Is Planning Overrated? Effectual Marketing Practices Among Silicon Valley Tech Companies
A substantial body of marketing theory is rooted in the view that successful organizations are those that utilize their understanding of customer needs to create a product mix (Drucker 1954; Dibbs et al. 2005). These customer-centric organizations emphasi
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epth interviews, we structured an interview guide with open-ended questions in order to learn how tech startups find their first customers and what they do to build an initial customer base, as well as what role, if any, effectuation and improvisation play in their new product development efforts. The audio-recorded interviews resulted in 3.5 hours of conversation and 41 single-spaced pages of transcription. Analysis of the data was an iterative process (Thompson 1997). Our interpretations were developed over multiple readings (Spiggle 1994). Following Strauss and Corbin (1990), we used a hermeneutic framework in which we analyzed each participant’s data holistically and open coded it (Goulding 2002) until recurrent themes appeared and then completed an inter-textual analysis, identified patterns, and developed thematic understanding that accounted for the data (Spiggle 1994). We separately analyzed the transcripts and then conferred and refined to develop a common, acceptable understanding of the data. RESULTS AND DISCUSSION Our insights from the depth interviews revealed numerous findings regarding the processes innovative tech start-ups utilize to formulate new product development strategies and the role a customer- or product-centric focus plays in the ventures’ decision making. Three key themes emerged from the data. They are self-focus, need finding, and network creation and utilization. Self-Focus When we asked about business creation, the entrepreneurs reported their initial product/service ideas were personally motivated. One participant stated, “My view was, I was probably too immature to even care about what the market wanted. I just wanted to build this because it was cool.” Another said, “We created something really cool which we liked, and then we thought about who could use it.” A third reported, “I am very passionate about my product. I was clear about the market requirements and why the market will need this product. I am a risk taker and follow my gut feeling. I believe common sense is a key to success.” It is evident from this small sampling of quotes that our tech entrepreneurs utilize a product-centric, not customer-centric, approach to entrepreneurial success, as their initial product-development strategy does not consider stakeholder groups, including potential customers but rather is self-focused (Brockner, Higgins and Low (2004). Need Finding Only after the individuals we interviewed created an offering did they go about finding a need for it. During their initial need finding, the entrepreneurs most often relied on their own expertise to inform their decisions. One said, “You then take that hunch [product] and then try to see if there is a need for it.” Another added, “I guess from experience, we knew who the market would be.” As their venture evolved, the entrepreneurs began to adapt their offerings based on listening and learning. “You do not start necessarily with a plan. You start with the vision. It needs a vision to spark, to do something different, and then you get into it. You realiz
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