Monday, December 26, 2011

Saye's Law Revisited

Mark Cuban:
I'm working with a company that at one point had a product that was not only best in its class, but also technically far ahead of its competition. It created a better way of offering its service, and customers loved it and paid for it.

Then it made a fatal mistake. It asked its customers what features they wanted to see in the product, and they delivered on those features. Unfortunately for this company, its competitors didn't ask customers what they wanted. Instead, they had a vision of ways that business could be done differently and, as a result, better. Customers didn't really see the value or need until they saw the new product. When they tried it, they loved it.

So what did "my" company do when it saw what its competitor had done? It repeated its mistake and once again asked its customers what they wanted in the product. Of course the customer responded with the features that they now loved from the other product.

Anecdotal to be sure, but a pretty good illustration, I think, of the fact that businesses do not wait till consumers have expressed their preferences to begin production. Production must precede consumption and it's production that creates demand. I know, it seems obvious to many of us, but not, alas, to enough of us.

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