Hello value proposition – what about product design?

Preparing for a presentation on the Business Model Canvas and Design Thinking for a major bank in Switzerland, I ran the slide-deck by a good friend and talented designer; Tom Djajadiningrat. His feedback was crisp and to the point; “Nice! Waar ik me druk om kan maken is als developers de value proposition uitsluitend zien als wat voor het bedrijf waarde creëert… en totaal vergeten om value te zien uit het perspectief van de gebruiker.” which translates into something like: ‘Nice! What worries me is when the developers see the value proposition only as something that creates value for the company… and completely ignore the point of view of the end-user”.

To some extend this is due to misuse of the Business Model Canvas; where the value proposition is mapped against the customer needs (and not the company needs), but this is clearly a risk when using the Business Model Canvas early in the design process, i.e. to map out the business model and identifying the value proposition before designing the actual artefact.
Yes, value proposition is a bit tricky, especially when it should drive product design. It is not automatic that the thing that makes a product successful also is recognised as what generates profit. Focus on value proposition is a constraint within which to do product design.

The example that came to mind is the one of the first iPod. The ‘value proposition’ of the iPod was ‘1000 sings in your pocket’. But that was not new. I mean, at the time you could buy a variety of MP3 players. You needed to almost have a Masters in informatics to manage your (portable) music.

Equally important for the iPod’s success was the easy management of songs via iTunes, and the access to the songs while on the road with the ‘click-wheel’. Most importantly, the iPod was just gorgeous, and made all of us ran out to discover the amount of our ‘disposable’ income and whether the iPod was priced accordingly.

original-apple-ipod

Creativity and design is often ignored or discarded as something trivial. We all recognise when something is ‘good’ which gives us the feeling that we all are experts on ‘good’. But being able to recognise what is ‘good’ does not mean we are able to create something that will be recognised as good. That takes special skill, a particular eye and a creative mind. Designing a ‘good product balances overall design with elegantly crafted details. Challenges do not come more wicked than that. Starting from the value proposition of ‘a 1000 songs in your pocket’, the iPod and it;s success was not trivial.

Some products succeed whereas many products fail. Designing a successful product talkes more than defining the value proposition, and certainly more than defining what makes a profit for the company. The click-wheel did not make a profit for Apple. But would the first iPod with up/down buttons instead of a click-wheel be equally successful? Doubtful. If it is not identified as ‘value proposition’ does not diminish it’s importance for the product success.

Also interesting in this context is ‘iTunes’ itself, which was not developed from scratch by Apple, but obtained through the acquisition of the company Soundjam.  More importantly, the main activity of the Soundjam developers after having become part of the Apple family is said to have been ‘simplifying’ the iTunes interface; making it more user friendly. Thus, what creates ‘value proposition’ and for whom?

So, yes, the canvas helps us to strategyze based on value propositions, customer segments and other business constraints, and yes, the BMC should be used early in the process. The business model canvas helps to set the constraints within which to design, and also to understand the constrains that design could challenge. But the canvas is a tool to assist in the progressive elaboration of the project and we have to realise (and remember) that 1) having identified the value proposition is not a substitution for designing the product, and 2) product design goes far beyond the – often abstract – value proposition.

Design Thinking, what is core?

the-flower-of-design-thinkingCore to design thinking is prototyping & testing. If you browse around the web you find many aspects linked to design thinking, one more fancy than the other. But central to all; prototyping and testing.

The reason is clear; designers think differently then the rest of us (let’s say the engineer). What differentiates a designer from an engineer is that an engineer creates a solution to a carefully analysed and understood problem, whereas a designer creates many solutions as a means to understand the problem. For a designer, a prototype is a hypothesis. Well, that is how I see it.

The image shown aims to illustrate my view on Design Thinking.

It tries to bring across 3 main points:

  1. Core to design thinking is prototype and test, serving the design process, of which evaluation (learning) is a core element. It does not say anything about time to market (speed to get it out there) nor about the quality of the prototype. This is a skill in itself. Talk to a designer to get a feel for this.
  2. Contextual to design thinking are the many tools and methods that you can apply to get a better understanding of the problem space and help you to identify the solution space. These tools are not core, and often distract from what design thinking aims to achieve, which is to make ideas tangible to find out why they do not work (which is a different way of saying “do I understand the problem”). Some even go as far to say that design thinking by itself may not be enough anymore. For example, “In the era of Living Services, Fjord have created their own design system – Design Rule of 3 – which consists of design thinking, design doing and design culture.” Yes, I agree. The larger the (scope of the) project, the more difficult it is to understand the problem space, so you need to scale up on your exploration, and manage expectations concerning time to market.
  3. Basis of any design project, at least in my experience, is a business opportunity and/or a business model. Only in rare situations, a design project is performed completely outside any business context. For that reason, I place the business model canvas as a leave of the root of the flower.

