Business Design: Focusing on the Customer’s Job to be Done
At High Alpha, we’re in the business of building businesses. Every core function at High Alpha, from marketing to product, focuses on designing a business centered around the customer. As the saying goes,
“love the problem, not the solution.”
By principle, we are laser focused on first understanding the customer’s problem, instead of just jumping to solutioning. We do this because we know that customers are not just buying a product, they are actually hiring a tool or service to satisfy their “Job to be Done.”
Pioneered by Harvard Business School professor and Disruptive Innovation expert, Clayton Christensen, the Jobs to be Done (JTBD) framework serves as a powerful tool for innovation. On the Business Design team, we use this framework to uncover opportunities, by first seeking to understand the JTBD, or the problem a customer wants to solve within a particular circumstance. At the onset ideation, the first stage of the company creation process, we prioritize our focus on the customer’s desired outcomes over features, tools, or products.
Defining the Basics: Jobs to be Done
A customer’s JTBD can be defined by three main dimensions: functional, social, and emotional jobs.
A customer’s social and emotional jobs can often be even more powerful than functional jobs. Take Uber, for example. The functional JTBD centers around providing transportation from point A to point B. But the bigger competitive advantages of Uber over its alternatives are derived from the emotional and social jobs it solves for, such as:
- Emotional: Uber helps me not worry about traveling without any cash on hand.
- Emotional: Uber enables me to feel confident in knowing when my driver will arrive to pick me up.
- Emotional: Uber helps me not stress about arriving on time to my destination in a city I’ve never visited before.
- Social: Uber shows my employer that I travel more economically vs. traveling by taxi or rental car.
Source: The Verge
Identifying these functional and particularly social and emotional jobs provides a deeper understanding of customer motivations. It can also help show opportunities for a business to differentiate, define a competitive advantage, and find that ‘wow factor’. This becomes more apparent as we think about customers having the ability to ‘fire’ a current tool or service when something else makes better progress on their JTBD.
On that note of competitive differentiation, understanding the JTBDs helps to expand one’s view of the competitive landscape. Take coffee, for example. From a traditional lens, we might assume a customer needs a cup of coffee, without considering the JTBD they want to accomplish. Potential coffee competitors could include Starbucks, McDonald's, or even a local coffee store. The competitive landscape changes once we identify and put a focus on the customer’s JTBD. Let’s say, in this case, that the JTBD for the customer is to give her an excuse to chat with her colleagues from work. Potential competitors to accomplish this job could be getting coffee, going out for a group lunch, grabbing drinks after work, or even chatting by the water cooler. We can see here that competitors aren’t just limited to other coffee places and that there are several diverse solutions which could accomplish this job.
Jobs to be Done in Action: Business Design
On the Business Design team at High Alpha, we work alongside entrepreneurs, VC firms, and corporations to source ideas and design, validate, and launch new startups. As we ideate, we apply our venture investor lens to rapidly surface and triage concepts. We then investigate the leading concepts to understand customer jobs and opportunities.
As we begin to identify strategic opportunity areas during ideation, we first seek to define the customer. It helps to develop a customer profile and map out all the stakeholders in the ecosystem which interact with the customer. As we gain clarity on the customer, we next break down their functional, social, and emotional jobs. We then validate our understanding of these jobs by interviewing customers and analyzing the mega-trends (political/regulatory, economic, social, and technological) that impact a customer’s JTBDs and their importance to the customer.
The right JTBDs are ultimately prioritized by determining which jobs are important, unsatisfied, and high value to customers. Important jobs are based on the customer’s ranking of their jobs, the impact of upcoming trends, and how big the total market opportunity is for that job. Unsatisfied jobs are those that are unmet by current solutions in the marketplace. High-value jobs are those jobs which (in order of importance) drive revenue, create efficiencies, and reduce pain. Ultimately, by determining the priority job, we can begin to find the white space for our solution.
After we prioritize JTBDs for each concept, our top concepts compete during Sprint Week — High Alpha’s forcing function for innovation. The Business Design Team’s pre-work of identifying a customer’s JTBD becomes central to the Sprint Team’s solutioning process. The customer’s JTBD ultimately informs the business model, or how we create, capture, and deliver value with the businesses we are designing.
Source: High Alpha
Throughout Sprint Week, we are further developing the business model for each new business concept, using our customer insights, research, and jobs hypotheses, by answering three questions:
- Do people want this?: How will the business create value through its offering, customer access, and payment methods
- Is it worth it?: How does the business capture value through revenue, cost, margin, and throughput
- Can we do it?: How does the business develop value through resources and processes
Overall, Jobs to be Done is a common framework that our High Alpha team uses to dive deeper into customer motivations, uncover opportunities, and to understand the competitive landscape. Before we can get to the launch of the next-gen enterprise software company, we must first understand what JTBD prospective customers are looking to address and what offerings attempt to satisfy that JTBD. Through this framework, we build the muscle to innovate.
Stay tuned for Part II of this series, where we will dive deeper into our frameworks for business design at High Alpha.
Amna is an Analyst on the Business Design and Corporate Innovation team at High Alpha, a venture studio pioneering a new model for entrepreneurship that unites company building and venture capital. She works with the team to source and develop new business concepts with entrepreneurs, VC firms, and corporations through new company formation. To learn more, visit highalpha.com or subscribe to our newsletter.
High Alpha is a venture studio pioneering a new model for entrepreneurship that unites company building and venture capital. To learn more, visit highalpha.com or subscribe to our newsletter.