Learning To Build

Learning to Build: The 5 Bedrock Skills of Innovators and Entrepreneurs, Bob Moesta book

partial excerpts

Foreword

By Des Traynor, Co-Founder and Chief Strategy Officer, Intercom

“What‘s the next big opportunity?” is the most common question you hear in businesses of all shapes and sizes. I

I often try to reframe the question for them; the important question is “How do we consistently find the next big opportunity,”

I still remember where I was when I finally found out who Bob was.

We had a successful startup, and our primary question was simply “Where do we go from here?” That proved to be a great question for someone like Bob.

how to identify struggling moments in customers’ lives

he taught me to focus purely on the causal relationships in our business

talk to your users and look for the chain of events (trigger)

Part One: Setting the Scene

Introduction

Be prepared; this book is the red pill of innovation. (See table)

My story of unraveling The Matrix began the summer of my junior year in college when I had the opportunity to do an engineering internship at a major car manufacturer

1985

discovered a problem: 43 percent of the newly designed rearview mirrors would pop out of their holder when the weather got too hot and humid

Why couldn’t I solve this problem? What was I doing wrong? This was way different than what I was learning at school where every problem had one unique and exact answer.

It seemed every new solution created a new problem or added a new procedure that made the price skyrocket

My problem was unclear to me at the time; the training I relied on hampered any real progress.

What’s the Difference Between an Inventor and an Innovator?

An inventor discovers something completely new. It’s patentable. It solves one problem for one person. An inventor creates something that has never been done before

An innovator, on the other hand, focuses on society as a whole, looking for ways to help people do better.

Innovators want to help people be unstuck.

innovation is the notion of solving a struggling moment and helping people at scale

My Real Education Began

It’s at this pivotal moment that I was introduced to an entirely new worldview of problem-solving by three key innovators hired by the car giant to get to the root of several manufacturing problems. Leading the effort was my boss, Dr. Willie Moore—an engineer from the University of Michigan and the first female African American particle physicist. Alongside her were two outside consultants: Dr. W. Edwards Deming—quality guru and statistician—and Dr. Genichi Taguchi—Japanese engineer and father of quality engineering methods.

All problems are really problems about the variation of function: focus on what it’s supposed to do, not what it’s not supposed to do. There are infinite problems and only finite functions.”

I should have been looking at the function of the mirror case—the structure—and the variation of function that caused the problem

look at the situation more broadly. How could we make cases for the mirrors that would not expand and shrink in different temperatures and humidity? How could we build a case that was stable in extremely different climates? How could we make the mirror case dimensions “robust” to the environment it was going to perform in?

I needed to look at the problem as a system with functions. What were the systems in the mirror case that were not performing the way that they should’ve? Then I needed to unpack those systems into control factors and noise factors.

Control factors are parameters of a system you can change that impact the system’s performance, and that you have the ability, responsibility, and control to set

Noise factors are the parameters that impact the system that you cannot control, you choose not to control, or that are too expensive to control. We did not have control over the humidity inside the plants or on the roads where the cars would be eventually driven

We needed to ask ourselves the following questions

How can we change the things that we have control over, control factors, to make us less sensitive to the things we cannot control, noise factors? (Taguchi defined this as robustness.)

How do we set the control factors so that the noise factors no longer affect the output and get us the low-cost solution?

we designed a set of experiments and tested only the things that were in our control

But we did not test one factor at a time; we used an orthogonal array (math) to create a unique small set of prototypes that would explore thousands of combinations through only a few dozen tests at strategically different points

After just two weeks, we solved the problem that had eluded the experts for over a year, reduced costs by 12 percent, and increased productivity—the trifecta

Over time, I realized that I’d been taught a very antiquated way to solve problems. In engineering school, they call them problem sets; everything is a problem. And you are always just one prototype or test away from solving the problem

it’s not just one problem; it’s many problems which relate to a function and many different solutions that require you to make tradeoffs. By only framing the problem, we usually just framed the symptom and a way to measure it. We didn’t actually understand the underlying causal mechanism of the bigger picture.

