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Jay Haynes

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How to Size Your Market

Welcome to the next lesson in our online JTBD course. You will learn how to size your market using jobs-to-be-done innovation methods. In this video, we will explain how to avoid lethal market sizing mistakes and how to size your market using customer willingness-to-pay data.

We hope you will share and like the video on YouTube.

Sizing Your Market Transcript

Welcome to the Market Sizing lesson in the thrv Jobs-to-be-done Innovation Course. I am Jay Haynes, the Founder & CEO of thrv.

As we saw in the previous lesson, in business, the market always wins. So if you are on a product, marketing or sales team, it is critically important that you size your market correctly.

Your revenue and profit growth is a direct function of your market size. In this lesson, we will show you how to size your market using jobs to be done innovation methods.

Avoiding Lethal Market Mistakes

As we saw in the previous lessons, Blackberry, Britannica and Kodak all lost billions of dollars because they defined their markets incorrectly. This lead directly to their failure. This was also enormous lost opportunity for growth because Apple, Google and Facebook created trillions of dollars in equity value in the exact same markets.

So how do you size your markets to avoid lethal market mistakes?

In the previous lesson, we saw that these traditional market definitions are flawed because they all use a product as a key variable. Jobs Theory shows that that your customer’s are not buying your product, they are hiring your product to get a job done. So your customers Job is your true market.

In 2006 Microsoft thought there was a huge iPod market. And this made sense using the traditional market sizing equation of product price times the number of buyers. Apple had sold 200 million iPods at an average price of $150, making this a $30 billion market using the traditional equation. This is a HUGE market even for Microsoft. With all their resources and their gigantic customer base, Microsoft launched the Zune. And it was a TOTAL failure!

Their market sizing was the fatal flaw because there is no such thing as the “iPod market.” This supposed $30 billion market is now approximately ZERO! Product-based market sizing always leads to failure because all products change over time, but your customers job-to-be-done is a stable target to hit.

How to Size Your Market

To size your market, first define your critical customer as the job beneficiary. In a previous lesson, we saw how critical this is.

Then, identify your customer’s functional job, as we did in the previous lesson. Together, your job beneficiary and their functional job define your market. To size your market, you want to know what your critical customer, the job beneficiary, is willing to pay to get their job done. need curve market sizing

With this data, you can then plot the results on what we call a Need Curve. This looks like a traditional economics demand curve of price and quantity, but we are plotting the customer’s willingness to pay and the number of customers, the job beneficiaries, in the market. The area under the Need Curve is your market size. The Need Curve enables you to identify the size of your low cost customer segments and the size of your premium customer segments. As a result, the need curve helps you identify hidden opportunities for accelerated growth.

You can use a quantitative survey to get willingness to pay data in consumer, business, and medical markets.  Let’s look at an example in a consumer market.

Willingness to Pay Data in Consumer Markets

As we saw before, if we were competing with Apple and Google Maps and we wanted to size this market using the traditional definition, the navigation app market would be an entirely unattractive market because the leading products are free. But we know the true market in this example is not navigation apps. It is the job of getting to a destination on time.

In this example, when we surveyed customers we asked them, "At what price per month would you be willing to pay to get to your destinations on time?"

In the survey, you can ask a series of questions to calculate a range of your customer’s willingness to pay. Plot your survey data on a chart to identify the the Need Curve and calculate the size of your market. how to size your market

In this market example, even with free competitors, including Apple and Google, there is a $2 billion premium customer segment that is willing to pay a premium price for a solution that helps them get the job done better.

Why do high-grown customer segments and market opportunities like this exist even when the leading products are free?

Because there are unmet customer needs in your market.

 

We hope you will share and like this video you YouTube.

In the next lesson, you will learn how to identify your customer’s needs in their job. Identifying your customer’s needs is a critical step to satisfying unmet needs better than competitors in your market.

Visit us at thrv.com to get our free how-to guides and try our jobs-to-be-done software for free.

 

Posted by Jay Haynes in markets , 0 comments

How to Define Your Market

Welcome to the next lesson in our online JTBD course. You will learn how to define your market using jobs-to-be-done innovation methods. In this video, we will explain what a market is, types of customer jobs and how these jobs work together in consumer, business and medical markets.

We hope you will share and like the video on YouTube.

Define Your Market Transcript

Welcome to the Markets lesson in the thrv Jobs-to-be-done Innovation Course. I am Jay Haynes, the Founder & CEO of thrv.

In business, the market always wins, so correctly defining your market is critical to your success.

In this lesson we will look at how to define your market using jobs-to-be-done innovation methods. If you are on a product, marketing or sales team, your success depends on satisfying customer needs better than competitors in your market. This bring us to the critical question for this lesson.

What Is a Market?

What market are you actually in? Traditional market definitions are fatally flawed because they all use a product as a key variable. For example, the traditional Addressable Market is traditionally defined as all the units sold in a product category times the price per unit, and the Serviceable Market is the units of a product type times the price per unit.

All of these definitions are flawed because all products change over time. If you define your market using a product - for example, the iPod Market - you are trying to hit a moving target. Product defined markets lead directly to failure.

As we saw in an earlier lesson, BlackBerry thought there was a market for keyboard devices and they lost $50 billion in equity value. Britannica thought there was a market for encyclopedias and they lost almost 100% of their sales in just 6 years. Kodak thought there was a market for film and went from $30 billion to bankruptcy. Companies fail when they define their markets based on their products. Product-focus ironically leads your team directly to failure. And today, technology enables products to change at a rapidly accelerating rate. This is why companies fail. Forty percent of the Fortune 500 will no longer exist in just 10 years because their products will be obsolete.

Jobs Theory shows that your customers are not buying your product. They are HIRING your product to get a job done. This means that your customers will fire your product when a new product helps them get their job done faster and more accurately. This is why Apple, Google and Facebook became three of the most valuable companies in history in the exact same markets as Blackberry, Britannica and Kodak.

