As an innovator and entrepreneur, I design a lot of products. To do that successfully, I have to continually consider how everything will fit together as a whole. I also need to take into account a multitude of perspectives about the future product (including my customers’ perspectives, my designers’ perspectives, my builders’ perspectives, and so on).

Along with these and other considerations, I also need to think about what tradeoffs I’ll have to make. That means I have to continually consider cost and demand. In fact, this is especially important, since focusing solely on making the product perfect usually ends up with a project that’s way over budget and may not even be well received in the marketplace.

Luckily, there are a couple of tricks I employ that force me to see tradeoffs and thereby swiftly move me through the design process: setting constraints and seeing the big picture.

Setting Constraints

One of the keys to forcing tradeoffs in innovation, as well as selling, is a time wall or a time box. A time wall can be artificial or not, but it’s the fabricated notion that you must complete something by a certain date.

If there’s no time wall, you might innovate forever rather than bring your thing to market. But the moment a time wall is established, it forces you to make tradeoffs. What’s most important? What’s least important? It sets your priorities. It’s a triangulation between time, cost, and quality.

No one can have it all! A time wall pushes you to decide rather than endlessly tweak and expand your thing. Think of an hourglass: it’s always running out of time.

When innovating, I give myself what I call a time box: I have this much time, to do that much work. After I set the time box, I shape the work to fit into that box. When you innovate without a time box, you end up continually playing with your creation, adding on features and benefits. As a result, you fail to make explicit tradeoffs. When you hold the time box constant, you give yourself a time wall that puts pressure on the situation. It allows you to see what’s really important.

Another effective constraint is a dollar wall: I can’t spend more than this amount of money to get that accomplished. Again, it forces you to make explicit tradeoffs by placing yet another set of constraints on your creation. The dollar wall forces you to scope the work and de-risk.

Seeing the Big Picture

Forcing yourself to view the whole so that you can see how the pieces are interconnected is another way to help manage tradeoffs. In my office, for instance, I have a room lined with boards that represent categories of work: suspects, prospects, proposals, etc. Then within each board are cards for the work within that category. This allows me to see the whole while realizing that I have a limited capacity. Therefore, I can shift my priorities and easily make tradeoffs.

Playing with a set of possible scenarios is an excellent way to see the big picture. When a company comes to me for advice, I’ll use this technique to help flush out potential opportunities and weaknesses. I might say: “Imagine that I just bought you. Here’s what I would do….” Or I might ask them questions: If I was your competitor, what should I do? If I’m a startup trying to disrupt your industry, what should I do?

Similarly, when someone comes to me for help building their thing, I’ll present several possible scenarios to flush out what’s important: “If I wanted that done in half the time, what would you change? How much would it cost?”. Or, “If I gave you unlimited money, what would you do? How long would it take?” Or even, “If I gave you unlimited time to make your thing perfect, how much time would you need?”

Setting different types of possible scenarios forces you to think about your thing differently. Remember, you can’t have it all. Do you value time or money? What’s good enough? What does progress look like? It also helps you see the next iteration of your thing. It’s a way to remember that everything is a draft: in the first round we do this, and in the second round we do that. You’re not saying that you’ll never do it; you’re just prioritizing.

Make the Right Connections

Most people plan horribly because they can’t see the big picture; they plan for what they know, but they don’t plan for the unknowns. And therefore, they are building their thing off assumptions. To see the tradeoffs, you’ve got to see the whole so that you can make connections, and therefore make better decisions in whatever you’re trying to do.

Instead of making isolated decisions and asking, “Do I do this, or do I do that?” you are now taking a step back, seeing the bigger picture, and understanding the cost, time, and performance implications of your decisions.

Successful innovators and entrepreneurs do not view tradeoffs as a compromise. Rather, they see them as necessary tools for managing the speed at which they move forward. And instead of trying to make all the progress in one step by building the “best” version, they see half steps to make progress and evolve to the solution through multiple iterations.

When you can’t see tradeoffs, you get stuck. It’s like continually trying to put 10 pounds of crap into a five-pound bag. Overstuffing the bag never works. You’re just left with unintended consequences, where you solve one problem just to create another. That’s why you must set constraints and look at the big picture. Ultimately, that’s the only way to understand which problems you’re going to care about.

For more advice on how to swiftly and effectively move through any design process, you can find Learning to Build on Amazon.

Bob Moesta is a builder, teacher, entrepreneur, author, and co-founder of The Re-Wired Group, a design and development firm based in Detroit, Michigan. Early in his career, Bob received an education in building and launching new products from renowned innovators Dr. Clayton Christensen, Dr. Genichi Taguchi, Dr. W. Edwards Deming, and Dr. Willie Hobbs Moore. The worldview he gained has enabled him to work on and launch thousands of new products over the last thirty years, be the founder of ten different companies, and become a mentor to the next generation of builders and problem solvers. Bob is an adjunct lecturer at the Kellogg School at Northwestern University and a guest lecturer at Harvard Business School, and MIT’s Sloan School of Management.

“Do you know the difference between correlation and causation?”, one of my mentors, Dr. Taguchi, asked me one morning as we shared breakfast while traveling for work. I was still early in my career, and I relished the opportunity to pick his brain.

“I use correlation to find causation; they’re the same thing?” I responded.

“No. They’re very different, and if you confuse them, you may end up doing more harm than good.” Then he proceeded to tell me an old Japanese story about the…wind.

Apparently, hundreds of years ago, Japanese cultures believed that trees caused the wind. Because they needed the wind for fishing, they prohibited people from cutting down any trees for any reason.

It was not until they understood that it was, in fact, the wind that caused the trees to move that they could move forward and make progress. That’s correlation versus causation. The wind and the trees moving together is correlative, but which comes first — the cause — is way more important. Causal structures are rooted in the notion of cause and effect.

The Importance of Cause and Effect

There’s a mystic quality to seeing cause and effect, especially for innovators and entrepreneurs. People have said to me, “You’re a fortune teller.” The truth is, I have no magic; I don’t have telepathy. But I do have a framework for seeing causal structures, which allows me to put the right pieces together and say, “When this and that happen, here’s the effect…”

Innovators and entrepreneurs skilled at causal structures understand the cause and the effect as well as the sequence of events that need to happen. If I were to build an icon for causal structures, it would be dominoes falling. What are the dominoes that have to fall before people say, “Today’s the day…”?

Innovators and entrepreneurs skilled at causal structures don’t panic in uncertain times because they can see what others can’t, and can therefore reasonably predict how events will unfold. They may not know exactly when things will happen, but they understand how. They’re not anxious; they’re confident and able to make better decisions as a result.

Use Causal Structures to Help Make Progress

Causal structures are so embedded in my thought process that I apply them to everything in my life. Maybe you already do this as well.

Think about the last time you and your spouse got dressed up for an event. “Wow, you look amazing,” you say enthusiastically. But despite your praise, their response is mild, “Thanks,” they say, largely unmoved. At first, you think nothing of this interaction, but then you arrive at your event and a friend pays them a remarkably similar compliment. “You look stunning!” This time, however, your spouse is overjoyed.

Now on one level, this could bother you, right? But not if you understand the underlying causal structure. When you get familiar with people, they discount your responses because they know what you’re going to say. I call it the spousal discount.

