How Would You Beat?

How would you beat Apple and Google?

March 02, 2020 thrv Season 1 Episode 3
How Would You Beat?
How would you beat Apple and Google?
Chapters
How Would You Beat?
How would you beat Apple and Google?
Mar 02, 2020 Season 1 Episode 3
thrv

In this episode, we look at how to use Jobs-to-be-Done innovation methods to beat Apple and Google Maps. We love this example (and we created a video about it) because it shows that JTBD can identify growth opportunities and competitive weaknesses in very mature markets with dominant competitors (like Apple and Google).

Show Notes Transcript

In this episode, we look at how to use Jobs-to-be-Done innovation methods to beat Apple and Google Maps. We love this example (and we created a video about it) because it shows that JTBD can identify growth opportunities and competitive weaknesses in very mature markets with dominant competitors (like Apple and Google).

Jay Haynes :

Welcome to our podcast. How would you beat? In each episode we pick a company and talk about how you could use jobs-to-be-done innovation methods to beat that company's product. We'll discuss innovation theory and explain the methods so you can put the theory into practice at your company. I'm Jay Haynes, the founder and CEO of thv, that's thrv without the vowels thrv.com. We help product marketing and sales teams use jobs-to-be-done innovation methods to build market and sell great products. I'm here with my colleague, Jared Ranere. So in this episode, how would you beat Apple and Google specifically, how would you develop a product strategy to beat apple in Google Maps? This seems like a crazy idea. Because Apple and Google of course have trillion dollar market caps. They each have a combined about 100 billion dollars in cash and they have almost 100 Hundred percent market share in this market for navigation apps. So the products are free. And they have platform advantages, and they have technology and user advantages. So how would you beat them? Specifically, we'll show today how you could use what's known as jobs theory or jobs-to-be-done, also known as JTBD. And the core idea behind jobs theory in this innovation method is that your customers are actually not buying your products. What they're doing is hiring them to get a job done. So we'll explain what this means in detail. But the core of building a product strategy using jobs-to-be-done or jobs theory is really answering six critical questions, which we'll look at today. Who's the customer, you're going to target? What is the market? What is the job to be done that you're targeting? What's the size of the market opportunity? What's the segment you're going to target? What are the unmet needs you're going to target and specifically, what is your product feature idea due to create customer value? So could you even succeed in this market against Apple and Google if you tried?

Jared Ranere :

Yeah. And if we looked at historical examples, it's pretty easy to find one that competed fiercely, right? And that's ways, ways got acquired by Google for a billion dollars with zero revenue, just because their growth accelerated so quickly. And so it's a good question. You know, how did ways grow so fast? What did they do with their product that got so many people to use them so quickly?

Jay Haynes :

Yeah. And related to that is why did Magellan fail? People may not even remember Magellan, but they made GPS devices. So they're really in the exact same market. So why did they fail? And why did ways succeed? So we'll go through these product strategy questions, to build up a product strategy that would give us an idea about whether or not we could beat up on Google Maps. So the first question is who is the customer to target. And the key with jobs theory is there are really three critical customers, there's the beneficiary who benefits from getting the job done the execute or who helps execute the job and the purchaser. And in a market like this, this consumer market, those three people are the same. You're you're buying a product, you're executing the job, and you're the beneficiary. So we want to identify a group of customers in this market, who's struggled to get a job done, and we'll get into that in a detail. But the next question is, what is the market? Is there a navigation apps market?

Jared Ranere :

Right? And that brings up the question of what is a job? Right? So the job is the the goal that a customer is hiring a product to help them achieve? And the key to a job is that it is solution independent. This means that lasts over time. And the trick is that nobody really wants a navigation application just like they didn't want a paper maps That they put in the backseat of their car and pulled out and flip through and they tried to go somewhere, what they're trying to do is get to a destination on time. So nobody wants to use a map app. Nobody wants to use an in car GPS system, they want to achieve goals that are independent of that solution. And because they're solution independent, they're stable, and you can target them. And you can figure out why people are struggling to get the job done. Because remember, the struggle is what causes the purchase to struggle with the job. So I think get to the station on time is a good example of a job that we could target here.