Customers Just Want To Get Their Job Done

The core idea of defining your market based on your customer’s job-to-be-done dates back to 1960s and Professor Theodore Levitt. His famous Harvard Business article examined why industries repeatedly failed to identify new growth opportunities and competitive threats when products changed. He was famous for saying, “Customers don’t want a quarter-inch drill, they want a quarter-inch hole.”

In other words, your customers don’t want your products, they want to get their job done. This concept is true in any market, including yours. For example, consumers don’t want records, CDs or iPods. I am old enough that I even owned 8-track tapes in the 1970s. how to define your market

In this market, we all fired our old products, not because we wanted to get rid of our record collections but because the job is to create a mood with music. We all switched to new products that get this job done faster and more accurately. This happens in every market because your customer’s job is your true market.

In 2006 Microsoft made the fatal mistake of thinking there was a huge iPod market. With all their enormous resources they created an iPod competitor called the Zune, which they launched right when the iPod was becoming obsolete and it sales were falling off a cliff.

Don’t make this same mistake!

Products change but your customer’s job-to-be-done is a stable target for your team to hit. This is an important concept to remember. Your market opportunity might be bigger than you think, if you define your market using your customer’s job. We will look at market sizing in the next lesson.

We have seen how you can define your market using your customer’s job with examples in consumer markets. But the idea that your customer’s are not buying your product, they are hiring your product to get a job done, is true in business markets as well.

For example, CIOs don’t want block chain or WEP, which are product technologies. They want to obtain insights from data, which is a job-to-be-done. Similarly, Salespeople don’t want CRM software, they want to acquire customers. This is their job to be done. It is their goal, independent of the products they use.

And Jobs Theory works in medical markets as well. As we saw in an earlier lesson, patients don’t want syringes, they want to obtain a blood sample to diagnose their health. This is a medical job-to-be-done. Because products always change, very soon, you will likely never have to have another needle painfully inserted into your arm to obtain a blood sample. Similarly, surgeons don’t want stents or angioplasty balloons, which are medical products They want to restore artery blood flood. This is another job-to-be-done.

You should redefine your market using your customer’s job.

Let’s look at how you can identify and define your customer’s job-to-be-done - in other words, your market. How do you even know what your customer’s job even is?

3 Types of Customer Jobs

It is important for your team to identify the three different types of customer jobs in your market.

The first type of job is the customer’s functional job. This is the main goal customers are trying to achieve independent of any products or solutions they might be using today.

The second type of jobs are emotional jobs. Customers are, of course, real people with real human emotions. Emotional jobs are personal: how customers want to feel about themselves. And social. Social jobs are how customers want to be perceived by others.

And your customer’s have consumption jobs. Consumption jobs relate to using a solution to get a functional job done. Consumption jobs include interfacing with a product, learning to use a product, purchasing it, maintaining it and repairing it.

define your market

All three types of jobs are important to analyze because helping your customer get these jobs done better than your competitors is what creates the best customer experience with your product.

Let’s look at some examples of how these jobs work together in consumer, business and medical markets.

Consumer Markets

In a consumer market, new parents need to get a baby to sleep through the night. This is a functional job. As new parents try to get a baby to sleep through the night, they feel emotions, including feeling anxious about being a good parent. Avoiding anxiety is an emotional job. And parents need to purchase solutions to get a baby to sleep through the night like swaddle blankets, bedding, and nighttime diapers.

Your goal as a product, marketing, and sales team is to satisfy unmet needs in all three types of your customer’s jobs. We will explain unmet needs in much more detail in another lesson.

Let’s look at a few more examples of function, emotion, and consumption. As we saw in a previous lesson, the JTBD in this market is to get to a destination on time. This is the functional job that defines the market. As people execute this job, they want to avoid feeling anxious about being perceived as unprofessional by being late to a meeting.

A consumption job in this market is to interface with a product while traveling. If your customer cannot easily interface with your product, they won’t be able to get their functional job done.

Business Markets

Business markets have functional, emotional and consumption jobs as well. As we saw before, salespeople need to acquire new customers. This is the functional job, the goal salespeople need to achieve. Salespeople have emotional jobs, including being perceived as valuable to their team. And they have consumption jobs including maintaining current prospect information.

Medical Markets

The function-emotion-consumption pattern works in medical markets as well. As we saw, patients need to obtain a blood sample. This is a functional job in a medical market.

Patients want to reduce their anxiety about the procedure, which is an emotional job.

And patients may have to learn-to-use a new medical device like a micro needle array. This is a consumption job related to using a product.

All three job types are important to analyze because they determine your customer’s experience with your product. But defining your customer’s functional job correctly is critical because your customer’s functional job is your market.

Let’s look at how you can identify and define your customer’s functional job.

Defining Your Customer's Functional Job

Defining your customer’s job at the right level of abstraction is critical to ensuring that the theory is useful. Companies often struggle to define what their customer’s job even is. A functional job has three elements:

First, it is a goal that your customer is trying to achieve. Remember, a job and your market is not your job, it is your customer’s job. It is your customer’s goal and the problem they need you to solve.

Second, a functional job has an action verb and an object.

And third, a job cannot contain any mention of a solution, a product, a service or a technology.

Let’s look at a consumer example.

Consumer Jobs-To-Be-Done

A consumer might say, “I need to play MP3s.” Is this a job? Is it therefore a market?

Let’s use our three criteria to find out. 

First, is this a goal? Yes, this is something consumers want to do.

Second, does it have an action verb? Yes it does - “play.”

And does the action verb have an object? Yes it does - “MP3s.” So is this a job? Is it a market?

This is not a functional job because it contains a solution: MP3s. MP3s are a product format, which makes this an unstable definition of a market. And since formats, like all technologies and products, change over time, “play MP3s” is not a good definition of a market. As we saw before, the job is to create a mood with music. This is a stable definition because people have been creating a mood with music forever.

