May 6 2009
by Thanasis Delistathis

Use of focus groups

There are many times in startup pitches where the entrepreneurs are trying to convince us that they have the product features figured out because they have conducted one or two focus groups and have incorporated potential “customer feedback.”   

It is puzzling to me how frequently this happens.  Of course anyone who has worked in marketing knows that focus groups are not meant to provide conclusive evidence about customer needs and desires.  It is meant to focus the thinking around how to ask the right questions. It is really the first step.  It provides the context in understanding what to ask of customers.  After all, the sample in most cases is so small that it is dangerous to draw conclusions.

Not to say that focus groups cannot provide valuable feedback.  Entrepreneurs may quickly find out about wrong assumptions and it may become apparent that certain product features are out of the mainstream.  However, they cannot be the basis of conclusive customer segmentation.  

In fact in many cases, companies we look to fund are looking so far ahead that one has to be really careful about understanding how customers will react to revolutionary new products. 

In that regard I am reminded of what Henry Ford said once: “ If I had asked customers what they wanted, they would have said faster horses.”

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