You've got to stat with your existing tools, materials and resources (your time, expertise, network etc.) Every project starts with what you have today. No matter what you are doing, whether it's building a dining table (a project I tackled this summer btw) or building a venture, you start with what you can get access to.
In this article, we discuss some of the tools, materials and resources every startup founder has, and might even be overlooking, when it comes to building a brilliant business.
There are three key spaces in which a young company can innovate, disrupt and take on the market. Some of this I am sure you know and have been working on, but some of it you might have overlooked.
These key spaces are:
Most people tend to take a product-centric innovation approach, i.e.:
It looks like Model is an afterthought and Channel is the middle child that no one pays attention to (I can say that because I am one ), but there is more than that to these two spaces.
Lets not even touch product for now. There is so much said and done that I would rather concentrate on the other two which are often overlooked as opportunities for disruptive innovation.
Most innovation in this space is about charging less, but some excellent cases prove that it is not just about price.
Let's take Spotify as an example.
When they entered the market, the dominant player was iTunes. If you compared what you could actually do with the two products, you would see that they were very similar. You can play a song, create a playlist, pause, skip and so on. The "UX" was the same. But the Model, and the streaming technology that made it possible, was entirely different. It was the model innovation that disrupted the market and eventually forced the top-grossing company in the world to accept defeat, change its way and replicate the competition.
Now, to be able to replicate this Model innovation, you need to understand why was this Model was disruptive and so desirable.
Ok, here is where I say something controversial.
Most of the analysis I read about this case tells the same old story about Generation Z: "Gen Z cares about the experience and not about owning anything. People in Gen Z don't care about owning things."... I don't think that's true, not least because lots of people spanning many generations Spotify, and Gen Z people are not necessarily anti-ownership.
You might think it's all about the price point, but that's simply not the case. On average, we actually spend more money on Spotify than we did on iTunes.
The answer is getting the job done cheaper. I know it sounds like price but bear with me because getting into the nitty-gritty of this can give you an edge.
First, we need to understand WHY people use the product. In Jobs To Be Done theory people don't want songs, they want to achieve an outcome. Now stop. Be honest. When you select a playlist and play music, what are you trying to do?
I am confident in saying that most of us don't want songs per se, we want to set a mood with music.
To do so, we need to discover new music and in iTunes, to discover new music you had to mortgage the house – and this weakness was a huge opportunity for innovation.
This is why the Spotify discovery playlist was so successful. For the first time in people's lives, they had a tool that allowed them to discover new music beyond radio. And if we at it, what radio really lacks is the personalization and convenience of choosing the mood you want to set, and the niche genre in which you want to discover more music.
This is why being featured in these playlists is the way to market for artists that want to make it in Spotify.
So, to replicate this type of Model innovation success, you must:
1) Identify the outcome your customers are trying to achieve, e.g. set a mood with music.
2) Identify what part of getting that outcome is difficult, time-consuming or expensive, e.g. discovering new artists.
3) Explore Models that can make that pain go away, making the satisfaction of that "need" more convenient and accessible for users.
This one is by far the most obscure of innovation, so I am going to use one case only, but if you are interested, do check out this other post with lots more material.
Let's look at the ALS ice-bucket challenge.
If you look at Product and Channel on this one, you will see a perfect fit. In this Product, when you pour a bucket full of ice water over your head, you earn the right to nominate three other friends to go through the same ordeal and make a donation. The Channel is viral referral on social media. You would post the video of you doing the deed and request the nominees to do the same. In this case, the Product and Channel are working in total harmony, supporting each other to create growth. The videos on social keep people accountable, and it's a great way to communicate that you have nominated someone and generate virality. It's the product feature "nomination" that makes the social Channel so powerful.
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