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I've spent some time recently exploring the blogosphere to find reviews of various online money management services, including Mint, Wesabe, Geezeo and others. The interest is personal - Ive been a Mint user for the past few months and though Im relatively satisfied with the experience, Ive been wondering how Mint stacks up against the competition. As someone who could never get into the habit of using Quicken or Microsoft Money (although one program came with my computer and I bought the other a couple of years back in order to fulfill a short-lived New Years resolution to keep better track of my finances), I was a bit surprised by some of the criticisms I read:

"You cant import data to Mint in any way other than through your financial institution, meaning that if youve got years worth of financial data [on your computer], dont count on importing it

"Mint doesnt export data

"Without double entry book-keeping, you will not detect bank errors! Theres no forced monthly reconciliation, and no way for you to notice, Hey, wait a minute, I didnt shop there, unless you scrutinize each item yourself

I wasnt surprised by these criticisms because they werent valid or true, or because I couldnt see a rationale for the features mentioned. What surprised me was that I didn't care about these features at all. I realized that feature-filled programs like Quicken and Microsoft Money overshot my needs. And if they overshot my needs, they likely overshot the needs of others (e.g., students or anybody with a relatively simple financial picture). This spurred a question: What, if anything are Microsoft and Intuit trying to do for the customers they are overshooting?

Turns out that the folks at Intuit are on top of their game (not too surprising, since they'd had previous success with low-end disruptive products like QuickBooks). They launched an web-based solution, Quicken Online, this past January. A stripped-down version of their stand-alone Quicken product, Quicken Online allows users to keep track of all of their accounts and transactions in one place that is easy to access and has a simple interface and auto-tagging features similar to would-be disruptors like Mint or Wesabe.

Of course, Quicken Online's success isnt guaranteed. This is a crowded space. Mint, Wesabe, Geezeo, Buxter, Expensr are all fighting to manage money online. And Quicken's biggest differentiator isn't a good one: while the other sites I've just listed are free after the 30-day trial, Quicken Online charges users $2.99 a month. Not a lot to today's stand-alone Quicken user (who pays at least $30 for the software, plus $5-10/month for automatic bank account transaction downloads), but a price that is perhaps infinitely higher to the young twenty-somethings with simple financial pictures, who only want to see snapshots of money in and money out.

Quicken Online's simplicity demonstrates that Intuit understands the disruptive threat posed by web-based money management solutions and is taking action to defend itself, but Im not sure it shows that they truly understand the jobs-to-be-done and objectives of their target customer. It is hard for me to see myself paying $2.99/month for Quicken Online when Mint can meet my needs for free.

But I guess I have a 30-day trial to find out. Look for an update in April.

Ever year, millions of people participate in fantasy sports leagues and spend time during their workdays participating in those leagues or watching sports online. What if companies created simulations or activities in which their employees could participate that would actually create value for the employees and companies themselves? Examined through a jobs to be done perspective, might fantasy company simulations satisfy some of the same functional, emotional, and social jobs currently satisfied by fantasy sports?

On March 10, executive outplacement service provider Challenger, Gray & Christmas, Inc. (CG&C) released its March Madness Report. Each year, CG&C prepares an estimate of the amount of money that employers will lose due to employees participating in fantasy sports and due to employees paying attention to sporting events. The key facts from the report:

• As many as 37.3 million workers will participate in March Madness office pools this year and up to 1.5 million workers will watch games online from their desks


• For every 10 minutes of work time the 37.3 million pool participants spend focused on the NCAA Tournament, rather than their jobs, CG&C calculated that employers will lose $108.9 million


• If these participants waste just 10 minutes per workday on March Madness, from the day after selection Sunday through the end of the Tournament, CG&G calculated that employers will lose $1.7 billion cumulatively.

Regardless of the season, fantasy sports leagues are extremely popular pastimes. In 2007, the Fantasy Sports Trade Association (FSTA) released data showing that nearly 20 million people are actively playing fantasy sports in the U.S. and Canada while nearly 35 million people have played fantasy sports at one point in time.

Viewed through a jobs to be done lens, it is clear that fantasy sports participation during work hours satisfies functional jobs (such as "Give me a mental break from work), emotional jobs (such as "Make me feel good about my sports outcome prediction expertise), and social jobs (such as "Garner respect from friends and co-workers).

Now, consider the notion of company-sponsored simulations or activities. Rite Solutions, a technology services firm in Middletown, Rhode Island, created a process by which an employee or group of employees can conceive a new initiative for the company and volunteer to complete the tasks
(i.e. write some code, perform some calculations, create marketing materials, etc) required to develop the initiative further. Eventually, if the initiative matures and garners enough employee support, it may be implemented officially by the company.



As the project generates additional revenue for the company or reduces company costs, a portion of that revenue or cost reduction is returned to the employee(s) who generated the original idea as well as those individuals who volunteered their time or effort for the idea. The more effort employees contribute to projects that become official initiatives, the greater the percentage of the payback they stand to receive.

