What Kind of Need Does Your Business Satisfy?

Recently a business acquaintance told me about a website he’d invested in. In many ways, it sounded like a good opportunity. It addressed the needs of a large segment of the population, there was no clear leader among the incumbents, there were obvious revenue streams. I wondered if my lack of enthusiasm was just my habitual skepticism about most web startups. (A skepticism I’ve grown to mistrust because I haven’t seen the value in some great companies or sites until it slapped me in the face.)

But after some more thought I discovered what was behind my doubts. It was based on what I’ll call the duration of the need the site is addressing. No doubt this concept has been discussed ad nauseum by Harvard Business School professors but it was the first time I’d thought about business this way. Every business leader should ask him or herself the question: what is the duration of the need I’m trying to fulfill?

I believe the most successful companies address needs that are long in duration, not short. Let me give some examples.

Facebook addresses a need that never ends: our desire to communicate with friends and family. It’s infinitely renewable. So until someone else comes along and addresses that need in a more compelling way, Facebook will be an awesome company. (I’ve been a sceptic about their stock but I think I’ve changed my mind. :-/ )

On the other end of the spectrum are companies that address a single need: retirement homes, funeral parlors, trips to outer space…you get the idea.

In between are probably the majority of companies: they address a short time need that recurs. The more frequent the recurrence the better the business. (Selling TVs vs. selling food.)

If I had the time I’d do a scattergram showing where various companies sit on a chart with two axes: Duration of Need and Frequency of Need. The companies at the top right would be the winners.

I’ve thought about this problem with my website, Gigmor, a musician matching site. What is our value proposition to musicians once they’ve formed their band? That’s definitely part of our challenge. But our mission is also to connect musicians with paying gigs. Now we’re talking!