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Archive for May, 2009

Great Businesses Are Built on Instinct And Vision Not Focus Groups

Monday, May 4th, 2009

by: Geoff Ficke

The great British entrepreneur Anita Roddick, founder of the internationally acclaimed Body Shop chain of shops, once said: “Running a company on market research is like driving while looking in the rear view mirror”. Ms. Roddick is symbolic of the successful entrepreneur who builds a business by dint of passion, instinct and total belief that their vision is revolutionary. Business history is replete with examples of such pioneers.

The Body Shop has succeeded for decades because of Anita Roddick’s passionate belief that natural products, crafted with locally grown, native harvested herbs, fauna and flora gave the consumer better performing toiletry products while benefitting the environment. Her Company profited. The native populations, often impoverished, benefitted. The environment has benefitted because the elements harvested are naturally replenished.

Howard Schultz was the visionary behind the growth of Starbucks. Ray Kroc saw immense opportunity in a small California hamburger emporium run by the McDonald brothers. Henry Ford understood the possibility available to an entrepreneur with the ability to harness the forces of scale and mass production. Elizabeth Arden was a pioneer in the high fashion cosmetic industry because she had the eye for color that made her products indispensible to the well groomed woman early in the 20th century. Coco Chanel created a couture style that exists and is imitated to this day.

All of these business pioneers, and an endless list of others, possessed the one essential germ of entrepreneurial success: The ability to identify an underserved niche and fill it with goods and services that improved lives. They did so without utilizing exotic demographics, customer research or focus groups.

In our consumer product consulting business we have very rarely used focus groups to attempt to confirm assumptions about a product or new business idea.

The reason we find, as did Anita Roddick, the concept to be of limited value is because the variables are simply too great to accurately quantify results. The class chosen to participate, the questions asked, the way questions are asked, the methodology utilized to assemble results, and other elements are all capable of producing wrong or misleading information. The result is usually a commercial disappointment.

Successful entrepreneurs have a far better gauge of prospects for commercial success for a new product: their instinct. No one knows why Francois Coty understood what women wanted in perfume. The reasons that Vernon Stouffer saw opportunity after World War II in frozen meals when others already in the food industry did not are unfathomable. Orville Redenbacher just knew that gourmet popcorn would be popular with consumers. Leslie Wexner built The Limited into the world’s largest woman’s clothing chain based on his belief that designer styles at moderate price would be a simple, but winning formula.

None of these visionaries utilized fancy marketing methods before launching their companies. The creative mind saw an opportunity, looked at the marketplace and identified a niche and leapt into action. 

Every year many new products, services, retail concepts and businesses are launched. Some succeed, many do not. However, the winners almost always possess the key asset of being driven by an entrepreneur with keen instinct, vision and passion to provide beneficial new offerings for consumers. The late Anita Roddick was but one example of such a visionary. Her lasting legacy is that even in death she is a beacon of what is possible for any person to achieve if they simply follow their instincts, work diligently and pursue their goals with unswerving passion.