Entrepreneurs talk to people but do so through the lens of their product and its features and benefits:
Why is this feature important?
What does it help you do?
What is missing?
After doing this, then they think they understand the buyer.
You hear things like, “it’s easy to use” or “I love the interface”. So, they’ll go deeper and deeper into the product with you. And you get lost in a list of features.
But the thing is: that’s not uncovering demand.
What is uncovering demand?
Uncovering demand is about you going into their lives.
It’s about uncovering their struggling moment, the outcome they seek, and the progress that they are trying to make. Does it help them? It’s about the who, what, when, where, and why of how your product helps them, the job they are hiring your product to do.
Ultimately, uncovering demand is about broadening your worldview and realizing that innovation is about helping people.
When I was young and developing products on the red line, I was told to “build it, and people will come.” Demand on the red line was the number of “people” in a certain age group and demographic set; I could have everybody. The target market was an amazingly simple notion—who. It was attributes and correlative demographics in a very superficial way.
But what causes someone to buy?
The fact that I’m fifty-five, live in this zip code, and have that income does not cause me to buy the New York Times. Something happened that caused me to say, “Today’s the day that I’m going to subscribe to the New York Times.”
Oh, and don’t get me started on the virtues of buyer personas and their “ability” to uncover demand.
Personally, I use green line innovation or development to uncover demand. It is an umbrella term for a set of tools and methodologies that are proactive and anticipatory. When fully used, these methods result in better products and higher success rates.
This way helps us to understand what causes people to buy or to change behavior. Specific things had to happen in my life before I said, “Today’s the day…”
Value is in the eye of the buyer, and uncovering demand is about understanding where your buyer’s value is created.
And to be clear, profit is not value.
Creating value for the company is different than creating value for the customer. Ultimately, uncovering demand is about broadening your worldview and realizing that innovation is about helping people.
It’s not about you or your product’s features and benefits; it’s about who, when, where, and why. This is the key to defining demand. Want to dig further? Check out the five skills innovators need to build products.
Applying this thinking to get closer to our customers’ value codes.
If I asked, “Do you like steak, or do you like pizza?”
You might say, “I like both,” right?
So let‘s talk about a steak situation versus a pizza situation.
Typically, you’re having a steak when it’s been a rough week and you want to reward yourself, or you’re celebrating a special occasion.
You’re going to cook it a special way and maybe have guests; it’s an event.
A pizza situation looks entirely different: I’ve got four kids; I need to feed them, drive to soccer, and get homework done.
If you try to stick steak into that scenario, it’s horrible, and vice versa.
What you realize is that you like both steak and pizza, but if you take the pizza and put it in the steak situation, the value changes.
Wait, let’s step back a min…
What is value in this context?
Value is a function of the context, outcome, progress, and effort.
Uncovering demand is seeing value from the customer’s perspective as opposed to value from the product perspective. And it’s not about what people value. It’s about who, what, when, where, and why people value.
Once you can see value from the customer’s perspective, you realize that value is not a feature or a benefit. It’s a tradeoff people make depending on the context they are in. You can’t understand tradeoffs unless you know your customer’s value code.
Once you understand that people value pizza in certain situations, you can see that they will not pay a lot more for better pizza. But steak, now that’s a different story. As an innovator or entrepreneur, you need to understand how your product or service fits into people’s lives—demand.
But you still need to understand the supply-side:
How do I make it?
How do I position it?
How do I measure it?
How profitable is it?
….The what, how, and how much of product. We need to understand both sides, but I’ve found the supply-side tends to come easily—it’s almost a given.
Successful innovators and entrepreneurs understand how to separate the demand-side from the supply-side. As a result, they can see and manage the necessary tradeoffs.
Want to learn more? Dig into demand-side selling or listen to our podcast on trade-offs in product development.