I hope most of you guys read Intercom's book Jobs To Be Done. But very few people looked at the original source – The Innovator's Dilemma by C.Christensen. And there, in addition to the framework you already know, is a theory of subversive innovation, which would be good for product managers and especially for startup founders to know about.
In short, what is the point?
There are two kinds of innovations: sustaining and disruptive.
Sustaining innovation is when we make the best products that can be sold for more money to the most attractive customer segment.
Disruptive innovation is when we create a simpler or more convenient product that can be sold cheaper to a new or unattractive customer segment.
If we want to enter a new market where there are already competitors, the best strategy, says Christensen, is to choose sustaining innovations.
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It's very simple: if you're trying to qualify for the most delicious piece, you're likely to get involved with the competition right away. You will spend a lot of time and money on this, but most likely, you will not capture a significant market share.
Subversive innovations focus on the audience that is less interesting to established businesses: these users do not need all the functionality of the product on the market, they are willing to sacrifice quality for the sake of price and simplicity. So you launch a product without getting into a bloody fight, and you start making users and profits – and, accordingly, you have the potential to improve the product and future growth.
This, by the way, is another theory:
Technology is evolving at a faster rate than users can use it. That is, for example, Google continues to improve the search year by year, but only a small proportion of their audience uses all the functionality provided by the full power (a simple example – how often do you go to the second or third page of the search?).
How do you know that an idea has “disruptive” potential?
1. Can an idea be disruptive to a new market? In order to understand this, you have to answer at least one of two questions in the affirmative:
Is there a large segment of people who have not historically had the money, equipment or skills to solve the target problem (to which your product belongs), and as a result, they have either not solved the problem at all or have had to pay the expert to do it for them?
To use a product or service, do users need to go to an inconvenient, centralized location?
2. Can the idea become a disruptive one for the lower segment of the market? To understand this, you have to answer two questions in the affirmative:
Are there users in the lower segment of the market who will be happy to buy a product with a lower (but good enough) set of functionality at a lower price?
Can we create a business model that will allow us to generate sufficient revenue at lower prices to win over the overserved users from the lower end of the market?
3. Is the innovation disruptive for all the important established players in the market? If the innovation is supportive of at least one of them, your chances of success are very low.
Examples of products that have entered the market with “subversive” innovations (there are a lot of them in the book!):
- Airbnb for Booking
- Email for mail
- Oracle for Cullinet and IBM
- SQL for Oracle
- Salesforce for Siebel Systems
- Pipedrive for Salesforce
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