Returning to School

Almost immediately, I was asked to solve a problem with a catapult, rubber band, ball, and cup. “How many degrees do you need to pull back this rubber band to make the ball fly ten feet away and land in the cup?” my professor asked.

My professor had provided one problem and wanted the solution—the pull-back angle

I wanted to make the best, most robust, lowest cost catapult

So, I designed a simple set of nine experiments to test a variety of different parameters at different levels.

I discovered that if I doubled the number of rubber bands, made the catapult shorter, and pulled the rubber band thirty-two degrees, my ball would land in the cup with 97 percent accuracy. Whereas the standard solution—twenty-two degrees—that my professor expected, the “right” answer, only landed the ball in the cup 57 percent of the time.

I received a D for failing to follow the instructions.

They wanted me to do traditional A/B type testing where you create a hypothesis, test that hypothesis, and verify your hypothesis—the scientific method. Yet now I knew that there was another way forward, and I could not unsee it.

Under the leadership of Taguchi, Deming, and Moore, I had learned to assume that I knew nothing, test a set of different factors simultaneously to understand how the system worked, and only then to form a hypothesis, empirically through data and observation

I no longer wanted to focus on the problem. I wanted to know: what is it supposed to do?

Applying the New Methodology

The next summer, I was pleased to escape the confines of the classroom and return to the same internship program

another production-line dilemma. The car manufacturer was just beginning to use robots rather than people to paint cars, and they’d run into a problem. At the time, the robots that they were using to paint the cars weren’t capable of applying the paint in a uniform way

It caused significant rework, which was costing the manufacturer over $100 million annually at one plant

They were focused on the problems—orange peel and runs—and how to reduce them. But they were trying to control the noise factors that were really out of their control: humidity, paint color, and direction

Taguchi leaned over to me and said, “They are measuring the wrong things. It’s about the function—what it’s supposed to do and reducing the variation, not the problems.”

What function was it supposed to do? Turns out paint thickness is a way better measure: too thin, orange peel; too thick, runs. What was the variation that was causing the problems?

they talked about the orange peel and drips as two separate issues, whereas Taguchi had taught me to see them as two sides of the same function—paint thickness. They never talked about them as the same problem.

Conversely, I asked a different set of questions

How could I make myself least sensitive to the things I couldn’t control?

I created eighteen focus tests that represented thousands of permutations which ran over a weekend

You can‘t do that; that’s not how the math works. You’d have to test all five thousand combinations to find the best one.” So I showed them what Taguchi, Deming, and Moore had taught me.

“I’m doing these eighteen tests, but they’re spaced out in such a way that I can actually predict what the other test results would be,” I explained. I knew I was not necessarily getting the perfect run, but it got us in the top 90 percent.*

The Five Skills of Innovators and Entrepreneurs

Ch. 1: What’s an Innovator?

I know you want to dive right into the five skills of innovators and entrepreneurs, but first we need to gain a little more perspective and build some common ground on how new products are created. To do that, let’s continue my journey back in time…

Part Two: The Five Skills

Ch. 2: Empathetic Perspective

Imagine you’re planning a long car trip with your spouse and children. Before you leave, you start to think through the steps involved in getting from point A to point B with the least resistance

Empathetic perspective encapsulates the notion that there’s not just the external customer perspective—demand-side—and the internal company perspective—supply-side—but there are many different perspectives within both supply and demand. The most successful innovators can see the subtle differences between the many different perspectives, which enables them to foresee problems and make tradeoffs.

Ch. 3: Uncovering Demand

the customer rarely buys what the business thinks it sells.”
Peter Drucker

What’s the difference between a Snickers and a Milky Way? On the surface, these two products seem similar

it turns out, the who, what, when, where, and why—the context in which people buy a Snickers versus a Milky Way—is completely different.

Typically, people buy a Snickers when they’re hungry, missed the last meal, running out of energy, lots to do, and short on time; they need a boost

Snickers competes with a cup of coffee, a Red Bull, or a sandwich.

Conversely, a Milky Way converts into almost a liquid within three chews and slides down your throat, coating your mouth with chocolate and endorphins. It can take as long as twenty minutes to eat, and you savor the experience; it’s a candy bar. People usually eat it alone, after an emotional event, good or bad, and it helps them take a minute to regroup and feel better or acts as a reward. Milky Way competes with ice cream, brownies, and a glass of wine.

