Recently, Carey Ransom, Founder of Operate (a venture studio), sat down with Zac Lyons, Managing Partner and Founder of Agile Innovation Advisors, to discuss jobs-to-be-done (JTBD) for entrepreneurs as part of the Operate podcast. Here are some excerpts from that discussion.
Carey: Let’s start with jobs-to-be-done and a bit of a history lesson. Please describe where it comes from and its core tenets.
Zac: Sure, JTBD isn’t really a new concept. Its roots go back to the 1970’s when HBS professor Theodore Levitt famously said, “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.” Another HBS professor, Clayton Christensen, popularized jobs-to-be-done in his 2003 book, The Innovator’s Solution, after Tony Ulwick introduced the concept to him.
The core tenants of JTBD are:
Carey: Let’s talk a bit more about the key parts of JTBD. When you’re studying a job, how do you spot opportunities for improvement or innovation?
Zac: It’s a multi-step process. I first decompose the job into steps and then gather the customer metrics for each step, as we just discussed. I then have the customers prioritize those metrics either quantitatively using an online survey or qualitatively through in-depth interviews. Using a survey gives us statistical confidence. In it, we typically ask respondents to rate the needs using 2 scales, importance and satisfaction.
We then analyze the survey data to identify those needs that are rated as important and not well satisfied. Those are the needs that are the biggest opportunities for improvement and where you should focus your attention when creating new solutions or improving existing ones.
Carey: Somewhere along the way this framework became very resonant with you. You’ve now worked with it for a long time. What is it about JTBD that captivated you?
Zac: That’s right. I’ve been using JTBD for about 20 years. In the early 2000’s, I was a newly minted product manager at Intuit and was asked to develop a new version of TurboTax for Millennials. Being new to the role and wanting to be successful, I started going to conferences, reading books, and interviewing firms to get up to speed. As I dug in, however, I quickly learned that most new products fail, 75-90%. I didn’t want to fail. As a result, I was compelled to find a better way.
During this pursuit, I stumbled upon Tony Ulwick who introduced me to JTBD. Soon after, I hired him to do a project for me. I still remember the day we got the insights back from the study. I quickly pulled a team of marketing, design, and tax experts together and, within days, we developed marketing and product concepts that ended up bringing in 10k Millennials to TurboTax, winning us accolades from the WSJ and Business Week, and leading to my first patent. A light bulb went on in my brain. If I could be successful innovating with this approach, anyone could! Needless to say, I fell in love with JTBD
Carey: We came together around the belief that it is a great framework for startups. Why do you think so?
Zac: If you consider how often startups and new products fail (75-90% as a mentioned), then there is something definitely wrong with the current process entrepreneurs are using. The problem is that entrepreneurs and investors typically start with, and get excited by, an idea. The idea is usually some product or service they envision the world needs. If they are motivated enough, they then head down a path to bring that idea to market. Somewhere along the way, they fall in love with the idea. It becomes their baby they are brining into the world.
However, they typically don’t stop and change their perspective and think, what is it the target customer is trying to get done. What needs are they trying to satisfy? Even if they do market research, it is most often focused on the customer (who they are, what they look like, etc.) or it’s focused on their proposed solution and how to bring it to market.
JTBD acts as a counterweight to this mindset by changing the lens by which entrepreneurs can and should look at the market. Instead of looking at what people are currently doing, JTBD helps us focus on what they are trying to get done.
For example, imagine 2 entrepreneurs. One sees themselves as developing training wheels. So, what do they do to drive growth? They think about incrementally improving training wheels. But the other entrepreneur, who is focused on helping kids learn to ride a bike, is not tied to any one solution and can be innovative in terms of the best way to help their customers get that job done. So, they bring to market the balance bike. In this example, the balance bike is a better solution because it helps kids learn to balance and steer, key parts of riding a bike, before peddling.
Carey: Let’s talk about an example of using it for a startup. Instead of starting with an idea, let’s start with the job of getting insurance for a new car. Can you describe your process of analyzing it and how you would go about identifying potential opportunities?
Zac: Sure, first we would define the market we are going to study. By market, I mean a group of people doing the job. In this case, it’s consumers obtaining auto insurance for a new car. Of course, there are other people involved with auto insurance. For example, the insurance carriers who underwrite the policies, agents who sell the policies, and body/repair shops who get paid by auto insurance carriers for fixing vehicles. All have different needs they are trying to satisfy because all are doing different, but related, jobs. If you don’t do this well, then you can easily go off track by commingling different market constituents’ needs.
Then, I’d interview about 8-10 consumers who recently obtained auto insurance for a new car. We want to talk to people who are in the market. If they haven’t done the job, then they are not in the market.
