product/market fit

Is Febreze Disruptive? It Might Depend What Job You Hire it For.

I often start by reminding clients and prospects -- anyone who will listen -- that an innovative technology is a nice thing to have, and can certainly enable market disruption if it uniquely enables a large sustainable cost advantage, or a new way of doing things that is easier or more convenient. But technology is neither necessary, nor sufficient for disruption to occur.

Disruptive innovation is not about technology

Netflix was a good example in their early days. Yes, you placed orders for movies through a website, but there was nothing about the website that was novel or necessary in order to disrupt Blockbuster. In fact, they were considered a tech play because of the website, but there was nothing about technology that made Netflix successful (something they would have done well to remember when they tried to force an ill-advised price change on customers last year to combine streaming video and mailed DVDs). When Blockbuster added their own website and copied much of the mechanics of Netflix's ordering, it made no difference to their survival and did not enable them to prevent being disrupted.

Netflix's disruptive innovation was driven entirely by their business model. Apparently inferior to Blockbuster in the lack of physical presence to visit and browse movies and take something home to watch NOW (at least that's how Blockbuster positioned themselves against Netflix), they identified unmet and underserved market needs and created a new business model to serve them. By sending DVDs mail order from a central location, Netflix eliminated the huge cost of stores, and having inventory where it wasn't needed, and in the process enabled:

  • limitless catalog
  • convenience of not having to make a trip to the store either to pick up or return videos
  • low cost for high volume renters aka the best customers (flat subscription pricing rather than per video)

and removed friction in the rental process:

  • no late fees -- the number one complaint against Blockbuster and traditional video rental models
  • frustration when a desired title wasn't on the shelf

Dramatically lower costs could be passed on to consumers (and sustainable cost advantage is one of the key drivers of disruption), enabling rapid growth, and strong word of mouth helped Netflix avoid big marketing costs to grow.

What does this have to do with Febreze? Well, I started with Netflix because it is an example commonly misunderstood to be a technology-based disruptive innovation, when it really has nothing at all to do with technology, but is entirely about the process, the business model and the marketing. It's a company that most of us are familiar with, especially after its recent missteps, and it helps us make the leap to talking about a disruptive innovation that doesn't have any "tech" in it at all.

How the heck is an air freshener in a crowded marketplace an example of disruptive innovation?

Febreze is fascinating, because it started its life doing everything wrong, the way most "big company" new products are introduced to market. It was a product designed to be sprayed on draperies that reeked of cigarette smoke, a smelly sofa that was frequently inhabited by a wet family dog, or a room where cats had done their thing on the floor. It's purpose was to neutralize the odor.

The problem was, this was a made-in-the-boardroom problem. Although it seems reasonable to imagine that people are embarrassed and repulsed by these smells and would want to get rid of them, in the real world, the people who most needed to fix this problem didn't believe that they had a problem to fix. In the real world, people build up tolerances to smells the more they are exposed to them, and may even associate that "wet dog" smell with positive feelings. So, while any visitor to such a home might be hit in the face with detestable odors and wonder how people could live that way, the person who lives there has masked the smells in their mind and has no idea that their house smells like smoke, or like cat pee. And, even if they smell it a little bit, they certainly don't perceive their house to be unclean and in need of yet another kind of air freshener product.

So, when P&G launched Febreze as an odor-killing unscented spray in the mid-90s with ads targeting the homeowner's love for their pets, but hate for their smell, there was no resonance in the market with this messaging (might they have done better to target visiting friends instead?), and it was a complete dud in the market, with sales falling each month, rather than growing.

This scenario is laid out in a New York Times article (see pages 4 and 5 for the bit about Febreze) that details the work of behavioral researchers in understanding habits to influence purchasing decisions. The company was perplexed and sent researchers out to the field to try to understand what was happening with happy users of Febreze who were using lots of it, and what was different about them. Did they have more sensitive noses? Were they more anal about cleaning? Were they more socially embarrassed about the smells when visitors came over?

