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.


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  • icon
    Ninja (profile), 9 May 2018 @ 11:25am

    Reminds me of a discussion I was having the other day about cellphone services and I believe it will resonate with Americans here. For all the 5G talk, all the advertisement about how cool company x is because they offer extra gigabytes or flexibility between plans we just want a freaking company that offers reliable connectivity (including for voice), no shady fees and connections that fit modern usage. I don't want 5G, I want a working, reliable service.

    Seems that Fender actually gave a shit to their customers. Sadly this is a good selling point nowadays.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 9 May 2018 @ 12:31pm

      Re:

      Also, posting memes on Twitter and Viral Marketing isn't 'caring for your customers', which seems to be what most corporations now think it means.

      reply to this | link to this | view in chronology ]

    • icon
      Roger Strong (profile), 9 May 2018 @ 12:47pm

      Re:

      For most people 5G merely means that you could burn through your monthly data cap in the first ten minutes of the month rather than the first hour.

      Or that a rogue app could do it for you, sending you into huge data overage charges.

      reply to this | link to this | view in chronology ]

      • icon
        That One Guy (profile), 9 May 2018 @ 12:54pm

        Incredible speed... that you can't fully use

        Funny how that never comes up in the ads...

        'Upgrade your plan today and you too can enjoy blindly fast connection speeds for all your needs... right until you run smack into the data cap we imposed a while back, which will either throttle you back down to speeds that make your current rate look fast, or result in you paying massive overage fees.'

        reply to this | link to this | view in chronology ]

        • icon
          Ninja (profile), 9 May 2018 @ 2:02pm

          Re: Incredible speed... that you can't fully use

          I remember some folks a while back saying they had like 300Gb cap on Comcast (if memory serves). This weekend I did some major maintenance in my electronics, including my pc and set up cloud storage for backup purposes. Starting Friday night up to this afternoon I uploaded and downloaded almost 1Tb on my 50/35 connection.

          On mobile it's even more outrageous because the speed is not 50, 100 times slower but the limits are. And I'm not even considering autoplaying crap and advertisement.

          reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 9 May 2018 @ 12:33pm

    But were they "courageous"? Do their guitars still have jacks? And what about notches?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 9 May 2018 @ 12:39pm

    The IBD story on Gibson and the Obama administration's IRS scandal.

    https://www.investors.com/politics/editorials/gibson-guitar-raid-like-tea-party-intimidation/

    reply to this | link to this | view in chronology ]

    • icon
      Roger Strong (profile), 9 May 2018 @ 1:12pm

      Re:

      Yeah, they have a history of partisan wingnuttery.

      My favorite was during the 2009 healthcare debate. Their editorial claim:

      People such as scientist Stephen Hawking wouldn’t have a chance in the U.K., where the National Health Service would say the life of this brilliant man, because of his physical handicaps, is essentially worthless.

      They later admitted that Hawking lived in the U.K.

      Hawking's response:

      I wouldn’t be here today if it were not for the NHS [National Health Service]. I have received a large amount of high-quality treatment without which I would not have survived.

      What Gibson did was made illegal under a Bush II-era amendment to the Lacey Act. (Those opposed argued that the motivation for the act was to protect US lumber jobs. In other words, it would have passed under Trump too.)

      But as your article claims, competitors in China (making luxury bed, not guitars) aren't subject to US environmental law so it's all Obama's fault.

      reply to this | link to this | view in chronology ]

  • identicon
    James Gilbert, 9 May 2018 @ 12:54pm

    A good start

    Just like many a brick & mortar music store offers lessons in house and make good money doing so, Fender is on the right track with lessons - the really expensive part of learning the art of playing an instrument and a good way to get repeat business. However, as a private piano instructor of over 20 years (and even taught high school guitar once) there is a fundamental flaw in what they are offering. While the teaching videos they offer may be great, they offer no feedback if one is having problems nor do they tell you if you are actually playing the way they are teaching. I can't tell you how many students I've had who completely ignore what I tell them when they first get a piece of music to learn and don't realize when they come for their next lesson they didn't do what I told them to. Likewise, I've had many who tried to learn a piece of music via a YouTube video who really needed feedback from an experienced pianist for many reasons. Without some sort of feedback from a more experienced player, anyone learning to play an instrument *only* through watching videos is pretty much wasting their time.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 9 May 2018 @ 1:20pm

      Re: A good start

      However there is great value in well produced tutorials and instruction that show the 'how' details in a clear manner, and as someone who learns through emulation, I can rewind a video a lot more times than I can ask someone to 'show that to me again' while I stare at their hands.

      reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 10 May 2018 @ 2:04am

      Re: A good start

      anyone learning to play an instrument only through watching videos is pretty much wasting their time.

