Market need is not the same thing as market demand
You might think you can eyeball the marketplace and identify a clear need that isn’t being met. But the fact remains that need doesn’t become demand until someone’s willing to hand you a dollar.
Many, many of the entrepreneurs I’ve met (to varying degrees) have trouble accepting this fact of business. Their general approach is that of the artist. They try to intuit something about the world, create something to speak to it, and if people don’t get it, those people need to be educated until they do.
You might look at the business landscape and say to yourself, “You know what? There’s a real need for X right now and no one’s fulfilling it.” But then when you create that product or service, you find out that no one is really willing to pay money for it, or at least not an amount of money that would make the venture sustainable. People will even tell you, over and over again to your face, the exact reasons why they won’t pay money for it. But if you’re a visionary, your response might still be, “They just don’t get it.”
I’m often amazed at how casually people put their energy into new product ideas without any intention of listening to what the market tells them. The approach seems to be one of, “Well let’s just start doing stuff in this business space and see what happens.” The businessperson is effectively saying, “This is about me and my ideas. If people don’t get it, we just need to educate them until they do.” It’s the equivalent of a comedian who doesn’t get any laughs, then blames the crowd. It’s human nature and it happens everywhere. But what surprises me is how often people wilfully choose the fantasy of being a visionary over building something that actually sells.
Of course, any time you tell a visionary that the market ultimately decides whether there is demand for something, they will invariably hit you with that old quote from Henry Ford, who said, “If I’d asked people what they wanted, they would have asked for faster horses.” If read uncritically, this quote appears to say that real visionaries know what the market will want before the market does. But if read more closely, it simply says that, had Ford asked people what they wanted, they would have quickly told him that speed was what they were most interested in. From there, a disciplined businessperson could start working on solutions to the problem of speed, based on real market feedback.
I honestly suspect, though, that the real reason visionaries often dismiss what the market is telling them is because they simply don’t find it all that fun to create a product in an iterative, disciplined way. They want to take home run swings. They want to be Mark Zuckerberg or Steve Jobs, not realizing that both based nearly every major business decision they ever made on mountains of user data, product research, and iteration. What visionaries instead think of is the Steve Jobs who walked onto a stage holding a market-ready iPhone, as though the finished product had been forged in the smithy of human intuition.
It’s my opinion that most money simply isn’t made this way. It’s made in ways that visionaries would find horribly boring. That’s why they choose to continue on believing that they can eyeball the marketplace, intuit a demand, design a product, and then educate the market until people “get it.”
This whole article might seem a bit like a straw man argument. You might be thinking that the so-called visionaries I describe here aren’t real, but I see them everywhere. I would even say that this visionary approach is more common among the entrepreneurs I’ve met than anything resembling a disciplined, iterative, learn startup approach.
Yes, we can come up with our initial product ideas using intuition. But if we’re not willing to subject these ideas to the will of the market, or to a disciplined and iterative process of product development, then frankly, we need to admit to ourselves that we would rather be excited than successful.
