Listen to what your gut is telling you, because guts work faster than researchers.
Imagine a donkey that is equally hungry and thirsty is standing exactly midway between a stack of hay and a pail of water. Unable to make a rational decision as to whether it makes more sense to quench his thirst with the water or satiate his hunger with the hay, the donkey dies.
This story refers to a paradox in philosophy around the concept of free will. It’s called Buridan’s ass. If you’re responsible for creativity or innovation in your company, you’ve probably felt the great pain in the ass of having to justify and rationalize your ideas. Higher-ups will ask you, “Have you tested this? Do you know it’s true? What data have you collected?”
Companies have access to more information today than at any point in history. Data can be seductive; it lures us in with the promise of answers. For example, you can hire a company to cross-reference census data with media viewership data and statistics research to find out information like the average income for a postal code, the residents’ debt loads, their value systems, the kind of cars they drive, and where they like to eat out.
You can also hire an expert to conduct a sophisticated focus group with a sample of your target audience, and in that session, participants will reveal exactly how they feel about your industry and organization. You can even hire an expert to follow people around on the internet, find out what sites they visit, what devices they’re using, and exactly how much time they spend on social media during work hours.
If we don’t know when to quit researching and start acting, we can quickly get stuck in a loop like Buridan’s ass. Here’s a loop we often see in marketing teams:
The cycle of researching, adjusting, and researching again can take place in all areas of business. It eventually creates an elephant-sized pool of data of which no one can make heads or tails. Marketing teams that get stuck in this loop will eventually put out an advertising campaign that does not offend anyone — and does not engage anyone, either. They’ve fallen victim to a form of Proximity Paradox called analysis paralysis.
Analysis paralysis is often the result of assuming the right answer will be clear once you’ve collected enough information. But you won’t find the magic bullet by just scrutinizing numbers.
We once worked with a marketing director at a big accounting firm who loved research. Over the course of a year, he would hire every top research firm in the area to uncover every minute detail he could about his customers. He ended up with a dozen different audience segments within 100 square miles. Then he sat down with us, handed over the stacks of paper and said, “Now build me a marketing strategy that uniquely targets each of these twelve audiences, speaks to their values, and solves their specific problems.”
I’ve never been to the base of Mount Everest, but I imagine that staring up at that 29,000-foot ice wall and wondering where to even begin would be very similar to how I felt in that moment, staring at the mountain of research. The marketing director and his team felt the same way.
That level of detail might be helpful for a digital marketing expert about to invest several thousand dollars in a very precise and targeted Google search engine marketing campaign. That kind of expert would seize those stacks of paper and make magic happen. But this particular client had hired us because he had a brand problem. You couldn’t distinguish his accounting firm from the dozens of competitors just beyond his doorstep. His awareness among customers was less than five percent, his customer retention rates were dropping, and growth had plateaued.
He needed something big to turn the ship around and rejuvenate his brand. Something that would signal to current and potential customers that exciting things were ahead.
In my experience, the best advertising campaigns aren’t those that leverage data correlated to my postal code. The ads that really stick with me are often the ones that speak to a universal human value or struggle. While it’s convenient to have specific product offers served up to you at the times and locations when you’re ready to buy, these aren’t the experiences that build brand loyalty.
The client believed that if he conducted enough research, that big solution would be laid bare. We realized the research was actually a crutch he was using to validate a larger decision that needed to be made regarding the company’s brand and positioning. As long as he was busy conducting research, he could kick that larger brand decision down the road.
We eventually advised the client that there were a lot of cool directions we could take his marketing plan, but none came with a guarantee for success. Every time you put something out into the world, you take a risk that people won’t like it. To use a hackneyed quote, “You miss 100 percent of the shots you don’t take.” At some point, you must pick either Buridan’s stack of hay or pail of water and go for it. Otherwise, you will wither away and die.
People tend to use hindsight and research to convince themselves that an unexpected event would have been predicted had all the data been in. Psychologists call this “hindsight bias.”47 But all the data will never be in. And data can only show you the past. People hope they can use data like a crystal ball to see into the future. We want to be sure about the things we are moving toward to prove competency.
We want to be sure our product has all the right features so customers will buy it. We want to be sure our advertising campaign is novel so it will win an award. We want to be sure the recommendations we put forward will work so the client will hire us again. We want to look good to our boss so we get a raise and a promotion. And we don’t want to be the people at Pepsi’s in-house advertising agency getting dragged over the coals for the Kendall Jenner commercial.48
So we turn to research for guidance, or we turn to focus groups for validation. But these sources can only tell us what has worked in the past or which product option would be best for focus group participants on that specific day at that specific time. They don’t come with a guarantee that by the time your product or campaign goes to market, the world won’t have changed in a way that renders it completely irrelevant, or worse, tasteless.
