Desire, need or problem?
When considering whether to start up a business, conventional advice says that for a business to be successful it must provide a product or service that fulfils a customer desire or need, or solves a customer problem.
Note that sometimes a need and a problem are considered as the same thing.
On the surface this seems to make perfect sense, but I think in the real world of business this advice needs further analysis.
Let us first examine a case where the conventional wisdom is totally accurate. These are the facts:
- I intend to provide dental services.
- My customer has a bad tooth ache.
- Consequently, they have a desire to relive the pain; they have a need to relieve the pain: and they have the problem of a toothache.
- I can fulfil the desire, I can satisfy the need and I can solve the problem.
The idea of setting up a business that provides dental services will pass the desire, or need, or problem test with flying colours!
Need but no desire
Now let us consider the business of exit planning services.
- All private business owners need to plan for the exit from their businesses.
- This because they will all either want to retire, need to retire or will die.
- So, in setting up a business providing exit planning advice, I appear to have passed the test of providing a service that satisfies the need of business owners.
- But, although business owners, on the face of it, need exit planning advisory services, they don’t usually want them.
- At least not now, or until it is too late.
This tells us that for some businesses to be successful, need and desire are not either or. They both have to be present. The business owner not only needs exit planning, he also has to want it.
In some cases, need and desire both have to be present to justify starting up a business. However, this is not the case with desire alone.
Customer desire can be enough for a business to be successful whether there or not there is also a need or a problem. If customers desire something they will buy it whether or not they actually need it.
The vast fortunes of a business like Apple are based on a product (the mobile phone) that customers did not actually need when the product was invented. There was strictly no need, there was apparently no problem, because telephones and cameras already existed. But, a desire was created and this desire was quickly followed by what we would now consider as a basic need.
Or, putting it another way, a problem existed that required a solution.
What then about a problem? A problem is similar to a need, but only more so. A future problem arising through not having received exit planning advice is not necessarily enough for the business owner to desire the service. Whereas the problem of the toothache will almost certainly result in the customer wanting the dental service.
So, providing a solution to a problem alone could be enough on which to base a business. But it is not necessarily so.
Solution, but no problem?
This raises another interesting issue. Many startup ideas on based on a solution to an apparent problem. Often these solutions are ingenious. However, on examination (often by starting up a business and trying to sell the ingenious solution) it became apparent that the problem didn’t really exist.
A “solution looking for a problem” this is called and, unfortunately it will usually lead to failure.
Finally, let us look again at the apparently infallible approach of fulfilling customer desires even where no real need or problem exists. I have said that it appears that for a business to be successful it can be enough for it to fulfil customer desires. The trouble with this is that customer desires change.
Where desire alone exists without a need or a problem, a business is vulnerable to changes in fashion, tastes or circumstances. The rise, fall and disappearance of many famous businesses is testament to this fact.
So, what does this all tell us?
Firstly, traditional businesses like selling food, providing medical and financial services, and building and repairing houses pass the desire and need/problem tests on all counts and subsequently prosper and endure. They are, however, crowded with competition, which drives down their margins and their profitability.
If you are considering a startup in these industries, you need not worry whether there is there is customer demand. You can do well in them, subject to being better or as good as the competition, but fortunes are hard to find.
Secondly, where there is a need or a problem there may not be a desire. In these cases your startup could be a risky one.
(Have a look at the competition. Not much you say: should be good opportunities you say. Not necessarily so. Could there be not much competition because there is not much demand or desire?)
However, if your product is something new and ingenious you could create the desire and you could be on your way to your first billion!