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Authentic Demand

Authentic Demand

by Matt Chanoff

Posted on 06 September 2016

The secret of growing a startup isn't a great team or a great strategy.

There have been a lot of good posts on startup growth strategies lately, like this one and this one.

But when you start with the wrong mindset, you can only get so far. Here's an analogy to the mindset most founder are stuck with, and after that, a better one:

Imagine that your company is a soccer team and the product is the ball. Your strategy is the strategy needed to get past all the obstacles of the opposing team on the field. (those obstacles could be competition, lack of customer awareness, product glitches, etc.) Finally, the customer is sort of like an opposing goalie. Their incentive is to gain in some way. A goalie gains when they keep the ball out, because the ball costs a point. A customer does a cost/benefit analysis before accepting the price of the ball. In the world of most founders, a startup needs the best possible team with the best possible strategy to get that ball into the goal and rack up the score.

Let me offer a different analogy. Imagine a factory at the end of a shift. When the whistle blows the workers stow their equipment and head toward the gate. In this analogy, your product isn’t a soccer ball, it’s a factory gate. Thousands of workers walk through that gate. They're not thinking about the gate. They don’t care about the gate’s features, except in so far as it enables them to go home. Why are they walking through that gate? Because it’s the only plausible path for them. They’re not going to stand next to the machines until the factory starts up again tomorrow. They’re not going to lie down on the floor. They’re not going to head to the break room for a cup of coffee. They’re going to go home, eat dinner, and get some sleep.

They have not been electrified by some kind of super duper marketing. They’re just walking through the gate to get home. Sure, if you happen to have the perspective of the gate keeper, and it’s stuck or something, when you see the crowd of them strolling toward you, it looks to you like some kind of viral marketing event produced this clamoring hoard of customers. But they don’t feel like they’re clamoring for anything. Ideally, they don’t notice your product at all; they’re just being themselves. At that moment, in that situation, being themselves means walking through that gate.

That’s authentic demand. It’s knowing the customer so well that you know what gates they need to walk through in order to be themselves. Authentic demand is all around you. Alcoholics walk through buying alcohol gates. New parents walk through buying diapers gates. Designers walk through CAD tool acquiring gates.

But the last three examples are well known gates. Whenever a startup tries to make something like that, they run up against the problem that other companies already know about those customers, and have experience and resources and brand recognition the startup doesn’t have. We all already know that big box stores are a certain, reliable type of gate. But good luck launching a startup that does big box stores people will walk through when they’re already strolling through Walmart or Target.

So startups are stuck with the much harder job of discovering hidden gates; new innovations that customers immediately use, not because marketers have given the thing sizzle or added cooler features, but because it’s a gate through which the customers go to be themselves.