Febreze became an innovative market disruptor, almost by accident

It turned out that there were some avid users who had built spraying into their regular cleaning habits as a reward for finishing, so when the bedroom was finished being cleaned and tidied, a quick spray of Febreze on the comforter was the icing on the cake. When the laundry was clean, a spray of Febreze confirmed it. When the living room was cleaned and the sofa vacuumed off, Febreze was the finishing ritual. It wasn't that they perceived their homes to be dirty or in need of de-smelling, but that the spray at the end was a finishing detail to signal completion and get that little endorphin high that comes with completing something.

The happy ending is that P&G discovered this counter-intuitive behavior, and built this notion into their marketing. Sales exploded, to the point that it is today a best-selling $1B franchise. The now familiar ad template shows a giddy, self-gratified housewife who has finished the cleaning, gives it a shot of Febreze and closes her eyes to breathe in the warm fuzzy feelings. Or, more prosaicly, a quick spray when finished the task was the reward for finishing - the idea being to associate the product with habit formation and the good feeling of being done with the work and knowing that things were clean. In other words, rather than promoting it as a cleaning product, they are promoting it as something you should do after cleaning was complete.

So, the NYT article is about how statisticians and behaviorists are decoding habits and using them to sell to us, and the Febreze story is just a small piece of it, but it got me to thinking. What's interesting is that the original launch of Febreze was supported by conventional wisdom and conventional marketing. I'm sure they did research that confirmed everyone would like their homes to smell cleaner (a common symptom of bad market research is "confirmation bias", where people selectively remember things that confirm what they already believe to be true, or in this case, remember how much they dislike the smell in everyone else's home even when they don't recognize it in their own). Febreze would have been just another incremental and sustaining cleaning innovation, but for the discovery of this anomalous behavior of a few avid users. It may even have been cancelled for lack of sales had behavioral researchers not discovered the pattern of women using it when finished cleaning a room, rather than as a way to deodorize pet smells.

But hidden in the research story is that Febreze's ultimate success points to some critical factors that all "new market" disruptive innovations exhibit. Most notably:

job to be done. Early on, marketers positioned Febreze as an air freshener because they didn't understand the "job" that consumers were hiring it to do. It turns out that people didn't believe they had a smell problem. But, a quick spray at the end of cleaning a room created a habit-forming ritual that said "I'm done. This is clean and fresh and I can move on to the next room." A reward, and a signal of being clean, rather than a coverup of something shameful. Had the real job not been discovered, Febreze likely would have failed in the market as one of thousands of similar cleaning product innovations. By precisely targeting the job that the consumer identified with, they created positioning that is virtually impossible to dislodge them from. (Download this classic article which describes why identifying the job to be done is so important.)

target non-consumption. There were a small number of people who felt they needed a bandaid solution to mask disgusting smells. However, most people didn't recognize or agree that their house smelled bad, but did see a quick spray as a finishing touch -- almost like putting some sparkle on their lip gloss. By targeting the larger market of people who did not think their houses stunk and needed air fresheners as masking agents, but who did clean their houses, Febreze was able to identify a unique niche to dominate and grow from (now, people do buy Febreze as a quick fix to mask unpleasant odors, but that came later).

serve an unmet need. There was clearly an unmet need to signal "I'm done" and have a little celebration before moving to the next room. I suspect we all have this little celebration, whether we use Febreze or not, we step back and admire our work, smell the air. Febreze sprinkles the fairy dust that completes the job (that's how the ads seem to portray it). Originally unscented (because it was to mask odors, not replace them), Febreze now comes in many perfumed scents to leave behind the smell of "being done".

identify a new market. The new market for a deodorizing spray was people who viewed it as a finishing tool for cleaning. The people who it was originally designed for (those with smelly houses) didn't think they needed it, so the only way to sell it was to identify a new (adjacent) market where there was an unmet need.

