Much has been written about co-creation recently, including this recent article from Innovation Excellence on seniors as the new innovators. The major focus of the article is on the HelloAgainChallenge in which senior members of our aging population are actively involved in the creation of new ways to use mobile technology to address the needs of the senior sector.
At present the challenge is set up as an ideas channel, in which potential future customers are asked what they want on the promise of winning some sort of prize. Great motivation and nicely setup. Along with outlines of each idea, contributors are also asked to explain the problem being solved. Having spent a while looking at the customer development process of late this got me thinking…
Putting the Cart before the Horse
It’s all very exciting coming up with solutions, but it’s all about finding the right problem to solve. By gathering details of the problem up front, there is scope for the challenge to group ideas by problem and start from there.
Discovery and Design Pivots
Once you have a problem with customer who NEED to get it solved, the customer discovery phase would typically move through an iterative phase as a solution is developed and as a business model is uncovered. I’m a bit unclear as to how solutions will be developed over time, and how teams will collaborate with each other, particularly with prizes involved. Perhaps this will be a first stage.
The Business Model
Okay, so lets assume they find some great and compelling problems to solve, and some needy customers who are willing to pay for them…at what point is the business model developed? After all, an idea has to earn more than it costs to create. Perhaps a good way forwards would be to use the competition as a customer development channel in which participants are used as the early adopters with teams developing, validating and pivoting appropriate business models along the way.
Whatever happened to building strategic competitive advantage? With all the talk of business model generation, lean startups and customer development you might be forgiven for having thought that competitive advantage was all a bit last season. If you spent good money on a business degree that taught you otherwise, never fear. All is not forgotten.
Alex Osterwalder, author of Business Model Generation, has had some interesting thoughts on competition. His view is that competition is part of the environment or operating context for a business model, and is not part of the business model itself. Many of the comments think otherwise, debating the pro’s and cons of designating competitive advantage as being in or out of the business model. Does it matter so long as you are able to change your business model to respond to competitive forces? Let’s take a closer look.
Damien Newman used the design squiggle to illustrate the Design Thinking approach to solving problems.
It’s a really neat way of communicating the basic premise behind design thinking, and I like it a lot. Applied to business model innovation it shows the initial chaos and movement that surrounds any new business model as the founders get to grips with their concept. But what happens if we apply the squiggle to customer development?
What is a prototype for? In terms of customer development it is there to help us discover the scalable business model that best meets our customer’s needs. The first 30 slides or so of this presentation summarise the key points really well:
- Fail early and cheaply – don’t wait until launch to find out if your idea works, start now. The idea is to cycle through as many cheap, disposable prototypes as it takes to discover what your customers want. If you invested so little time in your prototype that you don’t mind throwing away and starting again…you are on the right track
- Make it real – don’t just talk about your idea, show people. The prototype is how you communicate your idea to others
- Test your assumptions – business models are based on a series of assumptions, e.g. ‘these are my customers’, ‘this is the product they want’, ‘they will pay $X for it each month’ … the prototype is where you test these assumptions. It’s also where you change (or pivot) your business model until you have something that works. Doing a survey is not enough, you need to actually verify your plan with a testable product of some sort.
- Iterate fast – each time you bust an assumption, start again. Build another prototype that does support your assumptions… or change your assumptions
I really liked this article on students participating in the teacher hiring process. Whilst the author identifies the problems of asking 10 year olds to interview and question teachers, she cites the example of her 8-year-old participating in a demonstration lesson. This allowed current teachers to observe how the candidate taught, as well as being able to interview students on what it was like being taught by this teacher.
If only more job interviews were like this. These are the main points:
- Why ask someone if they can do the job when you can ask them to show you?
- Why stop at the manager for hiring decisions? They won’t have to work with this person, so ask those who will. Don’t just guess if they will be a cultural fit, find out
It’s not how to innovate, it’s when…
A couple of years back I invited by friend Dr Rob Dew to come and run a lesson in innovation for a group of local business people in the Brisbane area. We had been trying to launch an innovation network and I wanted it to go beyond a series of mini lectures into something a bit more interactive. Rob designed a game that would show participants what innovation was and how it was relevant to their business. It was a while ago so I don’t recall scoring details, I’ve made some up to illustrate how it worked.
This post continues my exploration of lateral thinking techniques and their application to the business model generation space. You can see my original post on how lateral thinking applies to business problems here, and a previous post on using random word entry to stimulate business mode innovation here.
Lateral thinking is all about movement, and the deliberate movement of logical thinking to enable creative thinking. When it works, we can look backwards from our creative solution and make sense of the path we took to get there. But looking forwards “we just can’t get there from here”.
De Bono uses a number of techniques to achieve lateral thinking. One such method is random entry, the concept of using a different, randomly selected starting point as part of the creative problem solving process. You can do this with a well selected pool of words to be drawn on at random:
- Bench, envelope, radio, landlord, candy, gutter, sword, motor, bag, chain, beer, shoe, egg, field, gun, wine, acid, parking meter, brick, lipstick, ring, ghost, peanut, olive, panda, salt, windsurfer, pilot, barbeque, arrow, turtle, hockey, tent, diaper, jam, silver, stomach, mouth, champagne, ashtray, x-ray, artist, storm, flamingo, truck, volcano, mud, ostrich, caviar, bubble, helmet, screwdriver, bath, dinner, key, rocket, coupon, Christmas, politician, chimney, herd, flute, subway, beer, dictionary, clouds, canister
Hill Climbing and the Problem of Local Optima
In computer science, the Hill Climbing algorithm is an iterative technique for solving problems from a random starting point. Imagine an explorer being helicoptered into a hilly landscape and told to climb to the top of the nearest hill. They might not find the highest peak in the range, but they’ll find the highest point around where they started. This is known as the problem of ‘local optima’. You get around by running the process over and over again from a lot of different random starting points.
Note: This article was originally posted here, on InnovationExcellence. I thought I would repost it here.
Nine out of ten business start-ups, and one in six business transformations will confirm it. If you want to be part of the one in ten who succeeds, you’ll need to search for the answers first. By innovating our business model before we start executing, we can improve our chances of success and reduce the high risk and high cost of failure in an uncertain environment.