Sunday, December 20, 2009

The Enemies of "Customer Need"

Despite learning it during my MBA, I have sometimes forgotten or not focussed on the "Customer Need" in the excitement of starting and running a business. If your business is not growing, if your profitability is low, if running your business seems like an uphill task all the time then you may want to introspect on what Customer Need you are satisfying. The usual suspects who obstruct a clear view of Customer Need are Passion and Armchair Expertise.

Passion: Startups run on passion. And this passion extends to "loving the solution and forgetting the customer need". It happens to all of us - we device a way to solve a customer need and are so passionate about the solution that we are unwilling to ask ourselves whether the need itself really exists. So balance your passion with a hard cold look at customer need. Talk to several prospects, customers, acquaintances and see what their need is. If the need exists and if the need is large, devise a solution for the need. Again run the solution past prospects/customers and debate it before it becomes "the solution". Example: I met a guy a few days ago who was excited about a technology solution he has built for small retailers. When I asked if he had ever met small retailers, spoke to them, discussed their problems, observed them at work before he created the solution he says "no, but the solution is so cool they will buy it". Well, good luck with that.

Armchair Expertise: Beware the armchair expert! This is the worst guy to have on the team - the guy who never does research, who never meets people, relies on pure logic and is full of hubris. Almost nothing in the world works the way you expect it to. In the real world, there is government regulation, local realities, cultural context, customer expectations and a million other variables that logical deduction will never show up. There are so many failed products, failed strategies traceable to armchair expertise. Did you hear about the 400 million Indian middle class that were all going to wear Nike shoes, eat Kellogs, drink Coke and drive GM cars?  

The better your understanding of Customer Need the faster is your business success.
Post a Comment