Problems are markets … Solutions are products

Summary : Marketing pro’s love to use the word ‘solution’ as a synonym for ‘product.’ This way of thinking can lead to the common strategic product development error ... Avoiding the error is easy with a simple mental reset. Think of the solution as the end game. Then go back to the meaning of the words, not how customers perceive them.

Marketing pro’s love to use the word ‘solution’ as a synonym for ‘product.’ It sounds so much better when you can provide a solution, rather than have a product to sell. Meanwhile they avoid using the word ‘problem,’ because customers hate this.

This way of thinking can lead to the common strategic product development error of focusing only on the solution. This results in solutions to problems that either don’t exist or don’t have enough value to compensate for the cost of delivering the solution. Because after all, if you limit your discourse to only solutions, while avoiding the real problem, the results will often be product launch failures, lack of direction, and career crashes.

Avoiding the error is easy with a simple mental reset. Think of the solution as the end game. Then go back to the meaning of the words, not how customers perceive them. To have a solution, there has to be a problem. Thus it is of paramount importance to focus on finding and being able to delineate the problem before you start on a solution. If you can do this, you can assess if there is value in delivering a solution/product.

All products that became blockbusters were solutions to, as Gary Dickerson likes to put it, high-value problems. The RIM’s Blackberry solved the problem of not being able to get e-mail unless you were near a computer with a connection. Varian’s dual-magnet implanter technology solved a critical defect problem. Every great litho tool enabled new devices of greater value because their performance and/or power improvements enabled users to solve new compute problems. Apple’s iPhone solved the problem that a user interface is fundamentally restricted when only physical buttons can be used, opening smartphones to a wealth of new applications people either needed or wanted. It even works for consumer products that are mostly want based. For example, a high-value problem is that people want to stand out. There are plenty of solutions that have built businesses: cosmetics, jewelry, hyper-sports and luxury cars, etc.  But a word of caution: want based marketing seldom succeeds in B2B marketing (which is another maxim).

The problem with searching for high-value problems that need a solution is that customers never want to appear needy. So they will, instead, tell you what they want. Moreover, they may have just given up and accepted the problem as just being the nature of things. This is the basis for Henry Ford’s quip, “If I’d asked customers what they wanted, it would have been a faster horse.” This is why it is also dangerous to listen to customers (another maxim). Instead, you must watch them closely to develop an understanding of their high value problems. The pinnacle is when you can think like a customer to a degree that you know them better than they do themselves.

One of the brilliant marketing achievements of our time was when Martin van den Brink+ solved the monumental problem of moving lithography technology ahead because the development costs had become too high and too risky for any one equipment company to chance. Japanese suppliers first established the practice of not delivering a tool until it was really finished, which became the basis for SEMATECHs “iron-man” tests. This led customers to ask for things they didn’t buy, an eventual waste of R&D resources had brought the industry to a stalemate. So Martin turned the clock back, convincing customers to buy development tools that would be delivered as prototypes, with which the customer would co-develop the technology and system with ASML. It had to have been hard too, as customers were still leery of the days when GCA and others had shipped unfinished tools. The importance of making customer’s pay was that they would then have skin-in-the-game and share the risk. This turned out to be a trust builder and it made customers much more serious about their engagement. They were no longer customers, they were partners in every sense of the word. So at the critical moment when 157nm failed, the show didn’t stop.

Another is the development of yield management between KLA and Samsung, led by Richard Hong+ in the early nineties. Back then, Japan was the giant. Samsung was struggling to break into semiconductors as a major player. At the time, Samsung’s yields for memories were around 20% under Japanese suppliers. Richard understood how critical an issue this was and how KLA had perfected automated inspection on patterned wafers. By putting these in-line, Samsung was able to quickly identify and eliminated sources of killer defects. Samsung’s yields quickly skyrocketed to where they were consistently 5% above the best Japanese suppliers. This was the beginning of the end for Japan’s leadership position in semiconductor and the end of the beginning for Samsung.

+ Martin van den Brink and Richard Hong both received SEMI’s Sales and Marketing Excellence Award for the accomplishments written up here.

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