Business Jobs-To-Be-Done

Let’s look at another example in a business market. Businesses use software to run their companies, and they need to “install software.” Is this a JTBD? Is this a market? Let’s use our tests.

Businesses do install enterprise software, so it is a goal.

It also has an action verb and an object.

However, note that “install” is a consumption job. If you could achieve a goal without installing software, would you? Of course. Not long ago, installing business software used to be a large business for service firms, but today, cloud and SaaS applications are eliminating the need to install on-premise enterprise software.

Over time, new products emerge to eliminate or reduce the need to execute consumption jobs in order to use the product. This make sense because your customers don’t buy your product to interface with it or to learn to use it or install it. They buy your product to get their functional job done. As a result, the consumption job is not your market.

In this example, what about the word “software”? Software is an object, and it is a solution, but it is also a big enough platform that it is stable, like an aircraft. We will discuss platforms in more detail in later lessons.

Medical Jobs-To-Be-Done

Finally, Let’s look at an example of a medical job-to-be-done.

In a medical market, a patient, doctor, or nurse might say they need to “Monitor blood pressure.” Is this a job, is it a market? Again, Let’s use our tests.

Is it a customer goal? Yes, patients need to monitor their blood pressure.

It also has an action verb and an object.

And it has no solution.

But why do patients want to monitor their blood pressure? Is their end goal just to monitor?

It is important to analyze the level of abstraction of any job statement. Monitoring is an example of a step in achieving a higher-level goal. While there may be an opportunity in the short-term to provide a better product that does a better job of monitoring blood pressure, monitoring is not the end goal for a patient. define market

A patient, of course, monitors their blood pressure in order to optimize their health. If you have a health condition, blood pressure can be a key input. But the goal, therefore the job, and thus the market, is to optimize health. With higher level jobs like "optimize health", you can be more specific about your market definition.

For example, a patient who has diabetes needs to optimize their health with diabetes, so this is a specific job and therefore a market based on a health condition.

Different health conditions represent different markets because they are specific goals that different patients need to achieve, independent of any products, services, drugs or therapies they may use.

Level of Abstraction

You can specify level of abstraction for many types of jobs.

For example, parents need to instill a behavior in a child. But like health conditions, there are many types of behaviors, each of which defines a specific market.

For example, parents need to instill behaviors in their children to prevent anger, to learn music, or to resolve a dispute.

When defining your customers functional job, use these three tests, and use action verbs like these to help you identify your customer’s goals. You can refer back to this list when working with your team to define your market based on your customer’s job.

How to Identify JTBD

When identifying your customer’s job, you should conduct customer interviews, and analyze research to identify your customer’s goals independent of any solutions. Apply the three rules for jobs to ensure you have a well-defined market.

Defining your market using your customer’s job is just the beginning, but it has profound implications for everything your product, marketing, and sales teams do for your company.

We hope you will share and like this video you YouTube.

In the next lesson, you will learn how to size your market using your customer's job. This is critically important, since your revenue and profits are a function of the size of your market.

Visit us at thrv.com to get our free how-to guides and try our jobs-to-be-done software for free.

 

Posted by Jay Haynes in markets , 0 comments

How to Identify Your Critical Customer

Welcome to the next lesson in our online JTBD course. You will learn how to identify the critical customer in your market. In this video, we will show you how Nest succeeded by targeting a different customer in the thermostat market than the incumbents.

Identifying the critical customer in your market is the key to avoiding customer mistakes that have ruined once great companies. 

And we hope you will share and like the video on YouTube.

 

 

Define Your Customers Transcript

I am Jay Haynes, the Founder & CEO of thrv. In this lesson, we will show you how to use jobs-to-be-done innovation methods to define and identify the critical customer to serve in your market. 

In this lesson, you will learn why traditional customer definitions are flawed, and how these flaws in your customer definitions and personas can result in your competition stealing your customers and your market share.

The key to your company’s success is building, marketing, and selling products that satisfy customer needs better than competitors in your market. This brings us to the key question for this lesson. 

Who Is Your Customer?

To describe customers, companies often create personas or fictional characters who represent a user or customer type. Customer personas are often based on characteristics, including demographics like age, gender, and income, geographics like region or zip code, and psychographic, behavioral or situational characteristics.what's wrong with Personas in JTBD?

For example, in a consumer market, you might create two different personas. Paul is younger, urban with a master’s degree. Kate is older, rural and has a high school education. In business-to-business markets, you might create customer personas based on industry verticals, like medium-sized consumer packaged goods companies, or East Coast financial services companies. 

While personas can be useful in certain contexts, the problem with personas is that characteristics do not cause people to buy products. Customers buy new products because they struggle to get a job done at a price they are willing to pay, regardless of their persona or their characteristics.

Let’s look at an example with Apple and Google Maps. Who are the customers to target in this market? 

In this market, the underlying customer’s Job-to-be-done is to get to a destination on time. This is the reason people use Apple and Google Maps. We will define customer jobs in much more detail in the next lesson. But in short, your customers job-to-be-done is a goal they are trying to achieve, independent of your product or your solution. 

So who are the customers to target in this market? Who struggles to get to a destination on time?

If we created two personas using traditional characteristics, these two personas would NEVER be in the same customer segment because they have VERY different characteristics. But could they both struggle to get to a destination on time in the same way? 

The answer, of course, is yes. 

In this case, they both struggle to get to destinations on time because they both make frequent and unfamiliar stops. In other words, these two very different customer personas actually have the same unmet customer needs in this market. We will explore unmet needs in much more detail in later lessons. 

Is There a Better Way to Identify My Customer?

Since traditional personas based on characteristics can be limiting, we need a better way to answer the question, "Who is your customer?" The traditional dictionary definition of a customer is one that purchases a commodity or service. At first, this seems to make sense, since getting someone to purchase your product is how you generate revenue. But defining your customer as a purchaser is limiting because Jobs Theory shows that your customers are actually not BUYING your product, they are HIRING your product to get a job done. Let’s look at a medical market example to explain this in more detail. 

