Friday, 26 May 2023

Business model process

"Business Model Generation" is a book by Alexander Osterwalder and Yves Pigneur which introduces the Business Model Canvas, a visual tool for creating and analysing business models.

The book is divided into five parts:

  1. Canvas: section introduces the Business Model Canvas and explains how to use it to design, test, and iterate on business models.
  2. Patterns:  section describes business models with similar characteristics, similar arrangements of business model building blocks or similar behaviours. Theses similarities are referred to as Business model patterns.
  3. Design: section delves into various design techniques which one can use to better create a value added business model
  4. Strategy: section deals with reinterpreting business strategy through the lens of the business model canvas, it helps constructively question established business practices while examining the environment in search of new opportunities.
  5. Processes: section proposes a generic business model design process, which is adaptable to to an organisations specific needs.

Overall, "Business Model Generation" is a practical guide for entrepreneurs, innovators, and business leaders who want to design and optimise their business models to create value for customers and achieve sustainable growth. 

Process

Creating a business model may seem like a daunting task, modelling an existing business may seem more approachable however there are actually four broad instances when creating a business model is appropriate:
  • Satisfaction: the aim of satisfying an existing but unanswered market need.
  • Newness: to bring new technologies, products or service to market that do not yet exist.
  • Disrupting: leveraging a better business model to disrupt the market.
  • Creation: to create an entirely new market that did not exist before.
regardless of which of the overarching four goals of creating a business model you are pursuing there are five key phases to developing a business model:



  • Mobilise: This stage involves building a team, clarifying goals, and establishing a shared understanding of the business model design process. during this phase we set the stage for designing our new business model.
    • Establish project legitimacy by involving respected and visible member of upper management, respected by all in the organisation
    • Manage vested interests by identifying those who will benefit from a business model change, there will be parts of the organisation that will be threatened by change
    • Cross-functional team, ensure that various organisational perspectives are involved in the business model design, the greater the breadth of perspective the better.
    • Orientating decision makers, ensure that they are aware from at least practical perspective how the proposed changes will benefit the organisation as a whole.

  • Understand: In this stage, the focus is on gaining a deep understanding of the customers, market, industry, and competitive landscape. This involves conducting research, gathering data, and analysing insights to inform the design process. Be wary of analysis paralysis, keep the team focused and leverage a hypothesis based approach rather than strictly focusing on data-analysis driven approach.
    • Modelling existing business models, leveraging organisational experts to understand the as-is business model, this will provide an understanding of the existing strengths vs weakness and serve as inspiration for the and improved version/model
    • Look beyond the status quo, it is very difficult to look beyond we've always done it that way, leverage cross functional nature of your team to gain fresh perspectives.
    • Search past the current client base, identifying an untapped market segment is often far more valuable then expanding an existing one by 10%
    • Demonstrate progress, excessive analysis runs the risk of losing management support due to a lack of perceived progress, be sure to share insights and knowledge gained.

  • Design: This stage involves using the Business Model Canvas framework to design the key components of the business model, including customer segments, value proposition, channels, revenue streams, key resources, key activities, key partnerships, customer relationships, and cost structure.
    • Defend bold ideas, in established organisations often times ideas are watered down to ease implementation, this is a delicate balance, defending a bold idea while simultaneously ensuring it's feasibility.
    • Co-design, By involving a diverse breadth of organisation representation on the design team, the team can anticipate and circumvent potential implementation roadblocks.
    • Integration, one of the most important decisions is to whether integrate new business models or to establish new ones, 
    • Long term focus, when inviting new ideas focus your efforts on long term goals, not on quick quarterly increases we are looking to change the way business is done and look for 100% increases not annual 4% ones.