It’s the same reason we have outside consultants in business. I can go into a company and say the same thing somebody on the inside has been saying forever, but when I say it, people respond like it’s new and novel: “That’s amazing!” It has nothing to do with me and everything to do with the relationship. Once you recognize a causal structure, you can use it to your advantage to help people make progress.

Unpack Cause and Effect with Systems Thinking

If you are skilled at causal structures, you can observe the cause-and-effect phenomenon and utilize it to help you make progress. However, to see causal structures you need to be able to take a step back and see the whole as a system.

Causal structures are a fundamental view of how something works, which is ultimately about systems thinking. So what is a system? It may help to imagine a black box where all the action takes place. There are inputs to the black box, there are outputs from the black box, and there are outcomes. Taken together, these make up the system.

Think of a car’s braking system, for example. When you want the car to stop, you press the brake. That’s the input to the system. When the car slows down — deceleration — that’s the output from the system. The outcome is to slow the car to make a turn. In between the input and output resides the system where all the action takes place — the black box.

Innovators and entrepreneurs skilled at causal structures take a step back and see the whole. Not only do they understand the inputs (resources), outputs (products), and outcomes (results), but they also understand their sphere of influence: control factors and noise factors.

Control factors are parameters of a system you can change that impact the system’s performance, and you have the ability, responsibility, and control to set them (specifications). Noise factors are the parameters that impact the system that you cannot control, choose not to control, or are too expensive to control (operating limits).

Find Your Sphere of Influence

Systems thinking is crucial when you’re building a product or trying to solve a problem. Unless you have a system to unpack causal structures, you will struggle to find success. I learned this early on, when Taguchi taught me that to solve a problem, I needed to look at the system as a whole and ask myself the following:

• What are the inputs?
• What are the outputs?
• What are the outcomes?
• How do I understand my sphere of influence?
• How do I design it to work in the face of noise factors?
• What do I measure?

But it goes deeper than this. The system is part of a bigger system called the “super-system.” Additionally, there are “subsystems.” Understanding your system with inputs, outputs, noise factors, and control factors gives you a 360-degree view. Add to that an understanding of your thing within the larger context of super-systems and subsystems, and now you have a 720-degree view — an omniscient perspective.

When you conceptualize your thing in this manner, you can clearly see the boundaries, which naturally shows you your sphere of influence; I have these inputs, I want these outputs, and I am responsible for what’s going on in between.

Create Through Right to Left Thinking

Systems thinking is a critical tool for innovators and entrepreneurs because without it, you don’t know what to work on. But you must go one step further: you must learn to utilize right to left thinking.

Most people tend to think about the system like they do time, from left to right — the way we read in the US. There’s the input, the system, and the output. They think of cause and effect in the same manner: cause, then effect. They then tend to design and build with that direction: what do I have, what do I need, what can I build, who needs it, and what do they value?

But the output goes to a customer who takes that output and tries to do something with it; their intended outcome. And it’s that outcome that innovators and entrepreneurs should start with. I call this right to left thinking.

In other words, understand the outcomes and the context by which customers are going to use the product first. This creates a set of technology-agnostic specs (what the customer wants without a solution) for the outputs that you need to create to enable the customer to make that progress. Then ask yourself, “What systems and inputs do I need to then create those outputs?”

Ultimately, when you design something new, you want to move from right to left, but when you sit down to build it, everything happens left to right. So, when designing any product, remember: while considering the entire system, begin with the outcome in mind, translate it to outputs, and then take the time to design, build, and test.

For more advice on how to make progress using causal structures and systems thinking, you can find Learning to Build on Amazon.

Bob Moesta is a builder, teacher, entrepreneur, author, and co-founder of The Re-Wired Group, a design and development firm based in Detroit, Michigan. Early in his career, Bob received an education in building and launching new products from renowned innovators Dr. Clayton Christensen, Dr. Genichi Taguchi, Dr. W. Edwards Deming, and Dr. Willie Hobbs Moore. The worldview he gained has enabled him to work on and launch thousands of new products over the last thirty years, be the founder of ten different companies, and become a mentor to the next generation of builders and problem solvers. Bob is an adjunct lecturer at the Kellogg School at Northwestern University and a guest lecturer at Harvard Business School, and MIT’s Sloan School of Management.

When you’re designing, developing, and building a product, you need to think about tradeoffs. You must be able to define what you are willing to give up to move forward. I think of tradeoffs like this: you can have it this way; you can have it that way; or you cannot have it at all.

As innovators and entrepreneurs, we never have enough time, money, or knowledge to make a product perfect. Perfection is the trap, progress is the true measure, and tradeoffs are the way to get there. But like everything, knowing how to frame them to get the data and knowledge is the challenge.

It’s Not About Settling

Are tradeoffs really necessary? To answer that, let me share a real-life scenario with you. I’m working on a dating app. During the interview process, I talked to an impressive woman in her early thirties — Harvard law degree, employed at a big Washington, DC law firm — who was struggling to find a partner.

As we talked, I realized what the problem was: she couldn’t make tradeoffs. She saw the dating pool as infinite, and therefore just kept swiping, looking for the perfect match. “I don’t want to settle,” she told me. But she failed to realize that nobody’s perfect; relationships and marriage are about helping each other. They require a set of acceptable compromises.

People struggle with tradeoffs when they view them as settling. Tradeoffs are not about settling; they are about making progress by determining what’s most important. When you can’t make tradeoffs, you get stuck in decision hell, trying to find the proverbial needle in the haystack. So yes, they’re necessary.

The key is making sure you have all the data. If you do, you can actually frame the tradeoffs so you can make much better decisions. If you know how something works and have the empirical data, you can make the tradeoffs to have it perform better and more consistently at a lower cost.

Tradeoffs Matter

As an innovator and entrepreneur, tradeoffs should be one of your most important considerations. To further illustrate why, let’s look at a real-life example from Basecamp, which builds project management and team communication software.

When Basecamp first started to think about an app for the phone, they initially tried to put everything in it to replicate their web-based platform. Then they realized that it made the app way too slow on the phone. So they asked themselves, “What are the types of things people would do on the phone versus the computer?”

You’re not going to create a new account or a new project on your phone. But you will respond to comments and check your lists. So they stripped the app down to the point where it does only the things you might do while standing in line at the grocery store or taking the train home from work.

When the app was packed full and too slow, people downloaded it but never used it. Now usage has skyrocketed because they managed tradeoffs. They recognized that they couldn’t have everything, so they only kept what was most important. And that made all the difference to its success.

Finding “Good Enough”

One of my mentors, Dr. Genichi Taguchi, said, “Cost is more important than quality, but quality is the best way to reduce cost.” Tradeoffs are just as much about cost as functionality. What’s good enough?

Taguchi used to talk about how Mercedes had it easy because they made their specifications so tight; everything fit perfectly. But the reality is, to make it perfect, you’ve got to build 10 parts and throw away nine, dramatically increasing costs. It’s like French cooking: if you use a lot of high-quality ingredients, it’s hard to make a bad thing.

Skilled innovators and entrepreneurs can take a product that’s not perfect and make something great out of it by making the right tradeoffs. When they do, they can reduce costs while maintaining enough quality. In other words, they can find “good enough.”

