Explore Pixar‘s Relationship with Their Customers

Ed Catmull, CEO of Pixar, was asked to comment on kids as consumers. Specifically, the question asked about Pixar’s views on the trends they see amongst their five-year-old demographic (skip to the 24:10 mark in the video). His answer:

Five year olds actually haven’t changed as much. Clearly, the teenage world has changed a lot more because of the way media is spread. So that’s actually the bigger change. For the children, we haven’t seen much. In terms of the way we think about our stories though, we don’t segment them in that sense. That is, we do make movies that children can enjoy but we also make films that we [adults] can enjoy. And we believe very strongly that children live in an adult world. So we want things in the films which they don’t understand. Not that we’re trying to do it. But what makes things interesting for children is they’re figuring out the world. And if you try to make something in a movie so that it’s all easy for them to figure out, you’re actually having a distortion of the world they operate in and that they like to be in.

Does his response indicate that Pixar takes a jobs-to-be-done (JTBD) approach to their films? It’s certainly a stretch to definitively say they do based on one question and answer exchange, but let’s dive in a bit as a thought experiment.

A tenet of JTBD is that segmenting markets by people (i.e. demographics) is the wrong unit of analysis when building products. Instead, the jobs and the  situational context within which they exist provide a clearer link between people and their actions. It would appear from the exchange that Pixar does not ask “what movie will five-year-olds like and want to see?” but rather “what job do people hire films to get done?” Are they hired to entertain? To act as cheap, temporary babysitters? To momentarily escape from normal, daily life?

We can analyze and debate films’ JTBD and the situations in which people hire them, but instead of going down that path let’s consider how Mr. Catmull thinks about it based on his Q&A session.

For Catmull, Pixar isn’t making movies for five-year-olds, he’s making movies that transcend the simplicity and one-size-fits-all mentality that comes with demographic segmentation. He acknowledges that children are customers, but also acknowledges that the end result doesn’t revolve around them to the exclusion of others. He’s more motivated to tell a story about the world we live in—a world in which kids and adults are participants. Therefore, Pixar is less interested in telling a story that only addresses the cognitive abilities of children and more interested in telling a universally accessible story about the world we all experience, young and old. This approach cuts across demographic segments making them an ineffective and counterproductive way to consider customers.

We could argue, upon deeper reflection, that a Pixar film’s JTBD is to explore and examine the human condition through the perspective of fictional characters that resemble the world, but are not of this world in order to reconnect with our own humanity. In essence, Pixar reminds us we’re human in a world that so often doesn’t treat us as such. If you buy that (and it’s not important that you do—this is an mental exercise after all), then it’s a small step to realize how such a job wouldn’t fit neatly into carefully considered demographic segments.

Catmull provides additional information for our exercise at various other points in the interview. At one point, he explains Pixar’s belief that personal investment on the part of a director is key to making a film special. He citesUp’s achievement in this regard. It went “…above and beyond the standard vocabulary that’s used in storytelling.” In essence, Pixar entrusts new product development (and the massive investment that comes with it) into a single person’s vision. And it’s expected that the director’s vision will connect with moviegoers on a deep level. We could translate that to mean this: Pixar expects their films to address the unmet or underserved needs amongst their customers to feel human instead of creating films to fit perceived opportunities in a demographically sliced and diced market.

Catmull also suggests that Pixar doesn’t focus group their films. Instead, directors periodically and regularly present their films to a brain trust of internal staff who give feedback and offer commentary. What this tells us is that, again, the vision that drives the film is not limited by superficial market segments. It succeeds because it addresses a latent need that exists in the world. You don’t have to be five to enjoy Up nor do you have to be 35. You don’t have to be male or female, wealthy or poor. None of that matters because the film taps a deeper link with people along the jobs-to-be-done spectrum that would otherwise be missed if demographic segmentation were the only yardstick.

What’s most interesting about the lead quote from Catmull’s above is that Pixar avoids the trap of considering itself a maker of films for kids which ultimately drives their success with them.

