Saturated Markets and Value Creation
For years, innovation has been explained through the lens of unmet needs. However, in many sectors this narrative no longer reflects market reality. Needs still exist, but they are reasonably well addressed. The direct consequence is saturation: multiple solutions, functionally similar propositions, and increasingly weak differentiation.
In this context, friction points have ceased to be an acceptable side effect and have become the real trigger for new solutions. Not because the problem is new, but because the way it is solved remains unnecessarily costly for the user.
What we mean by a friction point
A friction point is not an isolated complaint or the opinion of a particularly demanding customer.
“A friction point is any component of the process that increases the cost — cognitive, operational, or emotional — for the user and repeatedly impacts their decisions.”
It can manifest, among other ways, in the following categories:
1. Unnecessary operational complexity
Signing up for a telecom plan that requires multiple calls, document submissions, and repeated validations. Or cancelling a gym membership only in person is a long-standing “classic” example.
2. High cognitive cost to understand or use the solution
Banking apps with too many menus and confusing terminology, or insurance platforms that force users to read lengthy terms just to understand what they are buying.
3. Lack of visibility or control
Online orders with no clear delivery information, an airline that does not explain the status of a claim, or not knowing how much contract lock-in remains on a service.
4. Slow or manual processes
Processes that could be clearly automated: having to print and sign a document to change personal details, sending emails to request an invoice, or repeatedly entering personal information in every interaction.
5. External dependencies that create uncertainty
Not knowing when home internet will be installed because it depends on an external technician who does not confirm — or changes — the appointment at the last minute. Or not receiving a package on time without a clear explanation or reliable delivery date.
The key is not to detect all friction points, but to identify those with real, recurring impact.
Detection: from qualitative narrative to evidence
Friction detection usually starts with active listening: interviews, direct observation, customer journey analysis. This is essential, but insufficient. The most common mistake is stopping at the narrative level and confusing emotional intensity with strategic relevance.
To move forward, these frictions must be contrasted with real usage data and observable behavior, avoiding the trap of falling in love with hypotheses that do not scale beyond a handful of cases.
Statistical validation: proving the problem is structural
Once a friction point has been identified, it must be shown not to be anecdotal. Statistical validation serves to confirm that the problem:
- Affects a significant proportion of users
- Repeats consistently over time
- Has a measurable impact on key variables
This can be addressed through:
- Cohort and funnel analysis
- A/B or multivariate testing
- Correlations between friction and churn, frequency, or average ticket
- Regression models to isolate the effect of the friction point
The goal is not absolute truth, but reducing the risk of building on a false priority.
Market validation
A warning: the existence of a friction point, even if statistically relevant, does not guarantee a business opportunity.
“The market is full of frictions that users tolerate because the cost of eliminating them is higher than the perceived benefit.”
Here, validation changes in nature: it is no longer about usage data, but about real economic behavior.
Are users willing to pay to remove the friction?
The critical question is not whether the friction is annoying (that has already been validated), but whether removing it generates sufficient economic value. To validate this, it is worth analyzing:
- Real willingness to pay (not just stated intent)
- Priority relative to other possible improvements
- Perceived switching costs versus the current solution
- The existence of acceptable substitutes
Many projects fail because they confuse friction with urgency, and urgency with monetization.
Sizing the opportunity in already-served markets
In most cases, you are not starting from an empty market. Solutions already exist, with loyal customers and entrenched habits. Growth, therefore, does not come only from new users, but from partial migration from existing solutions. As I explained in the Innovation Analysis: Back & Forth Methodology© model, needs are rarely new: what changes are the satisfiers, when someone manages to solve the same need better, faster, or with less friction.
This forces a realistic sizing exercise:
- TAM: the total market affected by the problem
- SAM: the portion accessible with the specific value proposition
- SOM: the realistically capturable share, assuming that:
- Some customers will migrate
- Others will stay with the current solution
- Switching costs are not trivial
Overestimating at this stage is usually a symptom of a naïve reading of the market.
In non-monopolistic or non-oligopolistic markets, core functionality is no longer a differentiator. Everyone does “enough.” Competitive advantage emerges when friction is removed without sacrificing value.
It is not a new need. It is the same need, better solved.
MVP: validating hypotheses, not building small products
The MVP approach (Minimum Viable Product) makes sense when it is used to validate critical hypotheses, not as an excuse to launch something incomplete. An MVP is the minimum version of a product needed to test whether it delivers real value, and it must allow verification that removing the friction creates real value and that the market responds.
From there, growth should be iterative, with constant value increments supported by agile processes, continuous feedback, and rapid adjustments. The goal is not to get it right the first time, but to learn faster than everyone else.
Innovation through pain removal
Today’s innovation is less about inventing new problems and more about removing unnecessary pain from existing ones. Friction points have become the axis around which real differentiation revolves — provided they are rigorously validated and translated into value that customers are willing to pay for.
