Discovering Markets

ISBN

1-934805-57-2
978-1-934805-57-2

Acknowledgements

Acknowledgements
This book is the work of a collaborative group.

Contributors
Larry Ball (Primary Author)
David Troness
Kartik Ariyur
Jason Huang
Steve Hickman
Petr Krupansky
Larry Miller

Editors
Erika Ball
Larry Ball
David Troness
Paul Dwyer
S. Robert Lang

Illustrators
Larry Ball
David Troness

Other Authors, Theoreticians, Practitioners Whose Writings or Teachings have Impacted This Work

Genrich Altshuller
Ellen Domb
Roni Horowitz
John Terninko
Alla Zusman
Boris Zlotin
Lev Shulyak
Yuri Salamatov
Victor Fey
Eugene Rivin
Darrell Mann
Sergei Ikovenko
Simon Litvin
Peter Ulan
Lane Desborough
Clayton Christensen
Renee Mauborgne
Kim Chan

Where the Material Comes From

Much of the material for this book was inspired by the thought leaders referenced. The original intent was to codify the insights of these thought leaders, but the exercise of codification ultimately led to the synthesis of other experimental processes. This is because codification required recognizing patterns of similarity among tools. Once this was achieved, the various tools were grouped with key decisions. Decisions require and generate information that flows to subsequent decisions. Patterns and gaps became visible during this formative process. Experimental methods were inserted into these gaps. The proof of these experimental methods lies in whether they actually help the reader identify product or process characteristics that will delight the market.

Intro to Discovering Markets

About This Book
This book aims to help product developers and inventors identify constrained consumers. In a separate eBook, Creating Offerings, we will explore how to create offerings that meet their needs as well as the business needs.

Prerequisite Knowledge: Working with Functions
Throughout this book, we will engage with the concepts of “Functions,” making it important to understand the definition as it is used here. If you have not already read Working with Functions, now would be an opportune time to do so. It is a brief read.

Working with Jobs To Be Done (JTBD)
Jobs to be Done is a concept that will be frequently referenced throughout this book. It was conceived by Clayton Christensen and Bobby Moesta. JTBD can be defined from various perspectives:

The progress that individuals wish to achieve under specific conditions. This perspective is beneficial in understanding the journey people take toward consumption. It helps us understand what motivates and hinders individuals from changing how they wish to achieve their progress.
The outcome that you are “hiring” a product or service to fulfill. This view is valuable in pinpointing the primary objective of the progress.
The boundaries of a system of functions that will deliver that outcome or progress. This perspective aids in comprehending the elements and interactions that occur within the JTBD. It also assists in identifying the system and super-system. A JTBD consists of a collection of functions operating on various objects. For instance, when I express my intention to do yard work, this reflects a JTBD that varies from household to household. I envision the changes I want to implement, including trimming the grass and some bushes, collecting debris, moving soil, and planting and watering plants. All these actions describe functions (modifications to objects), whether in terms of their height, position, or existence. The entire range of functions performed constitutes a Job To Be Done, defining the system and super-system.

Understanding the JTBD can help guide where we will innovate and which products will be desired by various market segments. This concept will be utilized in several other eBooks. At its core, we are trying to comprehend what people genuinely want and why they wish to hire products and services.

Defining Industry, Markets, and Market Segments
Traditional approaches to defining markets and market segments often begin with categorizing products and demographic groups that might use them. For example, people who buy flowers are usually considered a market. A traditional segmenting approach would divide the market into men, women, or teens buying flowers. However, this approach does little to identify underserved markets or segments. The segment of women, for instance, includes both those well-served and those who are unable to purchase flowers.

In this book, we will define industries, markets, and market segments differently, per Clayton Christensen. An industry consists of a group of related jobs to be done. For instance, the healthcare industry includes various roles necessary for assisting individuals (and animals) in improving their health. A market is defined as a Job to be Done along with job executors[1] within an industry. Individuals in this group may utilize entirely different products or services based on their diverse demographics and situations. A market segment is that group of individuals unable or struggling to complete a job under specific conditions due to shared obstacles. In simpler terms:

Segment = Job to be Done + Job Performer + Job Conditions + Impediment

These definitions directly address the need to identify constrained consumers who want to progress with a JTBD, whether they are current users or potential consumers.

Below is a diagram showing the different kinds of barriers to performing a JTBD. It also addresses the likelihood of disruption to a business based on the constraints within the market segment. (More on this later).

Why Segment the Market?

We aim to segment the market by utilizing JTBD constraints to concentrate our innovation efforts on a few aspects we can enhance. The consumer should feel that our offering assists them in accomplishing the JTBD in the manner they prefer and at a price they are willing to pay. The objective of this eBook is to provide us with groups of consumers that share similar requirements for achieving the JTBD.

Existing Customers with Different Requirements
One of our initial tasks is to understand the JTBD requirements for existing customers. In doing so, we may discover that some existing customers have conflicting Jobs to be Done and therefore different requirements. Ultimately, we can categorize customers into segments with shared needs.

Potential New Market Segments
Next, we can identify hidden market segments. Potential new markets often remain obscure because they are unable or reluctant to consume, making them less visible compared to existing customers.

Segmenting by Constraints

This means we can identify these new markets by searching for customers constrained in various ways or at different levels compared to our existing customers. Once we recognize these constraints, we will find that by eliminating these impediments, we are creating new markets.

Constraints on Existing Customers
Existing customers can also face significant constraints. This can occur when the progression of a product or service is obstructed by substantial contradictions that have never been resolved. For example, consider how many medical or dental procedures remain painful. A note of caution: our existing customers may leave if they find a way to circumvent their struggles or frustrations.

Barriers to Consumption
Referring to the figure above, we will start with those customers facing the most barriers. As each barrier is removed, the potential consumer may encounter a new challenge. Ultimately, all barriers must be dismantled before an intended customer can consume as they wish.

Barrier #1: The potential consumer does not recognize the JTBD
This reason is characterized by the statement, “I didn’t know that I could do that.” (Remember, we are still discussing customers who would perform the job if they were informed about it). Often, this issue lies in advertising and can be addressed by product promotion.

Another common reason is that the job itself is new because it is associated with a new product. When cars first emerged, there was a need to clear the windshield during rain. This job did not exist before, as there were no windshields on wagons and horses. Cars also required fueling, maintenance, and cleaning. These were new Jobs to be Done that necessitated assistance in accomplishing these tasks. Over time, resources become available to manage these new jobs. Those who remain alert to new products can identify these novel Jobs to be Done and provide means to fulfill them.

Barrier #2: The potential consumer recognizes the JTBD but is hesitant
Initially, a person may believe that the job is not critical in their world. It can be difficult to envision oneself undertaking the job and reaping its benefits. These customers are often late adopters or highly pragmatic with a “prove it” mentality. Sometimes, advertisements fail to adequately convey the product to these individuals. The issue lies in that these consumers have not yet identified with the job. Helping people relate to a job is a challenge for advertisers.

Again, this requires the careful attention of an anthropologist to understand why people are hesitant. There may be valid reasons that resonate with a significant portion of potential customers, yet these reasons remain hidden from us.

Barrier #3: The potential consumer wishes to perform the JTBD but is obstructed
A potential consumer is blocked when there is no product or service available to assist them as they desire. Blocked users also lack the ability to modify existing products or services to meet their needs. There is no workaround. Blocked consumers may gravitate towards products that enable them to accomplish the job, provided that all other barriers are eliminated.

There are various reasons why someone may be blocked from performing a job. It might be too costly for them, unavailable locally, or they may lack access to distribution channels. They might face regulatory obstacles or cultural barriers in their region. Additionally, they may be disabled or have insufficient knowledge to operate or maintain the products. The job may require an inaccessible expert. An individual may also face emotional blocks due to fear, religious beliefs, or cultural acceptance. The environment in which the job is performed may be particularly harsh or highly inconvenient. As you can see, the list of reasons for being unable to perform a job is extensive.

It does not take long to identify considerable groups of people blocked from performing a job somewhere in the world. Consider individuals who have never flown; dry cleaned their clothes; received dental treatment; read a book in their language; or used a telephone. When we broaden our perspective globally, we can recognize that there are vast oceans of potential consumers blocked from accomplishing the jobs you desire to help them with.

Barrier #4: The JTBD is facilitated, but consumption is reduced due to something being distasteful
We have finally arrived at a group of constrained consumers who can perform the JTBD. What distinguishes this group is that they continue to face challenges due to compromises they must make. These customers could switch to another option if something emerged that fully met their needs. There are several reasons why performing the job may be distasteful. Here are some reasons for job distaste: performance may be inconvenient, products may not be “try-able” before purchase, jobs may require experts who are not readily available, jobs may need to be conducted in unpleasant environments, the use of the product or service may cause physical pain, prices may be excessively high for most potential customers, and consumers may harbor distrust or biases against doing business with the provider. Customers may also be highly demanding regarding the performance of the products or services (as seen in the high-end market). Finally, job execution may not be personalized enough to be satisfying.

Consumers may also be impeded because existing businesses find them challenging to service. These customers may be poorly serviced due to business challenges rather than difficulties on the consumer’s end. These constrained customers could represent lucrative business opportunities. Altering the business model or values can be quite challenging but may be essential for the business’s survival. This group tends to prefer services in a manner that disrupts the existing business model. Other businesses may not find these customer needs disruptive. As they learn to meet these needs, the products or services they offer may become attractive to your customers. Clayton Christensen refers to these as disruptive technologies[22]. Once customers begin to adopt these disruptive technologies, legacy businesses can struggle to adapt their values, processes, or business models in time to prevent disaster.

Understanding the reasons behind job distaste is extremely important and will require interviews and causal analysis to pinpoint the underlying causes.

Barrier #5: The job is no longer irritating, but consumers can be delighted by alleviating institutionalized burdens
This group of consumers is not constantly irritated, but all products and services carry burdens. These individuals await surprises, and when these arise, they gravitate towards new products and services that continuously satisfy them more than their previous choices.

Among these customers are those who are over-served. As businesses try to maintain high margins, they provide products and services with additional features at increasing prices. This can be irritating to consumers that don’t need these additional features and can often cause inconveniences. A new product or service that is simpler and more convenient at a lower price is very welcome.

Once again, a deep dive is required to comprehend these forgotten burdens. These interviews should incorporate many “what if” questions to encourage people to step outside their current thinking regarding how these jobs ought to be executed.

Focus on Growing Consumers, Not Market Share
While business leaders may recognize that revenue growth can derive from increasing the number of consumers, there is often a reluctance to embrace this approach. Many believe that growth comes from better serving their current customers, especially in comparison to competitors, thereby gaining market share. Numerous individuals cite a desire to create “disruptive innovation” that differentiates them from their rivals.

However, have you ever noticed how slowly large, established businesses tend to grow? Year after year, established companies generally expand only at the pace of their industry’s growth. True organic growth often stagnates. Why does this phenomenon occur? To understand this, one must be familiar with the four types of innovation described by Clayton Christensen: Sustaining Innovations, Efficiency Innovations, Market-Creating Innovations, and Low-End Disruptors.

1) Sustaining Innovations:
Sustaining Innovations serve existing customers. These products and business models represent some of the most prevalent forms of innovation. People often mistake them for market-creating innovations, especially when the improvements are significant.

Example
An example of a sustaining innovation is a new vitamin. The JTBD is to provide essential nutrients that some demographics find challenging to obtain. When individuals run out of vitamins, they purchase more, thereby replenishing or “sustaining” the level of vitamins in their homes. Increasing market share or selling higher-priced vitamins is a strategy employed by companies to drive revenue growth. Unfortunately, competition imposes considerable limitations on the ability to expand through either of these methods.

Why Pursue Sustaining Innovations for Existing Customers?
Pursuing existing customers is generally an easier objective for a legacy business:

Efforts by internal or external innovators to develop products or services for established markets will likely meet with greater acceptance in legacy businesses.
Most innovators are working on sustaining innovations. You will have lots of company.
Companies rely on the substantial revenues generated from existing customers to satisfy financial stakeholders and maintain operations. Without consistent attention to existing customers, market share is lost along with vital revenues.
Existing customers are easier to analyze since the business is already familiar with them.
Pursuing sustaining innovations is less disruptive to internal communication within an incumbent business.
The hesitation of companies to explore new markets can also benefit those looking to license their ideas. The pursuit of product development for licensing is most effectively achieved by identifying market segments that already consume significant quantities and then creating products for these markets. Prospective licensing companies typically focus on preserving or expanding shelf space[3] rather than venturing into new markets. They prefer to sell products similar to those they are already producing, as it simplifies comparative shopping for customers. Additionally, they aim to develop these products with minimal investment and modifications to their manufacturing systems.

Disadvantages of Focusing Only on Existing Customers
It can be easy to convince ourselves that concentrating on existing customers equates to growth. While existing customers often yield the substantial revenues necessary to keep businesses operational:

They do not provide the growth that investors in the business often desire. Unfortunately, many established markets reach an equilibrium point where customers merely replace consumed products. This equilibrium occurs when old products are retired or consumed at the same rate they are purchased. We retire an old car and buy a new one; thus, the volume sold remains consistent.
There is a lot of competition for your existing customers. Thus, increasing market share is very challenging unless a significant and sustained competitive advantage is established. Even then, competitors will often make considerable efforts to regain market share.
The assertion, “We will grow by consistently delighting our customers,” overlooks the vast world of new customers.
Ultimately, growth slows, and sales can become saturated in certain regions of the world, sometimes declining, particularly if disrupted.

2) Efficiency Innovations
These innovations enhance the ways products are manufactured and delivered to customers. They often arise from Six Sigma or Lean management strategies. They are vital and considered secure investments for companies. If they can’t expand, they should at least focus on increasing profitability. This is a straightforward concept in large established firms, irrespective of economic conditions.

Efficiency innovations impact growth indirectly. They can provide the financial flexibility to reduce prices. They seldom lead to economic prosperity in a country. This necessitates Market-Creating Innovations, as illustrated in The Prosperity Paradox by Clayton Christensen and Efosa Ojomo.

3) Market-Creating Innovations:
Market-creating innovations enable constrained consumers to successfully achieve a Job To Be Done (JTBD). Market-Creating Innovations serve as the true growth engines for companies. However, as they often begin small, established companies need a significant number of market-creating innovations in the pipeline to grow more rapidly and must learn to manage them differently than sustaining or efficiency innovations.

Constrained Consumption versus Non-Consumption
The Christensen Institute asserts that Market-Creating Innovations target non-consumers. However, I believe this perspective overlooks those who consume but are considerably constrained in doing so. Therefore, for the purposes of this book, I refer to these individuals as Constrained Consumers rather than Non-Consumers.

Not All Non-Consumers Are Considered
We recognize that many individuals may never wish to execute a specific JTBD; therefore, except for those who can be converted (which we address in the algorithm), we do not categorize these individuals as part of our Constrained Consumers. We focus solely on those who would engage in consumption if they had the means to do so.

Constrained Consumers Worldwide
The chart above fails to portray the full extent of Constrained Consumers globally. The consumer segment should be represented as even smaller than what is depicted. How many people in Africa or India have ever flown on a plane, used a computer, driven a car, or utilized GPS? If one believes that a market is saturated, they need only broaden their perspective to encompass global consumption.

Examples of Constrained Consumers
An example of constrained consumers includes parents wishing for their children to wash their own clothes. The available products and services for this task are too complex for children. The barrier lies in the intricacy of executing the operation. In a similar vein, elderly and disabled individuals face the same challenge, placing them in the same market segment.

Another example of Constrained Consumers comprises families desiring to travel by air. Very few families can afford air travel for vacations. Many individuals share this barrier alongside families.

Advantages of Pursuing Market-Creating Innovations
There are compelling reasons to target non-consuming markets:

Satisfying non-consuming markets is the true growth engine.
Having many Market Creating Innovations in the pipeline can lead to significant growth.
Non-consuming markets are abundant, as you will see by using the algorithm.
Market Creating Innovations minimize competition complexity.
Market Creating Innovations have a higher probability of success than entering established markets or attempting to seize existing market share. [4].
Non-consuming markets tend to be more accepting of poor performance.
A compelling incentive to pursue non-consuming markets is that first-movers often have the chance to maintain dominance for many years.

Disadvantages of Pursuing Market-Creating Innovations (Particularly in Legacy Businesses)
Here are other disadvantages associated with pursuing Market-Creating innovations (especially in legacy firms).

Existing customers may not favor them due to generally inferior performance. However, this does not remain constant. Over time, the technology or business model supporting growth-creating innovations improves, making them appealing to less demanding existing customers. Ultimately, the high-end market also becomes receptive to these new products and business models. Consequently, the product can command higher margins. Such products and services are often described as “disruptive,” as they disrupt the status quo of legacy companies that were “doing things right.” They are also labeled disruptive because incumbent suppliers frequently struggle to adapt their own business models to catch up.
For this reason, products developed for constrained markets can eventually cannibalize legacy products.
Sales teams accustomed to high volumes of legacy products with existing customers may lack motivation to sell them due to low initial sales.
Integrating these offerings into existing production processes and supply chains poses challenges.
They challenge established business models due to market demands for new business models. Adapting business models to accommodate these new demands can prove difficult.
They compete for development and production resources with a company’s most valuable customers.
They often have unpredictable development cycles, complicating planning and funding.
They disrupt established business processes.
They can also disrupt organizational structures by altering communication and relationships.
Studying them can be challenging until they gain substantial market traction. Most marketing tools are designed for analyzing existing customers. To understand a consumer market, we must examine those who own the product or utilize the service. As consumers, we recognize their identities and that they are familiar with existing products or services. Many can be identified as owners of the product or users of the services. They likely have formed opinions about the products. In contrast, Constrained Consumers are more difficult to study, as they are not consuming, complicating identification based on product or service usage. They may lack firm opinions on preferred features. They may also be unaware of what is available. Numerous individuals are completely blocked from performing the function and have since dismissed the option from consideration. Determining whether they would consume if barriers were removed is more complex. One approach to investigate these markets involves emergent strategies[5] rather than execution strategies. In this context, we reverse the typical strategy to identify what constitutes economic success. By working backward, we outline the hypotheses that must be validated to achieve this success. This approach leads to a low-cost learning and experimentation process to assess whether these assumptions hold true. This entails developing trial products or prototypes and testing them with potential customers. While this requires time, it significantly enhances the likelihood of success.
They may necessitate investments in new personnel and equipment.
Growth-Creating Innovations are not ideal for licensing. Their novelty presents a barrier for sellers. They may not immediately recognize the necessity for this new offering. Furthermore, competition within the market must exist; otherwise, potential licensees may lack urgency regarding your Market-Creating innovations. [6]
If you are in a legacy business, most leaders desire growth; yet, when challenges arise, they often revert to “safer” strategies, leaving these innovations behind. Genuine market-creating innovations are difficult to cultivate within legacy companies during tough times.

Market-Creating Innovations Have a Natural Home in Startups and Separate Businesses
Market-Creating Innovations are among the rarest innovations in legacy companies, mainly due to the challenges they pose concerning addressing non-consuming markets discussed earlier. Conversely, small startups and separate business units focused on non-consuming markets typically do not encounter these obstacles; they can adapt quickly to new customers. If you are a small business seeking a solid foundation, new growth markets provide an excellent starting point. For additional insights on this topic, refer to Blue Ocean Strategy by W. Chan Kim and Renée Mauborgne).

On the other hand, Market-Creating innovations can show substantial potential if the new growth from previous Market-Creating innovations has been sustained for a significant period and competition among companies is fierce.

A Continuous Introduction of Market-Creating Innovations
Whether a company is experiencing rapid growth or facing stagnation or decline, it is crucial to maintain a consistent balance of products targeting both sustaining and growth markets. Ironically, the most opportune moment to introduce these products is during times of robust revenues. This occurs because resources are available, and the company can afford to be patient for growth. Nevertheless, the importance of nurturing growth markets may become overshadowed by the company’s success. In such scenarios, allocating resources toward new ventures can become a challenge.

A Shortcut that Rarely Works
Some companies attempt to circumvent the need for organic growth by acquiring businesses that cater to growth markets. They may delay until a separate business navigates the challenges associated with a non-consuming market and succeeds before acquiring it. While this strategy is feasible, caution is vital to ensure that the acquired company’s business model aligns with serving this growth market. Frequently, a company integrates another firm and then insists on applying its own business model. This approach aims to create economies of scale and avoid the disruptive business models of the acquired company. Such a decision can be disastrous, as the customer barriers to accomplishing the job may be linked to the business model itself. Another common issue is that the acquiring company often demands the use of its supply chain to achieve economies of scale. This can also lead to negative outcomes, as it places the needs of growth customers against those of established customers. When growth and sustaining customers compete for resources, sustaining customers typically prevail due to the significant revenues they generate.

4) Low-End Disruptors
Low-End Disruptors cater to two markets: those that are over-served and those that are constrained by cost. Their business model involves providing technology that is low-cost and has diminished capabilities compared to the technologies serving higher-end markets. The over-served customers find this appealing as long as the technology is simpler and meets their needs. In some cases, these technologies can be scaled more rapidly since the underlying technology is often well-understood.

Unfortunately, pursuing low-end disruptors can also be disruptive to a business, as it may seem to cannibalize existing offerings. This is generally not true until the technology improves sufficiently to encroach upon the lower-end customers.

Knee-Jerk Product Improvements Are Not Always the Most Profitable
Product developers often overlook the importance of exploring consumer constraints beyond performance, especially when engaging with existing customers. Unfortunately, enhancements related to performance may cater to a smaller market compared to those that address alternative concerns, such as cost, availability, or convenience.

Products in Search of Markets
Many product development initiatives begin with a solution in search of a market. This can foster a mindset of selling what can be produced rather than creating what can be sold. However, there are practical reasons for this occurrence. It can happen in daily life when individuals solve problems for themselves. Serendipitous discoveries can also arise, and it would be unreasonable to expect innovators to ignore these surprises simply because they have not defined a market. For this reason, a reverse strategy is recommended to identify target markets linked to these serendipitous discoveries.

Gift Givers and Purchasing Agents
Until now, we have assumed that market segments exist because individuals struggle to accomplish a JTBD themselves. This does not adequately address purchasing agents and gift givers who may be unfamiliar with the needs of constrained consumers. For the purpose of this book, we will consider these purchasers to be motivated by the individuals seeking to perform the JTBD themselves. More information about Gift Givers can be found in Creating Offerings.

Aligning the Business with the Customer
The aim of this book is to identify a market segment so we can offer a product or service that meets its needs. A market segment consists of a group of individuals attempting to accomplish a task while facing obstacles or challenges in specific circumstances. We strive to provide a compelling product or service that helps remove the barriers to completing their tasks. In this way, the business aligns itself with its customers. The business acts as a means for the customer to achieve their goals. Consumption should be beneficial for both the business and its clients, ensuring satisfaction for both parties.

Summary of the Market Discussion
By the time you complete this process, you should have a solid understanding of whom you are trying to serve. You should also know whether your business is likely to pursue this market segment aggressively. Markets that appear blocked by existing services and business models will be the most challenging for businesses with established and rigid models. These potential consumers are the least appealing to potential licensees due to the inherent risks of disrupting their own business.

It is generally imprudent to conflict with the business you are trying to support. You may be entirely correct that a growing market will produce more growth than existing customers, but changing the company culture while innovating new products and services requires more effort than most product developers can manage. Regardless of which markets the business is willing to serve, there is typically enough work available for product developers.

Conversely, new businesses should definitely avoid the treacherous, shark-infested waters of sustaining innovations, as the competition may be too overwhelming to overcome. The likelihood of success is significantly higher with growth-creating innovations or low-end disruptors. If you choose this path, it is advisable to adopt an emergent strategy rather than an execution-focused strategy when navigating the uncertainties surrounding the Highly Constrained.

In conclusion, the markets you choose to serve should align with your objectives. If your goal is rapid success or licensing, you should concentrate on established and trending market segments. If your aim is to transition a business into new, profitable markets and you are willing to invest the necessary resources, then your focus should shift to growth market segments with limited competition.

Identify the Industry or Brand

Method

Step 1: Choose an industry or brand that interests you. Typical Industry Classifications:

Advertising

Agriculture

Animation

Celebrity

Chemical

Construction

Cosmetics

Death

Education

Energy

Farming

Financial Services

Fishing & Hunting

Food

Fur

Garment

Government

Healthcare

Hospitality and Event Management

Human Resources

Information Technology

Leisure

Manufactured Goods

Machinery, Electronics, Computers, Etc.

Marketing Research

Media

Metalworking

Military

Mining

Music

Non-Profit

Packaging

Personal Care

Petroleum

Pharmaceuticals

Plastics

Professional Sports

Publishing

Pulp and Paper

Public Administration

Real Estate

Rental and Leasing

Service

Shipping

Software

Space

Stock Market

Scientific Services

Publishing, Broadcasting, Internet

Retail

Telecommunications

Textiles

Timber

Toys

Transportation

Utilities

Video Games

Warehousing

Water

Step 2: If you are uncertain, then work backward by asking: “What jobs does the business help their customers perform?” What industry or brand is represented by these jobs?

Explanation

The Path to Identify the Market Segment That You Want to Serve
The way we will reach this goal is to manage a decision process for identifying the target market segment. Here is a preview of the decision path:

Choose an industry or brand (Grouping of Associated Jobs) → Choose a Market (Job-to-be-Done + Job Executor) → Choose a Market Segment That We Want to Serve (Segment = Job Performer + Job Conditions + Impediment).

Each step is a decision that must be managed. If it is not a decision, then we are subject to the assumptions that take the place of the decision. We either unconsciously assume or consciously manage. Each decision can branch in different directions as we exercise our options. There may be reasons that we can identify for taking a given path. We would like to make informed decisions so that we manage where we are headed and know some of the possible consequences for each path. It is hoped that the reader will appreciate the natural flow of information that occurs from each of the above decision steps.

Identifying Industries (or the Brand)
We have defined a market as a group of people who are trying to perform a job (Job + Job Executor). Industries or Brands can be identified by the associated jobs that businesses within that industry or brand help customers to perform.

For instance, there are many jobs that people do within the healthcare industry. People provide intervention in case of severe injury. People self-medicate to reduce symptoms of chronic illnesses. People find cures for maladies. This is very different from the entertainment industry, which focuses on the job of amusing people. The industry is tightly coupled to the general group of jobs that it helps people to do.

A brand is an association of a company name or logo with the jobs that the company helps people perform. We can think of a brand as a mini-industry or a subset of an industry.

There are many possible motivations for choosing a given industry or brand. For instance, you may work for a company that is part of a certain industry and you are tasked with identifying products and services that the company can sell. Alternatively, you might be interested in licensing products to established businesses, and it makes sense to work in industries you are familiar with. You may have reasons to identify with a job within an industry. For instance, you work for a specific product or service line in the company, or your personal hobbies pertain to a particular job. Knowing this, we can work backward from the job to the industry.

Creating a Brand?
The creation of a brand occurs with the decision of the jobs that the products or services will facilitate. When a company begins and starts facilitating jobs, the types of jobs that are facilitated determine the brand in the minds of consumers.

Example—Affordable Housing

Step 1: Choose an industry or brand that interests you. Typical Industry Classifications:

All of these industries are involved:

Construction

Non-Profit

Public Administration

Real Estate

Rental and Leasing

Step 2: If you are uncertain, then work backward by asking: “What jobs does the business help their customers perform?” What industry or brand is represented by these jobs?

Working backward, we are trying to help people own or lease housing.

Explanation:

If a system is being simplified, the function may already come with a tool. If a new function is being created, the tool is not yet apparent. At this point, we do not require the tool. It is a burden to our reasoning. We take nothing for granted and begin with just the modification. For now, this is the most ideal form of the final result that we know.

