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3.2 Understanding User Needs
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Entrepreneurship 1: Developing the Opportunity
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Module 3: Markets, Need-Finding and Planning
This module will help you define your market, identify your user, harness the wisdom of the crowd, and come up with an informed plan for your venture. You'll learn market segmentation, how to determine user needs, how to use the competitive landscape as well as potential users to refine your idea, and how to create a simple but powerful plan for your start-up that will allow you to avoid common mistakes and pitfalls. By the end of this module, you'll be able to refine your own pitch, develop a clearer picture of your user, and develop a useful model for your own enterprise.
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Lori RosenkopfVice Dean and Director, Wharton Undergraduate Division
Simon and Midge Palley Professor of Management
Laura HuangAssistant Professor
Management
Karl T. UlrichVice Dean of Entrepreneurship and Innovation
The Wharton School
Ethan MollickAssociate Professor
Associate Professor of Management- Wharton School
David BellXinmei Zhang and Yongge Dai Professor, Professor of Marketing
Marketing
Kartik HosanagarProfessor
Wharton School
David HsuRichard A. Sapp Professor of Management
The Wharton School
Hi, I'm Kartik and we're going to talk about understanding user needs.
Now before we dive into concept development or
product development, user research is an excellent way to understand user needs.
It is critical in order to ensure that product development is directed and
it is effective.
And it is in fact a very fundamental part of product management, as well as user
experience design, but before we dive into user research, a caveat.
Companies like Facebook and Google probably never did any formal user
research before building their products and yet have been immensely successful.
So it is important to acknowledge that.
But having said that, at the same time, we know that for
every Google and Facebook, there are thousands,
in fact probably tens of thousands of entrepreneurs who built products without
necessary user research, only to see the products fall flat on its face.
And in fact, it is almost natural for an entrepreneur or
an engineer to go build a product based on a hypothesis that you have.
It all makes sense in our head.
But the question is whether the user actually
values the product that you have in mind.
Without user research, the chances of failure can be high simply because you
might build something that isn't a real important pain point for the user.
Or maybe it's the right pain point but you build it the wrong way, or
perhaps you end up with two many iterations before you arrive at
product market fit and therefore you end up losing time.
User research can help avoid all that.
If you think about user research, there's really four simple steps involved in it.
The first step is to gather raw data from customers about their needs,
the second is to interpret that data,
next we organize the needs based on different types that we observe.
So we might observe multiple people repeat the same need in different ways and
we might organize them into different buckets.
And finally, we establish the relative importance of these needs and
identify which ones are the most pressing for the user.
Now let's start with the first step which is gathering raw data on customer needs.
There are many ways to do this.
One popular way is to use surveys.
Now, surveys are good when you have specific questions in mind, for
example, how should I price this product?
What's the change in demand if I reduce the price by, say, $2?
Or in order to prioritize product features, you know,
feature A versus feature B, which one would the user value?
And it's useful for these kinds of very directed questions, but
surveys are less useful in this early phase of opportunity identification and
in fact, we'll later talk about surveys and interviews for
testing concepts once those concepts have developed.
But in this early phase when we're trying to understand user needs,
surveys are less useful.
Now another tool that's available to us is to
have a focus group with say eight to ten customers.
Now focus groups are highly productive.
You can get a great discussion going among your participants,
but it's also a very expensive data collection method.
And finally, you have interviews where you have a one-to-one format, and
this format tends to be somewhat cheap relative to focus groups, and
tends to be almost as effective as focus groups and much faster.
And therefore, that's my personally preferred method of gathering user needs,
and so we'll focus a little bit on interviews and how to conduct them.
Now, the first question that comes up when we're
trying to conduct an interview is who do we interview and how many do we interview?
In terms of who to interview,
it's important to interview all the relevant stakeholders.
That includes the eventual user, but it also includes the buyer of the product
to the extent that the buyer is not the eventual user.
It includes, perhaps, the IT staff that does the installation of the product,
in the case of an enterprise software product.
It also includes advisors who advise either the buyer or
the user in their choices.
What is really important to keep in mind as you determine who to interview
is that one should not assume the customer segment of interest.
You might have decided that the right user of your product is somebody
aged between 20 and 35 who's from an, I don't know,
Ivy League university working in consulting or in software.
But that's making too big an assumption too early and so
it's important that your sample be sufficiently varied.
Now the question is what's the right number?
There's no good answer to this question but it's important to, again, acknowledge
that we're trying to get a bird's eye view of user needs at this stage.
And so we're looking for qualitative information and
not necessarily statistical inference based on the interviews we conduct.
So we're not looking for large samples sizes of 100, 200 users to interview.
Instead, probably an interview sample size of anywhere from 5 to 20
subjects is probably right during this early phase of user needs identification.
