TCMBA #3 - Product Innovation in Specialty Coffee
This is the second in a six-part series about innovation. It's a long one, but I promise that taking these action steps will be worth it.
If you missed last week’s issue, you can find it here.
We often think we need to be inventors or engineers in order to have innovative ideas, but that couldn’t be further from the truth.
We just need to know where to look.
Can you determine what you're uniquely good at (your competitive advantage)? ☑️
Can you watch and listen to others? ☑️
Great, then you can innovate!
Today you'll learn the types of actions that very large product companies do to develop new products for the masses.
If you want to earn like them you need to act like them.
So first, let’s define innovation. What the heck is it, really?
Innovation is the introduction of something new or different.
That’s it!
That ‘something’ can be a:
Product
Process
Position
Paradigm
This week, we’re going to focus on Product.
To get us started, I’d like to tell you the abbreviated story of Swiffer.
Proctor and Gamble (P&G), a consumer goods company, wanted an innovative product. After watching his wife clean the floor, the Director of Corporate New Ventures thought, “there’s gotta be a better way to clean a floor.”
So, they did some research.
That meant they went into homes and watched women (yes, only women 🙄) clean their floors.
What they noticed surprised them:
🧽 The women pre-cleaned their floors despite knowing that the team was coming to watch them clean their floors. This showed that having a clean house for others was highly valued.
🧽 The steps to cleaning were very elaborate: sweeping, moving furniture, mixing solutions, locating the mop, cleaning, cleaning the mop.
🧽 ‘When you clean, you get dirty’ was a major contradiction they uncovered. All of the women changed into grubby clothing to do the cleaning.
🧽 Cleaning the mop was the hardest part and took most of the effort due to the chemistry of the cleaning product. The better the solution was at cleaning the floor, the harder it was to clean from the mop.
From these observations, P&G gleaned their product design requirements.
The product must:
Work for both sweeping and mopping
Not require cleaning the broom or mop
Be clean to use — grubby clothes not required
Be quick and fun so that cleaning the floors isn’t such a big deal
So, a prototype— literally, a diaper on a stick— was born.
The rest is history!
[EDIT: Turns out this was only new to the US. It was already being used in Japan and P&G pays the company a licensing fee.]
When asked, the women in the Swiffer focus group didn’t think they wanted this solution. And when P&G started the development process, they thought they were going to make a better cleaning solution.
This is often the case for the most innovative products.
They’re born out of observing and understanding ‘the job to be done.’ It’s difficult for consumers to imagine a solution that doesn’t exist. That’s why observation and questions about behaviors (not desires) can be the most valuable.
Take note of how P&G worked through this process:
✨ They stayed curious and were open to the unexpected.
✨ They noticed the details and read between the lines.
✨ They trusted the process, slowed down and went through all of the steps.
Okay, okay. So how would you apply this to your business?
Let’s get brainstorming!
The exercise last week was to figure out your competitive advantage and determine the 'why' behind it.
Here’s an example:
A coffee company I know is really good at signature drinks. They’re incredibly creative and delicious.
So let’s say that creativity, that interest is their competitive advantage.
Why are they so good at these drinks?
The owner is obsessed with cocktails.
They have those gorgeous cocktail bibles on their shelf, go to the most amazing cocktail bars when traveling, and relish in that culture.
Maybe this isn’t the most lucrative area to focus on (in terms of total addressable market) but it’s what the owner will dedicate resources to and be energized by. That’s important!
So what’s next? Look externally.
Start talking to your customers.
For example, speak to the customers who order from the signature menu often. Ask for 5 minutes of their time as they’re passing through. If they don’t have the time today, ask for tomorrow.
We’ll want to understand:
Why do they order these drinks?
Why don’t they always order these drinks?
Do they ever try to make drinks like this at home?
Why or why not?
What are they dissatisfied with when…[trying to make these drinks at home, ordering in the café]?
Pro tip: Don’t ask consumers how they think they will behave. Humans are notoriously bad at predicting their own behavior. Instead, watch them behave or ask them what they’ve done in the past. Past behavior is a strong predictor of future behavior.
Customers told us they:
☕ Don’t always have time to wait for the signature drink to be made.
☕ Love how the unique flavors play with the coffee.
☕ Don’t want to buy a bunch of random ingredients for home.
☕ Want to make drinks like this at home but don't know how.
Let's use these learnings to come up with our product requirements.
Those might be:
1️⃣ Quick to make at home
2️⃣ Low complexity— could be made by anybody
3️⃣ Maintain the flavor of the coffee
Next, we’ll list some ideas!
This part should involve:
🧠 Lots of different minds
⏳ Plenty of time and space
🦺 A psychologically safe environment (no ideas are bad/stupid/unworthy).
Taking breaks to walk in nature, listen to music, or get your mind off from what you’re working on can often inspire new ideas. Enjoy the process!
Here’s a list that I came up with on my own. I bet you have some ideas from this example just by reading this! I would love to hear them— just reply to this email!
💡 Instant coffee cocktail sachet. Just add water!
💡 Coffee cocktail in a can. Pre-made drinks that you can take on the go.
💡 Signature beverage kits. Re-sell small portions from your ingredient stock so people can make drinks at home.
💡 Coffee cocktail bible to mimic the owner’s inspiration book and teach customers how to make drinks home. Since this one is higher complexity for the consumer, it would be great as an add-on to one of the ideas above.
Now you get to decide which ideas fit the product requirements and your business the best.
Select a couple to start developing and testing.
And that’s it! Well, you’ll need an operations and go-to-market strategy, but this series is about innovation.
To summarize the process, here’s what you’ll want to do:
☑️ Understand your competitive advantage. Where do you want to play?
☑️ Talk to and observe consumers to understand their behaviors.
☑️ Decide on your product requirements.
☑️ Ideate! Brainstorm lots of solutions that solve for the requirements.
☑️ Choose a few and test them.
☑️ Get consumer feedback.
☑️ Select one final product to bring to market.
I promise you, if you start incorporating this process into your coffee business, you’ll be lightyears beyond the competition.
And if all of you reading this newsletter complete these steps? That’s okay, because you each have a different competitive advantage.
My hope for you— and for every stakeholder on the specialty coffee value chain— is that you are profitable and can succeed in your business for as long as you wish.
When you’re ready for help, here’s how we can work together:
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Access weekly group coaching in The Coffee MBA Community.
Need deeper support? Work with me 1:1.
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