If you're wondering why you've
seen so little original thought on these pages of late, it's because I
can't seem to shake the post-vacation blues. 'Til they're gone, I'll
keep relaying good ideas and inspirations from others.
It's been said that there are no new ideas in the world, just unique
and clever ways of re-combining and articulating the old ones. A recent
article
in Strategy & Innovation
by Eric Mankin contains no new insight, but a brilliantly simple
formula, based on well-established business knowledge, for assessing
whether your business concept truly fills an
unmet need.
The formula is based on Clay
Christensen's description of what 'filling an unmet need' really
means:
When a consumer
buys a product, they are really 'hiring' it to get a job done.
Companies are successful when they make it easier for their customers
to get done what they were already trying to do.
Mankin says that a product that 'makes it easier for customers to get
done what they were already trying to do' must meet four criteria:
- Lower price than existing alternatives
- Greater benefits than existing alternatives
- Easy to adopt and use (and no problem switching from what the customer's using now)
- Easy to buy (readily available)
Rate your new product or service according to these new criteria, and
you'll have a pretty good assessment of the likelihood of success of
your new business. A lot of cheaply-made, environmentally damaging and
wasteful products, like the new cheap disposable toothbrushes, the
Swiffer products, and the endless rounds of 'disposable wipes' of every
description meet criteria 2, 3 and 4 very well, and for buyers who
think only of short-term cost, criterion 1 as well, and they have been
very successful. The vast majority of new technologies, including
Social Networking tools, fail to meet criteria 3 and (because they're
only available to computer users) 4, and are doomed to fail until they
simplify adoption and broaden their reach (see diagram above). Clever
innovators know the only way around criterion 1 is to develop a product
or service that is unique, and has no existing alternatives, which is
why great new ideas like TiVo, and the pioneering products from
companies like Sony, are initially priced steeply, to recoup the costs
of development quickly.
Perception is reality, and skeptics might argue that the purpose of
advertising is to convince people that every new product meets these
criteria, but I have more respect for the average consumer than that. I
believe advertising does nothing more than raise awareness of a new
product's availability. Regardless of the cleverness of the message,
most consumers will assess each product on the basis of how well it
meets the four criteria above for them personally, and will discount any commercial that tries to do that thinking for them.
The easiest way for entrepreneurs to meet these criteria is:
- Offer something that is unique -- so that you're not competing with large companies with deep pockets.
- Do your research, so you know before you start that the
benefits that you see in your offering are also appreciated as such by
potential customers.
- Keep the product or service simple, so it 'sells itself' and can be virally marketed.
- Be accessible and never keep customers waiting.
- Be honest about what you can and can't do -- never overpromise or exaggerate.
If more innovators and entrepreneurs had Mankin's formula in front of
them as they developed their products and services, I think the success
rate of new innovations would be a lot higher.
Thanks to Innovation Weekly for the link.
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