0:00 Jay Haynes: welcome to the market sizing lesson in the thrv jobs to be done i novation course i'm Jay Haynes t e founder and ceo of thrive as w saw in the previous lesson in b siness the market always wins s if you are on a product m rketing or sales team it is c itically important that you s ze your market correctly your r venue and profit growth is a d rect function of your market s ze in this lesson we will show y u how to size your market u ing jobs to be done innovation m thods as we saw in the p evious lesson blackberry b itannica and kodak all lost b llions of dollars because they d fined their markets i correctly this led directly to t
0:48 eir failure but this was also a enormous loss opportunity for g owth because apple google and f cebook created trillions of d llars in equity value in the e act same markets so how do you s ze your markets to avoid l thal market mistakes in the p evious lesson we saw that t ese traditional market d finitions are flawed because t ey all use a product as a key v riable jobs theory shows that y ur customers are not buying y ur product they are hiring y ur product to get a job done s your customers job is your t ue market in 2006 microsoft t ought there was a huge ipod m rket and this made sense using t
1:37 e traditional market sizing e uation of product price times t e number of buyers apple had s ld 200 million ipods at an a erage price of $150 making t is a $30 billion market using t e traditional equation this is a huge market even for microsoft w th all of their resources and t eir gigantic customer base m crosoft launched the zune and i was a total failure there m rket sizing was the fatal flaw b cause there is no such thing a the ipod market this s pposedly $30 billion market is n w approximately zero product b sed market sizing always leads t
2:29 failure because products c ange over time but your c stomers job to be done is a s able target to hit to size y ur market first define your c itical customer as the job b neficiary in a previous lesson w saw how critical this is then i entify your customers f nctional job as we did in the p evious lesson together your j b beneficiary and their f nctional job define your m rket to size your market you w nt to know what your critical c stomer the job beneficiary is w lling to pay to get their job d ne with this data you can then p
3:16 ot the results on what we call a need curve this looks like a t aditional economics demand c rve of price and quantity but w are plotting the customers w llingness to pay and the n mber of customers the job b neficiaries in the market the a ea under the need curve is y ur market size the need curve e ables you to identify the size o your low cost customer s gments and the size of your p emium customer segments as a r sult the need curve helps you i entify hidden opportunities f r accelerated growth you can u e a quantitative survey to get w llingness to pay data in c nsumer business and medical m rkets let's look at an example i a consumer market as we saw b
4:05 fore if we were competing with a ple and google maps and we w nted to size this market using t e traditional definition the n vigation app market would be a entirely unattractive market b cause the leading products are f ee but we know the true market i this example is not n vigation apps it is the job of g tting to a destination on time i this example when we surveyed c stomers we asked them at what p ice per month would you be w lling to pay to get to your d stinations on time and in the s rvey you can ask a series of q estions to calculate a range o your customers willingness to p y plot your survey data on a c
4:53 art to identify the need curve a d calculate the size of your m rket in this market example, e en with free competitors, i cluding Apple and Google, t ere is a $2 billion premium c stomer segment that is willing t pay a premium price for a s lution that helps them get the j b done better. Why do high g owth customer segments and m rket opportunities like this e ist, even when the leading p oducts are free, because there a e unmet customer needs in your m rket. We hope you will share a d like this video on YouTube. I the next lesson, you will l arn how to identify your c stomers needs in their job. i
5:42 entifying your customers needs i a critical step to satisfying u met needs better than c mpetitors in your market. V sit us at thrv.com to get our ree how to guides and try our obs to be done software for free