Obtaining a blood sample is a medical job-to-be-done. Patients visit a trained phlebotomist who draws their blood with a syringe to obtain a blood sample. This market exists because patients need a blood sample to diagnosis their health. Patients are the ones who benefit from an accurate diagnosis from a blood sample. So patients are the Job Beneficiary and a Phlebotomist is the Job Executor who executes the job for the patient. 

The critical customer in any market is the job beneficiary. This is the person who benefits from successful execution of the job, regardless of their influence on the purchase decision. This is an important concept to remember. Markets exist because of job beneficiaries, not job executors or product purchasers. In this market, the insurance company is the dictionary definition of a customer who pays.

They are the purchaser of the procedure to obtain a blood sample, but they are not the reason the market exists. Patients are. If a new innovation helps patients obtain a blood sample faster and more accurately, the insurance company is more likely to purchase it. This is exactly what is happening in this market.

A company called SeventhSense has created a device that enables a patient to painlessly obtain their own blood sample at the touch of a button. This happens in every market because markets evolve to remove job executors as customers. This is an important concept to remember. If you are targeting job executors in your market, you are at risk that your competition will launch an innovation that gets the job done for the beneficiary without the executor. 

Identifying Customers in the Consumer Market

Let’s look at another example in a consumer market. In the market for thermostats, thermostat makers sold to professional contractors, who installed the thermostats in people’s homes. Thermostats sold for $30 to $60. Again, Jobs Theory shows that your customers are actually not BUYING your product, they are HIRING your product to get a job done.

And this is true for thermostats. Homeowners are hiring thermostats to achieve comfort in their home.This is the homeowners job-to-be-done. So the homeowner is the true customer in this market because they are the one who benefits from successfully achieving comfort in their home. They are the job beneficiary, the critical customer in the market. Contractors are the Job Executor. They help execute the job (in this case by installing a thermostat) on behalf of the job beneficiaries. Companies targeting executors as their customers are at risk because new solutions will evolve to get the job done for the beneficiary.

And this is exactly what happened in the thermostat market. A new company called Nest launched a thermostat targeted directly at the job beneficiary, the homeowner, rather than the contractor. Nest was priced at $249 against the competition's $30 pricing. Nest included a screw driver to eliminate the need for a homeowner to call a contractor.JTBD Nest Example

The incumbent Thermostat makers initially dismissed Nest’s strategy and pricing. But nest grew fast and took market share from the industry leaders. They were acquired by Google for $3.2 billion dollars. Why did Nest succeed? 

Because the job beneficiary, the homeowner, had unmet needs in the job of achieving comfort that they were willing to pay to satisfy. In a later lesson, we will show you how to to use quantitative surveys to identify unmet customer needs, underserved segments, your customers’ willingness to pay, and the true size of your market opportunity.

Identifying Customers in the Business Market

Let’s look at one final example in a business market. Companies need to enable secure data use for their employees, for example to access email and company data. This is a business-to-business job-to-be-done. One solution for companies is to install on-premise software like email servers and ERP and CRM systems.

IT Managers would manage these complex systems to execute the job of enabling secure data use for employees. But cloud SaaS software emerged to enable employees to securely use data on their own, without the need for IT managers. This is another example of markets evolving to remove job executors as customers. These examples show that the key customer in your market is the job beneficiary.

And remember your customer is a real person with real goals they need to achieve in their personal and professional lives. In other words, your customer has jobs they need to get done. To identify your customer, the job beneficiary, first identify the type of customer you are targeting if you are targeting consumers, you can define the job beneficiary by stages of life. For example, are they parents or retirees? 

If they are parents do they have toddlers or teenagers? You can identify consumer job beneficiaries by activity as well. For example, are they travelers, homeowners, or car buyers. It is important to define your customer as a job beneficiary because the job they need to get done is the market you are in. We will show you how to define your market using your customer’s job in the next lesson. 

if you are targeting business customers you can identify job beneficiaries by the functions they perform at the company. For example, are your business customers in finance, product, engineering or human resources. And you can identify business job beneficiaries by industry.

For example, aviation, telecom, or financial services. You can identify your customer by a cross-industry function, like VP of Operations and you can get specific to an industry, for example, Maintenance Directors in the aviation industry are responsible for ensuring the airworthiness of an aircraft.

In medical markets you can identify job beneficiaries, the patients, by health condition like diabetes, cardiovascular disease or cancer. And you can identify additional beneficiaries and executors by function like, surgeon, radiologist or administrator. 

In markets where the purchaser is not the job beneficiary, you should define and identify the purchaser, like an insurance company in medical markets. It is critical to understand the job beneficiaries in your market and to know how many there are in your target geography. Their willingness to pay to get the job done is your market opportunity.

In later lessons, we will show you how to calculate the most important numbers: how much revenue and profit growth can you generate in your market by targeting your critical customer, the job beneficiary.

We hope you will share and like this video!

In the next lesson, we will answer the question, "What is a market?", and show you how to define your customer’s job-to-be-done to help you avoid lethal market mistakes that have ruined once-great companies. 

 

Posted by Jay Haynes , 0 comments

How to Beat Apple and Google

We are excited to launch our #JTBD YouTube channel today to help your product team use Jobs-to-be-Done innovation methods. Our first 15 minute video covers all the basics of JTBD and shows how you can use JTBD to beat your competitors. Imagine you are on a product team and your mission is to beat Apple and Google. How would you do it?

In this video, we use Apple and Google Maps as our example competitors because they are two of the most successful competitors in history and they seem impossible to beat. But JTBD methods can reveal weaknesses in even the most successful competitors.

A good way to test if a product management or innovation method will work for your company is to apply it to your competitors. Does it help you reveal competitive weaknesses? Does it help you identify unmet customer needs? Does it help you generate and prioritize the best product ideas for your roadmap?