  • Implement: Once the business model has been validated and refined, this stage focuses on implementing the model and executing the necessary actions to bring it to life. 
    • Proactively manage roadblocks, before the implementation phase of the business model, by leveraging a cross-functional team in previous phases most implementation roadblocks should have been identified and mitigated, before the implementation phase.
    • Project sponsorship, an important success element is to maintain visible support from a respected senior manager, this sponsorship will legitimatise your endeavours. 
    • Old vs New business model, figuring out whether to integrate the new model into an existing one or to create it's own separate model, integrate into an existing business unit or to spin off a new one? creating the right structure is essential for success.
    • Communication Campaign, to counter 'fear of the new' a multi channel internal campaign announcing the new business model and creating excitement as well as interest is essential to gain mass buy in from the organisation.

  • Manage: Adapt and modify the business model in response to market reaction, Continues monitoring and updating the business model to changing market forces:
    • Governance, establishing a cross functional governance group, whose responsibility is to track and manage business models across the organisation, with the aim of ensuring that each model is up to date with current market forces.
    • Synergies & Conflicts, one of the responsibilities of the business model governance group would be to manage any synergies between models as well as mitigate and conflicts which could arise.
    • Portfolio, document and maintain a portfolio of all the organisations business models and the impact/influence they have on each other.
    • Beginner's mindset, do not fall into it's always worked this way mindset, regularly take a fresh look at each model, challenge everything. Market forces move suddenly and you may need an overhaul sooner than you think.




Business model strategy

"Business Model Generation" is a book by Alexander Osterwalder and Yves Pigneur which introduces the Business Model Canvas, a visual tool for creating and analysing business models.

The book is divided into five parts:

  1. Canvas: section introduces the Business Model Canvas and explains how to use it to design, test, and iterate on business models.
  2. Patterns:  section describes business models with similar characteristics, similar arrangements of business model building blocks or similar behaviours. Theses similarities are referred to as Business model patterns.
  3. Design: section delves into various design techniques which one can use to better create a value added business model
  4. Strategy: section deals with reinterpreting business strategy through the lens of the business model canvas, it helps constructively question established business practices while examining the environment in search of new opportunities.
  5. Processes: section proposes a generic business model design process, which is adaptable to to an organisations specific needs.

Overall, "Business Model Generation" is a practical guide for entrepreneurs, innovators, and business leaders who want to design and optimise their business models to create value for customers and achieve sustainable growth. 

Strategy

In todays day and age, the old proverb "If it's not broken, don't fix it" no longer applies, we very much live in an era of rapid change, to survive in the business world we must embrace that change and evolve with it or be left behind. The environment from a technological, competitive, customer, socio-econimcal and so on perspective is rapidly changing and your business cannot afford to fall behind, this is why it is more imperative than ever to constantly challenge and reassess one's business models and opportunities. 

there are four main areas of the environment which impact your business:
  • Market forces:
    • Market segments: the major customer groupings for your product or service, describe their attractiveness, seek to identify new segments.
    • Needs & demands: Outline what the market needs and analyses how well they are served.
    • Market issues: Identify key issues driving and transforming your market form the customer and offer perspectives.
    • Switching costs: Describes elements related to customers switching business to a competitor.
    • Revenue attractiveness: Identify elements related to revenue attractiveness.

  • Industry forces:
    • Suppliers & other value chain actors: Describe the key value chain incumbents in your market and spots new players entering the market, ensure that you are not depended on one particular supplier.
    • Stakeholders: Specify which actors may influence your organisation and business model.
    • Competitors (incumbents): Identify competitors and their relative strengths.
    • New Entrants (insurgents): Identify new insurgents into the market and determine whether they compete with a business model different than yours.
    • Substitute products & services: Describe potential substitutes for your offers, including those from other markets and industries. 

  • Key trends:
    • Technology trends: Identify technology trends that could threaten your business model or enable it to evolve or improve
    • Regulatory trends: describe regulations and laws that influence your business model
    • Societal & cultural trends: Identify major societal trends that may influence your business model
    • Socioeconomic trends: Outlines major socioeconomic trends relevant to your business model, Socioeconomic trends provide valuable insights into how the market and consumer preferences are evolving.

