DISRUPTIVE INNOVATION FOR
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
Consumers don’t go through life conforming to particular demographic
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
Instead it reached out to commuters who wanted to do something to pass
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
Its circulation is only rising
So the question you should be asking is…
What is the job that my prospective customers want
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 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
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
“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.
Lets connect and share ideas!
Figures culled from various data sources as of March 2014