Understanding this dynamic was a game changer for Snickers. They launched a commercial that spoke to people in this struggling moment. (trigger)

sales skyrocketed

The Difference Between Supply and Demand

It’s about realizing the progress that people are trying to make based on their context. Your product or services are merely part of their solution

Demand is caused by a struggling moment and the thought, “Maybe I can do better…” Without the struggling moment, there is no demand.

The problem arises when you are solely focused on the supply-side view of your product

In this scenario, the consumer is nebulous—an imagined, personified version of the customer—an aggregated set of demographic and psychographic information.

Their context revolves around the new desired outcomes they seek, and their competitive sets aren’t actually competitive sets but candidate sets: “I can do this, or I can do that.”

The Problem with Supply-Side-Only Thinking

Let’s take a trip back in time for this example. The year is 2010, and I’m sitting on the cold, metal bleachers at my daughter’s ice hockey game. She’s poised to take a slap shot from the point, and I quickly snap a picture. “It’s blurry again

I decide it’s time to buy a new camera, a good camera, so I get online and pull up Canon’s website

I don’t understand this lingo, and I have no interest in taking the time to learn it. I just want to take great pictures

Thankfully, along comes Apple. They make a high-quality camera, attach it to my phone so that it’s always with me, and make it easy to take great pictures—point and click

Canon, Nikon, and Sony were so focused on competing—the supply-side

The market rejected all three. They missed the point; people simply wanted to take great pictures. Apple, on the other hand, understood the struggling moment,

The Keys to Uncovering Demand

Uncovering demand starts with interviewing customers who’ve used your product before and made progress. You need them to tell you the story of how they got here. What dominoes had to fall for them to say, “Today’s the day…”

I uncover demand by using the Jobs to Be Done (JTBD) methodology to frame demand

a “Job” is the progress a person is trying to make in a struggling circumstance. (situation)

Recently, my friend Amrita bought a Peloton, and Greg and I sat down to understand why

when Covid hit, Amrita found herself quarantined in her condo, and the gym closed, so she bought a $3,000 Peloton

The following is a brief snippet of our hour-long conversation.

I used to be a long-distance runner; I loved running; I was “addicted” to it. But now my body feels different, and it’s become more uncomfortable to run.

Why is exercise important to you? What does exercise do for you?

Amrita: I would say out of vanity, for sure; I want to be a certain weight and size. Slowly, over the recent years, I’ve put on weight. Also, after I turned forty, I became more conscious of the importance of maintaining a healthy life.

Greg: You said a “healthy” life. Everyone defines healthy differently. Can you describe to me what that means to you?

Amrita: I work with a lot of people who are much younger than me. I find that if we are doing a team activity, hiking for instance, I’m conscious of the fact that I am not in as good of physical condition as they are. I also want to avoid the problems that come with aging when you are too sedentary

Greg: Are putting on weight and keeping up with others the same or different issues?

decided to buy a TRX. It’s a piece of exercise equipment that you can hang on your doorframe, so it doesn’t take up much space, and it’s good for strength training.

Before Covid, what kind of exercises did you do at the gym?

Amrita: I would usually run a little on the treadmill and then walk or do some strength training with weights

I missed the treadmill as a way to have my “me” time and just be with my own thoughts. The TRX was helpful, but it wasn’t enough.

I didn’t think a treadmill would even fit in our condo

Plus, for a while now, running has not been working for me

Let’s unpack this interview into the three key frameworks for how people buy.

  • The three sources of energy or motivations (functional, emotional, and social)
  • The four forces of progress (push, pull, anxiety, and habit forces)
  • The JTBD timeline (sequence of events and actions to make progress)

The Three Sources of Energy or Motivations

Functional Motivation: How cumbersome is the purchasing process for the buyer

she had one conversation with Peloton before making the purchase, and setting up the bike was included in the delivery

Emotional Motivation

this purchase was driven by her emotional motivations more than anything else

Social Motivations: How do other people perceive, respect, trust, or acknowledge me?