Jay Haynes :

Yeah, and just to give people some background, this concept really started in 1960s with Theodore Levitt, and he was famous for saying, Customers don't want a quarter inch drill. They want a quarter inch hole. And of course you could apply that in any market. consumers don't want navigation apps they want to get to destination on time. You know, people don't want iPods or records or cassettes. What they want to create a mood with music, and this is true in consumer business, medical markets, and you can apply the concepts. And so the key is that first goal. So in this case, if we're going to beat Apple and Google Maps, we want to focus on the job of getting to a destination on time. And that's a great starting point. But it's not enough. We need to figure out a lot more about that job. And Jared, as you were saying, where's the struggle? So before we even get to the struggle, how big is this market? And and how do we determine the size of the market because the size of the market is absolutely critical. If you are in a small market, you should pick another market. And the size of your market determines your revenue and profitability, growth and ultimately, the value of your company. So sizing a market is incredibly critical. So how big is this market that we're going to compete in?

Jared Ranere :

Well, if we were going to use the traditional market sizing definition right product price to The number of buyers, that that would give us a market size, right, our total addressable market, how many people actually pay for these products? So how many people pay for Google and Apple Maps? Yeah, the answer is zero. Nobody does. They're free. So suddenly, we have a zero dollar market opportunity to go after that doesn't sound too exciting. Now, of course, Apple and Google make money in other ways. they've identified different markets to target. And their maps are tools to help them achieve success in those other markets. They're selling phones, they are selling ads. So Google is collecting data through the maps applications. But let's say we just wanted to try to win by helping people with the job they're hiring the map to do, how do we figure it out if there's a market opportunity there?

Jay Haynes :

Yeah, that's a great question. And this is this is absolutely critical, because market sizing as before, is everything and this explains why Why companies fail, which if you go back and look at throughout history, what happens is all products go obsolete, everything is gonna become obsolete. So if you sized your market and said, Hey, we're in the CD market, or we're in the iPod market, or we're in the encyclopedia market, or we're in the film market, those are all absolutely terrible ways to define your market. Because those are from the product point of view, not your customer's point of view. And you know, what's fascinating is Encyclopedia Britannica is a great example of this. They lost 100% of their sales in about six years. It just fell off a cliff, people decided, Okay, the internet's much bigger, better than, you know, these 26 bound volumes. We're no longer gonna buy encyclopedias. And that's because they define their market incorrectly. So in this case, the same thing is true. And so if we're going to size the market, what we want to look at is are people willing to pay to get the job done better than they can today? That's the part of the theory is what you're willing to pay for, since you're actually not buying products you're hiring it to get a job done is you're willing to pay to get the job done better. So you can use, you know, quantitative surveys, and there's lots of different techniques to do this. But you can get data on people's willingness to pay to get the job done. And in this case, it turns out there actually is a multi billion dollar opportunity in the United States for people who would be willing to pay to get this job done better. So why is this? This is such an interesting question. They're free products available, and yet people would still be willing to pay to get the job done better.

Jared Ranere :

Yeah, that's that's can be a hard question to answer. What's the point of paying for something that you can get for free? So if we look at jobs theory, it says the struggle is what causes a purchase. And I mentioned that earlier and we we kind of went by pretty quickly. But if you think about that a little more deeply. You can imagine yourself trying to achieve some goal and if you are having a hard time achieving that you would pay somebody or buy a product that would help you do it. You know, it's really a simple example is I struggled to keep my house clean. And so we pay somebody to clean it for us, right? That's a job that I'm having a hard time getting done. And I spend money to overcome that struggle. And that's what's happening here. And they get to a destination on time market. There are people that are not getting to a destination, as on time as frequently as they would like to, they're getting there too slowly, they're late too often. And being on time really matters to them. So we they're struggling to get the job done. That's why they're willing to make a purchase. And the question is, what is this segment of people? Who are they? And what are they struggling with?