In The Systems Bible, John Gall says, “The current army is always fully prepared to fight the war of the past.”49 After the Second World War, the US army modernized and became ready to fight the same war. But then they ended up in the jungle and got their butts kicked by a low-budget army in conditions they had never anticipated. Fast-forward to 2003: the US has the perfect weapons and equipment to win the Vietnam War, and they are putting them to use in the desert.
Excessive research keeps us looking to the past for a silver bullet, which is a wasted effort. It also diverts our time to analyzing data, rather than taking action.
For instance, the marketing director at that big accounting firm was using advertising campaign research as a scapegoat to delay decisions on larger organizational problems. His company had no retention strategy — when customers showed signs of leaving, and then left, no one followed up with them or tried to retain their business. The technology that the organization offered customers was badly outdated. Some frontline staff were poorly trained and could not guide existing customers to increasing the amount of business they did with the accounting firm.
For us, it was painfully clear that the organization would make more headway on its customer acquisition and retention goals if it took action to fix the three organizational service gaps. We had distance from the data. We could see that a customer retention plan and employee training were internal initiatives that the firm could implement for the cost of a manager’s time, and that upgrading the technology would create more value than a spring advertising campaign.
Our client couldn’t see that because he was too deep into the research. He was convinced he could use data from the past to validate a future advertising campaign, thereby ensuring its success. He was not convinced he could use data from the past to validate a series of service changes that would affect the entire company and its customers. The cost of a failed advertising campaign was about $150,000 in marketing budget. The cost of failed organizational changes was his job and reputation.
It sucks to be wrong, but life is full of variables. Something will always happen that you can’t account for. Some campaigns will flop, and some will be wildly successful — like Diamond Shreddies.
Minimize the pain of a flop by avoiding a big fall. Use existing data to choose one small action you can take immediately. Maybe the data suggested your customers prefer a different tone from your advertising — try it on one channel. Maybe it revealed a new niche audience — create a small campaign for them. Maybe it pointed you to a new prospective client or partner — take them for lunch. The cost of the failure is low, but if your action is successful, the value generated by the outcome is high.
You’ll make more progress building the plane while flying it than you will staying in the hangar evaluating the parts.
Apple is famous for the brand loyalty it has engendered in its users over the years. The iPod is one of its resounding success stories. It revolutionized how people buy and listen to their favorite music. It also helped the music industry overcome a huge problem that was threatening the commercial viability of record companies: the free, illegal downloading of songs that was rampant in the late 1990s.
Intuitively, you might think that exhaustive market research contributed heavily to the iPod’s successful development. But the late Steve Jobs, Apple’s co-founder and former chairman and CEO, once famously said:
Some people say, ‘Give customers what they want.’ But that’s not my approach. Our job is to figure out what they’re going to want before they do. I think Henry Ford once said, ‘If I’d asked customers what they wanted, they would have told me, “A faster horse!”’ People don’t know what they want until you show it to them. That’s why I never rely on market research. Our task is to read things that are not yet on the page.50
The success of the iPod as a new product hinged on encouraging users to download lots of songs from Apple’s iTunes store. This would not only generate additional revenue for Apple, but also encourage people to listen to their favorite music on the iPod as often as possible.
During the development of the first iPod device, Apple built several early prototypes. It soon became apparent that one of the problematic features would be the scrolling function. The scrolling options available on the early iPod prototypes were either directional (D-) pads or simple up and down arrow keys.
Both methods were cumbersome for the user. The more songs you downloaded onto the early prototypes, the more time-consuming it was to scroll through them to find the ones you wanted to listen to. This was totally at odds with the positive experience Jobs craved for the users of Apple’s products.
Scrolling was also a problem for existing competing products offered by Sony with its Walkman portable music product. Sony was the initial market leader in the digital music (mp3) player category. Other problems for the existing digital music players at the time were their size and song storage capacity. To make a device that could store a lot of songs, it needed to be quite large (i.e., not a handy device that you could put in your pocket and take everywhere with you).
Apple set about solving both these problems.
While Steve Jobs was not a believer in conducting market research to find out what customers wanted, he was very customer-focused in terms of product development. He liked product innovations to be groundbreaking and stylishly designed, but also intuitively easy and convenient for people to use.
That philosophy has allowed Apple to develop a range of stellar product innovations over the years, including the iPod.
During product development discussions about the scrolling problem in the iPod prototype, Apple’s director of marketing, Phil Schiller, suggested a click-wheel interface, rather than the traditional D-pad or arrow methods. Apple’s designers subsequently came up with a mechanical spinning wheel on the face of the next iPod prototype they developed. The wheel was positioned below the screen.