  • Macroeconomic forces
    • Global Market conditions: Outline current overall conditions from a broader macroeconomic perspective factoring the impact of overall performance of an economy.
    • Capital markets: the financial systems and platforms where you raise capital by issuing and trading various types of securities. Understand the current resources required for your business model
    • Economic Infrastructure: the physical and organisational structures, facilities, and systems that support economic activities and enable businesses to operate effectively. It encompasses various components that provide the foundation for economic development, such as transportation networks, communication systems, energy supply, and financial institutions. 
    • Commodities & other resources: Highlight current prices and price trends for resources required for your business model.

Evaluating your business model

Just like an annual medical checkup, your business model(s) will benefit from an annual review, by preemptively reviewing your business models you can react to, or take advantage of environmental forces before they impact you or you miss an opportunity.

There are two approaches to evaluating your business models, to evaluate each individual building block and of course reviewing the business model as a whole, it is important to understand that these activities are complementary.

One of the most common assessment tools is to use the SWOT analysis tool, 


This is a simple tool that is commonly known throughout the business world, however this tool has a tendency of producing vague insights that are difficult to action, when conducting a SWOT analysis, keep in mind the environmental factors and how they may impact your business model.

Strengths vs weaknesses 

Strengths are the internal characteristics and resources that give a business a competitive advantage over others. These are factors within the control of the business and represent its positive attributes. Whereas weaknesses are the internal factors that hinder a business's performance and place it at a disadvantage compared to competitors. These are areas where the business needs improvement or lacks certain capabilities. Strengths and weakness can often be thought of opposite sides of the same coin, generally the opposite of your strengths are your weaknesses, review some of the following questions to get an idea of both strengths and weaknesses around the individual building blocks of your business model.

Strength vs weakness value proposition assessment
  • Are our value propositions are well aligned with customer needs?
  • Do our value propositions have strong Network effects?
  • Do strong synergies between our products and services exist?
  • Are our customers satisfied with our products and/or services?

Strengths vs weakness of Cost/Revenue assessment
  • Do we benefit from strong margins?
  • Is our revenue are predictable?
  • Do we have recurring revenue streams and frequent repeat customers?
  • Are our revenue streams diversified?
  • Are our revenue streams sustainable?
  • Do we collect revenues before we incur expenses?
  • Do we charge what customers are willing to pay for?
  • Our pricing modes capture full willingness to pay?
  • Do we benefit from economies of scale?

Strengths vs weakness of Infrastructure Assessment
  • Are our key resources difficult or simple for competitors to replicate?
  • Are our resource needs predictable?
  • We have access to resources as we need them?
  • Do we have to maintain high volumes of stock?
  • We efficiently execute key activities?
  • Are our key activities are difficult to imitate?
  • Our production quality is high and consistent?
  • Do we balance in-house with external execution?
  • Are we are focused and work with partners when necessary?
  • Do we have strong relationships with our key partners?

Strengths vs weakness of Customer Interface Assessment
  • Are our customer churn rates low?
  • Is our customer base is well segmented?
  • Are we continuously acquiring new customers?
  • Are our Channels are efficient?
  • Are our channels effective?
  • Channel reach is strong among our customers?
  • Can customers easily see our channels?
  • Channels are strongly integrated?
  • Do our channels provide economies of scale?
  • Are our channels aligned to our customer segments?
  • Do we have strong customer relationships?
  • Is relationship quality aligned with customer segments?
  • Do relationships bind customers through high switching costs?
  • Is our brand strong and recognisable?

Threats

Threats are external factors that pose risks or challenges to a business's performance and profitability. These factors are outside the control of the business but can have a significant impact on its operations. Threats may include intense competition, economic downturns, changing consumer preferences, disruptive technologies, regulatory changes, or supplier-related risks. By identifying potential threats, businesses can proactively develop strategies to mitigate risks, adapt to changing conditions, and stay resilient in the face of challenges.

