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  • Ben Schmuck

Focus on Customers, Not Competitors

Updated: 4 days ago

"We're not competitor obsessed, we're customer obsessed. We start with the customer and work backwards" - Jeff Bezos

Note: This case study is for an industrial manufacturer from 2018 to 2020 time period. The company has a large product line in many different areas. The details of the firm and competitors are kept secret for confidentiality. If you focus on the application of the LeanInno, you'll learn about what we can bring to your company.


Let's start at the beginning in 2018.


The head of the division, John, came quickly into the conference room and flung the door shut. My attention immediately switched form my laptop screen to John. There were 4 of us in the conference room waiting for the start of the leadership staff meeting. John's face looked anxious and worried. "We all need to see this." John said as he quickly connected his computer to the projector.



John pulled up an email showing competitive intelligence results from one the company's top 3 global competitors. The results of the intelligence said that the competitor was building a new tool that was 33% bigger than our biggest product. "We have to do something." said John. "We cannot be last to market with this." The leaders discussed quickly how they could put a product development program together to meet or beat this new product to market.

"We cannot be last to market with this."

We met a week later with the results of the strategy, product development, and finance departments. The new product development program would cost the company $100M and take 3 years to complete. The momentum was huge. There was no stopping this program from launching.


I knew there was something wrong here. How can we decide to spend an incredible amount of R&D dollars based solely off of competitive intelligence? Our innovation framework is Problem, Solution, Business Model, in that order. What problem are we solving for our customers with a 33% larger tool? Why would a customer "hire" this tool? What job are they trying to complete?


Knowing there was no stopping the product development program, I convinced our team to launch a startup team in parallel with the dev program to interview customers and make our tool better than the competition.


We started interviewing our current customers as well as customers using the competitor's tools. We asked them how they liked their current products, what they liked what they didn't like. What jobs did the tool help them complete?


Then we asked specifically if a tool that was 33% larger would help them get their job done better. After 25-30 interviews across different customer segments we were seeing a pattern. The pattern was "No. The 33% tool will not help me get my job done faster, easier, better or more efficiently." If the tool is any bigger than your largest tool, then transporting it becomes a big issue. They would have to dismantle the tool to transport it from job to job which was a prohibitive amount of labor when switching jobs.


Fast forward to 2020.


We travelled to our annual trade show just before the outbreak of COVID-19 in the United States. Many of our competitors from other companies did not arrive due to the virus in their own country. I was working our booth with customers coming in and out. In the middle of the third day, I saw John arrive and we caught each others eyes. John came over and shook my hand.


"Thank you" said John. "If you hadn't done that customer research, and convinced me to stop our development project, our business would be a lot worse off now than it is today."


We had successfully convinced our leaders that the 33% larger tool was not a good investment and we watched our competitors lose money on the product development program with bleak sales. Even though we had already sunk $10M of the product development program, we saved $90M that could now be spent on bringing the right product and services to market.


Key Takeaways

  • Just because you see a competitor making a move, don't assume that they've done a good job validating that business idea.

  • If you focus on your customers, you can move much faster and solve their problems better than your competitors.

  • Being focused on competitors delays the start of any new business idea until you see a competitor make the move first.

  • It's never too late to kill an idea. Avoid the sunk cost fallacy.

#failuretype2 #customerproblemstatement #framework

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