PM Skills: Needfinding

Today we’re diving into needfinding, where it comes from? and how to do it right?

Hey, Carlos here!

Here’s yet another issue of my biweekly newsletter! Today we’re diving into needfinding, where it comes from? and how to do it right? Ultimately, what is the purpose of a product? Maybe that sounds a little philosophical but take a second to answer it.

Keep reading to get the full breakdown

A product’s purpose is to fill a need. Whether that means solving a problem, improving an existing service, or providing a better alternative.

Finding that need is a task to be overlooked at your own risk! Instead of giving users what they’re asking for, product managers need to be able to fully idealize a need before they can build the right product in the right way at the right time.

What Is Needfinding?

Needfinding is a branch of need-based design thinking, which was developed by Robert McKim in the 1970s. McKim, then head of Stanford University’s product design program, explored the idea of designing to fill a missing need rather than trying to give customers what they want.

Need-based design thinking ensures that everyone on the development team understands the motivations behind the product they’re working on. When teams build products that are sharply focused on filling a specific need, and everyone fully understands what that need is, that’s when world-changing products get launched!

Taking the time to execute proper needfinding goes a long way in defining the product vision, attaining product-market fit, and forms the basis for the whole development process. You might think you know what people need, but you might only know what they want.

Want vs Need

Giving customers what they want and giving them what they need may seem like the same thing…at first. But they’re actually very different things and it could mean the difference between success and failure.

Gibson Biddle, former VP of Product at Netflix, has an excellent example of what happens when you give customers what they’re asking for, instead of finding out what they actually need:

Essentially (if you didn’t catch the whole video), users in the early DVD-based days of Netflix, customers were asking for better access to new releases. The hottest movies were often unavailable because Netflix could only stock so many copies. So they ran a test to see if customer retention would be improved if more new releases were available.

The test made new releases available to a test group of 10,000 customers. After the test was over, they found that the number of users who canceled their subscription at the end of the month dropped from 4.5% to 4.45%. To roll this out to every customer it would cost Netflix $5 million, and save them $500,000.

So giving customers exactly what they were asking for turned out not to be the answer to improving retention, despite that seeming like a no-brainer. Gibson’s story is as much a testament to the power of A/B testing as it is needfinding!

For the full story check out: Delight Customers in Margin-Enhancing Ways by Netflix VP of Product

The Risk of Finding No Need

So why is needfinding so important? If you’ve had a great idea, and the product you’re building is something you and all of your friends would buy…surely there are other people who’ll love it too!

But that’s not always the case. Just because you, and those with you in your echo chamber, think that something is a great idea doesn’t mean the rest of the world will buy it. And as we’ve seen from Netflix, it’s not just necessary for building brand new products, but for choosing new features and deciding how to refine your existing product.

When you build a product that fills no need, don’t be surprised when you find that no one needs it! That should be a given, but it’s pretty amazing how many products make it to marketing despite not being asked for or needed by anyone.

Think about the Amazon Fire phone. People like phones, and people like Amazon. So surely a phone by Amazon would be a smash hit! Unfortunately, in an already saturated market, the fire phone didn’t fill any specific needs. Even Bezos himself doesn’t use a Fire phone anymore.

Find out what happens needfinding goes wrong in this guide: Understanding Product-Market Fit – A Product Manager’s Guide

The Needfinding Process

  1. Frame and Prepare

All good research begins with a hypothesis. What do you think your customers need vs what they claim to want. So here you need to set the scope of your study, and set the parameters for who should be studied.

  1. Watch and Record

  2. Ask and Record

These stages go hand in hand because just observing people often isn’t enough and asking them is also not reliable. You need both.

  1. Interpret and Reframe

With your findings, frame them in terms of what problems exist and what solutions need to be built. This stage needs to be repeated again and again until you have a fleshed-out need.

That’s the bare bones of the needfinding process, but there are some principles and best practices that’ll make it all come together…

Needfinding Principles and Best Practices

Needs are Forever, Solutions are Temporary

Needfinding is not about trying to figure out what to design next because in technology nothing is permanent. Need-driven design involves finding needs that are fully fleshed out and understood because needs are forever and solutions are ever-changing.

For example, people are always going to need entertainment. They want access to their favorite movies, and they want them as quickly as possible and for a reasonable price. First, Blockbuster filled that need, which then evolved into digital downloads, and then into streaming services. The need for entertainment has not changed, and for now, we think we’ve found the solution to fill it.

What comes next, no one knows. But we do know what the need is.

Visit Your Customers In Their Environment

User interviews and focus groups are incredibly important, but when you’re needfinding it’s always useful to see your customers in their natural environment. This is because users don’t often know what their needs or pain points are because they’re so embedded in their day-to-day.

Have you ever gotten halfway to work and found yourself thinking ‘did I lock my front door?’ When you locked your front door, you were doing it from muscle memory. It was early in the morning and you were on autopilot. This is how many of your users will interact with your product, especially if they use it often. So asking them what they think of it will always be skewed.

You might also be interested in Product Management Skills: User Research

Even for new products, needs seem obvious after they’ve been discovered, but they’re so often hidden from sight. Often, we don’t know what our pain points are because we’re so used to them.

One of the main principles of need-driven design is understanding how customers think and operate in their own environment. You need to really put yourself in your user’s shoes, with the goal of specifically identifying needs that they may not have noticed. As well as inviting them to you for interviews, be sure to go to where they are as well.


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Check out some of the previous issues on different vital PM skills!

PM Skills: User Research

PM Skills: A/B Testing

Product Management Skills: User Journey Mapping