BuzzPressure

“We don’t do focus groups,” he (Jonathan Ive) said firmly, explaining that they resulted in bland products designed not to offend anyone.

Jonathan Ive, Senior Vice President of Industrial Design, Apple, BBC News, July 1st, 2009

Yup focus groups suck for product design. Henry Ford knew it. His customers wanted a “faster horse”, they didn’t dream up the automobile. It’s not that they weren’t capable of conceiving the car it’s just his customer base weren’t product designers, they just wanted to get from point A to B quicker. Ignoring the potential of radical animal husbandry for a moment, a “faster horse” described the solution but wasn’t necessarily the actual solution.

I experienced this in spades when founding Covarity. Our first product was a high-falutin’ liquid credit platform. It was designed by a committee of experts: commercial lenders, syndicated lenders and regulatory bodies. The faster horse in this case was to shorten the time from credit requirement to decision. Facts were cited how a good chunk of business default because of inadequate captialization. The lenders around the table felt shortening timeframes and providing thorough and predictive analysis was good for both themselves and their customers.

Proudly we took the product out to trial but time and again I was finding our pilot sites weren’t using the product. Frustrated, I found a credit manager who was willing to let me shadow him for a while. Anxious to see him using the product I kept suggesting we run some accounts through. But time and again he was too busy to fire the app up as he gestured to his overflowing inbox of faxes and mailed in financial statements from his borrowers.

Normally this was my cue to find a coffee or stake out a place for lunch but he told me that it was “margining day” and he’d be a while so I hunkered down with my BlackBerry and started to reply to my own overflowing inbox. Then something happened.

I watched in amazement as the loan officer took financial statement after financial statement and highlighted them with an array of colors while feverishly making notes in the margins. Then he transcribed the statements into Excel. We got to talking about what he was doing, why adjustments were needed and the shocking frequency of analysis. He explained how this process took a huge bite out of his time and prevented him from working with his clients or landing new business.

Yep credit decisions could be sped up but that really wasn’t the field’s problem nor the burning issue. The key to satisfying both lender and borrower’s need appeared to be freeing up time by automating data (gasp) re-entry, called spreading in the biz, and the analysis associated with asset based lending appeared. Further investigation in the value chain proved out and refined the concept and the rest is history.

So talk to your customers, understand their problems and look to them for improvements,  just don’t build any faster horses.