Identifying and nurturing unexpected utility - 383 Byte Breakfast

- welcome to byte , John co-founder at 383
- the title of today’s talk is ‘Identifying and nurturing unexpected utility’

- many of you will probably know we have a book coming out next month on the subject of brand utility, called the
useful brands playbook.
- it includes a tonnes of research, interviews and actions all with the aim of helping brands focus on becoming more
useful
- part of the book is a report which we conducted with Forrester, where we surveyed 200 large US and UK
organisations.
- today I wanted to pick up on one specific statistic from that report around how to gather and act upon good
customer insight.
- in the report we conducted, 51% of those 200 organisations we spoke to felt that unique customer insight should be
at the heart of all organisational actions
- but crucially 70% felt under equipped to measure and understand their own customer experience currently.
- 75% relied on third party trend watching services as their main customer insight tool

So, when I talk about customer insight what I really mean is the advantages that come from
understanding the reasons why a customer finds your product or service useful.
And it’s that idea of utility that I want to start with this morning.
And to illustrate why understanding utility matters, I’m going to start with a little story about
the midlands.

And it’s a story that’s pretty close to us at 383.
Some of you might know that we have studios in London and Birmingham and
this photo in the background is the exterior of our Birmingham space.
It’s in the Jewellery Quarter, and it’s a 7000sqft factory space that’s we recently
renovated called Victoria Works.
Refurbished in part during the 90’s. But some areas, including the space we
bought, were left untouched for many years.

Here’s some shots of the inside from before we started work, and you can see
quite a lot of it was in a fair state of disrepair.
We had broken windows, crumbling brickwork and a missing roof on the top
floor.
A lot of the building was really stuck in the past.

The factory itself is also all Grade II listed, and being pretty interested in the
history of the space we really wanted to find out what had happened there.

This is the answer.
Our studio used to be home to a steel pen manufacturers, that’s what it had
been built for originally.

but more than that, it wasn’t just ‘another’ pen factory. It was
the first pen factory.
This is Joseph Gillott and he was the first person in the world
to mass manufacturer fountain pens.
He’s inventor of the steel pen press and Victoria Works was
built by him to house this new industry.

And on taking a trip to the pen museum which is
located across the road from where we work.
(who knew?!)
we discovered some pretty amazing things.
These photos you see here are literally in our
building - same windows and same brickwork. And
the shot I overlaid on the previous slide was taken
from this collection.

The factory was built in about 1840.
And it’s height they produced 150 million pens per year!
It genuinely placed Birmingham at the centre of a new
global economy.
And the reason it was so successful was that Gillott
realised there was a clear job for his invention to do…

The job was to enable every person to write.
Up until then fountain pens were super expensive, writing was for the elite, and
Gillott wanted to create an instrument that was available and affordable for
everyone.

And he did that job pretty successfully…
This statistic is fairly mind blowing.
So from that small industry, at one point in the 19th Century, 75% of everything
written in the world was with a Birmingham pen.
But, the story doesn’t end here.

In the 1930’s something fairly significant happened to the fountain pen industry.

This is Mr. Laszlo Biro. He turned up at the Budapest
International Fair in the 30’s with a ball point pen and
pretty quickly over the following years undid the monopoly
of the fountain pen industry.
But the reasons behind biro’s success weren’t because the
ballpoint was a particularly new innovation.

In fact the original patent for the ballpoint pen had been filed back in 1888.
However, the job that the ballpoint pen did at that point in time had limited
commerciality.
The patent stated that is was a pen to ‘write on leather’. Additionally it also
compromised the core job that the fountain pen did so well… which was to
allowing writing on paper.
And eventually the patent lapsed.
So, Biro came along and adapted a new version of the ballpoint, but also got
really lucky with the timing. As in the 1930’s a significant event happened that
really fuelled the usefulness of Biro’s version of the ballpoint.

And that significant event was World War II.
And world war II really changed the job that the pen needed to do,
because fountain pens were pretty terrible at altitude.
Biro’s ballpoint had a hidden use. It did this job of writing at altitude
much better than the fountain pen, so much so that Biro was
awarded huge contracts by the RAF during the war years which
fuelled the expansion of his factories and drove down the costs of his
pens.

- And what I think we can learn from the story is that there are several factors that affect
why a product is relevant at any particular point in time.
- And that the uses that a customer has for a product are constantly changing.
There are always new jobs to do.
This venn diagram is a useful lens to see the situation through. We have ’customer problems’
on the left, things that people need to do. We have the ‘context’ or situations of those
problems on the right, these are the reasons why someone needs to do them and we have
‘technology’ at the top, which is the innovation itself.
So with Biro, we had a new customer problem, writing at altitude.
Which was fuelled by a new context, the outbreak of war. And enabled by Biro’s new
technology, the combination of the original ballpoint, plus new inks and plastics.

