I doubt that Steve Jobs has ever asked Apple customers what type of products they want, or that he cares about what they need. Jobs believed that if he developed a mobile phone that plays music and surfs the web, he could create both the want and need. He was right: his iPhone changed the industry and started a mini technology revolution.
Most of the entrepreneurs I know fancy themselves to be like Jobs. They think they know—better than their customers—what the customers want, and what they need. Or they believe, as in the movie Field of Dreams, that if you “build it, they will come”. But it just doesn’t work this way in real life. The vast majority of technology startups fail because no one buys or uses their products.
Strategy consultant Sramana Mitra calls this failure “Infant Entrepreneur Mortality”. She says that in the hundreds of companies she has mentored, lack of customer validation is by far the biggest cause of failure. Startup guru Eric Ries says that “validated learning” about customers is even more important than revenue for a nascent startup. Revenue, by itself, doesn’t build traction for a business; it is only when you have products that are tested and proven, that customers are ready to buy, and that you can sell and deliver profitably that you have the right ingredients for a successful business.
How do you determine what customers will buy (or, if you’re building a free web technology, what it is that they will invest the time and effort to use)? Unfortunately, this isn’t a simple matter of asking. Your customers know what their problems are; they know what they like; and they know what they don’t need. They don’t know what you can uniquely develop for them that they will really want. This is what you need to figure out. Start by understanding what the customer’s problems are; use your experience and vision to conceive solutions; share this with potential customers in ways that they can understand; and learn. It is an iterative process.
The best example I’ve seen of a startup looking before it leaps is Campfire Labs. The startup has spent 14 months prototyping products. It hasn’t even started developing its products yet. It could be that Campfire never gets off the ground, but if and when it does, it has a better than average chance of becoming a Zynga or Facebook. In the meantime, it has already lived at least three lives (but, fortunately, hasn’t had to die three painful deaths). Campfire was founded by former Yahoo! search technologist Naveen Koorakula and, former Youtube head of international strategy and product, Sakina Arsiwala. Their goal is to change the way people collaborate on line—to make it more meaningful and to better manage the many contexts in which they interact (work, home, school, etc.).
Naveen and Sakina started by building a prototype of a personalized news/media site and sharing it with friends. But, while their techie friends would really get excited about algorithms, the others would scratch their heads trying to figure what the purpose of the product was. Next, they experimented with content sharing, interest graphs, and other technical concepts. They came with product ideas and asked their friends who were specialists in various disciplines to brainstorm with them. Once they thought they were on to something, they talked to random people on the street and workers in the mall next door. They went to university campuses and bought smoothies and sodas in order to get students to spend a few minutes with them. They carefully observed user reactions, read between the lines, and dug deeper to understand what the users were really saying. They incorporated what they learned into the next iteration.
Last time I met the Naveen and Sakina, they were still trying out new ideas. But they seemed to be getting closer and closer to having a product that users were eager to use.
Getting back to Steve Jobs. Does he really have some secret powers or a divine vision that lets him build one earth-shattering technology after another? I don’t think so. My guess is that in his secret lab, Jobs has teams developing and testing hundreds of ideas. He just implements the best of them. Jobs is not afraid of abandoning failures, and when something does click, he rules like a tyrant and makes it happen. Eric Ries agrees with me and prescribes a five-step process that can help people become more like Jobs:
- Hold your team to high standards; don’t settle for products that don’t meet the vision; iterate, iterate, iterate.
- Be disciplined about which vision to pursue; choose products that have large markets.
- Discover what’s in customers’ heads, and tackle problems where design is a differentiator.
- Work on as few products as possible; keep resources in reserve for experimentation.
- Start over (change direction) if you find yourself with a product that’s not working.
Editor’s note: Guest writer Vivek Wadhwa is an entrepreneur turned academic. He is a Visiting Scholar at the School of Information at UC-Berkeley, Senior Research Associate at Harvard Law School and Director of Research at the Center for Entrepreneurship and Research Commercialization at Duke University. You can follow him on Twitter at @vwadhwa and find his research at www.wadhwa.com.