– Jeff Bussgang is a General Partner at Flybridge Capital Partners, an early-stage venture capital firm in Boston. This post originally appeared on Bussgang’s blog www.seeingbothsides.com. The views expressed are his own. –
I’ll never forget my first marketing class at business school. Our professor peered at us with an intense glare as he pushed back on our standard “chip shot” comments. At one point in the class he asked the guy next to me to opine on the case we were discussing, which involved launching a new consumer product. “Well,” my neighbor answered confidently, “I think it will be a hit because I can see my mother-in-law buying it.”
“I see,” replied my professor dryly and then turned to the class with a withering look on his face, “Steve appears to have fallen into that fatal trap of ‘Mother-In-Law Market Research’; believing this new product will be a hit just because his mother-in-law likes it. Instead, let’s look at the data, shall we?”
This put down to allowing personal experience influence your assessment of new products and services came back to me this week, while at my board meeting for our mobile video portfolio company, Transpera. As we discussed poor video delivery quality and AT&T’s clogged network, everyone started devolving into their own anecdote of “what happened when I tried to watch a recent video on my iPhone.”
Although I know it frustrates entrepreneurs, I confess to being sympathetic to investors who use their own experience as a guide to their investment activities. Frankly, I think it’s a critical part of my job as an investor to try out new products and services and those experiences certainly do inform my investment judgment.