Killer Question #7
blog, killer questions | philmckinney | January 26, 2009 at 11:48 pm 
Killer Question #7: Could you customize a mass product?
When things get tough, the common reaction is to scale back and standardize the processes. The objective is to take costs out of the business. What would happened if you went the opposite direction? Rather than standardize, why not customize?
The perfect example of this is the recent phenomena of custom motorcycles. Like other forms of transportation, motorcycles are mass produced with the biggest choice being what color you want.
Paul Teutul, Sr. began his business of building custom choppers out of the basement of his home. With the creative help and following of his oldest son, Paul Jr., the two were soon on their way to the top with the success of Paul Sr.’s first bike, “True Blue” at Daytona Biketoberfest in 1999. From that point on, Paul Sr. knew he had something and established Orange County Choppers, Inc. that same year.
The Teutuls were quickly becoming recognized by chopper enthusiasts everywhere. They were not only making a name for themselves in the custom choppers world, but were picked up by the Discovery Channel in 2002 as the basis of what is now the hit television series, American Chopper. Their popularity has led them to build custom theme bikes for some of the biggest names in corporate America such as Microsoft, Lincoln and Coca-Cola.
Paul Sr took what many were convinced was a mass produced category and created one of the world’s premier builders of custom motorcycles.
What would happen if you customized your standard product or service.
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And what happens when they attempt to scale? For that matter, what happens in an economic downturn such as this?
People pay a premium for customization, which by definition is more time and resource intensive. Specialty outfits feast in good economic climes but often don’t have the same options of cost-cutting and streamlining their businesses when the economic environment turns. The results of contraction are more harsh… in some instances, devastating.
Your example doesn’t tell a complete story.
Isn’t that customization vs. standardization issue one of the major concerns confronting the SaaS industry? How do they cost effectively add business value (by integrating with the businesses processes) while still being standard enough that the product can be supported in a cost effective fashion. To date most of the SaaS suppliers have not come to grips with this conflict effectively, so it will likely separate out the winners from the losers.
OCC may be a good example of customization, as motorcycles and cars have long been a favorite item to customize (e.g., SEMA)…..but it is not a good example of a company that mass produces a custom product.
I would add two additional points…
(1) customization may or may not be more costly in terms of material and resources….
and
(2) examining your customer’s motivation for customization is fundamental to understanding what would happen if you customized. People may choose to customize a product in a similar manner, but their motivations may be entirely different (as well as the degree to which they will pay for the service).