As constituted, Rite-Solutions process is just one possible scenario in which employees can participate in fun, outside-of-work activities to benefit both themselves and the company. It satisfies functional jobs (such as "Give me something to do in my free time or "Create an additional source of income), emotional jobs ("Feel good about my contribution to the company), and social jobs (such as "Demonstrate my commitment to my peers). The process has been extremely successful, with the vast majority of employees participating in initiative generation, development, and execution all on their own time.

The possibilities are extensive - consider employees reviewing new product ideas or participating in internal focus groups or surveys to earn extra money in their spare time. By understanding their employees Jobs to be done, Rite-Solutions was able to develop a free time activity that nailed those jobs, creating a strong culture of employee engagement as well.

If employees are willing to spend a significant amount of time and effort participating in outside activities offering only emotional or social payback, might the promise of emotional, social, and financial payback be enough to harness some of that time and effort to benefit their company?

Read more about Rite-Solution's innovation strategy here.

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.

One of the paradoxical things about disruptive innovation is that incumbent companies get into trouble by doing exactly what they are supposed to do. They listen to their best customers, innovate to meet their needs, produce the best products on the market and seem to get blindsided by a disruptive innovator armed with a simple, cheap, convenient offering.

Incumbents almost always see the disruption coming. But making the down-market move often required to master disruption is challenging.

Take, for example, Microsoft's recent move to offer versions of its productivity software over the Internet. Pundits have noted the disruptive potential of Web-delivered application software like Google Apps, whose users can access free spreadsheet, word processing, instant messaging, and calendaring software over the Internet. Google Apps doesnt have all of the features packed into Excel, Word, and PowerPoint, but it is "good enough and it is free.

Down-market moves are incredibly difficult. First, the moves seem economically unattractive. Would Microsoft rather sell one additional copy of traditional packaged software with 80 percent gross margin or get one additional customer to use online services for free? At the margin, the choice is obvious.

With no core software business to worry about, Google doesn't face this dilemma...

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Pharmaceutical companies were once the darlings of Wall Street. With patent protection guaranteeing steady billion-dollar revenue streams, very high margins on drugs, and armies of top notch scientists working to keep drug development pipelines full, it was no surprise that shareholders courted pharmaceutical companies. But the charm seems to be fading lately. The data clearly shows that pharmaceutical companies need to act now and act innovatively to regain their preferred position with investors.

Generic drug companies are posing a big challenge. They have become stronger in light of rising healthcare costs in the US and the awareness of the lack of drugs in third world countries


R&D productivity is at an all time low. According to Sanford Bernstein, an investment bank, $64B was spent on R&D in 2006 and only 13 drugs were approved by the FDA


Cost-conscious politicians are talking about cost controls. Many experts estimate that if price controls are put in place (as proposed by leading democratic presidential candidates), the profits of the industry will disappear

While pharmaceutical companies are losing their charm, medical devices companies are becoming Wall Streets new darlings. According to the BCG ValueScience center, the TSR (Total Shareholder Return) of medical device companies outperformed the TSR of pharmaceutical companies by almost 2X in the last decade. If you ask why, the answer is clearly innovation.

Medical devices companies have led the healthcare sector in innovation. Innovation not only focused on superior outcomes outcomes defined traditionally as better treatment of the condition but on other performance metrics. We at Innosight, define a product along multiple performance dimensions for a particular stakeholder. For example, for a patient, the performance dimensions can be: treat the illness, price, ease of delivery, recovery time (time away from work), impact on appearance (does it leave a scar on the body) etc. These are discovered once you understand the Jobs of the stakeholder. Medical devices companies have innovated around dimensions other than just "treat better and have created excellent returns for their shareholders.

Companies need to reach a threshold for performance on the "treatment outcome performance dimension," which we at Innosight call qualifying jobs, but beyond that threshold, the market will reward performance on other dimensions, which we call differentiating jobs. Innovation in medical devices like insulin pumps, heart stents, laparoscopic surgical equipments (now even going to natural orifice) are not necessarily best in terms of outcome, but satisfy other important patient jobs of "getting back to work quickly, leave no visible scar on the body etc.

So what can a pharmaceutical company do? Here are some thoughts:

Think beyond outcome: Superior outcomes are not the only dimension capable of driving drug sales. Ease of administration, enabling higher compliance etc. will help sales. Pfizer's Exubera was a right move in this direction (it got the functional job of ease of administration right but failed on emotional jobs like not being socially conspicuous and hence failed). Decreasing the number of times one has to take a drug (say once a day from three times a day), or making drugs chewable for people who dont like to swallow pills would be rewarded in the market

Think beyond blockbuster: The rise of technologies like high throughput screening, genomics etc. creates an opportunity to play in "personalized or "customized (say for particular segments of the population) medicines

Manage the full life cycle of drugs: Face the threat of the generics industry by playing in the generics market (for example, Novartis has entered generics)

Manage the full life cycle of conditions: Currently pharmaceutical companies mainly focus on the treatment phase. There is an opportunity to play in diagnosis (e.g. Novartis has entered the diagnostic market), care management (e.g. disease management) etc.