Threats to value proposition assessment
  • Are substitute products and services available?
  • Are competitor threatening to or offering similar products/service at lower rates?
Threats to Cost/Revenue assessment
  • Are our profit margins threatened by competitors or technology?
  • Is a disproportional amount of our revenue coming in from a minority of streams?
  • Are any revenue streams at risk of disappearing or decreasing in flow?
  • Which costs are unpredictable and my increase?
  • Which costs threaten to outpace the revenue they support?
Threats to Infrastructure 
  • Could we face a disruption in the supply of certain resources?
  • Is the quality of our resources threatened in any way?
  • What key activities might be disrupted?
  • Is the quality of our activities threatened in anyway?
  • Are we in danger of losing any partners?
  • Might our partners collaborate with our competition?
  • Are we too dependent on any particular partner or supplier?

Threats to our Customer interface
  • Could our market become saturated soon?
  • Are competitors threatening our market share?
  • How likely are customers to defect to a competitor?
  • How quickly will competition intensify in our market?
  • Do any competitors threaten our channels?
  • Are any of our channels at risk of becoming irrelevant to our customers? 
  • Are any of our customer relationships in danger of deteriorating?

Opportunities

Opportunities are external factors in the business environment that have the potential to contribute positively to a company's growth and success. These factors arise from changes in the market, industry trends, technological advancements, emerging consumer needs, or regulatory shifts. Opportunities could include expanding into new markets, introducing innovative products or services, leveraging partnerships or collaborations, or capitalising on favorable market conditions. Identifying and seizing opportunities can enable businesses to enhance their market position and achieve sustainable growth.

Value proposition Opportunities
  • Could we generate recurring revenues by converting products into services?
  • Could we better integrate our products ore services?
  • Which additional customer needs could we satisfy?
  • What compliments to or extensions of our Value proposition are possible?
  • What other value could we provide to our customers?

Cost/Revenue Opportunities
  • Can we replace on-time transaction revenues with recurring revenues?
  • What other elements would customers be willing to pay for?
  • Do we have cross-selling opportunities either internally or with partners?
  • What other revenue streams could we add or create?
  • Can we increase prices?
  • Where can we reduce costs?

Infrasturcture opportunities
  • Could we use less costly resources to achieve the same result?
  • Which key resources could be better sourced from partners?
  • Which key resources are under-exploited?
  • Do we have unused intellectual property of value to others?
  • Could we standardise som key activities?
  • how could we improve efficiency in general?
  • Would IT support boost efficiency?
  • Are there outsourcing opportunities?
  • Could greater collaboration with partners help us focus on our core business?
  • Are there cross-selling opportunities with partners?
  • Could partner channels help us better reach our customers?
  • Could partners compliment our value proposition?
Customer Interface opportunities
  • How can we benefit from a growing market?
  • Could we serve new customer segments?
  • Could we better serve our customers through finer segmentation?
  • How could we improve channel efficiency or effectiveness? 
  • Could we integrate our channels better?
  • Could we find new complementary partner channels?
  • Could we better align channels with customer segments?
  • Is there potential to improve customer follow-up?
  • How could we tighten our relationships with customers?
  • Could we improve personalisation?
  • How could we increase switching costs?
  • Have we identified and "fired" non profitable customers, if not why?
  • Do we need to automate some relationships
the above are not an exhaustive list, they are merely a brain teaser a starting point to get started with a SWOT analysis.

Blue ocean Strategy framework

The Blue Ocean Strategy framework is a strategic management concept developed by W. Chan Kim and Renée Mauborgne. It provides a systematic approach for creating uncontested market spaces, referred to as 'blue oceans', where businesses can thrive and compete in a less crowded and highly profitable market.

The framework is built on the premise that instead of engaging in head-to-head competition in existing markets (red oceans), businesses should seek to create new markets with little or no competition. Here's a quick overview of the key components of the Blue Ocean Strategy framework:
  • Value Innovation: the cornerstone of the framework. It involves simultaneously pursuing differentiation and low cost to create a leap in value for both customers and the company itself. By offering a unique and compelling value proposition, businesses can break away from the competition.

