Need vs Want in Entrepreneurship

Summary

This transcript discusses the distinction between needs and wants in entrepreneurship. It emphasizes that while fulfilling needs is challenging due to market saturation, addressing wants can offer a competitive edge. Entrepreneurs should focus on creating value propositions that alleviate customer pain points or desires, which can then be monetized. Market research is key to identifying these opportunities. The script also highlights the importance of differentiating products or services and the challenges of creating awareness for wants through marketing.

Takeaways

• 🚀 Entrepreneurs seek to address customer needs or wants, which can be framed as solving a problem or alleviating pain.
• 💡 Identifying and fulfilling a customer's need or want creates a value proposition, which is crucial for entrepreneurship.
• 💼 The essence of entrepreneurship is building a business around a strong value proposition that customers prioritize.
• 🔍 Market research is key to understanding whether a product or service fulfills a need or a want.
• 📈 Needs are often already met, whereas wants can be transformative and lead to new market opportunities.
• 🌐 Higher-level needs, like self-actualization, often manifest as wants rather than basic needs.
• 📱 Wants can be created and shaped by innovative products, such as the iPhone, which introduced new functionalities and desires.
• 📉 Fulfilling a basic need is often more competitive due to established markets and lower profit margins.
• 📈 Wants can be more lucrative as they may be less saturated and offer higher profit potential.
• 🎯 Awareness and marketing are critical for fulfilling wants, as customers may not be aware of the desire until it's presented to them.
• 🤔 Entrepreneurs should ask themselves if their product or service is a need or a want and strategize accordingly to create a differentiated value proposition.

Q & A

What is the primary focus of an entrepreneur when identifying opportunities?

The primary focus of an entrepreneur is to identify a need, want, or desire of the customer, which can also be framed as solving a pain point or alleviating a burden for the customer, client, or end user.

What is a value proposition in entrepreneurship?

A value proposition in entrepreneurship is a promise of value to be delivered to the customer, client, or end user, which is created by identifying and fulfilling their needs, wants, or desires.

How does creating a business around a value proposition relate to entrepreneurship?

Creating a business to deliver a value proposition is the essence of entrepreneurship, as it involves identifying a need or want and providing a solution that customers are willing to pay for.

What is the difference between a need and a want in the context of market research?

In market research, a need is a basic requirement that has likely already been met, while a want is a desire that may not be recognized until a product or service makes it apparent.

Why are wants often more challenging to fulfill in entrepreneurship compared to needs?

Wants are often more challenging to fulfill because they require creating awareness through marketing, which can be time-consuming and costly, whereas needs are more straightforward as they are already recognized by the customer.

What is an example of a basic need that has been largely fulfilled in society?

An example of a basic need that has been largely fulfilled is nourishment, as evidenced by the availability of products like milk, which has been a staple for a long time.

How did the iPhone exemplify the concept of fulfilling a want that people didn't realize they had?

The iPhone exemplified the concept of fulfilling a want by introducing a device with functionalities that people did not know they desired until it was available, showcasing the value of a smart device in the palm of one's hand.

What is the significance of the Maslow's hierarchy of needs in understanding customer needs and wants?

Maslow's hierarchy of needs helps in understanding that basic needs like food, shelter, and water are at the bottom and are more likely to be fulfilled, while higher-level needs like self-actualization often convert to wants, which are less about necessity and more about personal fulfillment.

What is the competitive landscape like for products that fulfill basic needs versus wants?

Products that fulfill basic needs typically face more competition and have lower margins due to the abundance of suppliers, whereas products that fulfill wants may have less competition but require more effort in marketing to create awareness.

Why is it important for an entrepreneur to differentiate their product or service when fulfilling a need or want?

Differentiating a product or service is important because it helps to stand out in a competitive market and provides a unique value proposition that can attract customers and justify a premium price.

What questions should an entrepreneur ask themselves when evaluating a product idea based on the script?

An entrepreneur should ask if their product or service is a need or a want, the level of priority for that need or want, why people want it, the hurdles to make people aware of it, how it is differentiated from existing products or services, and what makes it unique.

