I like to post my own thoughts here, but I just read a short blog on Derek Sivers' blog that really hit home for me. He tells the story:

A new green college campus was built, but one thing was still debated:

Where in the grass should we put the paved walkways?

Some felt the walkways should be around the edges, to leave the center green and untouched.

Some felt the walkways should cut diagonal, connecting all buildings to all buildings.

One professor had the winning idea: Don't make any walkways this year. At the end of the year, look at where the grass is worn away, showing us where the students are walking. Then just pave those paths.

I love it! I've seen so many places that have beautifully planned out landscaping that is marred by efficient pedestrians that know that the shortest distance between two points is a straight line.

He goes on to say how we can model our business after this plan. This follows the use of rapid iteration model of software development.

Listen -> Build -> Release

Listen to what people need, listen to their pain points. Build something lightweight that you think people will love and that will remove their pain, build it quickly. Release it before you think it's done. Go back to listening, listen to what they like, what they don't like, and what they want. Go back to building, build what they want. This reduces the amount of time you spend concocting crazy use cases or user models that may or may not exist or spending too much time building something that nobody wants and let's you leverage the wisdom of the crowds. When you're done building you know that you have something that people want to use because they helped you decide on the features.

One example of a company that doesn't seem to do this is of course Apple. Apple (an to an extent Google) has an incredible ability to anticipate what consumers want before they know they want it. To be a true market leader and leap over the competition risks like these are not only desirable but necessary. There is often a time when a consumer doesn't know what they want or need, they just know they don't like what's out there. What was wrong with the Philips GoGear? Before the iPod Touch came out I don't know if I could have put my finger on it. It took Apple's leap of design and development before I realized how many features were missing. This model is significantly riskier, but like all things with risk comes the potential of reward.