How big is the iPod market? Trick question. There is no iPod market. Customers don’t want iPods, CDs, or cassettes. They want to listen to music. When looking at market sizing techniques through a jobs-to-be-done lens, we see that the market is dependent on the number of people who execute the job and what they would pay to get the job done perfectly. When we correctly size the market from this perspective, we are able to find hidden growth opportunities in existing markets.
Companies often size the market they are interested in by determining the dollar volume of the products being sold. Using that calculation, they decide to invest or divest in a market based on trends in revenue growth.
But here is the problem, and the myth. A product is not a market. Every product will one day become a thing of the past. Vinyl records and cassettes gave way to CDs and MP3s, but in time those formats too will fade. But just because a technology or a product becomes obsolete doesn’t mean the market disappeared. It means that the market (the people who hired the product to get a job done) moved on to buy another product; one that helped them get the job done better.
Trying to size the market around a product or technology leads to highly inaccurate results and poor market selection decisions. Companies may conclude that a market is huge (like Microsoft did when it invested in the Zune), when it fact it is falling off a cliff. Or they may conclude that a market is too small and fail to invest in a market with tremendous potential (a peril that Pandora avoided, when they invested in their product).
What Customers Want
What Customers Want, the best seller by innovation thought leader Tony Ulwick, explains what Outcome-Driven Innovation (ODI) is and why it works. Ulwick, who pioneered jobs-to-be-done thinking and invented ODI, details how ODI transforms jobs-to-be-done theory into a practical method to size the market and an effective process for innovation and growth.