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The Most Dangerous Business Assumption

One of the biggest traps that we fall into in technical companies is we assume we know what customers want or need. Silicon Valley companies grew up building engineering products for engineers. This means that we started by making products for ourselves and assumed that customers needed the same stuff too. Fortunately, we were right about that for over a decade. We’ve gotten into the bad habit of assuming we know what customers want and need. What happens in this situation is that companies evolve and the engineers no longer resemble customers. A major challenge for High Tech companies is to shift the organizational culture from assuming we know what customers want because its what we need to one which actively listens to customers talk about their businesses and understand what they’re trying to accomplish and why.

I was called late one afternoon and asked if I could attend a “very important meeting” the next day. I could hear the urgency in the woman’s voice. She explained a common technical problem that might be an issue so I agreed to move my schedule around and attend. The meeting the next morning started with a brainstorming session to identify the target audience for an education program around our “problem.” After 30 minutes or so, I asked which customers we were going to validate our assumptions with, and suggested that we need to know if the customers believe there is a problem, because we have no evidence of one. I was met by blank stares. I volunteered to broach the subject with the CIO of a large manufacturing customer and get his thoughts on the issue. Nobody else had any intention of talking with customers.

My friend works for a large internet provider and was working on a product team defining the companies offerings. At the time, I was shopping around for a service provider to host my blog and had established criteria for what I needed. His company did not give me options for different software and would force me to use their commerce tools without options. He brought this perspective to the product team with specific recommendations and explained my approach. The team did not take his recommendations because they said that this wasn’t how people make “real” decisions. They didn’t ask questions about my goals or my background, the team just assumed they new better. Like my situation, they used the “ivory tower” approach.

Markets are changing for High Technology companies as technical sophistication becomes mainstream. There will always be the need for breakthrough products but there has to be a cultural shift that includes partnership with customers defining some of that innovation. Product Marketing in Silicon Valley used to provide recommendations for product tweaks and modifications to what engineering had already developed. The real transition will be for technology firms to understand their customer’s businesses, not just their IT needs. We need to know how they make money, what their operational expenses are, what obstacles they encounter, and how they measure success. Companies that become trusted advisors to their customers because of this genuine concern for the business will grow because of this partnership. Innovation will be much more targeted to the customers needs and this will reduce the difficulties of technology adoption and accelerate its benefits.

2 comments to The Most Dangerous Business Assumption

  • Phil

    Surprisingly, a lot of “real” customers lack the discipline to sit down and understand their needs before selecting a technical solution. They seek the new, shiny vial of snake oil that will solve all that pains them and there are legions of snake oil salespeople who are all too happy to accommodate them. Time and again I have seen companies invest obscene sums of money on software or systems that solve some general problem which a fast-talking salesman convinces them resembles their own (ill-defined) problems. I see this more often in smaller business that lack technical prowess to question the sales pitch, and such businesses end up either disappointed with their newly acquired technology or dramatically underutilizing it.

    When that “large internet provider” said:
    “that’s not how people make ‘real’ decisions,”
    they meant to say:
    “that’s not how the sucker who falls for the easy sale makes decisions.”
    or just:
    “I hate my customers, why should I do work for them?”

    I can create an analogous rant about healthcare, where people fail to understand their personal health needs and surrender the responsibility for their health to a doctor who they assume knows more about health than they do. Fact is, you have to live in your body, not your doctor – so you better take the time to understand enough about the doctor’s business so that you don’t blindly misplace your faith.

    The solution, of course, is to engage in a partnership (with either your technology or healthcare provider), but such an arrangement requires commitment (of both time and money) from both sides. The wise consumer recognizes the value of such an investment, and will engage with companies who value that kind of partnership. Unfortunately, the low-bid race-to-the-bottom-line culture in both technology and healthcare tend to thwart the development of such ties. Would that we could model the value of such partnerships and invest accordingly.

  • JB

    I agree with your conventional wisdom listed above Devin – but the contrarian in me wants to share a quote from Henry Ford I recently ran across:

    “If I’d asked my customers what they wanted, they would have said a faster horse.” -Henry Ford

    I think while following the wisdom you outline above 95% of the time, it is also imperative to think beyond the customer’s wants/needs for the “product lust” factor which has the potential to drive a customer’s business (or better yet the whole market) to new opportunities.

    I would say Apple has nailed this at a consumer level, and Telepresence may fall into this category as well for Enterprise customers, though I’m not sure how much of TP was customer spec driven. Cheers!

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