Startups who are designing groundbreaking technologies that they believe are "disruptive" do well to remember these lessons. Disruption is a theory about marketing, not about product development or technology. To disrupt a market, you must be able to articulate a "job to be done" for which your target audience believes there is no better solution. You must meet an unmet or under-served need -- it's easier to sell to people who aren't part of the existing market (non-consumers who have opted out, and indicated that no available solution either satisfies the "job to be done" or is priced affordably), than to compete against incumbent solutions claiming to be better. And, you either need to be a "low-end" disruption (one which is targeted at the least demanding market segments based on pricing and sustainable cost advantage) or a "new market" disruption (create a market where none existed before).

Marketing and business strategy drive disruption

None of these characteristics have anything to do with building technology, but everything to do with appropriate segmentation, product positioning, messaging, and the compelling reasons why I would select your solution over all other available alternatives (which aren't necessarily products in the same "category"). Febreze ended up being a disruptive innovation because it succeeded (albeit after the fact) in marketing strategy, not because of how the product was designed.

Your thoughts?


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  • the 6 most common misconceptions about disruptive innovation
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  • how to measure the market value of being disruptive

Disrupt, or Be Disrupted: Are There Only Two Choices?

Solving the Innovator's Dilemma

There's a question that I'm frequently asked that goes something like "So, I've read/heard about the Innovator's Dilemma and disruptive innovation. I get it -- interesting idea -- we all need more innovation. But what difference does it make whether innovation is disruptive or not? What can I do about it / how can I use it?"

Generally, the question is posed as a challenge -- a conversation starter when people are trying to understand what I do for a living and whether my services have any relevance to them. Sometimes it is the challenge of a skeptic: someone who doesn't believe disruption theory is valid, and they're looking for logical holes to punch through.

Normally, I use this space to discuss causes and effects of disruption, and case studies and disruption analysis that (I hope) is instructive and interesting. But my business is more than an intellectual exercise, so today I'm going to address this question head-on, and I hope you'll excuse if a tiny bit of selling creeps in. Hopefully, you won't even notice.

Why We Care About Disruption

In a nutshell, disruptive innovation catches competition off guard, and leaves them without adequate response. If you could design it as an attribute of your business, it is the ideal strategy, because it creates new markets, satisfies needs that are unmet or underserved ("Blue Oceans") by existing solutions, and determines who the dominant players with the highest margins will be for years to come.

Where They Ain't

"I skate to where the puck is going, not to where it is," is a quote famously attributed to Wayne Gretzky, the greatest hockey player ever. He was explaining to a reporter why he always seemed to be in the right place at the right time, and to have the best and easiest scoring opportunities.

Going where the puck isn't is the essence of disruptive innovation. If you solve the problems that no one else is solving (and that potential customers are willing to pay to have solved), at order-of-magnitude lower cost, and with the highest degree of simplicity and convenience, then you'll generally have a disruptive innovation on your hands.

The trouble is, how do you find those sweet spots in your industry, or in your business? It's easy to see the next incremental step in innovation -- make the 'off button' bigger and red, make the product smaller, add another function (whiteners in your detergent). But going in a contrary direction, or one that others don't see the need to, is a lot harder to do. For that, you have to ask the right questions, and I know, that's also easier to say than do. Unless you are starting with the right framework or lens for examining what people really need.

Apart from the natural resistance that many have to stepping out of line and being different, this is what is so challenging about disruptive innovation, and why disruption is so rarely initiated from within the industry being disrupted. Regardless, to be disruptive, you have to hit the competition "where they ain't" (see "Wee Willie" Keeler), and do it in a way that isn't possible for market incumbents to match easily.

Identifying the Value

As a disruption consultant, the principle benefits my clients identify with implementing a disruptive business strategy or disruptive business model include:

  • creation of new revenue streams
  • easier sales
  • much higher than average margins
  • lower cost of doing business
  • larger markets and largest market shares

Coincidentally, when you achieve those things, you also create the positive perception of being a trendsetter, an industry (market and/or thought) leader, and a supplier who is better able to serve your customer's needs. So, those are the simple surface answers to the questions raised in the first paragraph, but there is a deeper underlying question of how that opportunity can be leveraged. How do we create value from disruption?

