Hiten Shah on building a wants vs. needs business and identifying what's in your control

Written by Laura Bosco

“I tend to ignore the economy because those factors are not in my control.”

I’ve just asked Hiten Shah my first question about navigating economic downturns. And he’s just smashed every question I prepared in 14 words.

I don’t say anything, but my eyes are pretty wide. This isn’t the prevailing thought in my Twitter and news feed. Most people aren’t ignoring the economy. They’re speculating, worrying, and grasping for answers.

They’re kinda freaking out.

What does Hiten know that we don’t?

In this interview:

  • Why Hiten isn't focused on the economy
  • Why needs-based businesses work right now
  • How you tell the difference between a want and a need
  • Identifying what you can control, influence, and ignore
  • How Hiten and Marie are thinking about FYI right now
  • Communicating with your team as things change rapidly
  • Why founders don’t get “off days”

Hiten Shah previously co-founded two SaaS companies: Crazy Egg in 2005 and KISSmetrics in 2008. He’s advised or invested in over 120 companies including Buffer and SlideShare. Currently, he’s building FYI with his co-founder, Marie Prokopets. FYI helps you find your documents quickly, so you can stop cursing your search bar. He also runs an email newsletter called Product Habits and, as a subscriber, I can confirm it’s packed with some of the best content out there.

Note: The headers, bio, and images below are our own words or creation. The rest is from Hiten.

There are some things you can control—delivering value is one of ‘em #

There are a lot of debates out there about the future. The future is uncertain.

Funnily enough, it always has been uncertain, but we pretended we could control it. And then something like this comes along, and the world collectively realizes, “Hey, we don't control that.”

Now, this is going to sound weird, but I tend to ignore the economy because those are factors not in my control.

It’s not like I pretend it doesn't exist. It's more so realizing there are only certain things we can control. One of the challenges is determining what those things are.

For example, one thing you can control is what value you're delivering to customers.

Hiten tweet on creating value

Back at KISSMetrics, that's what we focused on by ignoring, “Oh, it looks like we're going to be in a recession or depression or something.” We focused much more on what was happening in our own business and how we could adjust.

We learned we needed to focus on needs. Building and creating services, products, and goods that people actually need—not things we would describe as a want. Because there are a lot fewer wants when this kind of situation hits, and there are a lot more needs, and some of them might be new needs.

If you're thinking about what to do in your business, and you’re seeing customers drop, really think about the shift that happens during this time. We go from a world where you can create a business for something people want, to a world where you have to create a business for something people need.

So, what you want to do is figure out, “What do people need?” And, “How can I deliver upon their needs, not just upon their desires?”

It’s not the normal strategy you use when you build something.

How to find a legit need: do research and ask open-ended questions #

When we research and survey and dig in, one thing we do is we ask open-ended questions...even if we have a bunch of multiple-choice questions. And we don't introduce bias.

When we do this, we're asking questions in a way we can get the kind of answers we need. And the answers we need aren’t, “Oh, it would be nice to have this.” Instead, we're trying to identify, “what is the pain?”

A lot of finding that pain is open-ended questions or questions where you ask people to tell you a story.

So, when we were building FYI out a couple of years ago, we asked, “What is your number one challenge when it comes to creating and sharing documents?” And it turns out, people said their number one challenge is finding documents across all the different apps they use.

Then we started asking people, “Tell me the last time when you looked for a document and couldn't find it. What happened?” And once we talked to 20, 30, 40, 50 people, we realized, “Oh, they all can't find documents, and there's actually a bunch of emotion behind it.”

We wouldn't have understood that emotion if we didn't ask for stories.

They told us stories like, “Oh, I was with my boss, and it was really embarrassing that I couldn't find the document I created.” Or, “I couldn't find the document I sent over to her last week, and now we need it cause we're working on this thing.” It was emotional, and there was turmoil for them.

That's not a want. These people don't want to find documents, they need to find documents.

"A need is much stronger than a want."

—Hiten Shah

It's things like that you're really digging into—pain, emotion.

👉 Hiten goes deep on gathering and analyzing customer inputs in other conversations. We’ve rounded up a few of those at the bottom of this article for you.

Think you’ve caught a need? Here’s one way to tell #

After you've got the stories and the challenges, the way we do it (and the way I would recommend) is to score the behaviors you discover along three factors.

One, how painful is it? Two, how urgent is it? And three, how frequent is it?

