"If I had asked people what they wanted, they would have said faster horses."
–Henry Ford
"It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them."
— Steve Jobs
What do the above statements show? Should innovators listen to their customers? Do you think that if Henry Ford & Steve Jobs had listened to their customers, Ford Cars or iPhones would not have existed? There is a wonderful wonderful article called "Why Steve Jobs Never Listened to His Customers" by Gregory Ciotti which poses this question and is a must read. Agree, disagree or maybe, you should definitely read the article. The questions it raises and how it makes you think about entrepreneurship is important. The article and the subsequent comments got me thinking. What exactly is an innovative product or service and what role do end users play in its development. There are numerous products & services we have today and have existed in the past that would not have been possible if they had been customer tested to begin with. 
So, is there a kind of innovation, which, in-fact should not be customer tested at its inception? What would that kind of innovation scenario be? How does the innovator decide whether he should engage customers or not? Lots of questions spring to mind, unfortunately, not enough answers.
CREATION Vs ENHANCEMENT
For me, this seems more like Creation vs Enhancement. Innovation, I believe can apply to either case. Creating something new or enhancing an existing product so that it meets a totally new need are both innovations. Focus grouping & customer testing is, I believe most applicable when there are enhancements or improvements  to something that already exists. The first iPhone, even though built on existing concepts, was, for all practical purposes, a radical new creation. It totally redefined the mobile phone from what we had known it to be at that time. I don't believe focus groups at that point would have been helpful. The users perception and expectation would have been based on what they already knew. Their whole expectation would have been baselined on what they knew. 
Enhancements, on the other hand, I believe can be customer tested. You already have a product which people are used to and hence upgrades or modifications are something they can relate to and can give an opinion about its merits. Redesigns, added features, extra services, etc. are all things which can be very innovative and a great value add for a product or service. Cup holders in cars when initially introduced by GM were optional.  But they became so popular that GM very soon made it standard. Now, that is an add-on, an enhancement. 
Personally, while introducing a new product or service, I always start small and that methodology has always worked for me. I introduce the product/service based on my years of experience, confidence in the product & a gut belief that in this big wide world, there must be at-least a few more people who think like me and could possibly give this product a try. That has been my mantra. What I try to do is to minimize the loss potential, market it well and be ready to admit defeat if that was the case. The commonality of my experiments is that I always try to understand the result. Pass or Fail, I always try to understand why that happened. What clicked or did not. That is where the customer feedback comes in and that is where my experience comes from. 
So, yes, customer feedback and input are important but mostly in instances where the prospective customer can relate to the product or service. When a totally new concept or invention is happening, that may not be the case. End users, after all, don't always know what they want.
Well, those were my thoughts and experiences.....What do you think?