Outlines

00:00

🚀 Entrepreneurship: Identifying Needs and Wants

The paragraph discusses the fundamental concept of identifying needs and wants in entrepreneurship. It emphasizes that entrepreneurs should focus on solving customer pain points or fulfilling their desires to create a value proposition. The script explains that while needs are essential for survival, they are often already met by established markets, making it hard for new entrants to compete. Wants, on the other hand, can be more lucrative as they represent desires for self-expression and connection, like social media platforms. However, creating awareness for new wants requires significant marketing efforts. The paragraph concludes by advising students to consider whether an idea fulfills a need or a want, as this affects market competition and the potential for success.

05:05

🤔 Questions to Ask When Developing a Product or Service

This paragraph provides a list of critical questions entrepreneurs should ask themselves when developing a product or service. It encourages them to determine whether their offering is a need or a want and to assess the level of priority customers place on it. The script prompts them to consider why people would want their product or service, the hurdles in making customers aware of it, and how it differs from existing offerings. The paragraph concludes by stating that answering these questions effectively can lead to building a successful business venture.

Keywords

💡Entrepreneurship

Entrepreneurship refers to the process of designing, launching, and running a new business which starts as a startup and can grow to be a large company. In the context of the video, entrepreneurship is about identifying a customer's need or want and creating a value proposition to fulfill it, which is central to establishing a successful business venture.

💡Need

A 'need' is a basic requirement or necessity that must be fulfilled to maintain a certain standard of living or to avoid a negative outcome. In the video, it is discussed that while needs are important, they are often already met by existing solutions, making it harder for new entrepreneurs to enter the market with a product or service that fulfills a basic need.

💡Want

A 'want' is a desire for something that is not essential but would provide pleasure or improve one's life. The video script explains that wants can often be more lucrative for entrepreneurs because they can create new markets and are not as saturated as markets for basic needs.

💡Value Proposition

A value proposition is a promise of value to be delivered through a product or service. It defines why a customer should buy a product or use a service. In the video, creating a value proposition is identified as the essence of entrepreneurship, where the entrepreneur must figure out how to alleviate a customer's pain or fulfill their desires.

💡Market Research

Market research is the process of gathering, analyzing, and interpreting information about a market. It is crucial for identifying customer needs and wants. The video emphasizes market research as a tool for entrepreneurs to determine what customers desire or what problems they face.

💡Pain Point

A pain point refers to a problem or issue that a customer experiences that an entrepreneur can solve. The video script mentions that identifying and solving pain points is a way to create value for customers and establish a successful business.

💡Mass Market Hierarchy

The mass market hierarchy, as mentioned in the video, refers to the different levels of needs that people have, from basic physiological needs like food and water to higher-level needs like self-actualization. It is used to illustrate how needs are often already met, leaving more room for innovation in fulfilling wants.

💡Competition

Competition in this context refers to the rivalry among different companies trying to meet the same customer needs or wants. The video script explains that the level of competition is affected by whether an entrepreneur is trying to fulfill a need or a want, with needs often being more competitive due to their essential nature.

💡Awareness

Awareness in a business context refers to the knowledge that potential customers have about a product or service. The video discusses that for wants, entrepreneurs often need to create awareness through marketing, as customers may not realize they have a want until they are made aware of a product that fulfills it.

💡Differentiation

Differentiation is the process of distinguishing a product or service from competitors. In the video, it is highlighted as a strategy for entrepreneurs to stand out in the market, either by differentiating their product or by competing effectively among other products that fulfill similar needs or wants.

💡Innovation

Innovation is the process of translating an idea or invention into a good or service that creates value or for which customers will pay. The video uses examples like the iPhone to illustrate how innovation can create new wants and markets by offering products with unprecedented functionality.

Highlights

Entrepreneurs seek to identify customer needs, wants, or desires.

Solving customer pain points creates a value proposition.

A strong value proposition is essential for entrepreneurship.

Market research is crucial to determine new wants or pain points.

Needs are often already fulfilled, whereas wants can be new opportunities.

Higher-level needs often convert to wants, like social media platforms.

Basic needs like nourishment are typically well-served markets.

Wants can emerge unexpectedly and create new market opportunities.

The iPhone exemplifies how a product can fulfill an unrecognized want.

Apps on smartphones represent evolving wants for immediate access to content.

Determining if an idea is a need or a want affects competition and market priority.

Wants often require marketing to create awareness, unlike needs.

Creating awareness for a new want can be time-consuming and costly.

