Your *cost structure* is my opportunity

“Your margin is my opportunity.”

Jeff Bezos

Businesses evolve to be better for the consumer. That is, to better fit the JTBD. In many cases that’s by making the same thing easier, cheaper, better, etc. Sometimes though, the job changes and the new job can be done in a easier, cheaper, better, etc. way.

Cheaper means a structural change. We made X like this, now we can make it like that and now X costs 7% less. Sometimes a business will disrupt itself and find a better way to make something. Amazon did this. When they started work on digital products, the books, music, and video business brought in seventy-five cents of every dollar.

But the job of books, music, and video was about to change. Convenience rose in importance.

Sometimes a business will make things cheaper by finding a substitute that allows for a comparable or better product. Sometimes a business will find that consumers aren’t that into X and would rather have Y, which is cheaper anyway.

Here’s a list:

The Walmart example kinda fits least but it’s also the least technical focused. It’s on anyway because it fits the spirit. To innovate – as incumbent or disruptor – requires a mindset of experimentation and a clarity of the JTBD.

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