Jay Haynes :

Yeah, and this this is what's fascinating. And I'll use another example to explain how powerful looking at willingness to pay to get a job done can be because in a lot of markets when you're on a product team or even you're on a sales team, yeah, sure if you could lower your price. I mean, basic economics. You know, and demand curves, say like, Hey, we lowered our our price, we would sell a lot more of this product. So companies feel under tremendous pricing pressure. But one of my favorite examples, this is nest, because the thermostat market was a terrible market. You know, it was like 30 to $60 thermostats, and everybody hated them. And nest launched a product in that market priced at $250. I mean, that's extraordinary. That's almost 10 times the lowest price product in that market. And it was obviously enormously successful was bought by Google for almost, you know, over over $3 billion dollars. So, so why was that? Why would someone buy a thermostat for 250 bucks when there's one for $30? Well, the exam, the jobs theory shows that people are not willing to pay for a thermostat what they're willing to pay to achieve comfort in their home. In that case, that's the job and people were really unsatisfied with the $30 thermostat, but they were willing to pay a lot more because there was a segment of customers in that market, who had a high willingness to pay. And that's the key is identifying those segments, those really valuable customer segments. And that's true for here. If you were to beat Apple and Google Maps, you wouldn't want to just look at the broad market and say, Hey, everybody who's using this app on their phone is our market that would lead to failure. But what you can get, and that's

Jared Ranere :

Actually, it sounds counterintuitive, right? Because it always seems like you want to try to address them. biggest number of people you can find, right? You know, in this actually, in this era of growth at all cost, right growth is seeming to be the number of users then figure out how to get paid later, right. We've seen a lot of startups take that strategy. It seems like you would want to address everybody you possibly could that way you get the most users, but that can backfire. Right, right. Because, yeah, absolutely.

Jay Haynes :

Absolutely. If they don't are willing to pay, you know why? And most likely also, they're not even struggling to get the job done. You know. So in the in this case with Apple and Google Maps, there's a huge portion of this market apart. They're just they go throughout their routine. And they occasionally need to find a new store and a new meeting location or whatever. Those people are not really struggling to get this job done. The segment that is struggling, has really underserved customer needs, they have unmet needs that they are willing to pay for. And the data shows this. And this is actually true of ways as well. Now waves did have a free model. But what they did exceptionally well was they focused on unmet needs and a job step. And in this case, it was resetting the route. So if you were stuck in traffic, should you get off the freeway and take the side streets? Would you take an alternative route? Oh, gosh, you're gonna be late for your meeting. You know, that was that was really stressful and anxiety inducing. So when people figured out that ways could automatically reroute them. It was a huge success because there's clearly a large segment of people who are very frustrated for whatever reason that they can't do that well. And this is how you find those segments. It doesn't matter what the demographics are, whether you're Male, female, older young, you know, zip code or whatever, it's that you struggle to find an alternative route, or you struggle to determine the optimal sequence of stops in your day. And so this is how you can figure out who's the real underserved customer in your market is those customers that struggle the most. And that's really critical, because they've got unmet needs that they're willing to pay for. And they're, and they're likely to switch to a new product that satisfies those needs. So that's, that's the key is finding those unmet needs for that segment of customers.

Jared Ranere :

Yeah, and that raises an important question, right, what is a need? So a lot of companies don't agree on what their customers needs are right? And that's a major problem if the struggle causes a purchase and you're trying to get focused on satisfying customer needs better than competitors and find out what the needs are that your key segment is struggling with. And you can't even agree on what a need is or what your customers needs are going to be really hard to align the team around generating valuable ideas and executing against that roadmap. So in jobs-to-be-done, we define a need as actions, plus the variables required to get a job step done successfully. Now I just introduced a bunch of new terms at once, then, right just now. But we first let's start with job steps. We use job stuff to help us identify the customer needs because they tell the story of how to get the job done independent of any solution, what the customer has to go through, you know, there at the beginning, you have to identify information, understand the problem you're about to solve, right. In order to get the job done. You have to make a plan, you have to execute. Those are other job steps, the execution steps, you have to assess how it's going while you're executing it. You might have to make changes along the way and then finally, you conclude the job. by mapping out those steps. We can see What the variables are that cause people to successfully achieve each step or not? So the real like, these are a lot of new terms at once. But don't worry, the concept is really simple. Just think about everything someone has to do to achieve a goal and what can go wrong along the way. And a need is simply making sure that all the small pieces go right so that the whole job goes really well.

