Millennials are no longer turning to their banks for advice. In fact, over 70% of Millennials would rather go see their dentist than listen to what banks have to say. Since the financial meltdown of 2008 the perception of banks has been significantly marred. Trust has been eroded and loyalty ruined. Adding fuel to the fire, today’s digital revolution is poised to impact the financial services industry in a way that hasn’t been seen since the ATM was introduced in the 1970s. Technological progress is affecting every sector of the industry including asset management in the shape of robo-advisors. These robo-advisors are growing at unprecedented rates by meeting Millennials’ jobs to be done – an important segment to attract as Millennials are now the largest generation in the US and are about to command the largest share of wallet in the US with an estimated $7 trillion in liquid assets by 2020.
On two recent occasions, we’ve heard about tech-savvy companies solving common problems with one of the least innovative products we can think of – socks. Kind of fancy socks, but socks nonetheless. Oddly enough, that pretty quickly made a lot of sense. That’s because innovation isn’t really about solving complex challenges, developing fancy technology, or even having that phantom “Eureka!” moment. Companies that develop breakthrough new products do so by responding to newly relevant customer needs. More specifically, they find ways to address under-satisfied jobs that customers are trying to get done in their lives, or they alleviate the pain points that stand in the way of getting those jobs done. To better understand how a Jobs to be Done mentality can help break down problems until the right solution seems obvious, we’ll look at how two companies – Yondr and Netflix – have started addressing real customer needs using little more than some socks.
We’ll start by looking at Yondr, a company that satisfies two different types of jobs – functional and emotional – that have become increasingly relevant in recent years. Yondr essentially makes socks for smartphones. Once individuals put their phones in the socks, the socks lock and prevent those individuals from using their phones until they step outside of a defined geographical area. On the functional side, Yondr is helping venue owners and performers combat the problems that have developed as phones have become more advanced. Concert venues and comedy clubs, for example, now have a way to prevent attendees from capturing and posting images and videos of their events – an issue that has become increasingly problematic as phones with high-quality cameras have become ubiquitous. Similarly, testing centers can have students put their phones in these socks before taking tests, preventing them from accessing the Internet or copying testing materials. On the emotional job side, Yondr’s socks also give individuals a way to more fully experience the events they’re at by taking away the temptation to view the event through the screen of a phone or to rely on their phones as a social crutch rather than interacting with other attendees.
Although Yondr’s “socks with locks” may seem like a particularly clever idea, finding the need for such a solution is actually quite intuitive. It simply involves giving some thought to how the world is evolving, finding those jobs that are either new or more important than they once were, and learning where customers struggle to get those jobs done to their satisfaction. In this case, cell phones have become both more widespread and more powerful. Instead of thinking about how to incrementally improve phones and add more functionality, Yondr looked at a broader set of stakeholders to understand what jobs they were trying to get done – and where they were struggling – in this new smartphone-first era. It quickly became clear that among other needs, there were under-satisfied jobs related to protecting IP rights and sensitive content. Framed in that light, a simple sock with a locking mechanism provided a fairly obvious solution.
Just this week, T-Mobile announced Binge On, a free addition to the carrier’s Simple Choice plan that will allow subscribers to stream unlimited video from providers like Hulu, HBO, and Netflix without it counting against their data usage. T-Mobile Binge On is the latest piece of the company’s three-part strategy to take on market leaders Verizon and AT&T. In our recent piece for Forbes, we look at T-Mobile’s strategy for using its limited assets to make a play for more market share.
This post was written by Stephen Wunker and David Farber.
Since the open innovation craze swept the business community in the early 2000s, idea competitions have taken hold at a number of companies. While these competitions tend to bring in thousands of new ideas, most end up getting discarded. In our recent piece for Forbes, we look at what’s wrong with the idea competition approach, instead promoting innovation processes that revolve around growth platforms. We look at how some of the world’s leading companies have used growth platforms to create more stable innovation platforms that harvest only the categories of ideas that can be immediately put to good use. We also explore how you can choose the growth platforms that will fit your own innovation efforts.
This post was written by Steve Wunker.
