By building a product instead, albeit a simple one, the company learned much more: It had more accurate data about customer demand because it was observing real customer behavior, not asking hypothetical questions. It put itself in a position to interact with real customers and learn about their needs. For example, the business plan might call for discounted pricing, but how are customer perceptions of the product affected by the discounting strategy? It allowed itself to be surprised when customers behaved in unexpected ways, revealing information Zappos might not have known to ask about. For
...more