Jay Haynes :

Yeah, that's, that's a great way to think about it. And just for anybody who's interested in learning more about this, there's a guy named George Polya in the 1940s, who was trying to figure out how to solve problems. And the best way to think about joshy done for those people who are new to it is that your customers job to be done is a problem they're trying to solve. It's their goal and their struggle to achieve that goal is a problem. So when George Polya was looking at problems, he abstract it up and said, Well, okay, you can solve any problem if you go through these four steps, you understand the problem, you plan to solve it, you execute the solution, and then you assess how it went. And that's the basic idea is you've got these steps. And that's true for getting to a destination time. So understand the problem, you know, the first step is to estimate the departure time, you know, then you plan the stops, and then you actually travel to the destination. And then along the way you're assessing, hey, am I going to get there on time or not, and if not, you need to reset the route or make some sort of revision and then you conclude by you know, parking the vehicle walking to the destination, etc. So you can break down any job into those jobs steps. And then the key is each of those jobs have these variables. And the easiest way to think about this as you're solving your customers problems and problems have variables like you learned in school. And in this case, the variables are things that will not change. That is the key concept and the true power of jobs to be done and jobs theory. Just like the job people have been trying to get to a destination on time forever, and they're always going to try and get to the destination on time. The variables are stable too. So in this case, you know getting to destination on time has departure times routes open times at the stops, weathers delays alternative routes. Will sequence you know, etc. So all those things are the variables. And that's really the key is understanding those variables first, those are the needs in the job. And for with those needs, now we can start to think about which ones are unmet and what we should try and satisfy.

Jared Ranere :

Yeah, and the variables are interesting because the they're often data points, right? That change every time you execute the job, but the data points you need to know do not change, right? So you have to take care of them every single time you try to get this job done, and it's why they become needs. So what is an unmet need? Well, we can assume that the customer wants to get the job done quickly and accurately. To think about another way. Have you ever met anybody who wants to get to destinations slowly and not on time? Right? It's unlikely you'd be a Sunday leisure driver, but we didn't target that segment. Yeah. Yeah, that's I think that's a different job. Because you're really not right.

Jay Haynes :

Yeah, they don't want to be anywhere.

Jared Ranere :

So you want to get the job done quickly and accurately. And so you want to get the needs done quickly and accurately as well. Because if all the needs go quickly and accurately, then ultimately your job will go quickly and accurately as well. So unmet needs or needs that can only be satisfied slowly and inaccurately, or perhaps not at all with the existing solutions in the market. So how do you figure out which of the needs in the job or the ones that are slow and inaccurate or more importantly, the customers perceive as slow and inaccurate? They're saying, this is a problem for me. I'm not doing this. Well.

Jay Haynes :

Yeah. And there's lots of techniques, but the the idea pretty simply, is that you're measuring customer effort. So when they think about getting to destinations on time, whereas they're too much effort, and there's been you know, lots of good research published on customer effort scores and how they're more predictive of whether or not a customer is going to buy, or be a repeat customer. But this all makes sense, right? People are busy, we all have things to do in our lives, we want to get back to our jobs into our families and in our hobbies. And, you know, we want to live our lives. And when something's a struggle to achieve a goal, that means there's too much effort. So if there's too much effort, that is means that there are unmet needs. And specifically in this market, we know you know, we have some data on this that shows that, that planning the stops in a busy day, takes way too much effort. And there's a segment of customers who meet the criteria for developing a product strategy in this market, who struggle a lot to plan their stops because they make frequent and unfamiliar stops, whether they're traveling salespeople or whoever they are. This is actually is known as the Traveling Salesman Problem. Because it's hard to do. It's really hard if you're trying to get them off. destinations on time and unfamiliar place to optimize the sequence of those stops is actually very, very difficult to do. And now we have an unmet need to target. And this is just one of the needs, that's unmet in the job. But as our example here, so what would we do now? Now we know we have a customer, we have a market that's big enough, we have a segment that's big enough, we have an unmet need, we can target. And now we need to figure out how we're going to innovate to help satisfy this need faster and more accurately than Apple and Google Maps. So how would we do it? And how would we assess Apple and Google Maps?

