Innovation is often perceived as an enormous risk. No matter how much data you collect, there’s no guarantee your innovation—however clever, attractive, or useful it may be—will succeed. And that’s true in economies with developed markets, where infrastructure and laws actually support innovation. How can innovators in emerging and frontier markets increase their odds of success, given the unique challenges they face?
As my co-authors and I explain in The Prosperity Paradox: How Innovation Can Lift Nations Out of Poverty, innovators can take the chance out of innovation by understanding the causal mechanism behind customers’ purchasing decisions. To that end, they have a powerful tool at their disposal: Jobs Theory.
The theory asserts that people don’t buy products or services; they “hire” them to make progress in specific circumstances (their “Job to Be Done”). As Harvard Business School professor Theodore Levitt put it, “People don’t want a quarter-inch drill. They want a quarter-inch hole.”
My advice to innovators trying to crack emerging markets? Until you understand the Jobs your customers are hiring your product or service to do, in all their rich complexity and nuance, you can never be certain that your innovations will be successful. To uncover customer’s Jobs, try these five approaches:
1. Identify jobs all around you.
In a data-obsessed world, it might be surprising that some of the world’s greatest innovators have succeeded with little more than keen observation about customers’ jobs. Sony founder Akio Morita actually advised against market research, urging instead to “carefully watch how people live, get an intuitive sense as to what they might want and then go with it.”
That’s where innovators on the ground have an important advantage; in our research we’ve discovered that local innovators are often more in tune with the progress potential customers are already trying to make.
2. Look for opportunities in nonconsumption.
Too often, companies focus on grabbing market share away from competitors, rather than searching for untapped demand. That untapped demand is what we call nonconsumption—when people are unable or unwilling to purchase and/or use a product or service, and literally can’t consume it. It happens when a given product is physically unavailable, unaffordable, or inaccessible due to other restricting factors. Why does this matter? Spotting nonconsumption alerts you to jobs that aren’t being fulfilled, making for fertile opportunities. This is especially true in low- and middle-income countries, where nonconsumers often make up the majority of the population.
I recently chatted with EarthEnable’s co-founder Gayatri Datar to learn how her organization targeted nonconsumption. When visiting Rwanda she discovered that many people had dirt floors in their homes because they could not afford—or “consume”—concrete. It turns out that 75% of Rwandans live like this, and suffer various health problems as a result. By identifying that nonconsumption, EarthEnable was able to design a more affordable flooring solution for Rwandans. To date, it’s innovative solution has benefited 8,500 people.
3. Identify workarounds.
Customers who are so unhappy with available solutions that they go to great lengths to create their own are a goldmine to innovators. Their compensating behavior represents a failure of existing solutions to solve their Job to Be Done.
In rural India, many people compensate for a lack of refrigeration with a traditional clay-pot cooler and daily shopping and food preparation. Indian conglomerate Godrej noticed this workaround, and responded by creating a low-cost refrigerator. Of course, they could have offered a conventional refrigerator, but doing so would’ve ignored their customers’ Job to Be Done: keep my food fresh without electricity. Instead, Godrej developed chotuKool—a compact solution, powered by a rechargeable battery, that costs a fraction of what conventional refrigerators do. Today, tens of thousands of households and small businesses have ditched their workarounds in favor of chotuKool.
4. Recognize things people don’t want to do.
Just as we have positive jobs (help me show my son I care about his interests) we also have negative jobs (help me spend less time collecting wood so that I can use my time more productively).
It was this negative job that helped spur the creation of Inyenyeri. Globally, almost three billion people depend on traditional biomass for cooking, causing women and children to walk miles away from home in order to collect it when they might otherwise be in school or working. Inyenyeri addresses this negative job through its clean cooking and utility system. It works like this: customers lease a clean cookstove for free and either purchase affordable fuel pellets for cash, or trade in raw biomass for pellets. For customers who choose the latter, they must only collect half as much wood as they did before, saving them time, and exposing them to less risk.
5. Spot unusual uses of products.
You can learn a lot by observing how customers use various products, especially when they use them in ways your company didn’t anticipate. That’s what happened with Arm & Hammer baking soda. For nearly a century, the company’s iconic orange box of baking soda had been a staple in every American kitchen, an essential ingredient for baking. But in the late 1960s, management observed how customers were using it in all sorts of unexpected ways—adding it to laundry detergent, mixing it with toothpaste, even sprinkling it onto the carpet. This discovery led to a jobs-based strategy with the introduction of the first phosphate-free laundry detergent and a series of other highly successful products, such as cat litter, carpet cleaner, air fresheners, and deodorant.
On top of the risk that’s inherent to any innovation effort, there’s a common misconception that innovating in emerging markets is too difficult to overcome. How can you build a successful business when potential customers are barely making ends meet? But there’s a simple truth we must remember about the human condition: people are always looking to make progress. And if innovators are able to tap into that progress by addressing potential customers’ Jobs to Be Done, opportunities will be found where none seemed possible before.
For more insights on innovating in emerging markets, check out our five-part series.