The Physics of Startups
00:15:19 · S0
[00:15:19] S0: Yeah. Well, let's talk about uh finding it. Uh maybe there's two two sides of this that there's finding latent demand if what you're looking for is latent demand. Like, what do you do with that? Um, or if you suspect, maybe more properly, like if you suspect there is latent demand that will be unlocked or or released um with a new technology, with an AI application, whatever it might be, how do you what do you do with that? How do you validate it? Um and you also talk about um uh how frequently latent demand comes from people who have been in a job, they've been living that role, and they they you know, they feel it, they know the thing. It's like I was working in supply chain and I, you know, I could always feel like this was kind of wrong. And then I, you know, I went and watched XYZ startup that was targeted at that. Um Rob, what do you what do you say to founders who or how do you have you worked with founders who are looking for latent demand, who are trying to understand latent demand? Like how what do you advise them on versus um you know, a founder who's targeted a more classic, like, oh, you've got this project that you know you're working on and I can help you with that? Like how do how do how does the founder targeted at latent demand approach go to market and work, you know, and identifying it?
00:16:37 · Rob Snyder
[00:16:37] S1: Yeah, so so um what I've found is that um the the hard the the hardest part of all of this is finding actual demand, whether it's latent or not. The hardest part of everything is because once you find demand, everything downstream of that is is basically a math equation uh or or a fill-in-the-blank thing. And it's uh everything from how you describe your product to right, like there's some creativity there, but there's a lot less creativity than you'd think. And so um the the real thing is just finding demand generally. And so the way that people tend to try to find demand is um is like a bunch of discovery interviews to find pain points problems. We talked about why all that kind of like doesn't seem to work. Uh, then founders who are looking for active projects will often just throw the Hail Mary question out there. And you might you often will find things there, which is like, is there anything you'd pay someone to solve right now for you? Um, and and that that also like if there is active pull, right, classic active pull, you will find something by doing that, but you probably won't surface a latent project by doing that. And so the other example on my mind is um HBS student who uh who he like went and shadowed independent physical therapists and he he basically just tried everything, he shadowed them, he you know, just like followed them around, just tried to get a feel for it, even tried to buy an independent physical therapy practice, and in that in doing that, he saw the PL of the practice and realized that there was a huge line item there that oh maybe people are leaning against that, and or or maybe it's like a thing that they would, and so it's it's a question of where do you get the insight that forms your kind of anecdote about what poll is, your hypothesis about what poll is. And it's right, like you're probably not gonna get something from a Hail Mary that is latent. Because if you ask me, like you you couldn't, if you ask me the Hail Mary question right now, I would never say, Oh, I'd like to be in Mexico City right now. Like I just would never, that wouldn't even come to mind. But if it were possible, I would be there right now.
00:19:10 · Rob Snyder
Yeah, and so there's an element of this of right, like of um of getting out of the second person or like the independent observer mode and getting into the first person mode of like feeling exactly and knowing and and and of like knowing in your own experience and and being able to like experience what your customers are experiencing and have that conversation with them to figure out to just generate where you think the the poll actually is.
00:19:41 · S0
[00:19:41] S0: Yeah. You know, there's um one one of the active, the like super active founders in our community um has talked about actually that you know, two of them come to mind that have brought this up specifically. Um, and one of them, the way that I feel like we've talked about it is that putting supply, like in general, we've talked about like understanding demand, like that, you know, you uh you start basically with demand and you kind of like go from there to supply that matches that demand, et cetera. It feels linear. We've moved away from that a little bit with the pool anecdote, but um, but in general, it's it's been demand first and supply matches demand. Um, and what this founder has um, I don't know if you've worked with him on on this specifically or how this has come up, but it's like, can putting your supply in front of someone reveal demand or create demand? Like, what's the right word for that? If it because it feels like that is the latent demand that's like, oh, like I didn't, I I they wouldn't have volunteered that demand, but when they see that you can solve something, it reveals the demand that, or the you know, the leaning against whatever the right way of talking about it is. But what do you, you know, uh thinking about either that founder, that startups situation, or just like how do you think about like what the relationship between supply? Because supply feels more important for latent demand than you know a more classic or traditional approach.
00:20:59 · Rob Snyder
[00:20:59] S1: Yeah. I I don't think it is. Um, and and so I I understand that like if uh um you can only prove if latent demand is real by getting somebody to act. That is a hundred percent true. And to get somebody to act, you have to put a plausible supply in front of them. But but like a lot of people will interpret that to say, okay, cool, I should just pitch my idea and see how people react. And if you think about all of the infinite possible permutations of an idea that could exist in your mind, they'd base there's almost no chance that unless you get randomly lucky, that the idea that you pitch will fit a latent. Project on someone's to-do list. And so what you're gonna find by just pitching supply is you're going to find that you get pleasant nods and wow, that seems awesome, but you don't actually find demand. And so you still have to develop a hypothesis or an anecdote or whatever it is, some sense of what Paul is, whether you think it's a doing right now but blocked, or would do right now if only there is a way, and then and and and take that, then develop supply based on it, like a just a slide, right? Just say, you know, okay, you're you would be in Mexico City right now if only there was a way. And I'd say, yeah, of course I would, right? Or or and then you say, okay, now this is possible with XYZ technology on the supply side. And and and and it's still the same exact method for like a classic active pull. Same exact method. Um, and you just in both cases they communicate that their pull is real, that the pull is real by acting.
00:23:20 · S0
[00:23:20] S0: Is one of the things you write about latent demand is that it is frequently the force that is behind the fastest growing startups. Like they have they have tapped into a late in demand um that the market wasn't solving, um, that wasn't maybe a traditionally like people probably couldn't have articulated that they needed it, but then um, you know, the the right startup shows up with the right technology, somehow they're in front of the right people and they go, you know, they hit hypergrowth really, really fast. Is that is the playbook well, I mean, when why does that happen? Like, why is it that latent demand is potentially differentially like more powerful or faster, whatever it is? Or is it, do you agree with that? Um, and then is the playbook different for if you've tapped into latent demand versus the project or yeah, would love to do that.