Professor Clayton Christensen. Business of Software talk

Disruptive Innovation

Big incumbent companies spend billions on incrementally innovating their products – making them a little more functional or a little better to use. Disruptive innovators displace incumbents by making their product significantly more accessible, significantly cheaper or significantly easier to use.

What is the technology that could kill your business?

Disruptors often compete with non-consumption. Sony introduced the first portable radio in the 1960s. All existing radios were big, serious and expensive; Sony’s cost $2. It was an appalling product by any standards, but appealed to those who couldn’t afford the big branded competition and was therefore better than nothing.

Don’t listen to your customer – see what job they need to get done.

Traditional marketing tells us that we must listen to the customer when developing products. Understanding the needs of your customer is actually what is important when developing products. The unit of analysis should be the job to be done, not the customer herself. The customer rarely buys what the company thinks it is selling him. What are you selling your customers?

If your product solves a problem really well in a way that customers understand, marketing is irrelevant – customers will come to you. Jobs to be done are very stable over long periods of time – they are not vulnerable to product life cycles. Products are easy to copy; integration around of job provides defensible differentiation.