This scroll wheel had buttons surrounding it that allowed you to access the iPod’s menu, as well as to rewind, fast-forward, play, and stop songs. It looked markedly different from the grid or linear navigational layouts of D-pads and arrow keys on earlier iPod prototypes and existing mp3 players. It was innovative, stylish, and easy to use, so it ticked all those boxes. But most importantly, the faster the wheel was spun, the quicker the device would scroll through the songs. Users could therefore navigate larger lists of songs more quickly. It solved the user-experience problem!
There were other benefits of the wheel, too. You could spin it with just one hand and even when you weren’t looking at the device. That allowed you to scroll without taking your eyes off the road when you were driving, or when the device was in your pocket. It also made the iPod suitable for visually impaired users.
The scrolling wheel was being used for other non-related products from other organizations at the time, most notably a cordless phone developed by Bang & Olufsen. This phone had a small screen that enabled you to search a digital phone book that it contained. Its mechanical wheel allowed you to quickly scroll through the large number of listings that a typical phone book contains. Schiller had seen that Bang & Olufsen phone and suggested that the iPod designers develop a similar scroll wheel to solve the iPod’s navigation problem.51
The other problem of the pocket-sized iPod’s song storage capacity was solved by Toshiba’s development of a 1.8-inch, high-capacity hard drive. They had developed it as a general prototype. Apple’s chief engineer, Jon Rubinstein, was shown the prototype in a standard meeting with Toshiba during the development of the iPod. He immediately told Jobs that it was the breakthrough they needed to make a pocket-sized device. Standard hard drives used in laptops at the time were 2.5 inches. If they had been used instead, the iPod would have been too big to fit in your pocket. Jobs authorized a $10-million check to have exclusive rights to as many 1.8-inch hard drives as Toshiba could make.52
In October 2001, Jobs launched the first pocket-sized iPod device. It had a 1,000-song capacity, a 5GB hard drive, and it retailed for US$399. The initial reaction from critics was mixed, with most believing its price tag was too expensive to make a big impact with consumers.
But consumers soon began voting with their wallets. Within fourteen months, Apple sold 600,000 iPod devices.53 Incredibly, it also sold twenty-five million songs through its iTunes Store over the same period.54
Individual songs were initially priced at ninety-nine cents, with Apple taking twenty-nine cents per song for its role in providing a secure digital distribution network. The iPod established the market for digital music, with users quickly showing a voracious appetite for paying for songs to legally download onto their iPod devices. And the more songs people downloaded, the more important the scroll-wheel navigational tool became.
The iPod was therefore critical in providing two revenue streams for the Apple: the sale of the device, plus ongoing revenue from the sale of songs. Its share price skyrocketed. On the day of the launch of the first-generation device, you could buy Apple shares for US$9.38. In just over two years, the share price more than tripled to $32.20.55
By the end of 2006, annual iPod sales of US$39.4 million accounted for forty percent of Apple’s overall revenue.56 Demand for iPods and iTunes songs continued to grow unabated for several years. While the wheel certainly wasn’t the only reason that the iPod became an incredibly successful product, it contributed significantly to the device’s ease of use and popularity.
The second-generation iPod device was launched in 2002, less than nine months after the first model was released. It had even more song storage capacity, as well as an important enhancement to the wheel. The mechanical version was replaced by one that was touch-sensitive, with the buttons outside of the wheel.
By the time the fourth-generation iPod was released in 2004, the buttons were built into the touch-sensitive wheel. This navigational tool became a key feature of other subsequent iPod models such as the Mini and the Nano.
Over time, technology and the way songs are distributed has continued to evolve and change. The original Steve Jobs slogan for the first-generation iPod of “1,000 songs in your pocket” is no longer relevant. Today, you don’t need to store songs on a device to be able to access and listen to them whenever you want.
Songs are now typically accessed via the cloud using subscription-based web streaming services (including Apple Music). And smartphones have become the dominant way of accessing music. The convenience of the scrolling wheel has been surpassed by scrolling with your finger instead. Of course, Apple quickly became a leader in the smartphone market as well, with the development of the iPhone.
Steve Jobs himself paid tribute to the importance of the iPod’s click-wheel functionality when he launched the first iPhone back in 2007:
So, we have been very lucky to have brought a few revolutionary user interfaces to the market in our time. First was the mouse. The second was the click wheel. And now, we’re gonna bring multi-touch to the market.57
The sixth generation of the iPod, released in 2007, was the last to feature the click wheel for navigation. But the wheel functionality was an incredible breakthrough that solved a major problem when the original iPod was being developed. The idea is regarded as an iconic moment in the development of a revolutionary and very successful product. It came from understanding and anticipating a customer’s potential problem in using the iPod device and being determined to solve it, rather than from market research. If they had listened to market data, Apple may have created a paid version of Napster and another SanDisk Sansa-type mp3 player with more storage.
