It has been reported by The Wall Street Journal that Snap, Inc. — previously Snapchat — is preparing for an IPO early next year that would value the company at around $25 billion. This comes on the heels of Snapchat’s recent announcement that it’s expanding into the hardware realm with the coming launch of its new Snapchat Spectacles. All this from a company that makes yet another app in the crowded photo and messaging spaces. All this from a company that puts out a seemingly inferior product that offers far less functionality than its chief rivals in the social media realm. Yet, as we’ll explore in a moment, it’s precisely that “inferiority” that gives Snapchat its edge.
As Google Glass fades to distant memory, yet another alliterative wearable is trying to turn our faces into cameras. Why? Even Google — a company that we trust to develop self-driving cars and deliver burritos by drones — was heavily maligned for daring to add a camera to our glasses. The criticism was unrelenting: the glasses were expensive, they looked ridiculous, and they could be used to covertly take video of others without their knowledge. In some ways, Snapchat’s Spectacles address those concerns. They’ll retail for roughly one-tenth of what early adopters had to shell out for Google Glass, and the Spectacles camera has lights to indicate when it’s filming. How fashionable they are remains to be seen.
How is innovation consulting different from other kinds of consulting? In this guest post written for a-connect, our Managing Director Steve Wunker points out what makes innovation consulting distinctive, how the field has changed in the past decade, and what major trends will impact it in the future.
If you ask them, customers have a lot of needs—they want bigger, faster, more efficient, more variety. Most companies chase after this laundry list of to-do’s, churning out solutions that are increasingly elaborate and feature-laden. Sometimes they end up with a bullet train; other times, you get green-colored ketchup.
On the other end of the spectrum, we’ve seen companies direct their innovation efforts towards finding radical ways to do less—which correspondingly allows them charge less to their customers. These businesses are veterans at making tough trade-offs; they relish in ruthlessly and imaginatively funneling down to the bare bones of what their customers need. There are many ways to go about this cost-cutting, but the end result is almost always a transformative approach to the industry. We call this Costovation.
An example of this down-market innovation is Omenahotelli, a Scandinavian chain of budget hotels where just two things are guaranteed: a cheap rate and a central location. Anything else—like a lobby, receptionist, or even housekeeping services—is not part of the deal. Guests receive passcodes to unlock the front door and then self-service their way through their stay in highly-standardized rooms. Omenahotelli runs on a simple concept—price and location above all—and is as innovative as it is lean. It’s perfectly suited for budget travelers exploring an expensive part of the world.
Here are two key lessons about innovation that we’ve gathered from businesses that excel at Costovation.
Lesson #1: Innovation doesn’t have to be about more. We live in a world of ever-expanding phone display screens and 1000 flavor soda fountains, but catering to our ever-evolving whims comes at the expense of simplicity in the back-end supply chain. In contrast, one technique for Costovation involves rallying around the single most pressing customer need. It’s the opportunity to do just one or a handful of things very well.
For many years now we’ve seen the dangers of defining your business too narrowly. Think about Borders, which pioneered the book megastore model. Rather than using the Internet’s rise to consider how new technologies or business models could allow it to better satisfy customers’ jobs to be done, it defined itself as a bookseller. When times got tough, it doubled down on trying to sell more of the items its customers happened to be buying — books, CDs, and DVDs. It last turned a profit in 2006 before ultimately declaring bankruptcy and closing its doors in 2011. Online retailer Amazon now reigns supreme in the space.
Millennials are no longer turning to their banks for advice. In fact, over 70% of Millennials would rather go see their dentist than listen to what banks have to say. Since the financial meltdown of 2008 the perception of banks has been significantly marred. Trust has been eroded and loyalty ruined. Adding fuel to the fire, today’s digital revolution is poised to impact the financial services industry in a way that hasn’t been seen since the ATM was introduced in the 1970s. Technological progress is affecting every sector of the industry including asset management in the shape of robo-advisors. These robo-advisors are growing at unprecedented rates by meeting Millennials’ jobs to be done – an important segment to attract as Millennials are now the largest generation in the US and are about to command the largest share of wallet in the US with an estimated $7 trillion in liquid assets by 2020.
