“Think Different”

– Steve Jobs, Founder of Apple

Entrepreneurship arises from the improvement of the status quo. Such improvement can be incremental or revolutionary. Regardless of the magnitude of the innovation, the bottom line is that such improvement must be profitable,

One way to uncover the hidden potential of existing products is the use of the ACE Matrix. Designed by two American professors, Ian MacMillan and Rita McGrath, the use of the ACE Matrix can uncover opportunities to create new products from gaps in existing products.

 The process can be summarized as follows:

  • Identify the product’s salient attributes:
    • What is it used for?
    • Who uses it?
    • When is it used?
    • How is it used?
    • Why is it used?
  • Identify positive attributes: Select one of the key user groups and answer the following questions:
    • What are the positive attributes of the product which the user expects? These are non-negotiables
    • What are the positive attributes of the product which distinguishes it from the competition? These are differentiators
    • What are the positive attributes of the product which are unique, and hence the reason for a purchase decision? These are exciters
  • Identify negative attributes:
    • What are the negative attributes of the product which the user expects? These are tolerables
    • What are the negative attributes of the product which competitors have succeeded in eliminating? These are dissatisfiers
    • What are the negative attributes of the product which make the user buy from the competition? These are enragers
  • Validate assumptions: Once you have mapped out your assumptions about how users react to the product, these assumptions must be validated. Useful techniques for this validation include:
    • Focus groups
    • Discussions with lead customers and distributors
    • Test marketing
    • Observation
  • Design improvements: Select each negative attribute and try to convert it into a positive attribute as follows:
    • Dissatisfiers into differentiators
    • Enragers into exciters
    • Your competitors’ tolerables into dissatisfiers

In conclusion, the table below provides the actions you must take to improve on the salient attributes of your target product:

BASIC             DISCRIMINATOR ENERGIZER
POSITIVE NON-NEGOTIABLE                       DIFFERENTIATOR       EXCITER
Perform at least as well as competitors but not much better Perform better than competitors if attribute is salient to target customers Perform better than competitors
NEGATIVE TOLERABLE         DISSATISFIER ENRAGER
Perform no worse than competitors but not much better Perform better than competitors and correct problem soon Correct problem at any cost; capitalize on competitors’ enragers