Innovate the business model: There are multiple ways pharmaceutical companies can change their existing business model to increase revenue or decrease cost

Innovate around sales and marketing: Pharmaceutical companies still have huge sales forces selling drugs. Using technology can decrease the cost. The need is to segment the market on jobs of physicians. Some doctors will still require interaction with the sales force but many can do with e-detailing, company sponsored seminars/ conferences etc.

Move manufacturing offshore

These ideas are not new but not many pharmaceutical companies have ventured into these areas because of their tendency to anchor on the sustaining curve. They still cling to a blockbuster mindset; on any excel model, the NPV of any of the above ideas will not compare to the NPV of the next blockbuster drug.

Pharmaceutical companies need to start by busting the blockbuster culture in order to reclaim their status as darlings of wall street. They need something different than the traditional way of doing business or in other words, something INNOVATIVE.

One of the most interesting and occasionally amusing aspects of the good-enough theory is what is does to product reviewers. The good-enough theory is, of course, the theory that disruptive new products succeed because they are only good enough to get the job done that the customer is trying to do -- not too feature-laden, complex, and/or too expensive. Good-enough products inspire the non-consumers to come off the sidelines and into the game, and that's often where such products' explosive success begins.

Understanding what's good enough requires a deep insight into the minds of consumers. It is a level of insight that frankly is often beyond those who make their living reviewing products, as well as those who review movies, books, and music (speaking here as someone who has worked as such a critic). The very act of becoming an expert almost guarantees the development of a certain out-of-touch-ness with the "normal" consumer, not to mention the non-consumers.

For example, the job a consumer would like a movie to do is often simply "entertain me," while the job the critic wishes to do is more like "see a movie that offers me something I haven't seen 25 times before." It's no wonder that people who regularly read movie critics learn to align their taste with the critic's taste, so that by reading between the lines they can understand if a movie is one they would actually like to see.

Reviewers of products, particularly technology products, also have great difficulty putting themselves in the shoes of the non- to low-consuming public. So it was with great amusement that I read in yesterday's column by New York Times technology columnist David Pogue, "Well, this is a little embarrassing. One of the most significant electronics products of the year slipped into the market, became a mega-hit, changed its industry -- and I haven't reviewed it yet."

"It" is the Flip, a small, stripped-down recorder that was released last year and now has captured 13 percent of the camcorder market, according to its maker, Pure Digital. "Stripped-down" apparently does not accurately cover the Flip's good-enough-ness -- in Pogue's words, "understanding the appeal of this machine will require you not just to open your mind, but to practically empty it. Because on paper, the Flip looks like a cheesy toy that no self-respecting geek would fool with, let alone a technology columnist."

The review makes clear, though, that the Flip has managed to hit the sweet spot where it offers better quality and more ease-of-use than cell-phone video cameras yet hasn't compromised ease-of-use with too many features. Users can film video and either watch it on TV or download it to a computer via a built-in USB jack. The Flip even has basic editing software that pops up for use each time you download video to the computer. Says Pogue, "it's the video equivalent of a Kodak point-and-shoot camera....the size, shape, ruggedness, low price and one-button simplicity take it places where no real camcorder would go. Purses, coat pockets, beach bags. Skiing, playgrounds, house walk-throughs, museums, casual interviews, YouTube stunts, classrooms, airplanes -- and, with the $50 acrylic sealed case, even underwater."

Pogue surmises that one of the reasons for the Flip's success is that if people are successful with a technology product immediately, they'll fall in love with it. Which is another way to say, this product is simple enough, cheap enough, and compelling enough, to make non-consumers into consumers.

"Somebody at Pure Digital must have sat through countless meetings, steadfastly refusing to cede any ground to the forces of feature creep," writes Pogue. Whoever that person is, they get the Good-Enough Award.

On March 17, technology research firm IDC and information technology publication The Industry Standard, announced a partnership centered on the latters prediction market. Specifically, the two companies will create a joint service, sold by IDC, matching the data generated by the prediction market with the insights of IDCs analysts. This new service appears to be one of the first applications of a prediction market to technology trend and market forecasting by a research firm. Could a prediction market forecast information technology markets more accurately than a technology research analyst? How might the principles of disruptive innovation apply here? Is this an attempt by IDC to disrupt itself?

The Industry Standard, famous for a quick rise to prominence during the dot-com boom and then a similarly quick decline into bankruptcy at the end of the boom, re-launched in early February in a web-only form built around the core of a prediction market. Prediction markets are much like the stock market participants can buy and sell shares or place bets on whatever the market has securitized (in the case of prediction markets, most often future events and outcomes).

Theoretically, as participants use their tacit knowledge and experience to bet for or against a specific outcome, the probability of that outcome actually coming true will rise and fall. By introducing a far greater number of inputs (scale) and a greater diversity of those inputs (scope) into the prediction process, these types of markets have shown to be more accurate, over the course of repeated trials, in forecasting outcomes than individuals or even groups of experts.

