Why I Nearly Said No to Co-Writing This Article

Arttu Huhtiniemi proposed a title I wasn’t comfortable signing. But the argument underneath turned out to be right, so we spent the summer writing a two-part article about it.

In May, Arttu Huhtiniemi emailed me and proposed that we write an article together about product discovery and Europe’s competitiveness. He runs Euro SaaS Edge, a newsletter for European B2B SaaS founders and product leaders, and he had a title in mind: How European Founders Can Out-Think Silicon Valley.

I didn’t get back to him for a couple of weeks, partly because I was busy, partly because the title bothered me.

My quibble was that good product discovery doesn’t depend on which side of the Atlantic you do it. Writing about my problems-first discovery approach as though it were somehow specific to Europe would’ve been insincere.

What changed my mind

As it turned out, Arttu’s argument worked, but because of economics, not geography.

An iteration cycle is what you pay to get information about your customers. In complex B2B software, a full cycle takes weeks or months of engineering, a customer deployment, and then some more time to get relevant feedback and hard data, instead of opinions. One cycle in the wrong direction can cost months and hundreds of thousands of euros – or more. It is an expensive way to find out what customers actually need.

Working out what customers are trying to accomplish in what circumstances before defining solutions provides better information without having to build anything. You gather stable facts about the customer’s situation through interviews and observation, check them across several customers, and reason about them. That costs the same in Tallinn and in Mountain View.

So geography does not determine what discovery approach works best. But it changes the budget, which determines whether a startup can afford to learn by building solutions. European teams run out of money sooner, so they can afford fewer attempts.

I can defend that version of the claim, so I said yes. We wrote the article over the summer, and it got so long that Arttu wanted to split it in two parts.

I wasn’t comfortable with Arttu’s original title, but since the argument turned out to be solid, we spent the summer writing an article. Image by GPT Image 2

What the two parts contain

Part one sets out the resource gap: European startups raise about a quarter of US startups, and stock options are taxed on exercise which makes retaining talent more expensive. Arttu’s point is that the standard startup handbook gives American competitors two financial levers they can pull harder.

My section then deals with how product discovery is commonly practised and why it’s unnecessarily expensive and ineffective.

A root issue is how the industry understands customer problems. I define what I mean: they are facts about a customer’s situation, including what they are trying to accomplish, why, in what circumstances, and how they judge the result. Pain points are problems in a solution, feature requests are customers’ guesses at a solution. They are not the underlying problem your product should be a solution to, just clues to investigate further. Solution-centric thinking keeps product teams stuck inside a limited solution space.

But once you define problems completely independent of any solution, you can investigate them without building anything to test, which is the whole economic argument in one sentence.

Part two, published this morning, presents two European B2B SaaS companies whose products reached the leader tier of their markets against American competitors with several times more capital. One of them is my client, and we used my discovery method for B2B software. The other one didn’t employ any particular method, but also succeeded by investing significant time in understanding its customers before building anything.

Part two then proceeds to answer the objection that always follows my argument: “But we don’t have time!” We answer five questions, in order:

1. Is discovery expensive?

2. Does shipping equal progress?

3. Does the first to market win?

4. Is discovery an endless waste of time?

5. Is this just waterfall in disguise?

What if you are not European?

Arttu’s readers are, so we framed the argument for them. But nothing depends on which continent you live in. Compared to America, the economic equation is worse in Europe because of the funding gap. But I would make the same case to a well-funded US company that builds complex enterprise software: much of the iteration costs are simply unnecessary. Money spent finding out what you should have built is wasted money everywhere. Europeans just notice sooner that they ran out of money.

Both parts are free to read.

• Part 1: Europe can’t out-iterate the US. It can out-understand it.

• Part 2: How two European teams matched better-funded American rivals

See my ProductTank talk on B2B product discovery a day earlier

Next Wednesday, 2 September, I’m speaking at ProductTank Helsinki about product discovery in the age of AI. AI is making delivery dramatically faster, which shifts the constraint onto deciding what to build in the first place. I’ll present a case study of a new B2B SaaS product that succeeded in a market where earlier competitors had failed, and what the team did before writing any code.

The meetup is fully booked, and it’s in Helsinki, which is no use to you if you’re reading this from somewhere else.

So I’m giving the same talk for my readers online the day before, on Tuesday 1 September at 16:00 Finnish time (15:00 in Central Europe, 09:00 US Eastern). I am treating it as a rehearsal (just so you know what you are getting). You’ll see the case study a day early, and I’ll hear your questions. Please bring the difficult ones.

Send me a message if you’d like to join and I’ll send you the link. I will record the session.