Now, if you have maybe only one important class of stakeholder,
perhaps it's enough to interview five subjects.
But if you have lots of different stakeholders, for example,
the user is different from the buyer, there are advisors worth interviewing,
in which case you might end up closer to 20.
Now, I should also point out that a lot of research shows that once you've
interviewed about nine or ten people, you've easily got over 80% of user needs.
And further,
the performance of interviews is almost comparable to that of focus groups.
So probably a sweet spot is somewhere around ten.
Now, once we know who to interview and how many to interview,
the question is how should the interview proceed?
There are a few best practices that are worth keeping in mind.
First, it's really important to forget the product concept you have in mind to
the extent that you have fleshed it out in your mind, and
instead to focus more on the user needs.
And this is important because it's only natural and
tempting to ask the user about a certain product you have in mind.
You might ask the user, would you like this particular product or this feature?
And of course, subjects might be tempted to say yes just to please you, so
do not ask questions like, do you value this feature?
Or, will you use this feature?
Instead, ask them questions that are more open-ended and it's really again important
to remember that it's about the user and not about the product at this stage.
Also, don't ask leading questions at this early stage of idea development,
ask more open-ended questions.
For example, don't ask do you do this?
And instead ask how do you do something that's of interest to you as
the interviewer.
Also ask about the user's current behavior,
rather than speculating about their likely behavior in the future.
So don't ask users questions like will you use this product?
Or don't ask them questions about how much you do this in the future,
instead ask them how do you currently do something.
Because people don't really know how they'll behave in the future, and
they will speculate, and that's not going to be particularly informative.
And finally, try to be as specific as possible, both with your questions, and
try to get specific answers.
So ask for examples when the answers provided are very general.
So we're not looking for generalizations.
We're looking for specific stories
that can then lead to interesting insights about user needs.
Let's also talk a little bit about the interview content.
What should we try and ask, and what are we hoping to get out of the interview?
The way I approach it is that out of the interview,
I'm looking for two main types of insights.
First, I'm trying to understand user behavioral patterns.
And through this, I can understand different user personas that are out
there, which in turn will feed into user experience design.
For those of you who are not aware of the term personas, it actually really
relates to a term that you might have heard about, which is customer segments.
Customer segments are usually about demographics.
It's about roles that people might adopt.
For example, if we use Google Docs, we might have different roles.
I might be the one who's creating the document.
Somebody else might be collaborating with me and might edit the document,
has the role of an editor.
And a third person might have the role of a reader, and they don't really edit
the documents, but they are actually consuming the document that I've created.
And so these are different roles.
Now, personas capture some of these features of customer segments,
like demographics and roles, but they also go beyond.
They have a lot of behavioral information, behavioral patterns related to how users
do something that's of interest, which in turn will feed into product design.
And I think that's the big difference between a persona and a customer segment.
And that's really that a persona will go beyond a customer segment information,
like demographics, and
try and get into behaviors that ultimately feed into product design.
Now, besides user behavioral patterns,
the other big class of information I'm seeking in an interview
is to understand the steps in the customer journey or the customer experience.
For example, if I'm applying to college, then the steps might include starting by
talking to my friends about which colleges and which majors are of interest to them.
Based on those conversations, and based on some Google searches,
I might then identify majors of interest.
Then I might look up college rankings for these majors.
I might speak to some of the alumni at these colleges, and eventually identify
a small set of colleges and majors, and then apply to these places.
And so that's essentially what our journey might look like.
So it's important to understand what the user actually does
in each step of the journey.
And also, what's the user's spin point, and what's the user's emotion,
whether it's positive or negative, in each step of this journey?
This will help us understand where is the most pressing pain point in the entire
user journey.
So I'm now going to use an interview to try and
illustrate some of the principles I talked about.
For the purposes of this interview, I'm going to assume that we're interested in
understanding user needs tied to diet and nutrition.
And perhaps we have a certain concept in mind,
trying to help people make better nutritional and diet choices.
But that can mean several different product concepts.
It might mean a portal where we provide users with information about nutrition.
It might mean an app where people can quickly search for
caloric and other information tied to a specific recipe that they are considering
making, or it might be a marketplace to connect consumers with nutritionists.
So these are very different product concepts tied to the same fundamental
user need of helping people make better nutritional choices.
So we're going to use this interview to better understand
what's the actual user need.
Joining me here is Stephanie.
So Stephanie, I'm going to ask you a bunch of questions related to your diet and
nutritional choices.
First, let me ask you, how important or salient is diet or nutrition for you?
How often do you find yourself thinking about it, and
making conscious decisions related to that?
>> I think it's pretty much part of my daily life, and
has been since I was a child.