The Forces of Progress

The push of the situation. Think about the struggling moment for Amrita. What forces were pushing her toward buying a Peloton? The gym closed,

The magnetism of the new solution. The moment she realized that something might get her back to a fitter lifestyle and help her make progress, the solution created magnetism; she started to imagine a better life

The anxiety of the new solution

These anxieties are important because they hold people back from making the progress that they need

The habit of the present

The Timeline for Progress

the six stages a buyer must walk through before making a purchase (Stages of Consumer Buying Decision Process)

First Thought—creating the space in the brain

Passive Looking—learning

Active Looking—seeing the possibilities

Deciding—making the tradeoffs and establishing value

Onboarding—the act of doing the JTBD, meeting expectations, and delivering satisfaction and value

Ongoing Use—building the habit

Imagine the events that Amrita detailed in her interview like huge dominoes falling. What made her say

First Thought

When you finally have that first thought: “I’m not fitting into my clothes,” or “I can’t keep up with others physically.”

Before this first step, there’s not a place in your mind to file the information about treadmills or bikes.

Once you have the first thought, you’ve opened-up the space in your mind for the information. Without this first thought, there is no demand

once you have it, you notice things you didn’t notice before, which causes you to transition to passive looking

Passive Looking

Questions are places in your mind where answers fit. If you haven’t asked the question, the answer has nowhere to go

Because Amrita had the first thought, she noticed her friends’ Instagram posts about the Peloton. She remembered feeling addicted to running and saw that same energy in their posts

People can passively look for years if there’s no event pushing them to the next step on the timeline

Now Amrita was in active looking.

Active Looking

Active looking is when people plan, spend time, and even spend money figuring out what’s next

Deciding

This is where people make their tradeoffs and ultimately decide what they want. When buying, there’s no ideal solution, every customer makes tradeoffs

Onboarding

Onboarding is where the rubber hits the road. It’s where the consumer determines if you’ve met the expectations set when they decided to lock in and buy your product or service

Ongoing Use

There’s a difference between buying and onboarding a product or service and using a product or service every day—ongoing use. How well did you satisfy expectations? The satisfaction is determined by the expectations set. If Peloton did not set expectations well, Amrita will have new struggling moments

What’s Your Customer’s Value Code?

Oftentimes innovators talk to people but do so through the lens of their product and its features and benefits: Why is this feature important? What does it help you do? And then they think they understand the buyer

Uncovering demand is about you going into their lives. It’s about uncovering their struggling moment, the outcome they seek, and the progress that they are trying to make

It’s about the who, what, when, where, and why of how your product helps them, the job they are hiring your product to do.

If I asked, “Do you like steak, or do you like pizza?” You might say, “I like both,” right? So let‘s talk about a steak situation versus a pizza situation

Value is a function of the context, outcome, progress, and effort

it’s not about what people value. It’s about who, what, when, where, and why people value

you realize that value is not a feature or a benefit. It’s a tradeoff people make depending on the context they are in

You can’t understand tradeoffs unless you know your customer’s value code

Making It Real

Young Bob believed that supply created demand, and therefore, I thought that my responsibility was to convince people to buy my product. I was more worried about personas, correlation, and size of market than actually understanding the progress that people were trying to make.

Enlightened Bob, however, wants to understand how to add value one person at a time. Only then, when I can see the hidden patterns, can I think about scale. I know that my product does not create demand; demand is created by a struggling moment

Maybe you’ve nailed it. Maybe you still need some help. Ask yourself these clarifying questions:

Here are some resources to help continue your education into uncovering demand:

  • Demand-Side Sales 101: Stop Selling and Help Your Customers Make Progress by Bob Moesta with Greg Engle

Meet Dr. Clayton Christensen

In the beginning, I saw Clay as an advisor, teacher, and mentor. Once every quarter, I’d take the trip from Detroit to Boston and spend four uninterrupted hours learning from him. Over time—our relationship spanned twenty-seven years—I considered him to be one of my best friends and a brother.

Together, Clay and I—with the help of others like Karen Dillon, David Duncan, and Taddy Hall—architected the “Jobs to Be Done” (JTBD) theory,

Ch. 4: Causal Structures

Do you know the difference between correlation and causation?” Taguchi asked

Causal structures are rooted in the notion of cause and effect.

