How do you frame demand?

Your answer shapes your product and business

I ran a fascinating B2B sales workshop earlier this week with Eric Martin, Vanta’s first sales hire & head of sales. If you weren’t able to join, here’s the recording!

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And - my July accelerator batch is 80% full. If you’re:

• Struggling to get enough customer feedback to figure out where real demand is

• Trying to get to your first ~10+ customers but it feels like you have to make magic happen for every sale

• Or just feel like you should be making progress towards *true* PMF faster

Learn more here and apply here!

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Build something people want.

What do people want?

If you’ve read my stuff on demand vs. supply before, you know I have a slightly contrarian take here:

• Nobody wants software. Nobody wakes up saying, “Awesome! Today’s the day I get to buy new enterprise software!”

• Stop thinking about value propositions; start thinking about what makes value propositions relevant. Nobody says, “Hey! This startup’s value prop is so compelling, I’m going to drop all my goals and projects to buy their product.”

Our job as founders is to find, and understand, demand. Demand is this magical, invisible force - it’s the difference between customers pulling us through our sales process, and us pushing them through our sales process.

To find demand, we have to ask, “when customers buy our product, what are they really trying to achieve?” What’s the project in their Asana this fits into?

We get a rough understanding of this, and then sharpen it around our “hell yes” customers. For example:

• For MuukTest, demand is roughly that “a specific kind of startup doesn’t want better QA software, they want QA off their plate entirely.”

• For Waffle - my new software company - demand is roughly that “startups that buy Vanta/Drata etc. don’t want to spend 1-3+ months refactoring their product to get SOC 2 ready”

• For my one-man accelerator - demand is roughly that “the best and the brightest founders are sick of wasting time with a bunch of LARPy academic research / experimentation / analysis work & want a clearer path to their first 10-50 customers.”

Today, I want to share an interesting example of how slight differences in how you understand demand lead to wildly different products.

Let’s look at two competitors in the payroll / HR space: Gusto vs. Rippling.

Gusto was the hot new thing ~5ish years ago, while Rippling is clearly the new winner in the space.

Gusto and Rippling have totally different theories of demand, which led them to make very different downstream decisions (in product & everything else):

• Gusto’s theory of demand: Companies want to make payroll and HR admin more delightful. So they invested a ton in design and user experience. This paid off for them, in part because every payroll software before Gusto made Boston city hall look pretty.

• Rippling’s theory of demand: Companies want to fully automate away payroll and HR admin tasks. The truly delightful experience is not having to do this bullshit at all. Rippling’s product architecture is built around this theory of demand… to make it easy to automate away more and more people-admin tasks.

I think Rippling has a better theory of demand. Time will tell. But the point of this article: Seeing just how profoundly your theory of demand shapes your product.

PS - Theories of demand emerge from the process of selling & serving early customers… they are rarely planned from day 0. Go sell & serve, stop listening to the fools online who tell you to do more research and experiments.