DISRUPTIVE INNOVATION FOR

ENTREPRENEURS Prayukth K V

CHARACTERISTICS OF DISRUPTIVE PRODUCTS

Disruptive products are generally simpler and cheaper, with less margin, not greater profits

Disruptive technologies are typically first commercialized in emerging or insignificant markets

Leading firms’ most profitable customers generally don’t want, and initially can’t use, products based upon disruptive technologies

Initially embraced by the least profitable customers in a market

THE FACTS

Consumers don’t go through life conforming to particular demographic

segments.

No-one I know buys a book because of the age group they belong to

People don’t often go around looking for products to buy but they do want

something that gets the jobs done

It is only when they have a problem that they consider a solution at which

point they will hire a product/service

Therefore, it is the job, and not the customer or the product, that should be

the fundamental unit of analysis

Understanding the world through the lens of jobs-to-be-done gives an

incredible insight into people’s behaviour

We will look at the ‘Metro’ case study to understand this better

HOW DOES DISRUPTIVE INNOVATION OCCUR?

“In their efforts to stay ahead by developing competitively superior products, many companies don’t realize the speed at which they are moving up-market, oversatisfying the needs of their original customers as they race the competition toward higher performance, higher margin markets.”

“In doing so, they create a vacuum at lower price points into which competitors employing disruptive technologies can enter.”

“Only those companies that carefully measure trends in how their mainstream customers use their products can catch the points at which the basis of competition will change in the markets they serve.”

THE METRO EFFECT

Metro was first launched in Stockholm on 13 February 1995.

Metro newspaper editions are distributed in high-traffic commuter zones or in

public transport networks via a combination of self-service racks and by hand

distributors on weekdays

The newspaper is distributed free of cost

Remember Cellphones don’t work underground in subways

When Metro was first introduced, it didn’t try to compete head on with the

incumbent papers

Instead it reached out to commuters who wanted to do something to pass

time

These are folks who want to reach home quickly and do not want to stop

anywhere to buy anything

But if you hand over a paper to them for free, they will most probably take it

The stories are short, punchy and easy to read to allow readers to complete

the paper (and expose them to all the ads) within 20 minutes

THE INNOVATION – JOB DONE

For a traditional newspaper, a copy left behind on a

seat means the next reader gets it for free,

depriving the paper of revenue

A Metro reader who picks up a copy left behind has

just saved the newspaper the cost of distributing

one more paper

Today, Metro has over 67 daily editions in 22

countries

Its circulation is only rising

So the question you should be asking is…

What is the job that my prospective customers want

done?

HOW DO I FIGURE THAT OUT?

See what others have done in that field How different was that innovation?

How did it work?

How did it transform the existing landscape?

For how long have people sought something like that?

Give people what they want before they ask for it Steve Jobs and Akio Morita disparaged market research

Consumers are often unable to articulate exactly what they want; bounded by the confines imposed by existing solutions

A craiglist was always needed but no-one articulated the need for it

It is the job of businesses to know what people what want

Successful companies understand the jobs that arise in people’s lives and develop products that do the jobs perfectly

THINK!

Keep changing Every transition brings with it hundreds of untapped opportunities

Business should challenge assumptions and constantly lookout

for new ways to add value

Plan for failure.

Don’t bet all your resources on being right the first time. Think of

your initial efforts at commercializing a disruptive technology as

learning opportunities. Make revisions as you gather data.”

Build capabilities for a new horizon Change organizational culture and orientation to embrace

disruptive change

THINK!

“Don’t count on breakthroughs. Move ahead early and find the market for the current attributes of

the technology. It will be outside the current mainstream market.

You will also find that attributes that make disruptive technologies

unattractive to mainstream markets are the attributes on which

the new markets will be built.

INNOVATE…

Lets connect and share ideas!

Figures culled from various data sources as of March 2014