It Ain't Innovation if No One Wants To Buy What You're Selling

from the innovation-is-about-making-something-people-want dept

In case you missed it, last month Gibson, the famed guitar company, filed for bankruptcy. Matt LeMay has a really fascinating and worth reading Medium post up, claiming that Gibson's failure is a "cautionary tale about innovation." He compares what Gibson's management did over the past few years to another big name in guitars: Fender. And finds quite a telling story in the contrast.

Specifically, he notes that Gibson doubled down on "innovation" and trying to come up with something new -- almost none of which really seemed to catch on, while more or less ignoring the core product. Meanwhile, Fender took a step back and looked at what the data showed concerning what its existing customers wanted, and realized that it wasn't serving the customer as well as it could. LeMay points to a Forbes interview with Fender CEO, Andy Mooney, where he explains:

“About two years ago we did a lot of research about new guitar buyers. We were hungry for data and there wasn’t much available. We found that 45% of all the guitars we sell every year go to first-time players. That was much higher than we imagined. Ninety percent of those first-time players abandoned the instrument in the first 12 months — if not the first 90 days — but the 10% that didn’t tended to commit to the instrument for life and own multiple guitars and multiple amps.

We also found that 50% of new guitar buyers were women and that their tendency was to buy online rather than in a brick and mortar store because the intimidation factor in a brick and mortar store was rather high.

The last thing we found was that new buyers spend four times as much on lessons as they do on equipment. So that shaped a number of things. It shaped the commitment we made to Fender Play because we felt there was an independent business opportunity available to us that we’d never considered before because the trend in learning was moving online. We also found we needed to communicate more to the female audience in terms of the artists we connect with, in terms of using women in our imagery and thinking generally about the web.”

The end result is two very different approaches to innovation. LeMay points out that this is perfectly demonstrated in what you see when you go to each company's website:

A cursory glance at Fender’s website tells you a lot about how the company has implemented their findings: pictures of women playing their instruments dominate, and the “Fender Play” platform for learning how to play guitar is given equal billing with the guitars themselves. (Gibson’s website, on the other hand, features a picture of Slash with the headline “global brand ambassador” — a noxious and deeply company-centric piece of marketing jargon if ever there was one.)

It's a really good point, though I think it's slightly misplaced to argue that the problem was Gibson's focus on "innovation." The problem is Gibson's focus on something new and shiny without paying enough attention to what people actually wanted. If you've done anything in product development ever, you've probably heard the famous (and probably apocryphal) Henry Ford quote:

“If I had asked people what they wanted, they would have said faster horses.”

This is often deeply embedded in the minds of people who are quite sure they're coming up with the next great thing. And it's rarely actually true. There are exceptions, of course, but they are really few and far between. True innovation tends to come from better understanding what people actually want to accomplish and then helping them better do that. Sometimes it's coming up with something new. Sometimes it's coming up with a new way to sell. Or a more convenient way to use something. Or a better business model. Or a better way to educate. There are all sorts of innovations.

Indeed, digging deep into the Techdirt archives, I'm reminded of the debates we used to have about the difference between invention and innovation. Invention is coming up with something new. Innovation is successfully bringing something to a market that wants it. Sometimes the processes overlap, but not always. But, as we've pointed out (in the context of debates over patents), it's usually the innovation (successfully bringing something to market in a way that people want) that's much more important in the grand scheme of things than invention (just making something new).

It seems clear from looking at the approaches that Gibson and Fender each took that one focused on true innovation: figuring out a better way to solve the needs of customers. The other used the falsely promoted definition of innovation -- the one that is more synonymous with just "coming up with something completely new." (On a separate note, it's also possible that some of Gibson's problems stemmed from the ridiculous decision by the Justice Department to seize a bunch of its wood for extremely dubious reasons).

It would be a useful lesson in understanding innovation to recognize that that the innovation that matters is the one that best serves customers. Not the one that is just bright and shiny and loud.

Filed Under: business models, customers, guitars, innovation, invention
Companies: fender, gibson