Identify New or Existing Jobs to be Done

Explanation of Identify New or Existing Jobs to be Done

Definition of a Job to be Done and a Market

As mentioned in the introduction, for the purposes of this book, we define a Job to be Done as the way a person progresses toward a specific outcome. We will define a market as a group of people attempting to perform a certain job to be done. Market = Job to be Done. For example, individuals who cook pizzas belong to the same market, whether they do so in a restaurant, at home, or while camping outdoors. If we were to pay for our product or service based on what it does, that would represent the job.

From a functional perspective, a job is typically a modification performed on a key product related to the task or job that someone aims to accomplish. There may be many or few functions (modifications) that make up a job. Most of the time, a job consists of one primary function on a key system object. In the example above, the modification is cooking a pizza. No specifics are provided about what executes the modification. Note that the executor is not necessarily included in the diagram. However, the executor wants this modification to occur.

Cooking pizza can be part of a larger task of preparing a meal. When we examine the product being modified, we see that a product can be a single object or a collection of objects. While a job is simply the modification of an object or a collection of objects, the term “job” carries a special connotation that defines the potential environments in which the function is performed. This perspective is useful for identifying other objects in that environment. Another way to conceptualize this is to say that the job defines the super-system of objects. When the job is cooking a pizza, there will typically be an enclosed heat source, someone ready to eat the pizza, objects to serve the pizza on, etc.

The Choice of Market Depends on Your Goals
The decision to operate within a specific industry is likely not as crucial as the job-to-be-done that you select within that industry. While the job you pick is largely a matter of your objectives, various factors can influence the likelihood of achieving those goals.

You may be interested in licensing your ideas. You may be tasked with developing products or services for your employer. You could aim to solve significant humanitarian issues. You might be assigned to provide products or services for emerging regions worldwide. For each of these motivations, there are jobs that can either bring you closer to or take you further from your goals.

Goal: Jobs that Strengthen or Expand Your Brand
If your business is well-established, it is recognized for helping people accomplish specific jobs. If there is a desire to reinforce the brand, then the jobs you select should reflect those already associated with the brand.

If the intent is to broaden the brand’s scope, this is the opportunity to introduce new jobs that are slightly off-center.

Goal: If You Want to License Your Ideas
If your goal is to license a product or service to interested companies, it is vital to select a fairly common job where substantial “shelf space” is at stake. Manufacturers of these products are keen on preserving their shelf space in popular marketplace settings. If you wish to license your ideas: identify common jobs where “shelf space” matters. It is possible to spot these areas by visiting stores and observing shelf space and product locations. Consult store managers about what is trending and what is not. Also, consider products or services that have been popular in the past. Examine the broader job category to see if they could regain popularity. For instance, squirt guns were once widely popular before losing their appeal. Later, water blasters revived the squirt gun market due to the increased amount of water they could project. The broader market pertains to the job of entertaining oneself with water, which has always been a sought-after job.

Competing products and services fluctuate in popularity within this broader market. [12] Competition can be fierce. If you are familiar with the book “Blue Ocean Strategy,” you understand the difference between red oceans and blue oceans. The book advocates that blue oceans represent markets without many sharks in a feeding frenzy (established markets). Blue oceans are where people are eager to get a job done, but businesses have not yet recognized the need. Conversely, red oceans are where intense competition takes place, with sharks competing against each other. If you aim to license your ideas, you want to steer clear of the bloody waters. You can identify these areas by going to stores and examining shelf space and locations. Store managers can inform you about current trends. These are often the most lucrative areas for licensing your product ideas.

It is also feasible to reintroduce products that have previously been popular, but remember that the battles for shelf space may not be as fierce. If the advantages of your ideas are clear and they can be produced at a reasonable cost, then the likelihood of potential licensees wanting your ideas increases.

Goal: Solving Humanitarian Problems
Some people are motivated by the opportunity to introduce something to the world that reduces human suffering or empowers people to become more self-reliant. Individuals may be drawn to specific jobs based on their life experiences. If your goal is to address humanitarian issues, select a job that can simplify the lives of people living in challenging circumstances. This may involve some form of function analysis or causal analysis to determine which will yield a greater impact.

Goal: Performing Jobs in Emerging Regions
We will define an emerging region as one that is gaining economic significance. Many of the jobs-to-be-done have not been attainable in the past due to economic limitations. However, as salaries rise, the capacity to perform these jobs also increases. It may be challenging to ascertain if there is pent-up demand in emerging regions due to the limited availability of products and services to perform those jobs.

For now, we can assume that jobs popular in developed regions will eventually gain popularity in emerging regions, provided these are equivalent jobs. For example, it is unlikely that cooking pizza will become a common job in all parts of the world. However, there are equivalent jobs involving the baking of breads in a similar manner. It is essential to experience the environment to discover these equivalent jobs and gauge interest.

Unexpected Jobs
The assumption that we understand the job customers are trying to perform can be dangerously misleading. One way to avoid false assumptions is to observe how people use products and services. Be prepared to be surprised and maintain an open mind. Sometimes, what appears to be one job may actually be another. Imagine for a moment that your son owns a car. You have a newer, nicer car than he does. When he wants to go on a date, he asks to borrow your car. What job is he actually attempting to accomplish? Certainly, it is more than just transportation, which he could achieve sufficiently with his own car. Is there any doubt that he is using your car to impress the girl? Impressing a girl is a job. The car, his attire, and the restaurant are all vital elements of performing this job. When observing others, one of the most critical questions to ask yourself and them is: What is the job they are really trying to do?

New Jobs
It is easy to convince ourselves that no new jobs exist, only old jobs in new formats. The reality is that truly new jobs emerge due to changing circumstances in the modern world, and it is possible to actually create new human experiences. Examples include entirely new experiences stemming from the unusual combination of existing experiences; new jobs arising from new products, and new jobs that result from ever-evolving regulations. Even if we do not aim to create entirely new jobs, we can refresh existing ones by incorporating new user experiences. In this case, the experience alters the job executor.

Business Considerations when Choosing a Job
Regardless of the job you select, its characteristics must meet the needs of the business. At a minimum, most businesses must generate short-term profits. It requires large margins and high volumes. These factors depend on how common the job is (volume), how much people are willing to pay to complete the job (purchase price), and how much it costs the business to deliver the product or service (cost).

When identifying a market segment that is eager to consume: it is clear that some jobs are no longer common, and those that still serve the job may not be willing to pay a premium to do so. The job of getting your horse to pull a buggy faster is no longer popular or well-compensated. The job should be relevant to current times, ideally one that a significant number of people wish to accomplish. It is possible to assess whether interest in a specific job is growing or declining by using specialized search engines such as www.google.com/insights/search. This type of search reveals the kinds of searches people make online and which keywords are frequently used. It is possible to refine the search to specific products and services if necessary.

Ultimately, businesses are unlikely to be attracted to jobs that contribute to their own downfall. Businesses tend to be self-serving. Decision-makers usually make choices that maintain their business, even if it is at the expense of the greater good. For instance, a company that produces washers and dryers would be highly unlikely to develop clothes that do not require any form of cleaning. Eliminating the need for cleaning clothes would undoubtedly simplify the consumer’s life, but it would jeopardize the jobs and industry. The business would resist this innovation. Industries tend to be self-preserving to such an extent that they might consider new offerings that could cannibalize old offerings, but not eliminate the jobs they help customers accomplish.

Familiar and Hidden Core Jobs or Experiences

Method

Step 1: Choose a product or service related to your business.

Step 2: What jobs or experiences do your products or services enable?

Step 3: What hidden tasks do you help your customers achieve? (This may require some detective work, observing individuals as they carry out their jobs).

Step 4: Select one or more of these tasks or experiences.

Explanation

Most people identify the market based on the jobs their current products fulfill. It is important to consider these jobs in a functional manner. A product can be modified, and sometimes, the product itself is the customer.

As mentioned, we are likely serving many consumers who share the same needs when it comes to completing their tasks. However, there are also tasks that people accomplish with our products and services that may not be immediately apparent. Clayton Christensen famously recounts the various tasks that milkshakes performed for different customers. One group used shakes to stay alert during long drives, while others used shakes to reward their children for good sports performances. The requirements were vastly different. In the former case, the shakes needed to be very thick to keep the driver engaged longer. For the latter, a thick shake would cause the family to linger at the restaurant too long. Remember that products may serve multiple market segments, but the products do not define these segments. Some customers may feel genuinely dissatisfied with the compromises they are forced to make when using your products or services.

Example–Affordable Housing

Step 1: Choose a product or service related to your business

In 2017, there were 43 million households in the United States that were renting. Of these, 20.5 million (48%) households spent more than 30% of their adjusted gross income on housing, while 10.7 million (25%) spent over 50% of their adjusted gross income on housing. Ideally, we want these renters to be free from cost burdens. Such financial strain makes it exceedingly difficult to pursue an education. Even if they take on additional jobs to increase their adjusted gross income, they find themselves with little time for education, which is crucial for achieving economic mobility. Sadly, there is a dire shortage of affordable housing for these households. Furthermore, governments and sponsors are only providing a fraction of the funding necessary to help cover the rent for these individuals.

While households may be cost burdened by various other factors, my goal is to discover a way to provide low-cost housing, thereby increasing these households’ chances of obtaining a better education. In straightforward terms, the product is a low-cost housing option.

Step 2: What jobs or experiences do your products or services facilitate?

Upon my first review, I concentrated on the many functions that a house offers. The true product or service is to create an affordable home. In simple terms:

System–> Creates –> Shelter

Step 3: What hidden jobs do you help your customers accomplish? (This may require some detective work; observe individuals as they carry out their tasks).

Currently, there are no hidden jobs since this is a new offering.

Step 4: Pick one or more of these jobs or experiences.

System–> Creates –> Shelter

Jobs that Reinforce or Enlarge Your Brand

Method

Step 1: Identify jobs associated with your brand. Find an identifier that accurately encompasses these jobs.

Step 2: If you want to reinforce your brand, identify a job that is well aligned with this identifier.

Step 3: If you want to expand the brand, then find an identifier that encapsulates both the old jobs and the new group of jobs. Think of a more general term for the function that you typically perform.

Step 4: Identify jobs associated with the expanded brand. Care should be taken to recognize jobs that the business is willing to venture into. The new jobs should have a sufficient number of job performers to justify the business risks.

Explanation

Brands are a way of conceptualizing a collection of jobs that you assist people in completing. When considering any popular brand, a list of products comes to mind that help facilitate the performance of various jobs. We can usually find a way to encapsulate these jobs. For example, automobile maintenance comes to mind when we think of the term “Fram.” Automobile maintenance consists of many jobs.

We may want to further reinforce the jobs we are recognized for, particularly if the brand is new. In this case, we should select a job that strengthens the image of the brand.

If we want to expand a brand, we should select a job that is slightly “off-center.” For example, we might want to extend beyond automotive maintenance to automotive restoration.

Example—Car Maintenance

Step 1: Identify jobs associated with your brand. Find an identifier that accurately incorporates these jobs.

Jobs associated with the brand include changing oil filters, changing spark plugs, and changing car fluids. The identifier is car maintenance. This encapsulates jobs that involve removing and replacing car components.

Step 2: If you want to reinforce your brand, identify a job that is well aligned with this identifier.

A job that reinforces this is changing windshield wipers.

Step 3: If you want to enlarge the brand, then find an identifier that encapsulates both the old jobs and the new group of jobs. Think of a more general term for the function you typically perform.

I want to expand the brand to go beyond maintenance and include car repair.

Step 4: Identify jobs associated with the enlarged brand. Care should be taken to identify jobs that the business is willing to expand into. The new jobs should have a sufficient number of job performers to justify the business risks.

A job that stretches the brand is repairing dents and dings in the automobile body.

Problematic Jobs in the Product Life Cycle

Method

Step 1: Identify problematic jobs on the Product Life Cycle Map.

Step 2: Recognize that the purchase of the product for gift-givers is particularly problematic and may need to be the primary job that is improved.

Step 3: Identify the specific job executors for these problematic jobs.

Explanation

The next page illustrates the flow of jobs in the product life cycle. Whether your primary customers are businesses or end users, you can locate their jobs on the map. Probably the most crucial jobs are the “bottlenecks” that slow down the flow of the product to the job executor. Identifying major bottleneck jobs is essential and revealing. These jobs may signify new markets or could represent markets you are already serving but where you lack market share.

For many products, the job of purchasing the offering as a gift is the most challenging and significant for the sustainability of the product or service providers. Enhancing this job may be the most important task of all.

Note that this market segment may necessitate a change in business model to effectively serve customers, which can be highly disruptive to businesses.

Example–Affordable Housing

Step 1: Identify problematic jobs on the Product Life Cycle Map.

Acquiring the land and constructing the house.

Step 2: Recognize that the purchase of the product for gift-givers is particularly problematic and may need to be the primary job that is improved.

Not applicable.

Step 3: Identify the specific job executors of these problematic jobs.

The developer procures and develops the land, while the contractor constructs the house.

Jobs Indirectly Related to the Core Job

Method

Step 1: Identify the main job you are trying to perform.

Step 2: Identify jobs that precede or follow the main job and are indirectly related to it. Some groups of people are often required to perform these jobs. These can include social or personal tasks[13].

Step 3: Decide whether to refocus on the preceding job or incorporate it into the main job.

Explanation

Often, a job is preceded or followed by other necessary tasks. If these jobs pose more challenges than the main job or directly constrain it, we may want to either focus on these jobs or integrate them into our current task.

Example—Movie

Step 1: Identify the main job you are trying to perform

The main job is providing movie entertainment.

Many people need to hire a babysitter, pick up the kids, and take them home.

Step 3: Decide whether to refocus on the preceding job or incorporate it into the main job.

These tasks can be merged into the entertainment experience if the child is cared for during the movie.

Example—Affordable Housing

Step 1: Identify the main job you are trying to perform.

Procurement of land and construction of a house.

Step 2: Identify jobs that precede or follow the main job and are indirectly related to it. Some groups of people are often required to perform these jobs.

Negotiating deals to get people involved. Someone often has to establish utility connections, which can be quite costly. This is a potential task that may have implications in licensing.

Step 3: Decide whether to refocus on the preceding job or incorporate it into the main job.

The utility connections can be an expensive task, but we will hold off on addressing this for now.

Unexpected Jobs--Customer Innovations

Method

Step 1: Which customers use your product in the most unusual ways?[16]

Step 2: Who spends at least 50% of what your product costs to make it useful to them?[17]

Step 3: What are some examples of ad hoc modifications that customers have made to your product?[18]

Step 4: What job are they trying to accomplish with the product?

Step 5: What are the circumstances?

Step 6: Summarize the job and the circumstances.

Explanation

It is likely that some people are using your product or service for a completely different purpose than you intended. This represents a new potential market for your product.

To use your product for an unexpected purpose, the user may first modify it. (However, when someone modifies your product, it doesn’t necessarily mean they are using it for a new purpose. They may be altering it to perform the original task in a way that suits them better. This is important to consider as we move forward in segmenting the market.)

If you plan to observe customers, it is beneficial to be open to the idea that some of them are using your products for purposes that were not originally intended. This may only become apparent if you ask them why they are doing what they do. Clayton Christensen recounts a story[15] of an investigation into the behaviors of customers at a fast-food company. One notable behavior was the unexpected high consumption of milkshakes early in the morning, an unusual time for such a treat. When customers were questioned about this, it was revealed that they were using milkshakes to stay awake during long drives. They were hiring milkshakes to keep them alert! This is a different purpose than simply nourishing or entertaining oneself. Shakes are more convenient to consume than a bagel and last longer than drinks like coffee. To cater to this market, the features of the milkshake needed enhancement to help drivers stay awake. For example, it required a thick and appealing consistency. In contrast, parents who purchased shakes for their children had a very different intention. They wanted to use the occasion as a reward or to delight the child. For their purpose, they preferred a much thinner shake that could be consumed quickly. Note that the product features significantly influence the satisfaction of achieving the intended purpose.

Be aware that this market segment might necessitate a change in business model to serve these customers, which can be highly disruptive for businesses. It may also require careful research, like the milkshake study, to ascertain what job the customer is trying to complete. Sometimes the answer is not obvious, and even if we believe it is clear, we may be mistaken.

Example–Affordable Housing

Not applicable since we do not yet have a product.

Similar Jobs

Method

Step 1: Identify a job that your products or services fulfill.

Step 2: Determine the primary object on which the job operates.

Step 3: Explore neighboring markets in your area where you would be willing to expand your business. Which objects in these adjacent markets require the same functions that your products typically provide?

Step 4: Evaluate regions of the world where you would like to grow your business. What objects in these regions require the same functions that your products usually deliver?

Step 5: The new job is to provide the functions of the existing products and services on these new objects.

Explanation

In the previous step, customers utilized our product for unexpected tasks. In this step, we employ our product for unforeseen yet comparable tasks. As many tasks are performed on various products across different regions of the world, it is likely that tasks exist globally that are similar to those that your products or services currently help in performing. As noted, it is improbable that pizza will be made in every region of the world. We simply need to ask ourselves, “What needs to be sliced like a pizza?”

Example–Affordable Housing

Not applicable as we do not yet have a product.

Avoiding other Jobs

Method

Step 1: Identify a repugnant job related to the industry, particularly those associated with waste disposal, etc.

Step 2: Determine the job to be avoided entirely.

Explanation

Sometimes, the Job to Be Done is to avoid another task. An example of this is the desire to prevent discarding used packaging. This is a waste product that may not need packaging if the appropriate conditions are met.

Job is to Provide a Gift

Method

Step 1: Consider the job of delighting someone by gifting them the ability to perform a task.

Step 2: Consider the job of helping someone else to solve a problem by enabling them to perform a task.

Step 3: Consider the job of gifting an experience to someone.

Explanation: The main job to be done is to provide the gift of performing a task. Consider that a significant portion of annual revenue is typically generated around the holiday season when people purchase products and services. The gift giver may never perform the task that the gift is intended to facilitate. Often, they have little understanding of the features of the gift that the recipient would value the most. Gift givers frequently find themselves in a challenging position when it comes to assessing the worth of various offerings. These issues will be addressed in the next section. Just keep in mind that the primary objective is to provide a gift to someone or a group.

Example–Affordable Housing

Not applicable since we rarely see affordable housing given as a gift. If it were inexpensive enough, we might observe this in the future.

New or Added User Experiences

Method

Step 1: If you are starting with a known job (and potentially a product or service), identify this job.

Step 2: From the following table, identify one or more experiences that you would like to combine with this job to enhance the user’s ability to perform the job more effectively.

Step 3: If you are creating a new experience, then merge experiences that you believe will be desirable together.

List of Experiences

Mental Experiences

—State of Knowledge (Education, Wisdom, Instruction)

—Readiness to Engage Intellectually (Alertness, Openness, Interest)

—State of Thought (Introspection, Methodical Thinking, Analyzing, Evaluating)

—State of Decision (Decisive, Positive, Anticipating, Secretive)

—State of Creativity (Stimulated, Composing, Pretending, Expressive)

Physical Experiences

—Physical Movement (Exercise, Using Technique, Exploration, Entertainment)

—Adrenaline-Inducing (Scared, Thrills, Shock)

—Use of Senses (Taste, Temperature, Tactile, Pleasurable, Smell, Sound)

—Neat Environment (Outdoors, Public Places, Underwater, Home, Theater)

Self-Affirming Experiences

—Autonomy (Self-Reliance, Competence, Self-Confidence)

—Comparison (Competition, Pride, Power, Wealth, Dominance)

—Sense of Continuous Improvement (Growth, Advancement)

—Vindication (Innocence, Unashamed, Unregretting)

—Courage (Boldness, Bravery, Outspokenness, Invulnerability, Fearlessness, Forthrightness)

—Self-Image (Self-Promoting, Growing, Accepting, Forgiving, Respecting)

—Feeling Useful (Challenged, Masterful, Empowered, Victorious, Self-Reliant)

—Meaning (Purpose, Consecration, Sacrifice for Others, Altruism)

Social Experiences

—Built Up (Encouraged, Comforted, Rewarded, Enriched, Promoted)

—Togetherness (Camaraderie, Connection, Engagement, Socializing)

—Thought Well Of (Likeable, Beautiful, Humorous, Accepted, Dignified, Noble)

—Liking/Loving (Passionate, Infatuated, Loving, Fondness, Loved)

—Cooperative Experience (Friendly, Agreeable, Accommodating, Amicable)

—Conciliatory Experience (Tolerance, Acceptance, Humility, Forgiveness, Submissiveness)

—Being Helpful (Nurturing, Constructive, Mentoring, Comforting, Mediating)

—Altruistic (Unselfish, Concerned, Empathetic, Sensitive, Gentle, Generous)

—Identification (Nationalistic, Group Values, Group Pride)

Religious Experiences

— (Spiritual (Inspiring, Faithful, Moral, Inspired, Righteous, Idealistic)

Personal Emotional Experiences

—Happiness (Pleased, Happy, Excited, Cheerful, Lively, Joyful, Ecstatic)

—Freedom (Adventurous, Relaxing, Loss of Responsibilities, Carefree)

—Calm (Peaceful, Patient, Rested, Composed, Serene, Stable, Content)

—In Harmony (Balanced, Hopeful, Resigned, Guilt-Free, Free from Pain)

—Nostalgia (Good Memories)

Altered States

— (Near-Death, Out-of-Body, Trance)

Virtual Experiences

— (Simulated, Virtual, Pretend, Acting)

Explanation

This is an experimental method for creating new jobs.

One could argue that if we think in sufficiently general terms, there is no such thing as a “new job”. For instance, a new social game that promotes creativity and a sense of nostalgia could be thought of as an “entertainment experience.” Entertainment has been around forever; however, this is not helpful in identifying new products and services. If we only focused on existing or generalized jobs, how would we create completely new experiences such as new recreational products, games, amusements, and hobbies? Clearly, there is a need for the systematic synthesis of new jobs and experiences.

One way to do this is to start with a given job and add experiences. It is possible to make a common product deliver a completely new experience to the job executor. Consider how much sooner mountain biking might have come into existence had someone purposefully combined bicycle transportation with off-road experience.

The figure to the right shows an unknown object that will contain food. We have added the additional modification to the person who is interacting with the food container. The food container will educate the person on the nutritional contents of the food contained with little or no effort on the part of the executor. At this point, we do not know what will perform each job or how the person interacts with the container. We just know the jobs that will be performed. Remember that we are trying to identify the market segment. For this, we need to know the primary modifications on the primary product and the job executor. Later we will decompose the requirements for the system, in this case, the container.

The following methods can also be used to create completely new user experiences. This is possible through the unusual combination of experiences. For the moment, it is sufficient to define the experience that we want to create. Later, we will decide on the vehicle for delivering these experiences. The market would be people who would want these new and/or unusual experiences.

The process of generating the list of experiences was to catalog and include human experiences to which people are attracted and repelled. An attempt was made to make this list as complete as possible without regard to how “dark” these experiences were. Next, the list was divided into “attractive” and “repulsive” experiences. The opposite of the repulsive experiences was then added to the list of positive experiences to form the final list.

In the interest of disclosure, it should be noted that the author’s own ethical and moral boundaries and interpretations are reflected in the categorizations of “attractive” and “repulsive” experiences. It is recognized that others may not share the views of the author.

Example—Affordable Housing

Step 1: If you are starting with a known job (and potentially a product or service), identify this job.

Building a House.

Step 2: From the following table, identify one or more experiences that you would like to combine with this job that allow the user to do the job more perfectly from their perspective.

We would like the house that we are building to perform the job of inspiring the user towards self-sufficiency. In one sense, it needs to be functional, but we do not want the house to become a permanent way of life. In other words, it can’t be too good in certain aspects but it also cannot be sustainable or cause blight. It also needs to be durable. All of these combined will give the user a needed experience that propels them toward self-sufficiency. In functional terms:

(Someone) –> Builds/Procures –> House/Land –> Inspires –> Owner

Step 3: If you are creating a new experience, then combine experiences that you believe will be desirable together.

The Job is to Create Job Loyalty and Identification

Method

Step 1: Identify whether loyalty, identification, and identity are desirable features of the product or service.

Step 2: Identify the experience that your product must have with a consistent look and feel.

Step 3: Identify the experience that the appearance of the product or service must communicate to the consumer, indicating that this is something they relate to.

Step 4: Identify that the experience must be memorable, inspirational, or meaningful. If possible, we would like our product or service to transform the entire user environment to enhance memorability.

Step 5: Identify the experience that you want the user to associate more strongly with the offering brand. The brand needs to be linked with the Job to Be Done.

Step 6: Identify the experience that ensures the user feels comfortable with the product.

Step 7: Identify how various stakeholders’ identities are or could be dependent upon the products related to the job.

Explanation

There are user experiences that a product or service provider may want to promote, such as the experience of identification with the product, loyalty, or the job to be done[19]. When the consumer feels a connection or identifies with the product, the likelihood of follow-on purchases increases.

There may be many stakeholders whose identities are dependent upon a job or product. When a stakeholder relies on products for their identities, this can be referred to as the Identity Function[20]. In some cases, the identity function may be more significant to the stakeholders than the utility function of the product or service. The label on a shirt may mean more to the owner than the basic function of the shirt itself.

When we change an offering, we should be mindful of how the changes will affect the identities of the various stakeholders. Innovation can be very disruptive to people’s jobs, routines, etc. Disrupting people’s lives can have a dramatic impact on their identities. This, in turn, can create considerable resistance to the innovation. A case in point is the navy’s adaptation of long-range guns for use in sea battles[21]. The technology required for long-range shooting in rough seas was invented by the British when an officer discovered the imperceptible movements of the person who adjusted the firing altitude by moving the crank up and down while the boat rocked. This led to the combination of a lower gear ratio for the altitude crank and a long-range scope that would collapse when the gun recoiled to avoid injuring the person looking through the scope. The accuracy was dramatically improved. A commanding officer in the American navy adapted this to his vessel with the same results. Convincing the American navy to convert to this technology was very difficult due to how this innovation affected people’s identities. Now, the gunners became more significant than those who had previously steered the ship during close engagements. This impacted who shared meals together and other routines on board the ships. The identities of many officers were challenged, which led to many years of resistance despite the improvement of the primary utility function that these naval vessels performed. Most people would have expected such an innovation to be readily adopted, but it faced years of opposition due to the threat to people’s identities.

Additionally, we want the customer to feel comfortable with the product, and we want the experience to be memorable, inspirational, and meaningful.

Example — Affordable Housing

Step 1: Identify whether loyalty, identification, and identity are desirable features of the product or service.

Yes, this is a desirable feature.

Step 2: Identify the experience that your product must have with a consistent look and feel.

Having a consistent look and feel could be a definite advantage.

Step 3: Identify the experience that the appearance of the product or service must communicate to the consumer, indicating that this is something they relate to.

Yes, this is something that we want them to relate to.

Yes, we want it to be memorable, inspirational, or meaningful.

Step 5: Identify the experience that you want the user to associate more strongly with the offering brand. The brand needs to be linked with the Job to Be Done.

At this point, there is no brand, but this could certainly serve as a precursor to a memorable brand.

Step 6: Identify the experience that ensures the user feels comfortable with the product.

We definitely want burdened homeowners to feel comfortable with the product.

Step 7: Identify how various stakeholders’ identities are or could be dependent upon the products related to the job.

We want the stakeholders to also feel good about the products related to affordable housing.

New Jobs for New Products

Method

Step 1: Identify a New Situation. Choose one of the following scenarios.

