How high is customer demand?

Successful startups don't create demand. They position themselves in the path of existing demand.

In a good market, customers provide their own motivation.

Your job isn't to create customer motivation; it's to find where it already exists and then build something that satisfies it.

Timestamps:

00:00 I was listening to the Offsite podcast.
00:20 What does it take for a customer to take out their credit card?
00:46 How high is the customer's desire for the product?
01:23 When will a customer buy even when there's friction?
01:59 The pitfalls of optimizing a product when there's no demand
02:45 A framework for assessing Market Demand
03:21 Conclusion

Watch the whole episode of Jordan's conversation with Ruben.

★ More about me: ★

I'm Justin Jackson. I founded Transistor.fm (a podcast hosting and analytics platform) with Jon Buda.

I write, podcast, and make videos about bootstrapping, startups, marketing, calm companies, and business ethics.

My blog
Bluesky

Creators and Guests

Host

Justin Jackson

Co-founder of Transistor.fm

Guest

Jordan Gal

Founder of Rosie

What is Justin's brain?

Hi, I'm Justin Jackson. Here, I'm sharing brief thoughts on building a better life, bootstrapping, improving society, growing older in tech, being a dad...

Justin Jackson: 00:00

I just finished listening to this podcast, and I wanna talk about it. The podcast is called Off-site. It's by my friend, Jordan Gahl, and he's talking with my other friend, Ruben Gammes.

Jordan Gal: 00:13

And and I don't necessarily think that's bad because the credit card on file is the emotional and financial commitment.

Justin Jackson: 00:20

Jordan and Ruben are talking about what it takes for a customer to actually take out their credit card and pay for a product.

Jordan Gal: 00:27

Once you're committed, I think you're more likely to go through the friction of, well, you know, the clock's ticking. I have my card on file. I clearly want I I've decided that I want to use this.

Justin Jackson: 00:37

In this case, they're talking about signing up for software, but it could be anything. And the part that really kinda grabbed me is how Jordan said this.

Jordan Gal: 00:46

Are they high enough up on the desire scale to kind of push them all the way through whatever friction that they need to go through?

Justin Jackson: 00:54

We can think about customer desire and motivation like a thermometer. And once that thermometer gets past a certain threshold, their desire and motivation is so high that they're willing to jump through whatever hoops they have to in order to solve the problem that they're trying to solve. And as entrepreneurs, we often don't think about is the customer's motivation, is their desire sufficiently high? This is why at the beginning, it's actually not bad for there to be some friction. For example, when we launched our software product, we required a credit card upfront when you signed up for the fourteen day free trial.

Justin Jackson: 01:37

And that adds a lot of friction to the process. But that friction proved that people were so motivated that they were willing to jump over that hurdle, take out their credit card and pay for this thing. At the end of the day, in a good market, the customer is providing their own motivation. You don't have to do that for them. I've seen lots of founders spend years trying to optimize their way to success.

Justin Jackson: 02:04

They AB test their landing pages. They tweak their onboarding. They're trying to reduce friction everywhere. But the problem is the underlying customer desire. If you don't have a baseline of customer demand, you're just rearranging the deck chairs.

Justin Jackson: 02:21

Successful startups don't create demand. They position themselves in the path of existing demand. As a business owner, you shouldn't be asking, how do I convince people to want this? The question is, where are people already wanting something so badly that they're willing to jump through whatever hoops it takes to find a solution. Here's the framework.

Justin Jackson: 02:47

Number one, make sure that there's demonstrated evidence that people want what you're selling. Not, oh, this would be a nice to have, but do they actually want it? Number two, are there enough of these customers with high demand to build a real business? And third, is their desire strong enough that they're willing to pay meaningful money for a solution? You can't answer yes to all three of those.

Justin Jackson: 03:13

You don't have a promotion problem or an onboarding problem or a product problem even. You have a market problem. In a good market, the customer provides their own motivation. Your job isn't to create that motivation. It's to find where it already exists and then build something that satisfies it.