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post #1 of 1 Old 03-09-2005, 09:51 AM - Thread Starter
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Silicon Valley Doesn't Understand Consumers
Every entrepreneur worth his iPod is trying to come up with a new consumer electronics device. The problem is that they're designing them for other techies.
By Om Malik, business2.comMarch 08, 2005
Walk down University Avenue in Palo Alto and you're bound to overhear bits of conversation about some new consumer electronics gizmo. Venture capital firms have started to hire consumer-focused general partners, tweaking their spin from enterprise to the mass market.

If I could get a dollar for every time I hear someone talk about "fortune at the bottom of the pyramid," I could go out and buy an Apple (AAPL) G5 desktop. In short, Silicon Valley is once again having an affair with consumer electronics. Lest we forget, most affairs end in either recrimination or tears, and the Valley's past flirtation with consumer markets doesn't bode well for this latest attraction. Silicon Valley's two most successful CE companies -- Palm and TiVo (TIVO) -- are still limping along despite becoming icons of high-tech. For every iPod there are a dozen ReplayTVs that peaked way too soon.

The real reason most Silicon Valley CE startups fail is that they usually consist of alpha geeks designing products for other alpha geeks -- which means that the products are inherently complicated and usually overengineered. "Most Silicon Valley engineers create products for each other," says Udaya Patnaik, chief executive of San Mateo, Calif., design strategy and social research company Jump Associates. (I have no doubt that there's a great opportunity in advising companies on how to make their devices user-friendly -- if you can get their attention.)

Companies are not designing for the masses because the only feedback they get is from people who live in Silicon Valley. As a result, the consumer products coming out of Silicon Valley are inherently complex. I saw this over and over again at the recent Demo conference, which showcases new products and business models.

Palo Alto-based Digeo faced similar problems in making Moxi, its next-generation set-top box. The company had to make sure that consumers could understand the user interface in less than a minute. Digeo has spent nearly three years on that quest and now believes it has perfected a unique graphical way of navigating the thousands of program choices. It's the first user interface since the iPod that has rocked me. 2Wire, a set-top-box maker that has teamed up with SBC (SBC) and Dish Network, also has gotten it right.

But they are the exception. Too many CE devices coming out of Silicon Valley, as well as from Microsoft (MSFT), are anything but easy to use. This past weekend I attempted to make a Hewlett-Packard (HPQ) Media Center PC work with my plain old tube television so that I could record some college-hoops action while away from home. Three hours later I threw up my hands in frustration. It wasn't that the gear didn't work. There was nothing wrong with Microsoft's Media Center PC software, and the device, in fact, is masterfully engineered. The developers thought of everything, except for one little problem: The set-top-box tuner and the media center refused to talk to each other.

What should have been a 10-minute plug-and-play process led to a wasted evening and a litany of unmentionable words. The average consumer won't put up with that. When you buy a DVD player, you attach a set of cables to your TV, and you're watching Finding Nemo within 10 minutes. Apple has been able to re-create that magic with most of its products, including the best-selling digital-music player, the iPod.

The iPod has been such a smash not because of its rakish good looks, though that gets all the attention. It's succeeded because it is so easy to use that even Mom rocks out on her iPod. Maybe it's time for CE-focused startups to look for user feedback from those of us who are not alpha geeks. Simplicity and ease of use are vital for success in the consumer electronics market. That's a lesson no Silicon Valley startup should forget.
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