Jared Ranere :

Right? So in other words, we have a problem we have to solve. And now we've got to figure out how good does our solution have to be? And the way we do that is we look at what do people use today to satisfy this need. And of course, Google Maps our primary competitor here is a ubiquitous solution for trying to get to a destination on time so we can look at how you would determine the optimal sequence to make plan stops with Google Maps. So they've got an add a stop feature, right, and so you would enter in your origin, then enter a stop 1, stop 2 stop 3, stop 4, stop 5, imagine you have 6 to 8 to 10 stops that you have to make in a day. And essentially, you have to drag and drop those stops around and as many combinations as you can come up with, until you figure out which one has this the shortest total length of time, the least backtracking and the shortest amount of time in between. And then if you have any fixed appointments, while you get there on time, you're holding a lot of information in your head and doing a lot of manual activity. It's very slow and very inaccurate. And this is customer empathy. Right? putting yourself in your customers shoes, using their solutions to try to satisfy the needs. And now you know why they think it's high effort because it's slow and inaccurate to try to do this with the existing solutions in the market. Yeah, and and we really recommend that companies do this type of detailed competitive analysis. We see them not doing enough of it. And but this is really one of the powers of jobs-to-be-done is you can look at your competitors through this lens of your customers job. And as you said, Jared, you know, empathize with them, Wow, really trying to turn my optimal sequence that but that is a terrible experience, it really is. It would be slow and you know, time consuming, wildly inaccurate, you know, etc. So if we're going to generate new product ideas, now we have all we need, we have this unmet need that stable is not going to change over time. We know the market is big enough, etc. And the way to generate ideas with this is we actually now have criteria to generate the ideas. And I know companies and a lot of people have done brainstorming. You know, brainstorming is an idea that was invented like in the late 50s, early 60s, I think, and the idea behind brainstorming is that there are no bad ideas. And I love telling a story about when I worked at Microsoft. This is back in the late 90s you know, Microsoft was like dominant company in the world. They had a brainstorming room and I kid you not the brainstorming room had like Tickle Me Elmo finger paints, you know crowns it looks like my my kids like elementary school you know preschool and the idea was, of course that there are no bad ideas so this was the only place at Microsoft where my boss was not allowed to yell at me and Microsoft of course had a culture where they just told everybody they were stupid and you know you were constantly having these battles but except in the brainstorming room, and of course the brainstorming room produced no good ideas at all. It was terrible because there was no criteria to judge the ideas already just came up with a hundreds of ideas, which is not useful.So how do you know which one to actually go after?

Jay Haynes :

Yeah, right. You're like hey, do you like Jays idea, Jared idea? Who knows. But in this case, now we have the criteria. We know the unmet need here in our example that we're using, people are trying to get to a destination on time, they need to plan their stops and they need to optimize the sequence of stops. So optimizing the sequence of stops is a very specific need. And that we've seen, if you're doing that with Apple and Google, it's very hard to do. So we can use that as the criteria to judge ideas to generate and judge ideas. So the first idea would be, okay, people need to optimize their sequence of stops. Why don't we create an assistant service? So that sounds like a good idea, because that's what the executives do today, you know, you're an executive at a relatively big company, you have your assistant plan your stops. And if you're traveling to a new meeting, sorry, a new city and meeting with a bunch of new customers or something, you'd you'd have your assistant reschedule. So that seems good. And that's a good concept. You could measure and say that right, take a few minutes, you know, and and probably be pretty accurate, more accurate than doing it yourself and getting frustrated, because I could spend the time looking up all the information they might need. So that's one idea. And then the second idea, what would be a better idea? What's another idea to determine the optimal sequence?

Jared Ranere :

Well, you know, we got to get destinations. Somehow we need to know what the stops are. So people tend to put them in their calendar, right? Especially if they're a professional, we can pull in the stops from the calendar, right? We can sync the calendar with our application. And then if we can come up with the incredible algorithm that can determine the optimal sequence, then all we really need is a button that just says, Hey, make the right order. And then the user can approve, you know, do I like this order or not? But it's much faster, right, then then having to call an assistant.

