My Ideation heartstrings are going nuts right now! (Strengthsfinder). Does anyone else run on idea juice? Currently in a season of dedicated motherhood, meanwhile God has been refining almost rewiring me for a much different future away from my womp womp bookkeeping job. Listening to you guys confirms my strengths and arrggh mateys, you're my kind of people!
Thanks, your insightful analysis has illuminated a critical aspect that was previously overlooked in the Hire a Milkshake and Jobs to be Done theory. While I have found the framework to be highly valuable, I was unable to pinpoint the missing element until now. Your perspective provided me the necessary connection.
Conduct thorough research on your superconsumers. McDonald’s sought to understand the reasons behind the surge in milkshake purchases in the morning. By default, the researchers focused on a superconsuming audience, which yielded profound insights that ultimately led to increased sales in other categories.
The key shift was not to identify an audience and determine their desired product functions, but rather to pinpoint the specific tasks that *superconsumers* sought to accomplish with a product.
Clayton’s disruption model offers a valuable framework for organizing for innovation. Internal competition for resources within a siloed company can be a significant challenge. However, creating a separate organization with a hard-hitting team of experts and an independent reporting structure to the CEO can be an effective solution for many companies.
Other notable examples of companies that have successfully thrived despite competing innovations and headwinds came to mind while listening, like Adobe, Thomson Reuters, and Chick-fil-A.
We also love the jobs to be done theory and find it insightful, but largely as a market research exercise vs. a true innovation or strategy perspective.
The milkshake via drive through insight was amazing, but the insight hinted at even bigger ones:
1. Beverages are an expandable category from a day part perspective. What else is possible?
2. Beverages margins > food. QSRs like McD likely make most of their $ from beverages.
3. Some beverages are legal narcotics. While QSRs won't sell alcohol, coffee is logical
4. Combine milkshakes and coffee and what do you get? Frappucinos
The JTBD insight should have led to that company going full on into the milkshake category akin to what Starbucks has done with the Frappucinos, which has driven an extraordinary amount of growth for Starbucks.
Imagine if McD remembered they weren't in the hamburger biz, but the real estate biz, and then further realized that the revenue and gross margin per square foot is off the charts higher for cold, caffeinated, sweet beverages?
So interesting how Chick-fil-A built an empire by doing less than McDonald's, i.e. only serving chicken sandwiches.
I'm surprised no player has come out to focus only on frappuccinos, to be honest. Long overdue!
In Brazil, I built the first business in the city I lived in focused exclusively on empadas (different from empanadas). They were typically included in the mix of products offered in cafes, but we just put them front and center and took it to the bank for 12 years, until I shut the business down to move back to Canada.
I love it when someone's side gig becomes the main act of another player.
Here in DFW Texas there are vendors for Snow Cones and tacos on every other corner. It'd be interesting to see what a simple Frap business could do. With McDonald's is entering the breakfast dessert food market with CosMcs I fear that they've taken the lesson too far, but maybe they're onto something
I gave a load of keynotes where I lived in Brazil about nanobusinesses — laser-focused on just one product or service. A friend of mine had a carpentry business, took the concept and turned it into a door-only business. Crushed it. Another buddy built a drone business that only shot pictures and videos for construction companies.
Not sure which ones of the Pirates is commenting, but Christopher will appreciate this one: poutine-only drive-thru!
Love that you brought up OTIS elevators - I constantly think about how that’s only one of two brands I’ve ever seen for an elevator. And I can’t even recall the name of the other!
I enjoy the work; but, let's steel man this first. Help me think through the ways in which AAPL, MSFT, NFLX, NVDA, etc. did not just grow and grow and grow...but all companies that have semi-collapsed and phoenix'd (some more than once). More recognizably, what have they done: iPhone SE (alongside long-term updates securing resale-value and lower entry points for ecosystem value lock-in), Netflix succumbing to Freemium-ad tiers (and making $$$), NVDA transitioning between Home Gaming--> Personal Crypto Mining---> opportunity for redirecting deployment to more AI plays... From my research, the Innovator's Dilemma end-state was never "lesser." It was always: improve the foundational approach (get the core problem right), and then scale up faster and better to dominate as a new mainstream - and if you're an incumbent make Celeron's, and upscale customers over time (not because you want to imitate and out-cheapify, but because you want to establish a plausible future beachhead for yourself in case that future approach to solving the core problem proves more effective in value-creation...the margins will improve upstream while your new cost-structure base is a factor lower). Another example: iPhone came out, sold 500k day 1, then it took 10 weeks to get the next 500k. Price dropped $200...explicitly dropped the 4GB model...they went from early adopters buying at 599, to a verifiable "new category" only after they dropped price to $399 within 10 weeks (still $200 over most flagship BBs and other flips) and got lots of flack (but SJobs said sorry, not sorry).
We see a difference between (a) what the Innovator's Dilemma book prescribes and (b) what the Mag 7 have done.
In general, ID's advice for new entrants can work (e.g., come in low, and move up). ID's advice for incumbents is where we see issues, which is lower price with lesser offers to attract lesser/non consumers. At most ID talks about 'sustaining innovations', which preserve the status quo.
The written mini-book will flesh out a framework that should accommodate all the examples you showed, but also illustrate where ID falls short as a prescription and what new strategies Incumbents can take on, specifically as it relates to Category Design.
My Ideation heartstrings are going nuts right now! (Strengthsfinder). Does anyone else run on idea juice? Currently in a season of dedicated motherhood, meanwhile God has been refining almost rewiring me for a much different future away from my womp womp bookkeeping job. Listening to you guys confirms my strengths and arrggh mateys, you're my kind of people!
