This month we have a guest blogger, Nancy Goldstein of Compass(x) Strategy. While Nancy’s firm focuses on brand strategy and marketing for environmentally and socially responsible businesses, she just couldn’t resist commenting on the recent launch and subsequent discontinuation of the Microsoft KIN. I thought she makes some terrific points, and wanted to share them here. As you’ll see, she feels the KIN case is ripe with lessons to be learned to help businesses of all shapes, sizes and missions improve their new product launches. So, here’s what she thinks:
On May 13 of this year, Microsoft launched The KIN – their latest entry into the mobile market. Just 48 days later, Microsoft killed The KIN. After spending tens of millions of dollars on advertising, $500 million to acquire a small tech design firm, and countless dollars and people on development, the product was discontinued due to dismal sales.
It is easy, I believe, to criticize others for their failures. And many people have been having a lot of fun blasting Microsoft on this one. What is harder, but far more productive, is to analyze the situation to determine what we can learn that will make our own efforts better.
But first, a bit of background on the KIN:
The product was targeted to “15 to 30-year-olds who are social-networking enthusiasts,” said Robert J. Bach, president of Microsoft’s entertainment and devices division. However, as most reviewers aptly pointed out, given the functionality and design, the “bullseye” target is really at the younger end of the spectrum – high school and college students. The insight at the core of the product is that social life and self-expression are the “Social Generation’s” (Microsoft’s term) biggest priorities. Therefore, the Kin was developed as a people/friend driven device, rather than an app/function driven device.
Where did Microsoft go wrong?
Let’s start by saying that Microsoft does deserve some credit. The phone was based on a real consumer insight about how younger people use their phones/PDAs. Microsoft conducted thousands of interviews with their target audience to understand how they interacted with their friends and used their mobile devices. That is new behavior for Microsoft and they deserve credit for asking questions before diving into development.
However, one insight does not an entire product make. Specifically:
1. What people say and what people do are not always the same thing. As a result of listening to their audience talk about how much they loved Facebook, Twitter and MySpace, Microsoft built a device with social media at its core. Great. But apparently, since no one mentioned how much they love using a calendar, Microsoft didn’t put one on the device. Do people who love Facebook never have anywhere they have to be? What a very spontaneous bunch the Social Generation must be! The KIN has GPS, but no map functionality. Do members of the Social Generation not get lost going to all the spontaneously fun events they hear about through their extensive social network? Products must be designed based on what people really need, not just what they say.
Questions for your business: Do you know how people want to use your products? Not just what they say, but what they really want and need? How are you getting the answers to those questions?
2. Users and purchasers are not always the same people. This device is targeted to high school and college students. Great idea – it is an underserved market. But high school and college students don’t buy their own phones or pay their own phone bill. Microsoft was dependent on parents willing to cough up an additional $30 every month for a data plan just so their kid can be on Facebook.
Questions for your business: What is the purchase decision process like for your products? Do you understand who uses your products vs. who purchases or influences? How does that change the products or surrounding services that you offer?
3. Understanding what people are currently using is critical. As I mention regularly, people are not sitting around helplessly waiting for a new product to arrive. They are doing and using something. In this case, the competitive set appears to be traditional mobile phones. And given the functionality of mobile phones, the KIN is a great upgrade. However, The KIN is priced like a smartphone, and compared to a smartphone, it is severely lacking.
Questions for your business: what are your customers currently doing or using instead of your product? What will inspire them to switch? What are the barriers to switching and what can you do about them?