wound care division caring for a patient’s wound outcome-driven
TRANSCRIPT
VMA 2010
The Apple Phenomenon
What is the secret to Apple’s success and what can we learn from it?
Andy Wilkins
Agenda
• Introduction to Strategyn
• Apple’s Phenomenal Success Story
• Lessons from the iPod
• The iPhone cometh
• The iPhone value chain & service platform
• Building the ecosystem
• Lessons from Apple
• How Strategyn can help
The first real scientific method for determining customer & market needs….. that feeds all downstream innovation activities..
Idea / Concept Generation
SelectionConcept
testDevelop Launch
Concept Development LaunchOpportunityDiscovery
GrowthStrategy
Strategyn
Outcome Driven
Innovation
Process
What do Customers &
Markets really want?
Turns customer needs evaluation
into a science not an art!
In a recent study Strategyn’s innovation process generated new product/service
success rates of 86% vs an average success rated of 17%!
Some of the world’s most innovative companies are using Strategyn innovation concepts and process
"Strategyn's outcome-driven concepts and method bring discipline and predictability to the often random process of innovation."
Clayton Christensen, Harvard Business School Professor and “innovation guru”
Best Business Idea Winner
Outcome-Driven Innovation is a Harvard-Business Review best practice
The Apple Phenomenon
Apple’s phenomenal success story
275m iPods 70m iPhones 5m iPads
Devices
iTunes12bn songs
450m TV episodes100m movies
Services
iBook Store40m books
App Store250k apps
6.5bn downloads
Apple’s phenomenal success story
• Revenue - $19bn• Revenue growth - 50%+ pa
• Earnings $4/share
• Gross margin 35+%• Cash reserves $50bn!
• Apple’s forecast 4th Quarter numbers:
Not bad for a recession….!
Apple’s phenomenal success story
How do they manage this?
Lessons from the iPod
The challenge:• Sony dominated the category for portable music devices• How to enter a market this market with something new and differentiated?
The answer?•To create something so radically better that it would disrupt and redefine the category!!
How?• Gain deep understanding of what customers are trying to do with music• Dare to dream beyond the current definitions of a music player….• Create a solution that delivers what customers want…. In a radically better and the most intuitive way• Help customers to discover, purchase, share and organise their music• Use great design to create a beautiful product
The iPod
iTunes
Lessons from the iPod
What exactly did they do??
Spent time with customers
•Listen to music
•Find music
•Share music
•Organise music
•Create Playlists
•etc…
Determined what music jobs were important to them
1. First of all they made sure they understood the customers full needs in great detail…………….
Mapped out each job & determined the detailed needs for each job
Determined the relevant Contexts &
Attitudes
Lessons from the iPod
What exactly did they do??
Customers Customer needs
A radical new concept in user interface & design based on scroll wheel
•Listen to music
•Find music
•Share music
•Organise music
•Create Playlists
•etc…
2. Apple designed a radically new proposition that redefined the portable music category
The iPodthe scroll wheel
iTunes
The new iPod/iTunes platform
• A combined hardware and software service platform• Delivered an integrated solution for multiple music jobs• Beautiful design created an iconic must have device
An intuitive, seamless & beautiful experience
The iPhone
The iPhone cometh..
• The iPhone has been Apple’s master stroke• Apple used innovation to challenge almost every aspect of traditional mobile thinking• Lessons from the iPod experience have been re-used with spectacular results
Lets look at some of the results of Apple’s iPhone strategy so far:
70m iPhones have been sold since 2007!
• 6.5bn downloads from Apple App Store• 250k Apps
The iPhone cometh..
The competitive position of the iPhone is even more impressive:
• In first half of 2010 Apple sold 17m iPhones vs600m for the whole industry• Yet… Apple generate 39% of industry profits!• Gross margin is around 50%
The number of mobile visitors by device type over the last 12 months
• In first half of 2010 the iPhone use for web access was 7x higher than any other device
• Apple make approx 30% revenue• Currently estimated to be $1.35bn
The iPhone cometh..
• So…. how have Apple been so successful?
Answer:Create something so radically better that it would disrupt and redefine the mobile phone category!!
How?• Gain deep understanding of what customers are trying to do when on the move• Dare to dream beyond the current definitions of a phone….• Create a solution that delivers what customers want…. In a radically better and the most intuitive way• Use great design to create a beautiful product
"our job is to create beautiful product experiences”… Steve Jobs
The iPhone development strategy
What exactly did they do??
Spent time with customers
1. First of all they made sure they understood the customers full needs in great detail…………….
• Music jobs
Determined what jobs were important to them
• Calling jobs
• Messaging jobs
• Photo jobs
• Internet Access
• Gaming jobs
• etc
Mapped out each job & determined the detailed needs for each job
Determined the relevant Contexts &
Attitudes
The iPhone development strategy
What exactly did they do??
• Music jobs
• Calling jobs
• Messaging jobs
• Photo jobs
• Internet Access
• Gaming jobs
• etc
2. Apple designed a radically new proposition that redefined the mobile phone category
Customers& contexts
Customer needs
A radical new concept in user interface & design based on multi touch & gesture
control
Mapped out each job & determined the detailed needs for each job
The iPhoneWith multi touch
App Store
The new iPhone/App Store platform
• A combined hardware and software service platform• Delivered an integrated solution for multiple jobs• Beautiful design created an iconic must have device
An intuitive, seamless & beautiful experience
Customer Needs
The iPhone is not just a phone…. It’s a value chain and service platform!
