About these ads

Latent needs are overplayed as an innovation dynamic


Reading this thought piece from the Silicon Valley Product Group, The End of Requirements, I saw this point about latent needs:

Unrealized needs (also called “latent needs”) are those solutions where customers may not even be aware they even have the need until after they see and experience the solution. Examples include digital video recorders, tablets, always-on-voice, self-driving cars, etc.

In other words, customers often don’t know what they want. This is essentially another version of the Henry Ford quote, “If I asked people what they wanted, they’d have said faster horses.”

I want to differ with the Silicon Valley Product Group here. People do know their needs, it’s incumbent on companies to understand them. Then it’s appropriate to try out ideas that can better satisfy those jobs. This diagram illustrates the two separate dynamics:

Decoupling customer JTBD from solutions

In their post, they use self-driving cars as an example of “latent needs”. Two issues with that. First, self-driving cars are not yet in the market, so it’s not possible to say that was a latent need, as described by the Silicon Valley Product Group. The second issue is that self-driving cars will actually address known jobs-to-be-done. I wrote a whole post on that, Exactly what jobs will self-driving cars satisfy? In that post, I outline several jobs-to-be-done and some key outcomes desired:

Job-to-be-done Outcomes
I want to get from point A to point B Minimize commute time | Minimize accident risk | Minimize commute risk | Increase driving enjoyment
I want to get work done Increase digital work completed | Increase availability for conference calls | Minimize distractions
I want to improve the environment Minimize emissions | Minimize fossil fuel consumption
I want to enjoy my personal interests Increase spent on activity | Minimize distractions

The point here is that these are not latent needs. Some are needs that people do not think about now in the context of commuting in a vehicle. But they are not latent needs.

I do agree there are some needs that can be hard to discover, or which become more important as societal norms and expectations change. Sure, there are some needs that are not obvious and may indeed become more visible in the face of a potential solution. But these are exceptions, not the norm.

Making product and innovation decisions based on the thought that, “Well, people don’t really know what they want” is a recipe for a lot of wasted effort. It’s not a sustainable basis for growth.

Agree? Or think I’m oversimplifying things?

I’m @bhc3 on Twitter.

About these ads

About Hutch Carpenter
Senior Consultant for HYPE Innovation (hypeinnovation.com)

12 Responses to Latent needs are overplayed as an innovation dynamic

  1. Rick Mueller says:

    Hutchmeister,

    A,B, and C have been categorized in existing work as

    1. Nice to have -we buy this whenver the price or compexity gets reduced to out threshold

    2. Want to have – we buy this (or don’t) from discretionary income

    3. Need to have -we buy this and pay whatever we have to to get it

    Addressing the Jobs2Bdone more effectively can increase #2 (creates niche – not latent)

    Or, with continued development, transform #1 into a Disruptive Innovation (latent)

    Hope that helps.

    Rick
    Mgr Disruptive Innovation Group @ LinkedIn
    http://www.linkedin.com/groups/Disruptive-Innovation-1837479

    • Hey Rick – great to see over here on the blog. Can you elucidate on “A, B and C”? Not quite mapping that to what I wrote, but I do like the 1, 2, 3 types of desire people have.

      • Rick Mueller says:

        Hi Hutchmeister,

        > great to see over here on the blog

        Long-time lurker (and of course stealing whatever good ideas I might happen to find while here :-))

        > Can you elucidate on “A, B and C”?

        The ABC thing was probably a misnomer; the 1,2,3, thing is the more important anyway because #1 is what’s invisible to everybody but yourself (and sometimes even to yourself).

        #2 is something you buy when its a good deal or for some special reason (flying on Southwest even though you could have driven because the extra few dollars is worth not having to find parking when you get there or buying Tiffany jewelry for your 10th anniversary with your significant other) The market here is not latent – its discretionary. This is a place you can create a niche, perhaps even take heavy market share if you’re adept, but not a lot of potential for Disruption.

        #3 you buy because you have to – like food or cell service – pretty much commodities. Nothing that interesting here unless you can create a monopoly.

        #1 is different.

        A #1 scenario goes like this:

        There’s software ‘N’ and software ‘A’. They do about the same thing, but you use ‘N’ even though it’s twice the price because it’s better than ‘A’ and about half the time you need the extra capacity or quality.

        There’s another thing you do on rare occasion (F) for which there is also some independent software (Q) that can really do it really well and fast, but ‘Q’ is expensive and cumbersome, so for the very few times you really can’t avoid doing ‘F’ you grit your teeth and use the free, slow, and somewhat limited browser-based version rather than buy the expensive ‘PC’ software.

        Then one day you discover that the new release of ‘A’ now includes a very low end rendition of ‘F’, no where near as good as what ‘Q’ could do, but one that’s passable for your needs – and this low end but serviceable F comes free with ‘A’. So you decide buy and install A along side ‘N’, mostly to do ‘F’, but every now and then you use ‘A’ instead of ‘N’ when that part of the work really doesn’t have to be as polished as usual.

        ‘A’ gets more customers as a result of integrating this rudimentary version of ‘F’ and uses the extra money to further improve, becoming more and more like ‘N’ and improving ‘F’ as well, so now you’re using ‘A’ more and more for work that until recently you would have done exclusively on ‘N’ and also finding more uses for the upgraded ‘F’ as well. ‘N’ is seeing their sales start to stagnate a bit, so they add even more high-end features and raise the price commensurately. Eventually ‘A’ becomes good enough that you’re using ‘A’ all of the time to do things you once would have only done in (the now even more expensive) ‘N’.

        In this instance, ‘A’ has Disrupted ‘N’ by adding a very low-end version of ‘F’ that was entirely unrelated to its main function but that enough users of ‘N’ appreciated having such that they would buy and later give ‘A’ a shot at the work that used to be exclusively done on ‘N’.