Being Disruptive

I don't want to spend time here describing the services Innovative Disruption offers as a consultancy -- you can visit the pages of our website for that information. Simply understand that creating disruption and leveraging its value is done through a number of deliberate tactics, and that this process can be learned. Some of the key activities and priorities include:

  • identifying "jobs to be done"
  • radical simplification (of products especially)
  • dramatic improvement in accessibility, flexibility and/or convenience
  • change that enables nearly the same product/service to be done (or a "good enough" facsimile) for a fraction of the price
  • find ways to bring products to, or service market niches that are undesirable to incumbents

and, these are accomplished with a methodological framework, specialized analysis tools, Disruption Report Cards, and a mentality that experimentation and (fast) failure is part of the lifecycle of product introduction to be embraced because it is necessary to establishing product/market fit, not something to be punished. Lean startup behavior, in other words, is compatible with disruption (though neither necessary nor sufficient to create it).

Eat, or Be Eaten

We increasingly face a world where everyone is on one side of the equation or the other: disrupt, or be disrupted. The reality is that long term viability and sustainability of the business does not require disrupting to avoid being disrupted, but it does require the mindset of a disruptive innovator, and a willingness to seize disruptive opportunities when they are present. It also requires sustaining innovations 90% of the time, and the sort of operational efficiency that is often at odds with experimentation and innovation.

In other words, business needs a left brain and a right brain. You can't remain viable in the long term if you aren't constantly aware of when disruption is possible; on the other hand, maximizing the potential of disruption requires sustaining innovation and the sorts of activities that established companies excel at, and do every day. The key is to allocating a percentage of business activity to each of these dual modes, evaluating threats that could disrupt your business or industry, and being willing to cannibalize your own products and lines of business before someone else does.

Modern business allows no complacency. If you want to explore these questions more fully, I encourage you to download our ebook "Disruptive Confusion Unraveled".

Boeing's Big Boo-Boo: Top 6 Innovation Takeaways (Part 3 of 3)

In this 3-part series, we dissect the failure of Boeing's inflight satellite-based internet service, Connexion by Boeing. In parts one and two, we discussed the flawed business model and massive marketing mistakes that inevitably led to nearly $1 billion in losses before shutting down the project. In this 3rd and final article, we ask what could have been done differently, and what lessons should be learned.

Recap: A 6-Year Long String of Failures

After looking at the cost structure, revenue models, poor assumptions about market size and demand, pricing, scale of operations and marketing strategy, the inescapable conclusion is that almost everything that could have been done wrong to bring Connexion by Boeing inflight internet service to market, was. Like so much other big company innovation, it was clear that Boeing had no idea how to go about launching and driving market adoption of this service, or how to design a business model that had a chance of working.

Part 3: What could they have done differently?  (Hint: Next time pretend you're a startup.)

Although not in any way a disruptive innovation, or even one with potential to disrupt, the Connexion by Boeing service could have learned a lot from how disruptive innovations are successfully brought to market and how startups launch products.

Here are some of the things they could have done differently and lessons that can be learned from Connexion's failure.

1) Business Model Design

The cost structure that this service was saddled with, from satellite bandwidth licensing to having a business unit with 560 people to incredibly expensive technology needed on each plane, boxed Boeing in. To get the service available in a large enough number of planes and at the right price point to make it economically viable, Boeing ought to have used a strategy more akin to the early dotcom successes like Amazon and Yahoo and Google.

If your product depends on a mass market to be affordable, then you have to seed the market to bootstrap it. That means pricing low -- even giving it away for the first year (like Skype is doing) to get people on the grid and addicted.

Ultimately, the pricing strategy needs to recognize what the average or downmarket consumer considers good value, not be a skimming strategy dependent on only those willing to pay the maximum.

Lesson 1: There are many possible variables in designing a business model, and what works in one scenario doesn't always work in another. Don't assume you got it right the first time, and don't scale your business before you know that it's viable.

    2) Fast Failures

    Boeing assumed that the service they wanted to deliver at the price they wanted to sell it for was the service that the potential customers wanted and were willing to pay for. There was no small scale testing of this before scaling the business into a 560 person business unit, locked into very expensive satellite bandwidth contracts, targeting availability anywhere in the world.

