Unmet Need is a critical concept in the Jobs to be Done (JTBD) framework that identifies specific customer needs that are not adequately satisfied by current solutions in the market. Unmet needs represent the most valuable opportunities for innovation, growth, and equity value creation for portfolio companies.

Definition and Importance

In the JTBD framework, an unmet need is defined as a customer need (a metric that customers use to judge how quickly and accurately they can execute their job) that is not well-satisfied by existing solutions in the market. Specifically, a need is considered unmet when:

1. The customer's action required by the need cannot be performed quickly
2. The variable in the need cannot be established accurately
3. The overall customer effort required to satisfy the need is too high

Unmet needs are critically important because:

1. They drive purchasing decisions: Customers purchase new products specifically because they help address unmet needs better than existing solutions.
   
   
2. They represent growth opportunities: Markets exist because customers struggle to get jobs done, and the biggest growth opportunities lie in addressing the most significant struggles.
   
   
3. They provide objective innovation criteria: Unmet needs offer clear, measurable targets for product development rather than subjective opinions.
   
   
4. They enable targeted growth strategies: Focusing on specific unmet needs allows companies to create differentiated positions even in crowded markets.
   
   
5. They remain stable over time: While products and technologies change rapidly, unmet needs remain constant until effectively addressed, providing a stable foundation for long-term strategy.
   
   

Unmet Needs vs. Traditional Market Research

Traditional approaches to identifying market opportunities often focus on customer opinions about existing products, feature requests, or demographic trends. These approaches frequently fail to identify the most valuable innovation opportunities for several reasons:

Limitations of Traditional Approaches

1. Product-Centric Bias: Asking customers about product improvements keeps the focus on existing solutions rather than fundamental needs.
   
   
2. Solution Knowledge Gap: Customers can reliably describe their struggles but rarely envision innovative solutions that don't yet exist.
   
   
3. Stated vs. Actual Behavior: What customers say they want often differs from what actually drives their purchasing decisions.
   
   
4. Low-Value Improvements: Feature requests typically focus on incremental improvements rather than addressing fundamental struggles.
   
   

Advantages of the Unmet Needs Approach

The JTBD framework overcomes these limitations by:

1. Starting with the Job: Focusing on the customer's job-to-be-done rather than existing products.
   
   
2. Identifying Needs Systematically: Breaking down jobs into steps and needs in a structured way that ensures comprehensive coverage.
   
   
3. Measuring Satisfaction Objectively: Using quantitative research to identify which needs are most underserved.
   
   
4. Prioritizing Based on Struggle: Targeting innovation at the needs where customers experience the greatest difficulty.
   
   

This needs-based approach leads to more innovative solutions that address fundamental customer struggles rather than incremental product improvements.

Identifying Unmet Needs

Accurately identifying unmet needs requires rigorous research and analysis. The thrv methodology includes several approaches to ensure that portfolio companies correctly identify the most valuable unmet needs:

1. Comprehensive Need Identification

Before determining which needs are unmet, companies must first identify all the needs in the customer's job-to-be-done. This typically involves:

• Breaking down the job into 15-20 job steps
• Identifying 5-10 customer needs within each job step
• Documenting 50-100 total needs for the complete job

This comprehensive approach ensures no significant needs are overlooked.

2. Quantitative Need Assessment

Once all needs are identified, quantitative research determines which are underserved:

• Customer Surveys: Large-sample surveys measure how important each need is to customers and how satisfied they are with current solutions.
  
  
• Customer Effort Scores (CES): Surveys ask customers to rate how difficult it is to satisfy each need with existing solutions. The percentage of customers who indicate high difficulty becomes the Customer Effort Score.
  
  
• Speed and Accuracy Measurement: Direct observation and time studies measure how quickly and accurately customers can satisfy needs using current solutions.
  
  

3. Unmet Need Prioritization

Needs are prioritized as unmet based on several factors:

• High Customer Effort Score: Needs with high CES (typically above 30%) represent significant customer struggles.
  
  
• Importance-Satisfaction Gap: Needs that are highly important but have low satisfaction scores indicate valuable opportunities.
  
  
• Execution Time and Accuracy: Needs that take excessive time to satisfy or cannot be satisfied accurately with current solutions are considered unmet.
  
  
• Competitive Analysis: Needs that are poorly addressed by all competitors in the market represent particularly valuable opportunities.
  
  

This data-driven approach ensures that innovation efforts focus on the needs that represent the greatest market opportunities.

The Psychology of Unmet Needs

Understanding the psychological aspects of unmet needs helps explain why they drive purchasing decisions:

Customer Anxiety and Frustration

When customers cannot satisfy important needs quickly and accurately, they experience anxiety and frustration. These negative emotions create a powerful motivation to seek better solutions.

For example, a business traveler who struggles to plan optimal routes with multiple stops experiences stress about potentially missing appointments or wasting time. This anxiety creates a strong motivation to adopt new solutions that address this unmet need.

The Value of Relief

Products that address significant unmet needs provide relief from anxiety and frustration. This relief creates substantial perceived value, often greater than the objective time or cost savings provided by the solution.

