Would you like to be the Apple of market research?

Kathryn Korostoff (of Research Rockstar fame) has posted an interesting question on LinkedIn about what it would mean to be the Apple of market research in the NewMR discussion group and I thought I’d like to share and extend my response here.

I think Apple in an interesting example of how survivor bias can make some risky decisions look good. Apple has made some big bets and recently several have paid off very well, as did the decision Jobs and Wozniak made in the 1970s to move from the homebrew Apple 1 to the production line, ready to run Apple II. However, many other companies who have made these 'bet the company' decisions have failed (as Apple nearly did when it made the Mac too proprietary and lost ground to the PC and when it produced lemons such as the Lisa and the Newton).

I think a research company that could be called the Apple of market research would be one that took a big bet on a single style or approach, a big bet that could not be fully justified on research because they are assuming the marketplace and people will change. Examples of market research companies that have done this include: Gordon Black and Harris when it went so strongly into online polling, or Diane Hessan who has developed a really strong community offer based on one approach, or perhaps even more John Kearon and BrainJuicer who have combined chutzpah, style, smarts, and a very, very strong branding message to what they are doing. But surely the strongest claim to have been an ‘Apple’ in its time would have to be the company formed by Maurice Millward and Gordon Brown when with very little research experience these two advertising guys created a business in a tiny office in the West Midlands to research advertising, creating ad tracking and one of the most clearly branded of the research companies, Millward Brown.

My feeling is that these innovative companies tend to either become traditional when they start to be successful (Sony and Nokia perhaps), or they keep making big bets and consequently go the way of Lehman Brothers, Arthur Anderson, IBM as a PC company, Lotus (cars and software), AOL, Myspace, etc.

As an additional thought on this topic, I wonder if any market researcher would ever recommend a 'bet the company' approach to a client? For example, if we felt the odds on some new strategy or product were something like going bust 20%, doing OK (i.e. the ROI on the effort would equate the norm, say 5% to 10%) 60%, and making a major impact with great rewards and returns 20%, would we recommend it? Or, is one of our core benefits that we tend to be risk averse?

(BTW, my feeling is that Apple has probably peaked, at least for the moment, I think the iPhone will continue to lose ground to Android phones and I suspect that the tablet computer will not really take of outside of the home for a while yet, which will hold the iPad back, almost nobody with a Mac changes to PC these days, but not many go the other way, which to me means they need to get even more students using them).

 

Comments

[ResearchRocks]

Thanks for posting this Ray. Here are just 2 of my own thoughts on what an Apple-inspired MR company might be...
1. The iTunes model. I am in awe of the success of the iTunes store's success (and the App store). Sure, it is really just a modern day take on the razors/razor blades model, but it is still impressive. What would that mean? How about an MR firm that can create a simple, graphical platform that clients can simply buy data updates to as needed?

2. Schools as sales channels. I think it is clever how Apple gets so many high schools and colleges to standardize on it. Kids come out of school preferring Apple products because that is what they have used. A NewMR research company could partner with schools to gain awareness and preference for their models/online tools/etc.

[Copeland1985]

I would have said almost the same thing, except maybe with a bit less name throwing (Canadian humor). The other side of this story is that Apple does do market research and Steve Jobs just tells people otherwise. They do tons of market research for pricing, CSAT, and more, but I'll admit I have neither seen or heard of them doing any of their own product/concept tests with market research companies. Over 8-billion dollars went into R&D to make the first iPhone "just right" ... maybe a short online survey could have saved them a few million on that process. Also, just because they don't "DO" market research doesn't mean that all of the management team doesn't read up on the latest market trends, spending, and white papers inadvertently doing their own secondary market research. The one thing I have to disagree with you about is the statement about Apple hitting it's peak. With the continued split between high and low incomes there is a MASSIVELY growing market for expensive quality "advanced" electronics as well as less expensive quality "basic" electronics. Also, Android saw a huge gain last year, but there are three problems with it's ability to "takeover": 1. Android is only an OS and not a phone brand (unlike BlackBerry and iPhone), so shitty implementation of the OS on devices can't be controlled and does destroy the brand-equity. 2. The smartphone industry is still so new with so few players in good OS development that a game-changer could rip tons of market share away from the big players. 3. Google has so much going on right now that it can't keep up with connectivity between all of it's offerings. Thanks for the post!