How to identify the need?

I believe to have a successful product / service, you need to fill a need that clients and customers have.

My question is how do you find, spot, identify or realize a need is there?

Nothing magical about it. There's really only two main ways:

1. You have the itch, as tomeduarte says. As you think about it, or talk to others, you find others that have the same or similar needs and thus "The Vision" is born. This is part luck, part self-awareness.
2. Sometimes, you work in an environment where you can observe and take note of the need(s) of another. The itch isn't yours, but it doesn't have to be. You just have to be in a place where you can see people scratching. The idea is to put yourself in a career/job/situation where this happens. Working as a dev in a closet on one project at a time won't give you this exposure. Working in sales will. Working as a field rep will. Stack the deck so that you commonly talk to the potential "itchers", not the "scratchers". :)

Of course, once you have established that initial idea (loftily called "the vision"), you then embark on iteratively refining it via business planning.

As you will definitely read if you go around the blogs and books related to this subject, the best itch to scratch is your own. However, plenty of people run and have run successful businesses in areas that they didn't know anything about at first; it just makes it harder to succeed.

Find a niche

A common reasoning for this topic are:

• think of something you really wish existed ( problem )
• find out how you could implement/build/create it ( your value proposition )
• go out there and see if anyone else is willing to pay for it ( your market )and how much ( perceived value )

Once you have all that, you can do your math and ask yourself these questions:

1. is it a profitable product? can you earn more than what you need to spend?
2. is there a market willing to pay? is it big enough to "make it" with, say, 10% market share?
3. what are the resources you need to do it?

After that, if you still think you have a viable product, think again - long and hard. It's hard to learn to say no and recognize ideas for being just that, ideas.

1. Start. Do you need a team? Then get a team together. Can you hack away a prototype - or even better an MVP? Get going.
2. JFDI and get a product out there as fast as you can and confirm your findings above.
3. Reevaluate. Did things went according to plan? Chances are they didn't. Was it because of your mistakes along the way? Was the business model fundamentally flawed? Was the team not engaged enough? Find your stress point(s) and think whether it's worth fixing.

There's also quite a few threads here about recommended books, check them out.