Monday, March 30, 2009

Business Model Innovation and Design

Yesterday, as part of my Managing Innovation and Change course with Prof. Chesbrough, I attended a lecture on Business Model Innovation and Design by Alex Osterwalder.

Alex started by providing a definition of business model, "how an organization makes (or intends to make) money", which he maps around a simple yet powerful visual tool, the business model canvas:

The business model canvas by Alex Osterwalder

In the center we have the value proposition of whatever business model we are looking at. To the right we have the customer, segments and relationships, and how the revenue is generated. To the left we have the company resources, activities and partners and its cost structure.

This unified framework captures a lot of information in a snapshot. Alex successfully used it to describe existing business models and to compare them to those of competing companies. Such a simple tool helped the audience generate insights "on the fly". Visual representation, a design tool, does a great job helping describing and applying a business concept.

Alex went on explaining how design thinking can be applied to design new business models providing examples of design tools for observation, ideation, prototyping and visual thinking. You can find more in his blog, Business Model Design and Innovation.

Alex's work is an example of how meaningful the dialogue between business and design can be. There are many interesting things going on around this subject and I am currently working on a project along these lines so I will be blogging about it soon.

Sunday, March 15, 2009

My Personal Theory of Risk

"Wo aber Gefahr ist, wächst das Rettende auch"

"But where danger is, grows the saving power also"

Friedrich Hölderlin

Monday, March 9, 2009

Storytelling and technology

My favorite feature of many many web 2.0 sites is the status update feature. Such a tiny thing is a crazy mix of personal news update, ego-exhibitionism, gossip and who knows what else (probably this is the reason why it appeals to so many people). Such a simple feature can serve many different purposes as casual or as transcendent as you can imagine. Actually there is a debate going on regarding uses of microblogging, Twitter in this case, beyond its traditional purpose.

twitter tweets...

I want to bring here the case of Twitter as an example of how users can find innovative use cases for existing technologies. Recently, going through Frog Design's blog I found this interesting post on how Twitter has been used for a real-time reenactment of the 23 feb 1981 coup d’etat in Spain. In a country that was struggling to consolidate a budding democracy those were uncertain days. I was too young to recall anything but my parents have told me how we were driving home, close to a military cantonment, not knowing if tanks would be out blocking the roads. The whole country held on to their radios and TV sets listening to the pieces of news that kept on dripping every other minute.

...also en español

Twenty eight years later, Twitter users have revisited, minute by minute, this historical event for my country. Isn't it a wonderful way of telling a story with today’s latest technical tools and language?. I am shocked with what people can come up with when given the adequate resources...

Sunday, March 8, 2009

Some Blackberry Pearl design flops

A simple design mistake can trigger a call to 911. Such a simple thing is a total turnoff for me as a user.

Friday, March 6, 2009

Are we social capital pack rats?

On a previous post, A note on "branded" email, I mentioned the study I carried out together with several classmates on the value proposition of social networking. Thang has spotted an article on The McKinsey Quarterly, When job seekers invade Facebook , that touches on two of the subjects we dealt with in our study.

The first subject is The transferability of "Social Capital" from offline to online. In our study we supported the thesis that, amongst other benefits, the value proposition of social networking has to do with accumulating social capital. As the article reads "Anthropologists tell us that it’s impossible to maintain stable social relationships with more than 150 people." True! Of course users do not maintain stable social relationships with all of their contacts. In-depth interviews with users showed us that usually social networking websites like Facebook work as a repository of potentially useful contacts.

In other words, we collect acquaintances, people we think we might reconnect with, be it for leisure or professional purposes. Given that storing contacts is virtually free, why not doing it? Who knows if I might need those contacts later?

[ Side note 1: Facebook uses a rigid and awkward mechanism to manage people in our network. Facebook forces us to label such an heterogeneous set of online contacts as friends. What about mimicking the offline categories we already use: friend, relative, work colleague, acquaintance.... "Contacts" could be the generic or default term. This taxonomy would allow users to manage privacy and content-sharing permissions in a more natural and transparent way. ]

[ Side note 2: Something that intrigues me are the psychological / sociological reasons behind this "contacts-collector" behavior. Does it have to do with a culture of not giving up choices?]

From a business perspective it results that within our social networks we have a humongous amount of potential value that we rarely convert into anything real. Deeper friendships, job opportunities, favors, or even romantic dates go unrealized. The biz question is very straight forward then: is there a way of materializing that diffuse social capital? In a meaningful way, beyond casual apps, I mean. The entrepreneur in me has a couple of ideas about it...

Let me finish with another quote from the article: "Overall, online social networking, with its support groups and trusted access, is governed by a culture of sharing, not selling." That also appeared as a clear conclusion of our user research. Does that mean that business models that rely on selling are completely preempted in social networking? Well, that is the second subject of our study I alluded to at the beginnig of this post: Creating and capturing value: Specialized vs. generalized social network platforms. I better end this post here or I would have to rename it as the never ending post... Audience, the discussion is served...anyone?

Tuesday, March 3, 2009

About winning

"Winning continuously is a complete disaster"
Takeshi H.

This little wisdom pearl that could be attributed to Sun Tzu comes from my classmate and friend Takeshi. He initially alluded at the negative effect on personal relationships of having one side always winning. The quote can have many other different readings. It could also point at the need of commiting mistakes in order to learn.

Takeshi introduced me to the work of the Japanese architect Tadao Ando and is also a fan of 101 Things I Learned in Architecture School, by Matthew Fredderick, a great read for anybody who likes to connect dots.

Sunday, March 1, 2009

The design process

The design process is my favorite tool for problem solving. Lines 1 to 5 in the following exhibit describe different approaches to map this process:
The design process - Click on the image to enlarge

  1. The Universal Traveler. Koberg, D. and Bagnall, J. Thomson Crisp Learning, 2003
  2. Kolb’s Experiential Learning Theory as explained in the New Product Development course - Haas MBA 290N-2
  3. IDEO Product Development. Harvard Business School case study, April 2007
  4. SY Partners approach to innovation
  5. Design Thinking. Tim Brown. Harvard Business Review, June 2008
The first phase, in red in the previous exhibit, consists in looking around you, and inside you too, to understand the problem. The second phase, in orange, is about coming up with alternatives and selecting the one that would be applied in the third phase, implementation, in green.
What I like about the Universal Traveler's approach is that it explicitly adds the problem definition at the end of the observation stage and singles out evaluation at the end of the process.

Two considerations. The process is iterative in each phase and as a whole:
  • In each phase because problems are complex and dynamic and there always room for us to do more research, come up with new ideas, etc.
  • As a whole because after evaluation -feedback- the process should start all over again.
Other related approaches are John Boyd's OODA loop (Observe, Orient, Decide, Act) or the Agile software development methodology. I find interesting similarities in Steve Blank's Customer Development philosophy, or should I say religion after reading his book The Four Steps to the Ephipany? Yes, I am a believer.