At the time of the launch of the sixth-generation device, more than 100 million iPods had been sold, along with two-and-a-half billion songs.58 The iPod was the clear market leader in the digital music player market, with more than seventy percent market share.59 Although iPod sales have largely evaporated for Apple, the revenue it generates via songs streamed from Apple Music continues to provide the company with strong revenue. Apple Music has twenty-seven million paid subscribers and that number is growing rapidly.60 And Apple’s entry into the music market can be traced back to the success of the iPod.
Maybe you haven’t had enough time with your data to gain the insight you need to redesign your beta product, launch your national brand campaign, or write your next book. But chances are probably high that there are a few small things you can knock off today that can move you closer to your end goal.
“The future is no more predictable now than it was in the past,” John Gall writes in The Systems Bible. “But you can at least take note of trends.”61
Write down all the recent trends that you’ve noticed in your website analytics, Facebook engagement, or customer feedback. Choose the three that interest you most, and then ask yourself, “Where is the arrow pointing?” In what direction does that trend suggest you point your marketing? What opportunity is out there that you can take advantage of?
Based on that information, define two or three small marketing experiments that you will conduct to test those trends. Create a mini project plan with the following information:
Once you’ve made the plan, follow it. Don’t overthink it and stall, and don’t be premature in interpreting the results. Give your experiment time to run its course, and then analyze it on the planned date. Don’t be late, either — feedback must be prompt if it’s going to be useful. If one of your experiments materializes in the way you had hoped, you need to be quick to capitalize on it before the circumstances that are making it successful change.
Here’s an example. When I was in college, I funded my beer budget by blogging and managing social media for an equine pharmaceuticals company. I created content around equine first aid and general horse health. One trend I noticed was that Facebook comments would spike when I shared riding and horse care ideas that only half of our followers agreed with.
I looked at where the arrow was pointing and guessed that I could increase engagement by making the company’s Facebook page a place where horse owners could share their own experiences and opinions, and not just receive indisputable horse health-care tips.
I decided that once a month for four months I would write a blog post on topics about which my readers held strong opinions, like whether to put an insulated blanket on a horse in the winter or whether to vaccinate your horse. My audience was made up of women in their forties who kept a few horses on their own farm and rode for recreation. The budget for blogging and promoting Facebook posts would remain the same. I would analyze the results in four months’ time.
As I predicted, the hot-button topic posts received the most engagement of all blog posts published in a month. Followers would weigh in with their own opinions, and then debate or agree with other commenters. Followers also shared the hot-button posts more than other posts, and the page’s likes got a bump as well.
You don’t need a lot of data, strategic planning, or budget to open up new opportunities for your product or brand. You just need to keep your eyes open for the trends bubbling on the fringes, and be willing to experiment with them.
You can be a marketer sitting on the creative for a new campaign, an engineer sitting on the designs for a new product, or an HR professional sitting on the curriculum for a new employee training program. Before you take your baby public, you’re going to stall and ask yourself: Is it good enough? Will people like it? Will I look like an idiot? That’s the Proximity Paradox directing your focus to the potential negative outcomes, and you lose sight of the larger good your product will bring to the world.
In the Startup School podcast, Seth Godin talks about the importance of launching. “It’s so easy to become paralyzed in the pursuit of perfect that you end up not being good. You’re so worried about launching in a spectacular way that you never do.”62
If you’re hit with a case of analysis paralysis, try this:
Step Four is the hardest. Liz Ryan, a longtime Fortune 500 HR senior vice-president, says when the stakes get high, people fear their intuition. They want the comfort of data to present a logical decision for them. Ryan says that our intuition — or gut — is our compass and survival coach, yet in business, we ignore the body and rely on the brain. Unfortunately, our brains lag behind what our guts already know.63
Ryan found that when her gut recoiled, the logical reason for her reaction would drop into her brain twelve to seventy-two hours later. Skip that long wait and instead learn to listen to your intuition in the moment. Tune into your emotions and physiological reactions. When you think about launching that crazy idea, does your heart pound, your palms sweat, and your adrenaline race? It’s probably a cue that you’re onto something important.
Turn off the inner yammer of logical reasons to kill your crazy idea, and instead, go for a walk. Focus your attention on where your physical reaction is coming from. Your body may be arming you with courage to step up, trust your gut, and launch your product even though the outcome is not certain.
Remember that all great success stories start with a rocky opening chapter. As LinkedIn founder Reid Hoffman said, “If you are not embarrassed by the first version of your product, you’ve launched too late.”64