The Importance of Cause and Effect

Ch. 5: Prototyping to Learn

Many years ago, I was brought on as an advisor at a major cookie and cracker manufacturer. My job was to help them speed up their production line for two popular cookies, but as I rolled up my sleeves and got to work, people kept saying, “You should visit the chip guy; he’s struggling with an issue.” So I went over to see if I could help.

“I’m just having a little fragility problem—they break too easily,” he told me as he brushed aside my assistance. “I’m redesigning the formula, and I just have to run one more test*

When you don’t look at a situation broadly enough, you conduct A/B testing—testing one factor, then another, and so on. You are always one prototype away from solving the problem, but you never get any closer to the solution.

Rather than frame the problem and search for the solution like a needle in a haystack, you need to look at the problem as a system. What are the systems that are not performing the way that they should? Then you need to unpack those systems into control factors and noise factors?

By the time the chip guy and I sat down, he had already conducted almost three hundred samples (or experiments, I would like to say). He never planned to do so many, only one more.

Taguchi was always obsessed with measurement. He would say, “How do you make something better if you can’t measure the variation?” He believed that all innovation must start with better measurement—and measurement of the “right” things. He would always tell me, “You’re measuring the wrong thing; you’re not thinking about this right.” When we were painting the cars, it was about reducing rework. He’d say, “You’ve got to measure the functional thing that’s not happening. Where’s the variation?” This would force me to go down to the right level. I learned the importance and utility of metrics and structure.

Ch. 6: Making Tradeoffs

Tradeoffs are one of the keys to making progress. You must be able to define what you are willing to give up to move forward. I think of tradeoffs as, you can have it this way; you can have it that way; or you cannot have it at all. As innovators and entrepreneurs, we never have enough time, money, or knowledge to make it perfect. Perfection is the trap, progress is the true measure, and tradeoffs are the way to get there. But like everything, knowing how to frame them to get the data and knowledge is the challenge.

For instance, I’m working on a dating app, and during interviews, I talked to an impressive woman in her early thirties—Harvard law degree, employed at a big Washington, DC law firm—who was struggling to find a partner. As we talked, I realized the problem: she couldn’t make tradeoffs

Here are some resources to help continue your education into making tradeoffs:

By now, you can probably see how the five skills of innovators and entrepreneurs fit together. The most skilled innovators and entrepreneurs I’ve met along the way have the ability to weave all five skills together. Let’s take a step back and look at the whole.

Part Three: Putting It Together and Helping You Make Progress

Putting It Together and Helping You Make Progress

Ch. 7: Integrating the Five Skills

These five skills are not for the masses: it’s going to be hard. I believe there’s not one predictable way to innovate, but these skills are a method for building a reliable process for how to think in virtually any situation. No one of these skills in isolation will make you a great innovator or entrepreneur; the challenge lies in applying all five. They’re interdependent. For the book, I’ve just artificially separated them. In fact, you’re better off doing a half-assed job at all five than being excellent at any one of these skills. It’s not about the parts. It’s about the whole.

Overall, I see these skills not just as the key to innovation and entrepreneurship but as the foundational skills to a happy life. They help you make progress; they help you help others make progress, which in turn makes you happy. Life is about a series of tradeoffs that you make, not the magic of getting it all. No one has everything.

Conclusion

I believe that the world would be better off if more of us overthought life. Imagine the impact on society as a whole. Hopefully, I’ve inspired you to take the five skills to the next level. So what next? Ask yourself the following questions:

What struggle did this book reveal to me, and what progress do I want to make because I read this book?

What did I hire this book to do?

I’ve categorized the reasons that people would hire this book into four JTBD categories:

Last Thoughts. . .

Innovation and entrepreneurship are entirely about helping people make progress. That’s the purpose of this book—to pass forward the lessons taught to me by giants in innovation and entrepreneurship so that you can make progress and in turn help others.


Edited:    |       |    Search Twitter for discussion

No Space passed/matched! - http://fluxent.com/wiki/ThreadMode