The Development Process Matters

Let me share another story with you; this illustrates why the development process matters when it comes to identifying tradeoffs for a product. In 1988, I was working full-time at an American car manufacturer under the direction of three of my mentors: Drs. Taguchi, Deming, and Moore. It quickly became apparent that we weren’t keeping up with our Japanese competition, and neither were our American counterparts.

In Japan, industry leaders were creating new cars in half the time — three years from conception to release, compared to our six — and they were also doing this at half the cost, which was kind of amazing. If we wanted to stay competitive in the industry, we’d need to make drastic changes, and fast.

That’s when Deming, a team of executives, and myself went to Japan on a study mission. After a careful analysis, we noticed significant differences between our development process and our Japanese counterparts. Our process started with an early concept design that was readily accepted. The design would be committed to paper, where we would spell out the details — engine, transmission, body, etc.

At this early stage, we’d make only slight modifications. Then each team would break off into their individual silos and begin working on their element. Agreement and common understanding were assumed, and the early process would run relatively smoothly — changes were in the thousands.

But as we got closer and closer to launch, design changes would skyrocket — by almost 100 times. Our teams worked in silos that were extremely independent, so they never consulted one another in an in-depth or meaningful fashion as they built out their components. As a result, when we got close to launch and finally started to pull everything together, there would be problems; the car would not connect perfectly.

Adopting a New Approach

From a cost perspective, discovering these conflicts and differences late is disastrous. At the beginning of the design, changes are negligible; it’s on paper only. On the backend, however, changes run in the millions. There are custom steel tools that now must be replaced, costing in the millions each. Plus, each change impacts another element, which then must also be adjusted.

Our Japanese competitors, on the other hand, did not start with one readily accepted concept design. Instead, they had multiple prototypes and made tons of changes in the early stages when the design was still on paper — 100 times the prototypes.

Nothing was assumed. In essence, they pushed their product to fail early in the process, before they ever pulled the entire design together, dramatically reducing time and money spent.

In the end, the Japanese manufacturer got to the finish line with a lot less drama. And oh, by the way, their cars actually performed better in the marketplace too. We needed to change our approach.

Look at the Totality

This story is a perfect example of the power in managing tradeoffs well. When I compared the systems of the American design to the Japanese design, the American one was superior on a microscopic level.

Take the exhaust system, for example: each component used to build our version was higher quality, but when I compared the two exhaust systems side by side in their entirety, the Japanese version outperformed, and it did so at half the cost.

Innovators and entrepreneurs skilled at managing tradeoffs understand this complexity. As a result, they frame tradeoffs within the context of the whole system. What’s the economic impact of failure? For instance, one screw falling out is not a big deal. A hundred screws, on the other hand, now that’s a big deal.

Tradeoffs are the key to great decision-making. It’s critical to being a good consumer and even more critical to becoming a skilled innovator and entrepreneur. You can’t have it all, so you must look at the totality, understand how it’s interconnected, and determine what’s good enough.

For more advice on how to manage tradeoffs well, you can find Learning to Build on Amazon.

Bob Moesta is a builder, teacher, entrepreneur, author, and co-founder of The Re-Wired Group, a design and development firm based in Detroit, Michigan. Early in his career, Bob received an education in building and launching new products from renowned innovators Dr. Clayton Christensen, Dr. Genichi Taguchi, Dr. W. Edwards Deming, and Dr. Willie Hobbs Moore. The worldview he gained has enabled him to work on and launch thousands of new products over the last thirty years, be the founder of ten different companies, and become a mentor to the next generation of builders and problem solvers. Bob is an adjunct lecturer at the Kellogg School at Northwestern University and a guest lecturer at Harvard Business School, and MIT’s Sloan School of Management.

Many years ago, I was brought on as an advisor at a major cookie and cracker manufacturer. My job was to help them speed up their production line for two popular cookies, but as I rolled up my sleeves and got to work, people kept saying, “You should visit the chip guy; he’s struggling with an issue.” So I went over to see if I could help.

“I’m just having a little fragility problem — they break too easily,” he told me as he brushed aside my assistance. “I’m redesigning the formula, and I just have to run one more test to confirm it, then we’ll be ready to go.”

“Okay,” I said. But about six weeks later, people started prodding me again: “You really need to visit the chip guy.” So once again, I went over to see if I could help. “What seems to be the problem?” I asked.

“Well, I fixed the fragility problem, but now it’s too thick, and the crunch went away when you bite into it, so I’m fixing that now; I almost have it, just one more test,” he told me as he sent me away.

Fast-forward six months and, guess what: the chip guy was still struggling. After hundreds of tests, he was still no closer to a solution. Every time he solved one problem, he just created another. I felt for the man, because I had been there myself in the past. I knew the issue wasn’t the chips — the issue was that he wasn’t thinking about the problem broadly enough. In other words, he wasn’t prototyping to learn.

Look at the Problem as a System

Far too often, we as innovators and entrepreneurs look at an issue as one problem with one solution. That’s what the chip guy was doing. When you don’t look at a situation broadly enough, you conduct A/B testing — testing one factor, then another, and so on. You are always one prototype away from solving the problem, but you never get any closer to the solution.

Rather than frame the problem and search for the solution like a needle in a haystack, you need to look at the problem as a system. What are the systems that are not performing the way that they should? Then you need to unpack those systems into control factors (parameters of a system you can change that impact the system’s performance) and noise factors (parameters that you can’t control, choose not to control, or are too expensive to control).

By the time the chip guy and I sat down, he had already conducted almost 300 samples (or experiments, I would like to say). He never planned to do so many, only one more. Together we prototyped using an orthogonal array, testing less than 20 samples that strategically represented a space of thousands of possibilities. We weren’t trying to find the answer, but trying to understand how it worked: what were the limits of the current system and the tradeoffs we needed to make?

Ultimately, we solved the problem in just weeks, offering up a process and recipe that could be launched in multiple plants faster than any product before. That’s the power of prototyping to learn. You figure out how something works in context, where it doesn’t work — its failure points and its limitations — and then use that knowledge to synthesize and optimize a solution that meets the desired performance and tradeoffs.

Prototype to Learn

Let’s break down the process of prototyping to learn by walking through a project I worked on designing dish soap for a company operating out of a developing country. The company had been developing the soap for about a year, and they were stuck.

Every time they got a status update from the chemists, they’d hear the same thing: “We’re almost there, just one more thing to fix.” And each time they’d fix the problem, something else would break.

“We don’t know why it’s not working,” they said, exasperated. Then they started to list the litany of issues that they’d run into, including costs. Now let’s be clear. I didn’t know what to do; I knew nothing about dish soap. But, using the step-by-step process I’ll walk you through below, I could confidently approach problems just like this one.

Understand System Design

My first step was system design. How does dish soap work? Obviously, dish soap cleans dishes; that’s not what I mean. I needed to figure out how dish soap does the job of cleaning dishes. What’s the mechanism by which the soap works? And how does the customer know it’s working?

So I learned about the cleaning system, which involves surfactants that attack both fat and carbohydrates, breaking them down into smaller pieces. Then I realized that the soap needed to create foam. Without foam, the customer wouldn’t get the feedback that it’s working.

