Thales Teixeira is my new favourite business thinker. His book, Decoupling the Customer Value Chain, challenges readers to think differently about how customers see and interpret value. He argues that it is the customer who disrupts a company, more than competitors and technologists.
For example, we used to visit electronics stores to buy a TV or a DVD player. Today, we are likely to visit the same store to see and touch the product, but buy it on Amazon at a lower price. In other words, the store accrues the cost of keeping and displaying stock without selling it. In this scenario, Amazon did not set out to disrupt electronics stores. On the contrary, it was the customer’s new behaviours, which emerged organically, that caused the disruption.
Teixeira encourages the reader to pay more attention to these changing behaviours than to so-called innovative technologies. Importantly, he does not disqualify the disruptive powers of some technologies, like A.I. However, some of the most disruptive companies, like Uber and Airbnb, did not invent any new technology per se. Their claim to fame was identifying and, in some cases, creating new customer behaviours.
When studying opportunities in relation to customer behaviour, Teixeira advises us to re-create the steps that a customer takes to acquire value. For example, to buy music we used to (1) discover it on radios, (2) drive to a store, (3) listen to the album at a booth in-store, (4) buy the album, (5) play it in the car or at home. Today, we (1) open an app, (2) play our favourite song, and (3) discover new music in the process. As you can see, the value chain is different.
Importantly, the latter value chain reduces the friction from desire to satisfaction. What took a few days now takes a few seconds. Our role as innovators, therefore, is not so much to create new technologies, but to think about and try to anticipate what the customer is trying to do, and reduce the friction as much as possible. In this case, friction could be understood in terms of time, money or effort.
I could go on and on about Thales Teixeira, but it is worth finding and studying his book, Decoupling the Customer Value Chain, which is both accessible and insightful.
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