Jay Haynes :

Yeah. And and that's right. I mean, that, as we mentioned, you know, software is very good at doing things like taking information inputs and outputs and helping to make decisions. In fact, this is the Traveling Salesman Problem. So this type of optimization is exactly what computer algorithms are really good at, they're going to be, you know, faster and more accurate than humans. So that sinkin optimized feature, which I love, yeah, Jared, I like your idea more than my idea. Because we can we can judge those we can say which is going to be faster, which is gonna be faster and more accurate for the customer from the customer's point of view, and this is why job's done is so customer centric, because you really are looking at it from the customer and saying, Well, okay, I got an idea this assistant service, Jared has an idea for speed and accuracy. Sorry for sinking optimize, which one's gonna be faster and more accurate? That's the one you should go with. And you know, there's some, you might have to do some R&D, it's probably non trivial to figure out this optimization algorithm, but at least you know, what you're trying to do? Why are you putting this product feature into your roadmap? How do you prioritize what's going in a roadmap? Well, in this case, we're gonna create a ton of value relative to Apple and Google Maps for this segment of customers who are willing to pay because we're going to help them optimize the sequence of stops. And this is exactly what explains ways to success ways was really successful because they helped you reset the route and find an alternative route faster and more accurately than you could do on Apple and Google Maps. So it's a, it's a way to de-risk your investment in your product roadmap by building a product strategy based around your customers struggle to get their job done.

Jared Ranere :

Right. And if you gain agreement with your team all on the way up to the unmet needs and how the competitor is trying to satisfy the needs and fail, then now you're having a very narrow conversation about what which ideas to pursue. I've been in a lot of very difficult roadmapping meetings where it feels like a political disaster, and people are horse trading all over the place, and it's just very painful and uncomfortable and takes a very long time. And a lot of it comes down to people not knowing what the criteria is for good idea or not. And they start just talking about what do they like and what do they not like and what are their affiliations? Who do they want to champion in the room not which idea is the best for the customer? So if you reframe that question from the point of view of your customer, it is It takes the tension out of the conversation and makes everything a lot easier because you've already agreed on what problem you're trying to solve. And then, you know, maybe you can have an interesting conversation then about the level of effort and the risk to execute this idea, right? What What should we do first, second, and third, because of how long it will take to build and how do we, you know, accelerate our process to get to the best idea as fast as possible.

Jay Haynes :

Yeah, and I think that's a good point to end here. But I'll tell one final story that I love. Because, Jared, what you're explaining there is sometimes what we refer to as the HIPPO, which is the highest paid person's opinion. And a lot of teams. This is where the roadmap This is how the roadmap gets decided. How do you prioritize your roadmap? Well, the HIPPO decides, and my favorite story is about the Amazon Fire phone. You know, Jeff Bezos, obviously the founder and CEO of Amazon, you know, currently, I think, the wealthiest person in the world. If Jeff Bezos is you your boss, he's your HIPPO. And he says, We're building a phone and we're doing it this way. That's the way you're gonna do it. Because you have no other criteria to say, Jeff, this is a totally insane idea. And it was a great postmortem story on story on this. Of course, the Amazon Fire phone was a complete disaster. It was a huge failure because he had some big vision of its, you know, crazy, weird 3D interface that who knows what it was, what Job was helping you get done, but he wanted to build it. So everybody, all the executives of the company were like, well, we have to build this thing. And it turns out, it was a huge failure. So in the in the postmortem story about it, it was this conversation about the executives all didn't want to do it, but they didn't really have any criteria to say, Jeff, we shouldn't do this even before they invested $1 in it. I mean, likely they probably lost hundreds of millions of dollars on it. You know, similar to Microsoft launching a Zune the iPod competitor. And this is this is one of the things that jobs theory really helps teams with is gaining agreement on all these product roadmap and strategy and messaging and positioning and even sales tactics, techniques because you're really are empathizing with your, your, your customer. So just to conclude here, so how would you beat Apple and Google Maps, the way we would do it is we pick a customer, the underserved customers in the segment that we're going to target who struggle, we'd pick the market, which is getting to a destination on time, not navigation apps, we look at willingness to pay to size this opportunity, which is a few billion dollars in the US. And then finally, we would generate product ideas that create customer value by getting the job done faster and more accurately. Thanks for listening to our How Would You Beat Podcast, visit us at thrv.com that's thrv.com to get our free How To Guides and try our jobs-to-be-done software for free.