What is product definition?

Product definition is a process in which a startup finds a problem, ideates a solution, assumes a potential customer with that problem and defines metrics for success. Product definition is clearly articulating the problem, the solution, the customer, and the success metrics.

The definition is used for new products but also for features of an existing product.

Problem statement

The output of the first step is to clearly define a problem. To do that you need answers to the following questions:

  • What is the problem?
  • What is the customer trying to accomplish?
  • When does the problem occur?
  • What are the current solutions?
  • What is missing from the current solutions?

The problem definition will guide you to focus on the specific needs that you uncovered. To specifically define the problem you can use customer interviews and observations as methodologies. This stage is important because it will define your goal of the project. It will serve as an objective north star and will help in the ideation process when you will start to define solutions. Without a defined problem it will be hard to know what you're aiming for as a goal. Without a clearly defined problem statement it will be extremely difficult to explain to investors, team and other stakeholders what you're trying to achieve.

The problem statement will identify the gap between the current state and the goal(desired state). To define the problem clearly, you need multiple points of views (user, user researcher etc) to guide the next step to a feasible solution.

Solution statement

Now that you've talked to users about the problem, fell in love with the problem now it's time to paint a picture of the solution. It should contain the desired result and the customer benefit.

Each part of the solution should have labels on the features, based on the importance in the customer's perspective:

  • What is critical - without this, there is no solution
  • What is important - without this, there is a solution but not that successful
  • What is nice to have - this will make the solution more attractive, but it's success is not dependent on this

There can be multiple solutions described in different solution documents. At this stage you should have a clear understanding what the problem you're trying to solve and what you're available solutions are.

In this step it's important that you know customer's needs and be able to categorize their importance, because a solution of only nice-to-have features will not be a success and will not make the user switch from their current solution or adopt a new one. One way to make sure your solution also solves what is critical, is to follow up on the customer interviews and watch their reactions to your solutions.

Target customer definition

The target customer is a person you identified to be most likely to adopt your solution. From here you can make a better idea about your market and target groups. It would be a mistake to try to appeal to everyone - this just translate in "we have no idea who this product is for", except when you're building a new type of oxygen.

It’s important to identify a target customer, a niche and a market so you can dominate it. It will help you further in the development process to target users reach the right audience that will most likely convert to customers.

The output of this process:

  • Articulate the specific group of people that have the problem you defined earlier
  • Where can you reach the people in the specific group?
  • What messages about your solution works best?
  • What is their age, location, language, spending power, interests and stage of life? If you're targeting B2B - CEO, CFO etc.
  • What is your competition targeting? What is their message?

In this step you avoid making assumptions and be specific (it won't limit your market and if you're wrong, you will discover other potential targets).

Measuring success or failure

Not all data are created equal. The metrics are dependent on the goal you're trying to achieve with your solution.

The goal:

Actions include:

  • Acquisition and activation
  • Retention and engagement
  • Monetization and revenue


  • Direct or proxy
  • Individual and aggregate
  • Magnitude and ratio
  • Intrinsic vs heuristic

Once this is clear, the team can start development and you will need to set a time to measure if goals are attained or not. Depending on the expectations and the result, you can iterate on the definition and work agile with more specific information about the problem, solution and target market.