For the first several interviews, I’d spend time really understanding the steps they must go through to get the job done perfectly and map those out in what we call a job map. We’re not doing process mapping of what they are doing, but what they ideally want to do. So, we may interview 3-4 consumers with different ways of obtaining auto insurance and end up with 3-4 different process maps. However, there is only one job map, and it must apply to all of them to be a job map. For example, one person may call an auto insurance carrier and ask for coverage and rates on the new car, while someone else may go online to get that information. That’s how they are doing it. What they are trying to do is obtain a rate quote.
Once we have the job map nailed down, we can begin gathering the consumers metrics for each step in the job or their needs. So, the job map acts like an outline to ensure we capture all the needs associated with the job. A lot of people will jump to gathering a handful of high-level needs, if they do customer interviews at all, and could easily miss some important aspects of the job. In mature markets, getting very granular is important because that’s often where opportunity still resides.
Furthermore, we know that consumers are trying to get steps of the job done quickly, predictably, and efficiently to successfully complete the job. So, we can use this structure to guide our customer interviews and gather the needs. For example, they may want to determine which insurance carrier offers the lowest rates for a certain level of coverage or avoid having to provide personal information to obtain a rate quote.
We typically will gather 50-100 needs for a job, organized by the job map. Once we have this information, we can ask customers to prioritize them in a survey as we previously discussed to identify which are unmet and, thus, potential opportunities for innovation.
Carey: I often talk about how a lot of the startup advice out there is the opposite of what I suggest. Many advise to put a pitch deck together that pretends you have it all figured out, while I’d rather have a process conversation about what needs to be learned and how they’re going to go do it. Why do you think most people ignore or hide the difficult, ugly learning process in a startup?
Zac: The short answer, I believe, is because they don’t know how to define a learning process or even what to learn. Many entrepreneurs come from disciplines like engineering or product management. The focus of their career has been to develop new solutions. That’s what they have been trained to do. Maybe they have done some experimentation in their career, but that most likely has been, again, around solutions. They’ve spent very little time thinking about the problem.
Furthermore, most VCs and investors reward entrepreneurs who have a slickly-pitched solution and just assume the problem is well defined. Albert Einstein once said, “If I had an HOUR to solve a problem, I’d spend 55 MINUTES thinking about the problem and 5 MINUTES thinking about solutions.” The more time one spends understanding a problem, the more effective the resolution. Don’t look for solutions immediately. Take time to comprehend the issue at hand. Keep redefining the problem until you get to the root cause. However, this is counter to how most of us operate. We typically jump into solution mode immediately.
Carey: If you were going to advise an aspiring entrepreneur on how to get started, what would you say?
Zac: Getting started with JTBD is easy. The first thing I would tell them is that, although they likely already have a solution in mind (after all, that’s what excites people to aspire to be entrepreneurs), take a step back and think about for whom you are ideally trying to create value. Who is that group of people that you want using your product or service? To start, it can be a demographic, say 50+ year old men.
Next, identify what it is they are doing or trying to get done for which your product or service will be used. Many times, what the entrepreneur has in mind is only a small piece of what their customer is trying to do. The entrepreneur may have an app in mind, but who would use it and for what purpose? For example, we worked with a startup that had launched a VPN service. After we studied their target market, security/privacy-centric consumers, we learned that they don’t just want to protect their security and privacy when surfing the internet (what VPNs do), but also keep their passwords, files, and old social media posts secure. So, the startup went on to launch a more complete solution for consumers, helping them get more of the job done, and at a higher price point.
Getting out and interviewing the target audience is the best way to do this. Ask them when they use your product, what are they trying to accomplish or achieve? What do they hope to get done? This will help you identify the job they are doing.
The good news is that even thinking in this way can help an aspiring entrepreneur begin to see beyond their idea. The goal is to develop an outside-in market perspective and move away from the inside-out company view most entrepreneurs have.
Carey: How should investors think differently about startups, what questions they ask and early data they should request from founders?
Zac: I believe investors should look for entrepreneurs and startups who are focused on solving large, unmet customer needs rather than chasing the latest technology. It seems that most investors and entrepreneurs simply focus on what is hot. Today, it’s AI, before that it was AR/VR and before that it was block chain. These new technologies are great, but if they don’t help customers solve a problem they have, then what is their point.
Entrepreneurs may always start with a solution to some problem, but good investors should look for startups that have a clear idea, and supporting data, of the problem they are going to solve and how their solution clearly addresses that problem. Too often, that is skimmed over.
If I were an investor in early-stage companies, I’d consider funding a portion of this effort to ensure the companies I invest in are crystal clear on the problem they are solving and how big a problem it is. I think this is a better use of money early on than filing for patents. I don’t really understand why more investors don’t help fund entrepreneurs’ efforts to understand the customer problem better.
Carey: Thank you so much for the conversation today, and I know this will be probably one of my most valued episodes ever because of just how relevant and durable it is in the world. So thanks again.
Zac: You're welcome. Thank you for having me.
San Diego, CA