think ahead

March 16, 2020

Innovative business ideas are invariably founded in deep customer insights—not just understanding their needs and wants, but taking a leap while they walk —just as Airbnb did.

Henry Ford knew this about customer needs: customers do not necessarily know what they need — yet. As the founder of the Ford Motor Company purportedly said, “If I had asked people what they wanted, they would have said a faster horse.” He understood that consumers wanted to travel more rapidly. But their concept of how to travel was still limited to horses. Had he accepted faster horses as the reigning status quo, we would not be talking about how his Model T led a profound—and irreversible—transformation. But while consumers had not yet come to want his Model T— even though it could go faster than any horse, Ford knew they would. And they did.

Flash forward from 1908 — when Ford began selling the Model T — to 1986, when Howard D Schultz became Chairman and Chief Executive of Starbucks. Schultz was a visionary when it came to customer needs. Before anyone else, Schwartz knew what the world would need: fancy, espresso-based coffee drinks customized according to individual orders; a coffeehouse experience designed to feel like a community living room; and mobile payment and mobile ordering linked to a popular gift card and consumer app. By anticipating these needs, Schwartz ensured that our expectations for coffee shops would never be the same.

Do not just focus on the needs of the specific customers in your market. Open up your lens to focus as well on those broader social trends that affect consumers at large.

get closer to your customers

Steve Jobs, founder of Apple, noted, “Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.” With that approach, Jobs convinced many of us that we needed a ‘thousand songs in our pocket’ — his marketing pitch for the iPod. He did the same with a seemingly endless set of other projects that we never knew we wanted, let alone needed.

Joseph A Michelli is the author of numerous bestsellers, including The Starbucks Experience, The New Gold Standard, and the Prescription for Excellence. He was named as one of the Top 10 thought leaders in Customer Service by Global Gurus. His new book is The Airbnb Way.

Mercedes-Benz infused car ownership with exceptional, best-in-class customer service —so much so that even reaching out to its call center is designed to provide reassurance as well as delight. The Ritz-Carlton Hotel Company redefined the hotel experience with universal, standardized hotel amenities no matter what location a customer is in. Zappos anticipated a customer need to make shopping for shoes a whole lot more fun, and re-set the standard for an enjoyable, engaging customer experience. All have achieved remarkable business success by uncovering unmet customer needs and fulfilling them — better than any of their competitors.

find out what they want

Which leads us to Airbnb. The juggernaut that disrupted the hospitality industry went from three air mattresses to over 38 billion in just more than a decade. But from its inception, it focused on customer needs. Two of its founders, Brian Chesky and Joe Gebbia, had just graduated from the Rhode Island School of Design and relocated to San Francisco, where they shared an apartment with a third roommate. When that roommate suddenly left, they had an idea: rent the empty room to people coming to town for an upcoming design conference. They used a rudimentary website to target attendees, and connected with three guests. For eighty dollars a night, the guests stayed on air mattresses. But they had economical accommodations for the whole duration of the conference, in a city known for pricey lodgings. During the experience of hosting those guests, Chesky and Gebbia arrived at five critical observations:

  • People are willing to access economical travel accommodations.
  • Securing a reservation using tools on the web is not only efficient, it has countless benefits.
  • Guests are open to staying with strangers.
  • A powerful bond can be created by this type of arrangement.
  • Both hosts and guests enjoyed positive outcomes.

Next, Chesky and Gebbia enlisted their friend and computer scientist Nathan Blecharcyzk to build out the framework and system for what has become Airbnb. Blecharcyzk became the third leader of the company, and in no time, the company was experiencing absolutely meteoric success. The online travel accommodation and experience marketplace has processed more than four hundred million guest arrivals all over the world in 65,000 cities across 191 countries—from the United States to China to France to India. And all of this began with discovering unmet customer needs, and working to fulfill them.

Airbnb continues to find and work to fulfill unmet customer needs by using these three key strategies. Each can play a role in your effort to meet needs of your customers — whether they are aware of those needs yet, or soon will be:

  • Never stop paying attention to how ‘all’ consumer habits change. Do not just focus on the needs of the specific customers in your market. Open up your lens to focus as well on those broader social trends that affect consumers at large. Airbnb was able to see past the needs of hotel customers in a way hotel companies themselves could not. While hotel companies had been making incremental changes to improve the experience of their key customer segments, leaders of those organizations overlooked the trending customer desires for greater personalization and unique offerings — and underestimated how those needs would translate into customer expectations for hotels. So hotels kept improving a fairly ubiquitous experience (a 325 square foot hotel room in high traffic areas) without changing it. In contrast, Airbnb offered diverse, crave-able, shareable places and experiences.

  • Create a process of listening, ideating, trying and doing for your teams. For Airbnb’s founders, design education shaped their approach to innovation. As a leader, you can draw on design theory to build a process for your teams to follow. They should start by listening for customer needs, both with their ears and by careful observations. Then, work to ideate an array of potential solutions that would meet those needs. Select the most viable solutions, and try them out, learning what would work and what would not. Finally deploy those solutions that will best address and fulfill customer needs. Leaders in innovative companies create cultures that follow this model, consistently listening, exploring, testing out, and then utilizing the best options.

Leaders should never see “success virtually as an entitlement,” or they will “lose sight of the true underlying factors that created success in the first place.”

  • Never get complacent and always stay restless. There is a great phrase that comes from Marshall Goldsmith on how to lead change — “What got you here won’t get you there.” And business expert Jim Collins also stresses how critical it is to constantly, even vigilantly, lead change. It is not a singular action, in other words. Collins suggests leaders should never see “success virtually as an entitlement,” or they will “lose sight of the true underlying factors that created success in the first place.” Complacency is the enemy of innovation here. So keep asking: What if? What else could we do? How do we know what we know? Never stop stretching as you embark on that tireless journey to excellent, unforgettable customer experience.

Airbnb has been able to infuse that approach into all levels of the company, including Airbnb hosts. As one superhost noted, “I think about what I would need if I was traveling and try to provide those things even if my guest has not specifically asked for them.” This sense for what is needed before it is even requested has become a hallmark of the company. It is a legacy that goes right back to Henry Ford and his Model T. When leaders strive to go far beyond meeting the obvious needs of their customers to finding meeting unstated needs, they can achieve a whole new level of greatness for their organization.