– New Product

– New Recreation or Sport

– New Vocation

– New Entertainment

– New Form of Socialization

– New Type of Rejuvenation

– New Mode of Transportation

– New Form of Grooming

– New Type of Health Care

– New Food

– New Plant

– New Issues Generated by New Products

Step 2: Choose one of the following jobs and relate it to the new situation from Step 1

– Protect Other Objects from

– Recreate with

– Enjoy with

– Operate

– Safeguard

– Transport

– Install or Plant

– Make Secure

– Store

– Organize

– Refurbish or Repair

– Maintain

– Prepare or Cook

– Dismantle

– Dispose of

– Measure

– Educate

– Assemble

– Communicate

– Search for

Step 3: Identify Alternative Markets. Consider Other Industries that might be interested in performing this Job. These other industries may be even more relevant than the one you start with.

Step 4: Expand on Known Jobs to others that may want this job performed. Some of the methods we’ve already discussed can help to broaden this new job into other new jobs. The most applicable group to apply this step to is “Typical Offerings that are Distasteful or Out of Reach”.

Explanation

Most truly new Jobs arise from situations or products that are also new. Here, we will identify jobs related to our industry that are innovative.

Example—Digital Pictures

Step 1: Identify a New Situation. Choose one of the following scenarios.

– New Product

– New Recreation or Sport

– New Vocation

– New Entertainment

– New form of Socialization

– New type of Rejuvenation

– New form of Transportation

– New form of Grooming

– New form of Health Care

– New Food

– New Plant

A New Product is chosen: digital cameras.

Step 2: Select one of the following tasks and relate it to the new situation from Step #1

– Protect Other Objects from

– Recreate with

– Enjoy with

– Operate

– Protect

– Transport

– Install or Plant

– Make Secure

– Store

– Organize

– Refurbish or Fix

– Maintain

– Prepare or Cook

– Dismantle

– Dispose of

– Measure

– Educate

– Assemble

– Communicate

– Search for

A new task is preserving digital pictures. There is a significant need that is currently unmet. Over time, information has a shorter lifespan. This is not solely due to the longevity of the media itself, but rather because the technology required to retrieve the data has a very limited lifespan. Digital media faces decreasing longevity. What is needed is a method for preserving digital media for millennia.

Step 3: Identify Alternative Markets. Consider Other Industries that might be interested in fulfilling this Job. These other industries may even be more intriguing than your initial choice.

Examples of other markets that may also have this need:

Public Records

Medical Information

Crime Evidence

Copies of Works of Art

Step 4: Expand on Known Jobs to others who might want this job completed. Some of the methods we have already discussed can help us expand this new job to other new tasks. The most relevant group to apply this step to is “Typical Offerings that are Distasteful or Out of Reach”.

Some individuals that might feel hindered from storing digital information for long durations are those who need to carry out this task in extremely harsh environments where the storage devices have limited lifespans. Others may be concerned about conflicts of interest or worry that no institution will exist long enough to preserve the data.

New Jobs to Facilitate New Regulations

Method

Step 1: Identify new regulations relevant to your industry or jobs within your industry.

Step 2: Determine tasks or roles necessary to comply with these new regulations.

Explanation

New regulations often necessitate the creation of new jobs for those who must comply with these rules. These new roles generate opportunities for innovative products and services that facilitate these positions.

Merging and Splitting Jobs

Method

Step 1: Identify tasks or jobs that are best performed simultaneously. Can they be accomplished in the same space?

Step 2: Consider merging jobs that function best simultaneously and within the same space.

Step 3: Identify jobs that are awkwardly performed together in the same space. Often, there is no special advantage or synergy when they are executed this way.

Step 4: Consider separating these jobs.

Explanation

Greater efficiency can be achieved when separate jobs are performed better simultaneously and in the same space. Likewise, jobs that are awkwardly performed together in the same location are often better done separately. There is a natural tendency to believe that unrelated jobs done together are often performed less effectively.

Choose the Job

Method

Step 1: Identify the functions you are considering.

Step 2: Ask yourself why this function is necessary. Refer to Discover Why Targeted Objects are Required.

Step 3: Consider whether there is a more ideal object that serves the purpose.

Step 4: Reflect on whether there is a more ideal modification for that object.

Step 5: Inquire if there is a more ideal physical phenomenon to deliver the modification.

Step 6: Utilize specialized search engines like www.google.com/insights/search to evaluate interest in performing the selected task.

Step 7: Choose the most ideal task.

Explanation

Typically, we select a task based on our interests, desires, or business goals. Is this the task we truly wish to assist a job executor with? Remember that most tasks consist of functions, and there is a genuine possibility that any function can be idealized. When examining a function for idealization, we are interested in the potential for more ideal products, modifications, physical phenomena, and tools. Why not pose these questions now regarding the task you are assessing? A comprehensive exploration of this subject can be found in the TRIZ Power Tools book, which addresses idealizing useful functions and understanding why objects and functions are needed.

Example—Affordable Housing

Step 1: Identify the functions you are considering.

(Someone) –> Constructs/Acquires –> House/Land –> Inspires –> Owner, stakeholders

Step 2: Ask yourself why this function is necessary. Refer to Discover Why Targeted Objects are Required.

The function is essential because without it, alternative sheltering systems would have to be utilized, or someone else would need to house families. Even if another way to shelter families could be found, adopting these means would create another significant challenge. When dealing with human systems, complexity increases.

Step 3: Consider whether there is a more ideal object that serves the purpose.

A more ideal object than a house might be a greenhouse that people inhabit, which would facilitate food production.

Step 4: Reflect on whether there is a more ideal modification for that object.

A more ideal modification could involve avoiding building new houses and instead repurposing existing structures. If there were a method to quickly and inexpensively renovate a ghost town where land is affordable and the homes are already present but unoccupied…

Step 5: Inquire if there is a more ideal physical phenomenon to deliver the modification.

In this scenario, we examine whether there are improved ways to construct houses. 3D printing serves as an example.

Step 6: Utilize specialized search engines like www.google.com/insights/search to evaluate interest in performing the selected task.

Step 7: Choose the most ideal task.

(Someone) –> Constructs/Acquires –> House/Land –> Inspires –> Owner, stakeholders

I still firmly believe this is the most ideal option, as finding land near job opportunities is quite challenging. More affordable alternatives may exist if we consider relocating communities to areas with inexpensive property, even if they are not close to jobs. For instance, if these communities had their own economy and operated entirely off-grid. I will remain vigilant for opportunities as I explore actual solutions within the super-system.

Hypothesize Potential Market Segments

Explanation of Potential Market Segments

A Different Approach to Segmenting Markets

Many marketing studies delineate market segments according to customer attributes, such as gender, race, and age. Such demographic market segmentation overlooks the fact that when a person shops, they are not seeking something for old people or young people; Caucasians or Hispanics. They are looking for something that helps them perform a task or get a job done. Effectively, they are hiring the product to assist them in accomplishing a Job to be Done.

For this book, a market “segment” will be defined as:

Segment = JTBD + Job Performer + Job Conditions + Impediment

Potential New Market Segments

Potential new markets remain hidden because they do not consume or consume much less than they could. They don’t consume because they are struggling against barriers and constraints that stump them. In this stage of the algorithm, we will examine various hindrances that will lead us to potential market segments. Note that any one of the potential market segments can range from surprised to unaware; from existing customers to non-consumers. For example, a lack of knowledge might render a potential customer entirely unaware of the possibility of performing a job; uninterested in the idea of performing a job; completely obstructed from performing a job; irritated by how to use a product or delighted by a new feature. The degree of hindrance relies on what has already been accomplished to alleviate consumption barriers.

Over-Served Consumers (Access)

Method

Step 1: Identify customers who do not require all the options your products provide. They prefer simplicity, lower prices, and convenience, and may be frustrated by the lack of these qualities.

Step 2: What is the total size of this customer group on a global scale?

Explanation

Clayton Christensen refers to these groups as “low-end disruption” markets or “overserved markets” in his theory of disruptive innovation.

These markets are where established companies often include excessive features that many customers neither want nor need, while charging high prices for them. This creates opportunities for new companies to offer simpler, cheaper, and easier-to-use products or services that appeal to customers who prioritize affordability over additional features.

Key characteristics of these markets include:

1. Customers finding existing solutions too expensive or complicated for their needs

2. Acceptance of “good enough” performance for a lower price or greater convenience

3. Preference for standard options instead of personalized ones

4. Simpler business models with reduced costs

5. Easier access to purchasing channels

Notable examples include:

– Discount stores (like Walmart) competing with department stores

– Budget airlines challenging full-service airlines

– Mini mills competing with large steel mills

– Online education competing with traditional colleges

Christensen noted that established companies often struggle to adapt to these changes because they focus on their most profitable customers who seek more features, not fewer. This allows room for simpler and more accessible alternatives to emerge.

Clayton Christensen warned that businesses overserving markets face significant risks from low-end disruption. These customers are dissatisfied with the high prices, complexity, and inconvenience of products designed for premium buyers. Even affluent individuals may feel they are paying considerably more than the actual value they receive in return.

Institutionalized Problems (Access)

Method

Step 1: Identify the problems that customers frequently encounter, which have become so ingrained that no one notices them anymore. These individuals have found workarounds that address their needs, but they remain burdensome nonetheless.

Step 2: How many customers does this represent on a global scale?

Explanation

This issue primarily arises when you have customers who seem generally satisfied but are actually underserved compared to more ideal offerings. They simply aren’t aware of it or have compensated for the burdens until they have been forgotten. They likely reached this state when the solution to their previous job-related problems was last provided. They were so pleased with the new solution that they overlooked the drawbacks. This often happens with high-usage customers.

Inconvenient or Inaccessible Experts (Access)

Method

Step 1: Identify a job that requires an expert with specialized knowledge to perform. Individuals are required to travel to an inconvenient central location to complete the task.

Step 2: What groups of people might be unwilling to perform this job or would find it undesirable due to:

The location where the job frequently occurs
Regulations
Culture
Absence of warranty if performed by the uncertified

Step 3: How many customers does this represent worldwide?

Step 4: Determine whether reliance on inconvenient or inaccessible experts is a limitation on recognized market segments.

Explanation

Potential customers may delay or avoid undertaking certain jobs because of the challenge of locating the necessary expert to carry out the job for them. The expert may also be completely unreachable. This is related to Features and Business Models.

Example—Stitching Up a Wound

Step 1: Identify a job that requires an expert with specialized knowledge to perform. People must come to an inconvenient central location to complete the task.

The job involves closing a deep but non-life-threatening wound. It must be done in a manner that minimizes scarring and reduces the risk of infection.

Step 2: What groups of people might not perform this job or find it distasteful due to:

The location where the job typically occurs
Regulations
Cultural factors
Risk of voiding warranty if performed by unqualified individuals

Examples of individuals who might be interested in performing this job include school nurses, family members, backpackers, onsite company medical personnel, or EMTs. The backpacker may simply wish to treat the wound sufficiently to return home. The school nurse may need to address this for low-income children and may aim to do a thorough job to avoid requiring a doctor’s intervention. An EMT may have limited time to treat a wound or may address it while en route.

Step 3: How many customers does this represent worldwide?

Step 4: Assess whether reliance on inconvenient or inaccessible experts constrains recognized market segments.

This likely constrains recognized customers seeking services in doctor’s offices, etc.

Example—Fixing Cars

Sometimes, the symptoms of an automotive issue are easy for a layperson to describe. However, these symptoms may arise from multiple causes that only an expert can accurately identify.

Step 1: Identify a job that requires an expert with specialized knowledge to perform.

People must come to an inconvenient central location to complete the task. The job of fixing a car typically requires an expert with considerable experience.

Step 2: What groups of people would not perform this job or find it distasteful due to:

The location where the job often occurs
Regulations
Cultural factors
Risk of voiding warranty if performed by unqualified individuals

Individuals in remote areas and those with maintenance warranties may exclude themselves. Do-it-Yourselfers (in other locations), auto enthusiasts, and novice mechanics might also refrain from performing these jobs.

Step 3: How many customers does this represent worldwide?

Step 4: Assess whether reliance on inconvenient or inaccessible experts constrains recognized market segments.

This could represent a recognized market if consumers must face challenging decisions regarding transportation, etc.

Job Hampered by Regulations (Access)

Method

Step 1: Is your job not widely performed in certain regions of the world due to difficult regulations?

Step 2: Identify the regions where the job is restricted due to regulations.

Government
Civil
Religious
Voluntary

Step 3: Which groups of people would refrain from performing this job or would find it objectionable due to regulations? How many potential customers does this represent worldwide?

Step 4: Assess whether regulations are a barrier to recognized market segments.

Explanation

Some jobs are challenging to perform in certain regions of the world due to government, civil, religious, or voluntary regulations. Some voluntary regulations, such as ISO standards, may restrict business with other companies that require internal controls. This generally relates to the provision of specific features.

Be aware that this market segment might necessitate a change in business model to serve customers, which can be highly disruptive to businesses.

Cultural Restrictions (Access)

Method

Step 1: Could your job be considered shameful or embarrassing if performed in certain public settings?

Step 2: Identify common scenarios where the job is restricted due to cultural norms.

Step 3: Determine regions of the country or world where the job is restricted because of cultural norms.

Step 4: Identify potential customers who would find these limitations unacceptable or distasteful. How many customers does this represent globally?

Step 5: Assess whether cultural restrictions act as a constraint on acknowledged market segments.

Explanation

While governments may prohibit certain jobs, there are positions deemed culturally unacceptable. Any job that is perceived as shameful or embarrassing to perform in public could qualify as this type of job. This usually pertains to the nature of the services offered.

Supporting Jobs are Hampered (Access)

Method

Step 1: Identify jobs that must be performed either before, during, or after this job is carried out. Use the Product Life Cycle Map.

Step 2: Identify situations where the supporting job cannot be accomplished, thus hindering the performance of the main job.

Step 3: What groups of people would not perform this job or would find it unpleasant because supporting jobs are obstructed or not possible? How many customers does this represent worldwide?

Step 4: Determine whether hindered supporting jobs are a constraint on recognized market segments.

Explanation

In order to accomplish certain tasks, it is often necessary to complete other tasks either before, during, or after the main task.

When young parents wish to attend the theatre, they must first find someone to watch their children while they are away. These tasks are separate, and the difficulty or failure to complete one task often hampers the other.

It is important to note that this market segment may require a change in business model to effectively serve customers, which can be quite disruptive to businesses. This often entails offering new features or different business models.

Example—Date Night

Many couples with children desire an evening of entertainment together, but there is a challenge…

Step 1: Identify the jobs that must be completed either before, during, or after the main job is performed. Utilize the Product Life Cycle Map.

If the couple has children, they need to ensure a safe environment for them. More often than not, they prefer to leave the children at home with a babysitter.

Step 2: Identify situations where the supporting job cannot be achieved, thus preventing the main job from being performed.

Frequently, finding a babysitter on short notice can be quite challenging. Additionally, the cost of hiring a babysitter can be prohibitive for couples with limited income or for those who wish to go out frequently.

Step 3: Which demographics might refrain from performing this job or consider it undesirable due to challenges in supporting jobs? How many potential customers does this demographic represent globally?

Young couples with children.

Step 4: Determine whether difficulties in supporting jobs present a constraint on recognized market segments.

Job Not Provided in the Geographical Region (Access)

Method

Step 1: Identify jobs in your industry that are not widely available in certain regions of the world.

Step 2: Identify customers who are hindered or prevented from performing these jobs in these regions. How many customers does this represent worldwide?

Step 3: Determine whether the availability of the job in a region is a limitation on recognized market segments.

Explanation

While this may be an issue related to manufacturing resources, there may be other factors that will be examined in the next book. For now, it is sufficient to merely identify whether the product or service is offered in the region. This is related to the Business Model.

Job Costs too Much (Access)

Method

Step 1: Is your product or service expensive due to significant capital expenditures for equipment, office space, land, etc.?

Step 2: What tasks does this product or service assist customers with?

Step 3: Which demographics would not pursue this task or would find it unappealing because it is so costly relative to their purchasing power? How many potential customers does this encompass worldwide?

Step 4: Determine if the high costs are a barrier for identified market segments.

Explanation

A sustainable market can be divided into those willing to pay a premium for superior performance (the high-end market) and those who are content with lower performance and hesitant to pay inflated prices for enhancements (the low-end market). Businesses often find it appealing to cater to the high-end market while dismissing lower-paying customers. The low-end market consistently seeks affordable products that fulfill their needs and is willing to forgo many features of the product since the service level exceeds their requirements.

Targeting the low-end market presents challenges. Although these markets can experience rapid growth, they often face substantial competition, which restricts potential profits. Eventually, these low-end disruptors will start to infiltrate markets that are predominantly served by high-end suppliers, leading to increased margins. A low-end disruptor may ultimately evolve into a high-end disruptor with greater profit margins.

It is likely that many potential customers would purchase more if only our offering were less expensive. One can easily justify that the company has identified the optimal price point to maximize profits. At this price level, reducing costs would only diminish net profit. This holds true only if the cost of delivering the offering remains unchanged. However, this assumption should not be made at this juncture. The cost of delivering the offering can and should be adjusted for those seeking lower prices. If this is the barrier to increased consumption, it becomes evident that innovation is necessary to lower the costs associated with providing the offering. High provider costs ultimately render the product unattractive to low-end customers.

Note that this market segment may necessitate a shift in business model to effectively serve customers, which can be highly disruptive for businesses. This pertains to offering features and business models.

Example—Dry Cleaning

Step 1: Is your product or service expensive because it requires a significant capital investment for equipment, office space, land, etc.?

Yes

Step 2: What task does this product or service help customers accomplish?

Clean soiled clothing that cannot be washed in a washing machine (wool, etc.). Providing crisp and starched garments to impress business associates or social dates can be quite costly.

Step 3: Which groups of people would be reluctant to perform this task or would find it unappealing due to the high costs? How many customers does this represent globally?

Many middle-class individuals dry clean their clothes less frequently than they would like due to the perceived high costs. This includes young adults in the dating age, young professionals, churchgoers, and club members.

Step 4: Determine whether high costs are a barrier for the identified market segments.

There are likely many potential customers who would visit more often if the prices were lower.

Example—Affordable Housing

Step 1: Is your product or service expensive due to significant capital expenditures for equipment, office space, land, etc.?

—Yes

Step 2: What task does this product or service help customers achieve?

—Providing shelter.

Step 3: Which groups of people would find this task unattainable or unsatisfactory due to its cost? How many potential customers does this represent globally?

— Homeless individuals

— Low-income and very low-income workers

— Churches that need to provide “Pocket Shelters” for refugees or the homeless

— Parents wanting to offer teens and young adults their own space

— Families needing to house elderly relatives

— Boarding houses aiming to accommodate more individuals for less money

— Group homes looking to provide more space at lower costs

— Bed and breakfasts seeking quicker returns on investments

— Individuals recently released from prison needing an affordable place to settle

— Students seeking low-income housing

— Indigenous people living on reservations

Step 4: Assess whether high costs are a barrier for the identified market segments.

High costs are indeed a barrier for all these segments.

The Job is Unknown (Deciding)

Method

Step 1: Is the knowledge that the job is possible a barrier to consumption? Is this lack of knowledge more prevalent in certain regions of the country or the world?

Step 2: Which potential customers are most likely to be hindered by knowledge of the job? How many customers does this represent worldwide?

Step 3: Is it possible that the need for the job is difficult to articulate[29]? Is it possible that simply explaining the job is too cumbersome?

Explanation

Often, it takes time and repeated exposure to a job to become convinced that the job is desirable. Worse yet, the job may be unknown to potential job executors. This relates to the business model.

Consumer not Converted to the Job (Deciding)

Method

Step 1: Is desirability a barrier to consumption? Is this lack of conversion more prevalent in certain regions of the country or the world?

Step 2: Which potential customers are most likely to be blocked by a lack of interest in the job? How many customers does this represent worldwide?

Step 3: Is it challenging to research the job?

Step 4: Is the information available misleading?

Step 5: Is the necessity for the job difficult to explain[29]?

Step 6: Is explaining the job too cumbersome?

Explanation

Often, it takes time and repeated exposure to a job to become convinced that it is desirable.

High Switching Costs (Deciding)

Method

Step 1: Does switching to your product entail significant switching costs? Remember that these costs may also be measured in time or in relinquishing an already owned product.

Step 2: Identify potential consumers who would be significantly hindered or blocked by these high switching costs. How many customers does this represent worldwide?

Step 3: Determine whether high switching costs are a constraint on established market segments.

Explanation

Many consumers are deterred from trying new products due to the high switching costs associated with these options. The products they are currently using have become unsatisfactory compared to what alternatives they could explore, but they may either have to wait until it becomes intolerable or continue indefinitely. This is a frequent issue with computer and software products. Another challenge for businesses is the transition from one workflow system to another.

Note that this market segment may necessitate a change in business model to serve customers, which is very disruptive for businesses. This relates to Features and Business Models.

Anticipated Market Trend Problems (Deciding)

Method

Step 1: Identify the forces that are seeking to change the nature of the job you have chosen.

Step 2: Identify the future job and its characteristics.

Step 3: Identify the challenges that job performers will likely face as they adapt to these changes in the future job.

Step 4: Assess whether new market trends are a constraint on identified market segments.

Explanation

If markets consist of jobs and job performers, then market trends are the forces that are altering the nature of jobs. Understanding these forces can assist us in recognizing how these jobs are evolving over time, allowing us to anticipate the challenges that may arise. This often relates to providing features or business models.

Job Not Try-Able (Deciding)

Method

Step 1: Do customers prefer to try out a product before making a decision to determine if it will be satisfactory, or do they prefer one that is difficult to return to the provider?

Step 2: Are subscription services difficult to cancel?

Step 3: Determine whether this product can be trialed.

Step 4: Who are the customers, and what are their typical situations?

Step 5: Which groups of people would be reluctant to perform this task or find it unappealing due to its time-consuming nature? How many customers does this include globally?

Step 6: Assess whether tryability represents a constraint on the identified market segments.

Explanation

Many customers mentally factor in the cost of buying twice in the event that the product doesn’t meet their expectations on the first attempt. The costs may not solely be associated with the price. If there are any challenges in returning products to the supplier, the customer may not consider it worth the risk or may postpone purchasing the product. If potential customers could test the product in a hassle-free setting, they might find it easier to decide. Furthermore, potential customers understand that complex tasks can become even more complicated if the necessary tools are difficult to use, likely leading them to want to try these products beforehand.

It is important to note that this market segment may require a shift in the business model to effectively serve customers, which can be highly disruptive to businesses. This is closely related to the overall business model.

Distasteful Providers (Deciding)

Method

Step 1: Identify individuals who are distrustful or may not trust at all the common providers of products or services to perform the job. They may be distrustful due to:

—Provider policies

—Provider culture

—Provider beliefs or values

—Provider history

—Provider business model

Step 2: Assess whether distaste towards certain providers is a constraint on recognized market segments.

Step 3: How many customers does this represent worldwide?

Explanation

No one wants to look in the mirror and ask, “What makes me unappealing?” Unfortunately, some individuals are reluctant consumers because there is something about the provider of the offering that they find unappealing.

Fears of Conflicts-of-Interest (Deciding)

Method

Step 1: Does your business rely on an asymmetry of information to function?

Step 2: In this role, do you withhold important information from customers attempting to perform their tasks?

Step 3: Identify situations where potential consumers may fear conflicts of interest, indicating that you are not prioritizing their needs.

Step 4: What groups of people might avoid this job or find it unappealing due to potential conflicts of interest? How many customers could this represent globally?

Step 5: Evaluate whether fears of conflicts of interest hinder recognized market segments.

Explanation

This occurs when an agent, who is expected to act in your best interest, has competing interests. This may be real or perceived, but it hinders the execution of the task. Consumers often sense this when there is an imbalance of information. (This dynamic is present in any sale). This relates to the Business Model.

Example—Buying a Car

Purchasing a vehicle typically centers around securing the best deal and negotiating with “the guy in the back,” who possesses the apparent or actual authority to accept or reject a customer’s offer price. Why is this process so frustrating? People generally struggle with negotiation, and many leave the dealership feeling taken advantage of or deceived (especially concerning financing offers – terms for both leasing and loans, trade-in values, unnecessary extended warranties, dealer add-ons, frivolous processing fees, etc.).

Step 1: Does your business rely on an asymmetry of information to operate?

Yes, car dealers commonly know the cost they incurred for the vehicle.

Step 2: In this role, do you withhold essential information from customers during the sales process?

Valuable information is often withheld during the sale of virtually anything.

Step 3: Identify situations where potential consumers may fear conflicts of interest, indicating that you are not prioritizing their needs.

Customers may worry about conflicts of interest when purchasing a vehicle.

Step 4: What groups of people might avoid this job or find it unappealing due to potential conflicts of interest? How many customers could this represent globally?

Nearly everyone.

Step 5: Assess whether fears of conflicts of interest hinder recognized market segments.

This constraint likely reduces car sales to identified customers.

Fears Related to Jobs (Deciding)

Method

Step 1: What fears are typically associated with this job?

Step 2: What fears are sometimes connected to this job due to phobias? How prevalent are these phobias?

Step 3: What groups of people exclude themselves from this job or face challenges because of these fears? How many individuals does this represent worldwide?

Explanation

Common jobs often come with typical fears. Even widely practiced jobs may provoke fears due to disabilities or past experiences. Such fears can lead to phobias. Individuals with phobias often wish to pursue a career but feel restricted. This can be one of the most significant barriers to job performance.

Example—Jogging for Exercise

There is considerable interest in jogging as a form of exercise.

Step 1: What fears are typically associated with this job?

The fear of injury

The fear of being pursued by a dog

The fear of being attacked

Step 2: What fears are sometimes linked to this job due to phobias? How prevalent are these phobias?

Fears of going outdoors.

Fears of encountering someone you know

Fear of developing skin cancer from sun exposure

Step 3: What groups of people exclude themselves from this job or encounter difficulties because of these fears? How many individuals does this represent worldwide?

People with social anxiety

Individuals fearful of animals

Those afraid of criminal activity

Hypochondriacs

Dignity is Lost (Deciding)

Method

Step 1: Is there anything about the JTBD that feels undignified?

Step 2: What fears are sometimes associated with this job?

Step 3: What groups of people exclude themselves from this job or face challenges due to these fears? How many individuals does this represent worldwide?

Explanation

Common jobs often come with typical fears. Even widely practiced professions may evoke fears due to disabilities or past experiences. Such fears can lead to phobias. Individuals with phobias may wish to pursue a career but feel constrained. This can be one of the most significant barriers to job performance.

Example—Dry Toilets

One of the options for toilets in tiny homes is “dry toilets.” This is a misnomer since human waste is not actually dry. An example of a dry toilet is a bedside commode. While such commodes are legal, they often consist of a plastic bag that collects the waste, which is then tied off and disposed of in the garbage. The better models use absorbent material.

Step 1: Is there anything about the JTBD that feels undignified?

Removing this bag from a tiny home can feel very undignified.

Step 2: What fears are sometimes associated with this job?

The fear of being seen while disposing of the bag. “People will know what I am doing.”

Step 3: What groups of people exclude themselves from this job or face challenges due to these fears?

The chronically homeless in America. Sometimes they have had traumatic experiences with public toilets.

How many individuals does this represent worldwide?

Hard to say. Some of the poorest people in India still squat on urban streets. They don’t seem overly alarmed. This may be a smaller number than I think.

Lack of Knowledge (Skills)

Method

Step 1: Does your job require technical knowledge to assemble, set up, or perform?

Step 2: Does it require customer training to accomplish effectively? (The assumption is that no product or service should require training.)

Step 3: What group of people is hindered by a lack of knowledge? How many customers does this represent worldwide?

Step 4: Determine if a lack of knowledge is a constraint on recognized market segments.

Explanation

Some jobs are difficult to perform due to a relative lack of knowledge. Those who carry out the job must be equipped with essential information. Since the potential consumer does not perceive themselves as knowledgeable enough to perform the job, they choose not to participate. In effect, they restrict themselves. This generally relates to offering features.