Exceptions exist where products like Spanx spread without significant marketing.

Both needs and wants have qualities that entrepreneurs should consider.

A strategy that creates a value proposition is key to success.

Ask if your product or service is a need or a want and why people want it.

Consider the hurdles to market entry and how your offering is differentiated.

Effectively addressing a need or want can build a successful business venture.

Transcripts

Okay, let’s talk a little about the concept of a need or a want in entrepreneurship.

We’ll in general the entrepreneur is looking for a need, a want, a desire of the customer.

Sometimes it's framed in terms of the hurt or pain that you’re trying to solve for

the customers client or end user.

In that way if you can identify that hurt pain want whatever if you can alleviate that

fulfills it or figure out a way to make it less burden some to the customers client or

end user.

Then you have created a value proposition.

Creating a business to deliver that value proposition is the essence of entrepreneurship.

An idea or concept with a strong enough value proposition towards the customer or client

is going to have a high level of priority.

It's going to be want it or need it by that end user and therefore you will be able to

charge money or transmit the desired amount of value that you’re pursuing in the entrepreneur

or venture.

So, with that being said and determining whether our hurt, need or want exist.

Generally that is the focus of market research to determine either what is the new want of

the individual or what is the hurt or pain?

I often ask my entrepreneurship students.

Is it better to fulfill a want of a potential end user or customer?

Or is it better to fulfill a need?

We’ll here’s the issue generally needs have already been fulfilled.

Were here, were all living, sustained and relatively happy.

Our needs have been meet to a certain extent.

Now if you think back on the academic literature of individuals needs.

And you think of mass loads hierarchy that at the bottom we all need food, shelter, water,

etcetera.

And at the very top we want self actualization.

We want to either some sense of fulfillment that we’re -- that we've done something

good for the world that we’re respected by others etcetera.

This higher level needs this are the things that generally convert to wants rather than

needs, the idea that we want to express our self more fully, that we want to stay in contact

with others.

This was bad news behind social media platforms like Twitter and Facebook.

This are wants of individuals to more fully express themselves or just stay in contact

with others versus needs you can think of milk.

We all need something to drink.

Milk is one of these products that nourishes us.

So, nourishment has been meet for a long time.

There are lots of suppliers in that game in the market and that pushes prices down and

it makes the market more competitive when a have load of margin, more competitors.

It's very difficult to break in to that market and be successful.

Well in the other end wants generally come about everyday sometimes we don’t even realize

we have the want until we see something that fulfills it or gives rise to that want within

us.

Think about the iPhone did we know we wanted something that has all of that functionality

in the palm of our hands.

Think about the evolution of apps for the iPhone.

If we realize that it was such a value proposition to us to be up to just with the push of a

button on our smart screen to be able to access whatever content is behind the app.

So, when you are looking at an idea, a concept to determine if it's an opportunity you’re

going to examine whether it is a need or it is a want because that affects the level of

competition and priority of the individuals in needing or wanting that.

Well here’s the downside to a want above the need.

A want you generally have to create awareness through marketing.

Now that generally takes a lot of time effort in work.

There are exceptions give you an example.

The company spanks was able to spread without a great deal of marketing effort where other

companies have to spend massive amounts of time energy and money on marketing to make

the end user aware of there products.

So, it will continue sales or sales growth.

So, in that way generally wants you have to introduce to the public you have to make them

aware of it.

You have to demonstrate the value proposition were needs far less so.

So, while it's not always more than official to sounds for our fulfill a need versus a

want or vice versa.

Both have resounding qualities that you’re trying to look forward.

And in any situation you’re trying employ a strategy that creates a value proposition

for the end user that in some way either differentiate its self or competes in each market among

the other needs and wants.

So, start with asking yourself these questions.

Is my product idea or service is it a need or is it a want?

What is the level of priority for that need or want?

Why do people want it?

What would be the hurdles that I have to ever come to make people aware of it or what will

be the hurdles that I have to overcome to enter in to this market?

Why is it different from the goods product, services, etcetera that already somehow satisfy

this need or want?

How is it differentiated?

These are the questions that you’re going to explore about the need or want that you’re

resolving or fulfilling for the customer.

And if you can effectively do that in light of all the circumstances that surround that

need or want.

Then you can build an effective business venture.

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