The Folly of Inside-Out Product Thinking
January 13, 2014

The Folly of Inside-Out Product Thinking

by Brian de Haaff

Have you ever run into this deductive reasoning? A. Customers like your existing products and your company. B. You are building a new product that reflects the priorities of a company executive who helped build your existing products. C. Therefore, customers will like your new product. It’s clearly a violation of the First Law of Product: Customers decide what products they like, not executives or companies. But it happens all the time.

Inside-out thinking is a situation where the wrong reasons are applied to decide which products should be invested in and developed. Here are a few of the common inside-out arguments that can tip you off that something is wrong:

  • “That market is so big, let’s build something for it.”

  • “My intuition says this is the next big thing.”

  • “This new product will position our company for what is important to us.”

  • “The sales guys really think they can sell this like crazy.”

  • “We don’t need customer validation, they don’t know what they want anyway.”

  • “The Board/CEO/other senior executive is pressuring us to do this.”

While there are circumstances when these arguments support good customer-driven thinking, they should be warning signs. And if they are the main argument — beware. True inside-out thinking is characterized by one or both of the following themes: 1. an impulse guided by a “we need” — not a “the customer needs” — mentality, and 2. skipping customer validation or ignoring troubling feedback from customers during validation.

When you see those two dynamics at play independently or together, you’ve left the realm of customer-informed decision-making. You’re in the land of gambling with employees livelihood and shareholders’ money. Sure, some inside-out products will succeed. But that is analogous to saying that some lottery ticket holders win too.

I came across this table in Gerry McGovern’s book, The Stranger’s Long Neck. McGovern surveyed SMB users of a website Microsoft runs – Pinpoint – that helps find IT solutions built on Microsoft technologies. The SMBs were asked what their top tasks were when they visited Pinpoint. McGovern then did something interesting: he asked the Microsoft product team what they thought users’ top tasks were.

The table below outlines the results:

That’s a stark difference between what users value and what Microsoft’s product leaders thought they did. Perhaps it reflects what Microsoft wished users valued. As McGovern notes, “And just like every other organization on the planet, what Microsoft wants is not always what the customer wants.”

I am not trying to pick on Microsoft; this misalignment is often the case at companies everywhere. Microsoft just happens to have been open enough to share their own experience here. Box founder/CEO Aaron Levie recently addressed this topic via Twitter when he offered a consequence of inside-out thinking here:

The easiest software incumbent to disrupt is the one prioritizing the needs of its strategy over the needs of its customer.

Inside-out thinking is simply poor decision-making — it is a bet with terrible odds and typically wastes resources and demotivates the team. It’s tough to understand how we can be so methodical with other operations in the organization and still go seat-of-the-pants when it comes to setting product strategy and building roadmaps which ultimately lead to customer delight or disenchantment. The good news is that it can be corrected if folks are willing to acknowledge there is a better way.

A better way revolves around the customer. It involves the customer at two key decision points in the product development process so we are focused on building what matters to them. First, we need to really understand what they need and why it matters. This requires that we are the customer too or we are immersed in their motivations and frustrations. And second, when we think we truly know what they need, we need to share what we plan to build with them for feedback and enhancements. We can do that through discussions, sharing mockups, or building product and iterating on it based on what they say and how they act.

Inside-out thinking is a pervasive problem in all companies — but is particularly bad in technology. It should be the task of the entire organization to avoid it, but at a minimum product management should speak for the customer based on truly understanding them and what they need.

This is a guest post by Hutch Carpenter. If you are looking to think outside in, be agile, and create visual product roadmaps — start a free trial of Aha! Hutch Carpenter incorporates customer insight into product strategy, design and development. Most recently, he was VP Product for Spigit. Spigit (acquired by Mindjet Sep. 2013) is the leader in the innovation management market, which better leverages diverse input from across a community to identify and select high potential ideas. He has been in product management for a decade. He’s an academic top 10% MBA graduate of Darden business school.

Follow Hutch @bhc3

Brian de Haaff

Brian de Haaff

Brian seeks business and wilderness adventure. He is the co-founder and CEO of Aha! — the world’s #1 product development software — and the author of the bestseller Lovability and The Startup Adventure newsletter. Brian writes and speaks about product and company growth and the journey of pursuing a meaningful life.

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