Potential Demand vs. Urgent Demand: A Small Difference That Can Make or Break a B2B SaaS

In the fast-paced world of B2B SaaS startups, success hinges on differentiating between potential demand and real, urgent demand. This distinction can make or break a company, determining whether your solution is seen as a “nice-to-have” or an absolute necessity to solve a high-priority problem.

Potential Demand: An Opportunity on the Horizon

Potential demand represents interest in your product that isn’t immediately pressing for the customer. It's characterized by:

1. Longer Sales Cycles: Customers recognize the value of your product, but there’s no immediate rush to purchase. Your offering may address a problem, but it's not one that currently consumes their focus. You may have customer buy-in regarding the advantages of your solution, such as ROI or better outcomes, but they are not convinced that acting now is crucial.
   
   

2. Non-Urgent Problems: The pain points your product addresses are genuine, but not critical enough for the customer to reallocate budget or staff quickly. Customers understand the long-term benefits but don’t feel compelled to act today.
   
   

For example, imagine a SaaS company offering employee engagement software. While increased engagement correlates with better retention and productivity, this issue might not be a top priority for many companies right now, especially when there are more immediate problems such as supply chain disruptions or customer acquisition challenges.

Real and Urgent Demand: The “Mission-Critical” Problem

In contrast, real and urgent demand exists when your product addresses an immediate, mission-critical problem. This type of demand often translates into:

1. Shorter Sales Cycles: Since customers are actively seeking a solution to a pressing problem, the time from initial interest to closing the deal shortens significantly.
   
   

2. Critical Business Needs: The problems your product solves are among the top three to five priorities for the customer. These challenges can’t be put off, and solving them is tied directly to business success. In some cases, they might even be existential threats to the business.
   
   

3. Immediate Resource Allocation: When a problem is urgent, customers are far more willing to invest both time and money to implement a solution. The potential benefits become secondary to the necessity of solving the problem now.

Consider a cybersecurity startup offering a solution to detect and prevent data breaches. For a company experiencing frequent security incidents or under regulatory pressure to enhance data protection, this solution is not just valuable—it’s critical. The demand here is real and urgent because it solves a “mission critical” problem. A data breach could ruin customer trust and lead to severe financial penalties, making this solution a top priority.

Identifying Urgent Demand

A key factor in successful startup growth is identifying the problems that create real and urgent demand. A product must not only solve a problem, but that problem must be so critical that it forces businesses to prioritize finding a solution. Startups that fail to distinguish between potential and urgent demand often face growth challenges.

Shaping Market Pull Through Urgent Demand

Real and urgent demand fosters what’s called "market pull." Market pull happens when customers are proactively searching for a solution (not specifically a product) to high-priority problems, creating a faster product-market fit (PMF) loop for startups.

In this scenario, potential customers often start by searching for additional headcount, service providers, or legacy vendors to meet their needs. If your product explicitly addresses these critical issues, and if it’s easy to implement, it becomes the obvious choice.

When market pull exists, the dynamic shifts from you pushing your product to customers, to customers seeking you out. This shift accelerates your growth, enabling you to rapidly iterate on PMF and scale.

The Key Lesson: Prioritize Real and Urgent Demand

As a founder, it’s tempting to pursue customers who express interest in your product, even if they don’t have an immediate need for it. But this approach often leads to the nightmare of prolonged sales cycles and slower growth. The key lesson is simple (but not easy): solve problems that are high on your customer’s priority list.

Potential demand may look promising on paper, but to scale effectively, your product must address real, urgent demand—solving problems that feel like the equivalent of a “hair-on-fire” situation for the customer. Only then will you see customers actively seeking solutions, shortening sales cycles, and driving growth. And that’s where real growth happens.