• Intuitive multi touch interface• Great usability & rich native apps• Best browsing experience
• Beautiful aesthetic design• Great performance & quality
• Broadest range of applications• Best media content• Simplest & safest 1 click purchasing
• Widespread availability• Attractive tariffs + visual voicemail
User interface
+ iOS
Device
Capabilities
iTunes, iBooks +
Apple App Store
User contexts,
jobs & needs
Mobile
Networks
Customer jobs
Deep Dive
Inn
ova
tio
n
iPh
on
eSe
rvic
e P
latf
orm
Rich user centric app design using human factors based UI dev
Most elegant and intuitive multi touch
based experience
Full computing platform with best aesthetic Design
Beautiful iconic device with stunning display
& performance
Integrated Voice mail & connection manager +
network deals
Best voice mail experience + best
margins in the business
Creation of marketplace services for media types
& app developers
Provide the richest suite of content & app
services + new revenues
iPhone Proposition
Deep insight into customer’s needs
& contexts
Most compelling proposition & beautiful
user experiences
Apple is building a formidable internal and external ecosystem where each part reinforces the value of the whole service platform
Device
Marketplaces
User contexts,
jobs & needs
Customer jobs
Content
Partners
App Store iTunes Store iBook Store
iPad iPhone iPod
iOS + Multi Touch (120m users and growing)UI + Software
Platform
New Form
Factors
New
Marketplaces
New Content
Partners
New UIs + OS
New Customer jobs
Future PropositionsApple Value Propositions
Apple Ecosystem
Developers Media Companies Publishers
Gatekeepers of Value Creation
So what can we learn from Apple?
The big lessons from Apple
1. Gain a deep understanding of the customer jobs they want to get done• This is what all innovation & product/service development should be aimed at!
2. Think outside the limits of existing product/service offerings to imagine solutions that are radically better• Dare to dream!
3. Create the best designed solutions that are beautiful to use• Experience is everything…. attention to detail is key• If a feature doesn’t deliver the desired experience don’t include it
4. Explore how your product can be developed into a service platform…. • Develop your product to support new jobs to increase value and revenue• Develop longer term relationships with customers based on mutual value
5. Leverage the capabilities of other related players to build an ecosystem• Create more value for customers & more innovation for your platform• Leverage the ecosystem to drive as much value and reinforce your market offering
Apple provide powerful evidence that there is a better way to think about product/service development… the old models are broken
1. Most product or service development starts with an idea (or the need to respond to something a competitor offers)
SelectionConcept
testDevelop Launch
Idea
• The failure rate of this process is around 80-90%..... • Not based on a solid or deep understanding of the jobs customers are trying to do• Not based on a deep understanding of the detailed needs for each job
• For most of us… innovation feels like a black art rather than a predictable process!
Time for a change of thinking?
“Insanity…is doing the same thing
over and over again and
expecting different results.”
Albert Einstein
Only 1 in 300 new products significantly impacts a company’s growth…. Frost & Sullivan
Using Customer Jobs as a starting point brings clarity to the real purpose of innovation
Improving an Existing Job
Getting Important Unfulfilled Jobs Done
Innovation boils down to 2 main challenges:
Jobs based analysis focuses innovation on solving the right problems
SelectionConcept
testDevelop Launch
Ideas
Precision based inputs to focus developing the ideas that will really
matter to customers
Jobs based Analysis
How can Strategyn help?
Spend time with customers
Determine what jobs are important to them
1. Jobs based study (involving Qual & Quant studies)
Map out each job & determine the detailed needs for each job
2. Outcomes based study (involving Qual & Quant studies)
• What jobs are important to customers• How satisfied are they• Scope of solution opportunity• Size of market opportunity• Segmentation of opportunity• Prioritisation & growth plan
Market Needs & Opportunity
• Detailed process mapping• Customer needs per process step• Ranked by importance + satisfaction• Size of market opportunity• Segmentation of opportunity• Prioritisation & growth plan
Detailed Needs for Product Dev
Further reading
Giving Customers a Fair Hearing, MIT Sloan
Management Review, Spring 2008
The Customer-Centred Innovation Map, Harvard
Business Review, May 2008
Turn Customer Input into Innovation, Harvard Business
Review, January 2002
Best Business Idea Winner
What Customers Wanta bestselling book by Strategyn CEO Tony
Ulwick, details the theory and practice of outcome-
driven innovation
The Innovator’s SolutionIn Professor Clayton
Christensen's book - The Innovator's Solution - he explains why Strategyn's
thinking and segmentation methods are critical to the successful management of
new market creation
29
Outcome-Driven Innovation™
www.strategyn.co.uk+ 44 (0)844 561 0401
Strategyn UKCranfield Innovation Centre
Cranfield University Technology ParkCranfield
BedfordshireUNITED KINGDOM
MK43 0AL
Apple have a formula for success…. So can you!
Thank you……
Andy Wilkins
+44 (0) 7713 [email protected]