And you can apply this lens to the pen market today by looking at pens designed for other
specific job.
The job a Sharpie does really well is to capture signatures.
The customer problem on the left - needing a pen that writes on anything.
The context, the why - is that people want autographs that last.
And the technology that Sharpie delivers that through is permanent inks.

This is the Space Pen, developed by the Fisher Space company.
The job it does really well is to allow astronauts to take notes in space.
The problem is zero gravity, the context that fueled the invention was the space program in
the 60s and the technology is a pressurised ink canister that flows in a zero G environment.

- So if we remove technology from the diagram for a minute, and examine that intersection
between customer problems and situation or context, you often see many jobs that a product
can do start to emerge.

- And when I talk about jobs, I’m really
talking about utility, Because when you
understand the job a product is doing
for the customer, you also understand
the reason it is being used.

- This idea of people buying products to achieve a goal is
often illustrated with this quote from Theodore Levitt in
the 60s. He said the ‘People don’t want a quarter inch
drill, they want a quarter inch hole’

- and many of you will probably know, that this idea of focusing on
the job that a customer is hiring a product for has been
developed in to an entire framework called ‘Jobs to be done’ by
Clay Christensen of the Harvard business school.
- Jobs to be done is really about unearthing why a product gets
used and it’s a really useful methodology in this whole area of
hidden utility.

- And it’s useful because when you know why something is being used you start to do two
things.
- you can reframe the market and reframe the products
- and it’s these two outcomes that I want to focus on next

- let’s start with reframe the market, which is probably the
more closely recognised outcome of jobs to be done.

- And to illustrate, I’m going to steal Clay Christensens text book case study from when he
worked with McDonalds.
- So here, the challenge was how can McDonalds sell more milkshake?
- and traditionally McDonalds had segmented their customer base by product and had typical
demographic profiles and target customers for each menu item
- When they were updating the milkshake they’d run focus groups with their target customers
and ask them if they liked the new version
- Invariably the target milkshake customers would say yes, because they liked milshake, but
McDonalds would see no bump in sales

- So, instead of asking target customers if they liked something, Clay Christensens team
instead observed what was actually happening in store.
- They spent 18hrs observing Milkshake sales and found some really interesting things.
- 50% sold early morning in the hours before 9am
- Almost always the milkshakes were sold to single males
- Usually the milkshake was their only purchase
- And all the customers typically got in their cars and left once they’d purchased

- So the team asked these customers why was it that they were actually buying the product,
what was the job they needed the milkshake to do.
- And they found that the job was really about the morning commute
- these people had a boring drive and the milkshake took a while to slurp
- it also sat neatly in their cup holder and could be drunk with one hand
- they also weren’t hungry enough to stop for breakfast at that time of day, but they needed
something that would fill them up until mid morning
The milkshake it turned out, did this job perfectly.

- And by understanding the job, McDonalds were able to reframe the market.
- The competition was no longer the burger king milkshake, it was the other breakfast items
those people might hire to do the same job;
- Some people occasionaly hired fruit - but that didn’t keep them full and was quick to eat
- On Friday’s people might hire doughnuts, but they were a bit unhealthy for everyday
- Some people had hired breakfast bagels - but they were a bit messy

- So, what did McDonalds do?
- Did Clay Christensens milkshake bring all the boys to the yard?!
- Firstly, by realising the job the milkshake needed to do they made the breakfast version
even thicker and added some fruit. Apparently it takes 23 minutes to drink a large one.
- Secondly, they also moved the dispensing machine closer to the drive through window
during breakfast hours making it quicker and easy to get the shake.
- These changes resulted in a 15% sales hike purely through understanding more about
how and why people buy.

- So reframing the market is often about understanding that the real competition isn’t always
similar products.

- and you see that idea of reframing coming out in other innovation stories too.
- this is the a great story that Tim Kastelle tells in his Ted talk talk about the marketing
of Xerox first line of copiers.
- This is the Xerox series A and at the time it came to market another machine called
the mimeograph was widely used in the states.
- Because the series A was a machine it was logical that Xerox would market it as a
mimeograph competitor.
- However, business saw limited value in the pitch - the Xerox basically did the same
job of the mimeograph with very few clear advantages.

- this is the Xerox series 9, their next product, and one of the most successful products
ever launched in the states.
- Here, Xerox completely reframed the positioning of their copier in the market.
- They adapted the technology to make a copier that was cheaper and faster than
previous versions, but crucially pitched it as a replacement for typists, rather than other
machines.
- With this business model and pitch the Xerox became incredibly valuable, the series 9
now did a specific job better than an expensive workforce at a fraction of the cost

- And you see this idea of reframing the market in successful tech products too.
- This is Slack, the chat application for businesses. It’s one of the fastest growing startups
in the world right now and has a valuation of over a billion dollars.
- And what’s interesting about Slack is there are a ton of other chat applications in this
same space, things like Hipchat which arguably do similar jobs.