In this short video, you will learn how to use JTBD to beat even the most feared competitors, like Apple and Google. We will show you how to identify unmet customer needs using your customer's job, how to measure competitor weaknesses, and how to generate product feature ideas that will create more customer value and help you win in your market.

We hope you enjoy this video. We will be posting more videos to help you use JTBD at your company. And we hope you will share and like the video on YouTube.

 

 

Posted by Jay Haynes , 0 comments

Should Facebook Allow Lies? A JTBD Perspective

 

facebook

 

Facebook has been in the news for allowing a Donald Trump ad that makes untrue statements: essentially lies. They have been defending this by claiming (i) protection of “free speech” and (ii) that politicians are already fact-checked.

This obviously has big risks for Facebook. Users could revolt and leave the platform, regulators could crack down and fine them, and the growing chorus of politicians who want to break them up could get even bigger and louder. And most importantly, advertisers (Facebook’s true customers) could spend their advertising dollars elsewhere if they feel pressure from their customers.

Facebook has enormous power due to its network effect, but it is not invincible. All companies, like all species, go extinct at some point. As CNBC reports, A Washington University study found that 40% of the Fortune 500 will no longer exist in just 10 years.

Species fail when they cannot adapt to their changing environment. And the same is true for companies. Customers “fire” current products and “hire” a new one, when a new product enters the market (the “environment”) that gets the customer’s job done faster and more accurately. Think of Blackberry, Britannica and Kodak—once dominant companies that failed when competitors (Apple, Google, and Facebook) stole their customers and their market share.

Facebook might be successful in the short-term allowing lies in its ads. A fascinating look at why this is can be found in Susan Blackmore’s The Meme Machine. She argues that memes are a second replicator like genes. Genes are replicators and they have created all species (see Richard Dawkins, The Selfish Gene).

“Genes are instructions for making proteins stored in the cells of the body and passed on in reproduction.... Memes are instructions for carrying out behavior stored in brains (or other objects) and passed on by imitation.” Memes are replicators that have created human minds. But memes don’t have to be true to spread rapidly and widely. So Donald Trump can be successful buying ads that get liked and shared on Facebook because a meme’s ability to spread (e.g. “Joe and Hunter Biden are corrupt”) is not dependent on how true it is.

So Facebook can make money selling lies. It is that simple. But should they?

Companies that shortcut their customer’s jobs-to-be-done (JTBD) ultimately will face consequences. The CEO of Wells Fargo was forced to resign because they shortcut their customers jobs by fraudulently charging them fees for accounts they didn’t want. Wells Fargo should have focused on getting consumers finance JTBDs done better. Instead, they took a shortcut to profits through fraud.

Facebook is shortcutting their users’ and advertisers’ jobs-to-be-done by selling lies. Facebook uses "Free Speech" to defend keeping lies on its platform. But more important than the legal question, is whether or not lies on its platform serves its users.

The jobs-to-be-done that Facebook’s users are “hiring” the platform to do include sharing memories and staying connected with friends. But they also include staying informed about current events and determine how to vote to help their lives. According to the Pew Research Center, about four-in-ten Americans (43%) get news on Facebook.

So how can Facebook avoid selling lies?

It can keep and satisfy its users (consumers) by actually helping them stay informed with the truth so that they can make better decisions in their lives. Over time, products will emerge to get the consumers’ jobs done better. This is why Facebook grew rapidly. Facebook, combined with mobile phones with cameras, replaced film and destroyed Kodak because the internet is a faster and more accurate way to share memories (which is a consumer JTBD).

Either Facebook will continue improving how it helps consumers stay informed and make decisions about their lives (another consumer JTBD) or another company will do it faster and more accurately and replace Facebook. Through this lens, it's clear that lies are an existential threat to Facebook. In the short term, lies (fake memes) can spread rapidly and generate profits via advertising, but in the long term any product that fails to get the consumer’s job done will go extinct.

No one, not even Mark Zuckerberg, can beat evolution.

Facebook’s advertisers, of course, are their true customers (they generate their revenue) and advertisers are “hiring” Facebook to acquire new customers (the advertisers’ job-to-be-done). If consumers no longer use Facebook because lies don’t help them with their jobs, then advertisers will be less successful acquiring customers on Facebook and will leave the platform as well.

This type of downward spiral can happen very rapidly for a company, so the threat to Facebook, is very real. In 2007, Blackberry’s market cap ($80 billion) was 4x larger than Apple’s when the iPhone launched. It is now effectively zero. This can happen to Facebook, and it might all start with little lies.

 

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How to Cut through the Clutter with Smart Product Positioning

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Issue: Too Much Competitive Noise

Positioning your product is key to fostering a unique connection with your customers. When a product or brand is positioned well, it’s easy to point out. There’s no confusion around what the product does, it makes it clear how it differs from its competitors, and when new products are launched, everything feels succinct and connected. And when customers are ready to buy, that clarity is what will drive them to choose your product over any competitors.

However, instead of creating an overarching market position, companies often rely on product features to position themselves as more valuable to the competition. This is a mistake as competitors can simply launch new features and continue to beat you with the same approach - an unending game of feature catch-up continues. Customers won’t be able to understand the difference and will get confused about what solution they should turn to for help.


Traditional Way: Positioning with Product Features  

It’s likely that you’ve studied various best practices when it comes to product positioning, including Harvard Business School Professor Michael Porter’s definition.

Michael Porter defined a competitive position in his 1985 book Competitive Strategy as a way of achieving competitive advantage. Porter identifies four different competitive positions based on broad or narrow market focus and product cost or product feature differentiation.

Cost Leadership Position

A cost leadership position means that you are targeting the broad market, but you have lower costs than your competitors. So you can generate more profits with higher margins, or you can lower your prices to customers and take more market share. Walmart is an example of this. They are known for low prices.