    Fast failure is a necessary part of startup methodology. The objective is to test the constraints, minimum viable product features and alternative business models, and assumptions about the target market. You expect to fail multiple times but learn from each failure until you arrive at the right configuration or determine that there is no product/market fit or viable business model.

    Big companies tend to see failures as something to penalize rather than something to learn from, which means when they fail, they fail big, just as Boeing did.

    Startups without the luxury of Fortune 500 cash backing them are forced to do things in a more lean fashion, and to test all their assumptions before committing them to the business model. This little bit of common sense might have been enough to work out the kinks without blowing a billion dollars, maybe even hitting profitability within months of operation.

    Lesson 2: Failing is a good thing in a startup if you do it fast, learn from it and pivot. In fact, it's a necessary component of identifying the right business model design and optimizing for success. It also costs a lot less than assuming you're right and failing slow.

    3) Cost Structure

    Lean startups need to keep their cost structure pared to the bone until they demonstrate that they have a business model that can scale because VCs wouldn't have it any other way. As noted above, Boeing built an outrageously costly platform making it virtually impossible for the service to be profitable unless every unrealistically optimistic projection came true, and boxing themselves into a price model that customers wouldn't buy into.

    Disruptive innovations tend to have the lowest cost structure, often by an order of magnitude. Boeing choose to implement almost the highest possible cost structure. This left the service vulnerable to lower cost technology advances (e.g. onboard conventional wifi from ground transmission stations and/or plane-to-plane daisy-chaining) that could be expected to compete in the future, undercutting and undermining Boeing's business model.

    Lesson 3: Always try to achieve the lowest possible cost that delivers a product/service that is "good enough" to satisfy your target market, and be conscious of technology advances that could obsolete your innovation using cheaper components or lower manufacturing and assembly costs.

    4) Network Effect Potential?

    One of the factors that strongly favors disruptive innovation is the existence of a potential network effect. In this case, there was a weak potential network effect that could have been exploited, which favored convenience and usability and faster time-to-critical-mass.

    Had Boeing promoted Connexion directly to consumers with a message that they could now get affordable (assuming the price was affordable, which in their model, it wasn't) internet access in the sky, using a single account with a single sign on and promoting the carriers that offered it, and gained a large subscriber base quickly, the other airlines would have to get on board or be left out of the game.

    Achieving this potential network effect / sole supplier status depended on having the right business model to begin with, and getting out of the starting blocks fast once product/market fit was established.

    Lesson 4: Always ask whether there is a possible network effect, and if there is, what you need to do to enable it. Don't get greedy in the early days, because networks can easily stall before reaching critical mass if you overprice or enable alternatives to establish viability.

    5) Customer Development

    The key idea here is that ideas about customer needs formed in a laboratory and without talking to customers are hypotheses, not an accurate description of real needs. The only way to uncover real needs and gain an understanding of who the market is and what its members are willing to pay for with a service of this nature is to go out in the field with a prototype/working model and observe and talk to them. Customer Development is the methodology most commonly used by successful startups to establish what the real needs are and get to Product/Market Fit.

    It appears that Boeing failed to understand that the airlines weren't really their customers, just gatekeepers. Unfortunately, for aircraft sales, the airlines are their customers, which complicates this enormously. Boeing probably shouldn't have been in this business, or should have found a way to work around this fundamental conflict.

    For this service to be successful, Boeing needed direct access to the end customer -- the passengers using the service. They needed to have a few market-test planes where the service was fully available, but could be run experimentally with different ways of constructing pricing. They needed to sit beside customers who were deciding whether or not to use the service and to see directly everything about its operation and the user experience, from how the customer pays to price barrier resistance to difficulties signing on to how it was communicated by flight crew to passengers.

    These and many more attributes needed to be known so that an affordable, easy-to-use, properly communicated and desired service could be introduced. Because this wasn't done, none of the obvious objections about usability, availability of power outlets, space to work, price point, etc. were encountered or thought of, creating numerous barriers to adoption.

    Lesson 5: Understand who your real customer is before you launch a service saddled with $1 billion in cost structure and have no way to reach them.

