One of the most common traps in business is prioritizing business needs over customer needs. This often shows up as the sunk cost fallacy or chasing the “shiny new thing.” Here are some examples:
I remember consulting for a large consumer electronics company that had invested heavily in developing a “smart” washing machine. The machine could connect to Wi-Fi, display maintenance alerts, and even let you start a load from your phone.
However, when I pressed them on what customer problem they were solving, the answers were vague. They talked about convenience and modernizing the laundry experience, but the added features didn’t make laundry a faster, easier, or better experience. In fact, some users saw the connectivity as unnecessary complexity. It was an example of a technical solution in search of a customer problem.
But, the narrative inside the company was that we needed to get customers to use the app and the online features. But why?
The real answer was the time, effort and money they had invested to build it. This kind of thinking is dangerous because the customer does not care how much you have invested. They only care if your product helps them.
Thinking that you need to stick to a product that doesn’t solve a customer problem simply because you have invested in it is an example of the sunk cost fallacy.
There are examples of this right now with AI. Many businesses are developing useful AI features and products that solve customer problems. But others are simply adding AI because they don’t want to fall behind or appear antiquated, or they must fulfill a mandate from the CEO.
In any case, if you realize that what you are building does not truly serve the customer, the best thing to do is retire the product or initiative and move on to the next one. No amount of investment or effort justifies pushing forward with something that doesn’t solve a real customer problem.
The sooner you move on, the less time and money you waste.