Personal Limitations (Skills)

Method

Step 1: What groups of people exclude themselves from doing this job or are hindered due to disabilities compared to the average population, but would likely perform it themselves if it were not so challenging? How many customers does this represent worldwide?

–Elderly (Arthritic, impaired memory, impaired movement)

–Children

–Pets

–Physically Handicapped (Missing limbs, Paralyzed, Blind, Deaf)

–Chronically Ill

–Mentally Handicapped

–People experiencing intense discomfort

Step 2: Recognize whether personal limitations are a constraint on identified market segments.

Explanation

The most common jobs are often challenging for certain groups of people due to physical, mental, emotional, or pain limitations. These groups can represent large portions of the population, such as the elderly or children. This generally relates to offering features.

Example—Brushing Teeth

Brushing teeth is considered a commonplace practice in most cultures. Everyone does it, right?

Step 1: What groups of people exclude themselves from performing this task or are hindered due to disabilities compared to the average population, but would likely do it themselves if it were not so challenging? How many customers does this represent worldwide?

–Elderly (Arthritic, impaired memory, impaired movement)

–Children

–Pets

–Physically Handicapped (Missing limbs, paralyzed, blind, deaf)

–Chronically Ill

–Mentally Handicapped

–People with intense discomfort

When considering the above possibilities: The groups of people who have difficulty are: small children, paralyzed individuals, those missing hands, and the mentally handicapped.

Step 2: Recognize whether personal limitations are a constraint on recognized market segments.

This could represent a limitation for slightly handicapped individuals or could signify entirely new market segments.

Example–Affordable Housing

There are likely many individuals who desire affordable housing because they wish to house family members with the following conditions: elderly parents, children (including grown children) who seek independence; physically handicapped children who want some independence; mentally handicapped family members who need to be taught independence.

Step 2: Recognize whether personal limitations are a constraint on recognized market segments.

In this case, the market segment that desires affordable housing would be individuals wanting a place to accommodate any of the above groups.

Job Preparation is Difficult (Preparation)

Method

Step 1: Is it difficult to transport the product or materials related to the job?

Step 2: Is the equipment difficult to set up or adjust?

Step 3: Is it difficult to plan the job?

Step 4: Is it difficult to locate materials related to the job?

Step 5: Is it difficult or dangerous to fuel the equipment?

Step 6: Is it difficult to test and adjust the equipment?

Explanation

Preparation is often as much work as performing the job itself. Setup time is a cost in manufacturing and can accumulate to significant levels.

Concurrent Jobs are a Distraction (Performing)

Method

Step 1: What other jobs are typically performed simultaneously with the subject job?

Step 2: Can these jobs interfere with or replace the job?

Step 3: Which group of people is hindered by a relative lack of knowledge? How many customers does this represent worldwide?

Step 4: Determine whether concurrent jobs are a distraction within recognized market segments.

Explanation

A concurrent job is a job that can or must be performed at the same time as the job in question. Jobs performed in parallel can become distractions to the effectiveness of the job that your product or process will facilitate. In a special presentation about the company IDEO, a production introduction was conducted around the use of baby strollers. While observing mothers with strollers, many mothers were seen carrying their babies while their strollers were filled with recent purchases. In this instance, the usual job of transporting the baby was overshadowed or impeded by the necessity of completing another job, which was shopping. This typically relates to offering additional features.

Urgent but Inconvenient Jobs (Performing)

Method

Step 1: Identify situations in which a job or task is inconvenient but best performed immediately.

—While on the move. (Typical equipment is not portable). For example: while riding a bike; while walking; while riding the bus; while driving; while on an airplane; while jogging.

—While in an inaccessible environment (Typically, you can’t get to it without considerable effort removing other objects.)

—The job is very time-consuming, but highly urgent.

—The job needs to be done remotely (Typical equipment requires numerous connections).

—In public where it is embarrassing. (Typical equipment or processes are visible to those around you), such as: in office situations; in crowds; at the market; at sports events; while making an arrest.

—While hands are full with other items. (Typical operations require use of hands).

—During combat (Typical equipment requires relaxed conditions).

Step 2: What groups of people exclude themselves from performing this job, or would be hindered by the inconvenience? How many customers does this represent worldwide?

Step 3: Determine whether urgency or inconveniences are constraints on recognized market segments.

Explanation

Some jobs need to be performed immediately, even when they are the most inconvenient and urgent. These tasks often require continuous monitoring to ensure that nothing goes thoroughly wrong. This generally relates to offering features.

Example—Pet Sitting

Monitoring pets is a universal task around the world.

Step 1: Identify situations in which the job or task is inconvenient but best performed immediately.

—While on the move. (Typical equipment is not portable). For example: While riding a bike; while walking; while riding the bus; while driving; while on an airplane; while jogging.

—While in an inaccessible environment (Typically, you can’t reach it without a lot of effort removing other objects).

—The job is very time-consuming but very urgent.

—The job needs to be done remotely (Typical equipment requires numerous connections).

—In public, where it is embarrassing. (Typical equipment or process is visible to those around you) such as: in office situations; in crowds; at the market; at sporting events; while making an arrest.

—While hands are full with other items. (Typical operation requires hands).

—During combat (typical equipment requires relaxed conditions).

One time this is inconvenient to monitor a pet is while at work.

Step 2: What groups of people exclude themselves from doing this job or would be hindered by the inconvenience? How many customers does this represent worldwide?

One group of people that excludes themselves is pet owners at work.

Step 3: Recognize whether urgency or inconveniences are constraints on identified market segments.

This likely represents a new market opportunity currently.

Boring Jobs (Performing)

Method

Step 1: Are there times when the job feels tedious?

Step 2: If the job is tedious, can other useful functions related to the job be integrated?

Step 3: What group of people is likely to struggle with this job due to its tedium? How many customers does this represent worldwide?

Step 4: Determine whether boredom presents a constraint on recognized market segments.

Explanation

The job is extremely monotonous[23]. The human intellect requires constant stimulation to remain satisfied. Many jobs are automated to such an extent that they lack challenge. In certain circumstances, this can pose risks. When machine operators have nothing to do, it is easy to get distracted by other thoughts. This is especially true for those responsible for operating vehicles or managing large industrial processes. This generally relates to providing engaging features.

Allergies and Phobias (Performing)

Method

Step 1: Are there individuals with allergies or phobias related to the job?

Step 2: Which groups of people might struggle with this job due to allergies or phobias? How many customers does this affect worldwide?

Explanation

This issue requires minimal explanation, as most individuals have either an allergy or a phobia. This can hinder some consumers from fully engaging in a desirable job.

Avoidant Behaviors (Performing)

Method

Step 1: Are there individuals who avoid the task, even though they know they must complete it?

Step 2: Identify the language they use to describe the task.

Step 3: Observe the workarounds that people employ.

Step 4: Which group of individuals might struggle with this task due to avoidant behaviors? How many customers does this represent globally?

Explanation

Avoidant behaviors are primarily related to thoughts concerning the task that compel a person to refrain from completing it or to do it as infrequently as possible. These behaviors may overlap with various other issues that hinder people from accomplishing their tasks, so we will focus here on the psychological thoughts related to tasks that we wish to undertake.

Not Personalized Enough (Performing)

Method

Step 1: Does the job need to be highly personalized for people to avoid irritation? Does the product or service assume that one size fits all?

Step 2: Identify potential consumers who would use or consume more if the product or service were more personalized. How many customers does this represent worldwide?

Step 3: Determine whether adaptability is a constraint in recognized markets.

Explanation

Many jobs are performed with a significant degree of variability in circumstances. Unfortunately, it is often uneconomical for most companies to provide a product or service that accommodates a high degree of variation. As a result, a large percentage of consumers become frustrated with the compromises they must make to accomplish the job. This variation may stem from human preferences or the different environments in which the job is carried out.

For instance, running shoes are used in a wide range of environments and must fit a diverse array of feet. This job, by its very nature, is highly variable. As a consequence, many consumers may feel dissatisfied. This is generally linked to the offerings of specific features.

Example—Running Shoes

Running shoes serve multiple functions. One function is to stabilize the feet on uncertain terrain.

Step 1: Does the job need to be highly personalized for people to avoid irritation? Does the product or service assume that one size fits all?

While there are various shoe sizes, a problem still exists. Foot shape is more variable than current running shoes can accommodate. The job of stabilizing feet is highly variable and can be very uncomfortable if done imperfectly.

Step 2: Identify potential consumers who would use or consume more if the product or service were more personalized. How many customers does this represent worldwide?

Individuals who would appreciate more personalized running shoes are those with unique foot shapes or specific stability needs. Globally, many people benefit from the one-size-fits-all approach. Unless costs can be significantly reduced, a customized approach will likely only appeal to those already located in well-developed markets and those who are dissatisfied with shoes that come in standardized sizes.

Step 3: Determine whether adaptability is a constraint in recognized market segments.

This is likely a constraint in recognized athletic shoe market segments.

Jobs Cause Human Burdens (Performing)

Method

Step 1: Experience or simulate the necessary actions to perform the job.

Step 2: Consider the mental demand required for thinking, deciding, calculating, remembering, looking, and searching. If data gathering is needed, take into account these three levels of gathering data: Ambient: Requires no special effort to collect data. Natural: Requires no special effort to interpret data. Continuous: Requires no special effort to update data.

Step 3: Consider the physical demands required for pushing, pulling, turning, controlling, and acting. Is it easy versus demanding, slow versus brisk, slack versus strenuous, restful versus laborious?

Step 4: Consider the temporal demand. This pertains to the time pressure, pace, or rate required to use the offering. Is it slow versus leisurely, or rapid versus frantic?

Step 5: Consider the effort required. How hard are individuals required to work (both mentally and physically)? This is assessed over the duration of the job rather than the mental and physical demand per operation.

Step 6: Consider the level of performance. How successful was the task or goal? How satisfied were the participants with their performance?

Step 7: Consider the level of frustration: How insecure, discouraged, irritated, stressed, and annoyed were the participants? Were they secure, gratified, content, relaxed, or complacent?

Step 8: Consider the emotional burden: Analyze the current design. Does it inspire awe? Does it raise suspicions about the product? Is it aesthetically pleasing?

Step 9: Which groups of people might avoid the job or face difficulties performing it due to the aforementioned “human factors”? How many customers does this represent worldwide?

Step 10: Acknowledge whether any of these “human burdens” serve as constraints on recognized market segments.

Explanation

If humans must be involved in the job, there should be a consistent drive to minimize their burdens. There is a discipline called “Human Factors” that aims to reduce human burdens. While we may not become experts in this field, we should strive to comprehend human burdens from the perspective of human factors. This is particularly important if there’s a requirement to operate the product or service for extended periods of time. A valuable tool for considering human factors comes from the NASA workload rating sheet, which generally relates to offering features.

Existing Offerings Uncomfortable (Performing)

Method

Step 1: Is the job typically physically, mentally, or emotionally painful?

Step 2: What groups of people will not perform this job or will delay performing this job because it is painful? How many customers does this represent worldwide?

Step 3: Recognize whether pain is a constraint on identified market segments.

Explanation

Some jobs are nearly unavoidable, yet they are so painful! Who actually wants to go to the dentist? Who wants to fix a drain under the sink? These jobs cause a lot of pain and they are easy to recognize. Unfortunately, people often delay performing these jobs until the problem worsens or resolves on its own. If a way were found to make these jobs less painful, they might be completed more frequently. This typically relates to offering additional features.

Dangerous Jobs (Performing)

Method

Step 1: Is your job dangerous?

Step 2: What groups of people exclude themselves from ever doing this job, or from doing it as often as it should be done? (They may delay it until others are compelled to do it, or until conditions become unbearable. They may postpone it until someone is hired to perform the job). How many customers does this represent worldwide?

Step 3: Would these individuals likely perform it themselves if it were no longer dangerous, or if the false perception of danger were eliminated?

Step 4: Recognize whether danger is a constraint on identified market segments.

Explanation

Most people exclude themselves from performing dangerous jobs. Typically, experts are called in to handle these tasks. The fear of performing it themselves places the provider in a strong position to command high pay for the service. If there were a safe method to complete the job, they might be willing to undertake it themselves. This generally relates to offering features.

Example—Pruning Tall Trees

Step 1: Is your job dangerous?

Pruning high limbs is indeed a dangerous job.

Step 2: What groups of people exclude themselves from ever doing this job, or from doing it as often as it should be done? (They may delay it until others are compelled to do it or until conditions become unbearable. They may postpone it until someone is hired to perform the task). How many customers does this represent worldwide?

Almost all homeowners exclude themselves from pruning high limbs.

Step 3: Would these individuals likely perform it themselves if it were no longer dangerous or if the false perception of danger were eliminated?

Many people would consider performing this job themselves if it could be done safely or without extensive planning.

Step 4: Determine whether danger is a constraint on identified market segments.

There are likely individuals who typically perform this job under hazardous conditions. It would be beneficial to reduce the danger for these individuals and also minimize product liability for businesses that facilitate risky jobs.

Jobs in Harsh Environments (Performing)

Method

Step 1: Consider performing the job or task in a challenging environment.

– Underwater (standard equipment is not waterproof)

– In an aircraft or spacecraft

– During a transportation accident

– In the wilderness

– In the desert heat

– In an explosive environment

– In a smoke-filled room

– In the dark

– In a storm

– In high winds

– In a fire

– In a high noise environment

– In remote isolation

Step 2: Which groups of people exclude themselves from doing this job or are hindered, but would likely perform it if it was no longer in a harsh environment? How many customers does this represent worldwide?

Step 3: Recognize whether harsh environments are a constraint on identified market segments.

Explanation

Similar to dangerous jobs are those performed in harsh environments. Harsh environments may also be hazardous, but the main feature is that the environment is extremely challenging in a way that makes it uncomfortable or difficult to do the job. This generally relates to offering features.

Example—Taking Pictures during Accidents

There is a crucial role for accident investigations in the insurance industry.

Step 1: Is your job or task in a challenging environment?

-Underwater (typical equipment is not waterproof)

-In an aircraft or spacecraft

-During a transportation accident

-In the wilderness

-In extreme desert heat

-In an explosive environment

-In a smoke-filled room

-In complete darkness

-In a storm

-In strong winds

-In a fire

-In a high-noise environment

-In remote isolation

Taking pictures at the scene of a car accident is often inconvenient at best and perilous at worst.

Step 2: What groups of people exclude themselves from carrying out this job or are hindered, but would likely do so if the environment were less harsh? How many potential customers does this represent worldwide?

One group that would be interested in performing this job is insurance agencies.

Step 3: Acknowledge whether harsh environments pose a constraint on recognized market segments.

This likely indicates the existence of new market opportunities.

Jobs in Interesting Environments (Performing)

Method

Step 1: Is there interest in performing the job in a new and engaging environment? Below is a partial list of appealing environments:

—In outdoor recreational settings

—During meals

—During transport or tours

—At tourist attractions

—In scenic locations

—In front of live audiences

—In the home

Step 2: What groups of people might exclude themselves from performing this job or face obstacles, but would likely do it if presented in an engaging environment? How many customers does this represent worldwide?

Step 3: Recognize whether unengaging environments are a constraint on identified market segments.

Explanation

Similar to jobs in harsh environments, there are jobs typically performed in expected settings which may be relocated to new and engaging environments. This may or may not involve harsh conditions, but the assumption is that the job performer will find the new environment interesting, relaxing, exhilarating, etc. This generally relates to offering features or business models.

Inadequate Performance (Outcomes)

Method

Step 1: Identify the main performance attribute of the product.

Step 2: Identify non-consumers or low-level consumers who would use or increase their usage if the main performance attributes were improved. How many customers does this represent worldwide?

Step 3: Determine if performance is a constraint in a recognized market.

Explanation

A sustaining market can be divided into those willing to pay a premium for higher performance (the high-end market) and those who are satisfied with lower performance and are reluctant to pay high prices for improved performance (the low-end market). Businesses find it compelling to cater to the high-end market while shedding lower-paying customers. They constantly push the performance of their products and services to satisfy high-end customers to increase margins.

Serving the high-end market may be challenging due to its high demands. Performance is often deemed insufficient, and these customers are rarely satisfied. If you are in the business of catering to high-end markets, you must accept that these customers will never fully stop expressing dissatisfaction as they will seldom be entirely satisfied. However, as long as you can stay ahead of the competition by providing superior performance, you will remain competitive.

One of the core competencies of companies serving high-end markets is their ability to address the complex issues that inevitably arise. Often, this requires integrated systems (which are costly to develop) to meet the performance requirements of the high-end market. Since providing integrated solutions is both challenging and expensive, the number of competitors in this area is usually limited. It is nearly impossible for new competitors to enter the market due to the significant costs and challenges associated with acquiring the expertise needed to integrate systems.

As a word of caution, focusing exclusively on the high-end market may eventually expose the business to disruptions from products at the low end or those that previously served other markets but now have the capability to serve the high-end market. These disruptors gradually erode the high-end market. While the incumbent product or service may offer even higher performance, it can only cater to a diminishing market of the most demanding users.

Most businesses that concentrate on the high-end market eventually adjust their values to prioritize high margins. When low-end disruptors begin to encroach on the low-end market, there is often an unwillingness to revert to lower margins, making it very challenging to defend against these low-end disruptors. This typically relates to offering features.

Job Creates Harm (Outcomes)

Method

Step 1: Identify all harmful effects that may arise from performing the job. This harm can affect the environment, the users, and bystanders. In particular, look for objects that come into contact with each other. Functions requiring contact often lead to wear.

Step 2: Do accidents frequently occur while performing the job? When accidents do happen, is it difficult to mitigate the consequences?

Step 3: It is always helpful to visit a repair facility to observe the types of repairs that are typically needed.

Step 4: What groups of people would avoid performing this job or find it distasteful due to these harmful actions? How many customers does this represent globally?

Step 5: Determine whether the occurrence of harmful actions limits recognized market segments.

Explanation

Nearly all functions generate harm. If a job comprises multiple functions, considerable harm is usually inflicted by the time the job is completed. When we develop a good machine, we inadvertently create a flawed machine as well. The flawed machine self-destructs and negatively impacts its surroundings due to the harmful functions. A prime example of a harmful function is the wear of objects within the system that are required to make contact with one another. This is generally related to the offered features.

Unpredictable or Unreliable Outcome (Outcomes)

Method

Step 1: Are current products and services unpredictable and unreliable? This can result from various factors such as poor quality, inadequate delivery, ineffective tools, or flawed processes.

Step 2: Which job executors find this role undesirable due to low predictability and reliability? How many customers does this encompass worldwide?

Step 3: Is safety compromised by the lack of predictability or reliability? Does this render the job hazardous? (If the job is hazardous, please refer to the section on dangerous jobs).

Step 4: Determine whether unpredictable or unreliable outcomes are a constraint in recognized market segments.

Explanation

If available products or services do not predictably perform the required task, this directly hinders job execution. Typically, a lack of predictability stems from product or service features. Sometimes, it arises from the chosen business model’s inadequacy. Predictability encompasses more than just reliability. Reliability indicates the frequency of failures, while a product might function correctly yet fail to deliver what the consumer expects. If a product breaks, it exacerbates the situation. This generally pertains to the features offered.

Job is Time Consuming (Outcomes)

Method

Step 1: Does it take too long for individuals to complete the job?

Step 2: Do those accompanying the job spend a significant amount of time that seems wasteful? Consider all the people affected by a job that requires an excessive amount of time to perform.

Step 3: What groups of people would avoid this job or find it undesirable due to its time consumption? How many customers does this represent worldwide?

Step 4: Determine whether a lack of time is a constraint for recognized market segments.

Explanation

When jobs are undesirable, they can never be completed quickly enough. Not only do the job performers suffer, but also those accompanying them, which may include family members, friends, sales personnel, etc. This generally relates to offering features.

Job Wastes Materials (Outcomes)

Method

Step 1: Does the job produce waste materials?

Step 2: What groups of people would avoid performing this job or would find it distasteful due to its wastefulness? How many customers does this represent worldwide?

Step 3: Determine whether job waste is a constraint on recognized market segments.

Explanation

Many jobs generate waste materials from otherwise usable base materials. Sometimes these waste materials can be reclaimed, but often it would be preferable if they were never produced in the first place. This generally relates to the features being offered.

Job Wastes Space (Outcomes)

Method

Step 1: Does performing the job occupy a lot of space? Is the space used typically expensive?

Step 2: Which groups of people would not perform this job or would find it unappealing due to its time-consuming nature? How many customers does this represent worldwide?

Step 3: Identify whether the lack of space poses a constraint on recognized market segments.

Explanation

Some jobs, by their nature, require a significant amount of space. This is particularly problematic if the space is costly to begin with. This usually relates to the provision of features.

Job Wastes Energy (Outcomes)

Method

Step 1: Does the job typically require a significant amount of costly energy?

Step 2: How much energy is ideally needed to perform the job? Identify the minimum amount of energy necessary for the task.

Step 3: Which groups of people would refuse to perform this job or find it distasteful due to its energy consumption or waste? How many customers does this represent globally?

Step 4: Determine whether the waste or use of energy is a constraint on recognized market segments.

Explanation

Most jobs can be executed using a fraction of the energy currently consumed. This is particularly significant to individuals if energy costs are high. Heating and cooling a home is an expensive task, primarily due to the Energy costs. This typically relates to the features provided.

Job Wastes Money (Outcomes)

Method

Step 1: Does the job often require repetition? Is it easy to perform the job incorrectly? Must it be done precisely? Does it require a lot of practice before it can be executed correctly?

Step 2: Do most people feel that some aspect of the job is not worth the cost incurred? Do they feel obligated to spend the money in order to carry out the part of the job they prefer?

Step 3: What groups of people would refuse to perform this job or find it distasteful because it wastes money? How many customers does this represent worldwide?

Step 4: Identify whether financial waste is a limitation on recognized market segments.

Explanation

A job that needs to be performed multiple times wastes money. A job wastes money when some aspect does not provide the expected benefit for which payment was made. A job that oversaturates some aspect and then incurs additional costs wastes money. This typically pertains to offering features or business models.

Equipment Hard to Maintain (Post Job)

Method

Step 1: If issues arise, is the equipment challenging to troubleshoot?

Step 2: Are there features of the equipment that are difficult to maintain or service?

Step 3: If failures happen, are they hard to clean up?

Step 4: Is the equipment prone to fail before the customer is expecting it?

Explanation

Few jobs occur without problems, messes, and accidents. Knowing the potential accidents that could happen may easily dissuade a potential customer, particularly if there is a risk associated with the incident.

Equipment Hard to Stow (Post Job)

Method

Step 1: Is the necessary equipment or materials difficult to store for future use?

Explanation

Some equipment and materials are so challenging to store that it may deter a potential customer from considering the job.

Equipment Hard to Decomission (Post Job)

Method

Step 1: Is the equipment difficult to dismantle?

Step 2: Is the equipment difficult to recycle?

Step 3: Is the equipment difficult to dispose of?

Explanation

The time comes for all things to be decommissioned. Certain equipment is particularly challenging to decommission due to size, material weight, dangers associated with handling materials, etc.

Hampered Business Customers (Customers)

Method

Step 1: Map out the entire value chain and identify who adds value and what they receive for that value. Be sure to include: the end customer, distributors, original equipment manufacturers (OEMs), and any third party that sets requirements for the product or service. It is essential to include the party that makes the purchasing decision for the end user. For consumer products frequently given as gifts, it is crucial to satisfy the needs of both the end user and the person who purchases the gift.

Step 2: Which part of the value chain is the most poorly served?

Step 3: Profit is generated for the customer through increased revenue, reduced manufacturing costs, and lower costs to serve. The primary metric for the B2B customer is profit. What factors hinder profit for the most poorly served customer? How do the product features translate into profit?

Step 4: Determine if an underserved member of the value chain constitutes a constraint on recognized market segments.

Explanation

This represents a specific case of the prior case, “Supporting Jobs are Hampered.”

Business-to-business customers, who act as intermediaries between your company and the end user, may face challenges in fulfilling the end customer’s needs. It is vital to have a clear understanding of the obstacles that impede customers between your business and the end user. The ultimate success of the product largely depends on the ability to meet the needs of the end consumer, but it is also important to support all parties in the value chain.

Note that this market segment may require a change in the business model to accommodate customers, which can be highly disruptive to businesses. This relates to product features and business models.

Customer Modifications (Customers)

Method

Step 1: Which customers use your product in the most unusual ways?[24]

Step 2: Who spends at least 50% of the cost of your product to make it useful for them?[25]

Step 3: What are some examples of ad hoc modifications that customers have made to your product?[26]

Step 4: What problem are they trying to overcome with their modifications?

Step 5: Which groups of people would be most interested in these modifications? How many customers does this represent worldwide?

Explanation

To use your product for its intended purpose, the user may first need to modify it so that it works better for them. These individuals may be on the fringes and difficult to detect. If you’re fortunate, they may share their modifications with you. This generally relates to offering features.

That Oppose the Job (Customers)

Method

Step 1: Is your product or service controversial?

Step 2: What undesirable functions does a product provide?

Step 3: What is the anti-function?

Step 4: What group of people would desire this anti-function? How many customers does this represent worldwide?

Explanation

Among the most challenging demographics to serve are those who oppose your products. It is easy to assume that you will never reach these individuals. Consider the case of the Nintendo Wii. Those who became loyal users were often the most resistant to video games. These included parents who believed that video games were creating rifts within families. Family members were becoming increasingly isolated by their gaming habits to the extent of excluding others and hampering communication. What was needed was an offering that effectively provided the anti-function of traditional video games. Instead of isolating family members, the solution should bring them together. One way to achieve this would be through competitive or cooperative gameplay. Those familiar with the final product recognize that Nintendo succeeded in delivering the anti-job of uniting families.

It is important to note that this market segment may necessitate a fundamental shift in business model to serve customers, which can be highly disruptive for businesses. This generally relates to offering specific features.

Example—Video Games

Step 1: Is your product or service controversial?

Video games are a highly controversial product.

Step 2: What undesirable functions does a product provide?

This product provides the detrimental function of isolating individuals.

Step 3: What is the anti-function?

The anti-function is to unite people.

Step 4: What group of people would desire this anti-function? How many customers does this represent worldwide?

Parents of family members who are not engrossed in video games would seek this anti-function.

Example — Affordable Housing

Step 1: Is your product or service controversial?

Yes, it is highly controversial. People generally resist having something in their neighborhoods that they believe will diminish the value of their homes.

Step 2: What undesirable functions does a product provide?

Affordable homes can indicate to visitors or potential buyers that the neighborhood is less desirable.

Step 3: What is the anti-function?

The affordable homes could indicate to visitors or potential buyers that the neighborhood is desirable.

Step 4: What group of people would desire this anti-function? How many customers does this represent worldwide?

Developers of affordable housing would greatly benefit if this were achievable. An example of this might be “servants’ quarters.” It would imply that you were in an affluent neighborhood. They may not be referred to as servants but rather as aides, particularly for the elderly. This could evolve into a growing trend as baby boomers age. In this scenario, the most desirable neighborhoods would feature aide quarters that could accommodate a significant number of rent-burdened individuals while providing jobs. This would enhance property values.

The Industry doesn't like Serving (Customers)

Method

Step 1: Identify customers that the industry prefers not to serve.

Step 2: What job are they trying to accomplish?

Step 3: Identify the reasons why the industry chooses not to serve these customers.

Step 4: Which groups of people would not perform this job or would find it distasteful because the industry prefers not to serve them? How many potential customers does this represent worldwide?

Step 5: Determine whether difficulty in serving is a constraint on recognized market segments.

Explanation

Thus far, we have discussed specific reasons that the industry prefers not to serve. This step allows us to consider any additional reasons that the industry may find existing customers difficult to service[28]. Beyond those who are dishonest or have criminal intent, there are individuals who, for various reasons, are found distasteful by the business. Customers in this category often sense the disdain and are less likely to engage. The few who attempt to engage provide valuable insights into the existence of untapped markets.

