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The hidden reason of Swapfiets' success
Hint: It's not reliability
Swapfiets is a very rapidly growing startup from Delft, The Netherlands. For €15 a month, you get a working bicycle which is marked by the very visible blue front tire. If your bicycle breaks down, you get a new one issued within 1 day. It is massively popular among students, that often live on a budget. I find that strange, as spending €180 a year on your bike sounds like a lot for a student. Second-hand bikes can be bought starting from €50. Do students value the reliability of such a bike that much, or are there other reasons? I’m a lecturer on startups and strategic design at the Delft University of Technology and I believe I found the answer during one of my classes.
It’s a Thursday morning in Delft. Students of the Build Your Startup course start to shuffle in the design studio. This classroom carries more resemblance to a kindergarten classroom than a lecture hall. The walls are filled with sketches, post-its and other drawings. As I double-check the HDMI connection of my laptop to the moveable big screen TV, the groups of students position themselves among the tables. Today I’m going to lecture on the job to be done framework.
It’s a design framework to better understand your users. It’s about recognizing what users use your product or service for. Let's use alarm clocks as an example. Functionally, it makes a sound in the morning at a set time (that soon one might associate with a bad mood. Never use a song you like as an alarm). Before alarm clocks were €8 euro at any basic store, before the invention of elaborate clocks, people in London during the Industrial Age had knocker-uppers. These people would wake you up at your home by tapping on your window with a long pole. There has even been one account of someone using a pea shooter (right image). The job to be done of what all these alarms have in common is not to make a sound, but to wake you up in the morning before work. Same job to be done, vastly different solutions - although the sound aspect seems to be dominant in waking up solutions. I've had a period in which the slamming of the door by my roommate was my alarm at 08:00. Does the job.
After a first example of the job to be done framework, I look at the roughly 30 students, I see some scribbling some things down while others just listen. I raise my hand to encourage participation as I ask how many of the students have a subscription to Swapfiets. It’s always more than I anticipated, and it feels like it’s growing every semester: almost 50% raises their hand.
Subscriptions have proven to be a successful business model for a longer time. Newspapers are one of the older forms. But, with the costless duplication of news, the uniqueness of this proposition has shown a decline. Nowadays people more often have a Netflix and Spotify subscription. In the past years, we’ve seen a surge (and some in decline already) in physical products as a service in stockings, razors, headphones, toothbrushes on subscription. The main component in that service is arguably reliability: Making sure you always have something that helps you execute that job.
What is the main job to be done of a bicycle? I asked this in class. After some answers, we arrive, on a very functional level, on the following: it is to get you from location A to location B. I make the argument that a working secondhand bike does this functional job just as well as a Swapfiets. Uber could be a competitor for that job, for getting you from A to B. Most students nod. Still, Swapfiets seems to be popular, so there must be something else. In that morning I’m in the unique situation - most researchers have to spend more effort to achieve this - that I have a large group of users and potential users. So I can do some research.
I ask a male student with blond hair that just raised his hand why he subscribed to Swapfiets. He responded that he needed a bicycle. "How is it compared to your old bike?”, I follow-up. “It’s way more reliable. I know that I always will have a working bicycle, even if it breaks down. It gives me peace of mind.” There we have our reliability argument, one we previously only had reached by reasoning, which is now a little bit validated. It gives him peace of mind. Apparently, this is a job to be done of owning a bicycle is having peace of mind about whether it works. I think we can all relate to the anxiety we experience when your main mode of transport, whether it’s a car or a bike, has 'its moments’. We call this an emotional job to be done. I think it’s reasonable to believe that Swapfiets is better at this emotional job to be done than a second-hand bicycle, as it comes with this replacement service. As that on its own worth €15 euro a month?
I better wanted to understand the (latent) reasoning of subscribing to Swapfiets. I asked him “When did you make the decision to get a subscription? Do you remember where you were?” The students' eyes lighted up as he said “Oh yeah, I was on my balcony, repairing my old bike. The balcony was too small, parts everywhere, it was horrible. I said to myself: the next time this bicycle brakes down, I’ll just get a Swapfiets.” You could see the frustration; the student was reliving the pain he went through on that balcony. Reliability is one argument, but preventing this hassle, ergo preventing anxiety is another one. Another emotional job to be done. Why didn’t he stop repairing and get one then? He argued that he started fixing it so he wanted to finish it. A for effort.
A different male student with dark hair raised his hand: “My situation was a bit different. My bicycle broke down and I needed one fast. I checked some bicycle shops, but those started from at least €100 euro. I did not have €100 euro lying around, but I had €15 euro for a Swapfiets.” Then it dawned on me. One of the reasons Swapfiets is so popular is a financing question. Students don’t always have the budget to spontaneously buy a new bicycle. But for the price of a crate of beer, they can have it for this month. The student resumed: “I intended to stop the subscription after a month or two, but in the end, it lasted for two years.”
Buying a bicycle is not the same as using a bicycle. In the job to be done framework, we call these related jobs to be done*. These are related jobs to be done that need to be executed in relation to the main job to be done. Arriving at the airport one hour before your flight is a related job to be done for your flight that functionally brings you from A to B. Assembling your IKEA furniture is a related job to be done before you can enjoy your new bed with your spouse. Having €100 euro is a job to be done that not many students can execute, it will upset their budget. But the €15 is something most students are able to spend spontaneously. On top of that, their bicycle budget will be more predictable (although higher). However, this last argument about predictability is reasoned and not validated though.
I believe that I saw some lightbulb moments with my students when we discovered this together that morning. There are two key lessons here:
You don’t need to excel at the main job to be done to run a successful business.
You need to understand your entire customer's situation, not just the usage after purchase.
I'm Jeroen Coelen, I'm a lecturer at TU Delft, innovator at Bit and keynote speaker on innovation methodologies.
*To be more specific, a consumption chain job
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