Exploring Opportunity Areas. Structured exploration is the key The exploratory phases of innovation...

Exploring Opportunity Areas

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Structured exploration is the key

• The exploratory phases of innovation all too often end with a vast array of insights left unrefined due to the absence of a comprehensive project scope

• What’s more, personal biases and executives’ interests frequently dictate the rules of the innovation game

• By structuring your approach to exploration, you forego many of these obstacles, focusing instead on targeting the market for which you are best equipped to enter

Copyright 2013 New Markets Advisors

Source: New Markets analysis

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First compile data-driven customer insights

Focus group / interview data Ethnographic research data Quantitative survey data

• Ethnographic research is used to explore the context in which customers use a product / service

• Ethnographies allow for the observation of problems as they naturally occur

• This kind of research promotes learning about actual behavior, as opposed to ideal behavior

• The key to a successful ethnography is critical observation that questions why specific behavior occurs

• Focus groups and interviews are both ways to elicit details about customer jobs and the context surrounding them

• These methods allow you to quickly gain multiple perspectives

• With these methods, you can dig deeply into underlying reasoning through follow-up questions

• The key to successfully using these methods is to continuously ask probing questions and to avoid talking about solutions and features

• Quantitative surveys are useful for validating findings by determining how prevalent certain findings, preferences, and behaviors are in a larger population

• Surveys can also be used to identify satisfaction gaps, discover correlations, and assist in segmenting a population into groups of target customers

• The findings from your qualitative research should be used to populate the choices for your survey

Source: Abbie Griffin. “Obtaining Customer Needs for Product Development.” The PDMA Handbook of New Product Development, 2013Copyright 2013 New Markets Advisors

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Next assess the target customer type

• Assuming that you approach exploration having identified the customer type that aligns most closely with your strategic vision, your next step is to evaluate whether or not the customer type is worth the investment

• Once the customer type is verified as the target, use the Jobs to be Done (JTBD) framework for exploration to rigorously define customers’ current key problems


How common is the customer type?Are their numbers growing or shrinking?


Copyright 2013 New Markets Advisors 5

How JTBD succeeds where others fail

• 30,000 new consumer products are launched each year – 95% of them fail

• Many of the existing methods used to evaluate what customers want ask the wrong questions

• Look beyond how customers are using existing products / services

• Jobs – as opposed to customers or products – must be the fundamental unit of analysis

• Jobs drive customer behavior and purchasing decisions

“People don’t want a quarter-inch drill, they want a quarter-inch hole.” – Ted Levitt


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The JTBD framework structures exploration

Element Brief DescriptionJobs What are people trying to get done, regardless of

what they are currently buying?Job drivers What drives differences in their jobs to be done?

What are the needs, attitudes, and circumstances that inspire particular jobs?

Current approaches and pain points

What do people do today? Where does there appear to be non-consumption? What are the pain points?

Competition What is the “real” competition? What do analogies and benchmarks suggest about underlying jobs?

Criteria How do people evaluate new solutions?

Obstacles What hinders adoption of new solutions?

Value How much money is at stake? How much headroom is there for expensive solutions?



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1. Identifying jobs (to be done)

• What are people trying to get done, regardless of what they are currently buying?

Example: Various Jobs to be Done in Education

Get a high-quality education• Have a degree or certificate

that will be viewed favorably by potential employers

• Increase my earning potential

• Allow me to stand out among job applicants

Spend less on an education• Limit the debt I have to take

on• Ensure that education costs

are less than a certain percentage of my income

• Balance spending so that education doesn’t preclude other major purchases

Get a good job• Earn income to support the

lifestyle I’m looking for• Make family proud of my

accomplishments• Earn enough money to start

a family



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2. Mapping job drivers

• What are all the relevant customer circumstances that potential customers find challenging, or which are over-served with options that are too expensive or hard to use?

• What drives the most important differences between customers?


Needs Attitudes CircumstancesSeek X because

it leads to YSeek X because it fits with who I am

Seek X because I need it right now


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3. Recognizing current approaches and pain points• What do people do today? What are the pain points?• Where does there appear to be non-consumption?