OK, I admit. I just wanted to create a nice illustration and immediately came up with a flower, so I tried to fit Design Thinking to the idea that I had and make it work. I think it does, more or less. What do you think?

 

On banks, touch-points and technology

In the process of digitization and automation, it is easy to loose touch with your customers, especially if the ‘stuff’ you are dealing with is something as abstract as an exchange item; money. Restoring touch-points becomes main focus.

TouchPoints

Grocery stores went through the process of digitization and automation. Starting as small shops, they where used to serve each client in person, and would know their clients in person. Then, in the beginning of last century, long before digitization and big data, they went through the process of first introducing self service, and afterwards, with the introduction of digital tools, through the process of using data (and loyalty cards) to understand client behaviors. Grocery stores had the luxury of a step wise introduction, first automation/self service, and then the introduction of advanced analytics to understand client behavior from data by means of data collection and statistics.

Grocery stores have one big advantage; they deal in physical goods. You, as a client, need to go out and get it, or someone needs to pass by and bring it to you. In short, intrinsic (still) is a personal transaction. This means that the whole process of digitization and becoming a data driven industry was developed while having a personal contact with the client.

Banks do not have had that advantage. Banks deal in somesthing abstract; a means of transaction. In the process of digitization and automation has removed the need to actually visit a bank or talk to a bank agent. The ‘transaction means’ in the past may have relied on physical goods (paper money, coins, remember Scrooge McDuck swimming in his money) nowadays it is digital and growing more and more abstract. Clients have access without ever having to enter a bank filial or meet a bank agent. On top of having lost contact with their clients, banks also have 1000 and 1 technology driven start-ups with innovative business models eating away at the basis of the bank’s income. Ideas such as peer to peer lending and robot advice (where investments are driven automatically by computer models following market trends instead of by human analysts).

Not surprisingly, banks have two important interests: touch-points and big-data.

What I find surprising is that the banks strategies are technology driven. For example, the UBS (or here, see page 9; the great transformation) list the following as main trends; privacy, self fitting products, wealth assistant (robot advise) and decomposed wealth management, all of which increases the reliance on technology and reduces the need for personal contact. Credit Suise, another major Swiss bank, “… announced that it is committed to making significant investments in expanding its client facing technology globally”

Why is technology seen as the solution for a problem created by technology? I am assuming of course that the main challenge of Banks is the growing distance towards their customers, which was created by automation and technology. You may dispute this. But if the problem of the banks are lack of contacts with their customers, shouldn’t the strategy be ‘getting in touch with the customer’’. Yes, technology may be a means in itself, but certainly not an objective.

Maybe it is sufficient to reduce MBOs to the following simple questions; When did you last ‘speak’ with a customer and what did you learn?

Btw, I thought the cartoon at the top of this page was funny and original. I was wrong; https://youtu.be/gWzhHInOiaY

 

Fred Voorhorst works as consultant for the FinTech industry, focussing on optimizing/improving wealth management advisory processes.

‘3D’ vision, by linking action and perception

Illustrations of space through movement, ‘3D’ on a single screen by linking action and perception, to insiders in Delft also known as the Delft Virtual Window System, (DVWS). This page shows some examples freely exploring around the topic of ecological perception and action/perception coupling, which was the basis for my PhD thesis work. An ancient archive of system designs, prototypes and experiments. Most movies are the result of a collaboration with ‘partner in crime’ dr. ing. Tom Djajadiningrat, the best industrial designer known to men, well, known to this man at least. Great times, great memories. Small and short movies. Remember, this was last century.

In this day and age, most of the illustrations below are mainstream ideas, and new technology would make implementation much easier. I mean, using two pendulums to measure the orientation of a monitor (which was an transparent LCD screen used to place on an overhead projector to share your computer screen – whoa…) ad link it back to the images shown on the screen. ‘Rocket science’ back in 1994….

Depth through movement. This movie shows the basic principle. At the time created in PovRay, rendered on a Quadra (over-night), and then imported in macromedia Director to create a QT movie.
Just fun. Using a Mondriaan picture ti highlight the difference between static information and the ability to move. Without movement the image is perfectly flat. Add some movement and you see that it is actual a spatial structure.
Wobby – Exploring a spatial object by changing the orientation of the monitor. The orientation of the monitor is measured with two pendulums.
Exploring the spatial structure of a Rietveld Red-Blue-chair, showing what you see as observer and how you interact with the screen (inset).
Wobby – Exploring the depth map of the northern part of the Netherlands. One of the possible applications we were exploring. Again,shown is what you see as observer and how you interact with the screen (inset).  
Interactive MRI. Moving the monitor allows navigation through the MRI slices, allowing you to get a better understanding of its spatial structure.  
Wiggly – in most situations you sit on a chair behind a computer. The sensors or your chair can estimate the orientation of your upper-body, and therefore the position of your head position. Linking this estimation to the camera movements makes it possible to explore a virtual space in an elegantly simple manner; just sit down and explore.