The Three-Layer Framework: Human Need, Value, and First Principles in a Single Memo Page

This is the third in a series of frameworks I keep returning to when I sit down to write an investment memo. The first was the founder archetype matrix, a way to decode the person behind the pitch before the deck ever gets opened. The second was the bet-type framework, a portfolio-level lens to classify conviction and sizing. Both have become permanent fixtures in how I approach judgment.

But there is one more layer that consistently appears in the highest-conviction memos I have studied. It does not sit in the financial model or the competitive landscape section. It sits in the summary, often no more than a single line, quietly stating which fundamental human need this company is built to address.

I started paying attention to this pattern after reviewing a handful of deal memos that produced extraordinary outcomes. Not just strong returns. Multiple hundreds. And across all of them, regardless of sector or business model, one structural similarity stood out: every memo explicitly identified a deep, non-negotiable human need at the core of the investment thesis. Not a market size projection. Not a technology advantage. A need.

The First Principles Connection

This idea is not new. It shares a clear lineage with first-principles thinking. The same act of breaking down a startup's existence into its most irreducible components: why does this product need to exist? What part of the human condition does it address?

But saying "fundamental human need" is still too broad to be useful in a memo. The question is how to classify it with enough structure to inform a decision, without becoming so academic that it loses its practical edge.

Many thinkers have attempted to build this taxonomy. The most famous is Maslow, whose hierarchy of needs maps everything from physiological survival to self-actualization. It is a natural starting point and a useful reference. Another notable attempt is the Elements of Value pyramid by Bain & Company, published in Harvard Business Review, which identifies 30 distinct fundamental attributes organized across four tiers, from functional to social to emotional to life-changing value, offering a more granular framework for evaluating consumer-facing companies.

The problem is that no single taxonomy fits every deal. Some memos frame the need through the lens of human desire: status, belonging, convenience. Others frame it through human activity: how people spend their time, what friction they tolerate. Others still through value creation: does this company save money, generate money, or create something entirely new?

I have read enough memos to know that the classification itself is less important than the act of asking the question. Different investors will prefer different lenses. A consumer investor might lean on desire and status. An enterprise investor might lean on workflow efficiency and cost reduction. What matters is that the memo forces you to articulate the answer clearly.

And in every case, the great companies share one trait. From day one, you can trace a direct line from the founder's vision to a fundamental human need that does not fade with market cycles, does not disappear when a new technology emerges, and does not depend on a favorable fundraising environment. It was always there. The company simply built the mechanism to address it.

The Three-Layer Framework

After studying these patterns across dozens of deal memos, I developed a simple three-layer framework to classify the fundamental human need a startup addresses. It is not meant to replace existing taxonomies. It is meant to sit inside a memo, as a practical structure that forces clarity without requiring an academic background in psychology.

Layer 1: Human Activity

The outermost layer. It asks: what basic human activity does this company serve?

These activities are broad, observable, and relatively stable. Some are as old as humanity itself. Others have emerged more recently as new generations develop new behavioral patterns. The list is not exhaustive, but it provides a useful starting point:

Eat, Live, Move, Learn, Work, Connect, Play, Create, Care, Trade, Buy, Invest, Express, Discover, Predict, Travel.

A food delivery startup and a restaurant supply chain platform both serve "Eat." A fitness app and a logistics platform both serve "Move." A social network and a collaboration tool both serve "Connect." The activity itself is neutral. What matters is that you can name it in one word.

Layer 2: Value Creation

The middle layer. Once you have identified the human activity, you ask: what specific form of value does this company create within that activity?

This is where the framework becomes operational. I organize value creation into four categories:

Most great companies combine multiple categories, but one usually dominates. The memo should name the primary value category and acknowledge secondary effects.

Layer 3: First Principle

The innermost layer. This is the irreducible truth that sits at the bottom of the investment thesis. It is not a feature set or a market projection. It is a single statement about human nature that no technology trend can invalidate.

A few examples of what this looks like in practice:

• Humans are social creatures — every major social platform, from WeChat to WhatsApp, is ultimately a mechanism for this single truth.
• People will always need to coordinate work — this underpins companies from Asana to Uber, across enterprise and marketplace models alike.
• Humans will always consume stories and music — Netflix, Spotify, and every media company before them sit on this foundation.
• Humans will always need temporary accommodation — Airbnb did not invent the need; it built a better interface for an exchange that has existed for centuries.
• Humans will always need to store and share knowledge — this is the root of Google, Notion, Wikipedia, and every knowledge management tool ever built.
• Humans will always seek information about uncertain futures — from ancient oracles to modern prediction markets and alternative data platforms, the need is identical.

The test for a good Layer 3 statement is simple: would this still be true fifty years from now? If the answer is yes, you have found a fundamental human need. The technology is just the current mechanism for addressing it.

Putting the Framework to Work

You might notice that across all three layers, the language is deliberately short. A one-word activity. A table with a handful of categories. A single sentence about human nature. This is intentional. The framework is not designed for academic analysis or deep psychological study. It is designed to sit inside a memo and deliver a snapshot.

When you are evaluating a deal with a co-investment partner or presenting a thesis to a club, you do not have time to explain a complex taxonomy. You need everyone around the table to look at the same page and reach the same understanding in seconds. The vocabulary is intentionally accessible: Eat, Connect, Belong, Coordinate. These are not industry terms. They are words any investor, regardless of background, can immediately grasp.

The real power of this framework is not classification for its own sake. It is differentiation. Two companies can serve the same Layer 1 activity, but the one that delivers a superior Layer 2 value, or one that sits on a more enduring Layer 3 principle, will outlast its peers.

Consider "Eat." A meal-kit delivery service and a restaurant reservation platform both serve the same human activity. But one is primarily about Efficiency (saving time on grocery shopping), while the other is about Network & Social (coordinating group dining and leveraging social proof through reviews). They are different investment theses, with different margin structures and different competitive moats.

The same activity can also shift across generations. "Connect" for a younger generation might mean short-form video and real-time voice channels, while for an older generation it means private messaging and community forums. The Layer 1 activity does not change. The Layer 2 value and the mechanism for delivering it evolve with technology and cultural norms.

This is what makes the framework useful for spotting enduring companies. You can look at a startup and ask: is this a temporary technology wrapper around an old need, or is it unlocking a fundamentally better value layer for the same human activity? The startups that survive market cycles are rarely the ones with the most advanced technology. They are the ones whose core thesis passes the fifty-year test.

Technology is ultimately a product of human aspiration. We build artificial intelligence, autonomous systems, and complex infrastructure not because we want machines for their own sake, but because we want better lives. Faster diagnoses. Deeper connections. More time to create. The tools evolve. The needs underneath them do not.

And the best ones, the ones you return to years later, still feel true not because of the financial projections, but because they captured something about people that had always been there, waiting for someone to build the right mechanism.