    6) Establish Product/Market Fit

    Establishing product/market fit is the process of identifying the compelling need that your target customer must have satisfied by the Minimum Viable Product, as well as all the assumptions that this is based on and the risk factors.

    If you haven't spoken to real customers, it's impossible to know whether your product/service innovation meets any compelling needs that they are willing to pay for. It's also difficult to uncover the risk factors that will inhibit adoption, or to know which assumptions are valid, and which are invalid.

    Boeing theorized that passengers were willing to pay for inflight internet access, but never validated that assumption with more than a flawed market survey, nor properly established if sufficient demand could be created at the pre-determined price point to have any chance at economic viability.

    They also didn't observe firsthand customers choosing not to use the service because they wanted to sleep, or to watch a movie, or because they lacked sufficient space to get value, or didn't have access to power or sufficient battery life -- they never learned any of the risk factors so that they could act to address/negate them, or pivot their strategy and work around the risks.

    Lesson 6: With any innovation, you must know how customers view the product, what the risk factors to viability and adoption are, what alternatives exist (to using your product -- they don't have to be direct competitors), what segment(s) you appeal to and what will motivate them to a purchase. You have to get out in the field with customers (not imagined customers) and see it yourself.

    Other Issues

    • Traditional market research instruments and focus groups are useless for designing non-sustaining innovations. They cannot uncover real needs and market drivers. The most you can expect from research with end-users is that they tell you their pain, not a solution or its value. After they've tried it in a real scenario, they can give lots of feedback about what's wrong with it. The conclusions of Boeing's research indicate that the survey used was an invalid research instrument that asked irrelevant self-serving questions - the sort used to fill press release content, not to determine customer needs.
    • Accessibility and Convenience. Every plane needed to be outfitted ASAP for this service to take off. Amazingly, it was not until this year that the first new plane was built and delivered with Connexion installed. Boeing should have made the decision to include it as a standard piece of equipment, and charge more if the airline said no. This way, there is no retrofit cost barrier to laggard carriers deciding to offer the service -- they could even conduct trials without having to plan years ahead and make big commitments.  Furthermore, the cost to retrofit existing planes should have been made much more attractive, even going so far as to bundle it with major maintenance service intervals at cost of materials, or cost of labor, whichever was lower.
    • Take responsibility for your own marketing. If you need to work through the carrier to reach the customer, do their marketing and business planning for them. A Connexion-in-a-box kit, because if they have to think, you've lost the game.
    • Pricing. What the market has clearly said regarding any communication/network service such as this (think landlines, cell phones, earth-based broadband, Tivo, even text messaging) is that it wants a reasonable (read: relatively low) subscription price which is capped, and which an average user perceives as good value. For example, if it costs me $30 for 2 hours of access, I'll wait until I'm on the ground and connect for free at the airport lounge (not free really, but I already have a subscription that works there). Very little email is that urgent, and I certainly won't pay that for gaming or to watch TV over the net.
    • What about the lack of carrier vision? Indeed there is plenty to pin on the carriers too. They don't get marketing either, at least not in a user-oriented authentic context. For any of the US majors, this would have been a cinch to create brand loyalty, much like frequent flyer miles did when American was the only one doing it. Think of this: a premium flyer package, as an add-on to my Crown Room or Admiral's Club membership.  How about a $15-20/month upgrade to my membership that not only gets me Club access, but gives me unlimited internet access on the plane, higher priority waitlisting for upgrades, a free drink on domestic flights and two freebies on international (if I'm stuck in cattle class), plus phone calls, movies, the whole shebang. It's hard to imagine anyone not buying this, with an associated increase in demand for Club memberships and an extremely sticky preference for a ticket on that carrier. Ironically, I would probably pay $30-40 more for a ticket on a carrier where I had those privileges, and that level of increased ticket price is well within most business traveler's discretion at time of purchase.

    In the end, it's about being sensitive to customer needs and perceptions, and offering a product and packaging that removes barriers to adoption, rather than erecting them.

    And carriers, please, power access in every seat should have been done 15 years ago.