I am always amazed by the number of business owners that haven’t truly thought through the business model of their next big venture from the customer viewpoint before diving headfirst into the execution. They don’t really ask themselves whether their solution is truly solving a problem for anyone. Or they get the business model (mostly) right but fail on execution - disappointing customers by not listening to their feedback, not iterating fast enough, not adding the features that customers want in the right order.
People tend to fall in love with their own ideas when launching a new company or product without testing whether it’s something the customer actually wants or needs. They embark on building something “because it’s cool,” before figuring out if they have a paying customer. This is what we call the Innovator’s Bias. In an era when it’s easier than ever to start a business or launch a product, your ability to identify and solve your customer’s pain point is what will enable your solution to stand out against all the other offerings in the market.
Having worked with startups and new corporate initiatives as an employee, co-founder, and hired gun to drive a new plan forward, I have experienced Innovator’s Bias from various viewpoints. People and companies tend to begin their innovation quest with their own worldview, not with the customer’s journey of using a product to solve a problem or perform a task. They rely too much on their own experience, skills, and assets which either leads to “false positives” of insight for a new business or inventing “fake” problems to solve all together. Defining your unique value proposition should begin with the user experience and the friction they are experiencing in their current reality.
In 2004, I was working for a media company in New York that had a satellite-delivered cable news network distributed to thousands of school districts in the US. The company was faced with how to develop a new revenue stream leveraging its aging infrastructure, which were the TVs in the schools and the satellite dishes on the roofs of the schools. They had two options: find a new business case for the division or shut it down. As a public company, shutting it down without a way to replace the revenue stream wasn’t an appealing option because there would be negative signalling to the market and their share price would likely go down. They decided to repurpose the equipment to solve a different challenge the schools were having, which was complying with their software licenses and maintaining their desktops and servers. We thought we had a way to serve both goals: use our satellite infrastructure to deliver software directly to school servers and use our relationships with the schools to develop a new revenue stream. I remember the boss one day proudly exclaimed to the whole team, “...the whole world changed today because we found the problem we were looking for!” This statement reveals the first mistake that companies and entrepreneurs make when launching something new: starting with the solution and trying to retrofit the customer’s problem into our perception of their problem.
The idea was that we would help the schools fix their license compliance problems by using another enabling technology to dynamically move software around the closed user network inside the school, so that it could be used wherever there was an available computer. Our system would also help school IT departments maintain the software by automatically updating it over our remote satellite connections. The software publishers liked the idea because it allowed them to easily account for what licenses were being sold and how they were being used. What we failed to understand was the role that the teachers played in how software was used in the curriculum. Our division, after all, was led by engineers and media executives. We had no teachers on our team who could have identified a major flaw in our strategy early on. Teachers were under enormous pressure to meet student achievement standards set forth in new federal legislation. What they wanted was an entire curriculum to go with the software, customized to helping them meet the new federal standards. We were ill-equipped to provide it and had not taken this cost into account in our strategic planning.
We had created the classic solution in search of a problem based on assets and knowledge we possessed, not on what the end users were really demanding. The satellite “solution” solved a fake problem (getting software into the school) and was a creative way for us to repurpose our equipment. While the schools did have a problem managing their computers and software licenses, they really had a bigger problem with meeting achievement standards. Even worse, our system was complicated and hard to understand which only added to our customer’s pain point. The servers mostly sat idle in the schools and we were nowhere in finding a path to revenue. While our solution was unique, we couldn’t produce results for our customers. If we had paid closer attention to their real problems, we might have built a successful product. Moral of the story: it’s always about customer pull and customers will validate your instincts through their behavior in how they interact with your solution.
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