Cost Focus Position
Porter's cost focus position is when you focus on a narrow or niche market with a low-cost product, such as Huawei.

The Differentiation Leadership

The differentiation leadership position is when you satisfy needs with your product differently than your competitors in the broad market. Apple’s iPhone is a great example of this.

Differentiation Focus Position

The differentiation focus position is when you satisfy needs with your product differently than your competitors in a narrow or niche market.

Although this breaks down the different approaches, how do you execute on this positioning method? How do you apply this to your market and your product?

You are probably already using industry best practices to lower your costs. But because you and your competitors are likely using the same best practices, lower costs on their own are likely not enough to lead you to success unless you are in a true commodity market.  So your focus should be on differentiating your product’s value. Unfortunately, Michael Porter doesn’t tell you how to do this. He also doesn’t explain how you should determine if you should target the broad market or the narrow market.


JTBD Way: Focus on the Job Steps

The key difference in JTBD positioning is that you don't use the product features to position the brand or product. Instead, you look at the steps a customer takes to get a job done and you focus on those steps.

In order to identify the best competitive position, you need to first identify the underserved customer segment using needs in the job. Who is struggling the most with this particular JTBD? After that, you’ll break out the job steps within the JTBD and identify the underserved job steps with unmet customer needs. Focusing on those specific unmet needs in the job steps is where you can begin to create a unique position.

Benefit:  Generate Growth from Consistent Positioning

JTBD makes it easier to generate growth out of new products because it helps companies avoid being stuck in a "product-focused position". Companies often fear launching and selling a new product because it may confuse their brand position with customers. For example, retailers might say they could never provide a service because customers don't know them for that.

If you make yourself known for a job or steps within a job then it's easier for the team to believe they can release a totally new product and easier for customers to buy into it.

Posted by Jay Haynes , 0 comments

Why 95% of Product Teams Fail at Defining Customer Needs

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Issue: Disagreement on Customer Needs

Your goal as a company is to build, market and sell products that satisfy customer needs better than competitors. Although it may sound oversimplified, identifying exactly what your customer’s needs are isn’t so straightforward for many teams. Research published by MIT Sloan found that 95% of all companies do not have an agreed-upon definition of a customer need. It’s likely your team also tends to argue about this.

Without an agreement on customer needs, teams often use customer requests, sales requests, feature ideas, or technologies as inputs into product development. Although these may offer helpful insight into how to connect with your customer, none of them provide your team with an unchanging, consistent definition.

In this post, we’ll teach you how to define a customer need, how to identify customer needs in your market, and how to organize needs to make them useful for your teams.

Traditional: Relying on Changing Input to Drive Product Roadmap

With the traditional product development process, when a new launch fails to generate growth, your team is left to iterate or pivot using more changing inputs. By trying to hit a moving target, teams are basically guessing at what customers want. This eventually leads disagreements, arguments, and harmful company politics, and it ultimately leads to a company's death spiral. It is why products, companies, and often careers fail.

Blackberry, Britannica, and Kodak all lost billions of dollars in equity value because they did not have a stable and quantifiable definition of customer needs. They defined their markets based on changing products and technologies, not on stable jobs and needs. You need a detailed customer need definition to make Jobs Theory useful and actionable for your team and your company.


JTBD Way: Focus on Unchanging Customer Needs

The best way to avoid trying to hit a moving target is to focus on the customer’s job-to-be-done. A customer’s job never changes and JTBD provides you with clear criteria on how to identify the customer’s job steps and needs within the job. It serves as a stable target for your team to hit, regardless of what product, services, or technologies evolve. You can learn more about how to answer the question of what your customer’s job-to-be-done is in this post.

Similarly, your customer's needs in their job will not change either. Like the job itself, needs are stable over time because they are also independent of any product, service or solution.

Let's look at our Apple and Google Maps example with the job-to-be-done being “get to a destination on time.” This is a stable job that will never change as opposed to “figure out a route to work” or “catch the next bus.” Getting to a destination on time becomes the market in this case.

But if we want to build a superior product, knowing the job isn't enough. We need to double-click into the customer needs to determine what product features we should build to get the job done better than Apple and Google.

In order to get to a destination on time, a lot of variables come into play (e.g., know the arrival time, the address of the destination, how long it will take to get to the destination, the optimal sequence of planned stops and if the destination can be reached on time). These are all variables in the job. In order to achieve their goal of getting to a destination on time, consumers need to do something with each of these variables; they need to take actions on them (e.g, calculate how long it will take, determine the optimal sequence, etc.).  These actions along with each of the possible variables are what the customer needs to do to successfully achieve the goal and get the job done.

Since every customer need has an action and a variable, you can measure the speed and accuracy with which customers can satisfy a need. This is the true power of Jobs-to-be-Done. You now have the ability to measure the speed and accuracy of your customer's needs to determine why they are unsatisfied in a market.

Benefit: Align Your Team on Customer Needs

To recap, customer needs are actions a customer must take using variables required to get the job done. Customer needs in the job, like the job itself, are stable over time and they have no solutions. This means that your team will have a stable target to hit. Structuring needs this way makes Jobs Theory useful and actionable for your team. It provides them with a shared focal point and a clearer understanding of what they are building, selling and marketing to customers.

If you want to figure out the next steps in identifying and measuring your customer’s needs, take our Jobs-to-be-Done online course.

Posted by Jay Haynes , 1 comment

Why JTBD is the Only Fail-Safe Product Strategy

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Issue: Confusing Operational Efficiency with Product Strategy

Choosing the right product strategy is critical to your success and your ability to create equity value for your company. But many companies do not have a clearly defined definition for a product strategy. People often confuse operational effectiveness with strategy, focusing on their internal goals like reduced costs or revenue growth. Creating a product strategy based on your company and not your customer can quickly create a misalignment among teams, causing higher costs and unending arguments.


