13 January 2012

How your approach will truly make it or break it your company.

In my earlier post "Identify a market or identify a problem? How you approach your idea makes a difference!", I've described two approaches to a product / service. This post is a reminder of another concrete example of how the two approaches comes to play in reality. 

As I discuss further with my business partner Jackson Lin, we came across the example of buying / selling cars. I realized, my type of approach have a serious short coming. 

When it comes to cars, I rarely think about in terms of features. Such as

- If they have an advanced navigation system
- If they can lower and higher their body like a range over
- If they can parallel parking like the Lexus
- If they can provide on-star support like the ones from GM
- If they can detect someone in the car like the Volvo
- 0 - 60 mph under how many seconds
- Backup camera
- Heated seats
- Removable seats
- Stereo systems
- Design of the engine compartment, easy/difficult to take things in/out. 
- Design of the battery compartment, whether it's easy or difficult to take in / out. 

I just care about the following things

1. Reliability If not reliable, then find a more reliable more.
2. Maintenance / Warranty. Does it offer a 60,000 miles / 6 years or better factory warranty. Less hassle and worries for me
3. Price. How much it cost out of my pocket. 

The problem with my ways of thinking is that I completely missed out a vertical market where cars / manufactures differentiated themselves by offerings convenience through feature sets.   Of course, once my 3 major factors are satisfied, only then I will take a deeper look into the features they offer, however, the point is, that's not how I would approach this product and if I am the head of these motor companies, I probably would miss out a huge potential customer base.  I wouldn't have build a Lexus when there is Toyota, I wouldn't have build Mercedes nor BMW when there is Volkswagen Jetta, just because my focus is all in the wrong area (or should I say, limited, as I'm only focusing on one area) 

Now, take another look at electrical car.  When you tell me, I'm developing a car because it can run on electricity. You are describing a feature change. I'm not that excited. As it's just geeks talking just because they can. 

However, when you describe that the gasoline price is sky rocketing. Oil supply around the world is diminishing. The trend of having a car that does not rely on gasoline but rather more depend on the more obtainable electricity, I go wow, a huge market, I see it, I love it. 

Now, the same electricty car, if it's in an era where gasonline is plenty, oil price is low, I simply will completely ignore this concept as I see no reason to waste time on it. 

Of course, the reverse can also be said for someone who is not happy with the car they have. They want all the features like heated seats, backup camera, kick ass navigation, USB support, wireless internet, electricity based, 
parallel  parking, heart beat detection, advanced airbag protection system, abs, 0-60mph in under 6 seconds, the list goes on and on. Only after they build it, they realized that it has a high price tag, can not offer mileage guarantee beyond 10,000 miles / 1 year, reliability is no where to compete with the likes of their competitors, and scratch their head trying to figure out a market for themselves. 

Now this is just an example in the context of building / selling cars. However, to me, it is equally applicable to building modern day software / services. 

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