In 2007, 10,000 people around the globe were asked about portable digital devices. It was part of a study conducted by the global media company Universal McCann. One of the hottest topics at the time was the first iPhone, which was announced but hadn’t yet been released. Once researchers tallied the results, they reached an interesting conclusion: Products like the iPhone are desired by consumers in countries such as Mexico or India, but not in affluent countries. The study stated: “There is no real need for a convergent product in the US, Germany and Japan,” places where, one researcher later theorized, users would not be motivated to replace their existing digital cameras, cellphones, and MP3 players with one device that did everything.
There’s a growing feeling that something is not working with market research, where billions are spent every year but results are mixed at best. Some of the problems relate to the basic challenge of using research to predict what consumers will want (especially with respect to products that are radically different). But marketers face one additional key problem: Study participants typically indicate preferences without first checking other information sources—yet this is very different from the way people shop for many products today.
In the Universal McCann study, for example, people were asked how much they agree with the statement, “I like the idea of having one portable device to fulfill all my needs.” Indeed, there was a significant difference between the percentage of people who completely agreed with this statement in Mexico (79%) and in the United States (31%). So, in theory, people in the United States were much less excited about a phone that’s also a camera and a music player.
But it was a different story when people got closer to making a decision. They heard about the iPhone in the media, where it was declared a revolutionary device, and read blogs and reviews from real users. As iPhones started rolling into the marketplace, the idea of “having one portable device to fulfill all my needs” was replaced by actual reports from users.
It’s easy to blame the market research firm for this, but this is not our point. We are trying to explain the inherent difficulties in assessing consumers’ reaction in this new era. First, more decisions today are impacted by what we call O sources of information—“Other” information sources, such as user reviews, friend and expert opinions, price comparison tools, and emerging technologies or sources—whereas market research measures P sources—“Prior” preferences, beliefs and experiences. But let’s go beyond that: As we discussed, consumers have limited insight into their real preferences. This is especially true with respect to products that are radically different. Universal McCann correctly reported what it found. What market researchers often underestimate, though, is the degree to which consumers have difficulty imagining or anticipating a new and very different reality. What makes the task of a market research firm even trickier is that just as consumers’ expectations may be wrong (as was the case with the iPhone), there are many cases where industry expectations about what consumers will buy are wrong.
This is just like the research before Sony came out with the Walkman, and found there was zero market demand for a portable cassette player, but management decided to go to market with the innovation anyway.
Breakthroughs can’t be predicted by market research.
Steve Jobs said, in 1998,
It’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.
Paul Higgins wonders if we should oppose the Tumblr acquisition by Yahoo:
Paul Higgins, The Community, Tumblr and Yahoo - Do we Protest?
There are a couple of services that are really important to my life and my business. One of them is Tumblr and the other is Evernote. In promoting Evernote for example I often tell people that if Microsoft buys it I will retire. That is because it has become so important to my work flow and because of my view that large corporations hardly ever get these sort of services right.
Tumblr is equally important to me in a different way and I am part of the community and honoured to be one of the Tech editors, and have almost 200,000 followers.
There are rumours going around that Yahoo is in negotiations to buy Tumblr which worries me a hell of a lot. Let me be clear that I have no problems with the founders and investors making money off the contributions of the community but I worry what would happen to Tumblr in the hands of a large entity.
In a world where business models like these require both the founders and investors to contribute and create but the community to contribute and create as well, valuations and business strategies have a different flavour. No community and there is no business valuation. If you have similar concerns then please reblog or like this post. I intend such support to be a signal to both Tumblr and Yahoo (if the rumours are true) that the community is concerned and should be involved in the decision making process. Maybe that is thinking with delusions of grandeur or maybe it isn’t - over to you the community to decide.
I like Paul, and I can understand his concerns, but I don’t think we should protest this acquisition, but instead welcome it.
Tumblr is confronted with the growing attention of its most direct competitors — Facebook and Twitter — both of which have large and well-established management teams. Also, it’s not so obvious competitors — Google and Microsoft — are waiting in the wings to buy or copy Tumblr. In a way reminiscent of Zuckerberg, David Karp is a young man under intense pressure to grow the company that he started in high school into a company that will pay back today’s investors 10X or more on an $800M valuation. Oh, and keep a growing, fickle, and international community of users coming back for more. His genius has certainly been focused toward building the Tumblr architecture and staying close to his vision. But he doesn’t necessarily have the skill set, the team, or the inclination to do all the things needed for the next 10X growth. He may turn out to be Steve Jobs, but that remains to be seen.