This psychological component explains why customers are often willing to pay premium prices for solutions that address their most significant unmet needs, even when the absolute performance improvement might seem modest.

Status Quo Bias and Switching Costs

Despite their struggles, customers often continue using existing solutions due to status quo bias and perceived switching costs. For new solutions to overcome these barriers, they must address unmet needs substantially better than existing alternatives.

Understanding these psychological factors helps portfolio companies develop products and messaging that effectively overcome resistance to change.

The Quantification of Unmet Needs

One of the most powerful aspects of the unmet needs approach is the ability to quantify the degree to which needs are underserved:

Customer Effort Score (CES)

The Customer Effort Score represents the percentage of customers who indicate that satisfying a particular need is difficult with current solutions. For example, if 65% of surveyed customers say it's difficult to "determine the optimal sequence to make planned stops," this need has a CES of 65%.

Higher CES indicates greater opportunity, as it represents more customers struggling with the need.

Importance-Satisfaction Gap

The gap between how important a need is to customers and how satisfied they are with current solutions provides another quantitative measure of opportunity:

Gap = (Importance Rating - Satisfaction Rating) × Importance Rating

This formula weights the gap by importance, ensuring that the most significant opportunities receive priority.

Speed and Accuracy Metrics

Direct measurements of how long it takes customers to satisfy needs and how accurately they can do so provide objective data about unmet needs:

• Time to completion for specific needs
• Error rates in satisfying needs
• Process complexity (number of steps required)
• Success rate in need satisfaction

These quantitative measures allow portfolio companies to prioritize unmet needs objectively and track improvements over time.

Unmet Needs and Market Segmentation

One of the most valuable applications of unmet needs is in market segmentation:

Traditional vs. Needs-Based Segmentation

Traditional segmentation approaches often rely on demographic, firmographic, or psychographic characteristics that may have little relationship to purchasing behavior.

In contrast, needs-based segmentation groups customers based on which needs they find most important and most difficult to satisfy with current solutions. This approach creates segments that are directly relevant to product strategy and marketing.

Opportunity Segments

The thrv methodology identifies opportunity segments by analyzing which customers struggle with similar sets of needs. These segments represent groups of customers who:

1. Share common patterns of unmet needs
2. Are likely to value similar product innovations
3. Would respond to similar marketing messages
4. Represent a coherent target market for growth strategies

These opportunity segments are more actionable than traditional segments because they directly relate to why customers make purchasing decisions.

Premium Need Segments

Of particular interest are segments willing to pay premium prices to have specific unmet needs addressed. These segments often represent the most valuable growth opportunities, as they combine:

1. Strong motivation to purchase (due to significant struggles)
2. Higher willingness to pay (for solutions that address their struggles)
3. Lower price sensitivity (when solutions effectively address unmet needs)

Portfolio companies can create substantial value by identifying and targeting these premium segments with solutions specifically designed to address their unmet needs.

Unmet Needs and Product Strategy

Understanding unmet needs transforms how portfolio companies develop their product strategies:

1. Feature Prioritization

Rather than prioritizing features based on competitive parity or internal preferences, companies can prioritize based on which features best address high-priority unmet needs.

This approach ensures development resources focus on creating the greatest customer value, increasing adoption rates and accelerating growth.

2. Minimum Viable Product (MVP) Definition

Unmet needs provide clear criteria for defining truly minimal viable products that address essential customer struggles.

By focusing initial releases on the most critical unmet needs, companies can bring solutions to market faster while still providing compelling value.

3. Competitive Differentiation

Understanding which unmet needs competitors fail to address allows companies to develop products that excel specifically in these areas, creating meaningful differentiation even in crowded markets.

This approach is particularly valuable for portfolio companies competing against larger incumbents, as it allows them to create distinctive value propositions without matching competitors' full feature sets.

4. Roadmap Development

Product roadmaps can be structured around progressively addressing more unmet needs, with clear prioritization based on customer effort scores and strategic goals.

This provides a structured approach to long-term product evolution that maintains focus on customer value creation.

5. Revenue Growth Forecasting

By quantifying how many customers struggle with specific needs and how much they're willing to pay to address them, companies can develop more accurate revenue forecasts for new products and features.

This improves investment decisions and resource allocation, increasing returns on product development investments.

Unmet Needs in Marketing and Sales

Beyond product development, understanding unmet needs transforms marketing and sales approaches:

1. Message Development

Marketing messages can focus specifically on how products address customers' unmet needs, creating stronger resonance than feature-focused messaging.

For example, rather than promoting "advanced route optimization algorithms," a navigation app might message "Never waste time figuring out the best order for your stops again."

2. Customer Targeting

Marketing efforts can target the specific customer segments that struggle most with the needs the company's products address, increasing campaign efficiency and conversion rates.

3. Lead Qualification

Sales teams can qualify leads based on whether prospects struggle with the needs that the company's products address, rather than relying on traditional demographic criteria.

This approach identifies prospects more likely to purchase and enables more targeted sales conversations.

