Why do we find failed products so interesting? Blunders like New Coke, that scooter that Paul Blart rides, and those misogynistic, pink Lady Bic pens captivate us because we’re consumers ourselves. We see ourselves as part of the story and can easily understand why ridiculous products don’t work. So they get a lot of press.
As product innovators, we study each other’s failures to learn what not to do at our jobs. But the answer is often the same, carried over from our interest as consumers: product innovators created something that obviously didn’t delight customers. “Think customer first!” is the resulting cry, the foundation behind the design thinking movement and its application in frameworks like the design sprint. All you need to do is design something that delights a large customer base, sit back in a lawn chair, and wait for the dollars to rain down from the sky, right? If only it were that simple.
Failing to delight customers isn’t the only cause of new product failures. It’s probably not even the most common. For every product that fails publicly there are countless more that never make it to the public eye. Sometimes new products don’t make economic sense. They’re too costly to build or priced too high to be worth it for customers. Sometimes they don’t make strategic sense. The company who creates them has no business being in that business because they don’t have the capabilities it takes to win. Sometimes the technology to make them doesn’t exist yet or is just too new. Sometimes failure results from a mix of these reasons and more.
We love design thinking but it’s unlikely to solve for everything you need to achieve commercial success with a new product. Still, it does provide a useful foundation you can build on to address risks beyond customer delight in different ways. Let’s look at three ways we tweak our approach to design thinking to account for a more holistic definition of success and to avoid some pitfalls that get less attention from the business press.=
Customers love it. But can we make money?
One of the most enjoyable parts of design sprints is the dedicated space for creativity that we don’t often get in our day-to-day jobs. When we focus this creativity solely on customer need, we come up with some amazing concepts that stretch the imagination, that change customers’ lives, that solve problems for our customers they never knew they had until we presented them with an alternative. And that might cause bankruptcy if we allow them to exist.
Let’s look at a current example that has made it to the business press: Tesla’s Cybertruck. Consumers are certainly not saying Cybertrucks shouldn’t exist. Tesla has over a million orders for the truck so far–years worth of sales already booked. But despite their ability to delight a large customer base, I wonder if Cybertrucks make economic sense for Tesla and if the resources spent on the program so far might have had a better return for them elsewhere.
When Tesla announced the Cybertruck in 2019, they expected to launch in 2021. Now they’re saying they’ll launch in November 2023. They still haven’t fulfilled a single order and nobody would be surprised if their latest deadline slips and then slips again. They also don’t expect their Cybertruck business to be scalable or profitable for a long time even after they finally start shipping trucks. Why? Let’s look at Elon Musk’s comments in Tesla’s Q3 2023 earnings call. Hint: it’s not the pandemic.
“But this difficulty going from a prototype to volume production is like 10,000% harder to get to volume production than to make the prototype in the first place. And then it is even harder than that to reach positive cash flow. That is why there have not been new car start-ups that have been successful for 100 years apart from Tesla. So, I just want to temper expectations for Cybertruck.”
Musk goes on to give what he calls “best guesses” about when Cybertruck will reach at-scale production levels and when it will be cash flow positive. 4 years since the product prototype was revealed publicly and with a million orders in hand, Musk is still making best guesses about the economic viability of Cybertrucks. Why? Because of all the new to the world technology that they crammed into the Cybertruck to delight customers. The vehicle was designed to bring the wow, not to be economically viable. Tesla is not just implementing scores of new technologies in the Cybertruck. It’s scaling them to commercial levels all at the same time while trying to reach a price point that makes sense for a large enough customer base to make the whole business make sense. And it sounds to me like this economic equation is still uncertain for Tesla, even in the long run.
Tesla has economic resources, a long time horizon, and a risk tolerance that most companies don’t. They’ll probably be okay. But assuming you don’t have the funds to stretch losses and uncertainty over the better part of a decade for new products, how might you avoid designing your own Cybertruck? The answer is not to stop worrying about customer problems and to only think about money. It’s simply to make economic viability part of the design equation earlier than Tesla did. Maybe from the very beginning.
How might you do that? One powerful way is to include economic realists in your design team to counter the perspectives of dreamy idealists. Giving economic experts a voice in the room adds a new dimension to creativity that, surprisingly, even the dreamers can appreciate. Solving for economic reality is just another need in the mix and idealists often rise to the challenge of accounting for them in the creative process.
Customers love it. But can we get it to them?
Once upon a time, before e-commerce was a thing, consumer product manufacturers were highly dependent on physical retailers to get their products to consumers. While ecommerce and home delivery options have seemingly made this easier, product creators still have to find a way to put that product in front of consumers so they can buy it. And competitive and economic forces at play with channel choices can sometimes make this tricky.
