How do we know our business idea is viable?
When customers spend money for it.
But is that always true?
What if they never spend money on it again?
What if we optimise the idea for their taste, which turns out to be so niche we end up shrinking our market?
Researchers have identified a specific group of early customers which have a tendency to purchase products destined for failure. In fact, they call them harbingers of failure.
Their sole differentiating trait, backed by research, is that they have much more niche taste than the mainstream market. It's not like they make the product fail, but rather have tendency to pick a losing product.
How can you avoid these harbingers of doom?
Make sure to understand every and each of your early customers. Early adopters are critical for testing the idea early and often, but business success ultimately lies with the broader market segment.
And if your product ends up being picked by these purveyors of failure, then at least you know you should pivot—rapidly.
Anderson, E., Lin, S., Simester, D., & Tucker, C. (2015). Harbingers of Failure. Journal of Marketing Research, 52(5), 580–592. https://doi.org/10.1509/jmr.13.0415 (public download)
Simester, D. I., Tucker, C. E., & Yang, C. (2019). The Surprising Breadth of Harbingers of Failure. Journal of Marketing Research, 56(6), 1034–1049. https://doi.org/10.1177/0022243719867935 (public download)
Subscribe to get the latest posts delivered right to your inbox. No spam. Only Bruno.