Following in the footsteps of technology prediction markets including Yahoo Tech Buzz and The PopSci Predictions Exchange, The Industry Standards market allows participants to place virtual currency bets on future technology-related events. Current predictions in the market include "Googles stock price will be below $500 per share by end of Q1, "Google to buy Digg, "Dell gets acquired by a Chinese manufacturer looking to get a foothold in the US, and "MySpace takes on iTunes with music store.

Unlike regular voting, participants can bet as much virtual money as they want on their predictions. When an outcome is achieved, participants who bet on that outcome when odds were low, for example, receive a greater payback than those who bet on that outcome when the odds were high. Participants who bet on an alternative outcome, lose the virtual money they placed on that bet. The names of the most successful participants, and their Net Worth are posted on the sites leaderboard.

Technology research firms such as IDC, Gartner, and Yankee Group are known for producing forecasts of revenue generation or unit sales. These forecasts are developed through the aggregation of inputs information from vendors and channels, macroeconomic conditions, customer surveys, technological trajectories, and so forth. Ultimately, however, there is only so much information that analysts can gather together and that, combined with intuition, experience, and a little secret sauce is used to generate the forecasts.

There are many ways in which prediction markets can fail to deliver accurate results. Assuming that a prediction market was constructed carefully and that it has the necessary quantity and diversity of participants, however, might it be able to aggregate a wider range of information than a technology research analyst could gather? Could a prediction market prove to be more accurate than a group of analysts? Could technology research firms turn the process of forecasting technology trends over to prediction markets and focus solely on analysis and interpretation?

Further, the principles of disruptive innovation teach that incumbents, if able, should co-opt or replicate the entrants innovation or business model to stave off disruption. Prediction markets are a potentially powerful low-cost, yet high quality tool for forecasting. Could an organization use a prediction market to harness collective intelligence to disrupt technology research firms? Might this new service offering be an attempt by IDC to protect itself from such an entrant?

The ongoing "greening" of the corporate world is a wonderful thing. As our industrial titans shift towards sustainability our environmental footprint decreases, consumption of finite resources becomes more rational, and we all get exposed to fewer toxins and chemicals.

The move towards sustainability also provides an instructive live case study of market evolution and innovation; as "green quickly becomes an essential performance characteristic in all sorts of products and businesses, companies are scrambling to innovate in order to take advantage and differentiate themselves from their traditional competitors, or if someone else has already done so, hop on before getting left in the dust.

The underlying phenomenon driving the emerging importance of sustainability is growing consumer awareness of the problems posed by unsustainable practices and products. This renders sustainability increasingly valuable to more people in more contexts (and, it should be noted, environmental regulations like fuel efficiency standards and carbon taxes cement such perceptions in law, forcing the economic calculus to account for externalities the market might otherwise ignore).

Taking a step back, all products and services can be thought of as aggregates of performance attributes I like coffee, for example, that is hot, strong, fresh, affordable, fairly traded, and sustainably harvested. When any performance characteristic becomes increasingly valuable others necessarily become relatively less valuable, be they price (e.g., people are willing to swallow the premium for organic food), convenience (theyll go to the one Whole Foods in town rather than the market down the street), reliability (they ditch the brand theyve trusted for ages in exchange for a new green product from a company theyve never heard of), or even quality (theyll settle for scratchy but 100% post-consumer recycled tissues). Understanding the impact of the increasing importance of sustainability in any given context is critical to projecting the nature and extent of the "green revolution and the best ways to innovate in response.

Disruptive innovation often takes place in these sorts of situations, when the dimensions of performance shift, when, for a variety of reasons, the market reassesses the value of specific characteristics in a product set. Those that figure out how to deliver the right set of performance characteristics succeed, while those that fail to do things differently just fail.

Consider consumer products giant Cloroxs recent behavior: last fall they purchased leading natural products company Burts Bees for $925 million, then perhaps more interestingly in this context, earlier this year they unveiled Green Works, a new set of eco-friendly and Sierra Club-endorsed products touted as "the first line of natural cleaners developed by a major consumer products company.

Clorox recognized that the market landscape had shifted, that more and more consumers were valuing green product attributes, and they adapted accordingly. That recognition enabled it to apply its corporate muscle and know-how to the challenge. It can reach into its pockets and swoop up an emerging competitor Burts Bees but it can also marshal its scientists to create compelling green chemical formulas for new products, its sourcing and manufacturing capabilities to harness economies of scale and bring down prices, its channel relationships to place sustainable products in Wal-Marts and supermarkets everywhere, and its market researchers and marketers to understand and reach mainstream consumers.

In short, Clorox can deliver products that meet the sustainable performance threshold (they are all natural, biodegradable, recyclable, not tested on animals, and so on) but that also adequately satisfy more traditional performance metrics like efficacy, affordability, reliability, and accessibility. As long as it understands the true market need and tailors its business model and product set accordingly, Clorox has the chance to outpace many of the startups and pure plays that make up the green products market today.