Be aware that servicing this market segment may necessitate a change in business model, which can be quite disruptive to companies. This relates to both features and business model.

Consume in Surprising Quantities (Customers)

Method

Step 1: When unusual consumption occurs or is requested (whether you can serve them or not), seize the opportunity to ask why the amount is so large or small. You may need to train employees to flag these occurrences.

Step 2: Inquire with these customers if they have experienced any issues consuming in these quantities and where they have attempted to go before. This will provide insight into how they instinctively believed they would be best served.

Step 3: Observe any differences between these customers and typical customers.

Step 4: Identify the job, circumstances, and challenges in consuming these quantities.

Step 5: Do these customers represent new or existing market segments? How many customers does this encompass worldwide?

Explanation

Periodically, a customer will emerge that consumes the product or service at high rates or volumes[30]. These opportunities can arise and fade quickly, and the reason for the unexpected consumption may vanish. Don’t hesitate to ask what is happening. They are typically willing to share.

It is important to note that this market segment may necessitate a change in the business model to serve customers, which can be very disruptive for businesses. This is related to the Business Model.

Using Uncommon Channels (Customers)

Method

Step 1: Which customers purchase your product in the most unusual ways?[31]

Step 2: What are the circumstances surrounding these purchases?

Step 3: Inquire why they choose to buy your product in this manner.

Step 4: Determine whether the channel acts as a constraint on recognized market segments.

Step 5: How many customers does this represent on a global scale?

Explanation

These customers are not shy about using your product in unconventional ways. It may involve more than just how they utilize the product; they may also prefer to purchase, transport, use, and store it in atypical manners. If you are lucky, you have likely encountered such cases.

Note that this market segment may necessitate a change in the business model to adequately serve customers, which can be very disruptive to businesses. This ties back to the Business Model.

Constantly Changing Needs (Customers)

Method

Step 1: Which customers’ needs are shifting most rapidly?

Step 2: What job are they trying to accomplish?

Step 3: Are these needs for adaptability the same across different customers within this group?

Step 4: Predict what the customer needs will be in five years.

Step 5: What are the circumstances for these groups?

Step 6: What groups of people would not perform this job or would find it distasteful due to frequently changing needs? How many customers does this represent worldwide?

Step 7: Determine whether constantly changing needs pose a constraint on recognized market segments.

Explanation

Sometimes products and services are not adaptable to different conditions of use[27]. It is possible to discern when customers are consistently requesting changes to the products to meet their evolving needs. Changes can arise for various reasons, such as organizational growth or shifts in their customers. Since making products more adaptable is generally not a challenging task, it makes sense to identify this group as a target market.

Note that this market segment may require a change in business model to serve customers, which can be very disruptive to businesses. This relates to Features and Business Models.

Desires Path-of-Least-Resistance (Customers)

Method

Step 1: Does it always seem like some customers are just looking for the path of least resistance?

Step 2: Are they willing to pay whatever is necessary to get the job done, as long as it is not excessively high?

Explanation

This type of customer is typically challenging to serve, but often quite profitable. For example, last-minute Christmas shoppers are simply trying to complete their tasks, regardless of cost.

Needs Excessive Service or Support (Customers)

Method

Step 1: Identify customers who require significantly more service or support attention than others. The associated costs for support or service can be very high.

Step 2: Consider: –Order entry–Tracking–Transportation of the product–Modification of the product or service–Assistance in making the product work properly–Servicing or repairing failed products.

Step 3: What task are they trying to accomplish?

Step 4: What are the circumstances of the task?

Step 5: Which groups of people would be unwilling to perform this task or would find it undesirable due to their inability to receive the extensive support they desire? How many customers does this encompass worldwide?

Step 6: Determine whether the need for excessive service is a constraint on recognized market segments.

Explanation

While this group of existing customers is often satisfied with the product, they tend to demand a disproportionate amount of service and support[32]. They may struggle with using the product correctly or transporting it to their homes. Few of them attempt to consume the product because requiring excessive service can also be a hassle from their perspective. Those few who do venture out can provide valuable insight into the existence of an important market. Products and services that address their needs can create new avenues for growth.

It is important to note that this market segment may necessitate a change in business model to accommodate customers, which can be very disruptive for businesses. This concept relates to the Business Model.

(Or) Solutions in Search of Markets

Explain Solutions in Search of Markets

A Backward Approach
Historically, it has been much more common for a business to start with products or potential products before considering the market that must be served. This is backwards. These product advances occur because someone has identified a “problem” and resolved it. Many untested assumptions are made about the importance of this problem and which market this problem would be significant for.

This constitutes a product in search of a market, which is less than optimal compared to a market in search of a product; and it can be detrimental if handled incorrectly. Simply providing a new function or improving the performance of a product may solve a problem for someone, but since the features of the product and the delivery methods were never tailored to suit the specific needs of a target market, the business must learn from experience which market the product is best suited for. This market might be small or unprofitable. Even if the market existed and was large, the means of providing this offering to the market may be totally inadequate. To serve a target market in the way that it prefers, everything needs to be aligned with that market.

Whenever we use a process that is out of order, assumptions must be made. Often, we do not realize that we are making these assumptions. Rather than relying on unsupported assumptions, a good process generates information that supports the following steps. Recall, in the preceding chapters, that we started with an industry, then a job, and then potential consumers who are hindered from performing this job. In the next book, we will identify the features that enable the customer to perform the job in a way that suits them best. Finally, we will reach the step of creating the product or service that includes these features.

Working It Forward
In spite of this caution, we are going to introduce a process that deliberately creates new products and then asks which markets might be well matched for these products. Why would we do this? If we can provide a process to rectify the shortcomings of this backward approach, it gives us another avenue for discovering new markets that is quite different from the preceding chapters of this book. In doing this, we will need to navigate back and forth somewhat, but the process will ultimately lead us to a target market that we want to pursue.

There are two approaches to remedy the unsupported assumptions created by starting with a product. The first is to go back and perform the process in the correct order, understanding that the product will likely change from what was originally envisioned. This is effectively done by asking what functions the new product or discovery delivers. Once we know the functions, we ask what jobs could utilize the given functions within the industry. Remember, this is where we began, with a job inside the target industry. Now we can work forward using the processes we have already outlined to find a group of potential consumers who are hindered from performing this job. Notice that what follows will almost certainly alter the product or process from what was originally envisioned.

A second approach is similar to the first, except that it seeks to discover a market in which the strengths and weaknesses of the product are well aligned. Once this target market is identified, less drastic changes can be made to the product to fully adapt it to the target market. The procedure is to ask what functions the new product or discovery delivers. Once we know the functions, we inquire what jobs could benefit from the given functions. Next, we examine the features of the product and identify the problems in the jobs that these features address. What groups of people are hindered in performing these jobs by these problems? Next, we identify the inherent weaknesses of the product and ask which of these groups will not be hindered by these weaknesses and may, in fact, find them to be strengths. These are the potential target markets. In effect, we have identified a group of potential consumers that are matched to the strengths and weaknesses of the product or service and are hindered from performing the job.

As mentioned, this is not the preferred method of identifying markets, but it will work and will allow us to discover markets that we might not have otherwise recognized. We will consider products or services that already exist and the creation of new ones just for this exercise.

A Weakness is Left
The weakness of this approach is that while we may identify customers who are uniquely matched to the product or service, this market may not already be hindered or blocked from performing the job. In other words, the market may or may not be a growth market.

Licensing
Some individuals enter this step with the intention of licensing a particular offering in a market different from the one it was originally designed for. While it is possible to do this, certain difficulties must be addressed. The first difficulty is how long windows of opportunity remain open. At the time you identify a new market for your product or service, the market may be ready for your offering. Unfortunately, no business may currently acknowledge that this underserved market exists. After all, you were the one who conducted the study, not them. Moreover, if they ever did care, that window of opportunity is likely to be closed now.

There are two basic routes to follow if you want to license your offering. First, look for windows of opportunity that are open for an extended period, or be prepared to sell the market rather than the offering itself. You can tell an area where the window is open by observing a great deal of recent research in that area. Research indicates that the window is still open.

The second approach of selling the market means that you need to share your enthusiasm for a particular market with a potential licensee to persuade them to want the product. They need to understand and trust that this is a growth market, and you have already done all the groundwork, including the market studies.

Exploiting Existing Products or Services
Sometimes, businesses develop products or processes as they strive to bring an offering to market. These special products or processes might, themselves, be marketable. This section is devoted to finding markets for products or services that already exist.

We begin with existing products or services for which we want to find new markets. It is only natural for a business to want to maximize its investments. For instance, a company may have invested a significant amount of money in a particular venture and then found that it could not pursue the market. The company now possesses technology assets that remain unused. This presents an opportunity to pursue other markets and capture the investment potential that was missed.

Discoveries
Discoveries are the most common inventions that people consider to be new products and services. It is only logical to think about who else might want the benefits that a solution or new technology could provide.

Deliberate Attempts to Create Unusual Products with Useful Capabilities
Most of the products we have considered so far were already created within the business or in response to personal experiences. In this step, we will deliberately attempt to create new products or services that are unusual in some way. We will later consider who might find these products or services to be useful. Note that most of these tools are identified as ASIT[33] tools. In ASIT, the step of asking who would want the product is usually taken at the time of creation. We have moved this determination to a later step.

The Crucial Step: Identifying Potential Markets for our Products
By this point, we have a product or service that we believe might provide a business opportunity. What makes a product particularly well-suited to a certain market is how the product’s inherent characteristics (be they strengths or weaknesses) become strengths in that market.

Exploiting Existing Business Breakthroughs

Method

What major breakthroughs in efficiency or effectiveness have we achieved in our business that could be applied in other industries[34]?

Explanation

To effectively run a business, we make process discoveries that enhance our operations. When evaluating the core business processes, we started by identifying the types of problems that were frequently addressed.

These solutions ultimately evolve into core processes. In most businesses, core processes are often taken for granted. It’s the water we swim in—“This is how we do business.” An outsider may recognize these strengths. Unbeknownst to us, these processes can grow into significant business opportunities. Here, we explore marketing the processes that contribute to our business success, which involves leveraging existing offerings.

Example—Appliance Warehousing

Appliance warehouses stock thousands of parts for service repairmen and do-it-yourselfers. Inventory often represents opportunity costs for many companies. To sustain operations and achieve healthy margins, an appliance warehouse must maximize inventory turnover. Since this is the core focus of these warehouses, some practices may have been developed that could assist other businesses.

What major breakthroughs in efficiency or effectiveness have we achieved in our business that could be applied in other industries[35]?

A significant breakthrough in the appliance warehousing sector is an inventory management system designed for optimal inventory turnover.

Exploiting Existing Business Information

Method

What information about customers and product use is generated as a by-product of our business that could be key to significantly enhancing the economics of another business[36]?

Explanation

Similar to the processes that have become central to our business, data is also produced that may prove valuable for other businesses. Here, we will explore the option of marketing proprietary data to other enterprises.

Example—Travel Accommodations

Travel agencies compile extensive geographical and demographic databases to cater to their travel clients.

What information about customers and product use is generated as a by-product of our business that could be key to significantly enhancing the economics of another business[37]?

The geographical and demographic databases might represent a valuable product that other businesses would find appealing.

Exploiting Existing Offerings that Do Unique Jobs

Method

What unique jobs does your company help your customers accomplish?

Explanation

Businesses may provide more value than they realize to their customers. In the process of delivering their main products or services, they may assist their customers in performing additional related tasks. Here, we identify those unique jobs as a service to customers that we might market.

Example—Appliance Warehousing

As mentioned, appliance warehouses stock appliance parts for repair technicians and do-it-yourselfers. Usually, it is not sufficient to simply help the customer procure a part. The customer is attempting to repair an appliance. This is the overall job. What they hire the appliance warehouse to do is to supply the necessary appliance parts. It is nearly impossible to solely supply parts. Often, it is essential to assist people in understanding how to install the parts or to research alternative options.

What unique jobs does your company help your customers accomplish?

A unique job is to assist customers in removing and installing parts.

Exploiting Existing and Unique Technologies

Method

Identify the functions that your product or service provides, along with the challenging circumstances under which these functions are performed. Reviewing company patents may be helpful if you are unfamiliar with the technologies used in the business.

Explanation

A technology is defined here as the capability to perform a function under specific circumstances. For example, telling time at great ocean depths. To accomplish tasks in certain environments, it may be essential to use specialized technologies. The seals on these watches could be unique. Adjacent markets may also have an interest in these products. Such technologies are often documented in patents owned by the company.

Example—Sealing Electronics at High Water Pressures

Your business produces underwater equipment that must function at substantial depths. Water often manages to seep through seals under these intense underwater pressures. Here, there could be an opportunity in adjacent markets.

Identify the functions that your product or service provides along with the difficult circumstances under which these functions are performed. Reviewing company patents may be beneficial if you are not familiar with the technologies of the business.

The function provided by the technology is to prevent water from reaching electronic components. The challenging circumstances entail performing this function under high hydrostatic pressures.

Exploiting Serendipitous Discoveries

Explanation

A substance or physical phenomenon has developed unusual properties. The effect was unexpected. This discovery may have been made by you or others within your company. Rather than dismissing this finding as a curiosity, it may be possible to leverage it.

Example—Low-Stick Adhesive

A newly discovered adhesive has low adhesion properties. This is a product that others may find beneficial.

Exploiting User Innovations

Explanation

This scenario is one of the most common in creating products and subsequently searching for markets. It begins with a problem, often related to personal circumstances, for which you have discovered a solution. This phenomenon is commonly known as “user innovation.” User innovations arise when there is a personal need alongside the resources to create the invention. Numerous examples of user innovations exist globally. In various industries, user innovations account for a significant portion of all innovations. For instance, among surgeons and skateboarders, most innovations are conceived by users. For user innovations to occur, two conditions must be fulfilled. First, the user must perceive that the existing options are insufficient. Second, the user must have adequate resources to implement the necessary changes.

Example—Car Maintenance

You have discovered a fuel additive that extends the time between oil changes, which are typically 3,000 miles apart. This service or product represents a new offering that others may find desirable.

ASIT Sacrifice Tool

Method

Step 1: Choose a product or process.

Step 2: Break down the product (or process) into individual components and list them in order of importance.

Step 3: Select one of these components (preferably one of the more important ones) and remove it.

Step 4: Under what circumstances is the missing component unnecessary? When do items that typically rely on the missing component no longer require its function? Provide a brief description of the product.

Step 5: When is it appropriate to suggest that the missing component is present? Provide a brief description of the product.

Explanation

The sacrifice tool creates an unconventional product or process by eliminating one of its essential elements.

Example—Lock

Step 1: Choose a product or process.

A lock has been selected.

Step 2: Break down the product (or process) into individual components and list them in order of importance.

The components are clasp, keys, and body.

Step 3: Pick one of these parts (preferably one of the more significant ones) and eliminate it.

What remains is our product. Remove the keys. Now you have a lock without keys.

Step 4: Under what circumstances is the missing part unnecessary? When do objects that are typically served by the missing object not require the service? Provide a brief description of the product.

It is essential when joining objects that should never be separated. The product is a permanent lock.

Step 6: When is it appropriate to make it seem like the missing part exists? Provide a brief description of the product.

When we want to deceive people into believing that something is locked when, in fact, it is not locked, such as during emergencies requiring quick access. The product is a fake lock.

ASIT Parasite Tool

Method

Step 1: Choose a product or process.

Step 2: Break down the product or process into individual components and list them by importance.

Step 3: Select one of the components (preferably one of the more important ones) and eliminate it.

Step 4: Identify objects in the environment that share similarities with the chosen object.

Step 5: One of these objects takes over the function of the missing component. This becomes the new product.

Step 6: Look for natural synergies among the remaining components.

Explanation

The ASIT Parasite Tool aims to create an innovative product or process by combining related objects in ways that eliminate most of one of the objects. The element that is transferred is regarded as parasitic to the new element.

Example—Spork

Step 1: Choose a product or process.

A fork is selected.

Step 2: Break down the product or process into individual components and list them by importance.

The tines are more significant than the handle.

Step 3: Select one of the parts (preferably one of the more significant ones) and remove it.

The handle has been selected.

Step 4: Find objects in the environment that resemble the chosen object.

A spoon is an example of an object in the environment that bears similarities.

Step 5: One of these objects assumes the function of the missing part. This is the new product.

The new product is a spoon with a fork attachment.

Step 6: Look for natural synergies among the remaining components.

ASIT Unification Tool

Method

Step 1: Select a product or process.

Step 2: What tasks is this product used for?

Step 3: List other items associated with the task. Take special note of items with similar functions (that operate on the same objects).

Step 4: The new “To Be Product” takes over all or part of the object’s functions. This is not merely a combination of products. Look for effective “convergence.” One of the two original products should be “invisible.” There should be no compromise in the original functions. Identify the resulting object as the new product.

Explanation

The ASIT Unification Tool seeks to fully transfer the function of one object to another object related to the same task. This tool sometimes leads to products that can be derived from the ASIT Parasite Tool.

Example—Rake/Hoe

Step 1: Select a product or process.

A rake is chosen.

Step 2: What tasks is this product used for?

A rake is used for gathering debris and moving soil.

Step 3: List other objects related to the job. Take special note of objects with similar functions (that operate on the same items).

A hoe is selected.

Step 4: The new “To Be Product” assumes all or part of the functions of the original objects. This is not merely a combination of products; look for effective “convergence.” One of the two original products should be rendered “invisible.” There must be no compromise in the original functions. Define the resulting object as the new product.

A small plate is added to the tines, creating a rake-hoe.

Unifying Competing Objects

Method

Step 1: Choose a product.

Step 2: Identify the job that the product performs.

Step 3: Identify other objects or processes that aim to provide the same job or functions. These objects may not be immediately obvious. These are the competing systems (the true competition).

Step 4: Combine the objects. The “To Be Product” takes over all or part of these objects’ functions. Identify synergies.

Explanation

Combining competing objects is a specific case of unification. In this context, we are not focusing on objects in the immediate job environment, but rather on combining products or processes that typically compete for this job. A competing object is one that someone would use if they were not using our product.

Example—PDA

Step 1: Choose a product.

A PDA is selected.

Step 2: Identify the job that the product performs.

A PDA organizes information.

Step 3: Identify other objects or processes that aim to fulfill the same roles or functions. These objects may not be easily recognizable. These represent the competing systems (the real competition).

Photo albums compete to organize information effectively.

Step 4: Combine the objects. The “To Be Product” assumes all or part of these objects’ functions. Identify synergies.

The PDA organizes images of business contacts and may also have a camera feature. (Sorry this is so dated).

Combine with the Anti-Function

Method

Step 1: Identify a product.

Step 2: Identify its function.

Step 3: Identify the anti-function.

Step 4: The baseline object takes on the anti-function. This is the virtual product.

Explanation

Absorbing the anti-function is another unique case of unification. However, rather than unifying with objects in the environment or competing objects, we unify with objects that possess the anti-function. This aligns with the natural evolution of systems. They ultimately absorb the anti-function. For example, a pencil has an eraser. Sewing machines are sometimes equipped with devices to cut fabric.

Example—Electrical Wall Socket

Step 1: Identify a product.

In this case, an electrical wall socket is selected.

Step 2: Identify its function.

The wall socket holds electrical plugs and conducts electricity.

Step 3: Identify the Anti-function.

The anti-function would be to disengage a plug.

Step 4: The baseline object takes over the anti-function. This is the virtual product.

The electrical socket prevents objects from entering unless both prongs are engaged.

ASIT Multiplicaion Tool

Method

Step 1: Pick a product.

Step 2: Make a list of the parts of the product or process and rank them by importance.

Step 3: Choose one of the parts from the list and add a second part that is somehow different from the first. This is the “Virtual Product.”

Step 4: Consider different configurations, such as allowing the two parts to manifest themselves at different times or in quantities greater than two. Think about how the parts can interact and how they can differ in significant ways.

Step 5: Identify the new product.

Explanation

The ASIT multiplication tool aims to create a new product by multiplying one part of the given product or service and then altering one of the multiplied elements in a way that enhances functionality or adds a new capability to the offering.

Example—Pencil Sharpener

Step 1: Pick a product.

A pencil sharpener has been selected.

Step 2: Make a list of the parts of the product or process and rank them by importance.

The parts include the sharpening mechanism, waste bin, and motor.

Step 3: Choose one of the parts from the list and add a second part that is somehow different from the first. This is the “Virtual Product.”

A second sharpening mechanism has been added.

Step 4: Consider various configurations, such as having the two parts manifest at different times or in multiples greater than two. Think about making the parts interact and ensure they differ in a significant way.

The two holes vary in size.

Step 5: Identify the new product.

ASIT Division Tool

Explanation

The ASIT Division Tool is designed to create a new product by separating a part of an object from the remainder of that object. This separation may grant the new product enhanced capabilities and functionality.

Method

Step 1: Choose a product.

Step 2: Compile a list of the components of the product or process, ranking them by significance.

Step 3: Select one of the components and detach it from the others, enabling a new arrangement. This becomes the “Virtual Product.”

Step 4: Explore various versions of the virtual product.

Step 5: Examine different configurations or scenarios in which the extracted component may be recombined.

Step 6: Consider ways in which the extracted component can exist independently from the main components.

Step 7: Reflect on recombining with the main components, but allow the extracted component to remain distinct. Combine only when necessary.

Step 8: Identify the new product or process.

Example—Segmented Book

Step 1: Choose a product.

A book is selected.

Step 2: Compile a list of the components of the product or process, ranking them by significance.

The components, ranked by importance, are: Words, illustrations, pages, and cover.

Step 3: Pick one of the parts and separate it from the others, allowing for a new organization. This is the “Virtual Product.”

Move the illustrations and text.

Step 4: Consider different versions of the virtual product.

Step 5: Think about different configurations or locations where the extracted part may be recombined.

Step 6: Consider ways that the extracted part may exist separately from the main components.

Step 7: Consider recombining with the main components but ensuring the extracted part is distinct. Combine only when necessary.

Step 8: Identify the new product or process.

The illustrations and text are stored in a database, allowing them to be used by several other books.

ASIT Breaking Symmetry Tool

Method

Step 1: Select a product.

Step 2: List the main characteristics

Step 3: Consider the following methods for creating a non-symmetric part. (This is akin to various approaches for resolving contradictions.)

– Spatial Dimensions

– Temporal Dimensions

– User Dimensions

– Environmental Dimensions

– Group Dimensions

– Characteristic Dimensions

Select one of the main characteristics and allow it to vary in one of the dimensions. This is the “Virtual product”.

Explanation

The ASIT Breaking Symmetry Tool aims to create a new, useful product by making some feature of the product asymmetric. Essentially, an attribute of the offering is distributed in time or space. This generates new capabilities in the offering.

Example—Pole Vaulting

Step 1: Choose a product.

A pole vault is selected.

Step 2: Make a list of the main characteristics

The list includes: length, flexibility, and balance.

Step 3: Consider the following ways in which we can make a component non-symmetric. (This is similar to different methods of resolving contradictions.)

– Space Dimensions

– Time Dimensions

– User Dimensions

– Environmental Dimensions

– Group Dimensions

– Characteristic Dimensions

Select one of the main characteristics and allow it to vary in one of the dimensions. This will become the “Virtual product.”

The pole’s flexibility will vary along its length.

Identify Potentially Grateful Market Segments

Method

Step 1: What generalized functions can the technology perform? Conduct Boolean searches. Draw a function diagram.

Step 2: What conditions could normally hinder the function being performed? What strengths is this technology known for?

Step 3: What objects (the functional products in the diagram) require these modifications under these conditions? State this in general terms and brainstorm potential objects. Consider using a Boolean search to identify specific objects.

Step 4: What weaknesses is this technology known to have?

Step 5: Under what circumstances would these weaknesses be considered strengths or not disrupt the function?

Step 6: What jobs require modifications of the objects in step 3; necessitate similar strengths, and leverage the inherent weaknesses? Use a Boolean search to uncover job types requiring these functions.

Step 7: Summarize potential market segments. Identify the job they are performing and the challenges they face. Provide examples of groups that fit this market segment.

Explanation

At this stage, we have technologies seeking markets: we have placed the cart before the horse and need to rectify this situation. First, we concentrate on the technology that the product or service provides. Recall that we defined technology as a function that our products or services offer under specific demanding conditions. Let’s work backward through an example to clarify our point. We begin with functions that the product or process currently performs. The product or process is used to modify or control something. Next, we identify the unique characteristics of the offering. These unique attributes will help us clarify the specific circumstances under which someone might wish to utilize the function. Once we identify these unique circumstances, we can pinpoint the objects being modified in the function that require special handling. Now we comprehend the modifications needed and the objects that require these specific adjustments. Identifying the jobs necessitating the object and the modifications becomes more straightforward. Once we know the jobs, we attempt to identify the obstacles faced in performing these jobs and the broader group of people who share this challenge.

Example—Limited Movement Fluid Seal

This technology consists of alternating layers of elastomer sheets and metal plates that enable movement of mechanical elements within fluids. Each plate-elastomer combination allows a small degree of movement. When multiple alternating layers are adhered together, significant movement becomes possible. This exemplifies the separation principle, illustrating the “separation between the parts and the whole.” The structure must accommodate both minimal and maximal movement. Furthermore, it demonstrates separation by direction; the structure is flexible only in the direction that permits the material to deform in shear. It remains very rigid in the direction of applied pressure but is flexible in rotation, making it ideal for deep-sea exploration, sealing mechanical devices required to operate outside the submersible vessel. Now, let’s explore other potential markets for this technology.

Step 1: What generalized functions can the technology perform? Conduct Boolean searches. Draw a function diagram.

One modification is the “exclusion of fluids.” This modification is executed by a flexible barrier. A function diagram is illustrated to the right, showing the fluid as the outcome of the function.

A second function is to serve as a flexible coupling between rotating components. To conserve space, we will focus on the latter function.

Step 2: What conditions could normally hinder the function being performed? What strengths is this technology known for?

The conditions that would typically hinder functionality include fluids that aggressively penetrate flexible barriers. This can occur by pushing through, eating through, or weeping through the barrier, especially when small amounts of fluids can damage the objects being protected.

Concerning strengths, this technology is renowned for the complete exclusion of all fluids under extreme conditions of pressure, erosion, and corrosion. It is also recognized for its foolproof exclusion of fluids, even in cases where small amounts could cause significant damage.

Step 3: What objects (the functional products in the diagram) require these modifications under these conditions? State it in a generalized form, and then brainstorm possible objects. Consider using a Boolean search to identify specific objects.

A Boolean Google search was conducted using the terms “harmful fluids” and “harmful gases.” The resulting generalized statement is “fluids that have harmful properties,” which includes:

#1 High-velocity fluids carrying erosive particles

#2 Fluids containing germs or viruses

#3 High-pressure fluids

#4 Corrosive fluids

#5 Poisonous fluids

#6 Rarefied fluids, including vacuums

#7 Radioactive fluids

#8 High-temperature fluids

Step 4: What weaknesses is this technology known for?

This technology is recognized for its resistance to movement caused by elastomeric layers. These elastomeric layers create an effective spring and damper (resistance to rapid movement). This means that some force must be present to overcome this resistance to movement. It is also known for the high costs associated with forming multiple elastic and metallic layers.

Step 5: Under what conditions could these weaknesses be strengths or not disrupt the function?

The conditions would be in high-cost operations where movement can be slow and geared down to allow for low power consumption. This weakness would be considered a strength if the movement could always be restored to a null condition (the zero-preload condition of the spring). This would naturally be built into the seal, as it has a natural position to which it always returns following any movement away from this null position.

