So I’ve been reading @cedric series on demand with great interest since I’ve been interested in persuasion (marketing, sales, etc) for a very long time.
I’m familiar with JTBD framework and skimmed HOI which is why the latest article on Vanguard was quite interesting to me. I’m a big believer in index funds and will recommend Vanguard to anyone who listens which is why I was very surprised to learn that the company was in doldrums for 15 years!
I learned about passive investing from Ramit Sethi’s book I will teach you to be rich.
Once I bought the following arguments:
active investing never outperformed passive investing
buying individual stocks is more risky than buying the index
you want the lowest possible fee index you can get
I was sold on Vanguard and have only put my money there (unless the company I worked for offered a 401k outside of Vanguard and I had no choice). I can’t imagine not buying an index fund (until recently when I bought some stocks)
So I was trying to make sense of the idea of authentic demand for Vanguard which didn’t exist for 15 years until people were persuaded that low cost passive investing was superior to expensive active investing.
Hence my question:
Does demand exist “a priori” and thus you need to find the right configuration of your offering to align with it or is demand created when you take an existing want, need, desire, fear, concern, etc. and redirect it towards your offering?
“Create a new category” has always been an option, and many startups do it, but it is much harder than building a product for an existing category. You have to create the understanding of the idea. As the Vanguard article says, the idea was not totally new there was academic research, and “A Random Walk Down Wall Street” (1973) was pretty influential, it was my intro to this. Arguably index funds are a cobination of existing things (funds, but cheap, and outperforming!) so not a totally new category, but they come with a set of ideas you have to explain. It really helps if other people are explaining this too not just you.
Lots of other examples, eg Amazon created cloud services, which were a new way of consuming hosted servers via APIs, that allowed for automation, which was aligned with other trends of the time, but also accelerated those trends.
I’m thinking more about the art of copywriting and how it can be used to create markets vs category creation. The latter is a game best suited for companies that the deep pockets.
I don’t think the not not, plus the other ideas of HOI can be easily grafted onto many (any?) of the prior demand side frameworks.
Notice how everything you say is built, subtly, around an assumption that demand = pain, and that demographics and worldviews are real. Whereas HOI argues that demand != pain, and behavioural responses to specific situations override demographic or even worldview traits.
This seems a bit theoretical, so, to make this more concrete:
You want to find a framing that is a not not
You want to find a situation where the not not is most effective, and then sell into that.
Whereas prior demand frameworks think:
You want to find customer pain that you can solve
You want to find demographics (specifically, a worldview) that increase the likelihood that a customer makes the specific tradeoffs necessary to buy your specific solution.
…but there’s this feeling I get every so often that I’m seeing something profound and then it floats away. Eric reached out and it turns out we live in the same city. I’ll report back what I learn!
Having read HOI myself, I found the cases more illuminating than their explanations. Maybe some of the confusion is necessary, but choices such as using double negatives all over the place felt unnecessary. For example, is the following really the best description of the claim that “people will do a lot to avoid going to bed without eating?” I highly doubt it since if we read it logically, it is the same as, “people will go to bed without having eaten.” Some of my frustration may be coming through here because I spent a lot of time agonizing over whether I was misunderstanding until I eventually gave up because I felt like I got the other examples and the intuitive interpretation is what I wrote above.
People will not not pinch their fingers in closing doors. Certainly fingers end up getting pinched, but you can rely on people to move their hands to avoid it happening. People will not not go to bed without having eaten. They will not not greet a friend they pass on the street. Parents will not not see that their children get home after school. Not nots are not musts.
I still liked the book and gained something from it, but I came away feeling like the authors have genuine insight but would have benefited from more effort to distill it clearly. Because of that, taking notes on the cases and then being aware that I could test the framework in my own context seemed most valuable. Unfortunately, I haven’t had the chance to do the latter (test it in my own context), so it’s mainly something I’ve got in the back of my head as worth testing if I’m in this situation.