So what are the lessons for big companies looking to navigate market shifts such as the emerging importance of sustainability? Early adopters are the canaries in the coal mine watch them closely in order to understand the new dimensions of performance they prize and the tradeoffs they are willing to make. A close reading of their evolving performance tradeoff profiles will clue you into the nature and extent of underlying shifts in the relative valuation of distinct performance attributes. Then, look at the thresholds for mainstream consumers how acutely do they feel the shifts that are motivating early adopters? What are the barriers that stand in their way today from consuming in the same way as the evangelists? You just might find that big company resources and capabilities, applied intelligently, can innovate around those barriers by, say, getting affordable and effective all-natural and sustainable cleaning products into Wal-Mart.

Innovation is the engine of economic growth. Companies that create new products, services, and business model can create profitable growth and substantial consumer welfare. Yet, sometimes there can be too much innovation.

Consider a recent article in The Wall Street Journal describing how automakers are creating new ways for drivers to start their car. Instead of manual keys, more than 50 2008 models feature push-button starters. Drivers of push-button cars still have to carry a small device that emits a wireless signal that authenticates the driver.

Not to be a Luddite about it, but what exactly was wrong with using a physical key to start a car? The process is familiar, it is easy to transfer a key to another driver and the process takes about 10 seconds.

Saving 10 seconds is wonderful in todays hectic world, but theres a catch...

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My last post argued that disruption in online video was likely to come from someone outside the industry. Yet, consummate industry insiders NBC Universal and Fox seem to be on the right track with their online video offering Hulu. How could that be? The companies have structured in a way that has helped them "forget enough of the core television model to position their new venture for success.

Fox (like FX a part of the News Corp family) and NBC (who also owns the Bravo, USA, and Telemundo networks) formed the joint venture last year. The strategic aim? Help ensure that the companies avoid the fate suffered by their cousins in the music industry, who let Apple capture the lions share of the value in the digitization of music.

When NBC and Fox formed their venture, most industry watchers were appropriately skeptical. Incumbents struggle enough on their own to formulate winning disruptive businesses; asking two incumbents to work together to create a disruptive business seemed like a recipe for disaster. Even the ventures name earned ridicule.

Yet, after a few twists and turns, Hulu appears to be on a path that might yet promise success

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Here at the Innoblog we often write about the concept of good-enough and how it is the most appropriate way for companies to go after low-end markets. In essence, good-enough is about crafting products or services that meet minimum thresholds of performance along traditional dimensions while delivering new performance along other dimensions. Recently were finding that some disruptive technologies designed for the developing world are making their way back to the United States. One in particular worth noting is the One Laptop Per Child XO laptop.

The non-profit One Laptop Per Child Foundation based in Cambridge, Massachusetts, is attempting to bring enhanced educational capabilities to children in the developing world (we previously wrote about it here). According to their website, "OLPC is a non-profit organization providing a means to an endan end that sees children in even the most remote regions of the globe being given the opportunity to tap into their own potential, to be exposed to a whole world of ideas, and to contribute to a more productive and saner world community. OLPCs means, the XO laptop, is inexpensive and optimized for conditions faced by those children, including the lack of electricity and network infrastructure. The XO has received rave reviews for its design and technological advancements, with the caveat that consumers in the developed world would likely find the machine lacking. This product, which is good enough (and even great) in the developing world, wont cut it in developed nations or will it?

Birmingham, Alabama, may soon be embracing the concept of good enough to better meet student's educational needs. The AP recently reported that the Birmingham City Council has approved $3.5 million to supply every child in grades 1 through 8 with the XO laptop and address technical issues. Although the school board still needs to agree to this venture, the City Councils actions spark interesting discussion.

Can a major city in a developed nation benefit from a technology designed for children who might be living in huts without electricity in the Sahara? At first glance, the technology doesnt seem to meet the threshold to be good enough. Computers are prevalent in homes, schools, and libraries across the United States, but there are still many areas that dont have the resources to give children consistent access to computing. Wealth and access barriers are certainly significant and in a society that is shifting towards reliance on computer literacy, this good enough solution may be better than nothing at all. For a school system in which the vast majority of students (~80%) qualify for free or reduced-price lunches, the XO laptop might be the right answer. While the XO laptop lacks hardware typical in most computers, like a hard drive and CD drive, and has been reported to be slow in startup, it lets students get familiar with keyboards and typing and allows them to access a world of possibilities through the internet. The XO laptop has the potential to enhance education for children here in the United States as well as the developing world.

On March 10, the Boston Globe carried the news that Greyhound Lines Inc.s and Peter Pan Bus Lines low-cost BoltBus service would commence carrying travelers between Boston and New York City in April. According to the article, BoltBus targets "students, commuters and travelers seeking express service between [Boston and New York][with] extra legroom by having 51 seats per vehiclecompared to the industry average of 54 seats, and will have WiFi access, [AC power outlets], and bathrooms.

Of particular interest, however, are BoltBus fares - tickets are advertised as being available for as low as $1 one-way. BoltBus will initially launch service between New York City and Washington D.C; a visit to BoltBus website revealed that
tickets for a few of the first trips between those two cities in late March are indeed available for $1. BoltBus cautions that availability of the $1 fare is contingent on demand with high demand expected to push fares as high as $25, according to the article.