Step 6: What jobs require modifying the objects in step 3; require the same strengths and make use of the inherent weaknesses? Use a Boolean search to discover the types of jobs that require the given function.

Exclusion of high-velocity fluids carrying erosive particles where movement is limited. Google search: (stop OR constrain OR control OR limit OR protect) AND (“erosive fluids” OR “erosive particles” OR “erosive gases”).

Exclusion of fluids containing germs or viruses where movement is limited. Google search: (stop OR constrain OR control OR limit OR protect) AND (“contaminated fluids” OR “contaminated gases”). Note: It was challenging to express germ or virus-laden gases.

Exclusion of high-pressure fluids where movement is limited. Google search: (stop OR constrain OR control OR limit OR protect) AND (“high pressure”). Note: High pressure was used because pressure is primarily associated with fluids.

Exclusion of corrosive fluids where movement is limited. (stop OR constrain OR control OR limit OR protect) AND (“corrosive fluids”).

Exclusion of poisonous fluids where movement is limited ((stop OR constrain OR control OR limit OR protect) AND (“poisonous fluid”)). Note: There are very few findings, leading to the belief that these market segments are quite limited.

Exclusion of rarefied fluids, including vacuums, where movement is limited. (stop OR constrain OR control OR limit OR protect) AND (rarefied OR vacuum).

Exclusion of radioactive fluids where movement is limited. (stop OR constrain OR control OR limit OR protect) AND (“radioactive fluid”).

Exclusion of high-temperature fluids (to humans) where movement is limited. (stop OR constrain OR control OR limit OR protect) AND (“hot liquid” OR “hot gas” OR “hot fluid”). Note: I concluded that this method of controlling harmful fluids did not warrant this means unless the fluid was extremely harmful. High-temperature fluids did not appear to meet this criterion unless the fluid was exceptionally hot; in which case, the elastomeric layers would have to be replaced by flexible high-temperature structures.

This search occurred over the course of two mornings. Each of the categories of jobs below was gradually added. The number of jobs that could utilize this technology was quite large, revealing an industry around modular components that protect against harmful fluids. Following are the general categories of jobs that required the function and utilized both the strengths and weaknesses of this technology.

Protection of objects in the external environment using flexible tubes or couplers. In other words, harmful fluids can be transported through structures utilizing the given technology.

Protection of objects inside tubes, particularly at great fluid depths. This is similar to the initial application in deep-sea exploration.

Protection of valve components controlling harmful fluids. Valves that must rotate closure members exposed to harmful fluids require seals and bearings capable of excluding these fluids near the axis of rotation. This technology is ideal for valve seals.

Protection of filtering equipment that operates with harmful fluids. This would only be useful if there are active elements in the filter.

Protection of people or the environment behind protective enclosures that must allow manipulation of objects inside the enclosures. This is akin to the gloves used in biological labs where dangerous diseases are studied.

Protection of blowout preventers. Similar to valves, this technology can be employed to protect components that must move relative to each other.

Direct control of dangerous fluids with “pinch valves.” These valves effectively reduce the diameter of a flow passage by constricting the fluid.

Protection of sensors that require small movement in contact with fluids. For example, sensors that change dimension due to heating or cooling.

Protection of skin. This was an unexpected search result. This could encompass personal protective equipment such as gloves, etc.

Reduce the loss of fluids to vacuums, such as space or vacuum furnaces. While we have primarily focused on harmful fluids, in this case, we may not want to lose very useful fluids or desire to avoid contaminating a vacuum space.

Protection of switches with limited movement, which must operate in contact with harmful fluids.

Protection of rotating couplings. Typically, rubber boots are used for these applications. Our technology might be applied in conditions of high erosion or corrosion, which would preclude the typical rubber boots from functioning.

Static sealing of all fluids where coupled parts have slight movement or misalignment.

Protection from dispensed harmful fluids, such as fuels or other very toxic chemicals. Some propulsion fuels are extremely hazardous.

Protection of life from harmful fluids within constrained spaces. Constrained spaces can be perilous if even small amounts of dangerous gases are present. Equipment utilizing harmful gases must not permit leakage into these environments.

Controlled injection of radioactive fluids into tissues. Certain medical procedures require the precise application of dangerous radioactive fluids to deep or remote tissues. Movement of the dispensing needle to the remote location may necessitate navigating a tortuous path. This technology facilitates flexible structures that will not leak during movement along this path.

Dispensing of radioactive fluids. Dispensing usually implies that the fluid moves from a large source to the necessary location through flexible tubing. Since even small amounts of radioactive fluids can cause severe contamination, the tubing must be both flexible and impervious to leakage.

Step 7: Summarize the potential market segments. State the job that they are doing and the impediment to performing the job. Give examples of groups of people that match this market segment.

The general market segment encompasses groups of people who wish to exclude extremely harmful fluids under situations where no breach of the barrier is permitted, over extended periods. This group is generally hindered from performing this job due to a lack of structures that can exclude such fluids while remaining flexible enough to allow relative movement between elements of these systems.

Example—Fake Lock

You have created a lock that requires no key and cannot be locked. Identify potential markets for this unusual lock.

Step 1: What generalized functions can the technology perform? Execute Boolean searches. Draw a function diagram.

The following Boolean search was utilized: (Lock OR Coupler OR Clasp) AND (Misinform OR Fake OR Deceive).

Decorative locks are designed to appear authentic but allow instant access to items like dollhouses or electric train decorations. Refer to the function diagram on the right. There is no joining function mentioned because the locks may simply be glued onto the decorations. Their function is not mechanical but purely aesthetic.

Locks that must be opened swiftly in a relatively secure environment. Observe that the primary function in the function diagram on the right is to mislead individuals. It performs a weak joining function. A possible role is to deceive people into believing that something is locked when it is not.

Locks to deter individuals in areas with numerous other theft targets, such as tire locks.

Step 2: What conditions might hinder the function of this technology? What strengths is this technology known for?

The condition under which the function can be performed, which would normally hinder it, is when rapid access is required, yet the enclosure must appear to be locked. For the purpose of conserving space, only the function of joining parts of an enclosure and misleading humans will be considered for the remainder of this example.

Step 3: What objects (the functional product in the diagram) require these modifications under these conditions? State it in a generalized form and then brainstorm possible objects. Consider using a Boolean search to identify specific objects.

These objects include gates, chains, and barriers to pathways.

Step 4: What are the weaknesses that this technology is known for?

The weakness is the risk associated with having an enclosure that is not secure.

Step 5: Under what conditions would these weaknesses be strengths or not disrupt the use of the function?

The conditions where these weaknesses would be strengths are those in which it is desirable that the lock be unlockable if necessary, while still appearing to be locked and drawing no attention. If the enclosure is unlocked, there are no serious risks.

Step 6: What jobs require modifying the objects in step 3, require the same strengths, and leverage the inherent weaknesses? Use a Boolean search to discover the type of jobs that require the given function.

Jobs that occur under these circumstances include: restricting people from certain paths in public locations. This is particularly desirable on paths where rapid escape may be needed.

Step 7: Summarize the potential market segments. State the job that they are doing and the impediment to performing the job. Give examples of groups of people that match this market segment.

The groups of people include: amusement and theme parks, traffic controllers at sporting events, and personnel who direct the flow of travelers in airports.

Example—Electric Car

The new product is an all-electric car.

Step 1: What are the generalized functions that the technology can perform? Conduct Boolean searches. Draw a function diagram.

The functions include:

Transporting occupants

Impressing users

Step 2: What are the conditions under which the function can be performed that would normally hinder the function? What are the strengths that this technology is recognized for?

Conditions where transportation is hindered:

Travel is only permitted for alternative fuels

Travel occurs in close quarters with humans

Travel noise must be kept to a minimum

High acceleration at low speeds is required

Travel where frequent stops and starts are necessary

Extended travel at slow speeds is necessary

These objects include: inexperienced drivers, drivers traveling only short distances, drivers requiring many stops and starts, and those traveling in areas congested with people.

Step 4: What are the weaknesses that this technology is recognized for?

It is known for low range, heavy weight, and small occupancy volume.

Step 5: Under what conditions would these weaknesses be strengths or not disrupt the use of the function?

These characteristics are beneficial when drivers are inexperienced.

Step 6: What jobs require modifying the objects in step 3; require the same strengths and make use of the “inherent weaknesses”? Use a Boolean search to discover the types of jobs that require the given function.

Jobs that occur under these circumstances are: self-transportation of teenagers, delivering mail, and transporting commuters over short distances.

Step 7: Summarize the potential market segments? State the job that they are doing and the impediment to performing the job. Give examples of groups of people that match this market segment.

The groups of people are: Parents of teen drivers are a potential market. An electric car would make it difficult to drive too far or too fast. The number of batteries could be reduced to further decrease the range. The car could be modified to make it more appealing to teenagers. For instance, it could feature interesting horn sounds or distinctive styling.

Summarize and Group the Potential Segments

Explanation of Summarize and Group the Potential Segments

Now that we have identified several potential market segments, it is time to summarize them and group them based on shared problems and circumstances. Without grouping them, we risk pursuing niche market segments. The larger the segment, the greater the chance of success.

Summarize and group the Potential Segments

Method

Step 1: List the potential market segments and how they are hindered in performing the job.

Step 2: Group the market segments into categories with similar problems and conditions.

Explanation

Remember that markets are characterized by a group of people who are trying to get a certain job done but are hindered from performing that job under specific conditions. These potential customers may be blocked or hindered from consuming.

Example–Affordable Housing

Step 1: List the potential market segments and how they are hindered in performing the job.

Several groups have been identified:

–Developers who would like to provide affordable housing and shelters as part of their personal mission. These organizations struggle to do this on a large scale due to high development costs. They are often hampered by the steep prices of land, materials, and labor.

–Families wishing to provide independent living for relatives with limitations such as elderly parents, handicapped, or otherwise relatives wanting more autonomy. Often, these families have available land, but the high costs of adding on or creating separate housing units are prohibitive.

–Families requiring their aid to live nearby. Again, they may have land available, but the cost of housing them is quite high. Part of the salary of these individuals could come from the living accommodations. They also have immediate employment options.

–Church developers struggling to provide “Pocket Shelters” for refugees or the homeless. Sometimes these churches have available land. Additionally, churches occupy a unique position within the community that may allow them to build these shelters as part of their mission.

–Boarding or Group Houses aiming to accommodate more people at lower costs.

–Bed and Breakfast businesses seeking a quicker payback on investments. Often, these operators reside on properties that could be utilized at minimal additional cost. The entrances could be separate from the home.

–Schools and cities looking for ways to house students with low-income housing.

–Housing authorities and developers attempting to provide affordable housing for indigenous people living on reservations.

–End consumers requiring affordable housing.

Step 2: Group the market segments into categories with similar problems and conditions.

We can categorize the above customers into groups with similar business models and circumstances. Typically, these consumers will engage directly with the burdened renter/owner needing housing (the end consumer). The needs of the end consumer must be met; however, since they are blocked consumers, they will likely be grateful for what they can acquire. The four broad consumer categories below are the primary consumers to satisfy.

–Affordable Single Home Developers (–Single Family Homes –Group Homes –Boarding Homes) These are all unified by the need to construct single units subject to the same zoning and building ordinances.

–Extreme Need Unit Developers (–Emergency or transition shelters –Churches providing “Pocket Shelters” for refugees or the homeless) These are all unified by municipal ordinances addressing individuals with extreme needs. These ordinances make special provisions for religious institutions.

–Affordable Multi-Unit Developers (–Schools and cities seeking ways to house students with low-income housing –Apartment Dwellings) These are all unified by municipal ordinances governing multi-family structures.

–Homeowners (–Families requiring their aid to live nearby –Bed and Breakfast businesses) These are all unified by municipal ordinances dealing with what can and cannot be done on single-family lots, while also having the added flexibility of land that has already been acquired, thus alleviating one of the primary constraints on affordable housing.

–Indigenous Housing developers: This is a special case due to the highly flexible housing ordinances on reservations. Also, the land is relatively inexpensive, although it can be challenging to secure land allocation due to grazing agreements established long ago.

–End consumers requiring affordable housing.

What will Decision Makers Consider?

Explanation of What Will Decision Makers Consider?

The first step in discovering markets is to determine the limitations of what key decision-makers will consider. New markets come in various forms, and most businesses find it challenging to pursue certain markets, even if these markets are typically associated with the products they already sell.

We could have used this step as a filter for potential markets, but it makes more sense to know where the business will operate before we delve too far down the path of a potential market. Additionally, once we complete this step for one effort, the knowledge we gain can be applicable for several years.

One of the goals of this book is to help innovators gain more control over their innovation careers. This is more likely when we understand the forces and conflicts that drive business decisions related to product development. Many innovators do not grasp these forces and conflicts, nor do they have sufficient control to address them. This lack of understanding can lead to frustration and counterproductive behaviors. In this chapter, we explore some of these forces and conflicts.

The need to grow by discovering and exploiting new markets may seem apparent, but most large established companies struggle to spark organic growth. Like innovators, business leaders often do not understand the forces that drive and disrupt growth. Consequently, the same management practices that helped grow a business can be misapplied, hindering growth.

Just as innovators encounter many dilemmas that influence the development of a product or process, businesses and product development managers also face dilemmas. Attempts to improve one aspect of the business may have significant side effects elsewhere. We know from TRIZ that it is possible to resolve conflicts, whether they are product or business-related. However, one must be in a position to control the factors that create the conflict to resolve them.

The Resources, Processes, and Values (RPV) Theory[7] helps explain why company management acts as they do:

–Why companies have difficulty dealing with disruptive threats and ultimately cannot implement necessary changes until it is too late.

–Why innovators and inventors often find themselves swimming upstream with what they believe should be obviously great ideas.

–Why great ideas are often overlooked or stifled before they have a chance to blossom and thrive.

–Why disruptive technologies are “crammed” into markets, why they don’t work there, and are eventually abandoned.

While most business leaders recognize the need for innovation, resources are often prioritized in such a way that puts innovation on the back burner. Innovators may see this as short-sighted, but managers and leaders believe they are acting on common sense for the benefit of their company. How can this be?

Completely new businesses usually start with minimal resources, and survival is at stake. With scarce resources, the day-to-day activities of any one person can vary greatly. Leaders and managers frequently have to prioritize resources in ways that might seem chaotic to managers of large established companies.

Unlike established businesses, new businesses celebrate small sales with modest margins. An incumbent firm would not give a second glance at such small margins and volumes. There are significant reasons why ventures into new growth markets fail within large established organizations—they assume that the resources, processes, and values of a large incumbent organization can be applied to new businesses entering new markets.

Similarly, those who have successfully launched a small venture are often confused by the seemingly illogical decisions made by incumbent firms when attempting to launch products within well-established companies. Innovators are often bewildered and discouraged by decisions to delay or terminate projects before they have a chance to succeed; decisions to divert resources from promising growth products; decisions to return to “classic” products and abandon newer technologies; decisions to fund incremental innovations over transformative technologies; and decisions to revert products back to their “core competency.”

The RPV theory posits that as companies successfully address problems, they develop Values and Processes that prioritize their Resources in a way that enables them to effectively tackle similar problems in the future. Resources include skills, personnel, technologies, facilities, equipment, vendor relations, distributor relationships, cash, and intellectual property.

Processes encompass how products are developed and manufactured; how personnel are hired; how budgeting and planning are conducted; and how intellectual property will be managed. Values include acceptable margins and sales volumes, the importance of various customers, and ethics. The RPV theory further states that these resources, processes, and values define both a company’s strengths and weaknesses.

The figure below illustrates a company’s growth from infancy to incumbency. During the initial stages (startup phase), a small company must effectively tackle a different set of problems than an incumbent company (operating in the execution phase). As these problems are solved, the processes and values become “common sense.” As the small company becomes more established, the problems that must be solved change. “Standard processes” begin to replace the more chaotic methods of the early startup needed to learn what works.

As time progresses, the need for managers and leaders who are capable of solving the problems of startups is diminishing. An awkward stage ensues where early managers may seem incapable of adapting to the newer world of standardized processes and values, which are necessary for a company to become established and grow in the newly found market. An innovator can feel like a fish out of water. Therefore, we observe that over time, the resources, processes, and values change until they are vastly different from those of the small startup organization.

While innovators acknowledge their perspective, they become increasingly frustrated by the “lack of vision or enlightenment” exhibited by company leaders and managers. However, given the same set of problems to solve, an innovator might buckle under the same pressures. Managers of established companies face an overwhelming set of dilemmas when it comes to innovation:

High sales and high growth are required to satisfy investors. If a company has concentrated on the growth of existing products and markets without constantly reaching out to new markets, it finds that generating instantaneous growth from already-high sales volumes is nearly impossible. It is a deep hole to climb out of, and few companies have done so successfully.
It is easy to forget that almost all products that eventually lead to significant growth in new markets started small. In established markets, small orders lack the enthusiasm generated by the large orders of incumbent customers. Managers struggle to prioritize the limited resources necessary for the new growth product to survive. Under these conditions, decisions are often made that seem to align with the best interests of the company, their best customers, and themselves. One could argue that the company is held hostage by these legacy customers. All values, organizational structures, reporting structures, management principles, and resources are aligned to sustain them. Unfortunately, the very act of satisfying legacy customers stifles growth. Innovators, who aim to satisfy new customers, will find they cannot compete with the needs of entrenched customers. Resources will always be diverted, and little excitement will be generated by the small orders of new products.
Because established companies need high growth numbers, they will eventually initiate massive programs to launch new products into new markets. Given that they are investing substantial amounts of money, they cannot afford to be patient for long. In this climate, they tend to make assumptions about non-consumers that are often incorrect. When growth does not materialize, they cut the project and revert to their “core competency,” further entrenching themselves. Innovation suffers as it is pushed to the back seat. In this unfavorable climate, it becomes very challenging for innovators to introduce new products.
Most marketing tools are developed to understand the needs of a consuming market. Marketing tools for non-consuming markets are not well understood. For this reason, a learning approach to developing products for new markets is often more productive. This method reverses the more traditional approach, which assumes that much is known about the market. Instead, the necessary assumptions for success are articulated, and then the organization attempts to determine if these assumptions are correct. Over time, most incumbents have successfully increased margins as they pivot up-market to increasingly demanding customers who can afford higher margins to address their more pressing issues. Unfortunately, margins generally start small for new markets. This is particularly true as non-consuming markets must be educated on the advantages of these new products or services. Companies in well-established markets typically cannot reprioritize their resources and processes to accept small margins on small sales volumes.

In summary of the RPV Theory, it is a sobering note that these forces are nearly inescapable for companies in established markets.

The Motivation-Ability Framework Theory[8] helps explain how non-market factors affect a company’s ability to innovate. The theory posits that if either motivation or ability is inhibited, innovation is unlikely to thrive. Non-market forces generally aim to enhance innovation but may inadvertently have a negative impact on either motivation or ability.

In summary, when we know where the business is willing to play and the forces that drive these decisions, innovators can be more adaptive. It becomes possible to avoid markets that the business cannot or will not support.

Is the Business Willing to Expand Core Resources?
Core resources include company brands, existing customer accounts, technologies, capital assets, and human resources. These are the assets most commonly recognized during mergers and acquisitions. (Processes and values may accompany the deal, but they are not always acknowledged or valued as highly).

Understanding the dilemma that companies face as they grow is crucial. As companies mature, resources undergo phases of growth, stabilization, and retraction. During economic downturns, a company may feel compelled to reduce certain resources to survive. Conversely, in good times, the company may need to expand resources to stabilize processes or grow. Of the resources mentioned, the brand is typically the only asset not targeted for reduction. Many companies are hesitant to cut technologies, particularly when it involves reducing human resources. Therefore, most companies tend to retain key personnel during economic hardships.

Since resources transition through various phases, the timing for new ideas can be critical. Most new products or service ideas necessitate changes to resources, processes, and values. Sometimes, it is wiser to postpone an idea until the resources required to implement it become available. Innovators must remain aware of resource availability and be patient for their return. Much preparatory work can be done in the background during this waiting period.

Is the Business Willing to Expand Core Processes?
Core processes are defined as the methods employed to address the typical problems that arise, which must be resolved repeatedly. These problems usually relate to critical customer needs.

Consider a scenario where the conditions in which an industry’s products must function are exceptionally harsh. No products from any company in this sector can endure these extreme conditions for long. The entire industry suffers from perceived poor reliability among its most demanding customers. One competitor decides to become a leader in reliability. They recognize that the most discerning customers are also the highest paying. To enhance reliability, the company cultivates and develops individuals with exceptional problem-solving skills. As these problem solvers refine their skills and tools, each solution significantly boosts product reliability, allowing the company to surpass competitors in the eyes of these demanding customers. The value that this reliability offers justifies substantial price increases, leading to high margins for the company. This business becomes known for its expensive yet reliable products.

Unbeknownst to them, a culture is being established. It is based on the core processes that enable them to meet the customer’s high reliability demands and the high margins that the reliability affords. The problem-solving processes and expectation of high margins become entrenched. The problem-solving approach is a core process, while the high margin expectation is a core value.

Additionally, other core processes emerge that empower the company to effectively cater to these demanding customers. One of the most crucial is the business model that facilitates daily financial and operational interactions. Large customers or customer segments can necessitate changes to these business processes. The business model becomes molded around the preferences of major customers. Due to rigid transaction systems, any modifications to a business model are approached slowly and cautiously. Significant changes are perceived as highly disruptive.

The rigidity of the business model can frustrate innovators who view the company as inflexible regarding new market pursuits. They often overlook the dilemmas this inflexibility causes. Many innovators lack the understanding that new markets typically require innovative business models that enable the company to engage with these new customers in their preferred ways.

Although the company aspires to grow, it cannot jeopardize its business model without diverting attention from primary customers. Since new growth opportunities tend to develop gradually, immediate gains do not warrant substantial disruptions to key customers. Managers see themselves as maintaining business continuity, while innovators might regard this approach as shortsighted or unenlightened.

Innovators must recognize that these dilemmas represent challenging unresolved contradictions. Any business capable of gracefully resolving these difficult contradictions has a promising and profitable future ahead. Business models must evolve to foster growth, yet they cannot be altered to fulfill the needs of essential customers.

For those unfamiliar with contradiction resolution, please refer to TRIZ Power Tools–Resolving Problems. Strategies exist to address this significant contradiction; however, the business must acknowledge it as an important issue and allocate the necessary resources. If the business is unwilling to change core processes, the innovator should recognize this and either reconcile with the current state or devote considerable time to resolving this important business contradiction.

Is the Business Willing to Expand Core Values?
When businesses are established, the core values reflect the principles of their founders. Due to the low margins and volumes typical of startup companies, it is often necessary to endure these conditions for a while. As the business grows and processes become more efficient, margins begin to rise. The company starts to expect these higher margins, making it increasingly difficult to revert to the low margins of its formative days, which were necessary for launching new products and services. Business leaders believe they can rely on “proven” processes that resulted in the margins they have come to anticipate. Unfortunately, new markets require novel business models with their associated adjustments in interactions. Many processes must change as a new business model is developed.

Because an incumbent business has succeeded in one market, there is an assumption that resources, processes, and values might easily transition to new markets. These resources, processes, and values represent strengths in established markets but signify disabilities in emerging growth markets. This is due to the necessity of new resources, processes, and values to effectively serve these new markets.

Success in incumbent markets fosters the belief that they possess a unique advantage, and this formula will work everywhere. A culture develops, almost religiously. Altering company values is akin to converting to a new faith, particularly if these values were crucial to achieving success in established markets.

In this section, we will explore some of the most challenging values to change.

Identify Key Business Decision Makers

Method

Step 1: Identify Key Decision Makers. Sometimes, a consensus among several individuals is necessary. Ask, “Is there someone else who will need to approve this, given you are satisfied with our agreed-upon conditions for satisfaction?”

Explanation

The decision to expand into new markets or market segments is crucial, as it can significantly impact the company. It requires strong leadership to make and maintain the decision to enter new markets. Gaining commitments from individuals who merely influence decision-makers is of little value. Remember, you are embarking on a long journey that will consume valuable resources, including your time. You want the highest probability of success possible, and it is essential that key decision-makers make a firm commitment to pursue the chosen markets.

Example: Affordable Housing

I am interested in demonstrating to key decision-makers how to construct low-cost housing that meets the needs of the working poor. Currently, there is a housing crisis affecting these individuals worldwide. They often struggle to gain traction in their pursuit of economic mobility, particularly if they face language barriers, have children, live far from job opportunities, or have recently been released from prison.

In our case, there are several key decision-makers:

1. Developers: These individuals are key decision-makers, but we will consider their interests later since they are also our customers. Developers are the primary organizations that assemble affordable housing. They not only provide funding but also collaborate with architects, engineers, etc., to design a product that meets consumer needs (in our case, the working poor). They oversee the bidding process and identify investors if the developer plans to sell the dwellings or the tax credits provided by HUD. Developers utilize various business models, such as Habitat for Humanity, which has a unique model that allows for homeownership, going beyond rentals like most developers.

2. Contractors/Builders: For this example, I will focus on a new independent contractor seeking to help build affordable housing. She currently lacks additional income and must start from scratch with new equipment. As you follow through this example, you will see that I am assuming a worst-case scenario regarding this contractor’s resources and a best-case scenario regarding her willingness to serve this market.

3. Municipality Planning Department: Within any given location, there are various municipalities (state, county, city). The planning department controls zoning and determines where buildings can be situated. All building plans require approval from the relevant planning departments.

4. Municipality Building Department: Each municipality has a building department. Where the planning department’s authority ends, the building department’s begins. This department oversees building codes and similar regulations. Building plans need to be approved by the building department.

5. Municipality Health or Environmental Quality Department: If alterations to water or waste removal are needed, the health department must be involved.

6. Municipality Housing Department: This department often manages grants provided by state governments to cities to assist with rent payments for low- and very-low-income renters. HUD’s goal is to ensure that renters do not pay more than 30% of their discretionary income on housing. In other words, rents are subsidized. These arrangements can only be made in housing that meets the affordable housing qualifications established by HUD. Unfortunately, only 17% to 60% (depending on the state) of applicants can find housing that meets HUD’s criteria, leaving the vast majority on waiting lists. Municipality Housing Departments also play a crucial role in highlighting housing needs to city councils and can initiate changes to zoning and housing ordinances.

7. HUD itself may be a key decision-maker. HUD requirements must be met or exceptions granted to explore new solutions. HUD incentivizes developers to create affordable housing by offering tax credits.

8. Homeowner Associations: If the solution involves neighborhoods with HOAs, these associations add another layer of requirements.

With so many key decision-makers involved, it’s a wonder that anything gets accomplished! To streamline this discussion, we will consolidate the categories as follows:

—Contractors/Builders

—Municipalities (including all departments, HUD, and HOAs)

Is Willingness to Play Known?

Method

Step 1: Is this an established business? If so, do you already know where the business is willing to operate? If the answer is “definitely, yes” jump down to the next major heading “Identify the Industry or Brand”. (But don’t be too quick to make this judgment).

Step 2: Is this a new business? If so, it is advisable to lay out some of the ground rules for what this new business might be willing to pursue. Continue with the following decisions.

Step 3: If this is an established business but you are not familiar with their interests in pursuing new markets, then proceed with the following decisions.

Explanation

A lot of time, effort, money, and hopes are often wasted on a casual answer to this question. It is very easy to invest your heart and soul into a new product or service only to discover that you were destined for failure before you began.

The decision to swim against the business flow is a choice to confront or even change the culture of the company. Unless you are dealing with a small company, the decision to change the culture typically comes from the top. (Even if the battle is won at the top, it can take years to trickle down to the lower levels of a large company). Struggling from the bottom to change the culture of a company is an all-consuming battle that will compete for your time to create new products and services. It is challenging enough to gain acceptance for ideas that fit within the existing culture without adding a new layer of issues. It may be hard to admit that your business is not progressive enough to move into new growth areas. It may be difficult to acknowledge that you feel trapped in a company that is only willing to consider new products and services that do not expand the core resources, processes, and values of your company. Recognizing the raw truth, no matter how unpleasant, is always better than operating under false assumptions. If the truth is unacceptable, you may want to consider seeking employment elsewhere.

