Do you know what you’re really selling?

GE Jet Engine B787

I’ve become convinced the reason businesses get overthrown, is that they get confused with what they actually sell. They define their business by what they make, instead of the problems they solve.

The problem with defining a business by outputs instead of solutions, is that companies can fall in love with their infrastructures. Which makes it nearly impossible to transition to new solutions which come from different systems.

I recently came across a very novel way to redefine what is sold. Surprisingly this happened at GE Aviation, a big, monolithic and justifiably conservative organisation. GE recently announced it will be selling its aircraft engines, not at a price, but at a cost per thrust. Wow.

Thrust is the clear benefit of jet engines, so why not sell the solution. Very innovative indeed. Why would they do this? It enables GE to own the solution rather than a particular product which solves it today. It gives GE a greater influence on an IoT driven Aviation Industry, better feedback loops, and it creates a permanent platform they control for aircrafts and their operators. Add to this a cheaper acquisition price of engines and everyone is happy. You can read more about it here.

So, what is it your business is really selling? 

You should totally read my book – The Great Fragmentation.