This is a new chapter in a classic story of disruptive innovation and incumbent response. For years, Peter Pan and Greyhound dominated the Boston to New York bus transportation market, charging fares as high as $42 each-way. Then, in the mid-1990s, "Chinatown buses operated by entrants Fung Wah and Lucky Star began to offer discounted bus service on the same route for between $15 and $25 each way.

It was a story of gives and gets. In order to get such low prices, travelers had to be willing to give up: drivers fluent in English, ticket counters, bus stations, customer service, assured televisions and restrooms, a guarantee of spotless maintenance records, and according to some news reports, safety one report noted that the Fung Wah drivers, for example, "have a tendency to treat the New Jersey Turnpike like Germanys high-speed Autobahn and Fung Wah had checkered maintenance and incident histories.

But for many travelers, the low price get far outweighed the gives. In recent years, one-way ticket fares decreased to $10 before rising and settling at $15. Business was booming. Able to be profitable, or at least remain in business at this fare level, Fung Wah and Lucky Star fit the mode of classic low-end disruptors. Offering good enough travel to customers valuing price above virtually all else, these entrants forced Greyhound and Peter Pan to eventually drop their fares to $20 each way to be more competitive.

Now Greyhound and Peter Pan are introducing BoltBus, attempting to co-opt the disruptive low-cost business model introduced by Fung Wah and Lucky Star. By selling tickets online, rather than at ticket counters, BoltBus is able to markedly reduce its costs and thus maintain such low fares. With gas prices rising, BoltBus expects to compete aggressively with Fung Wah and Lucky Star for rising tides of students, business travelers, and tourists looking for low prices. MegaBus.com, a bus service similar to BoltBus operated out of Chicago (which we wrote about here), has enjoyed substantial success in recent years by offering some $1 fares and an online-only ticket sales strategy. MegaBus.com now offers 30 routes compared with only 7 when it launched in 2006.

The principles of disruptive innovation teach that entrants leveraging low-cost business models can successfully disrupt incumbents when those incumbents are unwilling or unable to respond directly. Similarly, these principles also teach incumbents to respond to entrant attacks by replicating or co-opting the entrants business model if possible. In the case of the Boston to New York bus market, Greyhound and Peter Pan have finally become motivated to respond to the low-cost attacks by Fung Wah and Lucky Star and may even be able to outpace the entrants with even lower prices and more frills. Also, consider the subject of this previous post - might BoltBus have a market research revenue stream on their hands?

In November 2004, Public Broadcasting Service (PBS) aired The Persuaders, a new episode of Frontline, a public affairs television program. A 90-minute documentary, The Persuaders spotlighted the world of marketing strategy, its influence on the purchase and sale of products and services over the years as well as how it impacts the ways in which consumers view themselves and the world around them.

At the beginning of its second chapter (available for viewing online here), the documentary explores a major shift in marketing strategy that occurred in the late 1980s and early 1990s. Presented as a review of an important transition in the history of marketing strategy, this section of The Persuaders, just over 7 minutes worth of its second chapter, is actually an intriguing story of disruptive innovation and jobs to be done.

Prior to the late 1980s, companies sought to differentiate their products in branding and in advertising by emphasizing "real, tangible differences. Using what Kevin Roberts, CEO of Saatchi & Saatchi Worldwide articulates as "-er words, companies and their agencies emphasized the specific ways in which their products were better than the competition "whiter, brighter, cleaner, stronger for example.

In the documentary, the narrator then explains that such comparisons began to decrease in value to consumers and Roberts adds "everything works now. You know, French Fries taste crisp. Coffees hot. You know, beer tastes goodall these things now are table stakes.

Reacting to this new reality of the early 1990s, marketing strategy began to shift. Marketers turned to the study of cults, trying to figure out how to create "cultish connections between consumers and products. Marketers found that people "[join cults or brands] for exactly the same reasonsthey need to belong , and they want to make meaning. The documentary states that in this new "brand order, marketing became "pseudo-spiritual, focused on the "meaning of brands. Companies began to put pressure on their advertising agencies to create "emotional and spiritual bonds with consumers, bonds that would fulfill unsatisfied consumer desires for identity, for community. Consider one of the masters of creating emotional connections...

Apple 'iPod Jet' advertisement


Viewed through the twin-lenses of disruptive innovation and jobs to be done, a fascinating subtext emerges. For decades, marketing strategy was designed to address the most basic task-oriented needs of target consumers functional jobs. Consumers would hire products to get basic, functional jobs done. One brand of soap would make you 'cleaner' than another brand, one brand of laundry detergent would make clothes 'brighter' than another brand, one brand of toothpaste would make teeth 'whiter' than another brand and so on.

Over time, however, products became good enough from a functional jobs standpoint - consumers began to tire of advertising touting one products performance over another when in their eyes, both products would accomplish a functional job just fine. Consumers now began to look for products to deliver good enough performance on other job dimensions emotional and social. At this point, advertising emphasizing functional job performance would simply overshoot while consumer desire for emotional and social job performance remained underserved.

