Why companies that focus on progress and understand context are better off than others that don’t
Using the Jobs-to-be-done framework as a tool for differentiation in a saturated market
Former Nintendo of America President Reggie Fils-Aime once said of his competitors: “My competitive set is much bigger than my direct competitors in Sony and Microsoft. I compete for time. When I do that, I have to be creative and innovative in order to win that battle . . . That time you spend surfing the Web, watching a movie, watching a telecast of a conference: that’s all entertainment time we’re competing for.”
I’ve been pondering on these thoughts for a while now. How is it that certain companies are able to create long-lasting value, especially during a major crisis like the pandemic? How is it that certain companies are able to out-compete others even in the midst of very saturated markets? I’ve pursued this insatiable desire to learn what makes certain companies stand out from other competitors and it’s led me to this interesting world of Jobs-to-be-done.
“My competitive set is much bigger than my direct competitors in Sony and Microsoft. I compete for time. When I do that, I have to be creative and innovative in order to win that battle . . . That time you spend surfing the Web, watching a movie, watching a telecast of a conference: that’s all entertainment time we’re competing for.”
What is Jobs-to-be-done?
Jobs-to-be-done is a framework that helps businesses understand the “progress a customer is trying to make in a given circumstance.” It was developed by the renowned business professor, Clay Christensen, to complement his theory of disruptive innovation (HBR, 2016).
*For more information on this theory, check out the Innovator’s solution (2003).
In Know Your Customers’ “Jobs to be done,” Christensen says most businesses, so often, tend to focus on “building customer profiles and correlations in data” than “helping their customers fulfill a need.”
He goes further to say that people “hire” companies, products and services to do a job. If your product doesn’t fulfill customers’ needs, they “fire” your product. However, if they use your product and find it very beneficial, they’ll keep “re-hiring” your product every time they have that need.
Why is the J-T-B-D framework important?
It’s what makes dolls like the American Girl attain a market share that cannot be seized by their competitors. You may wonder, “How have they managed to stay relevant against all the odds?” Well, let’s take a look at what they’re selling.
As an outsider, you may think they’re just selling dolls. They’re not. They’re selling an experience — the American Girl experience. Each doll represents a place and time in U.S. history and carries along with it a story that young girls can connect to. According to the founder, Rowland, the dolls help “articulate their feelings and validate who they are.” (HBR, 2016) They hold within them valuable life experiences, values, and traditions.
The J-T-B-D framework is important because it shifts our mindsets. It helps us think about user needs in a different way and come up with insights that could potentially help us build sustainable business models.
While it seems easy to articulate, they are not as easy to execute because they require talking to customers and observing the true drivers (functional, emotional, and social) behind their behaviors, especially within a particular context.
A classic example is one where Mcdonald's hired Clay Christensen to understand why over half of all milkshakes at their various locations were sold out before 8:00 am every morning. It was surprising what they discovered.
Customers weren’t buying their milkshakes because they had nice flavors but because they needed something that was both “easy and entertaining” while driving to work in the morning. They needed a snack that would be just as satisfying as a meal eaten during breakfast.
To further accentuate the importance of J-T-B-D, I’ll give another example — Airbnb.
The Airbnb story
Everyone is familiar with the Airbnb story but only a few are aware of how their service became so successful. Airbnb founders, Brian Chesky and Joe Gebbia were industrial design students, based in California, looking for a means to pay their rent. They had realized an opportunity to create revenue for themselves as a result of a need that stemmed from a design conference they were going to attend — finding affordable accommodation.
Chesky and Gebbia decided that they would offer their homes as a rental. They were willing to offer airbeds and breakfast food for people who were attending the conference. Everyone knows California for its high standard of living. During major events like conferences and holidays, prices for hotels tend to go off the roof.
“What if we rented our air mattresses?” said Joe. There was that light bulb moment and the germination of a seed, the Air bed and breakfast business, in 2007.
The business was brilliant. There was clearly a need for it and so they thought they would open up the opportunity to other homeowners. However, they encountered an obstacle. People were not used to temporarily living under the same roof with strangers. The thought of inviting a stranger to stay the night drove folks away.
It’s possible to build an amazing technology, a cool product feature, a nice framework and still miss the customers you’re trying to serve.
This is just an aside but it’s possible to build an amazing technology, a cool product feature, a nice framework and still miss the customers you’re trying to serve. Why? Well, because the circumstances by which those exist are not clearly understood and the job-to-be-done is not clearly defined.
Going back to our story, the Airbnb founders felt dejected. They had tried all types of marketing gimmicks to get customers to use their product but people were just not interested in using their offering. They even went as far as creating one of their biggest publicity stunts of our time, the Obama Os and Capn’ McCains limited-edition cereal boxes during the 2008 elections.
People were more interested in their cereal boxes than their Airbnb website. They earned more in revenue than they ever had on any business idea. Chesky’s mum even asked him if he was now in the business of selling cereal. (Haha… the life of an entrepreneur).
P.S. I would recommend reading the Airbnb story by Leigh Gallagher to hear the hilarious tales of the three founders.
They thought, “Of course, people need affordable housing while they’re attending conferences in a different town or city. We’d get a lot of customers in no time.” The opposite was the case. They couldn’t even get customers to sign up on their website.
Circumstances are more important than customer characteristics, product features, new technology or trends.
What made them fail?
So, what made them fail? They couldn’t clearly articulate the jobs their customers were trying to get done. They were so focused on improving the functions of their product that they almost completely forgot about their customers’ needs.
So many times, businesses fall into this trap where they fail to realize that “circumstances are more important than customer characteristics, product features, new technology or trends.”
Finding their north star
It took an encounter with a fine gentleman, Greg McAdoo at Y-Combinator, to change their mindsets.
McAdoo was a partner at Sequoia who had come to YC with the intent of investing in a company and was impressed by Chesky, Gebbia and Blecharczyk’s tenacity. He had asked them if they were playing in the “vacation-rental” industry. They were shocked that they hadn’t used those two words together when describing their company.
This conversation with McAdoo led to a breakthrough moment for Airbnb founders. Not only did they get funding from Sequoia but they also discovered the context at which Airbnb would play and the circumstances that led to the different jobs their customers were trying to get done.
Finding the JTBD at Airbnb
It’s been a few years down the road and Airbnb’s JTBD has morphed from “booking a room with a local during a vacation” to “taking a spontaneous vacation to decrease burn out.”
Types of Jobs-to-be-done
So, ask yourself, “What job is my customer trying to get done and what category does it fall under?”
You may talk to customers and find out they use your product because it is fulfilling a social job (how they want to be perceived by others). It may not necessarily be functional. You may be selling dining tables and realize customers aren’t really buying your dinner tables for its function but simply for the symbolic connection it represents — family.
According to Kelton Global, the different types of JTBD include:
- Social jobs
- Emotional jobs
- Functional jobs
- Aesthetic jobs
- Symbolic jobs
All these jobs are relevant, find out what works for you. What jobs are your customers trying to fulfill?
In conclusion, think of JTBD as a tool to help you understand the context that surrounds your customers’ needs and how your company can assist customers in completing a specific job.
I hope this information helps someone out there. Please let me know if you found this beneficial by leaving a comment or a clap.
References
- Know Your Customers’ “Jobs to be done” by Clay Christensen, Taddy Hall, Karen Dillon and David S. Duncan
- Mastering jobs to be done by Kelton Global
- The Airbnb story by Leigh Gallagher
- When Coffee and Kale compete by Alan Klement
