In Steve Jobs does customer development, I asked readers to find a customer development lesson in Steve’s interview. There were a lot of good responses that I didn’t anticipate. But Reece came closest to the answer I was looking for:

“The subtler customer development point from Jobs is ‘We don’t need to add new stuff.’ He realized the feature set is fine — instead of cramming in new features that most users won’t touch, Apple can instead focus on positioning the product via marketing and pricing.”

In other words, Apple didn’t add a camera so they could deliver on their positioning (“lowest-cost way to the App Store”), increase market share (“everyone can afford it”), and maybe even increase revenue.

I think Reece made one small, important error; so let’s pick on him for the sake of our education.

“But if we just add feature X”

Reece implies that a camera is a feature “that most users won’t touch.” But adding a camera is probably a good idea. Maybe it’s the key to selling a billion more iPods. Who knows for sure?

Go to any group meeting at any startup and you’ll hear employees arguing for their own camera: “but if we just add feature X we’ll get more customers.” That’s a reasonable hypothesis. More people might buy the product with feature X. Should you build feature X?

Not necessarily. A startup’s cash-on-hand is shrinking every day. You want to add the features that will do the most to stop your losses. You don’t execute every random idea without prioritizing it.

The optimal plan may be to slow down product development, commit more resources to customer development, and find the right positioning for your product. The lesson here:

Once you reach a certain level of product/market fit, the best plan may be to add no new features, focus on positioning, make more money, and move up the startup pyramid — even though the team has a million obviously great ideas for new features that will make a buttload of money. You can improve the business without improving the product.

Quiz

Can you find other examples where Apple and Pixar did customer development?

Topics Customer Development · Positioning

2 comments · Show

  • Reece

    Thanks for the shout-out! Happy to be picked on, but one point in my defense – I wasn’t specifically saying “that a camera is a feature ‘that most users won’t touch.’” (I was speaking more generally about the tendency in many products to add too many features).

    What I meant is that the product was “finished” as is (for now) and there were other buttons and dials to push and turn that will help figure out where the product will sell the most. In this case, Apple decided that they needed to play with the price and marketing for the iPod touch. They may decide that a camera is an important addition at a later point, but only as it influences their product as a game machine and the “lowest cost way to the app store.”

  • Tim Raleigh

    I have always thought that the Newton (failure) was the progenitor of all future hand held apple products including the iPod.
    I think the iPod touch must have been heavily influenced by the Newton. Other than the handwriting recognition problems, most people who invested in a Newton loved everything else they could do with it.
    The Lisa was the customer development platform for the Macintosh.
    The Motorola ROKR was their ability to understand what users would want in the iPhone.
    I believe that all of the above were successful in helping Apple discover what customers really valued and wanted.
    The first laptop was a hack, but future iterations were not nearly as innovative.