0:00 Unknown: Welcome to the markets lesson in the thrive jobs to be done innovation course. I'm Jay Haynes, the founder and CEO of thrive in business the market always wins. So correctly defining your market is critical to your success. In this lesson, we will look at how to define your market using jobs to be done innovation methods. If you are on a product marketing or sales team, your success depends on satisfying customer needs better than competitors in your market. This brings us to the critical question for this lesson. What is a market? What market are you actually if traditional market definitions are fatally flawed, because they all use a product as a key
0:49 variable. For example, the traditional addressable market is traditionally defined as the unit sold in a product category times the price per unit. And the serviceable market is the units of a product type times the price per unit. All of these definitions are flawed, because all products change over time. If you define your market using a product, for example, the iPod market, you are trying to hit a moving target product defined markets lead directly to failure. As we saw in an earlier lesson, Blackberry thought there was a market for keyboard devices, and they lost $50 billion in equity
1:37 value. Britannica thought there was a market for encyclopedias, and they lost almost 100% of their sales in just six years. Kodak thought there was a market for film and went from $30 billion to bankruptcy. companies fail when they define their markets based on their products. Product focus ironically leads your team directly to failure. And today, technology enables products to change at a rapidly accelerating rate. This is why companies fail 40% of the Fortune 500 will no longer exist in just 10 years, because their products will be obsolete. Jobs
2:26 theory shows that your customers are not buying your product, they are hiring your product to get a job done. This means that your customers will fire your product when a new product helps them get their job done faster and more accurately. This is why Apple Google and Facebook became three of the most valuable companies in history in the exact same markets as Blackberry, Britannica, and Kodak. The core idea of defining your market based on your customers job to be done dates back to the 1960s and Professor Theodore Levitt, his famous Harvard Business article examined why industries repeatedly failed to identify new growth
3:15 opportunities and competitive threats when products changed. He was famous for saying customers don't want a quarter inch drill they want a quarter inch hole. In other words, your customers don't want your products they want to get their job done. This concept is true in any market, including yours. For example, consumers don't want records CDs or iPods. I'm old enough that I even owned eight track tapes in the 1970s. In this market, we all fired our old products, not because we wanted to get rid of our record collections, but because the job is to create a mood with music. And we all switch to new
4:02 products that get this job done faster and more accurately. This happens in every market because your customers job is your true market. In 2006, Microsoft made the fatal mistake of thinking there was a huge iPod market. With all their enormous resources. They created an iPod competitor called the Zune, which they launched right when the iPad was becoming obsolete and its sales were falling off a cliff. Don't make this same mistake. Products change but your customers job to be done is a stable target for your team to hit. This is an important
4:49 concept to remember. Your market opportunity might be bigger than you think if you define your market using your customers job We will look at market sizing. In the next lesson, we have seen how you can define your market using your customers job with examples in consumer markets. But the idea that your customers are not buying your product they are hiring your product to get a job done is true in business markets as well. For example, CIOs don't want blockchain or web, which are product technologies. They want to obtain insights from data, which is a job to be done. Similarly, sales people don't want CRM software, they want to acquire customers. This is their job to
5:37 be done. It is their goal independent of the products they use. And jobs theory works in medical markets as well. As we saw in an earlier lesson, patients don't want syringes, they want to obtain a blood sample to diagnose their health. This is a medical job to be done. Because products always change very soon, you will likely never have to have another needle painfully inserted into your arm to obtain a blood sample. Similarly, surgeons don't want stents or angioplasty balloons, which are medical products. They want to restore artery blood flow. This is another job to be done. You should redefine your market using your customers job. So let's look at how you can identify and define your
6:25 customers job to be done. In other words, your market. How do you even know what your customers job even is? It is important for your team to identify the three different types of customer jobs in your market. The first type of job is the customer's functional job. This is the main goal customers are trying to achieve independent of any products or solutions they may be using today. The second type of jobs are emotional jobs. Customers are of course, real people with real human emotions. Emotional jobs are personal how customers want to feel about themselves. And social social jobs are how customers want to be perceived by others.
