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Innovation Secrets From Apple, Priceline & Spotify

Find out why your customers come to you. And focus on making whatever that is faster and easier to get.

Andrew Bannecker

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So there I was, on the road with the pop sensation 'N Sync, inside one of the biggest music stores in Times Square in August 2000.

As the CEO of a start-up entertainment company, I was trying to remake the movie Grease with 'N Sync in the starring role.  And while my friendship with the band didn't make me one ounce cooler, it did give me a unique view into the inner workings of the music industry.

Because of the immense popularity of the band at that time, the owners of the major music store chain were with us in the room.  Watching people come in and out of the giant store to buy music, I asked those owners why they thought people bought music from them.

"To buy CDs," they told me.  I replied: "I don't think so."  

They looked at me like I was nuts.  "Nobody anywhere wants to buy a CD," I offered.

They responded indignantly. "Do you have any idea how many millions of CDs we sell a year?"

I pushed further, adding, "Nobody in the world wakes up in the morning thinking to themselves, 'Wow, I wish I was holding a round piece of plastic with a hole in it right now.'  They wake up in the morning thinking, 'I want to hear that new song in my ear! Right now!'  They have to buy a CD, but what they want is to put a song in their ear.  Right now!"

Walking away in disgust at my apparent stupidity, the CEO said to me: "What's the difference?"

What's the difference?  The difference is this: if the music industry realized that it existed not to sell records or CDs but simply to find the fastest, easiest way to let you hear the song you want to hear, they would have invented the iPod and iTunes.  Apple, a company not even in the music industry, did that instead.  And now Apple makes billions of dollars selling music, while record companies and music stores have suffered years of massively-declining sales.

More recent innovations in music, like Spotify, an Internet music streaming service, don't come from the music industry either.  The very chain of stores I was visiting with 'N Sync that day has since filed for bankruptcy liquidation.  And all because the founders never stopped to think about why their customers really came to them.

What business are you really in?  Why do your customers come to you?  What do they really want when they wake up in the morning?  I remember in the early days of Priceline, when a group of the founding executives and I discussed the fact that we were not selling airline tickets for a living.  No, we existed to help get you to your sister's wedding, at a price you could afford.  Think about it.  Would you treat your customers differently if your job was to help them get to a sister's wedding instead of just selling airline tickets?  Of course you would.

So take this challenge:  Ask your customers the real reason they come to you.  And focus all your efforts on making that thing they really need faster and easier to get.

Have you had experiences like those I describe?  I'd love to read about them.  Write me in the comments section below.

Last updated: Sep 18, 2012

JEFF HOFFMAN, co-founder of ColorJar, is a serial entrepreneur who was on the founding teams of Priceline.com and uBid.com. He is also a frequent public speaker on the topics of innovation, entrepreneurship, and leadership.
@SpeakerJeff




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