How Startups Can Validate Their Customer Need

Written by Dave Bailey

Steve Jobs on customer needs

Discover how startups can validate their customer need before they build their product plus a formula for compelling narratives that resonate with customers.

As Steve Jobs said: you have to start with the customer experience and work backwards to the technology. Jobs understood that when you try to reverse-engineer the need statement from the product, it’s too easy to lose touch with reality.

After six months of intense product development, this is exactly what happened to me. My product was my baby and I wanted to talk about it with everybody.

But when I didn’t lead with the need, it was often greeted with confused looks. I was giving people the ‘answer’ without asking them the ‘question’, like a weird game of Jeopardy.

Even when I did start with the need, I only afforded it a sentence or two. I’d describe it to perfectly frame my product. In other words, I did the exact opposite to Steve Jobs. And when the confused looks continued, I’d get defensive.

‘Trust me,’ I’d say. ‘It’s a problem — okay?’

Customer needs deserve a paragraph

Dedicating one or two sentences to the problem statement is often a false economy. For startups, the need is all that really matters. It’s the foundation of your entire business. It’s how you position your product. It’s the ‘why’. And it can trigger powerful emotions, like empathy, and disgust, on command.

Every need is contextual. It’s felt by a particular person, at a particular time, in pursuit of a particular end-goal. It has a functional side — e.g., ‘I need to make this picture look beautiful’ — and an emotional side — e.g., ‘I need attention from my friend’. And needs find a way of getting themselves met . . . with your product or without it.

I wanted to find a way to express my customer need that:

  • builds empathy with an early-adopting niche
  • clarifies the functional and emotional aspects of the need
  • avoids the trap of working backwards from the product

That’s when I came up with the ‘need narrative’.

Writing a compelling need narrative

The need narrative outlines a thesis on how to make people’s lives better. A clear need narrative helps you prioritise features, communicate the product effectively, and hone in on the most important niche. Every field in your need narrative is testable from day one.

For ___[target audience], it’s a constant challenge to ___[general problem]. Every ___[time period], these people ___[perform a key activity] in order to ___[achieve a primary goal]. This is especially true if you’re a [niche].
The main problem they face is ___[primary functional problem relating to activity] which leads to ___[bad/worst case outcomes]. Today, their best option is ___[substitutes], but of course, they ___[the most common complaints of each substitute]. With ___[key trend], the problem will only get worse over time.
If only there was a easier/better/cheaper way to ___[perform a key activity], then customers could ___[quantifiable impact on their primary goal] which would lead to ___[positive outcomes / emotions]. With ___[number of potential customers], there is a clear opportunity to meaningfully impact a huge number of people.

Here are some questions to help you fill in the blanks for your company:

  • Target audience: Who are your target customers? For B2B startups, who actually uses your product?
  • General problem: What’s a problem that every target customer can agree with (e.g., not enough time or money)?
  • Key activity: What are customers doing while they use your product (e.g., booking flights or collecting receipts)?
  • Primary goal: What’s the end-goal of performing this activity (e.g., travel abroad, or prepare a VAT return)?
  • Niche: Which sub-group of potential customers is most likely to be an early-adopter?
  • Primary functional problem: What’s the hardest part about doing the activity today?
  • Bad/worst case outcomes: What’s the worst case scenario if the activity goes wrong? For B2B startups, what is the negative business impact?
  • Substitutes: What’s the next-best-option or workaround?
  • Most common complaints: Why do customers hate these substitutes?
  • Key trend: What will make this problem worse in the future?
  • Quantifiable impact: How can you measure the impact of solving the problem?
  • Positive outcomes and emotions: What good things happen as a result?For B2B startups, what is the positive business impact?
  • Number of potential customers: How many people can you target?

Note on B2B startups: Ultimately, you want to show how helping certain employees perform their roles better will have a positive outcome on the business as a whole.

Tips from the trenches

To bring the message to life, use specific language and vivid metaphors. Adjust the formula to make it work for you. And try it out on both potential customers and lay people, to check that it’s accurate and easy to understand. Your aim is that anyone who hears it should be able to put themselves in your customer’s shoes.

When potential customers hear it, they should self-identify with every point.Once they validate the need, try asking them to guess what your product does to address it. Not only might they come up with good ideas, but they might also expect far less from you than you originally thought.


Continue reading about knowing what customers want:  

Originally published Mar 17, 2019, last updated Aug 19, 2021.

communications idea-stage product

About Dave Bailey

Hi, I’m Dave Bailey and I coach tech CEOs from Series A to pre-IPO. Join 20,000 entrepreneurs who receive my new essay every week. 

I will never sell your information, for any reason.

Trending essays

How to Use Nonviolent Communication at Work

All my biggest regrets as a founder are around not having difficult conversations sooner...

How to Coach Your Team and Get The Result You Want

If you’ve found it difficult to get the results you want from other people, try this simple technique...

How to Drive a Culture of Ownership

Do you wish your team took more ownership? Here’s how to trust them to get the job done without you...

10 Communication Techniques Used by Great Leaders

Whether you’re leading a meeting, a team, or a company, your ability to communicate can set you apart...

How to Ask Your Team The Right Questions

To improve your ability to ask great questions, it helps to understand the types of questions you can ask...

A Guide to Running Exceptional One-on-Ones

How effective are your one-on-ones? Here's a practical guide for managers and their direct reports...

Serious about levelling up as a CEO?

The Clarity Program is an accelerated coaching program that helps startup and scale-up CEOs communicate their customer need, strategy, and vision.

Learn about Clarity

Previously, Dave co-founded Delivery Hero and other scale-ups, and he's coached hundreds of scale-up CEOs across the US, Europe, Asia and Latin America.

Dave studied at Stanford Graduate School of Business and Oxford University. His writing has been featured in many of the world's top business publications. He has a passion for communication and strategy.

Learn more about Dave

©2023 Founder Coaching Limited. All Rights Reserved.
FOUNDER COACH® is a registered trademark of Founder Coaching Limited.