Understand the "Underserved needs" of your target customers

Today’s episode is about “Underserved needs”. It is the second one among the five steps of Achieving the Product-Market Fit, as described by Dan Olsen through the pyramid that we have discussed in our first article of this Product-Market Fit series.

Recently we have discussed “Customer targeting”. We went deep in explaining how best a startup can learn their customers, their behaviors, what they like, what they don’t like, and everything that can help them in serving their clients better. Identifying and learning about your customers is the first step to achieving Product-Market Fit, and the foundation of the second one “Underserved needs”.

What does “Underserved Needs” mean?

After conducting different customer interviews, analyzing data, and conducting competition analysis, you identify different gaps in terms of problems that clients have and solutions that are on the market. Now to understand this, let’s break the term “underserved needs” into two different words which are “underserved” and “needs”.

Underserved

The first word is “Underserved”, this represents those problems that have been solved but not sufficiently or that have not been solved at all. It is easy to identify the “Underserved” because you have an idea of what you want to do, what your competitors are currently doing, and the pain points that your target customers are still experiencing. So you can clearly and easily identify the gaps between what people want and what is being delivered. 

Now that you have identified the “underserved”, the next challenge is now to identify a NEED. Not every problem is worth solving. This is a hard truth that many people fail to understand. If you are a founder or planning to be one, take this as a million-dollar advice, not every problem is worth solving. You understand this, you understand the game. 

Now let’s discuss the “need” in detail. How do you know something is a need? What qualifications does it have to be a need? 

Need

This second term “Need” is actually what makes a difference. As mentioned in the “Underserved” part, there will always be so many pain points or problems not covered by the competitors, but the point is, is it a need? Can we go for it? 

To answer those questions, let’s discuss how to evaluate if a problem /pain point can be considered a need or not. This is an important part of product development because this is when you have a pool of problems and pain points and you have to choose which ones you are going to solve. Again, not every problem is worth solving.

Desirability

In my early days of Product Management, I thought that every problem that a client had, was important for them to the point they needed it solved. That was until I saw some startups going to the field to market their products and their target people were telling them that they are okay with their old way of doing things. That old way seemed like a problem to startups but the target people didn’t care about that.

I will give you an example of a startup that wanted to help SMEs in bookkeeping, keeping records easily using a mobile app where they would even get real-time analytics of how their business is doing, instead of writing everything in a small notebook where you can’t even get a clear image of how your business is doing, they were surprised when people were telling them that they don’t have any problem with their notebooks. 

The problem was there, but people didn’t care much about it, which means they had other pain points that needed attention. So the first thing to consider a problem as a need, is how much people want it solved. Remember the goal we have is to achieve the Product-Market Fit, always touch on those parts that customers are suffering the most.

Viability

As a startup or company, your first goal is to make money. If solving a problem won’t make you money, that problem is not worth solving. Again as I mentioned in Desirability, the more people want the problem to be solved, the more they will be likely to pay for it. 

You need to test if the problem that you identified will make you money if you solve it, if the problem won’t make money for you, leave that to NGOs to deal with it.

Summary: There is another test called the “Feasibility” test, to check if the identified need can be built given the capacity of a company/ startup, but that is considered when you have already chosen “needs” from problems and pain points. I advise you, before you qualify a problem or pain point as something that your team is going to solve, please check how desirable and viable that is, and if it qualifies you can proceed with checking if your team can build. If the problem has passed the desirable and viable test, it’s time for us to come up with a value proposition. Let’s meet next week for the “Value Proposition” article.