Customer Development

Identify How a Product or Service Solves Customers' Problems

Building a new business is hard. But building great businesses that last the test of time is harder. To create great businesses, it takes skill, intelligence, dedication and discipline. And it requires taking big risks and balancing how fast we deliver our product or service while maintaining high overall quality. Understanding your customers’ problems will greatly impact what business to build and how well you build it.

Before we get started, copy the Customer Problems Powerpoint template to your Google Drive and start defining what customer problems your business will solve.

How do I design a business that solves my customers’ problems?

After you defined your target audience through demographics and behavior, you want to do customer research to discover and validate the problems. To find those problems, you should ask questions like

  • What problems do your customers spend time and/or money solving right now?

  • How urgent or pressing is their problem?

    • Life or death situation

    • Heavy inconvenience

    • Minor life improvement

  • Is it a costly problem for your customers to have and/or to fix?

  • Do your customers know what steps to take to solve their problems?

  • Who/what do they currently turn to to solve this problem?

  • Would they easily change providers of the solutions? Do the customers have a lot of loyalty to their current product/service provider?

For example, SKY’S THE LIMIT customers (young entrepreneurs) often have the following problems:

  1. They don’t know the steps to take to start their business or grow it,

  2. They don’t know where to get money for their business,

  3. They need business experts who can help them solve specific problems for their business (like legal questions, or accounting for their money),

  4. They want someone who can help them stay accountable to keep working on their business idea,

  5. They need someone who is trustworthy, reliable and experienced who they can bounce ideas off of and who understands their particular business.

Customer problem statement

Once you have thought through those, write a customer problem statement. A well written customer problem statement should be as specific as possible: identify your target market, define the size of the market, define the size of the problem and define the current problem.

  • For example: Customers who buy t-shirts in San Francisco are having trouble finding t-shirts that have both stylish cuts and trendy designs that provide them with a sense of accomplishment.

The example above is a great example because it does not presuppose a solution, it targets a specific customer group with whom you can build empathy, it reflects the actual customer problem and it directs you to solve the problem.

Why is it important to design my business with my customers’ problem in mind?

You don't want to start a business that will fail. Research, validate your idea, and make sure you have a real market for your idea. Start a business that will solve a real problem people actually have to increase your chances of success.

Pro Tip

Read our article on Value Proposition to also answer what customers are wondering: why should I choose you?