The Secret to Never Building The Wrong Thing Again.

Amazon Fire Phone

The way people build products usually goes something like this:

Step 1: Have a great idea. This usually occurs in the shower, because that’s where all great ideas happen.

Step 2: Figure out exactly what problem that idea solves.

Step 3: Build the product.

Step 4: Find customers who have that problem, convince them to use your product.

But there’s something very, very wrong with building products this way. You don’t talk to customers until Step 4, when you’re trying to sell your product! What happens if you try to sell it, but no one wants it? What happens if you only discover you built the wrong thing after you’ve built the whole product?

You’re in a whole lot of trouble, that’s what happens. You’ve invested a tremendous amount of time, money, and resources into a solution for a problem no one has.

This is exactly what Amazon did with their new Fire Phone. Within a month of launching, they barely shipped 35,000 phones. Nobody wanted it. Amazon cut the price from $200 to 99 cents. It didn’t help.

Then they more or less gave up on Version 1 of the phone, writing it off as a 170 million dollar loss. They pledged to make Version 2 better by learning from the criticism, the feedback, and from their customers.

$170 million a very expensive lesson. (They should have hired Wonful. We could have taught them a better way to do this for.. say.. only $150 million? Twenty million in savings!)

What lesson should they have learned? What could we have taught them?

Reverse the approach. Instead of having an idea, figuring out what problem it solves, building the product, then talking to customers…

Step 1: Choose a customer segment.

Step 2: Talk to them and find out what problems they have.

Step 3: Develop a solution for those problems.

Step 4: Sell the solution to the people who said they had that problem.

Go talk to your customers first! Not to validate your product idea… but to find out what problems they actually have. Then go build something that solves those problems.

The three benefits to doing it this way are:

1) Discover if the customer segment you chose is a good or bad customer. You may discover it’s difficult to reach that customer segment (people in another country), they don’t have a lot of money (students), or they hate spending money (restaurants). If you discover this at the very beginning, it’s fast, easy, and inexpensive to switch to a new customer segment if you want to. If you discover these problems after you’ve built the product, it’s expensive and likely too late to address them.

2) Find out what your customers biggest problems are by going through an explicit problem discovery phase. People tend to focus on the first problem they find, or the one that resonates with them the most, but those rarely turn out to be the most important ones. Discovering lots of problems ensures you solve a problem important to the customer, and it’s always better to solve a “Top Three Problem” than it is to solve Problem #17 on their list. Once you’ve discovered many problems, you can choose which one you want to solve.

3) Once you decide on a problem, go through an explicit solution generation phase. The goal is not to think up one solution, but thirty. It’s easy to get attached to your first idea about how to solve a problem, and most people just stop there. But if you come up with thirty ideas, you can choose to explore the three most promising ones.  Run some experiments on those three, and you’ll uncover which is the best idea. If you only have one idea, you’re going to risk everything on your first idea.

One of the biggest challenges to this approach is letting go of your own ideas, and instead trusting the discovery process to reveal the best customer, the best problem to solve, and the best way to solve it.

Accepting a small increase in the time to market is another common challenge. Most companies take shortcuts or skip this phase completely to get the product out to market faster, but they’re failing to adequately weigh the risks. Rushing through or ignoring this process drastically increases the chance of building the wrong thing, and the cost of building the wrong thing is massive.

Spending a little more time and money on the front end to ensure you’re building the best right thing means you’ll be able to deliver incredible value to your customers. Not doing it means risking the fate of your project or company.

 

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