Juan David Campolargo

Market Research is Bananas

Monkey: Bananas, please. 

Human: (hands out a smartphone).

Monkey: I’m hungry and I can’t eat this piece of glass. Come on!

Human: Did you know that you could order any food from anywhere in the world using that piece of glass, including the tastiest bananas?

Monkey: (looks at the phone and starts ordering).

To be continued...

 

Do you know what you want? What if I told you you don't know what you want?

Many companies and entrepreneurs are infected by a virus called market research. Asking people what they want or what they want a solution for is like asking a monkey if they want a smartphone. 

The monkey would just say, “I want a better banana.” But the monkey didn’t know that with a smartphone he could order the best food ever (yes, including bananas).

Methodologies such as the Lean Startup influenced how we approach the innovation process by relying too much on the user and consumer input, rather than focusing on the most underlying pains people have. Incremental factors such as speed, storage, and effectiveness won’t lead to creating original and groundbreaking ideas. 

If Henry Ford had asked people what they wanted to move in space, people would have said, “A faster horse.” People would have never said that they wanted a car. 

First things first. Let’s differentiate the two types of innovation that we’re dealing with in this essay:

Graphic inspired by Zero To One.

Each type of innovation will give us the answer to whether or not we should do market/user research.

0 to 1 innovation is like creating a car in the 1900s or a smartphone in the 2000s. Asking consumers if they were going to buy either would have been of little help because people don’t know what they want. Here, people didn’t know they needed a car or much less a smartphone. Once they had it, they couldn’t live without it.

1 to N innovation is taking a car or a phone and improving speed, efficiency, and quality.  Here, understanding both the market and the consumer is important because we should solve problems people care about.

0 to 1 is solving problems people have but didn’t know could be solved. While 1 to N explicitly solves problems, people want to be solved. Neither is better, rather they complement each other as we need both. However, we can’t generalize one approach to all methods of innovations and ideas. 

You want to listen to the customers’ problems, but never their solutions.

Let me also define the two types of customer research I’ll talk about. We have market research and user research. 

Market research asks “What do people want?.” While user research asks, “What is useful to people?” (I’ll be mostly referring to all customer research as market research throughout but they’re different).

In theory, doing customer research seems helpful, but when you’re pursuing 0 to 1 innovation, it’s a big no-no!

To find out, let’s explore the science behind it, why people don’t know what they want.  

“I’m Just a Good Person.”

"People don't know what they want until you show it to them."

When we ask a monkey what it wants, We’re neglecting our human nature and how research (way beyond market research) should be done.

“Wait, a monkey isn’t a human.” Close enough. 

Let’s explore that concept quickly and explore why we don’t know what we want, yet our minds trick us into believing we’re making our own choice. 

Research is carried out in mainly two ways:

  1. Asking questions

  2. Observing behavior

Each one has advantages and disadvantages. Asking questions is typically done as surveys and questionnaires, or focus groups. Observing behavior is a more methodical approach. For example, let’s say you will release a new feature on your website that allows visitors to interact with each other. To test it, you release it in one region only and you observe.

At first, you thought the new feature would allow people to talk to one another. But after it was released, you realized people were using it to send video messages. Now you could make changes to make it more appealing and release into the entire world. 

Ok, enough definitions. Let’s talk about an example.

There was a famous study on organ donations. When people get a driver’s license, they get asked whether they’d like to donate their organs when they die. If you look at European countries, you’ll notice some countries have a high percentage of donors (about 99%) and others have a low percentage (less than 10%), despite being almost identical culturally and geographically.

“That’s strange?!”

For instance, Austria and Germany. They are right next to each other and they share the same language and even history. Yet in numbers, Germany looks selfish as very few people agree to donate their organs. In Austria, almost 100% agree to donate their organs. 

What is wrong with Germans? And why are Austrians so generous?

What drives the higher numbers?

The study showed that it’s simply how the questions are asked. Being opt-in vs opt-out makes the biggest difference. Apparently, people are indifferent. 

If they asked people to check the box to donate, people wouldn't check, and they’d become opt-out and vice versa. 

Just by changing the phrasing of the question and making you perform an action, we can flip people’s preferences. 

That is kind of interesting, but this is where it gets really interesting. 

If you were to go interview people right after they finish getting their license, and you’d ask questions like, “Tell me why you chose to donate your organs.” People are going to come up with an answer to justify their behavior even though that was not the case. 

If you ask people, they won’t say, “The option was opt-in, and I just didn’t care.” They will say something like, “I want to be generous and help people. This is what my parents instill in me.”

Your brain will come up with an answer (even if they’re not true) to justify your behavior. This is why asking people to give you answers isn’t reliable.

Asking questions and observing behaviors are not wrong but are often highly unreliable. There’s perhaps a third approach using neuroscience to also look at your brain or your body while you answer a question or perform an activity.  We’re not there yet but if we’re able to combine them to create a symbiosis, things could get interesting in the research world. 

———————————————————————————————————— Human: Why did you order bananas?

Monkey: They’re my favorite food. I just love bananas! #BananasLover

Human:(hands out sweet cookies)

Monkey: (ignores the bananas and eats the cookies in one bite)

Human: Hmmm. I thought bananas were your favorite food #BananasCheater

Monkey: i dunno 🤷‍♂️.

Unconventional Wisdom

Conventional wisdom: Market Research is crucial to develop a great product/idea.

Unconventional wisdom: Market Research must not be used when developing 0 to 1 product/ideas.

I’m not saying you should never do market research, but be aware of which type of innovation you're pursuing.

Just because every business book and business school tells you to do market research doesn’t mean you should. We should instead ask ourselves, “What is our goal?” and, “What type of innovation are we doing?” Then we can follow the path that makes sense for us.

Instead of asking people what they want to be solved, we need to figure out what their core problems are and test if our ideas solve their problems. Think about the monkey and the example of the bananas: the request is more bananas. But the core problem is not being hungry.

Think about Henry Ford and the horse. The request was a faster horse, but the need was getting places faster. 

Perhaps the answer is to do a combination of progressive user feedback instead of predesign market research. Again, clarify your goals and test your hypothesis.

To Market Research or Not To Market Research

Deciding whether to do market research is highly nontrivial and context-dependent, but knowing the type of innovation you’re doing could provide insights on how to move forward.

If you don’t do market research, you may realize the market is too small or that people didn’t care about the problem as much as you thought. 

If you do market research, you lose the emotional aspect of what everyone wants vs what you’re excited about. 

Elon Musk said once, "A lot of times people try to make products they think others would love but they don't love themselves." Instead, Musk creates products that get him and his team excited. Musk said, "I find if you do that, people will want to buy it. If it's compelling to you it will be compelling to others."

If you’re trying to truly innovate, you shouldn’t focus too much on market research because people don’t know what they want. Instead, focus on finding problems and coming up with cool solutions that you yourself like. 

And don’t forget to give that monkey a smartphone!

 

 

Thanks to Praveen, Zain, Avthar, Najla, and George for taking a look at drafts of this essay. 


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