How to Know If You’re on the Right Track? Question Everything

How to Know If You’re on the Right Track? Question Everything

You can’t discover what you really need to know about your product or service unless you interrogate your customers, suppliers, and manufacturers.

Illustration by Gracia Lam

 

Any founder interested in thriving over the long term needs to be addicted to innovation. I know I am. But there’s long been debate about how best to innovate. In Silicon Valley’s earlier days, Hewlett-Packard adhered to an innovation theory called the next bench. One engineer would ask the engineer sitting on the next bench over to describe the kind of tool he would find helpful. Since HP’s customers at the time were primarily other engineers, that constituted market research. But when HP became a more consumer-focused business, the company discovered, not sur­prisingly, that it needed to reach out to consumers for innovation inspiration.

 

On the other end of the spectrum was Apple, where Steve Jobs famously noted that asking consumers what they wanted was pointless–how could they know they need a graphic user interface? ­Apple’s job, he said, was to figure it out for them.

 

Granted, Mr. Jobs did OK with his approach, but most of us aren’t operating at that level of genius, which is why in the businesses I’ve owned, we talked to our customers obsessively. We wanted to know everything we possibly could about their needs, desires, and dissatisfactions with our products. We then used that knowledge to conduct market ­research on how to solve their frustrations. This–and the fact that we owned our manufacturing facilities–allowed us to swiftly improve our products and expand the product line to meet market demand.

 

That was my approach at Big Ass Fans, where we grew on average 43 percent annually over nearly 20 years. We took what most people thought was a boring, basic product and turned it into something unique, over and over again. This is how we did it–and how you can too.

 

Have the Talk, Again and Again

I may not be religious, but that doesn’t mean I don’t hold firmly to several articles of faith. And first among them is the vital importance of interrogating your customers–getting them to tell you everything they can about your product. At the fan company, we had a team that called each customer–not to hear what we did right, but to learn what went wrong. We asked pointed questions about every step, from ordering to installation to that first flip of the switch: How hard was it to find what you were looking for on the website? Were you able to find the instructions, and was any step confusing? Was anything damaged? Did the installer take a break to play Hacky Sack in the parking lot? Did you break a fingernail trying to open the box?

 

I may not be religious, but that doesn’t mean I don’t hold firmly to several articles of faith. And first among them is the vital importance of interrogating your customers–getting them to tell you everything they can about your product.

 

These kinds of conversations provide invaluable information that you can take to the bank in the form of better products and happier customers. Yet for some reason, very few young entrepreneurs we meet today at my investment firm, Unorthodox Ventures, seem to have the stomach for it. They’d rather bask in praise. Ask questions? Well, never.

 

We’ve worked with dozens of entrepreneurs who seem afraid to hear what customers really think. Worse yet, they build systems and protocols to insulate themselves from negative feedback in a quest to harvest positive reviews. They’re basing their company’s value on the number of happy emoji they collect. Hate to break it to them, but that’s not how the real world works. If you refuse to listen to anyone who sees potential problems, how are you ever going to improve?

 

Take Your Research to Market

Here’s the first question that aspiring entrepreneurs should ask: Am I offering something that’s truly original? Several years ago, two young entrepreneurs pitched us a handheld product. It didn’t take us more than 60 seconds to find a multitude of similar products for sale online. Had they even taken a cursory look? Of course not. Instead, they’d heeded the “sage” counsel of their nearest and dearest, an entrepreneurship professor at their university. Turns out, none of their “advisers” had a clue, especially the prof–in my experience, they so rarely do. Doing market research is a no-brainer, because it takes so little time and money compared with learning about the market the hard way. Yet plenty of would-be entrepreneurs don’t take this crucial first step.

One visitor to our office not long ago was actually convinced that getting multiple thumbs-up for his product from friends constituted valuable feedback. He also thought he was on the verge of spinning gold because two marketing firms hungry for his business told him he had a great idea. Imagine that!

 

I learned about the importance of market research the hard way. After finding success with our industrial fan, I thought I knew exactly what people wanted next. We spent two years and a million bucks producing a silent fan for commercial use. It had new controls, a new motor, a new design. It was a piece of art, but nobody in the industrial market was looking for art. We probably sold fewer than 200 of those fans.

 

The only silver lining is that I did learn from that incredibly expensive and embarrassing mistake. Most important, I learned to do market research up front. Good planning always pays off.

 

Where’s This Sh*t Made?

Executing your plans, though, is often a function of how much control you can maintain over product development, engineering, and manufacturing. We’ve come across too many entrepreneurs who had a great idea, found someone to build it, and might as well have just poured their idea down the drain.

 

A particular consumer device comes to mind. The founder had done a quick internet search and located a contract manufacturing company that turned his pencil drawing into a real product. Seemed like a great deal. Turnkey! No work! Next stop: Amazon!

 

The contract manufacturer, located about 10,000 miles from his desk, did everything. It designed the product, manufactured and packaged it, and shipped it to a third-party logistics provider for distribution. But, amazingly, the founder never, ever touched the device he’d drawn, and, unfortunately, it had significant problems and never worked properly. What that founder found himself with was a warehouse full of junk. We tried to help, but there wasn’t much we could do, because he didn’t actually own anything.

 

The only silver lining is that I did learn from that incredibly expensive and embarrassing mistake. Most important, I learned to do market research up front.

 

At the fan company, our factory was located across the street from our headquarters, so the engineering team could mock up prototypes in no time. Currently, we work with a food company that has been able to launch new flavors and quickly add retail partners because it does its own manufacturing in its own facility. The company was able to double retail distribution in 2021, adding more than 1,000 stores in the second half of the year. And it’s expected to double that again this summer.

 

We’ve been reminded lately just how volatile the economy can be. And we all know that focusing on the basics will make your business stronger and able to withstand the inevitable ups and downs. But it’s always good to remember that every downturn is like a low tide that leaves more beach to explore and more things to discover–more opportunities to innovate, if you’re willing to ask a few questions.

 

Are you and your customers on the same track? Are you talking with your regular customers, who already love you, but not asking the hard questions of those customers who have had an average experience.  Even more so, are your associates turning your customers into advocates or assigns. We can give you insight into your customer’s experience and expectations. We can even provide you with your competitors service experience as it relates to yours. Ready to learn more? We’re here to help so give us a call.

BY CAREY SMITH and CARL PHILLIPS