On the other hand, you may find that there is ample room for creativity within known markets. In the next section on discovering markets, we will see that there are many customers within the existing customer base who are not consuming. These customers are often within the scope of incumbent companies and represent significant growth opportunities. Take heart; there may still be some fun ahead.

It may be tempting to rely on the support of a few key individuals who seem to appreciate your ideas. Unfortunately, a critical mass is required to make a new product or service successful. Many “key” people must offer willing support for each phase of the development and deployment of a new product or service. Consequently, it is essential to gauge the sentiments up and down the chain of command and in the various areas where your product or service will be situated. Difficulties will arise, and support and vision are needed to navigate through each challenge. Remember that there is no guarantee that these key individuals will be around to protect your ideas, especially if the product development cycle spans several years.

The knowledge of where the business will operate will influence all subsequent ideas. Standing on firm ground can save you from a lot of frustration.

Example: Affordable Housing

Contractors / Builders: Not an established Business.

Municipality: Established but unsure where they are willing to operate.

Step 2: Is this a new business? If so, it is advisable to lay out some of the ground rules for what this new business might be willing to pursue. Continue with the following decisions.

Contractors / Builders: Since this is new, we will definitely pursue this further.

Step 3: If this is an established business but you are not familiar with their interests in pursuing new markets, then proceed with the following decisions.

Municipality: Definitely need to proceed.

(Resources) Willing to Expand the Brand?

Method

Step 1: What specific brands do you have?

Step 2: Related to each brand, what functions do your products or services provide?

Step 3: What customer jobs are these functions related to?

Step 4: What higher-level jobs are these jobs a part of?

Step 5: With these lower and higher-level jobs in mind, brainstorm to find a more general job that your brand could be associated with. This is the expanded job that new products and services can grow into.

Step 6: Are company executives willing to identify with this more expanded brand?

Step 7: Is the company willing to expand to completely unrelated jobs? If this is the case, then consider changing the brand in a way that associates it with the new job. (GE Financial Services is an example of this).

Step 8: Would the key decision-makers be willing to expand the brand, and to what level?

Explanation

A company’s brand is a reminder to consumers of what jobs they help facilitate. It is a beacon that attracts customers. This beacon is spread by word-of-mouth in almost any venue. A good brand with a good reputation is one of the most important resources that a company possesses. When asked what a business’s brand means to its customers, many people will respond by explaining the products that are associated with the business. “They (or we) make toasters, jet engines, or bridges.” Unfortunately, this does not fully encompass what a brand represents. Potential customers do not think in terms of products but rather in terms of the jobs or tasks that they are trying to get done. They perceive products and services as necessary to perform the functions of the job. When I want a bridge located in a certain place, I ask “who can provide the most resources and know-how to get this job done?” Company brands will come to mind. In this book, we will define a brand as a “representative” or “proxy” for a collection of customer jobs that the business is known for. Ask yourself, what jobs does my company help people to do? The brand is the proxy for these jobs.

Startup companies may not have had time to develop a well-known brand. On the other hand, they have more freedom in determining what they will be known for. Unfortunately, not having a brand from the outset slows down customers’ ability to come to them. The jobs that startups facilitate will establish their names and logos over time.

Incumbent companies may have an established brand that their current customers recognize and trust. Changing what a company is known for can be tricky business, especially if their brand is widely known for facilitating certain jobs. Even if the company takes on new jobs, existing customers will continue to associate the brand with the jobs they have historically been known for. Conversely, new customers will not associate them with newly unrelated jobs. Their problem is now similar to the branding issue faced by a startup company. “How can I help potential customers see our company in a new light?”

There are two approaches to changing what a company is known for. The first approach is to change the jobs that you help people do. A major change in the jobs will often necessitate a change to the brand name. This change will indicate to customers that the jobs have been greatly expanded or altered entirely. For example, GE Financial Services is a brand associating a new job with a well-known brand that was not initially recognized for financial services. Notice that “Financial Services” was added to indicate a change in jobs. This method of rebranding is becoming more common. It does not draw people to the company but rather helps people understand the new capabilities after they have somehow discovered the new brand. Once they understand the change, the new brand becomes a proxy for the new jobs.

A more gentle approach is to think in terms of expanding an existing brand. Can we create an expanded view of the jobs that the company’s products or services help people to accomplish? We do this by creating a more general view of the jobs that we already help people to do and then expand the processes and products into this new generalized space. If my company is Fram, then we are known for products such as air filters and spark plugs. More specifically, Fram is recognized for the specific jobs of changing air filters and spark plugs. A more general view is “automotive maintenance.” Were Fram to expand into rust control, this would be a natural expansion into the new space that “automotive maintenance” opens up. The good name of Fram and its high-quality filters and spark plugs would easily be associated with excellent rust inhibitors. All of these products could be found at auto parts outlets.

Expanding the brand takes a little abstraction involving the functions that your products or services provide. Functions are like mini-jobs. Many functions come together to help a job get done. Following is an approach for identifying a more general or expanded brand.

Example: Affordable Housing

Step 1: What specific brands do you have?

Contractors / Builders: the contractor has no established brand.

Municipality: no established brand.

Step 2: Related to each brand, what functions do your products or services provide?

Contractors / Builders: Builds affordable housing.

Municipality: Typical municipal services.

Step 3: What customer jobs are these functions related to?

Procuring suitable environments for residents and businesses.

Step 4: What higher-level jobs are these jobs a part of?

Establishing stable and self-sustaining communities.

Step 5: With these lower and higher-level jobs in mind, brainstorm to find a more general job that your brand could be associated with. This is the expanded job which new products and services can grow into.

Brand: Providing the dignity and grounding necessary for economic mobility.

Step 6: Are company executives willing to identify with this more expanded brand?

Contractors / Builders: Assumed yes.

Municipality: Maybe not. This relates to the issue of gentrification. Some municipalities want the tax base to expand. Being a wealthy community brings in substantial funds. Being a poor community does not improve the tax base. Over time, some communities may end up pushing out lower-paid workers due to higher rents and housing payments. Even higher real estate taxes can force many out or make it unfeasible to build.

Contractors / Builders: Not likely willing to expand to completely unrelated jobs as this would require a complete pivot for our contractor.

Municipality: Not likely.

Step 8: Would the key decision-makers be willing to expand the brand, and to what level?

Contractors / Builders: The assumption is that our contractor would be willing to create a brand that future customers would be able to remember.

Municipality: Willingness to become “poor town” is unlikely. They might be willing to become “opportunity village.”

(Resources) Willing to Expand to New Customers?

Method

Step 1: Make a list of your customers. If this list is too long, then identify a profile of your most common customers.

Step 2: Does your company have to make investments for each new customer?

Step 3: Is the timing right? Are there financial and human resources available to expand to new customers?

Step 4: Would the key decision-makers be willing to expand to new customers, and to what level?

Step 5: Is management willing to invest resources to truly understand their customers face-to-face and comprehend their environment?

Explanation

The customers represent hard-fought victories earned over many years. Startup companies may have few customers and are usually eager to expand as rapidly as possible. Established companies typically want to take on more customers, but this depends on the type of business in which they operate. In some industries, resources must be committed for each new customer. For example, customer and field representatives might be necessary at each customer site. There may be expenses associated with each representative. Therefore, any expansion of customers will require an increase in these related resources. In other words, the ability to add customers may depend on the availability of funds and sometimes on the availability of specialized talent.

Example: Affordable Housing

Step 1: Make a list of your customers. If this list is too long, then identify a profile of your most common customers.

Contractors / Builders: At this point, our contractor has no customers. The first likely customer could be a low-income resident of the reservation seeking independence while earning minimum wage.

Municipality: The municipality serves multiple customers from various economic and educational backgrounds.

Step 2: Does your company have to make investments for each new customer?

Contractors / Builders: Only an investment in machinery is required.

Municipality: Yes. To meet the needs of economically disadvantaged individuals, new investments in infrastructure may be necessary. Conversely, other service needs, such as municipal hospital costs, may be reduced.

Step 3: Is the timing right? Are there financial and human resources available to expand to new customers?

Contractors / Builders: Yes, if the expense is less than $5000.

Municipality: It is likely no, given the current economy, even if costs to the community decrease in the future.

Step 4: Would the key decision-makers be willing to expand to new customers and to what level?

Contractors / Builders: By definition, this contractor is willing and well-positioned to expand to new customers.

Municipality: Unlikely unless it addresses a significant near-term problem.

Step 5: Is management willing to invest resources to truly understand their customers face-to-face and comprehend their environment?

Contractors / Builders: This contractor is willing and well-positioned to understand them face-to-face.

Municipality: Depends on how thinly the municipality is spread.

(Resources) Willing to Expand Technologies?

Method

Step 1: Identify the functions that your products and services deliver

Step 2: Identify the conditions under which these functions are performed. The functions and conditions define the technology.

Step 3: Is your company willing to expand the technologies to perform new functions or to broaden the conditions under which these functions are performed? And to what extent?

Explanation

We will define technology as a function that our products or services provide under certain demanding conditions. Let’s work backward with an example to clarify our point. Consider a company that provides waterproof watches. The function is to inform users of the time. The demanding conditions involve operation at great depths of water. The ability to perform this function under such challenging conditions has come at a cost. To deliver functions under demanding circumstances, many issues must be resolved and lessons must be learned. This learning incurs costs, and the company may possess intellectual property that supports these technologies. Furthermore, the technologies are closely linked to the processes that created them. Modifying the technologies in any manner often necessitates further learning, along with the financial and human resources that accompany that learning.

Example: Affordable Housing

Step 1: Identify the functions that your products and services deliver

Contractors / Builders: The contractor’s service function is to build affordable shelters.

Municipality: The municipality’s function is to create and maintain a diverse community of residents and businesses.

Step 2: Identify the conditions under which these functions are performed. The functions and conditions define the technology.

Contractors / Builders: The conditions include all weather scenarios if building year-round. This may necessitate that the construction of the shelter includes protection from the elements. The urgency for such shelters is that they are needed now, but bidding may likely occur sporadically. Additionally, the effort to bid on single structures may present a significant obstacle, as the profit from each is minimal. Bids may need to encompass communities or blocks of homes.

Municipality: Typical conditions include understaffing and being under-resourced.

Step 3: Is your company willing to expand technologies to perform new functions or to broaden the conditions under which these functions are performed? And to what extent?

Contractors / Builders: It is assumed that the contractor is willing and able to adopt new technologies in inclement weather, provided the cost remains very low (<$5000) and the required skills still ensure the construction of a high-quality house.

Municipality: Unlikely unless it addresses a significant, well-known issue.

(Resources) Willing to Expand or Change the Service Model?

Method

Would the key decision-makers be willing to expand the service and delivery model, and to what extent?

Explanation

It is also possible to develop other “technologies” without creating new products. Some companies have successfully transitioned from offering new products to providing new services that enhance convenience for the customer. Other companies have introduced new delivery methods that make it more affordable and easier for the customer to access the product. The natural progression is from products to services to the delivery of those products.

Example: Affordable Housing

Would the key decision-makers be willing to expand the service and delivery model, and to what extent?

Contractors/Builders: Yes, provided that the new service model does not entail excessive costs for implementation.

Municipality: Unlikely.

(Resources) Willing to Expand Capital Assets?

Method

Is your company in a financial position to expand capital assets?

Explanation

Capital assets include factories, equipment, office space, land, etc., which the company has had to purchase over time. The ability to expand capital assets is usually a function of the company’s financial performance, which depends on timing. The appropriateness of timing depends on whether the company is in a financial position to expand.

Example: Affordable Housing

Is your company in a financial position to expand capital assets?

Contractors / Builders: Yes, as long as the cost is under $5000.

Municipality: Not likely.

(Resources) Willing to Expand Human Assets?

Method

Is your company in a financial position to expand its human resources?

Explanation

Human resources refer to employees who have acquired skills and knowledge relevant to the company’s products and processes. Human resources are increasingly seen as a company’s most valuable assets. People foster customer relationships. They are the primary holders of the company’s technologies. In summary, transforming a company’s resources is closely tied to human resources. The company may not directly own these assets as they could be consultants or temporary staff.

Example: Affordable Housing

Is your company in a financial position to expand its human resources?

Contractors / Builders: At the outset, the contractor may not have the necessary business volume to achieve this. Ultimately, it will likely be crucial to hire additional employees.

Municipality: Unlikely.

(Processes) Willing to Change Core Processes?

Method

Step 1: What are the typical problems that your company has faced and solved? What types of problems have you resolved repeatedly?

Step 2: These problems and solutions denote the company’s strengths. Using the types of problems that your company excels at resolving, what might these strengths be?

Step 3: What processes have been established around these strengths?

Step 4: It is likely that these processes have stabilized and become somewhat inflexible. Strong core processes can turn into weaknesses if they cannot adapt to new challenges or business opportunities. In what situations could the company’s strengths become weaknesses?

Step 5: Identify clear company weaknesses. In what situations are these weaknesses considered strengths?

Step 6: Is the organization willing to endure the difficulty of altering core processes?

Explanation

As mentioned, core processes are defined as the processes used to address the typical problems that arise and must be resolved repeatedly. The resulting culture becomes proficient at solving these problems, which is a core strength.

However, in identifying strengths, we also reveal significant weaknesses, as these strengths may ultimately be misapplied to inappropriate situations.

A simple example illustrates the dual nature of processes where strengths may also act as weaknesses. Consider two primitive individuals; one has become quite skilled at tool-making. He assesses every situation and extracts from the natural resources precisely those components that can be reworked into the perfect tool. This might take a week or so, but when he is finished, the tool works flawlessly, and the rest of the tribe is very impressed. The second individual is not very patient when it comes to making tools. Her attempts are awkward, and she tends to choose the most obvious materials and then uses them clumsily. She easily gives up and returns to what she knows, which is typically very inefficient. The tribe is seldom impressed by her efforts. One day, they encounter a large mother bear with its cub. The mother bear becomes defensive and begins to attack. The first individual stops to analyze the situation, while the second runs as fast as possible. The strength of the first, when misapplied, has transformed into a weakness.

Ironically, when you identify a company’s weakness, it is also likely that you will find its strength when applied in other areas.

Example: Affordable Housing

Step 1: What are the typical problems that your company has faced and solved? What types of problems have you resolved repeatedly?

Contractors / Builders: As this is a new company, very few problems have arisen.

Municipality: All types of housing issues related to poor standards, poor adherence to standards, zoning challenges, demands from various wealth classes, etc.

Step 2: These problems and solutions denote the company’s strengths. Using the types of problems that your company excels at resolving, what might these strengths be?

Contractors / Builders: At this point, the company’s strengths remain unknown.

Municipalities: Adherence to standards, rigidly.

Step 3: What processes have been established around these strengths?

Contractors / Builders: No processes have been established yet.

Municipalities: Endless forms, rules, and standards.

Contractors / Builders: This question is not applicable at this point.

Municipalities: When something new arises.

Step 5: Identify clear company weaknesses. In what situations are these weaknesses considered strengths?

Contractors / Builders: Lack of experience is the primary weakness. Additionally, the contractor has very few resources. This could be seen as a strength since there are no significant cultural barriers or switching costs to enter this new industry.

Municipalities: When compliance with existing codes and zoning is strong, acceptance of new technologies becomes easier. (Conversely, if these conditions are perceived as loopholes, there may be a rush to close them).

Step 6: Is the organization willing to endure the difficulty of altering core processes?

Contractors / Builders: Since there is little difficulty at this point, this should not be an issue. This illustrates one of the inherent strengths of new emerging businesses: their ability to enter new markets without the burden of an established culture.

Municipalities: Unlikely to be willing to change core processes.

(Processes) Willing to Expand or Change the Business Model?

Method

Step 1: Identify the business model. How do you make money? What are the revenue-generating mechanisms? How are the exchanges made with customers?

Step 2: If your company is small, stakeholders may be more flexible in this area. Are they willing to consider expanding the business model? To what extent?

Explanation

As mentioned, one area of core processes is the business model, which allows the company to manage daily financial and business interactions between companies or between the business and its customers. As certain customers become more important, they demand that business be conducted in specific ways. The business model is built around how these customers want to interact and what the business will allow. Additionally, patterns of interactions are internally developed, in which departments and individuals exchange with each other in predictable ways. Any changes to this business model can be disruptive, as the financial and business systems become more rigid.

Since it is nearly impossible to change a business model to accommodate new customers, the option left is to slightly alter or expand the model. Even then, this is one of the most disruptive changes that a business can make.

Example: Affordable Housing

Step 1: Identify the business model. How do you make money? What are the revenue-generating mechanisms? How are the exchanges made with customers?

Home buyers: It is hoped that the business model would be similar to Habitat for Humanity. In this case, the customer applies and qualifies for a home. The customer agrees to work on the home for a specified number of hours. The customer is granted a zero-interest loan. The loan repayments go into a fund that allows others the same opportunity. The fund was initially funded by generous benefactors.

Municipalities: They make their money from taxes. This is a sore point since it naturally leads to gentrification, where the less wealthy are pushed out.

Step 2: If your company is small, stakeholders may be more flexible in this area. Are they willing to consider expanding the business model? To what extent?

Contractors / Builders: Since the company is new and small, it is willing to consider any business model that will allow this to work.

Municipalities: Not likely.

(Processes) Willing to Consider Separate Businesses?

Method

Step 1: Is your company in a learning or execution mode?

Step 2: Are your company’s processes well-defined or still in flux?

Step 3: Is your company actively promoting new businesses? If so, how successful has the company been at nurturing these businesses?

Step 4: Is your company willing to consider separate businesses and entrepreneurial leadership for new markets?

Step 5: Is your company open to starting new businesses that may be required for entry into new markets, products, or services?

Step 6: If your company is willing to engage with new customers, are they seeking to enter established markets? (If this is the case, discourage this or refrain from involvement. Entering an established market has significant disadvantages and a high failure rate. It requires greater intellectual capital. You’ll start with low brand awareness and customer loyalty.)

Step 7: Would the key decision-makers be willing to create new businesses, and to what extent?

Explanation

Attempts to pursue entirely new or unrelated markets can be quite disruptive to businesses. The likelihood of achieving success in new markets is highest when these products and services are developed by independent organizations that are provided with the necessary resources, incentives, leadership, and process knowledge to function autonomously.

The new business might compete with the existing one, but this is often essential in order to seize new opportunities.

Internal innovators may find success in new growth markets if they can persuade management to separate ventures equipped with the right resources, processes, and values. This includes:

–Management that is not entrenched in the RPVs of the incumbent company, but has experience in launching spinoffs and successfully addressing similar challenges.

–Venture capital that is patient for growth but expects early profitability[9]. Growth is typically slow in initial stages, and the supporting company should understand this. However, the tendency of the parent company to revert will not change if the venture does not generate profits within a reasonable timeframe (usually undisclosed). Managers of spin-offs must grasp this and work diligently to achieve profitability as soon as possible. This compels the spin-off to undertake beneficial actions it might not otherwise consider. For these reasons, funding should not be excessive, but enough to foster a “learning organization.”

–Creating the spin-off as a “learning organization” capable of establishing assumptions for financial and market success, and then systematically testing and refining these assumptions.

–Giving a spinoff control over its own destiny through the management of its resources. Although the resources need not be vast, they must be reliable.

–Allowing for low margins during initial phases, with the understanding that market leaders in successful new markets often enjoy high margins as the market evolves into a sustainable structure.

–Educating spin-off employees in innovation processes that align with the environment they face.

Schools of Experience Theory[10]

Managers tend to succeed more when dealing with challenges they have faced in the past, particularly if they learn from previous mistakes. Managers who ultimately succeed will provide the most consistent success in the future. Notably, experiencing some level of failure is actually healthy. Understanding the pitfalls can be invaluable. Companies that associate problems with managers who have both failed and succeeded in similar situations are likely to enjoy the greatest success. Rather than shunning those who have failed, we should value their experiences if they have learned from them. Successful managers are developed rather than born.

Emergent Strategy Theory[11]

Deliberate strategies formulate plans based on “known” assumptions and are effective in more certain environments. In contrast, emergent strategies are more adaptable and therefore much better suited for highly uncertain situations. One approach to developing an emergent strategy is through “discovery-driven” planning. This process is the reverse of “Platform-Based” planning. In discovery-driven planning, projections are formulated, which must be enticing enough to motivate stakeholders. Next, the necessary assumptions for the projections to materialize are developed. Then, a plan is established to continuously test these assumptions. As assumptions are validated or contradicted, the projections and assumptions adapt, leading to the emergence of a successful strategy.

Example: Affordable Housing

Step 1: Is your company in a learning or execution mode?

Contractors / Builders: Not yet.

Municipality: Assumed execution.

Step 2: Are your company’s processes well-defined or still in flux?

Contractors / Builders: Not yet.

Municipality: Well-defined.

Step 3: Is your company actively promoting new businesses? If so, how successful has the company been at nurturing these businesses?

Contractors / Builders: Unknown.

Municipality: Not likely.

Step 4: Is your company willing to consider separate businesses and entrepreneurial leadership for new markets?

Contractors / Builders: Not yet. Not sufficiently established.

Municipality: Assumed no.

Step 5: Is your company willing to consider starting new businesses which might be required for new markets, products, or services?

Contractors / Builders: Probably.

Municipality: Not likely.

Step 6: If your company is willing to engage with new customers, are they seeking to enter established markets? (If this is the case, discourage this or refrain from involvement. Entering an established market has considerable disadvantages and a high rate of failure. It requires more intellectual capital. You’ll start with low brand awareness and customer loyalty.)

Contractors / Builders: Unknown.

Municipality: Assumed no.

Step 7: Would the key decision-makers be willing to create new businesses, and to what extent?

Contractors / Builders: Not yet.

Municipality: Assumed no.

(Processes) Willing to Expand the Value Chain?

Method

Step 1: Determine the structure of the Value Chain

Step 2: What are the capabilities of your suppliers?

Step 3: Are third-party vendors required to enhance the value of your products?

Step 4: Is the business willing to expand the value chain?

Step 5: Is the business open to creating a completely new value chain if new products or services are too disruptive to the existing value chain?

Step 6: Are key decision-makers willing to expand the value chain, and to what extent?

Explanation

One of the most critical misconceptions among incumbent businesses is that growth businesses should be able to function within the existing value chain. This assumption leads businesses to believe that suppliers who have grown alongside them can provide any type of component or service that they require. The rationale is that economies of scale will compensate for any deficiencies.

Unfortunately, as businesses strive to move upmarket to capture higher margins, their suppliers also join the rush for increased profits. New growth markets often demand lower prices than the value chain can accommodate. Consequently, the needs of growth markets can rarely be satisfied with the current value chain.

However, forward-thinking businesses can expand their supplier base to meet these needs. This is often a challenging decision for most incumbents, who tend to prefer reducing their number of suppliers. While it may seem like a long shot, this step should be considered if a business is committed to entering growth markets.

Example: Affordable Housing

Step 1: Determine the structure of the Value Chain

Sponsoring organization commissions an architect –> Architect designs the structure –> Municipality reviews and approves plans –> Developing organization sends out bids for contractors –> Structure is put out to bid with at least three potential contractors –> Winning contractor receives the bid –> Contractor is given the initial payment –> Contractor procures materials for construction and builds the structure –> Contractor sources materials from local dealers and non-local suppliers –> Contractor rents equipment to grade the land –> Contractor constructs the building –> Municipalities inspect at various stages –> Contractor completes construction –> Subcontractors purchase materials and create specialty mechanical equipment –> Contractor purchases and installs mechanical equipment –> Contractor receives final payment –> Developing organization obtains approval to rent –> Renters move in

Step 2: What are the capabilities of your suppliers?

Contractors/Builders: Capabilities are adequate for the aforementioned process. The concern is the willingness of contractors and subcontractors to build specialized equipment.

Municipality: Capabilities are sufficient for the aforementioned process. The concern is the willingness to consider new materials and properties.

Step 3: Are third-party vendors required to enhance the value of your products?

Contractors/Builders: Unknown.

Municipality: Potentially engineering expertise may be needed to utilize the new materials.

Step 4: Is the business willing to expand the value chain?

Contractors/Builders: Unknown.

Municipality: Unknown.

Step 5: Is the business open to creating a completely new value chain if new products or services are too disruptive to the existing value chain?

Contractors/Builders: Unlikely unless strongly motivated.

Municipality: Assumed no.

Step 6: Are key decision-makers willing to expand the value chain, and to what extent?

This question is not applicable to this scenario.

Contractors/Builders: Potentially open to new suppliers.

Municipality: Assumed no.

(Values) Willing to Consider Changing the Stated Values of Your Company?

Method

Step 1: What are the stated objectives of your company? Look for this in company or shareholder literature. If the company is publicly traded, the stated objectives are typically related to enriching shareholders. If the company is private or non-profit, it may have other stated values.

Step 2: Who are considered to be the main stakeholders?

Step 3: What does the stock prospectus say are the objectives of the company?

Step 4: What are the stated or expected behaviors of company employees?

Step 5: Is the business willing to expand or change the stated values to enter new markets? Consider becoming leaders in these values:

–Sustainability

–Environmental Friendliness

–Human or Animal Rights

–Humanitarian Efforts

–Labor Conditions

–Labor Stability

Explanation

There are both stated and unstated values of a company. The stated values may be written in plain sight, but employees may not be aware of them. These written values may not reflect those of the innovator, making it essential to investigate these stated values. The values upon which the business is built will determine its actions, principles, and policies. In this step, we will examine the stated values of the company.

Example: Affordable Housing

Contractors / Builders: It is unlikely that the contractor would have stated values at this stage.

Municipality: The stated values regarding providing affordable housing are unknown.

Step 2: Who are considered to be the main stakeholders?

Contractors / Builders: Third, because if the sponsor and municipality can agree, contractors can usually be found.

Municipality: Second.

Step 3: What does the stock prospectus say are the objectives of the company?

Not applicable to this situation with the contractor; however,

Contractors / Builders: Not applicable if new.

Municipality: The stated objectives regarding providing affordable housing are unknown.

Step 4: What are the stated or expected behaviors of company employees?

The expected behaviors of employees are unknown at this point since it consists only of a contractor.

Contractors / Builders: No likely expectations.

Municipality: The stated behaviors regarding providing affordable housing are unknown.

Step 5: Is the business willing to expand or change the stated values to enter new markets? Consider becoming leaders in these values:

–Sustainability

–Environmental Friendliness

–Human or Animal Rights

–Humanitarian Efforts

–Labor Conditions

–Labor Stability

Contractors / Builders: Possibly in the area of sustainability or environmental friendliness. It can be beneficial to be known for building environmentally friendly homes.

Municipality: Needs to be verified.

(Values) Willing to Change the Unstated Values of Your Company?

Method

Step 1: Is the company focused on satisfying the same customers? Does it actively seek to reach out to new customers? Are there numerous growth products in the pipeline? Is it challenging to prioritize essential resources for new growth products?

Step 2: Is the company being constrained by its most significant customers? Do crucial resources go to these primary customers, making it difficult to prioritize growth products? If so, an unstated value of the company is the satisfaction of its major customers.

Step 3: To understand other unstated values, investigate the causes of the outcomes from step 1. Collaborate with business leaders to trace the chain of causes back to important unstated values.

Step 4: What metrics are employed to prioritize resources for new product development? Keep in mind that many of these metrics may inadvertently work against new growth products. Additionally, consider that there are currently few metrics that prioritize growth.

Explanation

The influences of the past, present, and future (expectations) drive company values. Hidden values arise from consistently solving problems, with the solution process becoming embedded in the organization.