4. Sales Conversations

Sales representatives can focus discussions on understanding prospects' unmet needs and demonstrating how the company's solutions address these specific struggles.

This customer-centric approach typically results in higher close rates and larger deal sizes.

5. Customer Success

Customer success teams can ensure that implementations focus specifically on addressing customers' unmet needs, increasing satisfaction and reducing churn.

By maintaining focus on the needs that drove the purchase decision, companies can ensure their solutions deliver the expected value.

Unmet Needs in thrv's Methodology

In thrv's proprietary Jobs to be Done methodology, unmet needs serve as the foundation for creating growth strategies for portfolio companies:

1. Unmet Need Identification

The thrv platform includes tools and methodologies for identifying all needs in a customer's job-to-be-done and determining which are most underserved.

2. Opportunity Landscaping

The methodology analyzes the pattern of unmet needs across different customer segments to create a comprehensive map of market opportunities.

3. Growth Strategy Development

Based on unmet need analysis, thrv helps portfolio companies develop targeted growth strategies that focus on specific high-value opportunities.

4. Innovation Generation

Using unmet needs as criteria, thrv facilitates ideation processes that generate product concepts specifically designed to address high-priority unmet needs.

5. Message Optimization

The methodology includes frameworks for developing marketing and sales messages that directly address customers' unmet needs, increasing resonance and conversion.

6. Product Roadmap Development

thrv helps portfolio companies create and prioritize product roadmaps based on unmet needs, ensuring development resources create maximum customer value.

This comprehensive approach ensures that all aspects of a portfolio company's strategy align around addressing the unmet needs that represent the greatest growth opportunities.

Historical Examples of Unmet Needs Driving Innovation

Throughout business history, the most successful innovations have addressed significant unmet needs, often disrupting established markets:

Digital Photography vs. Film

Kodak dominated the film photography market but failed to recognize how digital technology could better address several key unmet needs in the job of "sharing memories":

• Unmet Need: Determine if a photo captured the desired moment
• Digital Solution: Instant image preview
• Unmet Need: Share photos with distant friends and family
• Digital Solution: Electronic sharing without physical printing

By focusing on protecting its film business rather than addressing these unmet needs, Kodak missed the digital transition and eventually filed for bankruptcy.

Streaming Services vs. MP3 Players

Apple's iPod dominated digital music, but streaming services like Pandora and Spotify identified and addressed key unmet needs in "creating a mood with music":

• Unmet Need: Find new music that fits a specific mood
• Streaming Solution: Algorithmic recommendations and instant access to new music
• Unmet Need: Access music without managing files or storage
• Streaming Solution: Cloud-based library with no local storage requirements

Despite the iPod's initial success, streaming services eventually dominated the market by better addressing these unmet needs.

Cloud Software vs. On-Premise Solutions

Enterprise software was traditionally installed on company servers, but SaaS solutions identified and addressed key unmet needs in "enabling secure data use":

• Unmet Need: Access business applications from any location
• SaaS Solution: Cloud-based access from any internet connection
• Unmet Need: Reduce IT infrastructure management burden
• SaaS Solution: Vendor-managed infrastructure with automatic updates

By addressing these unmet needs, SaaS providers disrupted the enterprise software market and created substantial equity value.

These examples illustrate how identifying and addressing unmet needs can create tremendous market opportunities, even against established competitors.

The Strategic Value of Unmet Need Analysis

For portfolio companies, a focus on unmet needs delivers several strategic benefits:

1. Higher Innovation Success Rates

By targeting validated unmet needs, companies dramatically increase the probability that new products will succeed in the market.

2. Accelerated Growth

Products designed to address high-priority unmet needs typically achieve faster adoption and more rapid revenue growth than feature-driven products.

3. Premium Pricing Opportunities

Solutions that effectively address important unmet needs can command premium prices, as customers are willing to pay more for solutions that help them overcome significant struggles.

4. Reduced Development Risk

By validating which needs represent the greatest customer struggles before significant investment, companies reduce the risk of developing unwanted features or products.

5. More Efficient Go-to-Market

Marketing and sales efforts focused on unmet needs typically generate higher conversion rates and shorter sales cycles, reducing customer acquisition costs.

6. Sustainable Competitive Advantage

A deep understanding of customer unmet needs provides a strategic advantage that is difficult for competitors to replicate, especially when embedded in organizational processes and culture.

Conclusion

Unmet needs represent the most valuable opportunities for innovation, growth, and equity value creation. By defining unmet needs as customer needs that cannot be satisfied quickly and accurately with current solutions, the JTBD framework provides a structured approach to identifying and targeting the most promising market opportunities.

The thrv methodology provides portfolio companies with sophisticated tools for identifying, measuring, and addressing unmet needs in their markets. This unmet needs-based approach accelerates growth, increases product adoption, and ultimately creates greater equity value with reduced risk.

By focusing innovation efforts specifically on addressing customers' most significant struggles, portfolio companies can develop compelling value propositions, achieve faster market adoption, and create sustainable competitive advantages—even in crowded markets with powerful incumbents.