Make tools for professionals and solutions for non-professionals

Image by Sachin Rekhi on Medium

Both Uber and Tesla would say their value proposition to the customers is mobility, yet they are in two completely different types of business. The key that made the difference is their target customer types: professionals vs non-professionals.

In a perfect world without AI and robots, two resources are necessary to accomplish any job: Labor and tools. Paintings are made by artists with brushes just as shipments are delivered by drivers with trucks. It’s not hard to find from the example given above that the artists and drivers are professionals. Professionals are domain experts who are willing to spend time and effort to accomplish a mission. As for the non-professionals, they are the ones who pay the artist and drivers. Non-professionals are the people who only spend a minimum amount of effort and time (usually on decision-making activities) on the matter, but willing to spend a reasonable amount of money to be taken care of.

As the title has given away, Uber’s customers are non-professionals while Tesla’s customers are professionals. Coming back from the different needs from different customer types, the products of Uber and Tesla are drastically different.

Uber offers mobility as a solution where the only cost for the customers is a premium price to get mobility. An Uber passenger will have free time to spend during the trip and there is minimum effort needs to be made to receive the mobility. A solution-type product is aiming to achieve the goal for the customer without requiring much time and effort from the customer. In other words, it directly delivers customers’ JTBD(Jobs to be done) which matches exactly the needs of the non-professional customer type. Looking back at the product side, the majority of the solution-type products on the market are moving towards wrapping professionals and tools as a package with a user-friendly software user interface. Because the JTBD does not tend to change over time, deliverables to customers mostly remain largely the same over time. Instead, the innovation for solution companies usually focuses on the operation to reduce friction in the process. In addition, tools are made to help them automate more tasks over time to lower the unit cost and thus increase the profit margin. In the case of Uber, they adopted the share-economy model to innovate operation, which allows them to onboard drivers quicker and cheaper. By automating the reservation process, they were able to reduce the cost from a call center and the distance/time spent to pick up the next passenger.

Tesla, on the other hand, offers a tool for their customer to spend much less money per mile traveled but substituted with their own time and effort. Instead of delivering the JTBD, the tool type products deliver tools to help the customer with JTBD. These products focus much more on usability thus the innovations are largely happening on the product itself to deliver values directly to customers to reduce their cost and effort to achieve JTBD. Tesla started by offering gas and maintenance savings and time spent in the gas station where the car charges like a cellphone overnight. Less hassle in general with killer infotainment and autopilot experience, which is all focused on making the driver’s life better.

From the examples above, it's easy to see that the tools are for the professionals and solutions are for non-professionals. However, with the advancing capabilities of the software, AI, and robots, some claim that a fully automated tool can also be for non-professionals. I would agree with at least one of the two conditions below being true:

  1. The task is in-complex to be solved by a tool. TurboTax is a great example in this case. There is a big portion of the population whose income only comes from W2 while the complexity of the filing W2 is relatively easy to be solved by a wizard-based UX. Once the tax situation starts to get complex, people would not hesitate to hire an accountant to be taken care of instead of trying to spend 2 weeks figuring out how to do it themselves.
  2. The AI/robot can cover the full spectrum of the task that needs to be performed by a professional. An example would be the transportation robots in the amazon warehouse which completely replaced human-operated forklift. Tesla is getting close with its self-driving technology, but in the consumer market in general there is hardly anything that is in the territory yet.

With the points made above, unless the problem to be solved is fairly in-complexed as TurboTax, it’s unrealistic to say that you are making a tool for non-professionals. A more realistic product strategy for making fully automated tools for non-professionals would be making a manual tool for professionals first. Then use the feedback along the way to automate the most time-consuming tasks to a point that it is automated enough to include the non-professionals into your serviceable available market as a part of the growth strategy in the later stage of the product.