INNOBLOG

What does the innovation playbook look like? Well, at the simplest level, it’s all about identifying an important unmet need in the market (or “job to be done,†as we call it), building an innovative business model to meet that need, and scaling it up. I heard a piece on the radio yesterday on innovation in the garbage disposal industry (of all things) that serves as a good case study for this approach.





1-800 Got Junk, which bills itself as “the world’s largest junk removal service,†uses an innovative business model to solve an important job to be done. The company states simply that “we remove the things that you don’t need,†and then seeks to make that process as simple as possible. It hires workers to clear out houses for people who are moving or looking to get rid of stuff. Customers “just point†to the stuff they want out of their lives – yard waste, old furniture, debris, mildewy old magazine collections – and Got Junk makes it go away, cleans up afterwards, and charges based on the volume removed. There is certainly a market need for this kind of service. Beyond the neurotic hoarders and collectors who need serious help, in our hyper-consumerist age, garages and basements and storage spaces tend to get overfilled. When renovating or moving or just getting around to spring cleaning, many folks would gladly pay someone else to do the messy stuff and the heavy lifting. How does Got Junk make the business case work? First of all, to get around the uneasiness that many people might have with letting off-the-street garbagemen traipse through the living room and rifle through their closets, the company outfits all its workers in cheerful uniforms and stresses customer service. These workers make a pretty low hourly salary, which keeps costs down, but can then do with the “junk†as they please. They can sell salvaged wood and metals to commodity recyclers, old couches and TVs on eBay and Craigslist, or even keep stuff! They also donate lots of goods to charity, which is good for society and for tax deductions. In essence, the Got Junk employment model is almost like restaurants paying waiters meager base salaries, or camps paying counselors next to nothing – all the money for the laborers is in the “tips.†The increased material liquidity enabled by internet-based services like eBay and Craigslist allows the business to scale. So, what’s the innovation playbook? Look for important and unmet needs in the marketplace, construct a product or service that removes or works around the barriers that have historically kept those needs from being satisfied (e.g., simplicity, cost, access, distaste for garbage men rooting through your house), and figure out how to make the business work, opportunistically borrowing elements of business models from other industries and taking advantage of new enabling technologies and infrastructures like the internet. That’s how you can turn trash into treasure – Got Junk brought in $150 million last year.