5 ms·
>but instead of making the costly trip abroad, they had Indian students at nearby Massachusetts Institute of Technology test the razor. This is one of the hard
by mistercow 13y ago
>but instead of making the costly trip abroad, they had Indian students at nearby Massachusetts Institute of Technology test the razor.
This is one of the hard things about being a tiny startup like P&G with very little capital to spare: you sometimes have to cut costs on little things that turn out to be more important than you thought. A few thousand dollars to fly your employees to India might not seem like much, but when you've only got $140B in assets, you have to make some tough calls, and you can't be right 100% of the time.
- steveplace 13y agoDepartmental budget politics can lead to decisions like that.
- bane 13y agoYes, because the cheap disposable Indian razor department gets to call on all $140B in assets in a Pyrrhic quest to crack the 12 cent foreign razor market.
- mistercow 13y agoObviously not. The point is that they weren't strapped for cash. It may not be a hugely profitable market, but if it's so unprofitable that they couldn't afford to send one guy over to India to actually talk to some Indian men about shaving, then the market isn't worth investing in in the first place. I mean seriously, they brought a product to market and didn't fly over to India until after the product flopped? And now that they have, they're talking about basic run-of-the-mill user testing like it's this brand new concept that they're just now discovering. How are these people still in business?
- vinceguidry 13y agoYou underestimate just how much volume there is in consumer goods and what this does to the players in that space. Margins are small, but cash piles are utterly ginormous. I don't care to do any research, but I wouldn't be surprised if P&G alone could buy out Silicon Valley minus Apple. They're HUGE. Also, once you break into a market, it become's a perpetual money machine. P&G could do six such flops and still come out on top, eventually, when they finally break in.
- mistercow 13y agoBut the cost of a flop in that case is the time they could have been selling a successful product. No matter how you slice it, the cost of a trip to India is going to be insignificant compared to the benefits of getting the product right the first time.
- vinceguidry 13y agoI was more responding to your question "how are these people still in business" than questioning your logic. Obviously it would have been better for them to test their market. But the flop itself is pretty insignificant, pocket change to a company like P&G.
- mistercow 13y agoOh, I see. Yeah, I wasn't suggesting that this in particular should drive them out of business. I was wondering how the kind of person who thought "flying to India to research a product for India" was trimmable fat would be able to successfully keep a company afloat.
- masklinn 13y ago> This is one of the hard things about being a tiny startup like P&G This was during the Vector's R&D circa 2002, Gillette was only bought by P&G in 2005. It's got nothing to do with P&G.
- mistercow 13y agoFair enough, but that doesn't really affect my point.
- sopooneo 13y agoI agree with your point. It seems insane to me to not have someone with a sharp mind and a friendly demeanor just go and travel around rural India for a couple weeks. Hire a guide once you're there. This would be in addition to any formal trials and focus groups. I am constantly amazed at how little importance is place on general, informal acquisition of domain knowledge. You never know what tiny fact is going to be important.