A critical success factor in mass customization is offering the right level of variety. However, solution space development as one of the three core capabilities for mass customization is often overlooked and under-researched in current literature. This is surprising, as the solution space design is a critical factor in developing products and services, combining the customer requirements in the external marketplace with the capacities of the internal production system. Motivated by the gap in existing research, this paper presents a holistic framework, aiming to encompass the critical steps required to develop a dynamic, smart solution space. The framework aims to increase the understanding of how solution space decisions should be managed, emphasizing that these decisions must carefully balance different, often opposing, considerations. The framework establishes two central axes for the companies to manage: the dichotomy of front-end and back-end focus, and the role of switching between learning (understanding) and doing (developing). Combined, these axes create a cyclical development process comprised of four modules: Outlook, Insight, Develop, and Co-create. Each module is presented with accompanying core questions, obstacles, opportunities, and tools.