You can actually make dish soap without foam that does an excellent job of cleaning, but people won’t realize it’s cleaning and keep adding more and more soap. I also found that the majority of people use dish soap with a sponge; therefore, if it’s too thin, the soap runs straight through the sponge and down the drain.

Next, I needed to consider smell and color. Finally, the dish soap needed to do all of these jobs while staying within a competitive cost structure. As you lay out all the systems, you suddenly realize that there are six different functions for dish soap.

Prioritization and Functionality of Systems

Next, I needed to prioritize those functions. What are the critical systems that drive overall performance and cost? For instance, the fragrance and color are fairly independent and not where you’ll spend a lot of time and money. However, the bubbles, thickness, and cleaning system are critical components.

After prioritizing the functions, I broke down those functions into parameters with control factors and noise factors. How could I change the things I had control over to make me less sensitive to the things I couldn’t control? How could I set the control factors so that the noise factors no longer affected the output?

For example, the detergent had to work on very greasy foods like olive oil, and on carbohydrates like rice that get caked onto pots and pans. This was one of several noise factors that influenced the system. We needed to play with the chemical makeup of the cleaning mechanism — our control factor — to determine how it impacted the outputs in the system: foam, thickness, etc.

Test the Critical Systems

Next, it was time to build a method for measuring the critical systems. To test the foam, we invented a method using a George Foreman grill where I put a specific amount of dish soap on the grill with a set amount of water. Then I would measure how many times I needed to wring the sponge in the grill before the soap started to foam and how long that foam lasted.

We measured the thickness of the soap in a tube and then looked at the length of time the soap stuck to the top of the sponge rather than just running through it. We also measured the soap’s ability to break fat and carbohydrates into particle size.

Then I played with the chemical formula. There were different actives in the surfactants, so as I adjusted the percent of actives, I looked at the impact on the overall cleaning mechanism as well as changes to foaming and thickness.

I knew that I did not have control over the context in which the customer would use the soap, so those were the noise factors that I tested each of the control factors against. They included hard versus soft water, hot water versus cool water, and grease versus caked food.

Measure Multiple Factors Simultaneously

Once I understood how many factors I was playing with, I knew how many tests I needed to run by simply plugging the numbers into one of Dr. Genichi Taguchi’s arrays from his book Taguchi Methods: Orthogonal Arrays and Linear Graphs. These arrays allow me to measure multiple factors simultaneously and understand how a thing works over sets of tests, within sets of conditions: the opposite of A/B testing or solving one problem at a time. And the tests are fully balanced.

With the dish soap, for instance, nine tests were performed with the color yellow, and nine with blue. We didn’t expect the color to have any impact at all, but as it turns out, blue is an oil-based color and yellow is a water-based color. Therefore, the blue didn’t work as well because the surfactant used some of its power to break down the color rather than clean the greasy dishes.

Taking this approach — prototyping to learn — did not rely on my theory of what the “best” dish soap was. That’s what makes it so powerful. I had no idea how the experiments were going to turn out; I let the dish soap tell me which one was the best. It was based entirely on empirical data.

Find the Tradeoffs

We ended up building 18 prototypes that we measured against these different dimensions. In doing so, we answered a ton of questions: how well did it stay on the sponge? How well did it cut grease? If the water was dirty, did it still foam? What was the foam height? What was the cost?

By the end, I had a whole understanding about what made the best dish soap. For instance, I knew that when I increased the magnesium chloride, it increased foam height without adding to the cost, but it made the soap thinner. Prototyping to learn allows me to see these tradeoffs.

Whenever I prototype, I know that some things are going to work, and others will not, but all of it helps me learn. Too often, people get singularly focused: “I want to make a dish soap with the most foam.” Prototyping will show which dish soap has the best foam, but it will also detail tradeoffs like cost.

When you follow this approach, you start to realize you can’t make the “best” product because you will lose money. You are able to make the tradeoffs in real time, which ultimately allows you to design and innovate solutions that achieve the performance you want.

For more advice on how to prototype to learn, you can find Learning to Build on Amazon.

Bob Moesta is a builder, teacher, entrepreneur, author, and co-founder of The Re-Wired Group, a design and development firm based in Detroit, Michigan. Early in his career, Bob received an education in building and launching new products from renowned innovators Dr. Clayton Christensen, Dr. Genichi Taguchi, Dr. W. Edwards Deming, and Dr. Willie Hobbs Moore. The worldview he gained has enabled him to work on and launch thousands of new products over the last thirty years, be the founder of ten different companies, and become a mentor to the next generation of builders and problem solvers. Bob is an adjunct lecturer at the Kellogg School at Northwestern University and a guest lecturer at Harvard Business School, and MIT’s Sloan School of Management.

In order for innovators and entrepreneurs to see around corners and see through space and time — in other words, to get an omniscient, God-like perspective that allows them to see the whole — they must have what I call “supply-side empathetic perspective.”

The benefits to such a perspective are vast. It allows you to see every situation from multiple points of view. And, it allows you to utterly understand the many perspectives that could impact your system and your product. That means, when you go back to build, you can see conflicts and problems before they arise.

Achieving supply-side empathetic perspective starts with identifying the key players. Ask yourself: who’s involved? Why are they involved? What do they do?

Internally, there are likely a multitude of roles, everything from marketing and finance to manufacturing and production surrounding your thing. Then there are external influencers, such as suppliers, customers, and partners. Each of these people occupy roles on different sides of the equation, and as a result, see differently. Innovators and entrepreneurs skilled at empathetic perspective can see the whole.

Learn to See the Whole

My education in supply-side empathetic perspective began while struggling to find an answer to a problem. The company I was working for (a car manufacturer) was having issues with their rearview mirrors. My mentor Dr. Willie Moore said, “I want you to become the molecule that becomes the plastic that then becomes the mirror.”

On the surface, it may seem like an unusual exercise, but it’s an incredibly brilliant way to gain supply-side empathetic perspective. Instead of asking, “What’s the problem? What’s the solution?”, I took a step back. I became the molecule and uncovered its journey. In doing so, I answered the critical who, what, when, where, and why, which were the first steps toward seeing the whole.

I’m the molecule. I’m made at Dow Chemicals, where they formulate me into pellets and then ship me to various plants via train. Once I arrive, I sit in the plant hopper and wait my turn. It may take days, weeks, or months, but suddenly, I get poured into a buffer that starts to heat me up.

There are different pressures and temperatures as I make my way through the machine, melding together. Then I’m placed into a mold where I sit and dry for 20 seconds. Then I get popped out, cooled for a minute before getting shaped, and placed into a box. That box goes to the assembly line at the plant where I’m then placed into a car, shipped to dealers, and bought by customers.

You Must Make Tradeoffs

Becoming your creation will help you figure out who’s involved, why they’re involved, and what they do. And not just from the perspective of the people, but also from the thing itself. It forces you to see the broader picture, which allows you to frame what’s going on and understand what to do.

Seeing this complexity quickly moves you from one problem/one solution to many problems/many solutions. You realize that you don’t have the answer, which stops you from assuming a solution and chasing after one hypothesis.

Oftentimes, when people go to design a product, they think there’s an objectively “best” way to do it because they lack empathetic perspective on the supply-side. They don’t understand the context or perspective that’s wrapped around their product or service, so they’re trying to find the absolute best way in which to build it. But there’s no such thing as a “best” way. You must make tradeoffs.

Empathetic perspective enables you to see around corners, project into the future, and therefore see the necessary tradeoffs. Without empathetic perspective, these tradeoffs become impossible.

Teach Others to See the Whole

It’s not just you as the leader who needs empathetic perspective; your people need it as well. As an innovator or entrepreneur, your people’s blind spots can cost you years in development and millions in lost revenue. They need to talk to each other in deep, meaningful ways, early and often. Most organizations don’t take the time to do this, and therefore, they lose sight of the bigger picture. They follow a process almost blindly.

The first step is to have everyone within your organization rotate: marketing needs to understand engineering; engineering needs to understand the assembly line, etc. Most people do not take the time to genuinely see things from other people’s perspectives. It’s not enough to simply talk to each other either. People need time to genuinely put themselves in each other’s shoes.

As a young, fairly green engineer, I thought I had empathetic perspective. I would walk around the plant, see the assembly-line workers, talk to the engine designers, and so on, but I wasn’t truly putting myself in their shoes. I’d listen, but I’d use that information to try to convince them of my perspective. I wanted to show them that they were wrong: “If we just did this my way, then that would work.”

That’s not empathetic perspective; it’s a direct assault type of view. A person with empathetic perspective doesn’t initiate conversation and then go head-to-head trying to convince other people to change their mind. This is about seeing things from many perspectives, seeing the conflicts, designing new ways to work, and creating a win-win for both.

People with empathetic perspective try to see where other people are coming from to understand what is going to happen. And they recognize that they might be the one who is wrong. There’s a lot of humbleness and curiosity embedded in empathetic perspective.

Develop Empathetic Perspective

There are a few ways to advance your ability to see empathetically. For example, you can pick a family member and try to understand their perspective on any topic. A great place to start is to talk to your child and uncover the progress they want to make with school or a sport. What are their goals? It’s been a long time since you were a kid, and the reality of their perspective is completely different than what you experienced.

You can also talk to a grandparent to uncover a big moment in their life. Try to empathetically understand why that moment was important. Or, the next time that you have a disagreement, make sure that you understand the situation from the other person’s perspective without judgment or attempting to change their mind.

Another great way to practice is to go to a place where you are unfamiliar, maybe a vacation in a city or country very dissimilar to where you live, and interact with people. Immersing yourself in different scenarios enables you to see empathetically.

Aside from conversing with people, you can also consider taking an improv class; playing different roles and being in different contexts helps immensely. Also, you can read a story from a different time and place, like The Adventures of Huckleberry Finn, and try to understand the main character’s motivations and emotions.

No matter which of these techniques you try, remember: your goal is to be an empty vessel. You are there to talk, interact, unpack, and see what they are trying to do.

Build True Alignment

Innovators and entrepreneurs skilled at empathetic perspective can see the whole internally and externally. Indeed, that’s the real value in empathetic perspective. Because it allows you to see the whole, it shows you how to build alignment, and it shows you where there are gaps in the alignment so you can work on those spaces.

If you don’t dig deeply and apply rigor, you will miss the real meaning behind what people are trying to say; people will say one thing when they mean another. Without the proper rigor, you will inadvertently apply your own perspective to other people’s words. But with it, you will be able to see around corners and see through space and time.

For more advice on how to develop empathetic perspective, you can find Learning to Build on Amazon.

Bob Moesta is a builder, teacher, entrepreneur, author, and co-founder of The Re-Wired Group, a design and development firm based in Detroit, Michigan. Early in his career, Bob received an education in building and launching new products from renowned innovators Dr. Clayton Christensen, Dr. Genichi Taguchi, Dr. W. Edwards Deming, and Dr. Willie Hobbs Moore. The worldview he gained has enabled him to work on and launch thousands of new products over the last thirty years, be the founder of ten different companies, and become a mentor to the next generation of builders and problem solvers. Bob is an adjunct lecturer at the Kellogg School at Northwestern University and a guest lecturer at Harvard Business School, and MIT’s Sloan School of Management.

Oftentimes, we as innovators talk to people through the lens of our product and its features and benefits. Why is this feature important? What does it help you do? We think questions like this help us understand the buyer, because we get answers like, “It’s easy to use,” or “I love the interface.” But questions like this are about the product, not the buyer. As a result, they don’t help us uncover demand.

Uncovering demand is about you going into your customers’ lives. It’s about uncovering their struggling moment, the outcome they seek, and the progress that they are trying to make. It’s about the who, what, when, where, and why of how (or even if) your product helps them. It’s about seeing value from the customer’s perspective as opposed to value from the product perspective.

As an innovator or entrepreneur, you need to uncover demand. You need to understand how your product or service fits into people’s lives. And that all starts with interviewing customers who’ve used your product before and made progress. You need them to tell you the story of how they got here. More specifically, you need to uncover the three key buying frameworks that lead them to say, “Today’s the day.”

The 3 Buying Frameworks

Recently, my friend Amrita bought a Peloton, and my partner and co-founder Greg Engle and I sat down to understand why. Amrita is a busy, successful technology executive in her forties who lives in Toronto, Canada with her husband Bill. They own a beautiful 800-square-foot condo in an upscale building that includes a gym, but when Covid hit, Amrita found herself quarantined in her condo, and the gym closed, so she bought a $3,000 Peloton.

Greg and I wanted to uncover how Amrita made the decision to buy. What we found after unpacking our hour-long conversation is that Amrita — like so many other people, including your customers — was influenced by three buying frameworks. If you want to uncover demand for your product, you need to understand those frameworks.

The first framework is the three sources of energy or motivations. The second framework is the four forces of progress. The last framework is the timeline — the sequence of events and actions to make progress.

The Motivation to Buy

There are three different categories of motivation to buy: functional, emotional, and social. Let’s discuss each of them, using Amrita’s experience as an example.

First, functional motivation. How cumbersome is the purchasing process for the buyer — time, effort, and speed? In Amrita’s case, Peloton made the purchase easy. For example, Amrita told us that she had one conversation with Peloton before making the purchase, and setting up the bike was included in the delivery. She just needed to find a place for the bike in her home.

Next, emotional motivation. What fears, frustrations, and desires are driving the purchase? For Amrita, this purchase was driven by her emotional motivations more than anything else. She had insecurity about her weight and physical ability to keep up. She missed her alone time that the treadmill provided, and she also longed for that feeling of being addicted to exercise, like running.

Thirdly, social motivations. How do other people perceive, respect, trust, or acknowledge the person? Amrita chose a bike in great part to get her husband, Bill, from a “no” to a “yes.” She knows he likes to bike, so it increased her chance of his buy-in. Amrita also talked about the live classes with Peloton and how she longed for that community support to help her get back into regular exercise.

Overall, your goal when considering this framework should be to reduce the negative functional, emotional, and social motivations that are causing anxiety and serving as a barrier. At the same time, you must amplify the positive motivations to create pull for the product or service.

The Forces of Progress

The forces of progress are another critical component to uncovering demand. First, consider the push of the situation — your customer’s “struggling moment.” What forces were pushing Amrita toward buying a Peloton? The gym closed, and she was facing a long period of time without access to exercise equipment. Lately, she’d been feeling older, not able to keep up physically, or fit into clothes like she used to. Additionally, Amrita was no longer able to run as exercise.

Secondly, think about the magnetism of the new solution. The moment Amrita realized that something might get her back to a fitter lifestyle and help her make progress, the solution created magnetism; she started to imagine a better life where she felt and looked more like her younger self. She started noticing her friends rave on social media about being “addicted” and getting in a quick 20-minute workout between meetings. This created a pull toward progress.

Thirdly, consider the anxiety of the new solution. Despite her struggle and the pull the new solution created, there was anxiety. Could she get Bill to agree to the bike? How could she justify the cost? Where was she going to put the Peloton? These anxieties are important to understand because they hold people back from making the progress that they need.

Finally, think about the habit of the present. For example, Amrita’s current gym was closed, but eventually it would open. Would she decide later that she wanted to go back to the gym and regret the Peloton? Would she love biking as much as she loved running?

The Timeline to Progress

People’s forces and motivations drive their decisions, but not in a vacuum. Ultimately, the way people buy is a system that plays out over time. And the final part of that system is the timeline to progress, which includes six stages.

The first stage is what I call “First Thought.” Once you have the first thought, you’ve opened-up the space in your mind for the information. Without this first thought, there is no demand. But once you have it, you notice things you didn’t notice before.

Once you’ve created space in your brain, you start to fill that space by transitioning to the next stage: passive looking. People can passively look for years if there’s no event pushing them to the next step on the timeline. Whatever the event, it acts like a domino falling in your life that moves you along the timeline to active looking — the next step in the process.

Active looking is when people plan, spend time, and even spend money figuring out what’s next. It’s when they seek the solution to their struggling moment. Then, they move to deciding: making the tradeoffs and establishing value.

Next is onboarding. This is where the consumer determines if you’ve met the expectations set when they decided to lock in and buy your product or service. From there, they move to the last stage: ongoing use. This is where the jobs get done and the progress is achieved.

Discover What They Value

Considering these three frameworks in their entirety will help you discover what your customer values, and thereby uncover demand. Indeed, once you can see value from the customer’s perspective, you realize that value is not a feature or a benefit. It’s a tradeoff people make depending on the context they are in.

You can’t understand what tradeoffs people are willing to make, or whether your product will help them in their struggling moment, unless you understand these frameworks. Once you do, though, you will understand what pushes them toward a purchase or moves them away from it. Then, you can take steps to address those things in a positive way.

For more advice on how to uncover demand for your product, you can find Learning to Build on Amazon.

Bob Moesta is a builder, teacher, entrepreneur, author, and co-founder of The Re-Wired Group, a design and development firm based in Detroit, Michigan. Early in his career, Bob received an education in building and launching new products from renowned innovators Dr. Clayton Christensen, Dr. Genichi Taguchi, Dr. W. Edwards Deming, and Dr. Willie Hobbs Moore. The worldview he gained has enabled him to work on and launch thousands of new products over the last thirty years, be the founder of ten different companies, and become a mentor to the next generation of builders and problem solvers. Bob is an adjunct lecturer at the Kellogg School at Northwestern University and a guest lecturer at Harvard Business School, and MIT’s Sloan School of Management.

As an innovator and entrepreneur, you probably already know that you can’t design and build a product without making tradeoffs. Everyone makes tradeoffs to make progress: “I’m willing to give up this so I can get that.” No one can have everything.

The question, then, isn’t whether or not you have to make tradeoffs. The question is what tradeoffs should you make? To design a truly great product, you have to be able to answer that question.

To do that, though, you have to take a step back and consider another crucial question: what tradeoffs are your customers willing to make?

Reflect Your Customers’ Values

To get to the bottom of what tradeoffs your customer is willing to make, you need to consider what’s most important (and least important) to them. You need to be able to reflect their values and their tradeoffs in the way you make your product.

For example, I worked on a project designing dish soap for a company operating out of a developing country. The company had been developing the soap for about a year, and they were stuck; every time they got a status update from the chemists, they’d hear the same thing: “We’re almost there, just one more thing to fix.” And each time they’d fix the problem, something else would break.

To create a great dish soap, we had to consider things from the customer perspective. Namely, how does the customer know it’s working? I quickly realized that the soap needed to create foam. Without foam, the customer wouldn’t get the feedback that it’s doing its job.

You can actually make dish soap without foam that does an excellent job of cleaning, but people won’t realize it’s cleaning and keep adding more and more soap. I might be able to make it clean, but if it doesn’t foam, customers will think it’s not working. I have to optimize between the foam that they see and the ability to clean.

To do this, I have to understand the tradeoffs between the two things. Ultimately, knowing how the customer is going to use it and what they are going to use it for helps me decide how much money to put into the foaming system versus the cleaning system.

Identify Consumer Tradeoffs First

For the customer, tradeoffs happen at the point that they ultimately decide what they want. This is where priorities are set and values are determined. It’s a triangle between time, cost, and quality. No one can have it all! People set their expectations here and will base their satisfaction on the criteria they set.

It’s important that you identify the tradeoffs consumers are willing to make first. Don’t talk features, benefits, and cost because people are willing to make tradeoffs. What makes your product or service kick ass? Where do you say no? Basically, you have to choose what to suck at.

To illustrate my point, let me share a story. Recently, a friend came to me and asked if I could help her get a family member unstuck during the decision-making process for buying a new condo. John had recently lost his wife and was consolidating from two homes to one. He and his wife spent half the year up north and the other half in Palm Beach, Florida. John wanted to move to Florida full-time. His children, however, worried that he didn’t have any family in Palm Beach and wanted him to relocate closer to family that already lived in Florida.

Eager, John jumped into home hunting from afar, while he was still settling the New York property. His family in Florida started to preview properties on his behalf via video conferencing. Immediately, John saw a condo that he loved and made an offer. But as he waited for the seller’s response, he got nervous and started to overanalyze the property: the building was too close to the one next door, and parking was too limited. When sellers tried to negotiate price, John haggled with his objections in mind and lost the sale.

Address the Constraints

Just a week later, John saw another condo that looked perfect and sent his family to go look. Again, John made an offer almost immediately, but this time, his offer was accepted. Again, he started to stress over the details: closeness to the street, security system, recycling, and pool maintenance. When the sellers refused to fix an issue with the air conditioning, John pulled out of the deal.

When he finally arrived in Florida to look in person, John saw nothing he liked; everything had at least one or two little details out of place. At this point, he’d looked with my friend at over 30 properties, and none were acceptable.

“What is he afraid of?” I asked. Often when people can’t make a choice, it’s because they are afraid of something. I suspected that there was some anxiety force that was manifesting through objections. “You need to take him out to lunch and ask what he’s really afraid of,” I told her. “Maybe he’s unsure about relocating. You’ve got to attack the habit of the old.”

Then I told her if it were me, I’d play a game with him: “Imagine that there are only three condos left, and these are the three condos. Which one would you pick, and why?” It would force him to make a choice, at least in a hypothetical scenario, and it would help determine what’s really important to him.

Help People Move Forward

Once I had done that, I would take him out to view a wider range of condos, including condos he wouldn’t consider buying because they were either above or below his price range. I’d let him see what it would cost to get the security features, pool maintenance, distance from the street, etc. He needed to see the tradeoff he’d make on price to get those amenities.

Finally, I would apply a time wall. It’s one of the most valuable tools for framing tradeoffs. I’d tell him that he needed to make a decision by a certain date, December 1, because otherwise, he’d run into the holidays. Then, I’d tell him that if he couldn’t decide by then, he should take a few months off and start again in the spring when the inventory would be high. Imposing a time wall would force him to either make the decision or not make the decision.

Just like John, consumers need help to make tradeoffs. That’s why you need to consider things from their perspective as soon as you begin to design and build a product. Doing so — identifying what tradeoffs they’re willing to make so you can reflect their values in your product — is a very effective way to help people move forward and make progress, and a great way to make sure the product you’re designing contains the right features and benefits.

For more advice on how to design a truly great product, you can find Learning to Build on Amazon.

Bob Moesta is a builder, teacher, entrepreneur, author, and co-founder of The Re-Wired Group, a design and development firm based in Detroit, Michigan. Early in his career, Bob received an education in building and launching new products from renowned innovators Dr. Clayton Christensen, Dr. Genichi Taguchi, Dr. W. Edwards Deming, and Dr. Willie Hobbs Moore. The worldview he gained has enabled him to work on and launch thousands of new products over the last thirty years, be the founder of ten different companies, and become a mentor to the next generation of builders and problem solvers. Bob is an adjunct lecturer at the Kellogg School at Northwestern University and a guest lecturer at Harvard Business School, and MIT’s Sloan School of Management.

(Royalty free image: https://unsplash.com/photos/mGP8gyGb8zY. Credit: Unsplash / Denny Müller)

The following is adapted from Learning to Build.

What’s the difference between a Snickers and a Milky Way? On the surface, these two products seem similar. They’re both candy bars that are made in the same plant with chocolatey ingredients and sit side by side in the candy aisle. When viewed from the supply-side, they seem to compete with one another.

So why would someone buy a Snickers versus a Milky Way? As it turns out, the who, what, when, where, and why — the context in which people buy a Snickers versus a Milky Way — is completely different. Let’s take a closer look, because understanding this context (what I refer to as the “struggling moment”) has profound ramifications for whether or not a product succeeds.

Solving the Struggle

Typically, people buy a Snickers when they’re hungry, missed their last meal, are running out of energy, have lots to do, and are short on time; they need a boost. Snickers fits this situation quite well because it feels like food — the nougat, caramel, and peanuts form a ball when you chew it, and you swallow it like food.

As the Snickers hits your stomach, the growling and hunger pangs stop because that ball absorbs the acid in the stomach and gives the body the energy it needs. Snickers competes with a cup of coffee, a Red Bull, or a sandwich. I would say Snickers is not a candy bar; it’s fuel.

Conversely, a Milky Way converts into almost a liquid within three chews and slides down your throat, coating your mouth with chocolate and endorphins. It can take as long as 20 minutes to eat, and you savor the experience; it’s a candy bar. Milky Way competes with ice cream, brownies, and a glass of wine.

Snickers and Milky Way are fundamentally different in terms of the struggling moment that they solve. Therefore, they are fundamentally different in terms of the demand that they fulfill.

Understanding this dynamic was a game changer for Snickers. Once they uncovered the demand and began marketing to people in their struggling moment, sales skyrocketed. Snickers is now the bestselling candy bar in its category with over $4 billion in sales.

Supply Versus Demand

To uncover demand, you must understand way more than who your customer is. What’s causing them to make a purchase? It’s understanding value from the customer-side of the world as opposed to the product-side of the world. It’s about realizing the progress that people are trying to make based on their context. Your product or services are merely part of their solution.

Demand is caused by a struggling moment and the thought, “Maybe I can do better…” Without the struggling moment, there is no demand. Demand is framed by who, when, where, and why. The problem arises when you are solely focused on the supply-side view of your product or service and see everything through that lens: How do I make it? How do I position it? How do I measure it? How profitable is it?

In this scenario, the consumer is nebulous — an imagined, personified version of the customer — an aggregated set of demographic and psychographic information. You aggregate and triangulate the consumer around the product through correlative data. You think of your creation in terms of competitive sets within a category or industry.

If Mars, Inc. had viewed Snickers from the supply-side, they would have focused on Milky Way as the competition. They would have zeroed in on making Snickers more delicious — taste-testing Milky Way and Snickers side by side, comparing ingredients, and tweaking the contents. In the end, they would have had two candy bars that were a parody of each other, missing a $4 billion opportunity.

Focus on the Demand Side

When you innovate from the demand side, you realize that the customer has a completely different perspective. They usually have a completely different reference point of your product (think Snickers versus Red Bull instead of Snickers versus Milky Way).

Their context revolves around the new desired outcomes they seek, and their competitive sets aren’t actually competitive sets but candidate sets: “I can do this, or I can do that.”

The customer has no idea how Snickers bars are made, and they don’t care. In most cases, they can’t tell you that a Snickers would even solve their struggling moment until they’ve tried it or until you step in to let them know.

Both supply and demand are important perspectives. In fact, as an innovator or entrepreneur, you need both, but in my experience, most innovators and entrepreneurs are more focused and skilled at the supply-side. It’s critical that you understand how demand works. How does your product or service fit into people’s lives?

For more advice on how to innovate from the demand side, you can find Learning to Build on Amazon.

Bob Moesta is a builder, teacher, entrepreneur, author, and co-founder of The Re-Wired Group, a design and development firm based in Detroit, Michigan. Early in his career, Bob received an education in building and launching new products from renowned innovators Dr. Clayton Christensen, Dr. Genichi Taguchi, Dr. W. Edwards Deming, and Dr. Willie Hobbs Moore. The worldview he gained has enabled him to work on and launch thousands of new products over the last thirty years, be the founder of ten different companies, and become a mentor to the next generation of builders and problem solvers. Bob is an adjunct lecturer at the Kellogg School at Northwestern University and a guest lecturer at Harvard Business School, and MIT’s Sloan School of Management.

Entrepreneurship and innovation is a journey — but it shouldn’t be a solo trip. If an innovator or entrepreneur is missing something, struggling to begin, or has reached a plateau, fellow entrepreneur and innovator Bob Moesta knows their next steps because he’s been there himself.

Bob has coached entrepreneurs for 20 years and developed more than 3,500 new products. He’s experienced success because of the insight his mentors have shared with him, and now he’s paying it forward.

In Learning to Build, Bob shares the five fundamental skills every successful innovator practices to be their best. Just as importantly, he provides the resources needed for anyone to learn these skills, grow through experience, and adapt their mindset. I recently caught up with Bob to learn more about why he wrote the book and the ideas he shares with readers.

Why did you write this book?

Throughout my more-than-30-year career developing and launching over 3,500 products and services, I’ve come across thousands of other innovators and entrepreneurs. The top 10 stand out to me, just as my key mentors stood out. One day, I intentionally took a step back and asked myself, “What do these people think or do differently from others? What skills do they possess?”

Upon reflection, I narrowed it down to five subtle skills that set them apart. These are the hidden parts of innovation that nobody seems to teach in an in-depth way — the stuff in between innovation tools and processes. I believe that they are the things that differentiate successful innovators and entrepreneurs from being typical engineers, software developers, or CEOs.

The goal of this book is to take an in-depth look at these five skills and why they are so important. By calling out these five skills, I want to impart the importance of the role that they play; it’s the rigor and depth behind them that I wish to convey.

The skills of innovators and entrepreneurs that are taught in this book are the things that gave me an approach and guardrails for building and creating and allowed me to adapt. Now I have little fear. When I walk into a situation, I’m humble enough to know that I don’t have the answers, but these five skills provide me the confidence to know that I will discover the answer. And, if you learn to embrace and implement them, I know they’ll do the same for you.

What’s an idea you share that really excites you?

The best innovators and entrepreneurs have the ability to see around corners and see through space and time. Their power comes from what I call “supply-side empathetic perspective.”

The benefits to such a perspective are vast. It allows you to see every situation from multiple points of view. And, it allows you to utterly understand the many perspectives (customers, team members, engineers, and so on) that could impact your system and your product. That means you can see conflicts and problems before they arise.

There are a few ways to advance your ability to see empathetically. For example, you can pick a family member and try to understand their perspective on any topic. A great place to start is to talk to your child and uncover the progress they want to make with school or a sport. What are their goals? It’s been a long time since you were a kid, and the reality of their perspective is completely different than what you experienced.

You can also talk to a grandparent to uncover a big moment in their life. Try to empathetically understand why that moment was important. Or, the next time that you have a disagreement, make sure that you understand the situation from the other person’s perspective without judgment or attempting to change their mind.

Another great way to practice is to go to a place where you are unfamiliar, maybe a vacation in a city or country very dissimilar to where you live, and interact with people. Immersing yourself in different scenarios enables you to see empathetically.

Aside from conversing with people, you can also consider taking an improv class; playing different roles and being in different contexts helps immensely. Also, you can read a story from a different time and place, like The Adventures of Huckleberry Finn, and try to understand the main character’s motivations and emotions.

No matter which of these techniques you try, keep in mind that your goal is to be an empty vessel. You are there to talk, interact, unpack, and see what they are trying to do. You are not there to convince them that you are right and they are wrong.

How will following your advice improve your readers’ lives?

It doesn’t matter if you’re trying to make dinner, write a book, or even buy a house. The five skills I describe in the book are at the core of making life better. Yet they are the things that are in between, that no one seems to talk about. Most people consider this the “art” of innovation.

The reason that these skills are so elusive is precisely because they are so intertwined; they happen so quickly that people don’t even recognize them as separate things. But when you separate the five skills and make them explicit, they enable you to take everything to the next level.

Overall, I see these skills not just as the key to innovation and entrepreneurship, but as the foundational skills to a happy life. They help you make progress; they help you help others make progress, which in turn makes you happy. Life is about a series of tradeoffs that you make, not the magic of getting it all. No one has everything.

The following is adapted from Demand-Side Sales 101.

Salespeople are competitive. Very competitive. They’re vying for awards, recognition, and sales commissions, and are always looking for a way to up their game. But you don’t need to learn six rules or seven habits to become a successful salesperson.

All you need to do is know your customer.

That’s it. You need to listen to your customer and truly understand their needs. As a salesperson, you need to identify a customer’s struggles and then present the products or services to them from their perspective. Too often we focus on the product or service and its features. That’s the wrong way.

What happens when we get to know our customers? We start listening instead of talking and help consumers make progress in their lives. The product is simply a way to help them through a situation or address a problem they’re having. By taking the approach of listening and helping, the business still makes a sale and eventually turns a profit. It’s a win-win situation.

How to Get Enrollment to Skyrocket

Let’s look at an example to see why knowing your customer is vital to sales. Paul LeBlanc, President of Southern New Hampshire University (SNHU), turned the college into a billion-dollar public educational institution simply by finding out who his prospective students were.

How did he do it? The story begins back in 2010 when SNHU’s message to prospective online students was something like, “We’ve got online classes, and you can take them at any time.” They were focusing only on their product. But LeBlanc thought the students taking online classes were different than a typical university student, and therefore had a different set of reasons why they might enroll.

I began working with Paul to help him tackle his problem. We interviewed some current online students to understand their reasons for taking classes and find out how they felt. Questions we asked included:

• Why did they choose an online school?
• Why now?
• What barriers stood in their way to enrolling and taking classes?

Knowing the customer always starts with understanding the people who have already bought your product and made progress in their lives with it, and then seeing the patterns and changing your sales approach based on what you learn from those patterns.

What did we find in the case of SNHU? We discovered that the typical online student was over 30, working a day job, and often supporting a family. This is in contrast to the typical college freshman, who’s fresh out of high school, has a sense of freedom, and is usually financially supported by their parents.

The online students were willing to sacrifice nights, weekends, and even sleep to learn online because they wanted a better career and a better life for their families. They chose to pursue online classes because of emotional reasons, not because of the university’s features and benefits.

An Ad That Yields Results

LeBlanc launched an ad campaign targeting these potential students. It took an emotional approach, using the message, “It’s possible.” The ad featured a single parent working an hourly job and struggling to meet their family’s needs but wanting more out of life. It showed the parent, now a student, studying hard to secure a better future for them and their family. And finally, it showed their accomplishment and the pride they had in achieving their goal.

The ad was not about the university’s courses of study or how the university ranked nationally, but about the journey the online student would go through while attending online classes. It was a total reversal of what you usually see in advertising. The ad in essence said, “We can help you get to where you want to go.”

The results? The ad ran for only one month, but SNHU received thousands of applications — at least ten times more than they usually received. This created a glut of applications, and staff members were taking months to process them. By the time they got back to the prospective student, the emotional tug they felt was gone. So we set up a small admissions team to handle the growing number of applications and get to them more quickly to act on those emotional feelings.

They also found that people were dropping out because they simply found that balancing life and academics was too hard. This time LeBlanc turned his academic advisors into life coaches, who monitored the students, encouraged them, and made sure they had what they needed to succeed. It cut the dropout rate by almost ninety percent.

Because of all these changes, enrollment skyrocketed from five hundred to one hundred thirty thousand students in only ten years. That’s huge. And it all boiled down to a different way of thinking — focusing on the potential student instead of touting the university’s features.

Know Your Customer to Succeed

You can do the same thing for your business. Turn the lens around and focus on the customer’s emotional needs, wants, and desires instead of your product’s cool features. You’ll make more sales and increase your commissions. Plus, that plaque for salesperson of the year will look great on your wall.

For more advice on learning about customers, you can find Demand-Side Sales 101 on Amazon.

Bob Moesta is a teacher, builder, entrepreneur, and co-founder at The Re-Wired Group, a design firm in Detroit, Michigan. Bob has developed & launched over 3,500 products and sold everything from design services, software, and houses to consumer electronics, and investment services. He’s an adjunct lecturer at Kellogg School at Northwestern University, lectures on innovation at Harvard and MIT, and enjoys mentoring at incubators. Greg Engle is a co-founder at the Re-Wired Group. Since the beginning of his career, helping people make progress has been part of Greg’s DNA. He’s worked in everything from food services and retailing, to construction, software, and now consulting services. Greg’s a native Detroiter and enjoys volunteering in the community, especially in local ice hockey leagues.