It sounds backwards at first. If a problem is solved, shouldn’t that be the best business of all?
Not usually.
Most great businesses are built on pain. Not misery in a dramatic sense, but friction: time wasted, money lost, uncertainty, risk, and effort people hate spending. The moment that friction disappears for everyone, the business that lived off it starts to starve. A solved problem turns into a commodity. Commodities are ruthless. They drive prices down, margins down, differentiation down, and loyalty down. If anyone can provide the solution, then nobody can charge much for it.
That’s why “a solved problem is a terrible business” is less a slogan and more a warning label. It means: don’t build your whole identity around something the world is rapidly making effortless.
What “solved” really means
A problem isn’t “solved” because a solution exists. A lot of problems have solutions that people ignore, can’t afford, don’t trust, or don’t implement. A problem becomes solved when:
- The solution is widely available
- The solution is easy to use
- The solution is trusted
- The solution is cheap enough that price stops being a barrier
- Switching between providers is painless
When those conditions appear, value leaks out of the product and into the ecosystem. The winners are often the ones who control distribution, brand, or scale, not the ones who simply “have the solution.”
Why solved problems crush profits
1) Differentiation evaporates
When customers view offerings as interchangeable, you stop selling value and start selling price. You’re no longer competing on “best,” you’re competing on “cheapest acceptable.” That race has one finish line: near-zero margin.
2) The market stops paying for expertise
If the answer is obvious, customers don’t want consultants. If the tool is simple, customers don’t want training. If the workflow is automated, customers don’t want ongoing support. The business shifts from “high-trust, high-value” to “low-trust, low-ticket.”
3) The customer becomes less grateful
When something becomes normal, it becomes invisible. People stop noticing the miracle and start noticing the inconvenience. The standard changes from “this is amazing” to “this should just work.” The emotional premium disappears.
4) Scale becomes the only moat
Once a problem is solved, big players can copy the features, undercut the price, and bundle the solution into something else. They don’t need to make money on that specific problem. They can use it as a loss leader, a checkbox, or a retention hook. Smaller businesses cannot survive that kind of gravity.
The trap entrepreneurs fall into
A common path looks like this:
- Find a painful problem
- Build a good solution
- Get traction
- The solution becomes standard
- The market recalibrates
- The original business model collapses
This doesn’t mean the company has to die. It means the company must evolve faster than the problem becomes trivial.
Many businesses mistake early success for permanence. They think: “We solved it. People love us.” The market thinks: “Great. Now that’s table stakes.”
Solved problems aren’t useless. They’re just not defensible.
It’s not that you can’t make money in a solved category. You can. But you must understand what you’re actually selling, because it’s not the raw solution anymore.
If the problem is solved, customers pay for one of these instead:
- Convenience: faster, simpler, fewer steps
- Trust: brand, reliability, guarantees
- Distribution: you’re already where they buy
- Integration: it works with everything else they do
- Customization: it fits their specific context
- Compliance and risk reduction: peace of mind
- Experience: better UI, better onboarding, better support
- Outcome: you take responsibility for results, not tools
Notice something: these are not “the solution.” These are layers around the solution. The solution is the core that anyone can copy. The layers are where the business lives.
The real business is in the unsolved edges
Even “solved” problems have unsolved edges. Those edges are where margin hides.
For example:
- It’s solved for most users, but not for a niche with special constraints
- It’s solved in normal conditions, but fails under stress, scale, or weird environments
- It’s solved technically, but not operationally in real workflows
- It’s solved for individuals, but not for teams
- It’s solved once, but not maintained over time
- It’s solved in theory, but adoption is still painful
A strong business notices that the world doesn’t pay for answers. It pays for outcomes that stay achieved.
How to build a business that doesn’t die when the problem gets solved
1) Pick problems that regenerate
Some problems come back every week because reality changes. Regulations shift, markets move, staff turns over, equipment ages, customers change tastes, risks evolve. These problems don’t get “solved” once. They require ongoing adaptation.
A one-time fix is vulnerable. A recurring need is resilient.
2) Sell a system, not a trick
Tricks get copied. Systems stick. A system includes process, training, monitoring, feedback loops, and continuous improvement. It becomes part of how someone operates, not just something they bought.
3) Own the workflow
If you sit inside the customer’s daily routine, switching away becomes painful. If you’re an extra step, you’re replaceable. The best businesses become the place where work happens, not the add-on.
4) Move up the value chain toward responsibility
Tools are easy to commoditize. Responsibility is harder. When you tie your offering to measurable outcomes, you shift from “software vendor” to “partner” or “operator.” Outcomes create pricing power.
5) Create compounding advantages
Some assets get stronger with time:
- Data and insights
- Network effects
- Brand trust
- Community and education
- Integrations and partnerships
- Operational excellence
If your advantage compounds, you can survive even when features become common.
A better way to think about it
A solved problem is a terrible business if your product is the solution.
A solved problem can be a great business if your product is the delivery, the trust, the integration, the maintenance, the guarantee, or the next problem that appears once the first one is handled.
The market is always solving yesterday’s pain. You don’t want to sell yesterday’s pain. You want to sell what remains painful after the obvious fix is available.
In other words, don’t fall in love with solving a problem. Fall in love with staying useful.