You’re looking for problems that score as high as possible on all three. That's when you have something that's a need.

You can also have a need when two out of three are really high. Something can be frequent and super urgent, and that's great. Or something can be urgent and painful but not as frequent. And that's great too.

If you're going after infrequent behavior, but there's high urgency and high pain, you can also pull that off, as long as you can build a business around it. Remember, frequency is one of the key drivers for retention and engagement with the product.

This whole exercise will help you understand what kind of behavior you're going after, what kind of problem you're looking to solve, and whether it falls under a want versus a need.

Taming the control freak: figure out what’s in YOUR court vs. what’s in THEIR court #

A lot of people turn into control freaks when there's this much uncertainty. Avoid doing that and focus on the things you can actually control.

You can definitely control the way you pitch your business to people. You can definitely control this ideology around wants vs. needs and acting on it in your business. For example, do you need to pivot your business? Do you need to change the customer? Do you need to change what you do for them? There're so many different options.

...focus on the things you can actually control.

—Hiten Shah

We, as human beings, believe we can control a lot more than we actually can. And oddly enough, we also believe we can influence more than we can.

What peas and tomatoes can teach us about control (yes, really) #

A really good example of this is kids. If you ever have kids or watch a kid, it's very rare for a child to 100% listen to you. Because they're actually in control.

My kids are generally poor eaters. Getting my daughter to actually sit down and eat, regardless of the meal, is a project.

Her favorite food is raw tomatoes. Her number two is peas. But the thing is, even if I put that stuff in front of her, it doesn't necessarily mean she's going to eat it. Because I'm not in control of her eating. That's her job.

When you start breaking this up in other areas, you realize there are very few things you're actually in control of when it comes to other people. You can't tell someone what to do and get them to do it.

Once you realize that, you can start figuring out, “what can I do in every scenario that's under my control?” And more specifically, “what's my responsibility versus what's other people's responsibility?”

"When it comes to the economy and recessions and depressions, you have to realize you didn't cause it. You're not in control of what happens to the economy."

—Hiten Shah

There are 3 options in every scenario: control, influence, or out of your hands #

If you have a team, you have a lot of influence over that team. But you have no control. You have no control over their current living situation working from home. All you can do is find out what's going on with people, offer your thoughts and suggestions, and figure out what you can control for them.

So, here’s a dumb example.

There are a lot of wifi issues out there right now. And I have a lovely home, but my home is 10 feet from other houses. That's just how it is where I live. And there're 30 options when I try to connect to wifi. It hasn't been working.

But I realized there are these adapters. You can take a box, hook a network cable up to it from your router, put that box anywhere, and connect it to your computer directly. So, that's what I did because I can control that.

I can't control or influence the wifi apparently, but I can control the fact that now I'm wired in, and that has given me stable internet since I put it up.

...start figuring out, 'what can I do in every scenario that's under my control?'

—Hiten Shah

Now, these boxes showed up at my cofounder’s house. Why? Because she had the same problem. And I can't control or influence much, but I can get her those boxes. I did what I could. Now it's on her and she has to go the next step.

The reason I share that example is I think you can treat more things the way I treated wifi issues.

You can look around and really think through:

  • Am I able to actually control that?
  • Am I just able to influence it?
  • Or is that not my problem?

I turn everything I can't control into some form of constraint or criteria, and then my decision making is filtered through that. If there is something I actually control, it's not a filter—it's a tactic.

But we start confusing all these things, and we also start worrying a lot.

It’s normal to worry right now, but there’s a better way to spend your time #

There are a lot of people worried about what happens next.

I'm not. Why? Because I don't know what will happen, and I can't predict it. This stems from a fundamental belief of mine, which is “nobody knows anything and we're all just trying to do the best that we can.”

Whatever ways that you can stop worrying about what comes next in the future, you should do that.

Being nimble and being able to change, that's key. Right now, you're seeing even the largest companies on the planet figure this out and change. That's amazing!

As a smaller organization, you have no excuse to not be nimble.

You just need to get out of your own head, not focus on the uncertainty, and focus on what you can control. And also, of course, what you can influence, knowing you can't control it.

How Hiten and Marie are being nimble and focusing on clarity at FYI #

We're in a pretty good spot with the business. We know what we need to do in order to make it successful and turn us into a need for more people. So we’re not doing that much differently, except having more rigor around making sure the things we're doing are correct.

