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The Innovator's Solution: Creating and Sustaining Successful Growth
Entrepreneurship CRITICAL

Jobs to Be Done — Segmenting by Circumstance, Not Demographics

The Innovator's Solution: Creating and Sustaining Successful Growth Clayton M. Christensen & Michael E. Raynor
jobs-to-be-done segmentation purpose-brands product-development customer-hiring

Key Principle

Customers don't buy products; they "hire" them to accomplish specific jobs. "The critical unit of analysis is the circumstance and not the customer." (Chapter 3) This is circumstance-based theory applied to product design: segmenting by the job-to-be-done produces products customers predictably want to buy; segmenting by customer attributes (demographics, psychographics, product features) produces one-size-fits-none failures.

Why This Matters

Over 60% of new-product development efforts are scuttled before market. Of the 40% that launch, 40% fail commercially — a net 75% failure rate (Chapter 3). The root cause is that companies segment markets by customer attributes or product categories because that is how data systems are structured, how retail channels are organized, and how advertising is bought. These structural forces push even well-intentioned teams toward segmentation schemes that obscure the actual causal variable — the job the customer needs done in a specific circumstance. Sony launched 12 disruptive growth businesses (1950-1982) under Morita's intuitive, observation-based approach. After MBA-trained marketers with quantitative attribute-based methods took over, Sony launched zero disruptive growth businesses for 18 years. (Chapter 3)

Good Examples

  • The milkshake study: A fast-food chain's demographic and taste-preference research failed. Observational research revealed two distinct jobs: (1) Morning commuters hired milkshakes to make boring drives interesting and stave off hunger until 10 AM — competing against bagels, bananas, doughnuts. (2) Evening parents hired milkshakes to placate children — requiring a thinner, smaller, faster product. The same customer needed completely different products at different times of day. (Chapter 3)
  • Marriott's purpose brand architecture: Marriott Hotels (convene major business meetings), Courtyard by Marriott (clean quiet place to work evenings), Fairfield Inn (inexpensive family lodging), Residence Inn (home away from home). Each brand communicates a specific job, guiding customers to match products to circumstances and protecting the parent brand during disruption. (Chapter 3)
  • Digital cameras: Succeeded not for red-eye editing or online albums (jobs customers weren't prioritizing — 98% of photos were looked at only once) but for verifying shots immediately and sharing images cheaply, which were already-prioritized jobs. (Chapter 3)

Counterpoints

  • Averaging across jobs destroys value: The milkshake chain's original research averaged morning commuters and evening parents into a single "milkshake customer." The resulting product improvements pleased neither segment. Averaging two distinct jobs produces a product optimized for a job that doesn't exist. (Chapter 3)
  • Don't ask customers to change priorities: "The things that people want to accomplish in their lives don't change quickly." Products succeed by helping customers do existing jobs better, not by creating new priorities. Digital camera features targeting new behaviors (red-eye editing, online albums) flopped. (Chapter 3)
  • The door-hanging tool: A product combining seven functions for hanging doors couldn't get shelf space because it didn't fit the retail plan-o-gram for drills, sanders, or saws. Channel structure killed a product that solved a real job. (Chapter 3)

Key Quotes

"The critical unit of analysis is the circumstance and not the customer." — Christensen & Raynor, Chapter 3

"Focus is scary — until you realize that it only means turning your back on markets you could never have anyway." — Christensen & Raynor, Chapter 3

"The things that people want to accomplish in their lives don't change quickly." — Christensen & Raynor, Chapter 3

Rules of Thumb

  • Segment by the job-to-be-done in a specific circumstance, not by customer demographics or product categories.
  • When the same customer hires the same product for different jobs at different times, treat those as different markets requiring different solutions.
  • Build purpose brands that communicate the job the product is hired for — not umbrella brands that blur across jobs.
  • Watch for the four forces that distort segmentation: fear of focus, demand for quantification, channel structure, and advertising economics. Recognize them as structural pressures, not evidence that attribute-based segmentation is correct.
  • Observe what customers actually do (especially workarounds and compensating behaviors) rather than asking what they want.

Related References