Chapter One

1. Two Perspectives on the World: Supply and Demand

“Experience by itself teaches nothing…Without theory, experience has no meaning. Without theory, one has no questions to ask. Hence, without theory, there is no learning.”

William Edwards Deming, statistician and business consultant

Through the years of developing new products and selling them, I have come to believe there are two dominant perspectives that drive the language and process for a business: the supply-side and demand-side. The notion of supply and demand drive how we see the world, what is important, and the metrics of success. Yet, they are two very different perspectives. As you will see, we need them both, but traditional sales are mostly focused on supply-side thinking.

Let’s contrast supply and demand with something we can all relate to—purchasing a new mattress. Traditionally, buying a mattress sucks, right? There’s foam, spring, pillowtop, and hybrids. There are also different sizes, cooling features, and adjustability. Commissions-based salespeople approach you in an empty store—it’s just you, them, and hundreds of beds—and they blatantly push their products using confusing jargon. What are they even saying? So, you stare at hundreds of different models, one costs $1,500 and another $4,000…

“Lay down and pick one,” they say.

“I have no idea how to pick one,” you think.

It’s intimidating! There’s almost no way to judge; you’re not a mattress expert. How many people want to buy a new mattress but are intimidated by this process?

In 2014, entrepreneur Philip Krim, CEO of Casper, set out to build a different type of mattress-buying experience. He wanted to make purchasing a mattress simple. Instead of variety, Krim decided to only build a few, high quality, foam mattresses. Then the truly novel part, he sucked the air out of his mattresses and shipped them directly to customer’s doors. No big box-stores, no aggressive salespeople and jargon, just a few clicks and voila, a bed-in-a-box sitting on your doorstep. And if you don’t like it, you have one hundred days to return it. And no, you do not have to get that bed back into the box; they’ll come take it away. At the time, industry experts paid little attention to Krim.

Five years later, Casper now has 3.2 percent of the US market share for mattresses—ranking seventh. They’ve sold to over one million customers with sales topping $400 million and are at a valuation of $1 billion. Meanwhile, industry leaders are barely increasing their market share, some are even losing market share. So, how did this startup come into a well-established industry with lots of competition and become an industry disruptor? It’s called demand-side selling, and it’s the basis for the JTBD theory of sales. Regardless of whether Casper is ultimately successful, their approach is noteworthy.

Synching Selling to the Way People Buy

Buying is very different than selling. The best sales process mimics the progress that people are trying to make in their lives. Selling is clearly a supply-side perspective, while buying sits on the demand-side.

Instead of thinking about their product’s features and benefits and asking, “What’s the demand for mattresses?” Casper entered the scene and sold sleep. They asked, “How many people struggle to sleep at night?” Their ads feature soft, fuzzy bunnies and kittens crawling across their mattresses, tugging at the sheets. “We asked these creatures of comfort what it’s like to sleep on a Casper,” the narrator says. “Some things just don’t need words.” The ad closes with the animals angelically sleeping. Not once do you hear about the features and benefits of a Casper.

What’s so special about their approach? It’s a worldview of selling from the customer’s vantage point, which we call demand-side selling. Casper understood why people buy mattresses and recognized the anxieties that got in the way. And as a result, designed a better, more simplified way to purchase a mattress. They made buying easy. They gave a few great options, eliminating confusion. They sold mattresses the way people want to buy—risk free and from the comfort of their home. And, in the process, upset the well-established mattress industry focused on their big, empty box-stores with hundreds of mattresses and confusing jargon.

Traditional sales are not in sync with the way people buy. We need to flip the focus of sales from supply-side selling to demand-side selling. Let’s contrast the two.

Supply-side: The focus is on the product or service and its features and benefits. How will I sell it? Who needs my product? You define demand through the product. In this scenario, the consumer is usually nebulous—an imagined, personified version of the customer—an aggregated set of demographic and psychographic information. You aggregate and triangulate the consumer around the product through correlative data. When operating under this model you canvas the world for people who need your product, adding features and benefits along the way, to reach the widest audience. With supply-side thinking the focus is on the profit—the product must make money inside a specific cost structure. Everything you talk about goes through the lens of the product or service. You push your product. The supply-side does not see how the product fits into people’s lives. It’s the fishbowl analogy: you cannot see the whole picture swimming on the inside, only what surrounds you.

“Just because I am 55, live in this zip code and have that income, it does not cause me to buy the New York Times today.”

Clayton Christensen, innovation expert and Harvard Business professor

Demand-side: The focus is on understanding the buyer and the user. How do people buy and how do they make progress? What’s causing them to make a purchase? You design your go-to-market strategy around the buyer’s worldview, not the product. You are looking at the world through a real buyer’s eyes. It’s understanding value from the customer-side of the world, as opposed to the product-side of the world. Demand-side selling is understanding what progress people want to make, and what they are willing to pay to make that progress. Our product or services are merely part of their solution. You create pull for your product because you are focused on helping the customer. Demand-side selling starts with the struggling moment. It’s the theory that people buy when they have a struggling moment and think, “Maybe, I can do better.”

Traditional economics thinks supply and demand are connected. But we would say that demand is independent of supply. Demand is about a fundamental struggle. Supply and demand are two completely different perspectives in sales.

Most people don’t think about your product or service if it doesn’t address a problem they have. When you’re getting a restful eight hours of sleep every night, you don’t even notice the mattress store when you walk past. But if you find yourself choosing the recliner every night...