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The Secret to Understanding CONSUMER TRENDS

ABOUT THIS EPISODE

Guest Teacher: Allen Gannett @Allen 

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Welcome to the ten minute MBA. I'm your host, Scott D clary. On the ten minute Mba I give you tools, tactic, strategies insights that you can use to start, scale, grow or x Your Business. Today your guest lecture is Alan Gannett. He is the ex CEO of track maven. He is currently an angel investor, he is the author of the creative curve and he is a Forbes thirty under thirty. He's going to teach you how to think about consumer trends when you are taking a product to market, novelty versus innovation versus familiarity, and how to best understand what actually resonates with your customer. I hope you enjoy one of the things I think really throws people for a loop is consumer trends. Like why are certain things popular when they're popular right like? That really gets people like feels really sub squishing and tangible. But the reality is we actually have all sorts of amazing sociology and...

Psychology Research and tells US exactly why consumer trends happen and like. I'll give you examples. For one of the most prominent forces, it's as humans. We have these two sort of urges, I like to call them, that we've developed over time. One is that our brain has realized, a sort of coded that things that we see that are familiar represent safety. Right, so if think about, you know, when you see your door for home like safe place. If you see a door that is the same physical door but it's a place you've never been before, your brains, I'm what's behind that door could be potentially sort of risky, and so merely the fact that something's more familiar changes what we think about and so familiarity breeds this idea of safety. As result, we also tend to fear things that are unfamiliar because we're like what's there? So that's one. Or do we have the other...

...urge it's really important to understand with consumer trends is that we've also developed this novelty seeking behavior where when our brains see something new, it gives it what's called a novelty bonus, which is basically this sort of like perceived benefit to that where it's like, okay, that piece of fruit that I've never seen before kind of looks like a weird strawberry. Oh well, like I should try eating that because it might actually be delicious. Right, it might be, you know, breakfast. Thing about when people were hunter gatherers. So it's interesting. These two things are contradictions, right, like literally, I just told you, like familiarity breeds safety, novelty breeds pursuit. That doesn't make sense. Like those, those are contradiction. What it is is our brain really is constantly looking for things blend of the familiar in the novel. We like things that are fair enough to be safe but yet novel enough to be new. So think about if you saw a berry when you were a hunter gather that was sort of like a weird strawberry. You be okay,...

I'm going to eat that. It's probably delicious. If you saw Berry look nothing like anything you've ever seen before, you might be like a little bit too much, like it might be poisonous. I'm going to leave it be. And so as a result, which you find with consumer trends is that over and over again there's all these studies. It basically show that the things that people like things that have one foot in the familiar and one foot in the new. And so if you think, think about like apple, like the apples are great example this like Apple. We think about is like sort of radical innovation. But actually, no, like that's not the story of Apple. If you look at apply s when they release their first tablet device, the Apple Newton, it was a spectacular failure. People like this is crazy, I don't want those. But then fast forwards today, the IPAD tablet computer is like wildly successful. Then you think about it, like getting to the point where the IPAD would be adopted by consumer was actually very incremental, right so, like the IPAD was an iphone without a phone. The...

...iphone was an ipod with a phone. The ipods a better mpatree player. Right. So, like, if you actually look at a lot of creative success stories, which will tend to find is that the ones that are successful adopted by consumers tend to be much more incremental than we realize, because we have those two urges that pursue the familiar and that pursuit of the novel that coexists. I really that's that's very insightful and it makes a lot of sense. Now I'm just wondering for somebody who is bringing a new product to market, like you mentioned, with with Apple, the the familiar and the novel do contradict. So how do you strike that balance when you're trying to, you know, go into a blue ocean you don't have a reference point as a business? Yeah, great question. And this is where a lot of entrepreneurs really a trick because they build what is in their mind the most advanced or the best set of features, not actually the right thing to do.

And the book I tell the story campus network, which was a social network card a month before facebook at Columbia University by the Student Body President, when Viral on Columbia's campus. The CO founders of it took off, much like the facebook cofounders did, in order to focus on it for a while. It was growing. And it's interesting is campus network obviously did not work right. We are not talking about, you know, Adam and Wayne who started it, talking about Mark Zuckerberg. And it's interesting, though, is that campus network actually had dramatically more features and a lot of features which much later facebook would have and lead to a lot of success. The activity, feed, groups, events, a lot of these things they had years before facebook years. And it's interesting is if you go back and you talk to the people who are involved in this. I got interviewed the folks from campus network and all stuff. It's like one of the things they point out is that...

...one of the reasons facebook one was that it was like incredibly simple. And so, you know people at the time we're using screen names and pseudonyms online. So like the amount of novelty they were willing to have was like just having their real name and photo and directory, which with facebook started as I think that was enough. The idea that you're also going to have all this other stuff out about you was like not no, like that was not something people were comfortable with, and you saw this. Were facebook very slowly over time, added more and more public features than made you more public. As we its consumers became more comfortable with it. I think it's a really great example when it comes to technology businesses. But it's so easy as a technology business to build the best features from a technical perspective or from a sort of Meta, I don't know, like a first principles perspective, m but like your job is not to just create something that has the most bells and whistles, but it's actually something that customers want use, and so I think that's...

...really important. This is why the Blue Ocean, I think the thing that's important is usually start with either a wedge or a metaphor. Right start with a much smaller feature set that people are ready for and overtime expand, or start with sort of like a metaphor or where you're doing something that maybe in a new space, but it's a familiar process and is letting you eventually grow into that Blue Ocean. But you can't just go and build a blue ocean. No one will lie anyways. That's it for today. I hope you got some value out of Allan's advice on better understanding consumer trends, better understanding your customers. Remember any business questions you have. Don't worry, I got you. This has been another ten minute MBA. Have a great day. I'll see it tomorrow.

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