  • Four Actions Framework: helps businesses identify new value propositions by challenging four key questions: 
    • Which factors that the industry takes for granted should be eliminated? 
    • Which factors should be reduced well below the industry's standard? 
    • Which factors should be raised well above the industry's standard? 
    • Which factors should be created that the industry has never offered?

  • Six Paths Framework: assists businesses in identifying new market opportunities by considering alternative perspectives. It explores six different angles: 
    • looking across industries, 
    • strategic groups, 
    • buyer groups, 
    • complementary products and services, 
    • functional/emotional appeal, 
    • and time

  • ERRC (Eliminate-Reduce-Raise-Create) Grid: guides businesses in systematically evaluating and strategising the key factors affecting competition. It helps identify which factors can be eliminated or reduced, which can be raised, and which new factors can be created to deliver a unique value proposition.

  • Non-Customers: The framework emphasises the importance of targeting non-customers as a source of untapped market potential. By understanding the needs and preferences of non-customers and tailoring products or services to attract them, businesses can expand their customer base and create new demand.
Overall, the Blue Ocean Strategy framework provides a structured approach for businesses to break away from fierce competition and explore new market spaces. It encourages innovation, value creation, and the pursuit of uncontested market opportunities to achieve long-term success.


To merge this concept with the business model framework we will focus our efforts on the four actions framework. If you observe the Business model canvas you will see that it is divided into two halves, the left being the cost-side and the right being to value-side. You can think of the right side as what you do to provide value to customers and the left side what you do to create that value.

when it comes to the left hand side of the business model canvas, focus on 
  • Which factors that the industry takes for granted should be eliminated
  • Which factors should be reduced well below the industry's standard?
when it comes to the right hand side of the business model canvas focus on
  • Which factors should be raised well above the industry's standard? 
  • Which factors should be created that the industry has never offered?
by following the above approach you will successfully integrate both the blue ocean framework and the business model canvas, by visualizing all the building blocks of your business model it is easier to identify the operational blocks which can be eliminated or their cost reduced while at the same time looking to increase the value provided to customers. one thing to keep in mind is that we must focus our efforts where they will make the most impact, reducing the cost of something little will not impact the greater whole, look for high impact changes first.

Thursday, 11 May 2023

Business model design

"Business Model Generation" is a book by Alexander Osterwalder and Yves Pigneur which introduces the Business Model Canvas, a visual tool for creating and analysing business models.

The book is divided into five parts:

  1. Canvas: section introduces the Business Model Canvas and explains how to use it to design, test, and iterate on business models.
  2. Patterns:  section describes business models with similar characteristics, similar arrangements of business model building blocks or similar behaviours. Theses similarities are referred to as Business model patterns.
  3. Design: section delves into various design techniques which one can use to better create a value added business model
  4. Strategy: section deals with reinterpreting business strategy through the lens of the business model canvas, it helps constructively question established business practices while examining the environment in search of new opportunities.
  5. Processes: section proposes a generic business model design process, which is adaptable to to an organisations specific needs.

Overall, "Business Model Generation" is a practical guide for entrepreneurs, innovators, and business leaders who want to design and optimise their business models to create value for customers and achieve sustainable growth. 

Design

The design section of the book focuses is on the practical aspects of designing and implementing effective business models. It provides a number of techniques and tools to help design better and more innovative business models

Customer Insights

The Customer Insights section emphasizes the importance of understanding your target customer segments in order to create a business model that addresses their specific needs and preferences. The section provides guidance on how to gather and analyze customer insights, and how to use this information to refine your business model.

