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Mistaking yourself for the market 14 June 2004
In late 1985, Karen Bertiger, the wife of Motorola engineer Bary Bertiger, refused to go on her honeymoon with Bary because she could not get mobile phone service at their planned destination, Turtle Cay in the Bahamas. She repeatedly asked her husband why Motorola couldn’t create a phone that would receive a signal anywhere in the world. As she noted on her web site:
It made no sense to me why a small global cell phone hadn't been made before …. Thank God that Robert Galvin, the then-Chairman of Motorola, Inc. found the idea intriguing when Bary presented it.
Motorola’s ill-fated Iridium
The satellite phone was a wonderful challenge for a company with many accomplished engineers. As Karen recounts it:
If you want results, ask an engineer why they can't do something -- they'll try to prove they CAN do it -- which the entire Motorola and Iridium teams DID!
Fifteen years and more than $4 billion later, Iridium filed for bankruptcy. The satellite system worked well, and its development had overcome many difficult technical issues. There just weren’t enough people willing to use it for the business to make money.
Executives often assume that their tastes in products and services are the same as the market that they are serving. New York Senator Alfonse D’Amato once asked a developer of campaign ads to create a commercial on the line-item veto. According to a recent article in The Atlantic Monthly, D’Amato said to his creative team:
“Don’t you understand? People all over the country are sitting at their dinner tables at night wondering why we don’t have a line-item veto.”
The passions and concerns of senior executives (or U.S. Senators) are usually not the same as those of their customers. Designing products to fit the personal needs of the senior management team (or their spouses) is thus rarely successful, and, as with Iridium, can be catastrophic.
One reason that the personal approach to product development is so pervasive is that it occasionally generates big winners. Steve Jobs at Apple, Frank Nuovo at Nokia, Bob Lutz at Chrysler/GM, and Jeff Hawkins at Palm/Handspring are businessmen whose personal product judgment has helped build companies and industries.
These particular executives are well-suited to personalizing their company’s product development efforts:
Ø They all have backgrounds in product development and design. Ø They are actively involved in the development of their new products, and make extensive use of prototyping and market research. Ø They continually test and refine their product concepts.
The few business leaders who have successfully imposed their vision on a market set a dangerous example for executives who don’t have backgrounds in product development or design. The leadership of a company is not representative of its customers, and executive excitement around a product is rarely a sufficient condition for its success.
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