Of Drill Bits and 1/4 Inch Holes

A common challenge that most Product Managers face on a regular basis is how to separate the noise from the signal. In other words: to understand and deliver what customers need, not necessarily what they want.

Theodore Levitt famously said

People don’t want to buy a quarter-inch drill; they want a quarter-inch hole

The problem is that most customers don’t know or understand the difference between needs vs. wants. To them, they are all the same. But, they aren’t.

Let’s look at some definitions:

Needs: A requirement, necessary duty, or obligation. A condition marked by the lack of something requisite.

Wants: To feel a need or a desire for; to wish for. To wish, need, crave, demand, or desire.

In Levitt’s quote above, the drill bit is a want, but the hole is an actual need.

That is, the customer’s need, or job-to-be-done, is to put a hole in the wall. The method by which they achieve that is secondary and less important. They don’t care to use a drill, a nail or a laser gun. As long as they end up with the right size hole in the wall, they’d have met their needs and are happy.

Here are two examples that I think demonstrate the power of focusing and delivering on customers needs vs. their wants.

1. When the first iPhone came out, many people criticized Steve Jobs for not putting a physical keyboard on the phone (what customers wanted). Instead, he gave them a better way to interact with their phones (what they needed).
2. If you ask people on the street, who are in a rush to get to a business meeting what they want they’d say a taxi (what they want). But Travis Kalanick — founder of Uber — knew better. What people needed was a faster way to get a cleaner, safer, and cheaper mode of transportation to get across town (what they need).

So how do you tell the two of them (wants and needs) apart?

The best way that I’ve found so far (I’d love to hear your methodology in the comments below) is by focusing on your customers’ job-to-be-done.

You can usually identify which one is your customer’s job-to-be-done by finding their desired outcome. Most of the time, the outcome is a need, where the steps on how to achieve it point to wants.

So if you start doing customer interviews and the person in front of you starts talking about the steps, or detail on how to accomplish something, then, usually, you know that they are describing their wants. But the moment you hear the customer explaining what is it that they hope to achieve at the end of all those steps, then you’ll have their need or be very close to it.

So you sorted your customers’ wants from their needs.

Should you go ahead and add them to the roadmap and prioritize them ready for implementation?

Not yet.

First, you need to find where your customers’ needs are aligned with your company’s needs.

You see, it’s possible to fulfill your customer’s needs and yet fall short of delivering on your company’s goals and vision, which, eventually will lead to failure.

Let me give you a silly example:

I need to buy a Ferrari (you know, so I can go faster on 101 during rush hour traffic). So I go to the dealership, and plea my case to the manager as to why he should sell me a Ferrari for $30,000 dollars (crazy, I know, I should offer $20K :)) .

Now, the manager could sell me the car for $30k and fulfill my needs, but would this be fulfilling Ferrari’s needs of selling high-end exclusive vehicles to an affluent consumer market? Nope, it wouldn’t.

If Ferrari’s managers would be kind enough to sell their cars at such a drastic discount, they’d end up with a bunch of happy customers but soon find themselves out of business.

So what does the manager at Ferrari tell me? “I’m sorry sir, you are not our target customer. Perhaps a visit to the Honda dealership?”

In this example, the dealership manager is acting as the Product Manager, and, before making a “product” decision, he’s making sure that his customer’s needs are aligned with his company’s needs. When they aren’t, he prioritizes based on his company’s needs.

Having to say “no” to a customer is not something that most Product Managers enjoy doing or even want to do (if the idea of saying “no” to a customer makes your stomach churn, then maybe, a career as a Product Manager is not for you). If you focus on identifying your customers’ needs that align with that of your business, at the end of the rainbow, you will find happy customers and maybe a pot of gold!