Demand =/= "people who want to buy your product"

The #1 misconception (and why we build things nobody wants)

If our primary goal is to “build something people want,” we probably should have a solid way to think about “what people want.”

When we don’t have a coherent way to think about what people want, we’re always just building stuff and guessing. Spearfishing. Playing the lottery.

In the rare case we succeed, we don’t know why.

I’ve found the concept of “demand vs. supply” to be actually useful. A rare gem in a startup ecosystem filled with actively counterproductive ideas.

But when founders first try to understand demand, they make one big mistake.

Demand is not “desire for supply”

Our default interpretation of “demand” is… “people who want our product.”

This sounds right, but it renders “demand” useless. Here’s why:

• We think we need to “create” demand by trying to pitch our supply as being more desirable. We try to persuade people that they should want our supply. This doesn’t work.

• We don’t know how to make our product better fit demand: If “demand” is “people who want a CRM,” how do I make a better CRM? No clue.

• We have no explanation for why new products win. We seem to think that it is alchemy, that some products just conjure up demand or are desirable for some idiosyncratic reason.

• We wind up going back to guessing and spearfishing.

Here’s what we need to understand: Demand is a standalone concept. It exists without supply; it is supply-agnostic, supply-independent.

Demand is “needing to accomplish something.” When we understand the “thing” they need to accomplish (and when + why a particular person needs to accomplish something), we can:

• Stop trying to create demand by talking about our product’s desirability, and instead find people who need to accomplish this thing.

• Design our product (supply) to better fit demand, to more elegantly help them accomplish their thing. We know generally how to improve our product, and what else we should build, and what alternatives we are really competing against.

• Understand why new products win: They aren’t conjuring demand out of nowhere, they are a better fit for some shape of demand.

I did the meme wrong, but… enjoy:

PS:

• Next PMF Camp launches September 30. Get help finding demand in your situation (& getting your first 10+ customers). Registration closes in a few weeks. Every PMF Camp has sold out so far. Learn more HERE and apply HERE.

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