What If You Are Not Like Steve Jobs?
Some days back I started reading Walter Isaacson‘s “Steve Jobs” all over again. Chapter fifteen, titled “The Launch” is about the launch of the first Macintosh in 1984, and ends with the following sentences:
…neither Raskin nor Wozniak nor Sculley nor anyone else at the company could have pulled off the creation of the Macintosh. Nor would it likely have emerged from focus groups and committees. On the day he unveiled the Macintosh, a reporter from Popular Science asked Jobs what type of market research he had done. Jobs responded by scoffing, “Did Alexander Graham Bell do any market research before he invented the telephone?”
I paused here, and thought:
Where does market research fit in when you have a CEO with a strong intuition and gut feel?
Jobs is famous for eschewing market research because he believed that it only yielded needs, wants, preferences of yesterday and not tomorrow. “It’s not the consumer’s job to know what they want”, he is known to have said when asked about market research for the iPad. And Jobs is hardly alone in this regard. Henry Ford is known to have said “If I had asked people how they could go faster from point A to point B, they would asked for more horses”. But for all the mavericks, you also come across many a quote about how important it is to know what customers want, such as this one from Sam Walton, no less an entrepreneur himself: “Focus on what the customer wants, and then deliver it”. To some extent, they reflect the differences in philosophies, strategies, positioning and target markets. While Walmart is about delighting customers with “Always Low Prices”, Apple is about delighting customers with products that they are willing to pay a premium for.
Interestingly, I came across an article in Economy Watch, which cited a 2011 survey done by the MIT Sloan School of Business.
According to a 2011 survey by the MIT Sloan School of Business, nearly 80 percent of all brand and market management decisions made by top-performing companies were primarily based on their CEO’s intuition, rather than any form of market research.
Below is the infographic that explains this survey, with a conclusion: Market research will always have its place, but it must be coupled with human instinct.
So, when we read, “Market research will always have it’s place”, what does that mean? Can we strike a balance between driving forward with intuition and knowing when, how much, and what market research to do, especially if you are not like Steve Jobs?
Very few products that get launched create entirely new categories in the market. Most products are evolutionary, better, faster, cheaper version of something that already exists in the market. For revolutionary new products, like the automobile, the telephone, an intuitive gut feel (defined in the infographic as Domain Knowledge + Self Knowledge) is likely to be more insightful than exhaustive market research. (It can be debated whether the iPod, iPhone, iPad are truly revolutionary products, as music players, smart phones and tablet computers had existed before, but the experience that Apple created was revolutionary. This can be the topic of an entirely separate post in itself).
Given that 80% of all new products fail, and if they were all driven by a visionary’s instinct, it is not clear if market research would reduce this number. Even the Macintosh was not successful initially, one of the factors that led to Jobs getting the boot. It is hard to say whether market research, rather than Steve’s intuition, could have saved the day for the Macintosh. But for most products, it is worthwhile to keep the ears closer to the ground.
This is a tricky one. How do we know if we have done everything we can to truly understand the market and customer need? Before we even embark on a market research project, we need to be clear about the goals of engaging in the exercise. What do we want to learn? is more important than What do we want to ask?. Many market research efforts tend to start with the latter and once all the truckloads of data is in, the effort to glean insights begins. So, it is important to ask the last question first.
Perhaps the people at Coca-Cola Company who did two years of exhaustive market research and conducted over 200,000 taste tests for New Coke fell into this trap. Through all these taste tests, they would have likely asked customers which tasted better, regular Coke or New Coke. And quite possibly, New Coke did taste better. But they failed to ask a critical question: Do you want a New Coke? As they say, a product launch is the most expensive form of market research!
There are a number of techniques for doing market research, and we will not go into each one of those here. At a high level, the techniques can be broken down into two broad buckets: Discovery and Validation. Discovery research tends to be exploratory and qualitative in nature, and is inherently open ended. This is more art than science. If you are creating a new type of camera, a customer’s need to feel confident in taking great pictures (as opposed to finding out after the fact that the focus was elsewhere), and create fond memories is more important to understand than knowing whether a camera should have 5.0 megapixels vs 50 megapixels, or a 3″ vs a 2″ display screen. Validation research, on the other hand, is pointed, quantitative and has specific goals. To take the camera example further, among the many questions that could be asked, one for instance could be about knowing whether people shoot video with their digital cameras. The Lytro camera is a great example of a new camera that addresses the need to take great pictures that are never out-of-focus, and does not shoot video!
The customer’s ability to express problems and needs is critical because their articulation or lack of it can create a gap between actual needs and expressed needs. Another thing to be aware of is that many customers start designing solutions to their own problems. So it is important to focus on the customer’s reality than their imagination.
The key thing to keep in mind, whether you are a visionary CEO leading with your gut, or doing market research, is that the quality of the answer received is highly dependent on the quality of the question asked.
[About the author: Rahul Abhyankar – Cofounder, Director of Programs and Faculty, Institute of Product Leadership. Rahul has over 25 years of high tech experience spanning product management leadership and engineering roles across large multinational companies and startups, delivering new product innovation in software, cloud, data analytics, hardware, and SaaS products/platforms. He is passionate about building products, cross functional leadership, mentoring and coaching.
(Originally published on productleadership.com. To go to the original article click here.)