- but for slack the job isn’t other chat applications.
- Slack’s job is to replace email.
- and you see that idea coming through in their comms on the homepage, in their company
purpose and in their PR efforts

- I mentioned there were two outcomes of truly understanding the utility of a product.
- We’ve touched on reframing the market, so now, let’s look at reframing the product.

- Frameworks like jobs to be done aren’t just about the marketing, they can also be about
growth hacking a product itself.
- And the more specific we can be with our jobs, the better you can understand how to grow
product features and ranges around utility.

- To illustrate this idea, lets look at GoPro
- When GoPro launched, the job that the product teams thought the product would do is
this….
- to be the best camera for extreme sports
- However, as we all know, GoPro’s are used for much much more

- from filming awesome city scapes with drones

- to filming on the back of dogs

- or as security on people’s Dash’s
- Don’t worry, no one was harmed in the making of this keynote

- so if we go back to our diagram you see pretty quickly that the when you put a product in
peoples hands many jobs can emerge.
- Often the utility of a product is much broader than we imagine.

- If we look at that jobs intersection of problems and context it’s not at all about being
the best camera for extreme sports, but also ‘fun footage of my dog’. ‘in car security
if I have an accident’ or ‘filming hard to reach places.’

- so what’s been GoPros response to this broader utility?
- reframing the actual product experience around the jobs the product is being hired to do

- Do a google search and you’ll see that GoPro’s purpose is now much broader than extreme
sports.
- Their customer pitch is ‘capture and share your world’

- their product accessories and on site UX also support the jobs too
- Click on accessories and you can browse a huge array of uses and in there you’ll find things
like dog harnesses, children chest mounts and selfie sticks designed to float.

- and finally, from a content strategy point of view, if you checkout their playlists on YouTube
you’ll see a huge range of categories from animals and music to travel and car stunts.

- And this idea of reframing the product experience itself isn’t just for physical products
- you can track the growth of digital only platforms in this way too

- if we look at ebay for a minute, the original job that ebays founder believed it would
do is this
- enable collectible auctions for individuals
- but as we all know, eBay’s utility and the way they’ve had to develop the platform has
been pretty different to this

- firstly eBay’s core business wasn’t really about auctions
- eBay were quick to introduce buy it now when they realised that the platform was as much
about selling in general terms as it was about auctions
- now around 70% of eBay’s transactions happen on fixed price items

- eBay also isn’t just about collectibles
- a huge number of one off high ticket luxury items get sold on eBay from yachts and power
boats to private islands

- finally, eBay turned out to not just be about individuals
- one of their biggest markets has been introducing eBay stores allowing the
platform to do the job of physical bricks and mortar for many online sellers

- so ebay have done a great job of adjusting their platform around the hidden utility.
- and they now say that the real job that ebay does, the platforms true purpose, is about
connecting people, not selling things

- so hopefully, just with those few examples you can start to see that when you understand the
different ways that people use a product or service you’re in a much better place.
- but how do you make sure that the hidden utility, doesn’t stay hidden?
- here’s 4 closing thoughts from our Useful Brands book to takeaway with you today

- firstly ensure that if you’re trying to grow a business you make sure that growth
hacking is both a marketing and a product discipline
- far too often business take an either/or approach, spending a tons of money
marketing a fairly undifferentiated product or, spending ages optimising a
product’s performance but losing focus on how to build an audience for it.
- growth hacking works best when teams work together and collaborate on growth

- secondly, make sure you're not asking the right customers the wrong
questions
- many organisations are great at paying lip service to customer insight, but
often fail to get any insight from the customers they speak to
- jobs to done is one of many frameworks you can use to gain unique
customer insight, and if you’re interested in getting started with it there’s a
great post on medium which provides a sample script to kickstart better
jobs to be done interviews.

- third, find small niches in big data.
- analytics tools like mix panel are really fantastic to properly interrogate and
understand customer behaviour on digital platforms
- these tools go much deeper than the type of broad brush metrics you can get from
Google Analytics and allow you to properly drill down in customer behaviour
- using things like mix panel you can test hypotheses around the jobs people might
be hiring your product for and really start intelligently grow features around smaller
data trends.

- and lastly, blend methodologies.
- at 383 we use a few different frameworks for getting customer insight, and often blend
different tools.
- when we’re filling out something like the lean business model canvas we’ll also use
jobs to done to inform the customer problems and customer segments sections of that
sheet
- by playing with lots of different tools and not being too strict with one school of
thought you can move much faster and experiment more quickly

So, that’s a brief overview of hidden utility and some of the insight from the Useful Brands
playbook.
There’s 9 other plays in the book and you’ve found any of this morning interesting I’d
recommend that you head over to usefulbrandsplaybook.com and sign up for a copy

we’ll be sending the first copies out in May, so if you think your organisation could benefit
from reading it, this is the place to go.

Identifying and nurturing unexpected utility - 383 Byte Breakfast

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