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Are customers the innovator’s curse?

May 24, 2015

In the well-know book, The Innovator's Dilemma, Harvard professor and businessman

Clayton Christensen explains the paradox of how they very same maxim that ensures

extraordinary success leads to dramatic failures. The large successful companies listened

responsively to their customers and invested aggressively in the technology, products, and

manufacturing capabilities that satisfied their customers' next-generation needs. The

emerging innovators also follow the same principle, but curiously succeed, often edging the

large companies out of business. The book argues that the very same customer who was

earlier responsible for their splendid success becomes the barrier to innovation.

Many celebrated stories about innovators paying scant attention to what customers articulated

as their needs yet ushered in a new generation widely accepted products and technologies are

now part of literature.

The story of Apple and Steve Jobs, one of the most successful innovators of our age has been

extensively written about. Steve Jobs, is often portrayed as a visionary and a perfectionist but

not one who would care much about any formal means of customer research. He was once

quoted, “We do no market research. We don't hire consultants”.

Henry Ford, responsible for transforming the automobile from an invention of unknown

utility into an innovation that changed the course of the 20th century, commented on the

legendary Model T that if he had asked his customers what they wanted, before coming up

with the Model T, they’d have asked for a faster horse.

Many “forward looking” companies, as part of their strategy and/or innovation processes

systematically and religiously engage with their most valued customers. These are typically

their biggest customers, often already reasonably satisfied with your current products and

services, and hence willing partners in co-innovation or ideation. This is considered a sacred

mantra, advocated and espoused by management consultants and corporates alike. After all,

this is a sound process to de-risk your innovation program or future strategic pursuits. This

makes it easier to find the first pilot or the customer, makes innovation less costly, makes

automatic sense to the board and is intuitively acceptable since it’s the outcome of some fact

based decision making process. Yet, what companies end up achieving with this is

incremental in nature – a cheaper or faster or better version of the same old products or

services their customers already had.

The recent controversy or (controversies) stirred by Housing.com’s CEO had an interesting

spinoff, which clarifies how companies and individuals must approach innovation. The

controversy helped since otherwise readers would have conveniently ignored the rambling of

a 26 year old, IIT drop out, CEO of a loss making startup. In between his sharp attacks on a

venture capitalist firms’ management, other startups etc he made an interesting observation.

He commented that he would would have never done something like Olacabs.com since that

problem has already been solved by Uber. For context, Olacabs is a successful venture which

has raised money from many coveted investors, is valued at $2.4 billion and would soon

gross $1b in revenue. And, while being irreverent could also be a common trait of innovators

but my takeaway from this was a new definition of innovation. It’s aim is not to create a

“new” by differentiating your product or services from competition about

a) solving problems and

b) solving it better than available solutions.

Its not about making the successful customers more successful but making those that

are complaining and frustrated with current solutions happy. This could be a startup,

or the guy who cannot ride a horse.

Would love to see your comments in companies should innovate.