18 Apr A Blinding Flash of "Pseudo Value"
Want to know what can happen when you lose focus on the customer? In order to win at innovation, you have to create real meaningful net customer value, that is, something your customer genuinely values and is willing to pay the going price for. It means the thing you deliver to them can’t just be a feature; it must provide a benefit. So many people in the innovation space create what I call “pseudo-value” because they are creating benefit statements that are really feature statements, and those features deliver no value whatsoever.
I’ll never forget how long I waited for the Apple Newton to arrive; I was one of the first people I know to have gotten one. It was supposed to provide all kinds of value as the first personal digital assistant, or PDA, and it was, in many ways, a very clever device. It cost, as I recall, about $700, which was a lot of money for a PDA and a lot of money back in 1998 when it came out . But the biggest problem was that it was supposed to allow you to make notes and have those notes digitized. The bottom line is simple: They over-promised and under-delivered, and as a result of that, Apple lost that opportunity.
They identified an opportunity, but did not create something that delivered meaningful value of any kind; it was “fake” value, it didn’t work, it didn’t deliver as promised, and they knew it at the time. Whenever you create a product that has “pseudo-value” you will lose. This was especially surprising for a company like Apple, whom I love and revere, but they lost the opportunity to be in the PDA space all the way up until the advent of the iPhone.
Examples litter the product landscape. Did GM really create meaningful net customer value by adding trim to a Chevy Cavalier and calling it a Cadillac Cimarron? Did the financial institutions, prior to the recent bust, add real value with the various new financial “innovations” that weren’t really innovations at all? Did these innovations, like the various new flavors of mortgage backed securities really add value for their customers? One must never forget the importance of delivering not “pseudo,” but real, value.