(or How I Learned to Stop Worrying & Love the Obvious)
(also know as ‘The empty hamburger dilemma’)
Most new products and services fail. This is a depressing reality to swallow, however I am amazed by how few people ask why this happens. Or worse still all the people who have an in-built assumption and acceptance that most new things should fail. This shouldn’t be the case.
Here is a sad graph showing total product failures.
Why all this failure?
It’s actually simple. Most new products fail because they’re the ‘wrong’ product, not because of project or executional risk. This ‘wrong product risk’ accounts for up to 80% of the total risk according to agile experts Energized Work who were in to do some training last week (the graph above is also from their deck).
So if building the ‘wrong’ product is the biggest risk (by far), then it is foolhardy to leave this risk unmitigated until the end of the process. And yet this is exactly what most people and companies tend to do.
You probably recognise this argument as it’s very much the basis of the excellent thinking being espoused by Steve Blank in his Customer Development Manifesto and more recently Eric Ries with his convincing Lean Startup philosophy. A brilliant albeit lengthy articulation of all this thinking is in Ries’ Stanford talk.
It makes complete sense. It’s about testing and iterating every part of your business model and product, and about getting frequent and fast customer guidance as much and as early as possible. And it’s not simply about asking customers, ‘what do you want?’ – we know they won’t be able to provide a clear or correct response to such a naive question – it’s about testing responses to concepts, prototypes and early product iterations.
This concept seems to be anathema to many entrepreneurs; well, at least to those who want to deliver *their* vision as opposed to solving a customer’s problem.
I suspect the same is true for many agencies, and given Made by Many is very much inspired by web start-up approaches, I have been wondering how agencies – traditional, digital and otherwise – handle this necessarily high degree of customer obsession?
The first obvious difference is that agencies have a harder time getting proximity to ‘real’ customers, because like it or not, their immediate customer is the client. And say what you will about doing loads of user research, segmentation, employing user-centred design blah, blah, blah, the in-built financial relationship means that many agencies focus on keeping their clients happy, not necessarily delighting real customers (account management hierarchies anyone?).
Of course there should be a direct correlation between these two measures, but it’s not absolute. And anyone who has watched the wonderful systems thinker John Seddon in full flight knows that when organisations set the wrong targets, people employ great ingenuity to reach the artificial targets at the expense of their true purpose.
The other challenge is that the agency model come from a heritage not of building products but of creating communication solutions (i.e. TV and print ads, brochure-ware websites). So we return to the well worn debate about marketing versus products which I’m not going to delve into too much here.
Suffice to say, while you can indeed test and iterate marketing solutions, it’s more about discovering what people *like* or don’t like. This is an ocean away from the product dilemma of what people *want* and might even buy. There aren’t too many people sitting around saying “I wish there was more advertising I could see.”
This has meant that many agencies – certainly the more traditional ones – became truly exceptional at the creative process. That is, generating brilliant ideas for marketing executions.
What I find fascinating is that more progressive agencies are experimenting with some very innovative tools to innovate… the creative process. Crowdsourcing, collaboration, diversity of input, sketching etc. Nothing wrong with that. We’re doing that ourselves.
At the other end of the scale to the big creative agencies are the production-focused agencies. They get things done, well. They know how to run projects and product development, and the more progressive are ditching the lunacy of a waterfall approach and embracing more agile methods. This is especially true of technology agencies who not only understand an agile iterative approach, but are skilled in building ‘real’ (software) products. Of course they still tend to focus on delivery; that is, the 20% risk.
I think it’s easy to look at just about any agency and see at which point on this scale – creative process experts vs product development experts – that they exist.
The problem, as you’ve probably already identified, is the relative absence of customer obsession. Sure it’s occasionally present in the creative process, and generally likely to be somewhere in a good product development process, but neither focuses squarely on the question of ‘what customers want?’. Instead it tends to get danced around.
What you’re left with is an empty hamburger. A top bun of creative thinking and a bottom bun of product delivery. The missing meat is customer obsession.
(This isn’t really the place for it, suffice to say Made by Many does indeed seek to integrate all these elements, and we’re dead-keen to get even better at the customer obsession based on some of the successful techniques we’re already using.)
This argument is of course certainly over simplified. In fact this entire blog post was based on a visual idea that popped into my head (below).
What I do know is that in agency-land ‘customer focus’ is too often merely rhetoric. Sometimes it’s not even known who the real customers are (!). And when you aren’t driven by the customer, it becomes a complete guess as to when you need to pivot.
So maybe, just maybe, it isn’t rocket science. The brilliant YCombinator understands the simplicity required. When their startups get further funding, they are awarded a t-shirt that reads: “I built something people want.”
Because surely the world already has enough awesome things that nobody wants.
What do you think? Right? Too harsh? Half right? Stories to share on missing the beef? Comments welcome and also love to hear from you @juzmcmuz .