Don't listen to your customers (look into their fridge)
A recent and interesting story from Wired illustrates a core principle of non-incremental innovation: don't listen to your customers.
The story is about how Tassos Stassopoulos in India launched a successful investment business by analyzing what families would consume more if given a chance, not by asking them, but by handing them money to see what they'd do with it.
Follow me in this rabbit hole...
Tassos Stassopoulos is a now famous investor known for his unorthodox investment strategies. Instead of relying on market data or interviews, Stassopoulos would, for instance, hand individuals in India's backcountry extra cash to take him shopping. They bought items like Cadbury chocolate and Coca-Cola, which were absent from her home but common in slightly wealthier households, leading to this simple anthropological principle: fridges would reveal how people aspire to live when they have more disposable income.
From this starting point, Stassopoulos began analyzing fridge contents by income level, noting how they evolved from storing traditional foods to including treats and international brands as families gained disposable income. The wealthiest households showed a preference for individual tastes and ethical products. This insight guided his investments in dairy processors in India, anticipating that rising incomes would boost demand for value-added dairy products, a prediction that proved accurate.
Once a family becomes truly affluent, their fridge will shift again. Where one brand of ice cream in the freezer was an indulgent treat for all the family, multiple brands of ice cream reveal that frozen desserts are now normal enough that individual family members can dislike each other’s preferred flavors. “Before, it was just, Yes, we can get ice cream,” he said. “Now it all becomes about me: I like chocolate and I don’t like strawberry.” Ingredients from different cultures as well as items marketed as healthy—fat-free, diet, or probiotic foods—also show up on refrigerator shelves at this income level, reflecting, in Stassopoulos’ rubric, a desire for self-improvement and, beneath it, a transition toward individualistic, Western values.
Stassopoulos’s fridge observations highlight the limitations of traditional customer interviews and surveys, which often miss the real drivers of consumer behavior. Now, obviously, this story has to be understood beyond collecting a few anecdotal evidence to make major investment decisions. These anecdotal samples have to be run at scale and organized well enough to be truly usable. But as such, they will map the underlying trends beginning to form in any market.
One of Stassopulos's team's most recent insights?
(...) our recent observations in China highlight the emergence of a new demographic: individuals on a journey of self-improvement, valuing authenticity and uniqueness. These consumers seek brands and products that align with their individuality, diverging from mainstream preferences; they mark a new and expanding trend. (...) For Tao and many like-minded people who are looking for ways to express their uniqueness, drinking a coffee at Starbucks no longer has the allure it used to have. Instead, they prefer Chinese boutique coffee stores that compete on creativity.
(You can't say I didn't warn you about this one ; )
The question is: in your market, what fridges would you need to open to capitalize on the next wave of opportunities?
