So let's break down this notion of strategy. A key word in this lesson is differentiated. Differentiated is a $10 word. It simply means creating something that's wow, something that's ten times better than what exists. If you're an innovator and you make something that's 10% better, that's probably not enough. If it's ten times better, then it really is. But even if it's ten times better, you still have to communicate that value proposition, especially if it's something radically new, and people don't really understand or imagine it. So you've been involved in several cases in changing the value proposition of Intel. And you not only have to do that technologically, you have to communicate that to people. We might talk a bit about something called Intel Inside, which is an unusual strategy for branding Intel, which is not a company that makes consumer products, it makes the brains of a consumer product. How do you communicate a radically different innovative value proposition? >> Well, I tell you a story about Intel Inside. >> Okay. >> As a young engineer, I think it was the mid 80s, I was told by my boss that you're on a business trip, there's going to be someone talk about a new program to be launched at Intel called Intel Inside. Go listen, and just give us an insight, what's happening. I went to this one and I came back and I told my boss, this is a marketing program, completely stupid. We engineers, we are technology people, we create value and differentiate it by doing great things. Who cares about marketing? >> Let's just explain to our viewers, learners, that Intel Inside was a little sticker Intel had put on computers and laptops, simply showing that inside the computer was an Intel microprocessor. >> But it took me time, and I realized that all of us know that. We dress nicely, we do things because at the end of the day, if people don't notice, they don't see the great inner side of you, because they've never had the chance to go know you because you don't look inviting for people to be liked. But when you invite them in by dressing properly, by staying the writings and whatever, you invite them in. And there's a good marketing program is about inviting people in, and then when they learn, they realize that it is better. And then you create this comfortability and trust and security about the product, and everybody, big brands. People buy Coca-Cola for the brand, they buy an Apple, because there's a promise that is being fulfilled again and again and again. And people gain confidence and gain trust, and it continued to do that. So I think building a good way of how to describe in this very simplistic manner is not a bad thing, it's a good thing. Assuming that what you have inside is really worthy for people to use. And you put all your wisdom, and all your energy, and all your innovative thoughts and ability to execute into creating that, making it happen. >> So in the end, maybe huge investments and many millions of dollars and big technological challenges, ultimately it boils down to possibly three words, the way you communicate what the value is. Unwire your world for Intel. For Walt Disney, Disney World, and Disney Land, we make people happy. So, in the end, you communicate your value proposition with a very short phrase that communicates, not only to the customer, but mainly also to the people in the organization who understand what the goal is. So Daddy, I want to talk to you about a problem that has bothered me for many years. For years, you headed a group of very talented, brilliant development engineers. And their task was to develop new products, new, innovative microprocessors. These people focus on their problem. They're distant from the marketplace, they don't get to see customers. How do you create products that create value for customers? When the people developing them, first of all, they're super smart. Most people use computers, they're not that super smart. How do you get engineers to develop products that are really attuned to the market place, when they never reach that market place or talk to a real customer? >> Talking to customer is a double edged sword. First you have to define who is your customer. For Intel, the customer was supposedly the OEM developing around an Intel product. >> Like IBM or Lenovo. >> It could be whatever. >> Yeah. >> But the real customer, and I think that was the genius of the Intel Inside, was the consumer buying the computer. That was the end user, the decider of what to buy. >> The customer's customer. >> The customer's customer. >> Right. >> Now, the engineers talk to the customer's customers all day long. They are themselves, they are the people around them, they are the people they visit, their friends or whatever. Sometimes the direct customers would lead you to linear assault. They only think about the next product, they want it a bit cheaper, they want it slightly better, and it's not bad. You have to understand what they want. But many of the great companies, I remember there was the shock that when we talked to Steve Jobs when Intel first one, the Apple Mac, back in 2005, he said it doesn't do market research. So you need to allow yourself to imagine what the customer may want. You have to risk that they may never want it. So be very careful about the practical relationship with the direct customer versus understanding what you believe the customer may be excited when they see it. And it doesn't come in many cases talking to people. Sometimes you envision that, and then you have to test it with the people. And in many cases, when it is good, people say, aha. But I don't think anyone called Steve Jobs that they want the smart phone. Nobody said that they want a smart phone. Nobody said that they want high performing notebook plus with good battery life and wireless communication. The customers thought that they want a better desktop. That's what they told us. And sometimes you have to jump through this situation. So talking to customers, you have to understand who the customer is. It's not trivial. >> I think that's really wise. And sometimes I tell my students that the very best market research is they themselves. If you can envision some product or service that you really would like to have, you, personally, and it doesn't exist, and if you can make it happen, that's good market research. Because if you need it and if you want it, maybe there are 10 million other people out there like you who also want it. So [COUGH] >> But I think it have to be crystallized here. >> Yes. >> There's a lot of improvement, a lot of done and very good strategies about continuous improvement. I'm not against this one. But this class is about innovation. And innovation is doing something completely different. There are very few people that would tell you what is this completely different thing than the one I have. I bet you the guy that invented the wheel did not do a market research. I doubt if anyone probably did. All they want is a win. He envisioned that, and all of a sudden, everyone said, of course. I think that this is the difficult case. When you are differentiating in a significant manner and they want to make as big a difference as possible, it's harder and harder to get people that have some experience to tell you that's what they want.
