How to Know If You’re on the Right Track? Question Everything

Any founder interested in long-term success must be addicted to innovation. i know i am But there has long been a debate about how best to innovate. In the early days of Silicon Valley, Hewlett-Packard adhered to an innovation theory called the Next Bench. An engineer would ask the engineer sitting on the bench next door to describe the type of tool he would find helpful. Since HP’s customers at the time were mostly other engineers, it made sense market research. However, as HP became a more consumer-centric company, the company unsurprisingly found that it needed to reach consumers to be inspired by innovation.

At the other end of the spectrum was Apple, where Steve Jobs famously observed that there was no point in asking consumers what they wanted – how could they know they needed a graphical user interface? Apple’s job, he said, is to find out for them.

Granted, Mr. Jobs was fine with his approach, but most of us don’t operate at that level of genius, which is why we’ve obsessively talked to our clients at the companies I’ve owned. We wanted to know as much as possible about their needs, wants and dissatisfaction with our products. We then used this knowledge to conduct market research on how to solve their frustrations. This – and the fact that we owned our manufacturing facilities – allowed us to quickly improve our products and expand the product line to meet market demand.

That was my approach at Big Ass Fans, where we’ve grown an average of 43 percent annually for almost 20 years. We took what most people thought was a boring, simple product and kept turning it into something unique. That’s how we did it – and that’s how you can too.

I may not be religious, but that doesn’t mean I don’t hold some articles of faith. And first and foremost is the vital importance of surveying your customers – getting them to tell you everything they can about your product. At Fan Company we had a team that called every customer – not to hear what we did right, but to find out what went wrong. We asked pointed questions at every step, from ordering to installation to that first flick of the switch: How hard was it to find what you were looking for on the website? Were you able to find the instructions and was each step confusing? Has anything been damaged? Did the plumber take a break to play hacky sack in the parking lot? Did you break a fingernail trying to open the box?

I may not be religious, but that doesn’t mean I don’t hold some articles of faith. And first and foremost is the vital importance of surveying your customers – getting them to tell you everything they can about your product.

These kinds of conversations provide invaluable information that you can pass on to the bank in the form of better products and happier customers. But for some reason very few young entrepreneurs we meet today at my investment firm, Unorthodox Ventures, seem to have the courage to do so. They prefer to bask in praise. Ask questions? Well, never.

We’ve worked with dozens of entrepreneurs who seem afraid to hear what customers really think. Worse, they build systems and protocols to protect themselves from negative feedback in order to get positive reviews. They base the value of their business on the number of happy emojis they collect. I hate to tell them, but that’s not how the real world works. If you refuse to listen to someone who sees potential problems, how can you ever improve?

Here’s the first question aspiring entrepreneurs should ask themselves: Am I offering something that’s truly original? A few years ago, two young entrepreneurs suggested a handheld product to us. It took us no more than 60 seconds to find a variety of similar products for sale online. Had they even caught a glimpse of it? Of course not. Instead, they had followed the “wise” advice of their nearest and dearest, a professor of entrepreneurship at their university. Turns out none of their “advisers” had a clue, especially the prof – in my experience they so rarely do. Doing market research is a breeze because it takes so little time and money compared to learning the market the hard way. But many aspiring entrepreneurs don’t take that crucial first step.

A visitor to our office not long ago was actually convinced that getting multiple thumbs ups for your product from friends is valuable feedback. He also thought he was about to spin gold because two marketing firms starving his business told him he had a great idea. Imagine!

I learned the hard way the importance of market research. After finding success with our industrial fan, I thought I knew exactly what people wanted next. We spent two years and a million dollars making a quiet fan for commercial use. It had new controls, a new engine, a new design. It was a work of art, but nobody in the industrial market was looking for art. We’ve probably sold fewer than 200 of these fans.

The only bright spot is that I learned from this incredibly expensive and embarrassing mistake. Most importantly, I’ve learned to do upfront market research. Good planning always pays off.

However, executing your plans often depends on how much control you can maintain over product development, engineering and manufacturing. We’ve encountered too many entrepreneurs who had a great idea, found someone to make it happen, and might as well have thrown their idea down the drain.

A specific consumer device comes to mind. The founder had done a quick internet search and found a contract manufacturing company that would turn his pencil drawing into a real product. Seemed like a lot. Turnkey! No work! Next stop: Amazon!

The contract manufacturer, around 10,000 kilometers from his desk, has done everything. It designed the product, manufactured and packaged it, and sent it to an outside logistics service provider for distribution. But amazingly, the founder never, ever touched the device he drew and unfortunately it had significant problems and never worked properly. What this founder found was a warehouse full of junk. We tried to help, but there wasn’t much we could do because he didn’t really have anything.

The only bright spot is that I learned from this incredibly expensive and embarrassing mistake. Most importantly, I’ve learned to do upfront market research.

At Fan Company, our factory was located across from our headquarters, allowing the engineering team to create prototypes on the fly. We are currently working with a food company that has been able to launch new flavors and add retail partners quickly because they do their own manufacturing in their own facility. The company doubled retail sales in 2021 and added more than 1,000 stores in the second half of the year. And it’s expected to double again this summer.