        In this scenario, the need for ‘F’ was TOTALLY LATENT to the makers of ‘N’, much as the demand for Facebook was entirely latent to Nokia, but not to an increasingly large number of Nokia users, and not to Apple, which has consistently provided increasingly more capable apps to access Facebook and many other functions that Nokia would never have taken the time to develop.

        We know, of course what happened with that – and that the demand for ‘F’ was indeed latent to the folks at ‘N’ (and those at ‘MS’ and at ‘P’ and ‘HP’ and ‘Mot’ and a host of others) that could really have benefited from being able to see a bit more clearly. But that doesn’t mean it was completely invisible – you just had to know where (and be willing) to look.

      • Good points here Rick, I like that the need for…a Facebook App?…was totally latent to Nokia. I may be oversimplifying your point there. Were you referring to the whole apps market, with Facebook as a proxy for that?

        I guess one could say the latent need people had was to interact with their favorite games, sites, etc. when they were away from their laptops? I’m not so sure that the need for mobile computing was really latent. Using Facebook as an example, people did want to interact and share with their friends. The constraint was that they had to do it from their computers. The need was there, but there wasn’t a good way to do so once you got up from your chair and went out.

        I may be butchering your point, feel free to correct me here.

        Hutch

  2. Hutch, in your “jobs-to-be-done” example above, each begins with the words “I want to…” Are you implying that JTBD is the same as desire? And if so, why the distinction? If a restaurant offers a more desirable hamburger is it appealing to my “job” of finding a tastier burger?

    • Hi Tom –

      I’m using “I want to…” because my take is that jobs-to-be-done cover both core needs – sort of Maslow’s hierarchy type of stuff – and things that might make you giggle if you called it a “need” (e.g. update my friends with my latest news).

      Both needs and wants are things we want to accomplish. We’re human! Regarding the burger. I’d probably look at that a combination of a job (e.g. eating out) and an outcome + constraint (e.g. best tasting burger under $12). This sounds funny, but the burger is a potential solution to a desired outcome of the job-to-be-done.

      Did I make sense there?

      Hutch

    • Interesting comment, Tom (howdie from a voice from your past!). Here’s my humble take. In most cases, customers can articulate their needs; sometimes companies don’t hear them. But customers don’t always know what SOLUTIONS will BEST ADDRESS their NEEDS — especially when prospective solutions or technologies are so new and innovative that people don’t even know they exist. From a product development perspective — “what they don’t know that they don’t know” or “what they can’t imagine or haven’t yet imagined.” This grey area represents market opportunity. Our chart: http://www.reinventioninc.com/who-we-are/our-approach-to-innovation.

  3. Mike Vandall says:

    Hutch-

    I think your comment, “People do know their needs, it’s incumbent on companies to understand them,” is spot on, however, I would also add that people in general have problems articulating those needs, so ultimately if companies want to innovate they need to obtain insights about their customer using a number of questioning techniques

  4. rcauvin says:

    Great insight, Hutch, that what many people call “latent needs” aren’t hidden at all. It’s the potential for improvement – the recognition that things could be better – that both solution providers and customers sometimes don’t see. I apparently missed this insight when I wrote about dormant problems in 2005 (http://blog.cauvin.org/2005/08/dormant-problems.html).

    For example, my friend Eric says he doesn’t “need” a faster computer. He enjoys his daily digital activities and doesn’t envision how his life would improve – except, perhaps, marginal time savings in his activities. His life might actually change – and dramatically for the better – if he buys a shiny new computer or tablet. But he most likely won’t know how it will change unless buys the new device.

    All of the problems that a new device might solve for Eric, and all the needs that it might address, already exist for him, and it may be fairly straightforward to uncover them. But he doesn’t envision which ones the new device will solve for him.

    • Thanks Roger. I think the term “latent needs” sometimes get mixed into these issues:

      1. Needs (and wants) that are not currently served in a product area, but could be. Customers have those needs, but innovators don’t think of those as part of their addressable market.

      2. Reactions to different solutions. Each potential solution has its own attributes that determine its acceptance by the market. It can be hard to know the decision criteria for a potential solution. These are deemed “latent needs”, when really it might be better to call them “unknown decision criteria”.

  5. I have experienced three levels of “maturity” when it comes to understanding and setting out to provide market centered innovative solutions. Depending on your level of maturity will frame how you understand the concept of “latent needs”.

    Level I – Ask a customer what they want. The customer is always right, right? This works great if you are satisficing (yes I used that word) existing customers. The problem is they can only tell you incremental improvements because they are already entrenched in an ecosystem of your existing solutions. This is the basis of Christensen’s Innovator’s Dilemma.

    Level II – Ask a customer what their problem is and they MAY be able to tell you. We are starting to pierce the veil into the Job to Be Done. But often times customers (as narcissistic as they may be) have a hard time expressing their own problems. Probably something to do with the ego of admitting you have a problem and can’t solve it yourself.

    Level III – Watch a customer and they will SHOW you their problems. I heard a great quote once that said “customer insight is the delta between what customers say and what customers do”. It takes a lot of patience and empathy to understand a customer problem through observation, but once you have really nailed the JTBD, I think Hutch’s model with multiple solutions presented to a selected pain point is spot on.

    Thanks for the article. Interesting take and notable clarification on the notion of “latent needs”.

    • rcauvin says:

      Yes, I think @ddetlefsen is dead on with the three levels. The reason we have to facilitate conversations (and observations) with customers (and engage in a sort of uncovering psychotherapy) is not so much that prospects don’t know their problems at some level. It’s that the problems aren’t always explicit, communicated, and ultimately understood.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 662 other followers

%d bloggers like this: