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.
A regular entrepreneur can definitely not take all of the risks that a person like Steve Jobs takes on a daily basis
lol, I guess we small baby entrepreneurs take a lot more risk in our daily trying and doing.
and if not yet, I will.
For a regular entrepreneur, the risk is greater. Think about it, Steve Jobs has already made his millions. If the iPad or another product is a disaster, it hurts the company's stock price, but doesn't affect his livelihood. If an "regular" entrepreneur fails, the family goes hungry and the kids don't get their education.
I roll my eyes at most attempts to boil Jobs down to a few bullet points, but I think you’re spot on. He has a fantastic sense of the market and nose for opportunity first and foremost.
Professor, thank you for another A+ article! I learn a lot from all of these. Are you teaching any class at Cal next semester?
Good article but until somebody pays for it — not venture capitalists, insiders, friends of friends, but real arms-length buyers — not sure I can agree the concept is validated. They can pay by using it so it attracts arms-length buyer ads, they can purchase goods or services .. whatever .. but people entirely unrelated to you or your company have to put up real dollars for the value you're giving them. Until money voluntarily and willfully changes hands for what you've built; an exchange of your work for their money, I don't think it's fair to say the concept has been validated.
Yes, I am doing at least one class that I'll discuss on Twitter once finalized…thanks
Thank you! This article is inspiring. I too admire how the iPhone came to market. I have an idea that fits a need, as well as huge potential in becoming a want by folks in the SEO industry….. Wish us luck!
"14 months prototyping products" without shipping? Are you serious? This might be a reasonable approach for a team within a $200B+ company, but there's no way this is sane for any consumer startup.
Here's a much better reason why we are not like Steve Jobs and Apple: We don't have MILLIONS of rabid fans who will buy whatever we release the day it comes out at a premium based solely on our demo.
Yes sometimes you have to research longer than this to create some wonderful products..:( I am doing it for more than 3 years on a single project..It has not got off the ground yet..
And you don't have rabid fans because you are unproven, indecisive and untalented. If it takes this long in vaporware, you blew it.
Do you think it was always that way that rabid fans automatically bought Apple products because Steve said it was a "magical" product? Hell, no. That became something that was earned over the years. This mentality of fans will make Apple products successful from the start where other products would probably fail. That's how it's going to be for the rest of the tablet rivals. Failure or very low sales. Vaporware is nothing but some fanboy's wet dream.
What most of you wankers don't seem to understand is that any company in their right mind would kill to be able to do what Apple can do in terms of marketing and sales, without the consumer ever having touched the product. I agree that the average consumer doesn't really know what they want. They may have some vague idea, but Apple products will somehow get close enough that the consumer will like it. No, not for you brainiac tech-heads that already know everything there is to know about electronic devices, but just the average, non-tech consumer. Apple (or any tech company) can't make any money from brainiacs, because they're too damn critical about everything.
Great perspective on start up and Apple. The key difference that Apple have achieved is the creation of need!
Laughed a lot at the comment about Apple Fan Boys- this is kinda the point! Drive vision, innovate, deliver quality and tell people- you too will have fan boys, maybe not as many as Apple unless you happen to have a few $bn at your disposal!
Liked the five steps, but Steve jobs has been just brought into this article just to pep up the reach. in first place, stratup don't enjoy such a smart workforce that jobs enjoys, no point of comparing the two. 2nd we shouldn't forget that it is his second coming :)
The 5 steps were Eric Ries' advice. Startups usually have more dedicated and committed workforces than big companies do.
Wished we had had time to do 14 months prototyping but that's a bit of an academic view of entrepreneurship. None the less, it is a really good article and it highlights really well the importance of vision and fluidity in a startup.
Would you rather spend all your resources marching forward only to fail after 14 months? Better to test your ideas and fail fast, recover, and try again.
Depends on whether or not you have the resources to survive 14+ months or not. At my current burn rate, draining the retirement account, I'd give me six, tops.
I disagree with this post for one reason… customers dont know what they want, they think they do, but they dont. I cant tell you how many times (as a web software developer) I have added a feature that as much as 90% of our users demanded, so we spent months building it, just to see the feature used 2 times in a year! (we hade 74,000 users). You are right, your not steve jobs, so the build it and they will come thing just wont work. But you need to discern your users wants and needs, not listening, and not deciding for them what they "will want".
Wrong. You create for what they will want tomorrow, not today.
Haha… I like that :)
@matt… it really is true, GREAT product management doesn't just repeat what customers say, they understand what customers do, how they think, and where they are going… and do so quantitatively. this leads to great ideas and design for what the customer will use and need.
You need better product managers who know how to cut through the noise and develop what customers need vs. ask for.
To the people who say it's unrealistic for an average person to have a 14 month prototyping period I say "You obviously don't know what you're talking about"
I'm an entrepreneur that has had two projects on the back-burner, slowly making steady progress. The first startup is a beauty product line (I am a little over two years into this idea). The second is a website that provides real-time rankings for (well I'm not going to tell you) (I am a little over three years working on this one.) Both ideas are starting to get some legitimate profitable traction right now, how ever small those profits might be.
It's only me directing these two projects and I've always been pretty broke! On average I've probably invested $100-$200 a month, and spend tons of time on both ideas. The truth is, I don't work a 40hr a week job and I have very cheap rent (which I did on purpose). This allows me the time needed to develop these ideas which I consider a fully necessary step!
In my opinion, the bottom line is: YOU NEED TO HAVE THE PERSISTENCE TO CONTINUE WITH YOUR PROJECT OVER THE MANY FAILURES YOU WILL ENCOUNTER IF YOU WANT TO CREATE SOMETHING WORTHWHILE.
I believe that was the point of the article. True, Steve Jobs can hire a hundred people and make this process quicker, but if he doesn't know how to direct a project like this he will just lose money quicker. You, on the other hand, don't have 100 people, but you do have your time, and if you know how to direct a project you will make progress, albeit much slower than Steve Jobs.
Persistence is key… I now have a spa carrying the beauty products and a sales campaign ready to hit the ground. I've also received a $30,000 grant for the website idea. I'm not "there" yet by any means, but I do have the persistence to keep going, even if it takes another five years, and the results are finally starting to show.
If you don't have this persistence, then you are not cut out to be a successful entrepreneur. Sorry; go get a regular job and spend the rest of your time dreaming, surfing the web and posting comments to validate your exisistence.
entrepreneurship, you are doing it right.
I concur. Algorithms don't necessarily always apply to entrepreneurship, hardly ever in my experience. Every path is different, what one does will not work for another and vice versa. The persistence and focus is key. For me as soon as I started listening to myself and focused on what I need to do or thought I needed to do rather than what others were doing is when my business (professional services consultation. not a web start-up or anything like most on here, regional b2b) started to really establish itself and work and gave me the "hey… this is going to totally work" glimmer. People set out with the wrong intentions often too. This guy has definitely got the right idea. I applaud him, especially for the last paragraph.
Chris, well said.
It looks to me like ur on apples Dick
Absolutely WOW! Beats everything else here =8-O
The problem is time, professor. I would suggest release the beta version of the product into the market and really see peoples reactions. Just going and asking random ppl will not give you the right feedback. You have to ask that early adopter who sees value in your creation. You have to ask those ppl who will really use or consider trying out your product. Release early, release simple with not a lot of features while using the KISS strategy. If there is interest around the product take it to the trajectory that the users want it to go while keeping the final vision (which off-course would evolve with time) intact.
Fouresquare is a good example. keep studying the market and user behaviour.. see what they like/dislike, talk to them! Use tools like uservoice
Just my 2Cents. I am a young CEO and have a lot to learn (:
Yes, that is a feasible strategy. I like the KISS methodology also. Don't like your name, though.
Thanks for getting back! I guess its time to login using facebook :)
those who can't do, teach.
ZIIIIIIING!
And those who can't do either lurk on boards anonymously posting silly comments. :)
jeez, man, never feed the trolls. i was taking an easy cheap shot. your job is to stay above the fray. now your readers will really wonder if you're worth listening to.
Yea, I know. I fell into the trap. I normally stay out! :)
that's okay, go debate arrington and sin no more.
Finally someone on TechCrunch that writes an interesting and informative article.
I am not sure a customer always knows what they want but if you really take the time to think about it, and then prototype some products back and forth with the public, then I think there likely is a bigger chance of success as suggested.
I know that personally I have at least 1/2 dozen ideas that I would love to explore more, with one being in progress now. But where I am from in canada it's hard to get information on the steps to look for partners and/or funding like these big american startups.
I would love to hear an article where a seasoned developer with great technical skill, but little business knowledge is able to build a innovative start-up from the ground up, vs the other way around.
Oh man… Your article starts with an incorrect statement. When Jobs launched iPhone, music and internet were already available in many other phones and it was nothing new. Actually many of the large mobile companies were already preparing their "next generation" smart phones (by the way the design concept we saw in the first iPhone was first seen in a design contest, on an LG phone).
Anyway, what was new with the iPhone was the combination of good hardware, excellent design, great interface and software, which boosted the whole music and internet experience. In no way he started this so called "revolution", he just may have realized the opportunity better than others and acted faster. And of course Apple huge fan base played a significant part on iPhone success.
But what I think is most importantly are the first years in Jobs history as they relate much more with the "entrepreneur spirit". So that's where I would look before I leap… ;)
Fair enough.
Where would we be here today if Google would have asked the idiots masses: Do you need another search engine?
There will always be visionaries and there will always be those that think progress should stop because they personally see no need for it. If you don't own a car then you see no reason for building roads. There are those willing to take risks and those that always want to play it safe. Humans would never make technological progress if everyone just played it safe. Never ask the masses anything. They either don't understand or don't see a need for it or are just not interested. Do your thing, introduce it to the masses and see if they use it or like it. I always say that nobody asked for the Ford Mustang but believe me, it certainly made history. But then again, nobody asked for the Edsel, either.
Actually, when Steve Jobs started on the business. He sure does cares for the needs of the people. I am talking about the 80's when his hair was still long. It just so happen, that he became really good of what he does and he knows how to create 'wants / need' for the people. (even he's not serious)
Obviously, if you want to venture for something. Don't act as if you know everything. Think big, but act locally. You know that you are successful already when you feel it. And yep, it will come.
Naveen and Sakina building a product. They don't have an established product yet and no one knows except hoping that they will have one. But why do you have to give an example of someone who don't have a product out yet. I have a brilliant and absolutely brilliant idea I am creating and prototyping everyday and every hour, sometime even in my sleep. But no matter how much time you spend prototyping and understanding , it will not be a product till it comes out and users experience it for real. Why do you think Microsoft spent so much money and time to build a phone and kill it in a month ? Do you think they did not try to understand their consumers and market ? They definitely did but again it was all assumption. To be certain they had to build one.
Now look at how GRAVITY is building its product. It is learning from its customers everyday and evaluating its customers' view and modifying the product almost every few days.
What you are trying to say is too vague. To build a consumer product and to build an enterprise product are two different games. Everyone has their own way to do things and hence there are N number of ways. There is no one formula to do and that is why it is entrepreneurship and not classroom assignment. I respect your view but sometimes I get disturbed when I see some thing so vague and being told as a mantra.
Camfire labs is making a mistake by waiting for everyone to get it. They should begin with the techie market they’ve already got. They can refine their product from there while building an excited customer base that can help them.
Viva Vivek! This is possibly the most important post made in the history of TC as are some of the comments below. And this single issue is what I have spent decades (most of my life!) thinking about and 'implementing'. And the tips near the end validate my strategy. Vivek, your post could be expanded into a book. It is the randomness of life that is why Microsoft and Google with Android won't die anytime soon. Their path allows for the unexpected far quicker than on garden walled systems. For example, I REALLY wanted an iPhone 4 – before it's spec was known. But since launch, I feel so let down by specific omissions that make a big difference to my life and work needs. No worries, the HTC Desire and Dell Streak, products of a more flexible eco system deliver. (I am an Apple lover BTW, in particular their marketing and one or two genius innovations, such as MagSafe.) Continuing, I have been trying to justify purchasing an iPad as a mobile replacement for a laptop/MacBook. However, Apple's cloud strategy still not defined (very very worrying for Apple's future IMHO unless they hurry up), I found the device (to quote various Amazon reviewers) one of those things you WANT (because it's so damned sexy), but will often fail to justify. (Beyond a very slick sales tool or web browsing device.) Despite playing with Numbers and Pages and being wowed by the usability, there was no actual way to share the data.
So, whilst Apple may have kick started the tablet market, I wonder who will deliver an intuitive multi touch cloud computing solution that provides solutions to our vital daily needs?
(I think I've gone off topic, but you get the point. For all the lustworthyness of the perfectly engineered product, like a Lambo, when it comes to practicality, random rules.)
Am too hot and busy to edit this, so excuse any typos or loss of traction. (Great Britain lacks an air conditioning culture, so on days like this, the pasty faced Brit suffers physical and mental epic fail…) :P
Thanks. I can see I stirred some real controversy, though. At least I have people thinking.
That's stimulating nature of the TC forums! :)
Nibras, a big thumbs up from me. As you so eloquently stated, forging new markets requires more than just a solid appraisal of existing needs, it requires vision. Thanks for the contribution. Do you have a regular blog?
I personally think Jobs just got a lucky break with iPod. After that, Apple has always built on the success of the iPod. iPod required and had iTunes to get the music going. iPhone is an iPod with a cell chip. With iPhone, iTunes got modified to allow apps. iPad is a bigger iPod and comes with its own set of apps at iTunes. There is no other success that Apple has got so far. Its Mac line is a failure – didn't live up in the market, AppleTV is another of those unless somehow they tie AppleTV up with iPod/iTunes combo and let me not go to MobileMe. Beyond these there isn't much Apple produces.
Amen! You are Spot On!
The same can be said of MSFT, GOOG, YHOO, RIMM, DELL, ADBE….