Marketing strategy now shifted - it was all about how a product made you feel about yourself (emotional) or how the product influenced how others looked at you (social). As evidence, the documentary references General Motors development of the Saturn brand. A car corporation developed with no haggle pricing and no-pressure sales environments, Saturn was so successful at creating a community feel for its products and brand that it was able to host a Homecoming in 1994 - 30,000 Saturn car owners and their family members spent their "vacations visiting its plant in Spring Hill, Tennessee to meet other Saturn owners as well as Saturn employees. The company turned the visit into a highly successful advertising campaign and variants (see below).

Consider companies like Apple, BMW, WWE, Harley Davidson, and Nike. Consider products like the Volkswagen Beetle, the Motorola RAZR, and the Apple iPod. When customers reach for their wallets before they know why, its often because a company or a product delivers at least good enough functional job performance while nailing customer emotional and/or social jobs. This is what advertising companies began to discover in the early 1990s and what many of the most successful brands accomplish today.

A careful understanding of customer jobs to be done is the first step. A careful allocation of resources to nail the most important or differentiating jobs is the second.

Saturn 'Homecoming' advertisement


Saturn 'Rebels' advertisement

Do you forget to take your medications? Dont worry, youre not alone! Many patients forget to take their pills or misread directions. This phenomenon, known as "medication non-compliance, is a major issue driving up healthcare costs; the National Association of Chain Drug Stores says medication non-compliances costs the U.S. healthcare system more than $177 billion every year. Even worse, non-compliance also limits the effectiveness of medical regimens and needlessly exposes patients to increased risk.

What type of solutions exist to help people remember to take their medications? There are inexpensive plastic pill cases with slots to place your pills by day of the week. There are intelligent pill dispensers which use an alarm or voice notification to let you know when it is time to take your medication. There are pill packs with embedded RFID that register the time and date taken per pill and that transfer the results over to doctors. If you are living in assisted living a nurse can administer your medications for about $20 a day.

How can we differentiate between these solutions? And if we were a company seeking breakthrough success in the marketplace which would we support?

The solution that bests addresses a deep problem or job felt by the customer will likely be successful. We recommend that the companies developing these solutions seek to understand who their customers are and their most important and unmet jobs or problems. It might be patient themselves, or the patients wife who gets frustrated having her husband not remember whether or not he took his medication. It might be the physician who cant diagnose the true source of the patients pain without knowing whether or not they are complying with their medication regime. Once a customer with a deep need or important job to be done is identified the next step is to understand how well the solutions address the job.

For example, if the customer is a woman with a heart condition who travels frequently and needs to take 10 pills a day 7 in the morning and 3 at night with the job "ensure I take the right mix of pills at the right time of the day, Paratas myonePAC is a great solution. myonePAC "prepares a persons medications by day and dosing time in a sealed, clear plastic packet that is arthritic-approved for easy opening. Each onePAC dose is custom-printed with the persons name; day and time of dose; medication names, strengths and descriptions; and other details to help them take the right medications at the right time, every time (see image below). Because each pack is printed with the medication names and prescription the customer can travel safely with her medication without bringing 10 individual bottles with her.

To conclude, companies developing these innovative pillbox solution should seek to understand three things, much like Parata did with their portion-pack solution:

1. Who is the customer?
2. What is the customers most important and unmet job to be done?
3. How well does our solution solve this job?

On Monday, February 4, Kraft Foods and JetBlue Airways Corporation announced that Kraft would provide free bagels and servings of its new Philadelphia 1/3 Less Fat Soft Cream Cheese to travelers on a number of Jet Blues routes during the month of February. In addition to free breakfast, Kraft also announced that it would send along two tuxedo-clad employees to distribute the products and also to talk up the promotion.

In an article on the promotion, Peter Boatwright, a marketing professor at Carnegie Mellon University, supported the value of a captive set of fliers as an audience for in-flight market research. Boatwright did suggest, however, that if the concept were to lose its novelty due to market research experiments being performed on every flight, fliers would most likely tune out the researchers. In the meantime, however, could Kraft and Jet Blue be on to something?

From a jobs to be done perspective, this Kraft/JetBlue market research strategy should offer up some value to the researchers, but could be greatly improved. Today, many travelers thinking ahead to a multi-hour journey with limited or no connectivity to the outside world and limited or no ability to move, pack solutions to address jobs such as reduce my boredom or make the trip go by more quickly. From game devices and music players to books and magazines to laptops, these solutions are often out in full force before the door is closed. Be it airplane, train, or bus travel, few individuals choose to sit in silence, staring out the window or contemplating their existence for the duration of the journey.

Leisure travelers visiting family or going on vacation are often extremely price sensitive. Before preparing solutions to address their jobs to be done en route, leisure travelers often conduct extensive research to identify the mode of transportation that will satisfy their trip duration and cost objectives. In most cases, cost is the paramount concern consider the legions of folks who travel through the Boston, New York, Washington D.C. corridor via bus service, enduring traffic jams and multi-hour journeys to avoid the air travel premium.

