Swedish-style as a service

People love IKEA, to the effect of nearly one billion annual visits. The flat pack furniture and furnishings yields twenty-four billion euros in revenue each year. But could there be more in store for this store of galore?

One way to find business opportunities is to observe users and follow their lead. Instagram for example, developed both polls and shops (in-part) because users hacked those features before they were available. IKEA faces a similar opportunity.

If you’ve never been, IKEA is organized as an upstairs showroom and a downstairs warehouse. When a customer likes a lamp upstairs they note the aisle and bin code and when downstairs find the item. An upstairs room might look like this:
An IKEA "show room"

For larger item like couches and shelves, customers do the above and haul, unbox, and assemble their purchase. Flat packs, material selection, design choices, and scale all contribute to IKEA’s success.

Here’s the pitch: IKEA as a service.

The upstairs showrooms have appealing arrangements. It’s modern. It’s clean! For this made up start up an IKEA specialist comes to customer’s home to clean and arrange it in the flat packer’s fashion. The program includes a points program, where customers earn points toward future delivery and installation of IKEA products.

An IKEA saas offers a few advantages: recurring revenue, reduced churn, and a chance to grow their customer base. Wow Mike the house looks great, someone might say and of course I would tell them about the service, and offer my IKEA referral code.

Consider cleaning a car. My car isn’t new but it looks new after a good cleaning. The same thing occurred to college-me while shopping at The Gap. It wasn’t the clothes that looked good, it was the manikins! If I wanted to look good it wasn’t the clothes I needed, it was the body. Some number of people must do this at IKEA. Their goal is appearance and one way for that job-to-be-done is buying IKEA products.

The IKEA effect may be taken but this saas business might have great legs, like the beautiful bamboo ones available at IKEA.


Made up start ups is an ongoing series. They’re intended to be half-tongue-in-cheek and half-serious. The point is thinking in different ways, like Tyrone.

From field to city to car to circuit

This is a podcast episode covering the consumer journey from field to city to car to circuit.

The consumer journey has been one where a business shares information to a consumer depending where they are. That started at the farm with the creation of the Sears catalog, a moved to the city with the creation of stores, then moved to the car with the creation of malls and large big box centers like Walmart, and finally our story is at the point where it is on the Internet with online brand Zappos, Amazon, Warby Parker.

The selling, at least to the American consumer, is remarkably consistent. There has to be a way to talk directly to consumers whether in a store on the pages of a catalog or via an Instagram account. There has to be a way to get the product to the consumer, whether that is the new railway system, the rural mail delivery, or two day shipping.

This episode was a little less organized than normal and recorded outside. Thank you for your patience.

The podcast is available as Mike’s Notes: Apple, ListenNotes, or Overcast.

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.

Alpha erosion and hot dogs?

Wharton Moneyball is a great podcast. The intersection of sports and business doesn’t do justice to the topics covered. Two events Moneyball does not overlook are the Kentucky Derby and Nathan’s Hot Dog Eating Contest.

During the July 2021 episode, co-host Shane Jensen asked if
it’s Joey Chestnut’s technique or some god-given gift that allows him to eat a record seventy-five hot dogs in ten minutes. Eating expert and co-host Eric Bradlow explained :

“They all do the same thing. Eat multiple hot dogs followed by buns dipped in water. Eat multiple hot dogs followed by buns dipped in water. Everybody, since Kobayashi started this strategy in the mid-2000s, uses this strategy.” – @EBradlow, Wharton Moneyball Podcast

Kobayashi’s creativity (and success) invited competitors. Alpha erosion is the idea that valuable advantages degrade with imitation. What was once scarce and valuable, is now abundant and worth less. Daryl Morey said that in the early days of basketball moneyball it was easier to draft players. By 2017 Morey noted how many other team’s draft boards looked a lot like the one in Houston.

But knowing alpha erosion exists and seeing it occur is not fait accompli. There are at least two paths: innovation and restriction.

Innovation occurs when an organization can deliver better products each year as judged by their consumers. Find the JTBD. The capacity for this is dictated by an organization’s culture. Does an organization allow for exploration, does it allow for an Innovator’s Solution. 

Restriction occurs when an organization can gain an advantage by acting in a way the competition cannot. Part-of-the-reason Dollar Shave Club and other DTC companies succeeded was because the distribution advantage of legacy companies was also a weakness. Gillette could not compete (as judged by the consumer) without upsetting the retail partners.

