Apple Does "No Market Research", So You Don't Have To Either
We do no market research. We don't hire consultants. The only consultants I've ever hired in my 10 years is one firm to analyze Gateway's retail strategy so I would not make some of the same mistakes they made [when launching Apple's retail stores]. But we never hire consultants, per se. We just want to make great products.
Apple staff primarily want to make great products for themselves:
We did iTunes because we all love music. We made what we thought was the best jukebox in iTunes. Then we all wanted to carry our whole music libraries around with us. The team worked really hard. And the reason that they worked so hard is because we all wanted one. You know? I mean, the first few hundred customers were us.
It's not about pop culture, and it's not about fooling people, and it's not about convincing people that they want something they don't. We figure out what we want. And I think we're pretty good at having the right discipline to think through whether a lot of other people are going to want it, too. That's what we get paid to do.
So you can't go out and ask people, you know, what's the next big [thing]. There's a great quote by Henry Ford, right? He said, ‘If I'd have asked my customers what they wanted, they would have told me "A faster horse."’
When Jobs says Apple does “no market research”, I believe he means that Apple no longer does market research for new product development. After all, Apple surveys extensively
, in order to determine customer satisfaction after transactions (purchases, repairs, support calls).
Apple used to do MR for product development. I recall, after John Sculley had fired Steve Jobs, seeing some of the market research behind the Apple Newton. I was an analyst in the mobile computing space and was briefed on the Newton prior to its launch. It was well researched -- targeting consumers who did not yet have computers and who felt that pocket organizers were not enough, Apple put an impressive amount of research into discovering their pain points.
Of course, Sculley’s Apple got the market for the personal digital assistant (a term John Sculley coined) wrong: selling tech to people who are technology laggards is practically quixotic. The early market for PDAs actually turned out to be for what were later characterized as “mobile companions” – devices that let computer users take their digital data with them. And that ended up being far less important than what were next called “personal communicators” (nowadays, “smart phones”).
The failure of the Newton, which was well researched if not as well researched as the Edsel (to continue Jobs’ allusion to Ford), may be something that Jobs has internalized as a reason to avoid MR.
Speaking of failure, it is easy to overlook Jobs’ own impressive record of failure: the Lisa
, NeXT, Motorola ROKR, Apple TV. That said, 8 of the Top 10 Apple Products Which Flopped
were designed during the Jobs interregnum, when Jobs was not with Apple. But this just demonstrates how hard it is to launch groundbreaking new products.
Start with a gut sense of an opportunity, and the conversations start rolling.
What do we hate?
A: Our cell phones.
What do we have the technology to make?
A: A cell phone with a Mac inside.
What would we like to own?
A: An iPhone, what else?
But Jobs also explained that in this specific conversation, there were big debates across the organization about whether or not they could and should do it. Ultimately, he looked around and said, “Let’s do it.”
To paraphrase Pragmatic Marketing
, “you can’t innovate without market research the way Apple claims to”. First, your organization is not Apple. Apple develops hardware, operating systems
and Internet services, giving it a unique capability among the technology firms it competes with to innovate across all three layers; most other companies can innovate along only one of these dimensions and must partner with other firms. Second, your CEO (apologies to him or her) is not Steve Jobs. Steve Jobs is a unique innovator in American industry, Disneyesque for his stature and record of innovation. Arguably no other American company has a CEO with Steve’s track record for successfully introducing new products.
Face it, as even Jobs’ and Apple’s track record shows, many innovative new products fail—launching a new product or service is probably the most difficult task any organization undertakes. The odds are against you, and therefore even well researched products can fail. But the issue is not that market research was done at all but that it wasn’t done to the level needed; perhaps it wasn’t framed correctly or wasn’t timely enough: for the Newton, the group researched were consumers without computers, a poorly chosen target market if ever there was one; for the Edsel, the research characterized car buyers in the early 1950s but their needs and wants had changed by 1957 (thanks to two recessions since the research was commissioned and thanks to Mercury repositioning to address some of that opportunity).
And -- sorry, Henry Ford -- but learning that your customers want a faster horse is actually incredibly valuable input. True disruptions in your industry, powered by these seemingly impossible requests, provide the seeds for incredible growth from innovation. To identify those disruptions, you need to thoroughly understand what your customers dislike about your current industry and your current offerings. It’s not the job of market research to creatively determine the solutions—it’s the job of market research to identify the problems that, if solved by some means, create these enormous opportunities.
Blockbuster customer satisfaction research showed that customers hated late fees and were disappointed in the size of store inventories, but those facts were baked into Blockbuster’s business model. It took creative thinking and iteration for Netflix to determine how to solve these pain points (people forget that Netflix also had late fees when it started, before moving to monthly subscriptions two years after its founding). Iteration, based on research into earlier failure, is essential: the Macintosh followed the Lisa, the iPhone followed the Apple-inspired Motorola ROKR, and so on.
As Harry Brignull
wrote on Bokardo, “What makes a more compelling story? To focus on 99% perspiration (boring) or the 1% inspiration (amazing)?”
Market research, diligently done with perspiration, can provide the spark that ignites inspiration.