Understanding Customer Behavior

Steve Jobs, the venerable founder and late CEO of Apple, often cited this quote from Henry Ford: "If I'd have asked customers what they wanted, they would have told me, ‘A faster horse!'” Henry Ford envisioned an innovation that the customer didn't realize was even possible. He created the Model-T automobile, the first "horseless carriage" that was mass-produced and therefore within reach of the masses, and then founded the Ford Motor Company.

Apple ignores its customers, ignores the critics, ignores the press, and ignores its employees. New products are approved by Steve Jobs and a tiny group of key employees with a vision for the future. This is from a company that was saved from bankruptcy in 1997 by a $150 million investment from Microsoft.

So, back to tea. Customer thinking is derivative. It is based on the way they see tea today. According to conventional wisdom, a tea shop is a place where you sit and sip a cup of tea with a good friend and eat pastries or finger sandwiches. Or, if you're a bit more progressive, a place where you sample fine loose leaf teas and modern, Asian inspired health foods. But this has been done before! There are more than 25,000 cafes in the US already, most of which serve tea and pastries. Innovation doesn't happen in an echo chamber.

To succeed, you should ignore what the customer is saying and focus instead on what drives their behavior. There is a big difference between what a customer says they want and what prompts a purchase.

The only people who are less honest than customers are friends and family. They'll tell you that just about any idea you have is a good one and that you should "go for it". Have you ever seen the early episodes of a season of American Idol? Most of those people were told by well-meaning friends and family that they could sing.

The moral of the story? Turn down the volume and start watching customer behavior. Look for opportunities for innovation. Look for the next big thing. There are opportunities all around us, but the next big thing is unlikely to be a carbon copy of something that already exists. An entrepreneur, by nature, thinks they can do it better. The successful ones also do something different!