The New Venture Challenge was pleased to present Dr. Page Moreau, Marketing Professor at Leeds School of Business, to deliver a workshop on Wednesday, January 20th, titled “Your Business Concept: Product and Service Offering.”  Quick quiz:  What percentage of new products fail in the marketplace?  (Answer: 40%)

With those odds, entrepreneurs need to step into their customers’ shoes.  A lot has to be right for a successful product launch.  The concept should meet a real need, the design has to work and the product has to be positioned well.  You’ll get these decisions right, says Dr. Moreau, if you know your customer.

80% of product development costs get locked in on the “fuzzy front end.”  That’s because we get attached to our ideas.  The key is to challenge your assumptions and talk to your customers.

So how do you talk (or better yet, listen) to your customers?  “Abstract up” to hear what they need.  A customer might not pinpoint the solution, but they know when they’re dissatisfied.  The entrepreneur’s job is to fill that abstract need: The CEO of Revlon says they sell hope.

And – profitability depends on the diffusion of your product.  Will the early adopters convince the majority to buy it?  Word of mouth is powerful, but it depends on how similar the two groups of customers are.  The early adopters might be very different from the majority.

Who first adopted digital cameras?  Not professional photographers. Real estate professionals, early web developers and others who needed online pics, even if they were grainy.  Every product has to get across the chasm between early adopters and the majority.  How many of you own a Segue?

Finally, recognize the little ways you’re asking your customers to change by buying your product; it can be the difference between flying colors and stuck in the mud.  As one student put it, if you use Skype, now you have to “get gussied up” just to talk on the phone.  On the other hand, a new insulin pen reduced the prep time from 1 minute to 10 seconds: sales went up by 30%.

For anyone who couldn’t make it to the marketing workshops with Page, we’re posting the slides on the New Venture Challenge blog.  Thanks to Mark Wiranowski for guest blogging the event.