Companies in the on-line business are rushing services to market. But do they really know what people want?
Nick Baran
The frenzied on-line market is heading in the same direction as pen-based computing--scurrying to offer something without finding out first if it's what people want. There's this blind faith that people are ready to live on-line. People might want E-mail, they might be fascinated by conferencing, and some can even endure chat sessions. But are they really interested in reading magazines and newspapers on their computer screens?
Omni
magazine recently announced that it will offer its monthly issues electronically and supplement them with less-frequent paper issues. It seems like a risky move to me. Most people still prefer sitting in an easy chair, o
r on the train, or in the airport, thumbing through hard copy, particularly if the alternative is paying by the hour to read on-line.
As the telecomputing revolution sweeps through the land, its pioneers should bear in mind an obvious but often-overlooked credo: Listen to your customers. No matter how deep your pockets, no matter how great your previous successes, no matter how profound your vision, if you don't listen to your customers, you will fail.
If you need an example of what happens when industries ignore their customers, the pen-based computing market is a good one. Companies such as Momenta went bankrupt because they brought to market products that nobody wanted. These companies believed they could convince people that what they wanted was an expensive pen-input device with less-than-accurate handwriting recognition.
Another example: Time Warner recently installed new set-top boxes for its cable customers in four states and then raised the monthly rates, even for those customers
who didn't want the box's new features. The media giant told customers they would lose their cable channels if they didn't upgrade to the new box. Amidst a howl of protest, Time Warner backed down and is now offering the new set-top box as an option. It could have avoided this problem by listening to its customers.
Or what about electronic shopping? When I talk to people in the on-line business, they dismiss the problem of transaction security as one that will be solved soon. They'd better realize that until security is completely solved and solid, people won't use on-line systems for doing business. It's similar to the makers of pen computers assuring everyone that perfect handwriting recognition is just around the corner.
Business transactions must be 100 percent reliable and secure. Security is not some minor side issue. It is the foundation on which electronic commerce must be built. We're still far away from truly secure electronic networks, and until we get there, electronic commerce will
never take off. Developers of on-line services should be focusing on security technology at least as much as they are on getting Pamela Anderson to sit in on an on-line chat session.
Interactive entertainment. This is what the deal makers of Hollywood and Silicon Valley are cooking up for us. This is where they say multimedia is going. But is this something people want? There's little evidence that audiences yearn to be active participants in movies and do things such as choose the fate of Forrest Gump. Spielberg and Gates could end up spending billions of dollars developing products that nobody wants. As Time Warner found out the hard way, and as Hewlett-Packard found out by doing a customer survey, people are interested in interactive services--but they won't pay extra for them.
This lack of understanding about what people want is surprising considering all the market-research tools available. But in the high-tech world, where growth has been so phenomenal, companies become so convinced of th
eir invincibility and so sure of the power of their technology "vision" that they ignore business fundamentals.
I don't mean to imply that there is no room for new and innovative technologies. But there is a need for new ways of thinking about how to market these technologies--how to make them affordable and accessible.
In France, the creators of Minitel had the market savvy to give everyone a free terminal and make money on the information piped into those terminals. Maybe the telecomputing companies should give the hardware away and make money selling the content. But first, they ought to ask people what they want--and then listen.
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Nick Baran, a consulting editor for BYTE, is the author of Inside the Information Superhighway Revolution (Coriolis Group Books, 1995). He can be reached on the Internet or BIX at
nickbaran@bix.com
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Stop, Look, and Listen!
