The Innovator's Solut!on

Disruption does not guarantee success, but it sure helps: The Innovator's Dilemma showed that following a strategy of disruption increased the odds of creating a successful growth business from 6 percent to 37 percent.

Disruption does not guarantee success, but it sure helps: The Innovator's Dilemma showed that following a strategy of disruption increased the odds of creating a successful growth business from 6 percent to 37 percent. Disruptive innovation offers a significantly higher probability of success in building new-growth businesses compared to sustaining innovations. Disruptive innovations introduce simpler, more convenient, and less expensive products that appeal to new or less-demanding customers. They typically take root in two types of markets: Low-end disruptions: Target overserved customers with a lower-cost business model New-market disruptions: Compete against nonconsumption, enabling new populations to begin using a product Successful disruptors follow a consistent pattern: Start with a technology that is "good enough" for unserved or underserved customers Improve the product over time along a trajectory of innovation Eventually displace established competitors as performance improves

Customers—people and companies—have "jobs" that arise regularly and need to get done. When customers become aware of a job that they need to get done in their lives, they look around for a product or service that they can "hire" to get the job done. Jobs-to-be-done framework: Instead of segmenting markets based on customer attributes or product characteristics, focus on the underlying job that customers are trying to accomplish. This approach provides several advantages: Reveals true competition across product categories Uncovers opportunities for innovation and growth Guides product development to better meet customer needs Example: Milkshake study Morning commuters "hired" milkshakes to: Make commute more interesting Stave off hunger until lunch Be consumed easily while driving Competing products: Bagels, bananas, breakfast bars By understanding the job, the company could improve the milkshake to better serve customers' needs, rather than simply tweaking product attributes.

Competing against nonconsumption often offers the biggest source of growth in a world of one-size-fits-all products that do no jobs satisfactorily. Nonconsumption opportunities arise when people are trying to get a job done but are unable to do so because existing solutions are: Too expensive Too complicated Inaccessible Targeting nonconsumption offers several advantages: Less direct competition from established players Lower performance requirements to satisfy customers Potential for rapid adoption and market growth Examples of successful disruptions targeting nonconsumption: Personal computers (vs. mainframes) Cellular phones (vs. landlines) Discount retailers (vs. department stores) To identify nonconsumption opportunities: Look for situations where people "hire" workarounds or suboptimal solutions Identify barriers preventing broader adoption of existing products Develop simpler, more accessible solutions to address unmet needs