Traditional Way: Company Focused, Not Customer Focused

The traditional way of defining a strategy is to focus more on what you are going to do for your company rather than saying what you are going to do for your customer. “Our strategy next year is to increase budget, hire a team, invest in a new marketing channel, etc.” None of that is what you will do for your customer.

In 1996, Harvard Business School Professor Michael Porter wrote a famous paper called “What is Strategy?” Companies often use Michael Porter's definition of strategy, since he was a pioneering academic in the field, famous for analyzing industries to determine competitive strategy.

In Porter's view, “the essence of strategy is choosing to perform activities differently than rivals do.” Activities companies perform include manufacturing, engineering, distribution, marketing, and selling. For example, mobile phone companies each perform these activities but they have had very different results.

In many financial reporting periods, Apple has had 98% of the profits in the industry and it isn't because Apple performs activities differently, as Michael Porter would predict. In fact, Apple uses Samsung to perform some of their manufacturing activities.

Apple has leading profit share because they satisfy customer needs differently than their competitors, enabling them to take leading profit share. Successful strategy satisfies needs differently than your competitors. So customer needs, not activities, should be the focus of your product strategy.

This is why Michael Porter is outdated.

Because in 1996, MP didn't have the customer's JTBD in his strategy toolkit. Performing different activities from your competitors is important, but anyone can copy activities using industry best practices. Satisfying your customers JTBD in a unique way is harder to copy.

Needs in your customer's job-to-be-done, not your activities, should be the foundation of your strategy because your customer's JTBD tells you what activities to perform to satisfy your customer better than your competitors.

JTBD Way: Choose a Customer and Focus on Their Unmet Needs

A product strategy is making three choices - identify which job beneficiary to target, select which job-to-be-done to fulfill, and determine which platform you are going to use to satisfy customer needs differently than your competitors.  

Let's look at a well-known example to demonstrate why a JTBD-based product strategy definition is more useful. We all have executed the job of creating a mood with music. While the products have changed dramatically over time, the job is stable and has not changed.  The needs in the job have not changed either.

For example, one need in creating a mood with music is to find a new song for the mood. This need follows the job-to-be-done structure with an action and a variable. So we can measure the speed and accuracy of different platforms satisfying this need.

Let's look at how satisfying this need has changed over time with the arrival of new platforms that led to different product strategies. In 1984 when the CD was released, finding a new song for the mood was time-consuming and often very inaccurate, because you often couldn't find a new song. The speed was slow and the accuracy was low because consumers were forced to buy entire albums.

Then, CD changers emerged to help with this need by enabling consumers to search their library for songs. But finding a new song for a mood was still time-consuming and not always accurate. The iPod of course, was a huge improvement because it reduced the steps and time significantly. Accuracy was improved with the introduction of the iTunes store, but you still might not be able to quickly find a song for the mood.

However, Microsoft was clearly not using customer needs in the job to create their product. In 2007, Microsoft’s Zune simply tried to copy what Apple was providing without making the experience faster or more accurate. This is an excellent example of why products succeed or fail with the right product strategy.

But Pandora launched with different product strategy using a new platform: streaming. Pandora's streaming and music taste algorithms satisfied this need faster and more accurately. When Pandora launched, it was signing up 90,000 new users per day because it satisfied unmet needs in the job faster and more accurately.

This is a great example of where product strategy can lead to success or failure. A company with enormous resources (Microsoft) chose the wrong product strategy (i.e. using a hard drive to satisfy needs in the same way as the iPod) and it led to failure. In contrast, Pandora chose a differentiated strategy to satisfy needs faster and more accurately and it took Apple an entire decade to launch a competing streaming service.


Benefit: Align your team around one central strategy

To recap, you create a product strategy by identifying a job beneficiary and job to target, and then choose a platform that will satisfy unmet customer needs faster and more accurately than your competitors.

Using Jobs-to-be-Done as the foundation for your product strategy means you will have a strategy that is unambiguous and easy to remember. Everybody is aligned and it gives you direction on what to do in your department to fulfill strategy. It mitigates risk because you know whether or not you're building the right platform or not. 

Posted by Jay Haynes , 0 comments

Stop the Downward Spiral of Feature-to-Feature Comparison

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Issue:  Miscalculating Your Real Competitors

Creating equity value in your company comes down to one thing - your ability to satisfy customer needs better than competitors in your market. This is why competitive analysis is critical to your product strategy. But often times, product teams use traditional “industry” research to identify their competitors, creating a product roadmap based mostly on what features are already in the market. The challenge with this thinking is that you risk playing feature catch-up while your real competitor sneaks up behind you and steals significant market share.

In this post, we will teach you how to identify your real competitors. You will also learn how to identify competitor weaknesses that you can exploit to create more equity value for your company with less risk.


Traditional Way: Feature Parity Drives Product Strategy

In traditional competitive analysis, product teams often compare their own product's features to a competitor's features. If Product A has all of the features of Product B plus a few more, then Product A has the advantage. In their minds, more features equal competitive advantage. The problem is that customers don't want features; they want to get their job done.

Focusing on feature-to-feature comparison is the wrong way to think about competitive differentiation. Your team will be constantly trying to catch up - with very little chance of actually doing so. If you've ever been on a team that is playing feature catch-up, you know it's like bailing water out of a leaky boat: every time you release a feature and think your work is done, your competition releases something new, racing ahead of you yet again. You will always be a step behind.


The problem is that customers don't want features;
they want to get the job done.


For example, Microsoft thought they caught up to the iPod by including all of its features in the Zune. Apple launched the iPhone. Microsoft tried to catch up again with the Windows Phone. Playing catch-up leads to failure.

Plus, just because it's market standard, doesn't mean it's the best way to do it. What seems like state of the art today will be archean tomorrow.

JTBD Way: Focus on Your Customer’s Unmet Need

Your customers' struggle to get the job done causes them to look for new competitive solutions to get the job done faster and more accurately. In order to beat your competitors, you have to start with where the customer struggles to get the job done and figure out where the competitor is failing. Where are they not getting the job done fast or accurately enough?

