The idea of a Need Narrative comes from Dave Bailey and you should start by spending 4 minutes to read this article about it.
The first software product I built was a failure. It was a B2B SaaS product, and while we did manage to land some initial customers and get to a few thousand dollars of MRR, we hit a wall. We just couldn’t figure out how to increase sales. Hitting that wall was very painful.
At the time, I thought we simply didn’t know how to sell. And maybe we didn’t…but, that wasn’t the problem.
Now, I know that our product failed because we didn’t understand our customer. More specifically, our product failed because we didn’t start by truly understanding the customer’s need.
And, though our product failed, we didn’t.
We found some investors who (still!) believe in us. We pivoted and built a new product. That time around, we did a bit better. We’d learned a few things about customer discovery, especially how to dig into customers’ problems and test varying solutions. As a result, we quickly got to around 3,000 weekly signups for early access to a B2C product we hadn’t even started building yet. I’ll save the story of that product for another time.
Fast forward to today, and we’re building GrowthMatch (here’s why). We’ve continued honing our skills around customer discovery, and it’s paying off.
Recently, we discovered one of the most amazing tools we’ve ever found for early stage customer discovery: it’s called the Need Narrative.
In this post, I’ll explain why you … need … a Need Narrative, and how you can create one. I usually don’t capitalize phrases like Need Narrative, but this thing is so amazing it deserves those caps.
WHAT’S A NEED NARRATIVE?
Think of your Need Narrative as the foundation of your entire company.
Without it, you’re building on sand. Or quicksand.
With it, everything is easier, including building your product, figuring out pricing, selling, recruiting, fundraising. Everything.
The primary purpose of a Need Narrative is to create a true, validated statement of your target customer’s key problems and desired outcomes; in short, their need.
It doesn’t include anything about potential solutions to these problems or ways you might deliver desired outcomes—that should come next, only after you’ve created, iterated on and validated your Need Narrative.
If you start testing solutions before you validate a Need Narrative, there’s a high likelihood that you’ll end up building a solution that doesn’t address an important need or isn’t the right solution to address the need. You’ll be in the same position I was in back in 2016, pulling your hair out because you can’t figure out why customers won’t bite.
And, even if you get lucky and do build the right solution that addresses an important need, without a Need Narrative it will take you much longer to figure out how to position your product in a way that’s compelling enough for your customers to sign up. The entire process of getting to an early version of product-market fit will take you way longer than it needs to take.
THE STRUCTURE OF A NEED NARRATIVE
Basically, a Need Narrative is the most helpful Mad Lib you can imagine for early stage founders. Here’s what it looks like:
For [target audience], it’s a constant challenge to [general problem]. Every [time period], these people [perform a key activity] in order to [achieve a primary goal]. This is especially true if you’re a [niche].
The main problem they face is [primary functional problem relating to activity] which leads to [bad/worst case outcomes]. Today, their best option is [substitutes], but of course, they [the most common complaints of each substitute]. With [key trend], the problem will only get worse over time.
If only there was an easier/better/cheaper way to [perform a key activity], then customers could [quantifiable impact on their primary goal] which would lead to [positive outcomes / emotions]. With [number of potential customers], there is a clear opportunity to meaningfully impact a huge number of people.
Pretty simple, right? This thing is deceptively valuable. Don’t be surprised if you start carrying around a printed version in your pocket.
IS CREATING AND VALIDATING A NEED NARRATIVE “WORTH IT?”
Will it take you time to work your way toward a validated Need Narrative? Yes, it will. But, it will save you 100x that amount of time down the road, as you’ll avoid all sorts of pitfalls that other startups fall into (like building the wrong product, failing to get traction, struggling to attract investors, etc.).
In fact, I believe that creating and validating your Need Narrative is one of the only two things you should focus on, during the early stages of your startup (the other being building an incredible core team).
And, if you’ve already jumped ahead, then coming back and nailing your Need Narrative is the most important thing you can possibly do to de-risk your startup and increase your likelihood of finding product-market fit.
Why? First of all, you’ll know you’re targeting a real problem, so you’ve de-risked a big part of the early stage roadmap.
You’ll have a rock-solid foundation upon which you can begin testing different solution ideas (so, don’t jump straight to building product, yet!).
You’ll pull pieces of the Need Narrative out to build your messaging later. Creating your website, sales pitch, demo presentation, etc. all become 100x easier because those exercises are simply moving pieces around into the right order. All the heavy lifting has already been done. And since the customer need is validated (and if you do your solution testing right, the solution will be validated too), your messaging will work better from the get-go. More signups, more sales, or whatever you’re trying to drive.
Beyond the value of eventually having a validated Need Narrative, the exercise will also help you understand where your team is misaligned and how you can get everyone to a shared understanding of who your customer is and what problem(s) you should focus on solving for them.
HOW DO I KNOW WHEN MY NEED NARRATIVE IS VALIDATED?
I suggest measuring validation based on the “Nod Rate” you get during customer interviews. As the guide below explains, first you’ll create your Need Narrative (with your team, if you have a team). Then, you’ll setup interviews with people who fit your target customer profile.
During those interviews, you’ll move through the Need Narrative in a systematic way, and you will watch your target customer to see if they are nodding affirmatively as you move through each section of the narrative.
Your Need Narrative is validated when, nearly 100% of the time, your target customer nods affirmatively through your entire narrative. That’s what we call a near-100% Nod Rate, and that’s what you’re working toward.
You can consistently increase your Nod Rate in two ways. First, by iterating on your Need Narrative as you conduct these interviews. And second, by iterating on your target customer definition as you learn what characteristics seem to make a customer more or less likely to nod. It’s a bit of a moving target, and certainly both an art and a science. But you’ll get the hang of it quickly as you do these interviews.
Also – a note about Marketplaces. If you’re thinking about building a marketplace where you have two customers (supply and demand), you need to create two separate Need Narratives, one for each customer type. Then, you’ll need to validate each one independently. Only after you’ve validated each Need Narrative should you begin testing solutions. Critically, you should test multiple solutions, some of which aren’t marketplaces at all. You need to prove to yourself that a marketplace is indeed the right solution to fulfill your customers’ needs. When you’re attempting to address the needs of two different customers simultaneously, you must validate a solution that’s desirable to and addresses the primary needs of both customers simultaneously. There are other dynamics that make marketplaces hard, but this is an often overlooked dynamic that creates a lot of downstream problems if you don’t get it right from the beginning.
Download the FREE Need Narrative Guide
HOW DO I CREATE A NEED NARRATIVE FOR MY STARTUP?
To create your Need Narrative, download the guide above. We put this PDF guide together to help guide you in developing a Need Narrative with your team (or on your own, if you’re a solo founder).
The entire exercise will take you about 60-90 minutes, or faster if you have a smaller team. It’ll leave you with a solid Need Narrative you can test with customers and iterate until it’s working well. And like I said in the title of this post, it’ll save you at least 90 days of wasted time, energy and money down the road.
If you want to prepare more thoroughly before you guide your team through this 90-minute exercise, consider booking this Working Session on GrowthMatch, where I’ll walk you through the process and get you prepared to host your team’s Need Narrative exercise.