Why would anyone start a business without knowing there is a need? It is important to find out, and there are way to do so

1. © Max Brand Equity, Inc.
Why would anyone spend /me, effort and money developing
a new product without being confident there is a need?
When you think about it, is it not silly to spend lots of >me, effort and money developing a
product or service without any idea whether or not anyone needs it. Yet, many founders of
businesses do this every day. Whether it is someone who invented a new mousetrap, or a new
restaurant, people fall so much in love with the idea, that the either neglect to, or even resist
any feedback which would suggest that their idea should be changed or even dropped. The first
patent for the spring-loaded mousetrap was registered by the US Patent Office in 1979. Yet,
there have been over 4,000 patents for an “improved” mousetrap since then, few of them
successful!
While prospec>ve users of a product or service are usually not good at telling you what they
want (people did not say they needed microwave ovens or cupholders before they saw them),
they can react to them when they see them. OWen they can also give valuable input about how
they would use the product or service, though not always. This is why new products need to be
tested, retested, and encouraged for long-term usage (when people first saw microwave ovens,
they said they would use them to cook en>re meals from scratch, and few said they would use

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them to reheat leW-overs, or frozen dinners – partly because in those days, frozen meals came in
metal trays and it took the introduc>on of plas>c trays to enable that).
This process is also required for more complex products. How will not only pa>ents, but doctors
and hospitals respond to a new or improved medical devices? Even in the case of a new food
product, how will retailers, wholesalers, or restaurants react, in addi>on to consumers?
This market/needs understanding needs to be carried out repeatedly and itera>vely. From the
first learning, make changes, and improvements. Retest with the market. In fact, is your target
market/user, what you think it is?
It makes no difference what the market is, or what the product or service is. The founders and
those close to them are not usually good judges of the need for their idea. Even if they have an
accurate idea that there is a need, the nature, reason, and poten>al other needs are hard to
iden>fy. While some ideas simply misjudge the existence of a market, others mis-iden>fy the
market. So, when the microwave oven was developed, the first ones were large ones intented to
cook en>re meals from scratch. Consumers told them that because it was all they could
imagine. In prac>ce, they were ini>ally used to heat up leWovers, which were small por>ons
stored in the fridge. Later, as frozen meals started using plas>c or cardboard, instead of
aluminum, the microwave became used for that, which lead to the expansion of both frozen
meals, and the compact microwave oven market – these were synergis>c, as aluminum could
not be used in a microwave oven. So, the microwave manufacturers and food manufacturers
worked synergis>cally, though not in a pre-planned way. Similarly detergent makers and
washing machine manufacturers are synergis>c.
So, what is the best way to understand market needs and size them? There is no “one size fits
all” method. At the most basic, but s>ll valuable, the founder can have semi-structured
conversa>ons with some hypothe>cal customers. Now, it is likely that the audience is not
representa>ve of the market. Furthermore, the interview itself may suffer from “loaded”
ques>ons, and may be subject to analysis which has inbuilt bias. However, it is a valuable start.
From there, one can go to third party interviews and analysis; quan>ta>ve interviews (beig
cau>ous that the ques>onnaire is objec>vely and carefully designed, and/or to ethnographic
research where observed behavior is used instead of projected or claimed behavior, e.g. ask a
poten>al customer to use a prototype and watch them use it.
These data can then be used to project market segments and market size.
Cri>cally, this research is not a “one-off” ac>on, but part of an ongoing process that keeps the
learning going. The market changes, not only because customers/end-users do, but because
compe>tors change, technology changes, complementary products change, prices change, and
channels of distribu>on.