Restriction for an individual is to remove ego, which often opens new paths for competition success. Movie Producer Jason Blum demonstrated the success of the low-budget horror film and hasn’t suffered much alpha erosion. Part-of-the-reason, said Blum, is that people in show business like the rewards of the show part more than the business part. There are huge advantages for a person if they can look stupid.

Shoveling as many hot dogs into your mouth may not seems like a good idea. It’s probably not. But the lessons we get from it sure are tasty.

Zombie revenue

One tenant of jobs to be done is that people tend to be not great at articulating the scope of a purchase. For instance, in early June 2021 the lumbar support on my car seat broke. There are no plans to fix it, and this deficit will be some kind of non-zero explanation for when it’s time to get a new car. Will I reason with this later? Unlikely.

JTBD exists in these moments. One moment is when users hack a product. For instance 60 jail broken iPhone features became part of the iPhone. Or even Instagram, lauded for the design choices, drew from teenage boys taking screenshots of solid colors, adding text, and posting as the first polls.

Another according to JTBD father Bob Moesta is zombie revenue. Gym subscribers may make their model work but other businesses can find future fruitful funds in dead accounts. Basecamp, Moesta said, noticed that archived projects were zombie revenues. Customers didn’t need to manage something but they did need to access it and Basecamp created something for them.

Source: Bob Moesta
Full JTBD post.

Jazzercise? Job-ercise?

“I was teaching in the morning, which tends to be a time when a lot of stay-at-home moms take a class. They would come and take a couple of classes and then I’d never see them again. I wondered what in the world was going on. I went and talked to some of them and they said they like it but they said I was teaching it like they were going to be professional dancers. They didn’t want that, but they did want to look like professional dancers.

That is Judi Sheppard Missett on the How I Built This podcast.

There are a few ways to find the JTBD. One is to talk to current customers. Another is to talk to previous customers. Bob Moesta says to talk to both. What the previous customers told Judi was that they wanted to look great and have fun doing it.

The whole episode is good because it highlights a systemic need: non-weight lifting exercise. People wanted a thing, and as is often the case, couldn’t articulate it.

Everything in our life seems obvious now but there’s always a change around the corner. Phil Knight wrote in Shoe Dog that runners were considered weirdos. Nobody exercised. There was a need there, and Knight and Missett both filled it.

Moesta says that he likes to see things as sets. Jazzercise then might be the set between fitness-fun-novelty-and-groups. Whatever your customer’s set is, follow Judi’s steps and go ask them.

‘Peloton doesn’t offer discounts’

One of the challenges of running a business is seeing a business from the customer’s perspective. Internally your worldview is all website updates and payment processing, employees and benefits, and hiring and HR. Externally the customer wonders: does this do what I want?

Enter jobs-to-be-done.

Job-father Bob Moesta joined Customer Camp to conduct a mock-interview with Amanda about her Peloton purchase. It’s really good. You don’t even need to conduct ‘JOBS’ interviews to get something good from watching. For instance, framing.

Amanda wanted a Peloton. After getting and liking an Oura ring, and hearing her friends talk about Peloton she wanted one. It was better than a treadmill—if she wanted to run she could just run outside. So, Amanda and her husband watched for a Black Friday deal. None came.

A holiday deal? Nope. Is there any discount? No. There’s not really a Peloton discount, and Amanda was hearing about shipping delays (thanks Covid). So Amanda and her husband ordered one, financed with Affirm.

“Finance a stationary bike?!?!?” – Boomer

Well not really, it’s a 0% loan. It’s basically a payment plan. Actually Amanda notes, it’s like a gym membership.

Now here’s the magic trick business model: Peloton pays Affirm a commission for each bike sold and financed. 50M$ in Q3 2020. Peloton doesn’t offer discounts but it does offer 0% financing. And that’s the magic.

This, as regular readers know, is Alchemy. The financial picture is the same for Peloton: they have a retail cost and accept less than that to sell more units. The question is how much less and to who? Having Affirm be the who and the amount be vague creates value. Buyers hold Peloton in higher esteem and it just feels good to finance something at 0%. As one friend told me “it’s free money.”

To the accounting office it’s the same. To the market it’s different.

Translating JTBD

“At Twitter we had all the sales people in a different building and so we organized a margarita and taco event in the sales building. Of course all the engineers wanted margaritas and tacos so they had to go and spend time with the sales people and ask them around their roles.”