Remote: Office Not Required Book Review

I read Remote: Office Not Required over the weekend (it’s a fast read) to see what I could learn about working with remotely located coworkers. I came away with a simple change of perception that will likely change the way I operate in the future.

Our company has two offices which, in a sense, makes us a remotely located group. I say ‘in a sense’ because those offices are, at most, 30 miles from one another. Before reading the book, the idea that this small distance made us a remotely located organization seemed far fetched. If I needed to talk to someone face-to-face, we’d simply go to the same office. Or, more often than not, the people who I interacted with most already worked from the same office I did- nothing remote about that, right? Well, now I think differently.

The book explains the simple concept that even if you’re across the street from your office working at a cafe, you’re effectively remote. People at the office can no longer physically walk up to you. Yes, they can walk across the street, but otherwise need to make contact via some other method, many of which are asynchronous and therefore don’t require immediate attention like a physical interruption does. That’s working remotely. It’s so simple that, in hindsight, I’m surprised I didn’t make the connection. Just because many of us are in the same office for lengthy periods of time doesn’t mean, as a whole, that we’re not a remotely oriented team. Just the opposite: many colleagues are not in the same office as me and therefore, each and every day, half or more of our staff are effectively remote. And then there are our clients who are hardly ever in our office.

The simple change in perception the book gave me is worth the price of admission. From there though, I didn’t get much tactical value. I found significant portions of the book covered workflow adaptations we’ve implemented and tools we already use. It was great to compare notes against what 37signals does and the other companies they highlight. I suppose some of that does have tactical value, but it seems minimal compared to the larger shift in mindset I took away.

I don’t have much more to say at this point other than a quick critique of the writing and format. Once again, 37signals has published a book that strikes me more like a collection of blog posts than a streamlined, cohesive narrative. This might leave a bad taste in your mouth, but it certainly makes for a quicker, more consolidated package. And who won’t benefit from a quick, weekend read with takeaways you can put to use the same day?

Eager Sellers, Stony Buyers & the Four Progress Making Forces

A great benefit the web provides to curious souls is the ability to lose oneself in ideas, one link after another until you can’t remember where you started anymore. That’s how I came across an HBR article—”Eager Sellers and Stony Buyers: Understanding the Psychology of New-Product Adoption“— by John T. Gourville. I’m sure I came across it in my continuing exploration into the jobs-to-be-done framework, but I couldn’t tell you exactly how I came upon it. Nevertheless, it’s a great companion piece to those of you getting into JTBD and, in particular, the Four Progress Making Forces by the fine folks at The Rewired Group.

The article  provides context for the push and pull concepts in the four forces diagram (my version of which sits below and includes some of Clayton Christensen’s innovation lingo).

The Four Progress Making Forces Diagram

The article explains the psychology behind consumer behavior and how sellers can tap into that knowledge to help them increase sales. Some takeaways:

  • The likelihood that someone will buy is based more on perceived value than actual value.
  • Consumers use a reference point—something they already own or use—as a way to compare a potential new purchase.
  • This reference point acts as a way to judge the new option. If the new option is perceived to be better than its reference point, it’ll be viewed as a positive or a gain. If it’s perceived to be relatively inferior, it’ll be seen as a negative or a loss.
  • Losses have greater psychological impact than similarly sized gains and will therefore lead people to value that which they already own or use (the “endowment effect“). Buyers value losses at about three times the rate of gains while sellers value gains by a factor of three over losses. Combined, the gap between buyers and sellers can be 9x.

All of these points and the supporting documentation that Gourville includes speaks directly to the idea behind two of the four forces– the habit of the present and the anxiety of the new. They help you understand why people resist innovations, even ones that will benefit them.

On the flip side are the other two forces—the push of the situation and the magnetism of the new—that entice and encourage the adoption of new products and services. The article explains that anything new is ultimately judged as a series of trade-offs. A consumer will gain something here, but lose something there. If, in aggregate, the gains outweigh the losses, the new thing can win a convert.

