Saturday, January 26, 2008

Planner as speculator or second thoughts on forecasting

I’m pretty sure I’m on record for saying that I haven't had much use for trend studies in general and trend forecasting in particular. The majority of services that track cultural trends I’ve looked into don’t do much but draw big general conclusions from a few observations. For me, they provide a perfect storm of irrelevancy: slim data, shaky conceptual frameworks and obvious conclusions: Families are time-starved! Everything is going mobile! Green is in!

The most suspect of these vendors/services don’t do anything but scan the press for “news” on the latest events and use the frequency of these press releases as evidence of a trend, conveniently forgetting that PR designed to create a trend is not really the strongest evidence that behavior is actually changing.

What I used to say in response to various vendors who tried to sell me their culture-watching services is: I don’t try to predict the future. Describing the present is hard enough.

Lately, however, I’ve found myself more involved in projects which demand various sized bets on future behavior. In my old job, as head of planning at a biggish agency, most of the questions were versions of: does it make more sense to launch this latest giant TV at X price and when we do, how should we talk about it to attract the people who are most likely to buy it.

These days as a so-called strategist at a smallish company, the questions frequently sound more like: we’re building a product that will allow people to watch their own digestion processes--from stomach to small intestine--in real time. We’re sure this is going to be big. Health is big. Diet is big. Indigestion is big. We also have the technology that allows people to broadcast this imagery to their friends on their websites. Should we move ahead with this project? And if we do, who do you think would be most interested in sharing medical imagery on their websites?

An extreme--though probably only barely--example to make the point: I’m frequently finding myself being asked to speculate on target motivations for new categories of behavior--behavior that doesn't exist yet--at least not as general consumer behavior. Undoubtedly, scientists have been watching their own digestion in real-time for years. But not as consumers. This isn't something we’ve all been doing or wanting to do, just going online to check on the state of our G-I tracks. It’s new or newly accessible technology which either will or will not create a consumer habit.

How can we know whether this will catch on? How do we make a guess good enough to pay for? Since that’s really two different questions and this is getting long, I’ll save my two different answers for next post. In the meantime, please share all your recipes for divination and soothsaying

3 comments:

Paul Soldera said...

Sounds very much like the type of issue VCs face every day when pitched new products and ideas.

If I was to hazard a guess, I'd say there are three main components (this is a guess mind you, don't quote me on any of these). 1. How something spreads as an 'idea' 2. Its utility. 3. Its meaning. Any one of those in isolation is very powerful, two is more powerful, three very rare.

The stupidest, inane things spread because they just catch a spark (I'd put Digestion Reality TV into this category), they need little utility or meaning to keep going. Things that are just plain useful also succeed - but they have to be REALLY useful to spread on their own, most need to catch a bit of a spark to help them along. Things that have deep meaning also spread. Attached to some utility they spread faster, but 'pure ideas' are also some of the most powerful .

My two cents, will be interested to read your follow-up.

Heather LeFevre said...

What do you think about an idea needing a chance take root? Who knows what would have happened, but Jobs announcing the iPhone 6 months before it was launched supposedly gave us all time to get used to the idea.

sk said...

Clients are getting in the way of my blogging! But thanks for the comments. And Hi heather

The VC analogy is an apt one. In fact, the VC's are often the clients in question. And I've found they are more sensitive to an ideas potential to attract more capital (from biz development and investors) than they are to its potential to attract real consumer interest. They tend to see "killer apps" everywhere they look. Forecasters are, also, hopelessly optimistic, both in terms of the rate of the "adoption curve" and in terms of the distinctiveness of the product. I seem to recall an HBS article which demonstrated that the producer of a new product generally thinks the product is 10x more interesting/different/ appealing than the consumer. They always forget that in most cases, the consumers has a half-dozen other options and probably doesn't need the product to begin with.

And I agree that it's important to give ideas a time to take root. it's one of the reasons why so many fast followers take over the first movers. Unfortunately, wall street tends to be impatient. You need financial control and strong nerve to keep the money flowing