7:12 And your customers have consumption jobs. Consumption jobs relate to using a solution to get a functional job done. Consumption jobs include interfacing with a product, learning to use a product, purchasing it, maintaining and repairing it. All three types of jobs are important to analyze. Because helping your customer get these jobs done better than your competitors, is what creates the best customer experience with your product. Let's look at some examples of how these jobs work together in consumer business and medical markets. In a consumer market, new parents need to get a baby to sleep through the night. This is a functional job. As new parents tried to get a baby to sleep through the night they
7:58 feel emotions, including feeling anxious about being a good parent. Avoiding anxiety is an emotional job. And parents need to purchase solutions to get a baby to sleep through the night like swaddle blankets, bedding and nighttime diapers. Your goal as a product marketing and sales team is to satisfy unmet needs. In all three types of your customers jobs, we will explain unmet needs in much more detail in another lesson. Let's look at a few more examples of function of emotion and consumption. As we saw in a previous lesson, the job to be done in this market is to get to a destination on time. This is the functional job that
8:47 defines the market. As people execute this job, they want to avoid feeling anxious about being perceived as unprofessional by being late to a meeting. A consumption job in this market is to interface with a product while traveling. If your customer cannot easily interface with your product, they won't be able to get their functional job done. Business markets have functional emotional and consumption jobs as well. As we saw before salespeople need to acquire new customers. This is the functional job the goal salespeople need to achieve. sales people have emotional jobs, including being perceived as valuable to their team, and they have consumption jobs, including maintaining current
9:34 prospect information. The function of motion and consumption pattern works in medical markets as well. As we saw patients need to obtain a blood sample. This is a functional job in a medical market. patients want to reduce their anxiety about the procedure, which is an emotional job and patients may have to learn to use A new medical device like a micro needle array. This is a consumption job related to using a product. All three job types are important to analyze because they determine your customers experience with your product. But defining your customers functional job correctly is critical because your customer's
10:23 functional job is your market. Let's look at how you can identify and define your customer's functional job. defining your customers job at the right level of abstraction is critical to ensuring that the theory is useful. companies often struggle to define what their customers job even is. a functional job has three elements. First, it is a goal that your customer is trying to achieve. Remember, a job and your market is not your job. It is your customer's job. It is your customer's goal and the problem they need you to solve.
11:10 Second, a functional job has an action verb and an object. And third, a job cannot contain any mention of a solution, a product, a service or a technology. Let's look at a consumer example. A consumer might say I need to play mp3. Is this a job? Is it therefore a market? Let's use our three criteria to find out first, is this a goal? Yes, this is something consumers want to do. Second, does it have an action verb? Yes, play? And does the action verb have an object? Yes, it does mp3. So is this a job? Is it a market? This is not a functional job because it contains a solution mp3, mp3 or
12:02 a product format, which makes this an unstable definition of a market. And since formats like all technologies and products change over time, play mp3 is is not a good definition of a market. As we saw before, the job is to create a mood with music. This is a stable definition because people have been creating a mood with music forever. Let's look at another example. In a business market. businesses use software to run their companies and they need to install software. Is this a job to be done? Is this a market? Let's use our tests. businesses do install enterprise software, so it is a goal. It also has an
12:48 action verb and an object. However, note that install is a consumption job. If you could achieve a goal without installing software, would you? Of course, not long ago, installing business software used to be a large business for service firms. But today, cloud and SaaS applications are eliminating the need to install on premise enterprise software. Over time, new products emerge to eliminate or reduce the need to execute consumption jobs in order to use the product. This makes sense, because your customers don't buy your product to interface with it or learn to use it or install it. They buy
13:35 your product to get their functional job done. As a result, the consumption job is not your market. In this example, what about the word software? software is an object and it is a solution. But it is also a big enough platform that it is stable like an aircraft. We will discuss platforms in more detail in later lessons. Finally, let's look at an example of a medical job to be done. In a medical market. A patient doctor or nurse might say they need to monitor blood pressure. Is this a job? Is it a market? Again, let's use our tests. Is it a customer goal? Yes, patients need to monitor their blood pressure. It also has an action
14:23 verb and an object and it has no solution. But why do patients want to monitor their blood pressure is their end goal just to monitor it is important to analyze the level of abstraction of any job statement. Monitoring is an example of a step in achieving a higher level goal. While there may be an opportunity in the short term, to provide a better product that does a better job of monitoring blood pressure. Monitoring is not the end goal for a patient. A patient of course monitor Their blood pressure in order to optimize their health. If you have a health condition, blood pressure can be a key input. But
15:08 the goal therefore the job, and thus the market is to optimize health. with higher level jobs like optimize health, you can be more specific about your market definition. For example, a patient who has diabetes needs to optimize their health with diabetes. So this is a specific job and therefore a market based on a health condition. Different health conditions represent different markets because they are specific goals that different patients need to achieve independent of any products, services, drugs or therapies they may use. You can specify level of abstraction for many types of jobs. For example, parents need to instill a behavior in a child. But like
15:56 health conditions, there are many types of behaviors each which defines a specific market. For example, parents need to instill behaviors in their children to prevent anger, to learn music, or to resolve a dispute. When defining your customers functional job, use these three tests and use action verbs like these to help you identify your customers goals. You can refer back to this list when working with your team to define your market based on your customers job. When identifying your customers job, you should conduct customer interviews, and analyze research to identify your customers goals, independent of any solutions. Apply the three rules for jobs
16:42 to ensure you have a well defined market. defining your market using your customers job is just the beginning. But it has profound implications for everything your product marketing and sales teams do for your company. We hope you'll share this and like this on YouTube. In the next lesson, you will learn how to size your market using your customers job. This is critically important since your revenue and profits are a function of the size of your market. Visit us at thr v.com. To get our free how to guides and try our jobs to be done software for free.
