Brands

It’s Not Just Entrepreneurs Who Shouldn’t Be Wedded to Their Big Idea

When Whitney Casey set out to create a digital way to help women style their wardrobe virtually, her initial idea was that when users purchased an item online, they would be prompted to add those items to their online “wardrobe.” But, as she told Entrepreneur, “the idea wasn’t scalable. I would have had to partner with hundreds of stores.” Instead, she pivoted. She created a technology that uses a customer’s e-receipts to auto-populate their virtual wardrobe. Her site, Finery, was acquired by Stitch Fix in 2019.

Slack and Flickr co-founder Stewart Butterfield’s first big business idea was designing online video games. When that didn’t work, he created Flickr, an image sharing website based on technology that was part of the original game.

Casey and Butterfield aren’t the only entrepreneurs who had to scrap one idea and shift to another: According to a Wharton study, the average age of successful entrepreneurs is 45 – often because they’ve tossed out a lot of bad ideas to get to their good one, a scalable idea and one that was wanted by consumers in the market.

It’s not just entrepreneurs who need to leverage the mindset of flexibility. As leaders, we should never be so emotionally invested in a new product, whether digital or physical, that we can’t adjust, change, or discard it entirely. Hesitation to pivot often leaves room for competitors to come in and take advantage of an opportunity waiting just around the corner.

And sometimes, a business model that once worked stops working. Consider Bed Bath & Beyond. In 2019, CNN ran a headline that announced, “Bed Bath & Beyond is running out of time,” due to poor inventory management, an outdated website and lack of features like buying online and in-store pickup. Then COVID-19 hit. As in-store shopping ground to a halt, the retail chain committed to spending roughly half of its capital expenditures on going digital in order to add features like ship-from-store and even same-day delivery; customers can also filter items by which ones are able to be picked up at the store closest to them.

It is now using Google Cloud analytics to build a predictive e-commerce platform, enhance supply chains, and optimize inventory planning. And it seems to be working. The company recently reported more than 75 percent growth in e-commerce sales during each of the last three quarters.

As executives look to add new digital products to their business strategy, here are three things they should consider:

  1. Build for the customer first, not last. 

If your customer doesn’t need it, they won’t pay for it. Sometimes, a product doesn’t exist in the marketplace because it simply isn’t wanted or needed. Insightful executives know how to recognize when this is the case — even if they’re already far into the development process.

That’s also why it’s so important to consider the data before creating a product, so that you can build for the customer’s needs, rather than start with an idea or technology that seems promising and then figure out how to incorporate the customer later (this strategy rarely works). Digital-first companies are doing this well: MotoRefi, for example, started with the premise that customers needed a simpler, more transparent process to refinance their auto loans. The platform was built by leaders from the technology, automotive, and finance industries who understood the refinance marketplace.

Many traditional industries, however, especially ones that began as brick-and-mortar, are just now beginning to have conversations about how to best leverage the customer experience as a starting point. User experience is key in this initiative. According to a Salesforce report, 4 in 5 customers place the same emphasis on flawless engagement as they do on product quality.

  1. CTOs shouldn’t be the only ones responsible for product development. 

According to Salesforce, 54 percent of customers report feeling as if sales, customer support and marketing don’t share information. This could be one of the reasons why, according to Gartner data, that only 11 percent of businesses meet all their targets after launching a product.

Incorporating a variety of executives with differing backgrounds, across various divisions, from marketing to information to customer success, is critical from the very beginning of the process. It’s equally as important when companies update their technology stacks and complete new iterations of existing products. Doing so ensures that multiple perspectives are involved and prevents oversights.

When CarFax, for example, found that nearly 200,000 cars had their odometers rolled back each year, they developed an Odometer Fraud Check feature. This product was created from seeing a need in the marketplace and strategizing a path forward with help and input from multiple departments.

  1. Incorporate an omnichannel strategy.

As shared in a recent post, omnichannel strategy is the future of the digital age. An omnichannel strategy puts customers at the center of the brand experience, and it’s not just through websites and apps anymore. Customers should be able to communicate and make purchasing decisions through channels such as email, text, chat, augmented reality, social media and more. A recent report noted that 76 percent of customers prefer different channels depending on the context.

Omnichannel strategy is undeniably a path to profitability. Omnichannel consumers are worth 30 percent more to a company than a single-channel consumer and help convert new customers to repeat customers, who are responsible for 41 percent of a company’s revenue, according to Adobe.

USAA, for example, has done this well. Its customer experience is less about a website or a mobile app as a destination – and more about integrating with the technology around them, such as IoT and virtual assistants.

According to Harvard Business School professor Clayton Christensen, 80 percent of the more than 30,000 new consumer products that are launched each year fail. When leaders separate themselves from their emotional investment in a product and consider a customer-focused digital strategy, they’re one step closer to being in the 20 percent that succeed.

One of the core principles of entrepreneurship – and product design – is being open to change. It’s time to expand this mindset to business leaders in general. Passion and emotion still have a valuable place in the digital age, however, a willingness to understand customer needs, look at data, redefine success and pivot is more important than ever.

 

Jennifer Ives is senior vice president of global partnerships for 3Pillar Global. 

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