First, identify all the competitors (products, services, technology, or manual processes) that satisfy needs in each step in the job. Then calculate the speed and accuracy with which the competitors satisfy the needs in the steps.

Let’s look at an example of a customer job-to-be-done creating a mood with music.

The Zune team at Microsoft compared the Zune to the iPod using traditional product feature analysis. The Zune actually had more features than the iPod, including a Podcasting feature. But this analysis did not help determine if the Zune was going to take market share from the iPod.

This analysis is flawed because customers don't want features, they want to get their job done. Zune, for all of its features, was getting the job done in the exact same way as the iPod.

Pandora, however, had fewer features than the iPod, but because it had a different feature (automatically generated streaming playlists) that satisfied an unmet need in the job of creating a mood with music, it was able to grow successfully and create equity value.

This illustrates why your competitive analysis should not be based on feature comparisons - because feature comparisons are not predictive of your growth.  

The speed and accuracy with which the competitive solutions satisfy the needs are the benchmark for how good your new solution needs to be. If it does not satisfy the needs faster and more accurately, you have not given customers sufficient incentive to switch to your product.


Benefit: Lead Your Market, Instead of Following

Focusing on your true competitor, you will avoid the risk of wasting capital and feature catch-up. With Jobs-to-be-Done, you’ll figure out where the customer struggles to get the job done, and where the competitor doesn't help the customer get the job done fast or accurately enough.

Want to figure out your true competitor? Take our online Jobs-to-be-Done course today.

Posted by Jay Haynes , 0 comments

How to Size Your Market & Calculate a Customer's Willingness to Pay

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Issue: Incorrectly Sizing a Market Leads to Product Failure

Market sizing is used to determine which markets are worth investing in. If a product wins its market, it still may not be worth building if the market is not large enough to generate a sizeable return. To make this decision, you need a good definition of a market.

What is a market?

The traditional way to size a market is to use a product-based market definition and a formula that looks something like: product price * number of buyers = size of market. But what do you do when your market sizing calculation leads you to invest in an existing product category that totally goes away when it is disrupted by a brand new invention?

And how would you size the market for that new product category and know whether or not it’s worth investing in? Defining and sizing your market incorrectly can lead directly to product failure and missing enormous opportunities.

In this post, we’ll show you how to avoid traditional market sizing mistakes by using Jobs-to-be-Done to size your market.

 

Traditional Way: Incorrectly Sizing a Market Leads Directly to Product Failure

Let’s look at an example of using the traditional product-based market sizing formula.

In 2007, you could have looked backward at iPod Sales and seen that Apple sold 200 million units at a price of $150. Our traditional formula (product price * number of buyers) tells us that the iPod market was $30 billion and the MP3 player market was even larger.

In 1990, you could have tracked sales of encyclopedias (Britannica alone sold 120,000) and identified a multi-billion dollar encyclopedia market.

In 1996, Kodak’s revenues reached $16 billion as it dominated sales in the enormous film market.

All of these market size calculations would have fooled you into making terrible business decisions.

Kodak went bankrupt in 2012.

Encyclopedia Britannica was sold for half its value in 1996.

And in fact, Microsoft thought the MP3 player market was so attractive, they invested in the Zune, which they wrote down as a $289 million loss in 2007. With the launch of the iPhone, the MP3 player market went away.

In 2007, customers didn’t want iPods anymore than they want records, cassettes or CDs. They wanted to create a mood with music.

“Creating a mood with music” is a job your customers want to get done and they hire product solutions to do it. In fact, the MP3 player market never existed. “Creating a mood with music” is the market.

The product-based definition of the market will lead you astray. Markets defined with Jobs-to-be-Done will remain stable over time and give your team a clear target for innovation. Sizing your market based on the customer’s job will help you put a dollar value on new product categories your company should invest in that cannot be sized looking backward at old product sales.

 

JTBD Way: Using Jobs-to-be-Done to Size Your Market

To size a market opportunity, don’t analyze the products currently in the market. Instead, analyze the willingness to pay to get the job done.

  1. Define your market as a goal customers are trying to achieve (a job-to-be-done)
  2. Identify the range of your customers’ willingness to pay to get that job done using interviews and surveys.
  3. Chart the answers on a scatter plot and draw a best fit line through the points. The area under the curve is the size of the market. This will help you identify if the biggest opportunities are in the premium market or the low-cost portion of the market.

 

 

 

Let’s look at an example. How would you do this if you wanted to take share from Google Maps and Apple Maps in which the traditional market sizing formula would show us a market worth nothing ($0 * Billions of users = 0)?

  1. Define the market not as the ‘map app’ market but as a job-to-be-done e.g. “get to a destination on time”.
  2. In interviews and surveys ask people who need to get the job done how much they would be willing to pay to get to their destinations on time every time they tried to it.
  3. Chart the range of answers on a scatter plot and calculate the area under the curve.

We actually did this research at thrv and found a premium ‘get to a destination on time’ market worth $2 billion. These customers are willing to pay for a new solution because they cannot get the job done effectively with the existing solutions in the market. In other words, they have unmet needs in the job.

 

Benefit: Make Confident Decisions in Your Product Investments

When you have an idea for a new product, it can be hard to answer the question “Is the market big enough for it?” when all you have is sales of existing products to size your market. If you use Jobs-to-be-Done to size your market, you will be able to justify investments in new product categories that make your company the leader. Instead of launching products like the Zune into markets that are about to disappear and recording losses, you will be focused on stable markets and be able to defend and win investments in products like the iPhone. You will accelerate your company’s growth.

Want to learn exactly how to apply this to your product and company? Take our Jobs-to-be-Done online course. After creating your own market sizing analysis, we’ll show you how to then identify unmet needs in your customer’s job-to-be-done and stop relying on demographic-based personas.

Posted by Jay Haynes , 1 comment

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