Forget Competitors: The Real Startup Success Lies in Unmet Demand

Startups are often told to focus on competition—to be bigger, faster, cheaper than everyone else. But what if competing isn’t the real key to success? Instead of obsessing over how to outdo competitors, the most successful startups focus on something far more impactful: unmet demand. 

This approach helps them create unique value without getting caught in a zero-sum battle. In this article, we’ll explore why targeting unmet demand is the game-changing strategy that will set your startup apart and how you can adopt this mindset to build a sustainable business.

The Problem with Traditional Competitive Analysis

The concept of competition is often presented as a head-to-head battle: a winner and a loser in a known market space. This approach triggers a mindset that focuses on “bigger, better, cheaper” tactics, often missing the bigger question—who is the target, and what do they truly need? Instead of zero-sum thinking, focusing on important needs, wants, or desires that are not being adequately satisfied by existing alternatives creates real opportunities for differentiation.

A term like “competitive analysis” can prime your audience—investors or customers alike—to expect a combative narrative, which can limit their perception of the value you’re offering. In a market filled with players vying to capture market share, the focus on unmet demand allows you to identify opportunities that aren’t about simply outperforming your competitors but about creating new value that they haven’t even addressed.

Moving from Competition to Opportunity

Think of your market as a landscape rather than a battlefield. Instead of treating every other business as an enemy to beat, consider them part of a spectrum of alternatives that potential customers might turn to. This approach allows you to align your solution not as one among many in a head-to-head race but as a unique answer to needs that are currently unmet.

A Real-Life Example: Salesforce and the CRM Market

Before Salesforce came along, customer relationship management (CRM) systems were mainly used by large corporations that could afford costly, cumbersome software installations. Companies like Oracle and SAP offered powerful but inflexible systems that were only accessible to the wealthiest of clients. Salesforce noticed something different—90% of what these systems did could be streamlined into a much simpler, cloud-based solution.

Salesforce addressed the pain points of usability, ease of deployment, and reliability that existing alternatives were failing to deliver. By creating a CRM solution that was accessible, scalable, and easy to use, Salesforce didn’t just capture market share from competitors; they created a new category for companies that had previously been priced out of the market. They targeted unmet demand instead of competing directly in the ‘bigger, better, cheaper’ game.

Practical Advice: How to Shift Your Focus to Unmet Demand

1. Identify the Gaps: Analyze existing solutions in the market and identify areas where they fall short in fulfilling the most important needs of potential customers. These gaps represent your entry point into creating unique value.

2. Align with Needs, Wants, and Desires: Frame your solution around the unmet needs, wants, or desires of your target audience. Be careful not to describe it in terms that seem too absolute—such as declaring an “uncontested market space” outright—as that can come across as overly confident and make investors skeptical.

3. Change Your Language: Avoid using the term “competitive analysis.” Instead, use phrases like “landscape of alternatives” or “unmet demand opportunities” to reframe how you position your startup. This helps potential investors or stakeholders see your vision without immediately defaulting to a competitive mindset.

4. Show Uncontested Space: Use visual aids that emphasize unmet needs without resorting to traditional competition graphs. Instead of classic two-by-two competitor matrices, consider showing a “demand landscape,” highlighting where the market is not addressing current needs.

Case Study: In-N-Out’s Value Innovation

In-N-Out Burger exemplifies how a focus on specific unmet desires can create a sustainable, differentiated business model. In-N-Out decided not to compete on variety like McDonald’s or Burger King. Instead, they focused on high-quality ingredients, transparency, and simplicity. 

Their motto, “Quality You Can Taste,” resonated with customers who were tired of the chemically-engineered tastes of traditional fast food. By providing exactly what customers wanted—a limited, high-quality menu that was fresh and simple—they created a business model that remains difficult to replicate.

Tools and Resources to Capture Unmet Demand

• Jobs-To-Be-Done Framework: Use the JTBD approach to understand the fundamental jobs customers are trying to get done and see if current solutions adequately address those needs.
• Value Proposition Canvas: Map out the pains and gains of your target audience to identify specific gaps that current products do not fulfill.
• Customer Interviews: Talk to customers, not just about what they want but also about what frustrates them about existing solutions. Look for clues to unmet needs that might not be apparent in surveys or market research.

Join Our Founders Network

Finding and addressing unmet demand is crucial for startup success, but it’s easier said than done. In our Founders Network, we support entrepreneurs in identifying and capitalizing on these opportunities. Join us to connect with other founders, share insights, and get ongoing support that can help you stand out in your market by solving the real problems people are facing.