A problem often encountered in innovation is the contradiction between, on the one hand, innovators inventing a new product or service that they think will be useful or "beneficial", and on the other hand, the fact that too often this new offer does not find its market.
The concept of the hidden need points to a way of solving the problem.
When companies innovate to enter a new market, there is often a need that they do not realize exists. And if they knew what that need was, if that need was obvious, if, in other words, it wasn't hidden, they would already be addressing it or doing R&D to try to satisfy it. (1)
Discovering the hidden need that one's solution addresses is the key to being able to predict whether a new offering is suitable for the market, whether it solves problems that are decisive for its adoption. This is what makes it possible to remove the uncertainties inherent in the adoption of a new offer and to secure the innovation effort.
The aim here is to explain a number of things we have learned about hidden needs in order to guide companies' thinking about how to successfully make choices that promote the success of their innovations.
A HIDDEN NEED IS AN UNREALIZED PRIORITY
The first thing we discovered is that a hidden need takes the form in the mind of potential customer of an unrealized priority.
What is an unrealized priority? It is a goal that becomes a priority for a potential market customer only if they believe there is a solution to achieve it.
There are many examples in the world of start-ups that we can learn from, we will start by giving an example that many readers have probably encountered, namely Evernote.
We all know that Evernote is an application for finding, taking, and retrieving notes. About ten years ago, one of the authors of this article (Bruno) found himself in the situation of hearing about Evernote for the first time at a conference. Listening to the talk, he realized that Evernote was a kind of enhanced electronic post-it note that met his note-taking needs. As soon as he came out of it, the first thing he did was to buy an annual license.
Before attending the conference, Bruno had certainly, like many people, encountered many problems in retrieving notes taken in the street, on a bus, etc. But it would be wrong to say that these problems were so acute that he could not stop thinking about them and that wanting to solve them was a daily concern for him.
No: it was only after Bruno realized that there was a solution for not losing potentially important information that the purchase of a solution like Evernote became compelling for him. Before, this goal was only a latent priority: as long as there was no solution to accomplish it, this goal was not a priority.
Another example: hyperGROWTH worked for Plume, a startup that designed an edutainment solution for learning to write. Plume was initially very successful, as its application was used by nearly 20,000 teachers in France to amplify and simplify the teaching of writing to children in their classrooms. But Plume had a problem: this edutainment positioning did not really work with parents.
Here we have a typical example of a solution that defines itself in a way that everyone can understand: "an edutainment solution for learning to write while having fun", and yet parents did not react.
After mining the parent market, we have identified that there are 3 unrealized priorities in this market.
One parent in four have the priority of "remedying their child's poor writing skills", one parent in five wants to make their children's writing autonomous. and one parent in three has a third unfulfilled priority (the remaining 15% of parents who do not seem to have any particular expectations regarding improving their child's writing skills) (modified percentages).
This breakdown of the parent market into unrealized priorities established that Plume's edutainment positioning could not work because it did not meet any of the unrealized market priorities.
Plume therefore chose to position itself in the segment of parents who want to make their children's writing autonomous. These parents have 8-9 year old children who require a lot of help in the evening to do their written homework. And this need for assistance prevents parents from doing other things for the family: cooking, relaxing, having fun with their child, communicating with him or her in ways other than around homework, avoiding arguing with him or her all the time about doing homework, etc.
Again, we see here that as long as these parents are not exposed to a solution to fulfill their unfulfilled priority, they "make do", they get used to living without it and get used to it. This is the phenomenon of habituation.
On the other hand, if a solution appears and a parent perceives that it allows him or her to free up time spent assisting the child with written homework (without, of course, abandoning him/her but, on the contrary, ensuring that the child will enjoy learning and practicing writing thoroughly on his or her own), then adopting this solution becomes a priority.
This unrealized priority was a real hidden need for Plume's management team, even though they are teachers with long experience of teaching written expression to children.
