Competing Against Luck Summary

To innovate successfully, focus not on what your product does, but why your customers need it.

Understanding the Jobs to Be Done Theory

Customers use products to accomplish specific tasks in their lives. This idea, known as the jobs to be done theory, shifts the focus from product features to the needs and goals that customers aim to achieve. Innovation becomes more effective when it aligns with these "jobs."

Jobs to be done theory explains that products are "hired" by customers to solve functional, emotional, or social problems. Observing why customers use a product reveals the deeper reasons behind their choices, which are often overlooked by traditional market research focused on demographics or sales trends.

Take McDonald’s as an example. The company improved milkshake sales not by changing the ingredients or branding but by identifying that commuters "hired" milkshakes to make their mornings more enjoyable and delay hunger. Based on this understanding, they adapted the product to fulfill this unique need.

Examples

• Commuters drank milkshakes during long drives for a fun, substantial breakfast.
• Customers "hired" Airbnb for authentic travel experiences rather than just a place to stay.
• Video conferencing tools like Zoom address not just communication but also collaboration and team connectivity.

Observing Everyday Life Unveils Opportunities

Paying attention to everyday behavior often uncovers unmet needs or creative uses for products. This approach can guide businesses to improve solutions or create new ones.

Customer interactions can reveal gaps that are not always obvious. Products may be used in unexpected ways or substituted for alternatives through workarounds. These signals are often a goldmine for discovering challenges your product can address.

For instance, homeowners using a drill aren’t driven by the tool itself but by the desire to build or fix something. Similarly, smart alarms that provide motivational quotes or news updates move beyond just waking people up—they address emotional and functional aspects of starting the day.

Examples

• A drill fulfills a practical, emotional, and social role for DIYers.
• Smartwatches that cater to fitness, communication, and style embody layered functions.
• Nonconsumers turn household items into tools for entirely new purposes.

Building Customer Stories for Deeper Insights

Customer behaviors and struggles often tell richer stories than surveys or direct feedback. Observing their interactions reveals the underlying motivations for their choices.

Creating a strong product begins with understanding these narratives. Consider Pleasant Rowland’s American Girl dolls. She saw dolls as more than playthings—they became bridges to historical education and emotional connections, offering a deeper experience for children and parents alike.

Businesses must think about not only attracting customers but also the existing product or behavior they would need to replace. Change doesn’t occur easily. By uncovering these patterns, companies can create compelling products that pull customers toward them.

Examples

• Customers chose American Girl dolls for education and emotional connection, not just play.
• Streaming services replaced traditional TV subscriptions by offering convenience and variety.
• Smartphone adoption surged as they combined multiple devices into one.

Align Processes Around the Customer’s Job

Successful businesses prioritize the job customers are trying to do, not just the internal efficiency of their processes. This creates better outcomes and a seamless experience.

The Mayo Clinic exemplifies this by organizing all a patient's specialist visits into a coordinated, single-day experience, recognizing that patients want answers quickly and with minimal hassle. This process-driven approach centers on what adds value to the user’s experience.

Metrics should reflect how well a product or service addresses the user's goals. Shifting from features and outputs to job-aligned outcomes ensures that teams remain focused on what truly matters to the customer.

Examples

• The Mayo Clinic’s coordination system reduces patient stress and confusion.
• A project management software that prioritizes user task completion rates over feature releases.
• Online retailers streamline checkout to match the shopper's need for quick transactions.

The Trap of Metrics and Misguided Growth

Businesses often fall into traps of prioritizing quantifiable metrics while losing sight of the foundational needs of their customers. Passive data, or qualitative insights, get overshadowed by surface-level figures.

Growing companies may expand too broadly or chase trends that dilute their brand identity. V8 Vegetable Juice initially succeeded by solving a clear "job" of convenient vegetable consumption but later lost its focus through over-diversification.

Avoiding confirmation bias is also critical. Misreading customer data to align with existing strategies rather than challenging them can lead businesses off-course. Staying rooted in the customer's job ensures consistent relevance.

Examples

• V8 strayed from its original purpose by expanding its range too far.
• Listening to qualitative data helped McDonald's revisit assumptions about milkshakes.
• Tech companies that ignore user feedback risk creating bloated, unusable apps.

Innovation Goes Beyond Functionality

People don't only buy products for their basic functions; emotional and social factors often play a larger role. Understanding this expands opportunities for creating memorable experiences.

For example, Tesla cars aren't just vehicles; they signal environmental awareness and status. Similarly, high-end kitchen appliances fulfill the social role of indicating a well-equipped home beyond their cooking utility.

Embracing these emotional and social dimensions of "jobs to be done" connects products to deeper aspects of human life and enhances their relevance in customers' lives.

Examples

• Luxury watches are often about status rather than just telling time.
• Starbucks sells not only coffee but also a welcoming communal experience.
• Social media platforms enable self-expression and connectivity beyond basic communication.

Nonconsumption: An Untapped Resource

The group of people who don't use your product—or a product at all—represents an enormous opportunity. Observing why the nonconsumer exists can spark innovative solutions.

Workarounds and nonconsumption supply clues to barriers such as complexity, cost, or lack of fit. The challenge lies in addressing these weaknesses without alienating current users.

For instance, budget airlines tapped into nonconsumers of air travel by offering simple, low-cost alternatives. They grew by solving a job for people who prioritized affordability over luxury.

Examples

• Budget airlines emerged to cater to low-budget travelers who avoided flying.
• Tablets became popular with older adults seeking simpler tech than laptops.
• Streaming services introduced monthly pricing to attract sporadic watchers.

Simplicity Wins

In an over-complicated world, simple solutions that focus on solving a specific customer job consistently outperform feature-laden alternatives.

Consider how streaming platforms like Netflix succeeded not by offering every imaginable feature but by making movies and shows accessible anytime, anywhere. Their focus on usability created loyal customers.

Keeping solutions simple and job-focused ensures that the product doesn’t overwhelm users, builds trust, and solves the problem it was "hired" to address.

Examples

• Nest thermostats simplify the complex side of climate control at home.
• Spotify dominates by organizing music in an easy, accessible way.
• Duolingo attracts language learners through bite-sized, gamified lessons.

Balance Growth with Purpose

Businesses must pursue growth wisely and stay true to their foundational job. Expansion should only be considered if it directly benefits the user’s goal.

Trying to be all things to all customers can dilute a company's impact, as seen in missteps from once-specialized brands. Staying lean and focused allows companies to continue delivering excellent results in their primary areas of expertise.

Leading with purpose ensures a baseline of trust from loyal users, paving the way for gradual, natural expansion.

Examples

• Apple succeeded by focusing on usability even as it diversified across devices.
• IKEA remains consistent in offering affordable furniture, expanding into new markets slowly.
• Peloton connects fitness and inclusiveness to grow its passionate user base.

Takeaways

1. Observe your customers’ actions and problems, rather than relying solely on direct feedback.
2. Align your team’s processes around what your customers need, not just operational efficiency.
3. Revisit your product’s core "job" frequently to ensure ongoing focus and meaningful growth.