The company cannot exist without its primary stakeholders. These stakeholders are individuals with numerous unstated values. Each has their own reasons for remaining with the business, and these motivations propel the company forward. Particularly significant for innovators are the unstated values that underlie the prioritization of new products and innovations. These undercurrents seldom surface but drive the entire business.

The selected metrics for prioritizing product introductions and enhancements can significantly hinder innovation. For instance, metrics that impose high expected margins on new products create a considerable obstacle, as most new products face negative margins for several years. Moreover, requiring a minimum Internal Rate of Return demands a quick return, which can be challenging to achieve. Another common metric is Return on Net Assets, which favors outsourcing as it is easier than generating additional profits. When vital resources are directed toward existing customers and internal efficiency efforts at the expense of growth products and services, this can stifle innovation.

An important aspect is that often, managers and even financial leaders struggle to articulate how these metrics became the primary ones. However, because they continue to be utilized unquestioningly, they have unconsciously prioritized resources away from growth products. According to Clayton Christensen, this issue began in the 1980s with the introduction of the spreadsheet. This phenomenon has persisted and dramatically impacted new product introductions. An example Christensen provides is the metrics utilized for DRAM and Microprocessors at Intel Corporation, which prioritized funding toward microprocessors and away from DRAM, leading to the near-total abandonment of DRAM almost without conscious decision. While this may have benefited Intel in microprocessors, it illustrates how unconscious metrics can dictate resource allocation. Later, these same metrics diverted Intel from electronics for mobile devices, which subsequently evolved into a significant growth market. At the time of Christensen’s presentation, he expressed disappointment that there are virtually no metrics designed to prioritize growth. This is because nearly all metrics focusing on the top line do not guarantee the company easy gains. Growth is challenging and risky. In contrast, efficiency innovations that streamline processes or reduce variation are much simpler to implement.

Example: Affordable Housing

Step 1: Is the company focused on satisfying the same customers? Does it allow for reaching out to new customers? Are there numerous growth products in the pipeline? Is it challenging to prioritize critical resources for new growth products?

Contractors / Builders: Large contracting firms may struggle to reach out to new customers unless they are desperate for additional business. Small one-person firms in this context could prioritize critical resources more effectively.

Municipality: Typically assumed to be entirely focused on satisfying existing customers.

Step 2: Is the company being held captive by its most important customers? Do critical resources go to these significant customers, thus making it hard to prioritize growth products? If so, an unstated value of the company is the satisfaction of its major customers.

Contractors / Builders: In the case of our new contractor, probably not.

Municipality: Yes, the municipality is held captive by its major customers, as reflected in their budgets and goals.

Step 3: To understand other unstated values, look for the causes of the outcomes from step 1. Collaborate with business leaders to trace the chain of causes back to important unstated values.

Contractors / Builders: For contractors, there may be more lucrative markets to pursue, complicating the retention of preferred contractors for bid requests.

Municipality: Uncertain about the chain of causes that leads municipalities to be unresponsive.

Step 4: What metrics are utilized to prioritize resources for new product development? Remember that many of these metrics will inherently select against new growth products. Also, note that there are few metrics that prioritize growth.

Contractors / Builders: It is unlikely that any metrics are in place.

Municipality: It is assumed that there are no metrics currently in use.

(Values) Willing to Consider New Margin Thresholds?

Method

Step 1: What is the margin threshold for new products?

Step 2: Is your company willing to consider reducing the threshold margins for entering new markets? It is often necessary to accept low margins in the early stages.

Explanation

The margin threshold is a significant value that is rarely challenged or discussed. Unfortunately, it can have a very limiting effect on the innovative capacity of the company. Over time, companies tend to migrate “up market” in search of higher and higher margins. Eventually, the company may no longer accept new products that promise lower margins, regardless of the volume. This margin threshold is often referenced when considering investment in new business opportunities. It provides insight into the business model and what it is not prepared to pursue. Growth products and services typically require lower margins to thrive. If the business is unwilling to accommodate low thresholds, this is generally detrimental to growth products. Conversely, the margin is determined by the manufacturing cost of the new product. A high margin indicates that costs must be minimized, which raises the innovation threshold for new offerings.

Example: Affordable Housing

Step 1: What is the margin threshold for new products?

Contractors / Builders: For new contractors, the margin threshold can be quite low.

Municipality: No consideration of margin.

Step 2: Is your company willing to consider reducing the threshold margins for entering new markets? It is often necessary to accept low margins in the early stages.

Contractors / Builders: At this stage, the threshold for new contractors is probably very limited.

Municipality: Assumed no.

(Values) Able to Devote the Time?

Method

Step 1: Will key decision-makers be able to devote the time necessary to follow the product developments?

Explanation

This is one of the biggest obstacles for products. Personalities that lack the time or engagement can hinder progress if key decision-makers leave.

Example: Affordable Housing

Step 1: Will key decision-makers be able to devote the time necessary to follow the product developments?

Contractors/Builders: This is essential because the contractor will need to construct the building.

Municipality: They will take the required time to consider new material findings from the architects and engineers.

Clarify the Conditions of Satisfaction

Method

Step 1: Throughout the interviews, listen for the primary pain points of the stakeholders as they relate to potential new markets.

Step 2: Based on the pain points and the responses from the previous steps, determine the conditions of satisfaction for the key decision-makers.

Explanation

What we have accomplished is arming ourselves with the necessary information to define the conditions of satisfaction for the key decision-makers. We have identified the boundaries that must not be crossed, which constitute the minimum threshold for satisfaction. Additionally, we have pinpointed what would truly excite the business. Our next step is to clearly communicate the conditions of satisfaction to all involved parties.

Remember that it is essential for firm commitments to be made and upheld in order to expand the markets you serve. (Even with a firm commitment, there is no guarantee that the key decision-maker will remain in their position of authority long enough to see the process through to completion)

Example: Affordable Housing

Step 1: Throughout the interviews, listen for the primary pain points of the stakeholders as they relate to potential new markets.

Contractors / Builders: Likely related to the consistency and profitability of the proposed new markets.

Municipality: Likely related to how easily the codes and regulations will be satisfied.

Step 2: Based on the pain points and the responses from the previous steps, determine the conditions of satisfaction for the key decision-makers.

Here are the assumed conditions for the satisfaction of the main decision-makers:

Contractors / Builders:

— Initially, builds can be managed by one individual, the contractor. (Small contractors are the most likely to favor this).

— Can work in all weather conditions.

— Equipment investment for the contractor is <$5000.

— Projects are consistent throughout the year.

— Projects generate approximately $50,000 annually. ($20-75K).

Municipality:

— Structural materials studies have been completed by architects and engineers: This includes compression, tension, shear, and potentially torsion capabilities.

— The projects clearly meet all applicable codes and standards.

Commitment from Key Decision Makers

Method

Step 1: Ask, “If we meet these conditions for satisfaction, what will you do?”

Step 2: If the answer is “We will definitely move forward,” then you can proceed.

Step 3: If the answer is anything else, then reassess and determine the conditions for satisfaction that must be met.

Explanation

It is crucial to establish and maintain firm commitments to expand the markets you serve. Even with a solid commitment, there is no assurance that the key decision-maker will remain in their authoritative position long enough to see the process through to completion.

The key question that must be answered to your satisfaction by the key decision-makers is: “What will you do if we meet all of your conditions for satisfaction?” If the response is “We will think about it and get back to you,” the likelihood of closing the deal is quite low. What you seek is a decisive forward response, such as “We will fully engage and make the proposition work.” The natural outcome of fulfilling the satisfaction of key stakeholders is progress. However, there may be reasons why you cannot achieve the desired response.

No genuine interest in collaborating with you at the outset.

No clear consensus on the conditions for satisfaction (you have not met the threshold for satisfaction). You will recognize this when you articulate it, as there will be noticeable enthusiasm.

The organization may not be in a position to take on new work, regardless of its appeal.

If the response is number 2, then there is room for further negotiation. The incentive needs to increase in some way. “What would it take to genuinely excite you about a new product or service that we have not yet discussed?”

Example: Affordable Housing

Step 1: Ask, “If we meet these conditions for satisfaction, what will you do?”

Step 2: If the answer is “We will definitely move forward,” then you can proceed.

Step 3: If the answer is anything else, then reassess and determine the conditions for satisfaction that must be met.

For every critical decision-maker, there are often too many involved to secure a genuine commitment. I consulted a contractor, housing authority representative, architect, city planner, and developer to gather their insights. As time goes on, I will need to return to some of these decision-makers to ensure I am on the right path.

Choose the Target Market Segments

Explanation of Choose the Target Market Segments

Hopefully, by this point, you have identified several potential target markets. Unfortunately, pursuing more than one is difficult and requires a lot of resources. It is time to focus on one market. It is unlikely that an individual or team will be able to choose a market based on economics alone. This section aims to highlight several factors to consider when selecting a market. Ultimately, the factor that influences a team the most is its enthusiasm for a particular market. People generally use one of two models to make decisions. The first model is based on benefits and costs. The second model revolves around identity. We ask, “Would a person like me do that?” Business needs should also be incorporated into this decision. Keep in mind that you may choose or be trying to choose a market where key decision-makers are unwilling to engage. A decision that contradicts business objectives will likely lead nowhere. We begin by summarizing the potential markets.

Filter by Where the Business is Willing to Play

Method

Step 1: Verify with the Key Decision Makers that they are willing to consider the market segment options you are proposing. You should be clear on what each segment will require regarding the following:

–expanding its brand

–expanding to new customers

–expanding its technologies

–expanding or changing its service or delivery model

–expanding capital assets

–expanding human assets

–expanding or changing the business model

–considering separate businesses

–expanding the value chain

–considering a lower margin threshold (not essential)

Step 2: If any option requires you to do something that the business is not willing to do, then consider how you might work around this.

Step 3: If there is no way around the problem, then consider abandoning the option.

Explanation

If we have already determined where the business is willing to operate, then we have likely been filtering the possible market segments as we considered various options. At any rate, we verify that the business is willing to engage at this step. Apply what you already know about where the business is willing to operate. There is no need to swim upstream if the market is undesirable. Here is a short list to remind you.

Example — Affordable Housing

Step 1: Verify with the Key Decision Makers that they are willing to consider the market segment options you are proposing.

Contractors / Builders: Will likely consider anything as long as the financials look promising.

Municipality: Would not likely push back on any market segments as long as zoning and codes are followed.

Step 2: If any option requires you to do something that the business is not willing to do, then consider how you might work around this.

Step 3: If there is no way around the problem, then consider abandoning the option.

Filter for Potential Market Size

Method

Step 1: Study the market segments online until you have a sense of the market size. (We will learn more about actual market segment size when we conduct customer interviews in the eBook Creating Offerings.)

Step 2: We aim for the largest market possible. For the greatest chance of success, we should avoid small niche markets. If the potential markets are too small, consider combining several by looking for shared problems within shared situations. If market problems are not shared, perhaps the means of solving the separate problems can be shared.

Option: Use a de-rated survey. A de-rated survey attempts to determine market size by asking a general population or a targeted population about their interest. Taking the percentage of positive responders in a region and multiplying it by the population in that region yields a highly optimistic estimate of interest. Now, we come to the de-rating. Since there is a high risk that many responders exaggerate their interest, it is necessary to multiply the calculated market size by a number significantly less than one.

Option: Auctions—offer fictitious products on public internet auctions. Responders should be rewarded for participating in a fake auction. De-rate the reactions of the respondents. Only do this where it is permissible under the auction terms.

Option: Go to Google Insights at www.google.com/insights/search/# to identify the interest in overcoming the obstacles to performing the function. Use Google AdWords to get the absolute market size of the searches found on Insights.

Explanation

This is one of the riskiest steps due to the difficulty of sizing up non-consuming markets. They are challenging to study. We have included experimental methods for determining market size of non-consuming markets. The volume of the market that will respond to your offering is largely determined by the product attributes, especially price.

Example: Affordable Housing

The market size is promising for any of the market segments mentioned. To reiterate from above:

In 2017, there were 43 million households in the United States that were renting. There were 20.5 million households (48%) that spent more than 30% of their adjusted gross income on housing. There were 10.7 million households (25%) that spent over 50% of their adjusted gross income on housing.

“After analyzing public-use microdata for 2013 from the Current Population Survey (the same monthly survey that supports the BLS’s wage and employment reports), we estimate that last year about 20.6 million people — 30% of all hourly, non-self-employed workers aged 18 and older — fall into that ‘near-minimum-wage’ category. That includes 8.8 million people in states with minimum wages above $7.25 and 11.8 million in states where the federal rate applies.”

[42]

Filter for Team Enthusiasm, Passion and Shared Meaning

Method

Step 1: Understand the “Whys” for choosing a particular market segment. What are the passions and reasons that team members have for serving each market segment?

Step 2: Are there any options that the team cannot support?

Step 3: Create a shared meaning and mantra that will propel the team forward.

Explanation

The team needs to feel a genuine connection of purpose with the market segment. How many times have you purchased a product from a company that you felt shared your passion for something? Isn’t it refreshing? There are notable examples of this. Apple is a good example. OXO is another. When we buy products from these companies, we feel a strong loyalty and desire to make repeat purchases because we resonate with them. This all begins with teams that have a passion for a target market. Teams that share such a vision work harder and are less likely to give up.

It is interesting to note that Phillips[38] assesses business desirability after filtering for team enthusiasm.

Example–Affordable Housing

Step 1: Understand the “Whys” for choosing a particular market segment. What are the passions and reasons that team members have for serving each market segment?

Step 2: Are there any options that the team cannot support?

Step 3: Create a shared meaning and mantra that will propel the team forward.

Most of the market segments generate plenty of enthusiasm.

— Developers who want to provide affordable housing and shelters out of their personal mission: Originally, I aimed to help cost-burdened people. However, I realized that the route to helping these individuals is through the developers with financial resources. I have a strong passion for serving developers.

— Families looking to provide independent living for relatives with limitations such as elderly parents, individuals with disabilities, or others desiring more independence: This wasn’t my first thought, but I can easily support these individuals who have genuine humanitarian concerns.

— Families needing their aid to live nearby: This is similar to the above humanitarian reasons.

— Church developers struggling to provide “Pocket Shelters” for refugees or the homeless: A strong shared humanitarian reason to serve this market.

— Group Homes: There are good humanitarian reasons, but I have not seen a significant lack of these in most communities.

— Boarding Homes: I do not have a strong desire to serve this segment unless they are willing to charge lower rents to assist cost-burdened households.

— Bed and Breakfast businesses: I do not have a strong passion for serving this customer group, but I understand that any product demand from this group can help elevate this offering. On the other hand, it might tie up resources that could assist other groups.

— Schools and cities seeking ways to house students with low-income housing: I support housing for students as long as communities can keep housing costs down.

— Housing authorities and developers working to provide affordable housing for Indigenous people living on reservations: I have significant enthusiasm for this group.

Filter for How Well the Market is Already Being Served

Method

Step 1: Search the internet for products and services that target the markets you are considering. Note the level of activity in serving them.

Step 2: What compromises do existing products and services impose on this market? This gives us a better idea of whether this market is well served.

Step 3: Determine how well the market is currently being served.

Step 4: If you wish to license your product, first consider an established market where the competition is fierce and there are at least three major players.

Step 5: If the market already exists and the business you are trying to serve is not already in that market, consider another market. If your company is still seeking to enter established markets, discourage it or refrain from getting involved.

Step 6: If the market is not being served, it is less likely you will find an existing business willing to take the risk with such a new market. In this case, it is more probable that a new business will need to be established to meet the needs of this market. Only consider this if you or your business is willing to make the necessary sacrifices.

Explanation

Up to this point, we have made no overt attempt to determine how well these markets are being served. It is insufficient to assume that since you haven’t heard about them being served, they aren’t.

Once we begin searching for products that target certain markets, we will likely find some that do. Just because products exist to satisfy a market does not mean that they are well served. The products and services may be inadequate for that market. (The next book helps us understand what this market really wants). Finding existing products indicates that at least someone has recognized that this market exists. What we are interested in is the level of activity and finding clues regarding how long this market has been served. If the activity is low, three possibilities exist: First, the market is truly small. Second, it hasn’t been served for long. Third, the market is currently being poorly served.

Once you have identified how well the market is being served, it is necessary to decide whether you want to pursue these markets. If you represent a business looking to move into an established market, understand that they are very difficult to penetrate for various reasons. Entering an established market presents major disadvantages. First, it requires higher intellectual capital, especially if integrated solutions are needed to meet the market’s demands. Second, you will start with low brand awareness and customer loyalty.

If you desire to license a patent to an existing company, look for established markets where competition is intense and businesses seek new ideas to maintain shelf space.

If the market is not being served or is served inadequately, established businesses are unlikely to try servicing them. In this case, it will be necessary to start a new business as new markets will require novel business models to serve them. Established businesses will find this too disruptive.

Example–Affordable Housing

Step 1: Search the internet for products and services that target the markets you are considering. Note the level of activity in serving them.

Based on the research I have conducted, ALL of the market segments are being served. However, only a fraction of burdened households are being adequately served.

Step 2: What compromises do existing products and services impose on this market? This gives us a better idea of whether this market is well served.

A few homes are quite affordable but lack essential elements that must be added later, often at significant costs. An example of this is tiny homes, which are affordable at the low end but require expensive septic hookups to function as a home. These hookups can substantially increase the total cost of a home.

Step 3: Determine how well the market is currently being served.

The percentage of the market being served is in the teens. While one may think this is a growth market with so few being served, this issue has persisted for many years and seems to be worsening.

Step 4: If you wish to license your product, first consider an established market where the competition is fierce and there are at least three major players.

My goal is to license to developers or builders. Although overburdened households are not being well served, the competition to create housing for them is quite intense and generally low in profitability. This presents a good opportunity for licensing. Each of the other players is looking for some small advantage. What I now need is a technology that complements the existing players, making them more competitive. This indicates I should NOT engage in the actual creation of affordable housing. The next best opportunity to make affordable housing happen is to develop low-cost septic hookups that can drive the industry towards lower and more affordable levels.

Step 5: If the market already exists and your business is not one of the main players, consider serving another market. If your company is still seeking to enter established markets, discourage it or refrain from getting involved.

It may be wise, considering that there are already offerings aimed at serving these markets, to contribute to these businesses with offerings that benefit all competitors, as previously stated.

Step 6: If the market is not being served, it is less likely you will find an existing business that is willing to take the risk with such a new market. In this case, a new business will need to be established to meet the needs of this market. Only consider this if you or your business is willing to make the necessary sacrifices.

Many businesses are attempting to serve these markets, albeit poorly.

Filter for Low End Disruptor

Method

Step 1: Is the capability curve of a low-end disruptive technology catching up with market demand in a market that you currently serve?

Step 2: Consider reducing the capabilities of the product and transitioning to the new disruptive technology.

Explanation

Clayton Christensen discusses this in his series of books: The Innovator’s Dilemma, The Innovator’s Solution, and Seeing What’s Next. He explains that low-end disruptors usually originate outside of the current market. The needs of the existing segments you serve typically evolve more slowly than the product capabilities of current technologies used in your market. Low-end disruptors gradually acquire capabilities that meet the needs of the markets you are serving. Christensen explains why these disruptors are so challenging to adapt to. That is why they are referred to as disruptors.

Example—Affordable Housing

Step 1: Is the capability curve of a low-end disruptive technology catching up with market demand in a market that you currently serve?

Some types of manufactured housing or 3-D printing technologies could be considered low-end disruptors to traditional building methods. Additionally, manufactured homes are evolving and becoming increasingly affordable, particularly in the low end of the market. This presents another reason not to attempt to compete in this area.

Step 2: Consider reducing the capabilities of the product to serve the low-end market.

That would be the definition of affordable housing. However, it likely needs to incorporate new technologies that are emerging to make it viable.

Filter for Intensity of Consumer Dilemma

Method

Step 1: Identify the customer dilemma.

Step 2: Is the dilemma further intensified by the lack of options for satisfying needs? These options are what the market would turn to if your solution were not available.

Step 3: Determine whether the customer dilemma is significant enough to create a real need for new products and services. If not, then abandon the market.

Explanation

“Although many concepts may address a valid consumer need, if consumers do not feel enough ‘pain,’ they will not readily adopt a new product. Reframing consumer needs into dilemmas and evaluating the relative pain associated with each helps Philips ensure its innovation investments will resonate with consumers.[39]” The most severe dilemma arises when the market perceives it has no options. Identify markets where the customer has no alternatives. Then, you are competing against non-consumption. It is easy to satisfy such markets with products that underperform (the typical starting position of most new products) since they have nothing to compare with.

Remember that consumers experiencing pain are seeking immediate relief. If you are awake at 2:00 in the morning with discomfort and go to the store, you are looking for aspirin, not vitamins.

Example–Affordable Housing

Step 1: Identify the customer dilemma.

In all instances, the dilemma revolves around the high costs associated with providing housing.

Step 2: Is the dilemma further intensified by the absence of options for satisfying needs? These options are what the market would utilize if your solution were unavailable.

Currently, developers and builders have limited low-cost land and building options.

Step 3: Determine whether the customer dilemma is significant enough to create a real need for new products and services. If not, then abandon the market.

I believe the customer dilemma in all situations is significant enough to create a real need for new products and services. The most pressing and obvious need is for low-cost removal of gray and black water (human waste).

Filter for WHY YOU?

Method

Step 1: Is there a compelling reason that potential consumers will choose you to help them perform the Job to be Done? Why would they select you?

Step 2: If there is no sufficient reason but you still wish to pursue this market segment, do you intend to promote the product or service through appropriate advertising?

Step 3: Might the potential consumer opt to use your offering if it is provided by another company or brand?

Explanation

Simply having a great offering is not a sufficient reason for consumers to select you to assist them. They need to be aware of you and trust you enough to make that choice. What steps will you take to make this a reality?

Example–Affordable Housing

Step 1: Is there a compelling reason that potential consumers will choose you to help them perform the Job to be Done? Why would they select you?

No significant reason to choose me. No brand, no track record.

Step 2: If there is no sufficient reason but you still wish to pursue this market segment, do you intend to promote the product or service through appropriate advertising?

I intend to provide information about the offering on this website for free.

Step 3: Might the potential consumer opt to use your offering if it is provided by another company or brand?

Yes, it would almost certainly be offered through a developer or contractor.

Choose the Target Market Segments

Method

Step 1: List all of the market segments that fulfill the previous filters.

Step 2: Involving key decision-makers, select the market segment or segment group that your system will serve. If possible, focus on the largest group in which the competition is deemed irrelevant. Ideally, this will overlap with other markets.

Explanation

Now you have a shortlist of viable markets. It is time to make a selection. It is crucial that the key decision-makers are involved in this decision. The target markets should present substantial growth potential. If the market segments you have selected are too small, consider merging market segments to meet all needs. This may lead to intriguing contradictions that will need to be addressed later.

Example–Affordable Housing

Step 1: List all of the market segments that meet the previous filters.

None of the groups qualify under the filters for providing whole buildings. There is excessive competition in an established market with too many players already. A further analysis of sewage systems is required. There are only a few established systems competing for market share, presenting a strong licensing opportunity.

Step 2: Involving key decision-makers, select the market segment or segment group that your system will serve. If possible, focus on the largest group in which the competition is considered irrelevant. Ideally, this will overlap with other markets.

The selected group consists of developers/builders who need affordable off-grid human sewage systems. As this is a sub-system of what we have previously examined, there is no need to revisit the earlier steps. However, we must pay close attention to zoning and building ordinances related to gray and black-water systems. It should be noted that any off-grid shelters, including cabins, recreational vehicles, trailers, outhouses, and portable toilets, may benefit from this.

References

[1] Tony Ulwick – Why Your Idea is Worthless, and How to Create Effective Growth Plans – online presentation 9/22/2011

[2] Clayton Christensen – The Innovator’s Dilemma — Harper Business Essentials

[3] Stephen Key – One Simple Idea — McGraw Hill, page 23: “Successful companies of all sizes recognize the importance of shelf space. They also understand that shelf space for ‘me-too’ products is extremely limited… To secure shelf space for their own products and ensure ongoing shelf space for future offerings, companies strive to continuously innovate… to always stay a step ahead of the competition.”

[4] Clayton Christensen – The Innovator’s Dilemma includes statistics on the likelihood of success for products designed for non-consuming markets compared to sustaining markets.

[5] Clayton Christensen – Seeing What’s Next — HBS Press, page 288

[6] Stephen Key – One Simple Idea — McGraw Hill, page 58: “Just because an idea is clever doesn’t guarantee it will sell. If an idea strays too far from other products in the market or if the technology is too new or complicated, you could invest a significant amount of your time and effort for nothing—only to discover that no company wants to license it.” Page 71: “Companies prefer not to educate the market about a product or create a new market for it. They are like me: they favor ideas that are simple to explain and readily illustrate their unique value.”

[7] Clayton Christensen – Seeing What’s Next — HBS Press, page 279

[8] Clayton Christensen – Seeing What’s Next — HBS Press, page 289

[9] Clayton Christensen – The Innovator’s Dilemma — HBS Press

[10] Clayton Christensen – Seeing What’s Next — HBS Press, page 286

[11] Clayton Christensen – Seeing What’s Next — HBS Press, page 287

[12] Stephen Key – One Simple Idea — McGraw Hill, page 23: “Successful companies of all sizes understand the significance of shelf space. They also recognize that shelf space for ‘me-too’ products is extremely limited… Therefore, to secure shelf space for their offerings and ensure future shelf space, companies strive to continually innovate… to outpace the competition.”

[13] What is Outcome Driven Innovation (ODI) by Anthony W. Ulwick, March 15, 2009

[14] What is Outcome Driven Innovation (ODI) by Anthony W. Ulwick, March 15, 2009

[15] Clayton Christensen – The Innovator’s Dilemma

[16] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[17] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[18] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[19] Clayton Christensen – http://www.fastcompany.com/article/can-you-make-complex-things-simple

[20] Clayton Christensen – http://www.innovationexcellence.com/blog/2013/07/31/disruptive-innovation-theory-revisited-christensen-hatkoff-kula/?utm_campaign=innovation-excellence-weekly&utm_source=hs_email&utm_medium=email&utm_content=9867055&_hsenc=p2ANqtz-_11ktwhdweclI3b8RGPYg54qJ2Kio9XCZPz6Nsfjn1xKpmjDMykmsPleZ-vQuHL9WWMl5_DF70Vx1cwiqquVAFn9_wtQ&_hsmi=9867055

[21] Elting E. Morison – Gunfire at Sea: A Case Study of Innovation – Men, Machines, and Modern Times (Cambridge, MA: MIT Press, 1966), pp. 17-44

[22] Clayton Christensen – The Innovator’s Dilemma

[23] Discussion with Petr Krupansky on 8/8/2011 about common tasks that job executors find tedious or boring.

[24] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[25] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[26] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[27] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[28] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[29] The Heath brothers explain that many struggle to understand the job due to its complexity. They recommend anchoring the job in something familiar and then adding an explanation to clarify the concept. They refer to this technique as “anchor and twist.”

http://www.fastcompany.com/magazine/127/made-to-stick-anchor-and-twist.html

[30] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[31] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[32] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[33] ASIT stands for Advanced Structured Innovative Thinking and was developed by Roni Horowitz.

[34] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[35] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[36] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[37] Kevin P. Coyne, Patricia Gorman Clifford, and Renée Dye – Breakthrough Thinking from Inside the Box

[38] Breakout Growth: Practical Lessons from Brands that Consistently Outperform Competitors by the Research and Technology Executive Council

[39] Breakout Growth: Practical Lessons from Brands That Consistently Outperform Competitors by the Research and Technology Executive Council

[40] Made to Stick by Chip and Dan Heath

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