From startups to large corporations, building a culture of innovation is high on the list of priorities for most companies. There’s enormous potential that can be unlocked by fostering creativity among the employees who know the ins and outs of your industry and your company better than anyone. But creating that culture is about more than adding a ping pong table, a few beanbag chairs, and some bright colors. In our recent piece for Forbes, we look at five strategies that companies can use to build a culture of innovation. From choosing the right type of innovation to focus on to empowering your workforce, we explore how companies from a range of industries have powered their innovation initiatives.
This post was written by Stephen Wunker and David Farber.
Nintendo recently announced that it would begin producing video games for smartphone and tablet devices. This is a big step for the oldest market player in video games. The industry was built on the backs of its core brands, such as Mario and Zelda, which remain a key part of its business. It’s an aggressive move from a company largely perceived as a legacy stalwart in a rapidly advancing industry. Nintendo’s conservative business model paradoxically positions it well to move into a rapidly growing mobile gaming industry that threatens to disrupt its core customer base.
Aside from winning share through its established brands, Nintendo has carved a unique place in the market by owning the entire value chain of its industry: it is the only major competitor to produce most of its own hardware (the platform that games run on) and software (the video games themselves). Competitors Microsoft and Sony mainly produce hardware (Xbox and Playstation, respectively), but tend to leave production in the hands of third party developers and publishers. They build increasingly powerful expensive pieces of gaming equipment that must appeal to as wide a range of video game developers as possible. Nintendo, however, exercises strict control of its core franchises to put a greater focus on developing engaging gameplay mechanics first and then producing hardware platforms designed to support those mechanics.
TechCrunch recently hosted its Boston Pitchoff, giving eight startup finalists a chance to pitch their businesses in front of a panel of VCs and tech journalists. Clique Chic - a website that gives members access to designer clothes and a personal stylist - won the competition and will advance to the final Disrupt NY competition later this spring.
The competition boasted healthcare wearables, social networking apps, gamified education tools, and even a foray into personalized medicine. Amidst this heavy competition, Clique Chic demonstrated that it's the business model - not the buildup - that makes a startup successful.
To learn more about the featured startups and to see what strategies set Clique Chic apart, check out our piece on Forbes.
This post was written by David Farber. To learn more about how New Markets Advisors helps companies enter new markets, click here.
For the past few years, tens of thousands of entrepreneurs have been flocking to Kickstarter to seek the funding they need to get their ideas off the ground. The crowdfunding site has given these innovators a platform to truly embrace the Lean Startup principles that companies large and small have used to launch breakthrough innovations. By putting the core of the Lean Startup practice to use – including getting cheap, early prototypes in front of real people, gathering feedback, and iterating based on that feedback – these entrepreneurs successfully funded over 22,000 projects in 2014 alone.
The most successful campaigns have shown us that winning also depends on how successfully you can utilize familiar platforms and growing trends, how significantly you can reduce trial costs and pain points, and how concretely you can demonstrate tangible value. We have extracted some of the key innovation lessons that can help companies – regardless of their size – better understand what they can do to increase their chances of success in launching new products and services.
Read our piece on Forbes to learn more about the lessons we can learn from the Kickstarter standouts of 2014.
This post was written by David Farber. Learn more about our work in strategy or building innovation capabilities.
APQC published an interview with Stephen Wunker, our Managing Director, about the nature of innovation, how to innovate in large corporations, and how to follow through on disruptive ideas. Download the interview here.
APQC is a member-based nonprofit and one of the leading proponents of benchmarking and best practice business research.
The Swasthya Slate packs a remarkable amount of electronics within a single diagnostic device. The Slate can take an electrocardiogram, monitor urine, and diagnose a range of serious conditions, all for a tiny fraction of the cost of traditional machines. Moreover, the Slate's simple interface enables low-skilled technicians to use the device, and communication with central servers allows for decision-support algorithms to recommend potentially appropriate treatments for patients being diagnosed.