I played a lot of sports when I was growing up, so
I had to think about kind of what I was eating and my practice schedule.
And that's carried with me throughout my adulthood,
not in the same capacity, necessarily, as when I was a child,
or when I was in secondary school, but now I run.
>> Okay.
>> I wouldn't necessarily call myself a runner, but
I have run some half marathons.
And so I am aware of exercise, and my training schedule, and
what my nutrition needs to be when I am in that training regimen.
>> Give me an example of a choice or
two that you make driven by your exercise regimen.
>> Just making sure that I am eating enough carbohydrates,
eating proper vegetables and fruits, watching my protein intake.
Is it too much?
Is it too little?
And also, my big thing is making sure I drink enough water.
>> Okay.
>> So I find a lot that I am dehydrated, so
that's something where I have to constantly remind myself to drink water.
>> And when you say, is protein too much or too little,
what's the range in your mind?
>> So my idea of nutrition, I don't necessarily calculate the grams or
the specifics.
But just knowing that I need to eat a lean protein for dinner, and
maybe I had some carbs for lunch, so
maybe I should balance that out with a salad and a lean protein for dinner.
And just keeping that in mind so that I'm not eating three cookies.
>> Okay. >> That maybe I swap out a cookie for
a piece of fruit, that kind of thing.
>> All right, so would you describe your
approach as being reactive or preventative?
>> I would say most of the time, it's preventative.
>> Yeah. >> I've tried to maintain my weight
throughout my adulthood.
I've had some fluctuations in that, due to being ill and
sick, and having to kind of go through the motions of
calibrating my body again after recovering from being ill.
So I think it's something that I try to be preventative.
And then obviously, if I'm training, I think there is a little bit of reactivity
to that, because you're listening to your body and
trying to mentally get through whatever you're training for.
>> Right, so clearly, your training drives a lot of your choices.
But is there an element of thinking about chronic illnesses that,
say, a family member might have, or
that might be a lot in the news that might drive some of these choices, as well?
>> Yeah, I think that the primary ones would be we have a family
history of cancer and diabetes.
So those are things that are kind of prevalent in my mind in some of
the choices that I make.
And making sure that I am exercising, that I'm seeing a doctor fairly regularly,
getting a physical once a year, seeing a specialist if I need to.
And just being cognizant of the diet that I'm taking,
watching my sugar, not eating fatty foods.
>> And so when you say sugar and fatty foods, that's, again,
driven by either diabetes or cancer?
>> Mm-hm.
In these kinds of situations. Yeah, and
just keeping that in my mind that the older I get, I believe it's
probably going to be even more difficult to stay healthy and be healthy.
And so, if you can take those actions now of knowing what should be in your diet and
what shouldn't be.
So, can you give me an instance of any scenario where you actually made a choice,
a change in your diet?
And what was that process or that journey like?
What was the first trigger point, and then where did you get additional information?
How did you change it?
Just walk me through the various steps in that.
Sure, so I actually worked abroad in West Africa for two years.
Okay.
And when I came back, I had a parasite.
Mm-hm.
And the parasite destroyed a lot of my body and
really affected how my body reacted to the certain foods that I ate.
Mm-hm.
And so, I really had to sit down and
think about what was triggering the responses that my body was having.
And so, I worked with a nutritionist and
several doctors to kind of figure that out.
But, in addition to the information that they gave me,
I did a lot of research primarily on the Internet and just kind of talked to
other people who may have had a similar situation to see was this normal.
What did you do?
Or how often did you feel this way?
That kind of thing.
Okay, and what might have been the sequence here?
It sounds like visiting the doctor was the first step in that sequence.
Was the nutritionist after, or was it talking to friends, or
was it researching online?
Well, first it was being aware of what the symptoms were, and then that was
triggering me to go to the doctor and figure out something is not right.
So then, I went to the doctor, was referred to another doctor, and
then with that, the suggestion of also talking to a nutritionist.
From the doctor, doctor gave the suggestion?
Yes, just so that I could meet someone regularly and
kind of talk about a food journal and keep those things written down and
come up with a plan on how to evaluate how I was taking care of myself.
And also, if there are any things in my diets or
adjustments and how that affected how I was feeling.
You mentioned a food journal, so is that something you maintain even today?
I don't maintain it today.
Okay. But you- I guess maybe mentally I maintain
it in that I'm aware of kind of what I'm eating more of, and
certain foods I just avoid.
Okay.
Or try to avoid because I still have an association with how they make me feel
based on when I was ill previously.
And when you discuss these steps like the doctor, the nutritionist,
researching online, talking to friends and family, and then eventually arriving at
the nutrition choices that you are comfortable with today.