We've also leveled up our communication with the team and the amount of clarity we're pushing.

...when we make adjustments, we're making sure that message is heard.

—Hiten Shah

We don't believe we can get away with unclear expectations from people. We used to on a smaller team. But now we are explicit about what the organization should be doing, how often we communicate that, and how often Marie and I are debating what we should do next.

We’re questioning more of our decisions around what we should be doing next, what we're doing today, and how to make adjustments really quickly. That's increased 10x, and we believe it will lead to better decision making. Then when we make adjustments, we're making sure that message is heard.

These are good practices in general, but they’re practices that, right now, have been super impactful for us.

Keeping your message crisp when things are changing rapidly #

Leaders fail with messaging when the message isn't clear and the message isn’t repeated. It’s not about the number of times you say something. It’s your own own conviction and clarity in your head.

If I'm clear about what this organization should be doing, and I've talked to the other leaders in the organization to get clear about it, then the messaging becomes really crisp.

The problem happens when I change my mind and no one else is along for the ride. That's when things go wrong.

Messaging is also about getting past any impatience you have. Most leaders I know are very impatient, whether they're willing to admit it or not, regardless of how long they've been doing things. And that impatience manifests in many different ways depending on your personality.

For me, it's repressed anger, believe it or not. For our head of engineering, he is willing to entertain ideas he shouldn't. He's very good at focusing on one thing at once. He’s not necessarily good at focusing on 3-10 things at once. Knowing that helps me help him.

This understanding of other people and how things manifest for them is really, really important.

—Hiten Shah

He and I can be in the mode of dreaming, which is probably not a good idea right now. We can go really wide and talk about the dream, what comes next, all these great ideas, and how things connect together. Or we can go really deep into the problems that are worth solving right now and the one focus he should have. We can be in the mode of what is important, how can we focus on it, and talk more deeply about that.

This understanding of other people and how things manifest for them is really, really important.

A final piece of advice: Get really good at doing stuff you don’t want to do #

Look, building a business is one of the most enjoyable things you can do. And at the same time, it's one of the most frustrating things you can do as well.

It’s something you're constantly working on, and there are just so many facets of it. Get really, really good at doing things you have to do, that you might not want to do. That's different for everybody in terms of how they should approach it for their own personality.

And it's okay if you have days where you just don't feel great, and you don't feel like doing the job. But that doesn't mean you can't do the job.

And that's the hardest part of it.

A lot of other jobs you can have an off day. As a founder running a business, the off days don't count. You don't get to have those. I know that's a harsh reality, but it's just absurdly true. So, any time you have a light day, please enjoy it. And when you have an off day, remember: It's an off day. It's okay. But you still have to do what you have to do.

More resources on wants vs. needs, researching customers, and rising above worry #

Hiten has helped produce over 500 podcast episodes, appeared on countless others, and generously shared his time with so many founders. Here are some other great reads and listens that will take you deeper into the topics above.

  • Catering to needs vs. wants: Hiten and Steli Efti dig into nice-to-have vs. must-have products on episode 295 of the Startup Chat.
  • Finding a need in data: Over on Divinations, Hiten explains how he gathered customer data, analyzed it for insights, and then crafted a strategy for FYI.
  • From need to MVP: For Product Board, Hiten breaks down how 51 interviews and 24 hours of analysis translated into an MVP his team created in less than 7 days. (See the sister article as well.)
  • Questions to ask in beta testing: Hiten’s co-founder, Marie Prokopets, outlines what questions they asked customers while beta testing FYI.
  • Figuring out where to go next with a PMF survey: Hiten breaks down the product/market fit survey using FYI as his example. (Really want to go deep on this? Read about the 700 PMF responses he analyzed when he researched Slack.)
  • How to stop worrying: Hiten and Steli Efti talk about creating good news when you’re swimming in bad news on episode 157 of the Startup Chat.
  • What else his kids taught him: The crawl, walk, run lesson Hiten learned from his two little ones.

And, of course, don’t forget you can follow Hiten on Twitter at @hnshah, subscribe to his newsletter at ProductHabits.com, and check out his latest company at usefyi.com.

We've edited and condensed our conversation with Hiten for clarity.

Laura Bosco is a writer and people person. She helps tech startups do tricky things, like explain who they are and what they're doing. Ping her on Twitter to say hi.