My worry is that he could wind up bringing in someone promising as COO, to help push forward, Karp may wind up being Mitch Kapor at Lotus, who hired Jim Manzi, and wound up losing the battle for the office suite to a late-to-the-game Microsoft. Or creating something like the Sculley mess at Apple.
Despite my concerns about Marissa Mayer’s ‘no remote work’ edict — which can be read most generously as an effort to reanimate a dispirited organizational culture, and less generously as an effort to indoctrinate the Yahoos with a top-down, Googlish entrepreneurial fervor — she has been making good acquisitions in the past months, and I believe that she has the chops to help Tumblr crack the code of advertising.
Mayer’s tenure at Google would translate into the skills needed to support Tumblr in growth on the operational side — keeping the service up and humming — and working to make revenue flow. Also, by selling at the price that Yahoo is willing to pay, today, to suit Yahoo’s needs, Karp, his investors, and his team will be able to decrease or obviate the possibility of bad technical or strategic decisions later, forced by the need to grow revenue or execute a dubious liquidity path. That turn of events is the one I worry about most, not becoming another Flickr in Yahoo’s bullpen.
So, for whatever negligible influence I might have on events, I cast my hypomythical ballot in favor of this deal, because chance are it could turn out great, and a purchase by Microsoft, or the possibility of a Lotus turn of events two years from now, for example, worries me much more.
Tim Cook, cited by Josh Tyrangial
The rumors are flying about Apple rolling out a game-changing TV, because of Walter Isaacson quoting Jobs as saying ‘I cracked it’. Some level of reserve is appropriate, I guess considering how old and entrenched the TV industry is. But, isn’t that a perfect recipe for disruption?
I’ve been talking about Apple’s push to win ‘the battle for the livingroom’ for years. Given Apple TV, and the rise of the post-PC world, Apple will obviously continue the push into the living room. Apple TV is to the next Apple Television as Newton was to the iPad. A foray, an exercise: a hobby, as Jobs said.
John Gruber, Universe Dented, Grass Underfoot
Steve Jobs’ parting words at the 2005 Stanford commencement address.
by Stowe Boyd
I recall my first mac, pushing in
the floppies, and them pushing back out.
It was like a rowing machine, or
kicking a can down the road.
And the modem sound, connecting
to the office or AOL.
Pushing a sound wave off into the ether, and an echo back:
the shape of a looming world,
pinging in the desktop.
Steve Jobs must have been that kid
sitting alone on the back porch,
taking apart his yo-yo and looking, looking
to find where the sleep came from, or
talking to the grease-spotted old men
at the gas station about spark plugs or
what makes trains go so so fast.
Two million years ago, a kid like Steve
debugged fire, chipped flint,
shaped a wheel, and changed
everything. Every last thing.
My sons caught a cascade
of my manhandled Macs,
one by one by one. I handed
Keenan a beat-up fifteen inch
some months ago, with peeling
stickers on the steely case, where
he pours and pulls his fiction. Now,
I live on this teeny tiny macbook air,
as close to me as breathing,
as close as my own fingerprints.
It’s been a tie between us, my
hugely-used laptops in their hands,
off at college, in a library, typing,
typing. Conrad dancing dub step
to Youtube, gaming deep in the night.
A custom now, a way of passing on
the well-handled tools of a booming world,
almost at random: once in a blue moon.
Somehow timed to Apple’s calendar,
but mostly touching ours.
'You make your tools, and they
shape you’ I read in McLuhan.
Jobs shaped our connections, the way
we touch the tempo and ties of
a strung-together world.
We could draw the graph of Macs passed on
from one to another, out past my sons,
across a sprawling world, out
past a hundred billion hand-offs.
We’d see a net of worn connection,
the world that Steve’s hands built.
More than anything else, Jobs’s genius is in managing the creative process. Here’s his playbook. By Leander Kahney.
Steve Jobs has resigned as CEO of Apple. In a letter to the board, he writes, “I have always said if there ever came a day when I could no longer meet my duties and expectations as Apple’s CEO, I would be the first to let you know. Unfortunately, that day has come.” Above, we’ve pulled three Newsweek covers of the visionary Apple co-founder from over the years.