Innovator’s guide to “purple cow” breeding, Part 1

Fascination with “purple cows”

As far as I know, the term “purple cow” was coined by Seth Godin, who has a book by the same name. Essentially, it is about achieving success by being exceptional, outstanding, a “purple cow”. During early 2000s, I lived through Ethernet’s meteoric rise to dominance; first as Metro and later as Carrier Ethernet, demolishing everything in its path. A clear example, in my mind, of a true “purple cow”, a major disruption.

Since then, I got increasingly intrigued an fascinated by a process of coming up with a “purple cow” type of idea, spending uncountable hours thinking about it, trying to work it out. (Somewhat disappointingly, Seth’s book didn’t provide any workable pointers to just how one gets themselves one of those cows. It simply says that if you get one, good things are bound to happen. Oh, well.)

You might ask, “what’s wrong with the traditional innovation methods”? Well, for a start, they tend to produce too few “purple cows”, and too many square pegs for what turns out to be round holes. I have strong aversion to waste, and thus just couldn’t accept that there isn’t a way other than “try, fail, tweak, try again”. Yes, I like certainty.

To cut the long story short, it turned out that somebody did come up with a method to breed those “purple cows”, after all. With certainty. In this series of blog posts I will talk about it.

Disclaimer: Ultimately yes, this is about a particular methodology, which has been developed by a for-profit company. No, they didn’t pay me, and I don’t own their shares and not getting a cut or any other benefit. This is a pure and simple case of sharing something “cool”, that I personally feel is worth sharing for the benefit of anyone who cares.

Coming to terms

This series of posts is concerned with innovation. So, what do I mean when I use that word? For me, it means “figuring out new ways to be useful“; to improve things that suck, or to enable people to do something new that benefits them significantly.

Why do that? In the context of this post, the main reason is to sustain or improve the innovating company’s growth. This typically happens either by (1) acquiring new customers, or by (2) extracting more from the existing ones in exchange for new value provided to them.

Let’s have a look at the growth sources in a bit more detail.

Major growth sources

In the diagram below, we have “product performance” in a generic sense, as in “feature richness”, on the Y axis, and “cost” on the X axis.

An oval in the middle represents a particular existing product, which addresses some portion of the “target market”, which includes some customer population, ranging in “performance requirements”, between the most demanding and the least demanding.

This product has a cost to produce it, which is typically lower than its “list price”, and a maximum feasible discounted price that it could be reasonably sold for. These three are marked out, respectively, on the X axis.

diagram

Map of major growth sources

In a typical scenario, any given product would have three broad categories of users (i.e., those who thought it matched their needs, and went ahead and paid for it):

  1. users, who’s needs are well matched by the product (not interesting in our context and thus not shown);
  2. users, who are OK but left wanting more (“underserved” users, typically around the top-right end of the oval); and
  3. users who’s needs are met too well (“over-served” users, who wouldn’t mind if the product was less feature-rich, and had a lower price; they are located around the bottom-left part of the oval).

Then there’s a fourth category, “non-consumers”. Those are the potential customers, who want the product, and may have reasonable set of needs, but the price of the existing product is too high for them. Classic example would be myself, wanting an inexpensive but highly reliable hard drive storage solution for my home. I do not want to pay for an Enterprise-class storage array, but I’m not comfortable with el-cheapo RAID solutions available on the market, because I’m concerned about losing my data. And I want the solution to be very quiet, too, as I intend to keep it in a living room.

The last part of this post will introduce the key concepts for what we’ll be talking about later.

Jobs to be done

One of the key concepts to keep in mind is the one of “jobs to be done”. I am not sure who first came up with it, but I came across it being mentioned by several business scientists from the Harvard Business School.

The idea behind the concept goes like this: our lives are series of jobs in need of being done. Be it cleaning our teeth, communicating over distance, transporting goods, or providing company’s employees with facility to store, access and process necessary information, while ensuring its integrity and security. To get those jobs done, we seek something that would help us do it, and most of the time are happy to shell out some cash to get that “something”. It could be a product or a service – does not matter.

So, the theory goes, if we can come up with something that helps people to get their various jobs done “better”, we will likely succeed in getting them to pay for it. Right?

Almost.

What is “better”? “Better” than what, exactly?

To understand how to improve something in a meaningful way, we first need to figure out what is worth improving, so the question becomes: “how do we find that out?”. This is quite important, because if we innovate to improve along the dimensions that are already good enough, we will discover that our customers are hesitant to pay for those improvements, as their needs along these lines are already well satisfied. Classical example of this – the “megapixel race” in the industry of compact digital cameras.

To help with this, the method I am talking about uses a concept of “desired outcomes“. They can be thought of as “measures, or dimensions, associated with the job to be done”. As an example, if we take the job of cleaning teeth, the desired outcomes could go like this:

  • Minimise the amount of time it takes to remove plaque from all teeth
  • Minimise the risk of hurting gums during the cleaning process
  • Minimise the likelihood of inducing gag reaction when cleaning the back teeth

… and so on.

Combination of these measures gives us an ability to accurately and completely represent all dimensions that determine, from customer’s point of view, how well a given job is being done, and evaluate whether our potential ideas are likely to produce any meaningful improvement.

Continued in Part 2

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About Dmitri Kalintsev

Some dude with a blog and opinions ;) View all posts by Dmitri Kalintsev

2 responses to “Innovator’s guide to “purple cow” breeding, Part 1

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