“The market is going to face this big, nasty problem and they will have no other choice but to use our product to solve it.” – Excited Entrepreneur
Most of the time, this entrepreneur is committing the same fallacy that we faced when working on a failed project called RapidChip.
This fallacy is related to, but different from the “If you build it, they will come” fallacy. This one is committed by excited technologists assuming that simply building the superior technology will draw customers. It leads to a rude awakening when, even though the technology is amazing, no one wants to buy it.
Instead of committing this fallacy, our excited entrepreneur knows that success comes from reducing a customer’s pain. Unfortunately, his excitement about his own solution creates a blindspot when regarding how the customer sees his solution. Solutions not only need to solve a customers pain, but also need to solve it in a way that the customer is expecting.
You can image an entrepreneur selling bionic feet believing he has the perfect solution to foot pain. Simply amputate the foot, and use this amazing bionic replacement. Unfortunately, this fails to consider how people think about solving foot pain (usually something other than cutting it off).
A more real world example was RapidChip. The intent was to solve a big industry problem: as transistors continue to shrink, manufacturing the silicon gets more expensive. RapidChip provided a solution. Essentially, we would manufacture half of the chip, allowing customers to customize the other half. Because the cost of manufacturing half of the chip would be shared between multiple projects, the overall cost of each project would be significantly reduced.
At first glance, this appeared like a great solution, but it overlooked the perspective of the customers. We assumed that customers would continue to create products that relied on custom chips. But this wasn’t their only choice. One option was for them to buy another companies chip; another was to make their next product applicable to a wider class of customers thereby justifying the cost. Our solution was only attractive if the customer had already decided to look for a new technique for manufacturing chips and knew that we existed when they were doing their planning. Our solution only works if multiple projects can share the bottom half, unfortunately, this means designing your chip around a specific half that already exists. This was a constraint they never had to deal with before, and so they were solving the expense problem with other solutions, or demanding we create a custom bottom half just for them, which unfortunately eliminates the entire value proposition.
This wasn’t the only reason that RapidChip failed, but once the above fallacy took root in the minds of those working on it, we failed to consider what other alternatives customers would use, nor had we considered how to convince them to accept the additional constraints of RapidChip. We didn’t seek to design the technology to be easy for customers to move to. It is easy to become so enamored with the elegance of your own solution, that you fail to consider the way a customer will see it.
Every solution introduces its own set of constraints. Just because your customer has a critical problem and you have a solution, doesn’t mean yours is the only solution. More importantly, never underestimate the ability of a man in desperation to find a solution no one else had considered.
Always, always, always consider the alternatives that a customer may already have to solving their “unsolvable” problem and be honest about the constraints that your solution imposes on your customer, and then design the solution so that the customer sees it as an obvious choice.
- Customer development – A process described in detail by Steven Blank
- If it walks like a duck, and looks like a duck, it’s a duck – A good discussion of lessons learned from a failed start-up. His paragraph with this title is related to the above.
One of the other reasons for the failure is that the company in question had no marketing experience to speak of (making a bigger chip full of smaller generic transistors and seeing who comes to use it in order to best deploy your sales force is not exactly doing market research). In fact, most of the RapidChip masterslices were based directly on hypothetical off-the-cuff sketches put forth as starting points by our friend D.D. in Bethesda, who was rather dismayed to discover that no one had put any further thought into his proposals.
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