Was that series of steps relatively smooth or were there certain steps or
portions of this process that were more painful where
it took you longer to get the necessary information or
get the necessary motivation in order to make the change?
No, I would say it was a pretty steady process, it was pretty linear.
I think the frustration that I had was sometimes you talk to one doctor and
they're not quite sure and so you're waiting for
other ideas, and tests, and that.
But once I knew what the problem was it was a bit of trial and error initially.
But then once I had the process of I have to meet with the nutritionist this day,
and I have to do this, and I need to make sure I'm not eating this.
It went fairly smoothly.
And what was the most critical moment or the aha moment?
Was that when you met the nutritionist, or was that something you found online, or
was it a friend or family member that gave you that critical insight?
Or was there no such aha moment where it was just a series of small,
incremental steps?
I think it was more of a series of small, incremental steps.
The combination of using those different resources,
whether it was doctors, nutritionists,
my own self-discipline of really listening to my body and
kind of knowing what I needed to do, but it was gradual.
I don't ever recall ever being like, yes, I figured it out, so.
Okay, and then finally, tied to nutrition the last question related to
that is if you think about whether it's access to information or is it access
to a person like a nutritionist or a doctor, or is it the motivation and
the behavioral aspect of it, what keeps you committed going forward?
Is any of these harder than the other elements of this journey you talked about?
I think mostly it's just the behavior like my own kind of discipline.
Okay. And
self-regulation of keeping in mind what I need to do and
if I need help or I'm not feeling well or something like that.
That, don't try to figure it out yourself, go to a doctor and
talk to them about what's going on and staying healthy that way.
Finally I want to understand some other aspects of your lifestyle that are not
related to health and nutrition.
Are you, do you consider yourself to be savvy with technology or
a little knowledge with technology?
I would say I'm pretty savvy.
Okay.
And again, let's talk about some websites and some tools that you might use.
Do you use Facebook?
Yes.
How about Twitter?
Yes.
Do you use any messaging outside of Facebook messaging, like say Skype or
Google Chat or any of these?
Yes, I use all of those actually.
You use all of them, okay.
How about Uber and Airbnb, have you used either of these?
Yes, I've used both.
You've used both, okay.
Let me ask you about health related websites.
Have you been to any, like WebMD or Livestrong, or
any of these other websites?
Yeah, WebMD.
Also, I've frequent the CDC website a lot just,
I like to because of all of my previous travels, knowing certain
things about different diseases, and also immunizations.
Keeping up to date on all of that stuff is kind of important to me.
And so, I do check things out and see what symptoms are for
even just flu cold symptoms, the difference of the two.
So yeah, I would say accessing those government resources,
and seeing also too what local health offices might offer.
Do they offer some kind of health fair or a nutrition day or something like that?
Have you ever paid for any health related products,
in particular products tied to diet and nutrition?
So, you clearly talked about paying for providers like nutritionists,
have you ever paid for any either a software or
a digital product that helps you make better choices?
Or an app that helps you, maybe it helps you track your diet and nutrition,
or helps makes choices or a fitness tracker or anything,
any product that's tied to health and nutrition.
So, I have had a heart rate monitor, which tracks your heart rate.
I don't have anything like a FitBit, but I do have an app on my phone that I utilize.
Okay, is that a free app or a paid app?
It's a free app, yeah.
But that is something that I'm working towards, I would really like to
get a wearable of some kind so that I can track things more regularly.
Okay, now if you're employer ever provided you a free service that you could use
that is, for example, consultation with a nutritionist or information or
things of that nature would you consider using it if it's free for you?
Yes.
And on your own would you go and a pay from your pocket to try and
seek these services On a preventive basis if there's no condition to worry about?
I think I would, yeah.
But it sounds like as far as health related products,
currently you don't necessarily pay for any of them.
No, I don't. Okay.
But I wouldn't be opposed to paying for them.
Okay, all right, thank you very much.
Thank you.
Finally, once the interview is done we gather all the data,
we process the interview transcript or our notes, and we interpret that.
And we identify all the different needs that are mentioned by
our different subjects.
And we might then organize these needs into different types and
once we've done that we might then try to establish the relative importance.
We might do that by seeing the number of times these needs are mentioned.
We might see the actual emotion people convey when the talk about these needs.
Or we might observe their body language, but
ultimately all of this helps us identify what are some of the most important needs.
So in summary, user research through interviews is a very useful
matter to understand user needs before we dive into product development or
even concept development.
It can help save a lot of time and money.
It helps to prioritize user requirements and helps to avoid features that you
think are important but are truly not relevant for the user.
And also it helps reduce the number of product iterations needed
to arrive at product-market fit.
Next, I will illustrate these principles through actual interviews where I'll try
to apply these principles to identify user needs and product requirements.
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