What's the Problem?

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This interesting nose picking device is an example of the kind of products that can be developed following the hunches of people inside a company as they chase technical challenges without checking in with their customers' world.

Developing products based on the hunches of people inside the company, often for the technical challenge, generally yield poor business outcomes.

Edward McQuarrie, another long time expert in in product development says the same thing in his seminal book "Customer Visits -- Building a Better Market Focus":

Empirical research shows ...
"1. The less the investment in user needs research, the greater the odds of failure.
2. The more narrow and restricted the range of research activities, the greater the odds of failure.
3. The less proficient the research, the greater the odds of failure.
4. The later in product development that research was conducted, the greater the odds of failure.
(McQuarrie, 1998, p. 8)

Another indictment:

"... customer input is still missing in most new products." (Ian Alam, p. 249)

Grabowski also gives the explanation.

"Customers do not buy just any new product. They buy only the new products for which they have a need." (Grabowski, 1998)

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Why do smart people get it so wrong?

Expert opinion boils it down to the focus on one's technology, product or organization, and not the customer.

Ehrenfried again:

"The excessively high rate of failure of new products is not due principally to lack of good engineering, insufficient investment capital, or lack of sales promotion. Products usually fail because there is insufficient demand for them."

"Too many products are developed to satisfy the desires, urges, and hunches of people within the company, rather than to meet the specific needs of the market external to the company. Products grow out of the desire to tinker, or because an engineer sees a purely technical challenge." (Ehrenfried, 1955 -- according to Grabowski, 1995)

The single greatest reason for product failure is not meeting customer needs. When technical it is in the integration.

Sheila Mello, an expert in product developent for many years lays it out directly in her book "Customer-centric Product Definition":

"... the single biggest factor in the failure of products to meet market needs is poor product definition. Product definition, in turn, is linked directly to the ability of a company to discover and synthesize customer input." (Mello, p. 18)

"... companies fail to build into the product development process the necessary steps that will ensure the full consideration of customer requirements, both stated and unstated, before product development begins. (Mello, p. 17)

Ralph Grabowski has been accumulating data on product failure for over 30 years. Paraphrasing his whitepapers:

Unbalanced investment in engineering over market research is a predictor of product failure. This is based on data from over a trillion dollars of lost capital or created value across several decades, across industries, and across company size. Failure and success correlate with the balancing of funds between market research and engineering. Companies with as much or more investment in market research compared to engineering were very successful. Those where the market research was less than 10% of the engineering investment were catastrophic failures. (Grabowski)

(cont'd above right)

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Why so little investment in front-end customer research during new product development?

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