      Anyone trying to learn on the Internet who does not have some social media account where they can post images and videos, and ask for help, is wasting their time. However, by using such channels they can get help from a multitude of sources.

      The power of the Internet is in the Interactivity that it enables, which multiples the effectiveness of the knowledge it also makes available.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 9 May 2018 @ 2:10pm

    A problem/issue in software.

    Many, many times I've been approached by A: software people (in the business) and they hesistate to share their VERY SECRET AND MIND BLOWING idea. B: people outside of software that are convinced that their idea is so innovative that it will revolutionize some damned fool thing. They just need a software person to implement it.

    I normally would show them one of my notebooks. Which had several ideas per page, often in extensive detail, that I'd had over the last year. Yep, couple of notebooks per year, many decades in the business.

    Your idea isn't new. You lack the capacity to be innovative and no, I really don't want to help you conquer the world. Software world or otherwise.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 9 May 2018 @ 7:48pm

    Fender simply did basic market research and realized they needed to appeal more to women and also put up video tutorials. Done and done, and success was immediate.

    The pro-IP lobby—as well as managers and engineers who think they are only as good as the number of patents they can take credit for—desperately want everyone to believe that the public domain is an outmoded cesspool where no one can compete and is bad for business. Yet 99% of the design and function of a guitar is in the public domain. Several companies make quality versions and built very successful businesses around it. One was not going to suddenly crush the other by tweaking a guitar's design and function any more than Coke was going to destroy Pepsi by changing the cola recipe in the '80s.

    Nevertheless, the "innovative" approach of Fender's rival, Gibson, was to try to modify the 1% of the design and function of a guitar in ways that would be protected by intellectual property law, even if it meant doing things people didn't want. The result was the company crashed and burned, and Fender didn't have to do a thing to make that happen.

    Even if Gibson had followed Fender's lead, it would not made Fender's approach any less successful or less worthwhile. Both companies have operated in the same market space for decades. Fender knows it only needs to stay profitable, not bet the farm on wiping out the competition through trademark and patent shenanigans.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 9 May 2018 @ 8:53pm

    tp's not going to like this at all, is he?

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 10 May 2018 @ 8:00am

    Guitar manufacturers have it tough because guitar players have a strong and irrational aversion to innovation. In the world of guitar, the older and/or more old-fashioned, the better. A large percentage of guitar players (who are semi-pro or above) automatically reject anything digital, even when blind studies have shown that there are no perceptible differences in the sound quality between an actual 1974 Marshall amp and a digital model.

    Bass players are exactly the opposite. The bass world is constantly innovating and adapting new technology. I love walking into gigs with my 4 pound, 800 watt amp.

    Gibson's strength is its history. Vintage Gibsons are worth ridiculous amounts of money, and for new guitars, the closer a particular model is to a vintage Gibson, the more popular it is.

    reply to this | link to this | view in chronology ]

  • identicon
    bshock, 10 May 2018 @ 9:47am

    Genuine "innovation" is about recognizing a customer need and fulfilling it. End of story.

    reply to this | link to this | view in chronology ]

  • identicon
    Yes, I know I'm commenting anonymously, 10 May 2018 @ 10:08am

    In other words: pay attention to what your customers are doing, not to what is desirable for your marketing department.
    Your customers might say something different in a survey from what they do/need. So you need to figure that out (see A/B testing).
    The marketing department wants simple results that are easy to put in ads, especially when they do not understand the technical issues involved. They are not primarily concerned with `unsexy' basics (e.g. usability).

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 10 May 2018 @ 1:06pm

      Re:

      It's not a choice between marketing and no marketing. Both Fender and Gibson have marketing teams. One just did the right thing and the other did not. That is, Fender's team surveyed the customers and found out who they are and what they do with their guitars, and reacted in a way to serve them better, while Gibson's just took on a cheerleading role for the CEO and his "disruptive" innovations and outdated brand marketing which no survey ever supported.

      reply to this | link to this | view in chronology ]

  • identicon
    EU privateer, 25 May 2018 @ 12:59pm

    Gibson's problems were not limited to guitars. The bought a whole bunch of other companies at the wrong prices, then mismanaged them. So they lost huge sums of money because they couldn't do basic business.

    reply to this | link to this | view in chronology ]


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