Seth Godin wrote an interesting blog post about Netflix. In the post he says that “Netflix tests everything. They’re very proud that they A/B test interactions, offerings, pricing, everything.” But then he notes that “The three biggest assets of the company weren’t tested, because they couldn’t be.”
It was (as expected from Seth) an intriguing and thought provoking post, and made us think about the role of research and where it fits.
We’ll confess: in the Dimensional Research client base – mostly B2B technology companies – we don’t spend much time with the true technology innovators. Every successful technology company has a few amazing minds that come up with the technology ideas that change the face of Silicon Valley – the mouse, the browser, virtualization, cloud computing. I’ve worked with some of them and met others socially and I’ve never heard of a really breakthrough technology idea that came from a focus groups. The innovator brains are visionary and are so far ahead that only a small subset of their future customers can even understand the idea when it is explained, let alone articulate the need for innovation.
But those amazing technology innovators are usually only a tiny part of the technology company machine. There are much larger teams of people who need to take those ideas and develop, market, sell, support, collect payment, and so on. Those operations don’t require INNOVATION, they need OPTIMIZATION. How can they do what they’re doing more effectively? How can they generate better business returns for lower cost? It’s here where there ARE testable ideas, where customer feedback makes a huge impact on business results, and market research truly shines.
Yes, innovation is absolutely necessary and companies need those breakthrough ideas. But optimization is also necessary if you’re going to build a great business.
As always, we welcome contradictions so we can evolve. Have you used market research to come up with a truly innovative idea? How?