FROM INTUITIVE TO PREDICTIVE INNOVATION
The ability to break down a market into its unrealized priorities solves one of the great dilemmas of innovation, which is how to make informed decisions and stop doubting the value of innovation.
To illustrate this dilemma, let's take the example of Webotit, a startup that offers a solution for retailers to help consumers choose a complex product in shop.
To design his solution, the founder of Webotit started from his own experience of shopping in a shop: sales assistants were not always available when it was busy and gave advice that was not always sound. Based on this intuition, he presented his solution to retailers as a sort of virtual salesman, presenting it as "your best salesman, always available". However, this positioning was not very well accepted by retailers, who were very skeptical that a virtual salesperson could replace a flesh-and-blood salesperson and be of any use to shop’s visitors.
Identifying the unrealized priorities of complex product buyers in-store revealed that the main one was to stop hesitating about which product best meets their needs.
This led Webotit to realize that its apparent lack of success with retailers was due to poor positioning and certainly not to a lack of market. This led it to evolve its value proposition to position itself as a solution that helps retailers reduce the hesitation to buy in-store. This new positioning allows Webotit to no longer be seen as a substitute for the salesperson, but rather as a sales support solution that salespeople can use in the same way as consumers.
This approach has also enabled Webotit to prioritize the development of very specific product functionalities, thus saving precious time in its time to market. Finally, the identification of unrealized market priorities led the startup to move from a logic of validating intuitions to a logic of discovering the most decisive characteristics of the offer to meet market priorities.
REDUCING THE UNCERTAINTY OF INNOVATION
Too often, the entrepreneur, or more generally the innovator, hesitates between several possible options when deciding which features to develop first, or which message to formulate to promote his offer. This hesitation between several options, the consequences of which are unknown, inhibits boldness and prevents progress in the right direction.
When innovating, there is a need to be able to make decisions based on certainty, to be able to commit to an unambiguous direction and to identify the levers on which to act.
Uncovering and understanding the hidden need that an offering must address allows entrepreneurs and innovators to make the decisions that have the greatest impact on its success: defining the MVP (minimum viable product - the first product to be brought to market), choosing the target to address, determining the business model and, of course, formulating the value proposition.
By applying our method to the markets of twenty or so start-ups, both B2B and B2C, we have discovered that in most cases, a new market can be broken down into 3 or 4 unrealized priorities and not 25. Understanding each of these priorities is an extremely important phenomenon as it helps to explain the different forms of expression that the demand for innovation in most of the market (typically 85% as it was the case on the parents' market for PLUME) can take.
In other words, our method does not simply understand the demand for innovation from 30% of the market, leaving it unclear what the remaining 70% of potential customers expect.
This makes the choices more certain. Because when you can only identify the demand for innovation for 30% of your market, you don't know the needs of the other 70%, and so you don't really know the risk you are taking in not satisfying them.
Understanding the unrealized priorities of most of the parent’s market is what allowed Plume to say, for example, "In the end, our solution, given our history, given the existing functionalities of our solution, it is much more advantageous for us to target parents who want to make their child autonomous rather than the school remediation market."
Strategy is also about knowing what you don't want to do.
A NEW WAY TO INNOVATE
Creating new offers by discovering the hidden needs of the market is a new way of innovating that clarifies the strategic choices that must inevitably be made with the help of quantitative, clear, and indisputable information. We no longer get lost in market research reports, sometimes several hundred pages long, where no information is prioritized and and with a surfeit of diffuse and non actionable insights. On the contrary, the direction to be taken becomes very precise, very unambiguous, because it is determined by the unrealized priorities of the market.
By breaking down a market into unrealized priorities, a company can, in about 4 months, eliminate any possible doubt about the existence (or not) of market opportunities for its solution, remove the uncertainties it may encounter when developing a new offer, and guide the choices relating to product strategy, choice of target, identification of the best business model and formulation of the value proposition.
(1) inspired from David Rusenko's talk https://www.youtube.com/watch?v=0LNQxT9LvM0