provide exciting and educational experiences for them.

From analysing these situations and their best solutions (electric kettle for Alice, Trangia stove for Bob, campfire for Carol), we discovered **universal principles for all customer problems:**

A customer problem describes a specific example of a situation where a particular customer is

A customer problem exists independently of any solutions

A customer problem has multiple potential solutions

We can objectively evaluate and compare solutions against a specific customer problem

Now, let’s uncover exactly what elements we must understand about any customer problem to make this evaluation possible.

## The non-negotiable test for understanding any customer problem

Every solution exists to enable a customer to solve their problem: to use it in their specific situation by taking some sequence of actions to reach a good end-result.

To evaluate a solution, we must analyse two aspects:

Value of the best possible end-result the solution enables the customer to reach

Quality of the process that the solution requires the customer to go through to reach that end-result

Real customer problems always occur for a specific person in particular circumstances. Many elements of the situation affect the end-result they can reach and the actions they need to take. To evaluate alternative solutions, we must know what those elements are.

This gives us our key criterion for the elements of customer problems:

We must be able to evaluate any alternative solution to the same customer problem.

This is our non-negotiable test for how well we must understand customer problems.

To evaluate any solution, we must:

Have the ability to put ourselves in the place of the specific customer in the specific situation

Know exactly how the solution works from the customer’s perspective in that situation

Find out the sequence of actions that the solution requires the customer to take to reach the best end-result

Evaluating a new solution idea requires first defining it at a level of detail where it’s possible to construct the required sequence of actions. Until then, an idea is merely vague speculation – appealing in concept but completely untested against reality.

Now that we understand the criteria for customer problems, let’s examine how most companies get them wrong – and why it costs them.

## Critical mistakes that doom product development from day one

The most fundamental mistake that I see companies making is describing a customer problem in terms of solutions: 1) as solutions customers ask for, or 2) as problems in existing solutions.

Note that while the descriptions might be called customer needs, user stories, epics, use cases, jobs or user goals, they are nevertheless attempts to describe a customer problem to which a solution is a solution.

Even if companies avoid the most fundamental mistake, the descriptions of customer problems still usually fail our test. Customer problem descriptions might look like these:

“Boil water to make tea”

“As a user, I want to boil water so that I can make tea”

“Increase liquid temperature from A to B”

“Bob is a sporty guy who enjoys spending time in nature.”

What’s wrong with them? Simplistic or generic problem statements **do not enable evaluating and comparing alternative solutions analytically and objectively**.

They are unable to differentiate between a vast array of different kinds of situations – such as Alice’s, Bob’s and Carol’s – for which different solutions would actually be best.

Qualities of a person that don’t affect the evaluation are not elements of a customer problem. Imagine putting Bob in Alice’s situation. No matter how “sporty” and “nature-loving” Bob is, he would boil his water using an electric kettle, just like Alice.

If we can’t compare alternative solutions, we can’t know what the optimal solution would be. This limitation prevents us from innovating new, radically better solutions systematically and consistently, which is the ultimate goal of Deductive Innovation.

**“A solution can only be as good as your understanding of the problem.”**

—Paul Adams, Chief Product Officer of Intercom

Without properly understanding customer problems, we lack a yardstick for comparing alternatives. This vacuum leads to decisions based on the loudest voice, the most popular opinion, or the HiPPO (highest paid person’s opinion).

So, what does the right kind of description of a customer problem include?

## Master the 10 essential elements of customer problems your competitors miss

The specific situations of Alice, Bob and Carol provide a basic demonstration of what customer problems must contain.

Below I have listed 10 necessary elements of any customer problem. In some way, they all affect:

The sequence of actions a customer necessarily has to perform with the solution

The best end-result the solution enables them to reach

Consequently, they affect what the best overall solution is in each situation.

**Protagonist:**Who has the problem?A person at home, a hiker, a mother with children

**Goal:**What are they trying to get done?Boil water to make tea

**Motive:**Why are they doing it?Calm down at night, keep warm and hydrated in the wilderness, provide exciting experiences for children

**End-result:**What end-result are they trying to achieve?Hot water that is suitable for making tea

**Timing:**What initiates the situation and when?Getting ready for bed, satisfying thirst during the hike, fun weekend outing

**Location:**In what location or surroundings the situation plays out?Home, wilderness, forest

**Resources:**What resources and information are available in the situation and what do they cost?Electricity at home, Trangia fuel, dry wood and a spot for the campfire

**Causalities:**What forces and natural causal relationships affect and constrain the series of actions necessary to reach the end-result?One must obtain the water before boiling it; the water must be placed in a container to boil it; certain containers can be damaged by boiling water, fire or microwaves

**Criteria for the end-result:**How does the customer measure and evaluate the end-result in the situation?Water is boiling hot and evenly heated, suitable for making tea

The end-result is the “benefit” the customer gets from solving their problem

The criteria for a good end-result are very specific to the situation

**Criteria for the process:**How does the customer measure and evaluate the process of reaching the end-result?Convenience, saving electricity, effort, speed, safety

The process of using the solution is the “cost” to reach the end-result; but in consumer products, the process itself can also be a “benefit”, like in Carol’s case

The usual criteria for the process are minimising time, effort and risk

Notice again that all these elements are solution-independent, which is our foundational requirement for what a customer problem is.

## How much detail you need to document

You might wonder: “Do I really need to document all those 10 elements for every customer problem?”

**For familiar situations**, a vivid 1-2 sentence description often suffices. Take our tea examples:

Alice is at home, exhausted after a long day, getting ready for bed soon.

Bob is trekking in the wilderness, needing warm hydration.

Carol is on an outing with her children in a forest for an exciting and educational experience.

Despite lacking many of the 10 elements explicitly, such short descriptions work because:

They describe real people in real situations

The context is familiar to everyone

Common sense fills in most details

**But watch out for important hidden details.** Even in seemingly simple situations, small variations can demand completely different solutions. Consider this twist: Alice prefers green tea, which contains less caffeine and requires water at about 80°C, not boiling. Suddenly none of the solutions we evaluated are optimal for her situation.

**For B2B software**, brief descriptions rarely suffice:

Domain complexity requires explicit detail. The elements of customer problems in drug development, reinsurance, or operating a nuclear plant are not self-evident or obvious.

Product developers are not familiar with the domain. Facts about customer problems must be documented for shared understanding.

Business situations often include multiple people in different roles with different goals, which add layers of complexity to customer problems.

For a solution that is used to process complex large data sets, the description of a specific situation must include an example of a realistic data set.

Describing customer problems for software, and B2B software in particular, involve some further considerations beyond the 10 basic elements. We will get to those in a later article.

## Five ways the 10 elements strengthen your B2B product strategy

**Precision targeting**: Once you know all the necessary elements of the customer problems, you will no longer have to speculate what to build. Every element of your product addresses a specific, validated aspect of your ideal customers’ real-life problem.

**Predictive power**: You can evaluate potential solutions objectively before developing them or testing them with actual customers. You can predict with confidence which solution customers will be excited about.

**Scalability insights**: When customer problems and their elements are discovered and stated explicitly, you can identify which underlying problems are actually common across customers – irrespective of solutions customers are asking. This unlocks the potential for truly scalable products.

**Customer retention**: Products that truly understand and solve core problems don’t just satisfy – they create raving fans that won’t churn. Instead they recommend your product to others.

**Competitive edge**: While others chase ever-changing feature ideas, you are solving enduring, high-value customer problems. You have a stable, long-term basis to create the best possible solution that competition cannot beat.

## Understanding the 10 elements is a foundation for powerful implementation

We have uncovered the list of 10 essential elements that define every customer problem to which a product is a solution. This gives you unprecedented clarity in understanding what your product needs to solve.

But knowing the elements is just the beginning – the real power comes from knowing how to uncover and apply them systematically.

Think about the implications:

While your competitors chase the competitors or implement feature requests, you’ll understand the deep structure of customer problems

While others guess what to build next, you’ll have objective criteria for evaluating solutions before development

While they iterate endlessly, you’ll get to the right solution faster and directly

This difference in approach can propel a product from merely survival to market domination.

## Applying these principles to complex B2B software products

The principles we have explored using the tea example are already powerful. But creating B2B software products brings additional complexity and requires understanding a few more elements.

We need to adapt and expand the approach for:

Multiple stakeholders with potentially competing needs

Complex business processes

Enterprise-scale implications

Industry-specific regulations and constraints

Creation of scalable products that solve common customer problems

## What’s next: Mastering B2B problem discovery

In the upcoming articles, I will reveal how Deductive Innovation’ discovery methods address the unique complexities of B2B software products. You will learn how to systematically uncover customer problems in enterprise environments – and why this is possible even when many seasoned industry experts believe it isn’t.

Ready to master problem discovery at a level your competitors can’t match?

**Subscribe now** to ensure you don’t miss any part of this series on revolutionising the B2B SaaS industry. Stop wrestling with unnecessary complexity and start creating products that dominate markets.