Current approaches• Trying restaurants

recommended by friends or family

• Going back to “tried and true” establishments

• Browsing menus in windows along a street

Pain points• Limited by knowledge and

preferences of friends and family

• Hard to find out about restaurants that aren’t local

• Disappointment with low-quality food

Learnings and solutions• Collect reviews from countless users• Allow ratings in several important categories• Allow users to see what reviewers have said about other establishments• Provide descriptions of menu items

Example:



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4. Analyzing competition

• Who are the direct competitors?

– Traditional competitors of the company

– Partners of direct competitors

– Products / services that satisfy the same jobs

• How does the field of competitors change when the job-to-be-done changes?

• Who occupies adjacent categories?

• What do they do differently? Why?

• How would restructuring the business model cause the field of partners and competitors to change?



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5. Understanding customers’ performance criteria• What trade-offs are customers making when assessing potential

solutions? • How well do these solutions rate along a wide variety of performance

criteria?


• What is success?

– Minimize / Maximize / Balance

– Cover the typical pain points – challenges, time sinks, sources of errors, and resource wastes

– Ensure you address situations covered by the key job drivers – needs, attitudes, and circumstances

• How can you measure success?

– How do you know a job has been done well?

– What adjectives would you use to describe success?

– How do you measure those adjectives?

• How much value does success create?

– How can types of success be traded off against each other?

• Understand the “why” behind outcomes


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6. Addressing obstacles to adoption

• What gets in the way of achieving excellent performance today? – Often this may have little to do with a product or service in itself, but be

more about the context in which it is used


Quench thirst

Refuel / Replenish

Caffeine boost

Early morning

After lunch

After running

Watching movie

At sporting event

At the gym

Drivers

Criteria

Obstacles

Competition

Value

Current approaches

Pain points


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7. Estimating value

• How much money is at stake?• How scalable are the proposed solutions?• How should the market be segmented?• How much of the available market will these

products / services satisfy?• How expensive can the solutions be?




Example – JTBD framework in action

Element Netflix Target CustomerJobs • Watch instantly

• Do little research on shows and movies before deciding to watch

Job drivers • Prefer to stay at home • Watch based on favorite actors, genre, and recommendations

Current approaches and pain points

• Browse shows and movies for ones that fit my preferences• Choose shows and movies based on friends’ and family’s word of

mouth

Competition • Red Box• On Demand• Amazon video

• YouTube• Free streaming sites• Major TV syndicates

Criteria • Fast loading time• Convenient• Fits personal tastes

• Good quality• Recent movie / TV releases• Affordable

Obstacles • Risk • Channel

Value • ~ $400 million in new subscriptions


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After you employ the jobs framework, evaluate company advantages• Does the company have assets (such as brand, salesforce, or intellectual

property) that would give it unique advantages in serving these customers?


Netflix leveraged its wealth of data and power to influence users to develop a hugely successful product• The company records and analyzes events, from user-generated

movie ratings to where users choose to pause and rewind

• Netflix also knows that 75% of its subscribers are influenced by the movie suggestions it makes

• In this context, Netflix virtually guaranteed the success of its original series House of Cards

– Netflix had positive user data about the director, lead actor, and British series from which the show was adapted

• By analyzing user data and patterns, Netflix was able to create original content that could be targeted at new and existing users

• Through new subscriber additions, Netflix earned back nearly its entire $100 million investment in House of Cards in under 3 months



Relevant services from New Markets

Light-touch counsel on strategy-shaping process

Facilitation of consensus-building meetings

Deeper involvement in strategy, opportunity exploration, and solution creation

Structuring of primary research and interpretation of results

Business plan creation

Who is New Markets?

• Experts in reframing market space and generating growth• Senior

experience• Creative and

pragmatic• First-class

consultants, thought leaders, and entrepreneurs


Recent Clients

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Our team’s publications have appeared in:

Contact


Stephen WunkerManaging DirectorNew Markets Advisors245 First Street, 18th FloorCambridge, MA 02142 USATel. +1 617 337 3060Fax +1 617 337 [email protected]

Exploring Opportunity Areas. Structured exploration is the key The exploratory phases of innovation...

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