Every Company Needs a Good Map

In the post about the pitching event on September 28, 2007, I suggested that those starting a business ask whether people would really want what you want to do. I remember reading that one investment firm uses the Maslow Hierarchy of needs to help predict or determine the potential viability of a business. I have been mulling this over for several weeks now, trying to find an appropriate way to present this subject.

The idea of starting a company based on the level of need is interesting but a bit different than most people consider. Most inventors have a product or service idea, not a need to be filled (the post by Devin is a very good review of 4 pitfalls of starting a business). The first step is usually to figure out a way to make the product or provide the service in some way that they feel will be profitable, even if the way is lacking in proof or prior example. The next step is to imagine how large the market is, not will be, but is in their estimation. So far, very little real market research has been done but that is no obstacle to the excited inventor. It is only after money and time have been invested that reality is checked and at that point, it is too late.

Here is the version of Maslow's Hierarchy that I used in Maps for Modern Magellans: Charts for Captains of Commerce (Chapter 8). You can click on it to see a larger version. There are many online versions and opinions about this hierarchy. It is less important which you use that it is that you use one. Some have 5 and some have as many as 8. The 5 is often the result of putting all the "growth Needs" in to one need grouping. (Another variation is the spelling - Maslow or Mazlow) For a quick and apparently accurate, as of this writing, review you can also do a Google search or visit the Wikipedia entry for this topic: http://en.wikipedia.org/wiki/Maslow's_hierarchy_of_needs

Over the next few days, I will post entries that deal with each of the levels and how they apply to business operations or introductions. The intent is to help you see how you can adjust or plan your business objectives.

Let's start with the bottom and work our way up: Physiological needs... 

This is level is usually quite easy to understand: basic survival. Hunger, thirst, warmth, and sleep are our major physiological needs. Very few products, aside from basic food, water, clothing, shelters, and blankets apply here alone. Most products are one or more steps higher eventhough the seller or inventor would like to think otherwise. In fact, a large part of marketing is getting people to feel that the product being sold meets basic needs.

When we say need, we often confuse that with a high level of want. Consider children in a toy store. They often say they need to have something but in reality, they just want it. Adults often do the same thing internally but they have the money to satisfy the desire. A large aspect of self-control is discerning between needs and wants.

Now consider what you sell or supply; is it needed or just desired? Most likely, comfort or convenience is in question but not survival. Just the same; can you demonstrate an improved level of survival? As you consider your business plan, marketing plan, and customer group; give time to figure out what level on the scale you can reach. How far down can you realistically say your product reaches? Is there a less sophisticated item that can satisfy the need you are attempting to address? Is survival in question without your product?

Personally, it often bothers me to see or read advertising that is a blatant attempt to manipulate my sense of need. Maybe it's just that I see through it or it is my revulsion at the thought of others being manipulated for the marketer's personal gain and not for the consumers actual benefit. This also hits at the trust issue, which is becoming almost non-existent in today's marketplace.

Another area to apply this hierarchy is in your management technique. Do you consider the needs of your staff? While evaluating behavior, can you see how people are attempting to meet one of these needs by their actions? Often we do not understand why a person would do what they do because we do not consider their motivation. One of the key aspects of a workplace is the manner and extent to which it meets the basic needs of the people wo work there.

Why does someone work for pay? For different people the need that is met is different. Given that knowledge their motivations and requirements will be different. At certain pay levels, most people are able to meet more than the basic needs. At hose levels, motivations are different, and at times less clear. A person who is struggling to meet the most basic needs will often feel that their pay is a requirement for survival. This can create a tremendous strain and also lead to actions that are anti-social, if the person feels their life, or the lives of those who depend on them are in danger. 

What can you do to reduce the sense of danger for employees or staff who need their pay to provide their basic needs?