Over the past few years, Jobs to be Done (“JTBD”) has emerged as one of the leading tools for innovators. As companies struggle to figure out which products will become breakthrough innovations and which will fall flat, companies large and small have time and again found that Jobs to be Done can provide the answer. Netflix co-founder Reed Hastings has talked openly about using JTBD to disrupt the video rental industry. General Mills regularly employs the theory to develop new product lines so it can hit its growth targets. Johnson and Johnson has even started listing familiarity with JTBD as a qualification for those applying for front-end innovation jobs. But despite the acclaim the theory has garnered and the obvious successes that have been born from it, organizations that stop with merely uncovering customers’ jobs are still launching products that struggle in the market. Ford is the latest casualty.
In March, Ford launched Credit Link — a pilot program that would let three to six customers share the lease on a new car. Through the program, customers would all have access to the new car, using an app to divvy up driving times and payments however they wished. Three months into the pilot, not a single customer has signed up. Some quick analysis has shown good traffic to the program’s website, but the number of conversions remains at zero.
Keeping up with customer demand is getting harder and harder. More than half of new products fail, and those that really move the needle are even more unlikely. While businesses may be struggling to understand what tomorrow’s customers want, the need to do so will only continue to grow more pressing. Customers will continue to demand more and more, and they’ll let the world know quickly if your new solutions don’t meet expectations. Competitors will continue coming up with strategies to undercut your prices, add new features, and slowly steal away market share. Startups will offer customized products and on-demand services that reduce demand for traditional offerings.
Corporate futurists are one way that companies will respond to these increasing market pressures. Futurists have the tough job of looking at social, technological, and economic trends from across industries and creating a view of how those forces will impact the direction your business needs to head. Unfortunately, most organizations aren’t in a position to add futurists to their ranks. At least not successfully. We’re seeing that companies are having a difficult time bridging the divide between customer insights and strategic planning, yet that’s exactly the area in which futurists would need to sit.
In a recent article for Forbes, we looked at several strategies for closing the research-to-strategy gap and integrating important trends into the product development process. These include creating a common innovation language that is used cross-functionally, mapping trends to specific use cases, and integrating a defined transfer plan into your innovation process.
Most new startups fail. That’s particularly true in the food and beverage space, where entrepreneurs often have great homemade products but lack the resources and business expertise to get their products to the next level. However, those skilled few that do succeed can be valuable bellwethers for how the industry will evolve. What’s more, the startups that take off often have important lessons for even the biggest consumer goods incumbents. That’s because those that succeed don’t do so based on luck. They thrive because they take a different view of the market – one that focuses on consumers’ jobs to be done.
The team at Mass Innovation Nights – an organization that helps local entrepreneurs promote their businesses – recently hosted an event to connect New England food startups with media members and innovation experts. Several of the companies featured at the event were already showing promise. Looking at how those businesses got their start and why they’re gaining so much traction, we’ve extracted three lessons that any consumer goods company would be wise to pay attention to. And in the process of learning from these young companies, we may well get a better idea of what’s coming down the road in the food and beverage realm.
On two recent occasions, we’ve heard about tech-savvy companies solving common problems with one of the least innovative products we can think of – socks. Kind of fancy socks, but socks nonetheless. Oddly enough, that pretty quickly made a lot of sense. That’s because innovation isn’t really about solving complex challenges, developing fancy technology, or even having that phantom “Eureka!” moment. Companies that develop breakthrough new products do so by responding to newly relevant customer needs. More specifically, they find ways to address under-satisfied jobs that customers are trying to get done in their lives, or they alleviate the pain points that stand in the way of getting those jobs done. To better understand how a Jobs to be Done mentality can help break down problems until the right solution seems obvious, we’ll look at how two companies – Yondr and Netflix – have started addressing real customer needs using little more than some socks.