Kris Cordle

Cordle goes on to tell Shane Parrish that once a sense of community forms it’s easier for the sales people to go to the engineers, “rather than filling out a form that goes to the engineer who goes, ‘what is this person talking about?’.”

Jobs-to-be-done is like an elegant meal—but in the kitchen the cooks are hot and the chef is scratching her head wondering what will make it into tomorrow’s soup.

JTBD-ing is messy because we don’t have the language for it. The axiom to don’t ask the customer what he wants exists not because the customer doesn’t know but because the customer doesn’t know how to express it.

Here’s a question transcription of a sample interview Moesta conducted:

Look at the ground Moesta covers! For a mattress! Look at the language. “You moved?” “Who suggested sand bags?”

JTBD is elegant because of the hard work behind it and the hard work is the translation. Often this comes down to: what does the person need to feel.

Now we can circle back to Cordle and see how, like a game of telephone, the message ‘needs to feel this’ gets garbled going from one person to another. What makes the message clearer is good communication which exists in a good culture.

Margaritas and tacos seems unnecessary to the bottom-line but becomes axiomatic once we trace the process back. Like looking at the flurry of activity in a kitchen can give a sense how such a polished meal emerges.

For more, check out Moesta’s (2020) Demand Side Sales 101.

The JTBD of WINE

A group of investment bankers sat down. It was going to be a good night for Danny Meyer. That was good, it was three-months into his first restaurant.

The man at the head of the table asked for a chardonnay. Meyer delighted. He’d just got in a premier cru Rousseau. It was $45 a bottle. In 2015, Meyer joked, that might buy you half a glass.

Meyer walked out and proudly presented the wine.

“That’s not a chardonnay,” the big banker said.

“What I needed to have done at that very moment, which I trust I’ve done since. When he said, ‘This is not a chardonnay’, I should have said, ‘It sounds like you want a California chardonnay.'”

Danny Meyer, YouTube 2015

Instead, Meyer argued that it was. It went back and forth and the banker brought in the table, each member of which nodded in agreement that it was indeed not a chardonnay.

It was probably less than a minute. Meyer retreated and returned with a cheaper wine from California and that’s the story behind his most important lesson, the irrelevancy of being right.

Wine is odd. People buy wine for all kinds of reasons. The Barefoot founders figured out one way. But there always is a reason. That’s the lesson Danny learned. It’s their reason.

Part of the wine boom from 1980 onward was because wine was presented as doing one job: conveyed in an inaccessible language. Robert Modavi first communicated differently. The Barefoot founders did too. They found out there were other ‘jobs’ of wine.

When I delivered newspapers as a kid I loved the Best Buy ads where I could compare MB and GB and RAM on every new Dell, Compaq, and Gateway computer. But what really mattered was the job: will this play Warcraft II?

Apple figured this out.

Meyer figured this out.

This trips up operators all the time because it’s economic to use shorthand. But shorthand cuts out the magic, the feeling, the job—which is the soul of what a customer hires a product. Don’t be right, do your job.

The ‘Job’ of what is said

“I thought hard about what other people are trying to accomplish and I tried to shape my language in a way they could hear it. That’s half of what I talk to founders about. It’s just that, how to build the API to the other person’s brain. It doesn’t matter what you say. It matters what they hear, and it matters how they feel.”

Sam Hinkie, ILTB

That expression has a real JTBD-ness to it. It’s not the how something is done but the what, and if it’s the right what.


Tracking Tom. After a monster of a game, Tom Brady is 162 yards ahead of pace, his largest difference of the year. If Brady plays the rest of the games he’ll likely hit the over and our speculation will be wrong but our reasoning continues to hold, though maybe less than we should have suspected. One question comes to mind:

Did we think about base rates wrong? The key to base rates is to choose the right reference class. Brady seems fanatical about his health, and maybe we should have taken a page from Morey and made a cross-class comparison to Lebron James.

There’s still more ‘zero’ outcomes than not. Tampa could clinch a playoff spot, or be eliminated. Brady could be injured or rest before the playoffs.

We speculated at the start of the season there were a lot more zero to 200-yard games (injury, rest, offense, etc.) than 400+-yard games. That’s held in the data, Brady’s median yards per game is 11 yards less than his average. It feels incredibly odds, but we’ll be wrong for the right reasons.