Imagine if in our drive to understand where markets are going we stopped looking at data and instead focused in on ourselves, our needs and our aspirations. What kind of future would we see?
In 1943, a psychologist named Abraham Maslow published a model of human needs which established a three-part hierarchy represented with a pyramid: a set of "basic needs" at the bottom, "social needs" in the middle, and "self-actualization" needs at the top.
The pyramid begins with "basic needs". Taken literally, that means things like food, water, shelter and everything required for immediate survival. A broader but more useful interpretation for the modern world would include things like access to education, transportation, communication and information.
Basic needs form the base of the pyramid because until these needs are met, people will be preoccupied with them and won't move on to address others. The base of the pyramid is the widest portion by area, signifying that it occupies more, time, energy and resources than the rest.
In other words, basic human needs have long been the biggest market and the vast majority of the economy exists to cater to them.
In the middle of the pyramid, Maslow places "social needs." They include things like connectedness, love, respect, intimacy, attention, and ego. This is the second biggest market. Over the last ten years a host of companies have exploded onto the scene to address and profit from our "social needs." Think Facebook, Twitter, Zynga and Path.
At the very top of the pyramid, Maslow placed a set of needs he classified as "self-actualization" needs. These include our drive to make an impact, experience new things, live up to our full potential as human beings, find meaning, be happy and fulfilled, etc. Like basic and social needs, self-actualization needs are universal - everyone has them - but they come "last" because we can't worry about them until our other needs are met. It's not that they aren't important to us, quite the opposite, but they are less urgent, or we can't afford them, or we don't have time - yet.
Self-actualization is at the top of the pyramid because so far it's been the smallest market. That's about to change.
There's a well-informed case to be made that in the near future we'll live in a global economy that is conquering poverty, providing access and opportunity to billions of people who've never had it, and rapidly addressing the "basic needs" of humanity. Take for example the fact that according to the U.S. Department of Labor the annual amount Americans have spent on food as a percentage of family income has dropped precipitously and consistently for the past 100 years. This isn't to say that the problems of poverty, food security and resource access will instantly disappear, but the worldwide shift towards people meeting more of their basic needs with less of their income is undeniable.
This trend then begs the question: in a world where more of the basic needs of all people are met with less work, what will they do with their time?
Most of us will still have to work, but an ever smaller share of our time will provide a better quality of life. No doubt we'll still go on Facebook, say hello to our friends, share what's going on and catch up, but at some point simply satisfying our social needs isn't enough. What happens when we each have the time, space and stability in life to truly focus on ourselves?
The answer is the pursuit of self-actualization. With less of our time taken up by basic survival, our need to improve ourselves will move from the back-burner to the front. Maslow's pyramid will be turned upside down, with time, energy, and resources migrating from the bottom to the top. No longer a luxury just for those with time and money, the market for self-actualization is set to grow across socioeconomic levels, geographic borders and cultural boundaries.
Where will the supply come from to meet this growing demand? It doesn't exist yet, but the opportunity to provide innovative products and services to a new generation of self-actualizers has never been greater.
As any good entrepreneur or investor will tell you, it pays to understand what people need. If you have an insight into a need that hasn't been met, and you can think of a scalable way to meet that need with a product or service that costs less than you can charge for it, you're in business. Just as we were once faced with what seemed like insurmountable questions about how to house ourselves, communicate and travel across the world, we're now faced with the question of developing technologies which help people make themselves fundamentally better. The smallest market is about to become the largest market, and those who harness this shift will help shape the future.