Intermediaries, End Users, and How This Impacts What's "Good Enough"

When most people discuss Clayton Christensen, they say a company can be disrupted when its products overshoot what the "average" customer considers good enough. The problem is that there's no such thing as an "average" customer -- at best there are only customer groups. Two of the largest customer groups are: (1) intermediaries who buy products for one or more end users; and (2) end users who buy products for themselves.

What's "Good Enough" for Intermediaries

If you're an intermediary buying multiple devices for multiple end users -- whether it's a purchase manager buying computers for employees, or a school administrator buying computers for students, or parents buying computers for their children -- your "good enough" standard is defined by the following considerations and jobs-to-be-done:

(1) You're buying more than one device, so affordability is important.

(2) You're managing more than one device, so you want the devices to be simple to maintain, monitor, and supervise, with everyone using the same thing.

(3) You want the devices to be simple for end users to operate -- even if you lose some usefulness/functionality -- so you don't have to spend lots of time and money on training. You want the devices to meet end user needs but no more, since surplus performance tends to add cost, complexity, training, etc.

(4) Because you're not the end user, you don't care as much about whether the product offers an above average or best-in-class user experience.

(5) You want good build quality but you don't care too much about product aesthetics. You're not buying the product for your own use so it's not part of your personal status or identity.

And different intermediaries have different good enough standards. A school administrator buying computers for children might think Chromebooks are good enough because the computing jobs-to-be-done are fairly limited. A purchase manager for a construction company might think Chromebooks aren't good enough but Dell PCs are. A purchase manager for a large advertising firm might think only Apple iMacs are good enough.

What's "Good Enough" for End Users

If you're an end user buying a product for yourself, your good enough standard might be shaped by the following considerations and jobs-to-be-done:

(1) You're spending your own money, and the amount spent is much less than what an intermediary spends when buying for multiple people. This reduces buyer accountability and lowers the stakes, making affordability less important.

(2) You have a personal, hands-on interest in how the device functions, looks, and feels, since you're the one using it. You care about the product's aesthetics and whether the product confers status.

(3) If the device can perform jobs beyond your strict needs -- but is still affordable -- then that's a plus because it gives you more flexibility and helps future-proof your purchase.

(4) You like meaningful, well-designed product improvements as long as the product stays affordable.

(5) You prefer using the best products available, as long as they're affordable.

These five qualities probably characterize a significant percentage of end user buyers. A product that targets these buyers seems unlikely to overserve, as long as product improvements are meaningful and well-designed and the product stays affordable.

The Impact of Cloud Computing

When you consider what's good enough for intermediaries versus end users, you can see how cloud computing has helped Apple's enterprise efforts: the cloud has given end user employees more say over the devices chosen by intermediary purchase managers. By giving end users more say, cloud computing has allowed the "dog" (end users) to finally start wagging the "tail" (intermediary purchasers).

Two contexts where this may not hold true are schools and homes with multiple children. When intermediary adults purchase a product for end user children, affordability and user needs (not wants) become prime considerations. Hence the Chromebook's current success in school environments. I've argued that Apple should make a more affordable product oriented to the needs of schools and parents, but an iPad with a detachable keyboard should still compete well in other contexts. See post titled Chromebooks as a Low End and New Market Disruption.

The Lesson

As a general matter, it probably makes sense for vendors to target end user buyers rather than intermediary buyers. Intermediary buyers tend to prioritize affordability and needs (not wants), which makes overserving and disruption a greater risk.

The author owns stock shares of Apple.