One way to view the landscape is to say that sellers “…create value through product change, but they capture that value best by minimizing behavior change. That results in a simple but powerful matrix.”

behavior/product change

As you might guess, sellers want to find themselves in the “smash hits” quadrant. They typically require consumers to change their behavior as little as possible while experiencing great gains in terms of what the new product or service offers. The trick is to reduce behavior changes on the part of consumers and/or increasing the value gained in switching to the new offer. Some advice:

  • Be patient: Adoption will likely be slow, so plan on that being the case. This obviously has implications on how you manage resources since you may need to run lean for longer than you’d like.
  • Strive for improvement: Increase the perceived gains so that they outweigh perceived losses as much as possible. Perhaps this means you need to delay a launch or wait for the status quo to naturally change in your favor.
  • Eliminate rival products or services: This is easier said than done, but you can tip the scales in your favor through regulatory bodies who can use their powers to help your cause.
  • Align behaviors: Build products or services that work with customers’ current behaviors, if at all possible.
  • Target non-consumption: You can avoid the endowment effect by finding customers that don’t already use an existing product or service. That population won’t have ingrained behaviors that could pose a problem.
  • Preach to the choir: Seek out people who are actively willing to adopt your innovation and let them advocate on your behalf.

My First Concert

I headed to my first concert three days before I turned 20 to see PJ as they were breaking big on MTV. Because I designed promos and ads for the events council at CU I was able to get in early and free. I stood right in front of Stone Gossard (he’s the one with the long hair… oh, wait…).

I have two vivid memories of the event. One, the hearing loss from the terrible opening band who set their amps to 11. Second, a recollection of the scene in the room after the show ended. Since I stood in front of the stage all night, I was among the last people to head toward the door after the fun ended. I remember a ton of clothing on the floor (surely lost by the body surfers, right?). T-shirts, bras, shoes, pants (pants? Really?) and other unidentified clothes-like crap.

Good times.

Change and the Habit of the Present

Christina Wodtke gave some needed depth to an old cliché: people don’t like change. Whether or not change is adopted, she argues, is not determined by a simplistic and innate dislike for new things. It’s determined by how well the change is communicated and how smoothly people transition to it. Wodtke writes:

“…when a big change comes, the end user is focused on what they have lost: productivity, comfort, familiarity. And the user weighs that loss as three times more important that any gain that company professes to offer.”

Her thoughts are like those that underly the ‘habit of the present,’ one of the four Progress Making Forces. Understanding why people stick with their present set of products, services and solutions is fundamental for product designers who want to grow their customer base. Two important points are highlighted in Wodtke’s work and we’ll explore them below:

  • Good enough: Two different solutions to the same problem can co-exist, even if one is clearly superior to the other. How? Via Clayton Christensen’s “good enough” concept– some people actively expend extra effort that an inferior solution requires compared to its superior alternative because switching has too many costs in terms of productivity, comfort and familiarity. You’ve probably experienced this phenomenon yourself. Think about a product or service that a friend has recommended you use, but you haven’t. Why haven’t you? It may be because your current solution gets the job done well enough and switching to the new solution will cost you too much in other ways.
  • Active resistance: Better solutions may be actively fought by people and systems that stand to lose in some way if it’s adopted. Lobbyists , for instance, will do all they can to torpedo new laws that threaten the status quo and the mechanisms by which they benefit from them. David Gray has researched change within organizations and has concluded that to affect change necessitates a deep understanding of culture– knowing what is and isn’t possible so that opportunities can be taken advantage of while challenges can be addressed before they cause trouble.

To overcome the good enough mentality will not only require you to sell the advantages of the better solution, but also require a transition plan for those using the existing (i.e. “inferior”) solution. Wodtke gives examples of how some sites have done this, but ultimately failed in their execution. Why? Because not enough effort was expended to acclimate customers to the improvements so that they would feel impelled to adopt it.

Active resistance is often political. It requires good salesmanship toward customers, but also to other stakeholders, direct or indirect, who feel they’ll lose something real or perceived. You may need to haggle, coerce or compromise in order to ease the pathway for these constituents who could otherwise actively work to thwart your efforts.

Of course, all of this is moot unless the new thing is actually an improvement over the old. Your ideas are vetted along the way, right?