Obviously you're not providing valid criticism.
Apple hires designers, designers who have been targeting large consumer markets for years, and Steve Jobs makes sure they are listened to. Throwing a bunch of random ideas in front of your customers will not turn them into good ideas, even if you spend 14 months doing it. The real value of a good designer is synthesizing observations about customer needs and desires with technology, and cutting down on the cycles you need to get to a great product. Unfortunately, everybody from the founders to the marketing types to the engineers feels that they should be the ones making design decisions and hiring yet another person to do it is fraught with politics. To make matters worse, many people believe believe that design is something that happens when an ideal designer has an instantaneous flash of insight (ideally during an interview!), and so they leave design positions unfilled for months. Even for designers, it is work that takes time that needs to get started early–ideally before too many important people become attached to their own ideas.
an interesting insight, that we feel within ourselves, but well captured …parigi
I agree with the overall concept of validating ideas but I'm not sure why Campfire Labs is such a great example of that. Buying smoothies and brainstorming with people for 14 months is very different from having people commit to using / buying your product (not to mention a luxury most entrepreneurs don't have). In most cases the way to go is to build the quickest prototype you can and start getting users. Then it's all about persistence and flexibility until you find the right direction or convince enough people your direction is right. If a few notable companies took the 14-month smoothie route I doubt some of today's Internet giants would have existed.
That is because they are thinking before they leap. Had they started a company of the bat, they would have failed miserably. As I wrote, they have lived the equivalent of 3 lives already.
Steve Jobs a genius? Apple may be the Master of Hype but it’s not the Master of the Universe. Anyone remember the failed Apple III, the Newton, Lisa and Jobs’ NeXT?
That was my thought as well. The article makes the same mistake that many entrepreneurs make: glossing over others work, difficulties, and failures.
Apple III?
Lisa?
NeXT?
Newton?
Remember Jobs’ famous comment to his startup gathering at NeXT that if they didn’t make it big in something like two years, they didn’t deserve to be in business? Yeah, talk about prophetic.
Jobs and Apple have had more than their share of spectacular failures. The lesson to learn here is that Jobs *keeps coming back.* Nothing stops this guy. For all his shortcomings, that’s what makes him a master entrepreneur.
Good point. This reminds me to write about the importance of failure…
Developing products could take 14 months or longer, especially if it's not something you can upgrade on-the-fly on the website and everyone automatically gets the new version. But in the world of web development, what's the point of spending those 14 months? You're essentially limiting the exposure to real potential customers.
When starting a new company, you're not always solving a problem. Sometimes what you have is a better search engine which is solving a problem, but sometimes you're creating a whole new way of interacting. People didn't really feel the need to get mayorships at restaurants before FourSquare or its predecessor came around. They also didn't need to tweet every time they go to the bathroom, even though they do it today. So if you've got a better way to solve some problem, great, but some of the great companies around now have created a whole new need in the market. It's those companies that have to train the market and have a hard problem showing why this is good until enough users sign up.
Sorry to burst your parochial tech purview, but regarding those "great companies" you mentioned: Twitter has a horrendous retention rate and is mainly used as a self-promotion tool aside from the rare breaking news story; and Foursquare only has 2 million users so far, making it not applicable to being called "great" yet. Hell, Gowalla just had a nice big advertisement in NYC that bombed (http://www.businessinsider.com/gowalla-billboard-2010-7).
Truthfully, you'd be amazed at the kinds of (useless) products that can be built with >$25M in the bank.
Point taken. None of them have existed yet.
I don't consider "only 2 million users" that bad, btw. There's a business there and they now need to execute. Same for twitter – they've got the users and can find the business models to make it interesting.
The thing is, hese companies would have failed the "solve a problem" test, right?
One of the big mistakes made in this repeated debate between the "smart guesser" and the "diligent researcher" is recognizing the nature of natural selection.
With lots of funding, and lots of folks out there willing to take risks… the statistics play out that one of these high-flying entrepreneur's is going to get it right.. without research. This does not always mean they are brilliant – often they are lucky. Remember, when you have a large enough sample of smart start-ups guessing at particular space or problem, someone is likely to get it right.
And the start-up doing research, will likely be able to explain intelligently and succinctly why exactly that other start-up succeeded and won the day with their "guess".
It's "turtles on the beach"… make enough little turtles, and a few of them will make it to the ocean and survive. Woe to those little turtles that stayed back and tried to plan out their path to the ocean…. they are too late.
I don't agree that Steve Jobs just gets to build whatever he wants. Steve Jobs boss is all the shareholders of Apple. Steve may have a tremendous amount of influence with determining direction but the boring work of validating that a market exists and what features should be included in the iPhone are left to his other teams.
Good hook for the article though :).