Psychologist Abraham H. Maslow (1908-1970) posited a theory of human’s needs in five stages, Hierarchy of Needs. Maslow noticed while studying monkeys early in his career there were some needs that were more important than others. When presented with hunger and thirst the monkeys choose to drink, instinctively knowing they could survive longer without food than water.

  1. The first level of Maslow’s Hierarchy of Needs refers to the physiological needs of human’ s. Maslow stated those needs were water, food, and sex. In order to survive as an individual and as a species, these needs are the very basic ones and, therefore, are first on the hierarchy.
  2. The next level of the Hierarchy of Needs is the need for safety and security. Safety can mean free from physical harm or a stable home environment. Safety can be somewhere to stay out of the elements.
  3. Once the physiological and safety needs are met, then human growth begins with the next stage of love and belonging needs. Here individuals seek connections to others through friendships, marriage, community, and memberships.
  4. Meeting the needs of belonging helps the individual move to the next stage that of esteem needs. As individuals seek to belong, they learn to respect others in order to garner and maintain friendships. The higher order of esteem for humans is self-esteem and self-respect. These feelings are associated with accomplishment, praise, respect from others, confidence, and competence. Once the individual has met esteem needs, they are primed to move to the next stage that of self-actualization.
  5. Self-actualization is a level very different from the other four. The previous four levels are about fulfilling deficits (d-needs), the last level is about growth motivation or “being” needs (b-needs). Maslow used famous people in history to illustrate the point about growth motivation. These individuals were those who were certainly considered the movers and shakers of their day: Abraham Lincoln, Alduous Huxley, Albert Einstein, Thomas Jefferson and other notable historic figures.

Self-actualization means the person is reality-centered and problem-centered. These individuals are comfortable with and enjoy their solitude. They enjoy deeper personal relationships with a few close friends and family. These individuals enjoy their freedom and are less motivated by social pressure and acceptance of others. They possess strong ethics, humility and respect towards others. Maslow stated these people have more peak experiences than others. A peak experience is when the person is taken out of themselves and their situation and feels small compared to the universe around him. These experiences are life changing experiences.

Maslow’s Hierarchy of Needs is usually a progression upward. However, the progression, while supposedly upward can take a downward turn. Individuals who are at an esteem level who lose their job, their marriage, their home in foreclosure, can experience what it is to slide down the ladder to more basic needs. A natural disaster, a death in the family, a divorce, or financial set-back can all cause someone to focus on lower level needs rather than their self-actualization.

Entrepreneurs looking to start a new business must have an idea where they are on the Hierarchy of Needs even if they are unsure of the concept. Is the entrepreneur someone who can problem solve well? Is that person reality centered? Is the entrepreneur sure of where the bulk of his customers might fit on the hierarchy? If those the entrepreneur is looking to reach are customers who are not in a position to purchase service of goods because of where they are on the hierarchy, the entrepreneur may want to re-think his position in the marketplace or launch when the economy or social situations make for a more favorable business climate.