We run on idea juice - we call it "thinker's high." You'll find plenty of it here!
Thanks, your insightful analysis has illuminated a critical aspect that was previously overlooked in the Hire a Milkshake and Jobs to be Done theory. While I have found the framework to be highly valuable, I was unable to pinpoint the missing element until now. Your perspective provided me the necessary connection.
Conduct thorough research on your superconsumers. McDonald’s sought to understand the reasons behind the surge in milkshake purchases in the morning. By default, the researchers focused on a superconsuming audience, which yielded profound insights that ultimately led to increased sales in other categories.
The key shift was not to identify an audience and determine their desired product functions, but rather to pinpoint the specific tasks that *superconsumers* sought to accomplish with a product.
Clayton’s disruption model offers a valuable framework for organizing for innovation. Internal competition for resources within a siloed company can be a significant challenge. However, creating a separate organization with a hard-hitting team of experts and an independent reporting structure to the CEO can be an effective solution for many companies.
Other notable examples of companies that have successfully thrived despite competing innovations and headwinds came to mind while listening, like Adobe, Thomson Reuters, and Chick-fil-A.
Hey Bill-
You nailed it.
We also love the jobs to be done theory and find it insightful, but largely as a market research exercise vs. a true innovation or strategy perspective.
The milkshake via drive through insight was amazing, but the insight hinted at even bigger ones:
1. Beverages are an expandable category from a day part perspective. What else is possible?
2. Beverages margins > food. QSRs like McD likely make most of their $ from beverages.
3. Some beverages are legal narcotics. While QSRs won't sell alcohol, coffee is logical
4. Combine milkshakes and coffee and what do you get? Frappucinos
The JTBD insight should have led to that company going full on into the milkshake category akin to what Starbucks has done with the Frappucinos, which has driven an extraordinary amount of growth for Starbucks.
Imagine if McD remembered they weren't in the hamburger biz, but the real estate biz, and then further realized that the revenue and gross margin per square foot is off the charts higher for cold, caffeinated, sweet beverages?
And enter Dutch Bros.
Thanks for the ongoing conversation. This reply alone is worth the subscription.
Thx Pirate Bill!
Your build was awesome!
So interesting how Chick-fil-A built an empire by doing less than McDonald's, i.e. only serving chicken sandwiches.
I'm surprised no player has come out to focus only on frappuccinos, to be honest. Long overdue!
In Brazil, I built the first business in the city I lived in focused exclusively on empadas (different from empanadas). They were typically included in the mix of products offered in cafes, but we just put them front and center and took it to the bank for 12 years, until I shut the business down to move back to Canada.
I love it when someone's side gig becomes the main act of another player.
Niche down!
Empanadas niche sounds amazing!
Side gig = main act is awesome languaging!
Here in DFW Texas there are vendors for Snow Cones and tacos on every other corner. It'd be interesting to see what a simple Frap business could do. With McDonald's is entering the breakfast dessert food market with CosMcs I fear that they've taken the lesson too far, but maybe they're onto something
Imagine a QSR with...
1. French fries and chicken nuggets only
2. Craft soda and frappucinos
3. Drive through only
Yes! That's what I'm talking about!
I gave a load of keynotes where I lived in Brazil about nanobusinesses — laser-focused on just one product or service. A friend of mine had a carpentry business, took the concept and turned it into a door-only business. Crushed it. Another buddy built a drone business that only shot pictures and videos for construction companies.
Not sure which ones of the Pirates is commenting, but Christopher will appreciate this one: poutine-only drive-thru!
I think McD's is committing the sin the Pirates touch on in the latest issue on the Innovator's Delusion.
Love that you brought up OTIS elevators - I constantly think about how that’s only one of two brands I’ve ever seen for an elevator. And I can’t even recall the name of the other!
I enjoy the work; but, let's steel man this first. Help me think through the ways in which AAPL, MSFT, NFLX, NVDA, etc. did not just grow and grow and grow...but all companies that have semi-collapsed and phoenix'd (some more than once). More recognizably, what have they done: iPhone SE (alongside long-term updates securing resale-value and lower entry points for ecosystem value lock-in), Netflix succumbing to Freemium-ad tiers (and making $$$), NVDA transitioning between Home Gaming--> Personal Crypto Mining---> opportunity for redirecting deployment to more AI plays... From my research, the Innovator's Dilemma end-state was never "lesser." It was always: improve the foundational approach (get the core problem right), and then scale up faster and better to dominate as a new mainstream - and if you're an incumbent make Celeron's, and upscale customers over time (not because you want to imitate and out-cheapify, but because you want to establish a plausible future beachhead for yourself in case that future approach to solving the core problem proves more effective in value-creation...the margins will improve upstream while your new cost-structure base is a factor lower). Another example: iPhone came out, sold 500k day 1, then it took 10 weeks to get the next 500k. Price dropped $200...explicitly dropped the 4GB model...they went from early adopters buying at 599, to a verifiable "new category" only after they dropped price to $399 within 10 weeks (still $200 over most flagship BBs and other flips) and got lots of flack (but SJobs said sorry, not sorry).
Arr, great stuff David!
We see a difference between (a) what the Innovator's Dilemma book prescribes and (b) what the Mag 7 have done.
In general, ID's advice for new entrants can work (e.g., come in low, and move up). ID's advice for incumbents is where we see issues, which is lower price with lesser offers to attract lesser/non consumers. At most ID talks about 'sustaining innovations', which preserve the status quo.
The written mini-book will flesh out a framework that should accommodate all the examples you showed, but also illustrate where ID falls short as a prescription and what new strategies Incumbents can take on, specifically as it relates to Category Design.
We love the feedback and keep it coming!
Stay tuned!