Let’s look at the old model of retail: the brick and mortar store. The amount of shelf space in a store is finite and consumer product manufacturers compete with one another to fill it with their products. Consumer delight here matters–retailers want to carry brands and products that consumers love to pull them into their stores. But the economics of retail also matter. Retailers make more money from individual consumers when they walk into their store frequently because, as we’ve all experienced, they tend to walk out having bought more than they originally intended to. This means that products that need to be bought frequently have more appeal to retailers for inclusion on their shelves. Frequent purchases drive frequent trips to the store which drive more unplanned purchases. Putting more money into retailers’ pockets.
What does this have to do with design thinking? Some products that consumers might love would have less appeal to brick and mortar retailers and make it less likely for retailers to ever carry them. Razors that stay sharp forever would reduce the frequency at which people have to go to Target to buy razors. Launderable paper towels would reduce the frequency at which people have to make a Walmart run to replenish their paper towel supply. Giant tubes of eye cream would cost me less per year but keep me away from the cosmetics aisle for months at a time. If retailers did decide to carry these products, they probably wouldn’t get prime shelf space.
Ecommerce has lessened the dependency on shopper frequency needs from brick and mortar retailers but created its own set of dependencies in product design. The shelf space for products is practically infinite if you consider the new equivalent to be pages on websites or apps displaying products consumers can buy. But the amount of time consumers have to shop is not infinite. It’s decreased. We’re too busy to shop, hence the trend toward outsourced shopping and home delivery services. Product suppliers are now competing for consumer attention in a world of infinite choice and constrained time. So in the ecommerce + home delivery world, new products don’t just have to delight consumers, they have to be presented in a way that cuts through the noise. They either have to be noticed or sought out by consumers during shopping or they have to intercept consumers during their non-shopping time, when consumers aren’t in a shopping mindset, and command their attention. How you accomplish that likely includes a solid marketing strategy but design choices might also help make your new product stand out. That Cybertruck is a lot more eye-catching than my broken F150. It’s why I clicked on the article about Tesla’s Q3 conference call when I wasn’t shopping for a truck. I kinda want one but my truck is falling apart and probably won’t last until 2030.
The answer here is similar to how we add the lens of economic viability to design thinking. Instead of focusing only on consumer delight during product design, add the unique constraints your product has around buying channels and customer interception to the discussion. Similar to the inclusion of economic realists to the room, this can be accomplished by bringing marketing experts in early to push your designers to consider how you’ll get products in front of customers and how you’ll grab their scattered attention.
Customers love it. But will they buy it?
Buying products that never existed before requires customers to change their behavior. The level of behavior change depends on how revolutionary the product is but some level will always have to happen for a new product to be successful. Yet incorrectly predicting buying behavior is probably the most common mistake that I’ve seen new product teams make in my career. Why? One pitfall of design thinking: customer focus can make us overconfident. A singular focus on the customer can trick us into thinking we know everything we need to know about them and can thus predict how they will behave.
A creative design team can usually find many ways to delight customers. But customer delight is not the same as customer buying. Customers can fall in love with a product, can swear on their children that they’ll buy it. And then casually walk away when given the opportunity to swipe away their hard-earned cash.
The number of customers we test with in design sprints is often questioned in this context. How can you feel confident that customers will buy a product if you only test it with 5 users? I won’t go into the argument that testing with 5 users is enough to see trends within a larger customer base. You can read it here. But I will agree that testing with 5 users (or 5,000 or 5 million for that matter) isn’t enough to predict buying behavior if you’re not actually testing for it the right way.
That’s hard to do in a design sprint and where design thinking experts often miss the mark. I’ll say it again. Customer delight is not the same as customer behavior change. Design teams often account for delight in testing–the easier one to account for–and then fail to account for actual behavior in the real world. They either assume that delighted customers will be buyers or, if they do try to account for buying behavior, they fail to account for customers’ notorious inability to predict their own behavior when faced with a real decision.
The answer here is again applying the right expertise on a design team. Most people can figure out whether or not a customer is delighted by a new product design. Just show it to them, have them use it, ask questions, watch their reaction. Predicting consumer behavior is a science and, at some point in the design process, requires a scientific approach developed by a scientific mind. This might not happen in the first or second design sprint where we don’t yet know if we can solve problems economically. But at some point in the process the psychology of behavior change needs to be addressed by someone who is trained to address it well.
Good news though. This doesn’t mean you need to hire a team of behavioral psychologists to predict buying behavior. You can observe and measure it directly without spending a lot of money. The best way to predict buying behavior of consumers is to actually give them the choice to buy and measure their reaction. And you don’t have to invest millions of dollars scaling up your product to do that. This is another thing that Tesla got right with their Cybertruck. They built a prototype, showed it to the world, and started selling. Before making the choice to invest in commercial scale. They’re confident there’s a market of actual buyers for Cybertrucks because enough customers have already forked over cash to buy them. While hopefully waiting patiently for Tesla to make the economics of selling them work.