There is no remarkable new technology in the Slate. Indeed, that's partly the point. Through packaging off-the-shelf parts in a straightforward-to-use package, the Slate aims for low-cost simplicity. The accuracy of its readings is reportedly 99% as good as far more expensive machines. Yet the way regulation, purchasing, and usage of these devices occurs in developed economies precludes the Slate's usage there. Instead, the Slate has been invented and is being rolled out in India. Read the Forbes article to learn more about the device and the disruptive innovation it represents.
This post was written by Steve Wunker. Click for more of New Markets' thinking about healthcare and Costovation.
Much of this week’s tech excitement has been around the size, shape, and display of the new iPhone 6. Perhaps the most important long-term implications, however, will come from Apple Pay, Apple’s new play in mobile payments. Apple Pay – enabled by Near Field Communication (NFC) – is hardly a noteworthy technology innovation. Despite limitations in point-of-sale (POS) infrastructure and relatively slow roll-out in the corresponding phone technology, Google Wallet and others long ago made mobile proximity payments a mass possibility. NFC has been around for roughly a decade. At the same time, companies such as Square have been steadily popularizing mobile payment solutions for both consumers and smaller merchants.
So, why is Apple Pay significant? Much like with Apple’s past successes, the relevant technology is now being integrated into a larger business model innovation. Somewhat serendipitously, this business innovation nicely coincides with shifting consumer behaviors and demands for retailers to upgrade POS terminals. In particular, Apple Pay benefits from five key advantages that might allow Apple to be the driving force in fueling the growth of the US mobile payments market.
A comprehensive growth strategy generally requires a well-balanced portfolio of organic growth programs and adjacency plays that support the core business. Winning in adjacencies is not always easy. In fact, many companies decide every few years to timidly test the waters of new markets before ultimately returning to the safe and stable profits that they know the core business can provide. Nevertheless, those that leverage key assets from the core and use new market opportunities to bring hard-to-capture value back to the core can save themselves from the do-or-die decisions that need to be made when a company waits too long to evolve. To that end, several major tech deals over the past few months have done a good job illustrating five of the primary ways companies can use new businesses in adjacencies to support the core.
Not long ago, Better Place was a company with heady PR, $2 billion+ valuations, and a superstar CEO. Now it's bust. The collapse of this company had little to do with underlying dynamics in its industry, electric vehicles. Rather, the firm violated several principles about how to gain fast market penetration for bold innovations. The idea underlying the company was truly exciting, but its path to customer acceptance was tortuous. My piece for Forbes tells what lessons about speed of adoption stem from this tale.
This post was written by Steve Wunker. Click to learn more about finding new growth opportunities.
Occasionally, new markets spring from technological leaps that create huge improvements in tackling well-known challenges. At least as frequently, though, the companies that push these new solutions into the market find themselves solving for problems that customers scarcely recognize.
When I led one of the world's first smartphone development programs, for Britain's Psion PLC in the late 1990s, we had dazzling technology. You could send a fax from a PDA! But we seldom paused to nail down the exact question we were trying to answer. As a smallish, albeit cutting-edge, company in a rapidly-moving market, we had to be precise about what we would and would not try to do. Yet we were bewitched by our cool solutions, and utterly flummoxed by how people could flock to a bare-bones PDA (Palm) or a primitive two-way pager that could send some e-mails (the Blackberry). It was a hard lesson to learn.
In my piece for Forbes, I lay out when asking the right question matters, and how to ask it in a broad yet rigorous way. Companies that thrive in new markets not only have good solutions, but they apply them to precisely the right problem.
This post was written by Steve Wunker.
Apple -- famed for its engineering and marketing -- is less renowned for its innovative business models. Historically that wasn't a problem; the company sold high volumes of a small number of products that were ingeniously engineered but not very expensive to build. It managed to do this at a high margin, enabling its iPhone to grasp over 50% of the profits in the entire mobile handset industry.
Yet this model is highly dependent on two factors: 1) the iPhone, which makes owning the full suite of Apple products much more appealing and 2) big subsidies from mobile carriers that make the iPhone price-competitive with Android and Windows offerings. A French upstart is starting to break that model, with dramatic results. Read more in my piece for Forbes.
This post was written by Steve Wunker.
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