Now consider the intersection of market research and the captive traveling audience, especially those folks highly sensitive to price. Research has proven time and time again that input from customers and noncustomers is essential to product development and positioning. As is the case, product and service companies often pay thousands of dollars to convene focus groups against which to test their offerings. It seems reasonable to assume that product or service companies would find the travelers occupying the 49 seats on a Greyhound Bus or the 150 seats or 100 seats on JetBlues Airbus A320 or Embraer ERJ-190 aircraft to be valuable market research participants. Might the Kraft/JetBlue partnership be headed in this direction?

But back to leisure traveler desire to minimize the cost of travel the Kraft/JetBlue partnership assumes that flyers will be willing to taste Krafts product and offer their feedback to the representatives free of charge. What might happen if the market research process were automated through a slightly upgraded version of the back seat entertainment systems on JetBlue aircraft and if flyers could make money from participating? Imagine settling into your seat with an option to take part in several market research activities during the course of your flight. After inputting basic personal information into the system, you could agree to watch short advertisements or product promotions before answering simple yes/no or rank your response between 1 and 5 questions.



It seems likely that few flyers would participate in such activities for free, but given how much money companies spend on focus groups, might sponsoring companies be willing to reduce flyer airfare by $5 or $10 for each activity completed? Perhaps the number of activities or maximum reduction would be capped, but what if a large number of activities were available could flyers reduce their airfare cost to zero or even make money? Might flyers be willing to select between different durations of activities with fare reductions consummate with length or complexity? Might flyers receive greater fare reductions if they are willing to share greater amounts of personal information? Consider that such a market research scenario could play out in busses and trains in addition to aircraft. If the interface, activities, and benefits are carefully thought out, it seems reasonable that many leisure travelers might choose to spend a significant amount of their journeys working down the cost of those journeys and even potentially completing their journey having made a profit or received free product.

In June 2006, Clayton Christensen and the Innosight Team authored an Innovators Insight analyzing the Southwest Approach. Many companies suggest that they are following a low-cost, low-price model similar to Southwest, but many also fail to create a model that leads to sustainable profit streams and competitive advantages while delivering on a low price promise. In that Insight, we suggested the notion of indentifying novel revenue streams and proposed a tact similar to the one discussed here corporations could pay fees for the right to sit next to a passive consumer, or a group of passive consumers. Now consider Kraft paying JetBlue a fee to have exclusive rights to the research activities in which travelers could participate. Given the cost of organizing and executing market research, might it actually be more profitable for JetBlue to have travelers in their seats than to have those seats empty? One day, might JetBlue give away air travel for free to ensure that it had enough of a captive audience for market research activities?

What do you think?

If you blinked, you missed NBC Universals hotly hyped new show "Quarterlife. After airing a single episode on NBC, the media titan decided to move the program to its Bravo cable network. NBCand the creators of "Quarterlifefell into a classic trap of trying to "cram disruption into an existing model.

No one has yet figured out how to create a sustainable video success on the Web. It is clear, though, that viewing habits are different on the Web. Users, especially those lacking high-speed Internet connections, will tolerate lower production quality. Comedy works well. Anything longer than six or seven minutes seems to sputter.

"Quarterlifes creators Marshall Herskovitz and Edward Zwick sought to bring television production qualities to the Internet. The two certainly have an impressive resume. They created landmarks television series "thirtysomething and "My So-Called Life.

The duo followed the television playbook: hire a set of attractive actors and actresses (including one with online credibility: Bitsie Tulloch of lonelygirl15 fame), use polished scripts, and create professional-grade content. They did embrace at least some of the more distinct aspects of Internet videos, with short episodes and a heavy dose of interactive content.

The show did reasonably well on MySpace, with some episodes drawing several hundred thousand viewers.

By and large, though, the shows creators fell into a classic trap....

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More over at HBSP's Innovation Insights

Our own Scott Anthony warned on his HBS blog Innovation Insights that Sony's Blu-Ray victory over Toshiba's HD-DVD format "will be meaningless if the real battleground turns out to be the fight for disruptive devices and business models that make it simpler, easier, and cheaper to access content over the Internet."

Surely enough, when asked in a March 3 Wall Street Journal interview if Toshiba intended to play a role in the video-downloading market, Toshiba Chief Executive Atsutoshi Nishida answered, "That's what we're hoping. We've been developing technologies in this area already, but now that we don't have the HD DVD business, I want to put even more energy into that."

When asked if the loss of the format battle was a blow to Toshiba's growth strategy, Nishida replied, "It was just one avenue of growth. It was one of 45 strategic business units that we have. This just means we now have 44." And later on, he said, "If you don't take risks, you make no progress. Situations change constantly, so if we can't change with them, then there's no future for us."

While Nishida never cited Innosight or Clayton Christensen in this interview, clearly he understands how disruptive innovation works. Here, for example, are his five tips for overcoming a crisis:

1. Keep in mind that business without risk is business without growth.
2. Work with the facts. Listen to the market, not your ego.
3. Act quickly and decisively. Delay makes things worse, not better.
4. Be a proactive leader and quickly communicate your decisions.
5. Be resilient and continue to innovate. Success is not forever, nor is failure.

It would not be wise to count Toshiba out, even if they did lose this round to Sony.