We’ll start by looking at Yondr, a company that satisfies two different types of jobs – functional and emotional – that have become increasingly relevant in recent years. Yondr essentially makes socks for smartphones. Once individuals put their phones in the socks, the socks lock and prevent those individuals from using their phones until they step outside of a defined geographical area. On the functional side, Yondr is helping venue owners and performers combat the problems that have developed as phones have become more advanced. Concert venues and comedy clubs, for example, now have a way to prevent attendees from capturing and posting images and videos of their events – an issue that has become increasingly problematic as phones with high-quality cameras have become ubiquitous. Similarly, testing centers can have students put their phones in these socks before taking tests, preventing them from accessing the Internet or copying testing materials. On the emotional job side, Yondr’s socks also give individuals a way to more fully experience the events they’re at by taking away the temptation to view the event through the screen of a phone or to rely on their phones as a social crutch rather than interacting with other attendees.
Although Yondr’s “socks with locks” may seem like a particularly clever idea, finding the need for such a solution is actually quite intuitive. It simply involves giving some thought to how the world is evolving, finding those jobs that are either new or more important than they once were, and learning where customers struggle to get those jobs done to their satisfaction. In this case, cell phones have become both more widespread and more powerful. Instead of thinking about how to incrementally improve phones and add more functionality, Yondr looked at a broader set of stakeholders to understand what jobs they were trying to get done – and where they were struggling – in this new smartphone-first era. It quickly became clear that among other needs, there were under-satisfied jobs related to protecting IP rights and sensitive content. Framed in that light, a simple sock with a locking mechanism provided a fairly obvious solution.
As the year winds to a close, the time has come to take a closer look at some of the most innovative products and services that have sprung to life this year. Thousands of new products launch every year. According to recent data from Nielsen, 85% of those innovations fail, and 70% of sales come from just 20% of newly launched products. Put simply, most success comes from a very small number of new products. So, who were this year’s big winners, and what makes them different?
This article looks at four products and services that launched this year with the potential to meaningfully impact their industries. In particular, it looks at how the Jobs to be Done concept — first popularized by Harvard Business School professor Clayton Christensen — can explain why these four innovations have so much potential. Our Jobs to be Done framework looks at eight discrete parts of the market landscape, with each revealing just one piece of the puzzle.
Looking through the lens of four of the most innovative solutions to be launched this year, we’ll explore how the parts of the framework can be used to predict how consumers decide the fate of new products and services.
Companies are often frozen in place by an “iron triangle” of failure, risk, and learning. Even those with lofty ambitions for furthering innovation get tripped up by common business behaviors that, while innocuous on their own, create inadvertent roadblocks to new forms of growth. Although existing structures tend to be optimized for incremental innovation in the core, they often do little to extract positive lessons from failures and fully map out risks in new areas. While much may be invested in innovation, little is learned. Check out our new piece on Forbes to learn more about what holds back innovation.
This post was written by Stephen Wunker. To learn more about how New Markets helps companies build innovation capabilities, click here.
Just this week, T-Mobile announced Binge On, a free addition to the carrier’s Simple Choice plan that will allow subscribers to stream unlimited video from providers like Hulu, HBO, and Netflix without it counting against their data usage. T-Mobile Binge On is the latest piece of the company’s three-part strategy to take on market leaders Verizon and AT&T. In our recent piece for Forbes, we look at T-Mobile’s strategy for using its limited assets to make a play for more market share.
This post was written by Stephen Wunker and David Farber.
Since the open innovation craze swept the business community in the early 2000s, idea competitions have taken hold at a number of companies. While these competitions tend to bring in thousands of new ideas, most end up getting discarded. In our recent piece for Forbes, we look at what’s wrong with the idea competition approach, instead promoting innovation processes that revolve around growth platforms. We look at how some of the world’s leading companies have used growth platforms to create more stable innovation platforms that harvest only the categories of ideas that can be immediately put to good use. We also explore how you can choose the growth platforms that will fit your own innovation efforts.
This post was written by Steve Wunker.
From startups to large corporations, building a culture of innovation is high on the list of priorities for most companies. There’s enormous potential that can be unlocked by fostering creativity among the employees who know the ins and outs of your industry and your company better than anyone. But creating that culture is about more than adding a ping pong table, a few beanbag chairs, and some bright colors. In our recent piece for Forbes, we look at five strategies that companies can use to build a culture of innovation. From choosing the right type of innovation to focus on to empowering your workforce, we explore how companies from a range of industries have powered their innovation initiatives.
This post was written by Stephen Wunker and David Farber.
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