The Harvard Business Review has an interesting piece about Airbnb, which, it notes, currently has a $30 billion valuation that makes it more valuable than most of the world's hotel chains despite the fact that it does not own a single room or building. But while "disruption" is the common word applied to the success of a company like Airbnb, that doesn't accurately or completely describe its success.
"Disruption theory explains and predicts the behavior of companies in danger of being disrupted, but it doesn’t tell a start-up company exactly what product or service to create to successfully disrupt a giant," the story says.
"To get that right, companies have to understand what Harvard Business School Professor Clayton Christensen calls the theory of Jobs to Be Done. Too many companies focus on making their products better and better without ever understanding why customers make the choices they do. Customers don’t simply buy products or services. They 'hire' them to do a job. That job is not just about function (having a nice bed to sleep in) but about creating the right set of experiences for customers. Those experiences have social and emotional components that may be even more powerful than the functional ones ... Being cheaper and 'good enough' doesn’t guarantee that people will choose your product or service over all others. You have to know what job customers are hiring you to do before you can hope to create the perfect solution for them – one that they’ll choose over all other options."
"Disruption theory explains and predicts the behavior of companies in danger of being disrupted, but it doesn’t tell a start-up company exactly what product or service to create to successfully disrupt a giant," the story says.
"To get that right, companies have to understand what Harvard Business School Professor Clayton Christensen calls the theory of Jobs to Be Done. Too many companies focus on making their products better and better without ever understanding why customers make the choices they do. Customers don’t simply buy products or services. They 'hire' them to do a job. That job is not just about function (having a nice bed to sleep in) but about creating the right set of experiences for customers. Those experiences have social and emotional components that may be even more powerful than the functional ones ... Being cheaper and 'good enough' doesn’t guarantee that people will choose your product or service over all others. You have to know what job customers are hiring you to do before you can hope to create the perfect solution for them – one that they’ll choose over all other options."
- KC's View:
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This sort of ties into something I've been thinking a lot about lately - the notion that boxes are less important than product, product is only as important as it is relevant to people's lives, and relevance can only be determined by the kind of actionable data that businesses are able to compile about their customers - that is actually acted upon. In other words, everything businesses do has to start with consumer behavior ... and everything that starts with process and legacy has to be put on a back burner.
