Posted by David Sherman on Sunday, November 07, 2004 at 1:08PM :
In Reply to: OT but interesting. posted by apb on Sunday, November 07, 2004 at 12:33PM :
It's an interesting story. I would take it a little further, though. The standard "Harvard Business School" model of product development that you see in big companies is that the marketeers go out and identify a need for a product, ask the potential customers what they want, draw up specifications for it, hand the specifications (including cost) to the engineers and say "design it". I've worked for these kinds of companies and it's not all all uncommon for one of them to spend millions of dollars designing something and then can the project at the last minute because either it turns out nobody wants it after all or it doesn't fit the new CEO's "strategic direction"
Small businesses, on the other hand, don't have time or cash for such "market research". They usually start out building a product for some market they know about from personal experience. Then, as they start talking to customers they find out that there's really a need for something else, so they branch out in that direction. With anything really innovative, the customers don't know that they want it, so all the formal market research in the world won't identify the "need". Lots of Bell Telephone market research in the 60s showed that people wanted picture phones. I doubt that any phone customers they suveyed said they wanted the internet.
However, by going to the customer's plant or shop and seeing how they do things, and what aspects of their operation seem to be too hard or take too much time or cost too much, and listening to them describe how they do things (rather than just trying to get them to buy your product), a small businessman can often find a really good little business niche that none of the big Harvard Business School companies would have ever noticed.
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