Some key steps in the Customer Insights section include:
  • Identifying your target customer segments: This involves defining the specific groups of customers that your business is targeting, based on factors such as demographics, behaviors, needs, and preferences.
  • Gathering customer data: This can be done through various methods, including surveys, focus groups, interviews, observation, and social media monitoring. The goal is to gather information about customer needs, pain points, preferences, and behaviors.
  • Analyzing customer data: Once you have gathered customer data, the next step is to analyze it to identify key insights and patterns. This can involve categorizing data, creating customer personas, and identifying common themes and trends.
Using customer insights to refine your business model: Based on your customer insights, you can make adjustments to your value proposition, channels, customer relationships, revenue streams, and other aspects of your business model to better meet the needs and preferences of your target customers.

Overall, the Customer Insights section of the "Design" chapter emphasizes the importance of gathering and analyzing customer insights in order to create a business model that is well-aligned with your target customer segments. By understanding your customers' needs and preferences, you can create a more compelling value proposition, more effective distribution channels, and more valuable customer relationships, ultimately leading to greater success and profitability for your business.

Talking about customer insights is one thing but actually mapping them is a different story 

A common technique to gain customer insights is an empathy map, which is a tool used in design thinking as well as OCM to help understand the needs, desires, and pain points of a particular user or customer group. It's a visual framework that helps teams gain a deeper understanding of their target audience's perspectives and experiences, which can then inform the development of more effective products, services, or communication strategies.

An empathy map typically consists of a simple diagram with four main quadrants and two sub suctions:


  • See: This quadrant captures what the user sees or observes. This includes their physical surroundings, the people they interact with, and any other contextual information that may be relevant.

  • Think and Feel: This quadrant captures what the user is thinking and feeling about their experiences. This includes their beliefs, attitudes, and emotions, as well as any biases or assumptions they may hold.

  • Say and Do: This quadrant captures what the user says and does in response to their experiences. This includes their verbal and nonverbal communication, as well as any actions they take in response to different situations.

  • Hear: This quadrant captures what the user hears from others, such as feedback, opinions, or advice.

  • Pain: what are the users biggest frustrations, what obstacles stand between them and what they want or need to achieve, and finally which risks might she fear taking?
By filling in each quadrant of the empathy map with relevant information, design teams can gain a more holistic view of their target audience, and identify opportunities to improve their experiences and meet their needs more effectively.

Ideation

Ideation is the process of generating and refining ideas for new business models. It provides guidance on how to use creativity and innovation to develop unique and compelling business models that can drive growth and profitability.

Some key elements of the Ideation section include:
  • Understanding the market and industry: This involves conducting research on market trends, customer needs, and industry dynamics to identify potential opportunities for innovation and disruption.
  • Brainstorming and ideation: This involves generating a large number of ideas for new business models, without judgment or evaluation. The goal is to encourage creativity and generate a wide range of possibilities.
  • Idea selection and evaluation: Once a large number of ideas have been generated, the next step is to evaluate them based on criteria such as feasibility, scalability, profitability, and alignment with the organization's mission and values.
  • Prototyping and testing: This involves creating a prototype or minimum viable product (MVP) to test and validate the business model in the market. This can involve testing assumptions, gathering feedback, and refining the model based on customer insights.

Overall, the Ideation emphasizes the importance of creativity, innovation, and experimentation in developing new business models. By generating a wide range of ideas, evaluating them systematically, and testing and refining the most promising ones, organizations can create business models that are well-aligned with market needs and trends, and that have the potential to drive growth and profitability over the long term.

The process of ideation can be viewed as a process of both divergent and convergent thinking.


Divergent thinking is the process of generating a wide range of ideas or possibilities. In ideation, this phase involves using various techniques such as brainstorming or mind-mapping to explore as many potential ideas as possible. The goal is to generate a high quantity of ideas without evaluating them or worrying about their feasibility. This approach encourages creativity, curiosity, and openness to new perspectives and possibilities.

Convergent thinking, on the other hand, is the process of evaluating and selecting the most promising ideas. In ideation, this phase involves reviewing and analyzing the ideas generated in the divergent thinking phase to assess their feasibility, impact, and value. This approach encourages critical thinking, analysis, and synthesis to arrive at a workable solution or idea.

The ideation process typically involves alternating between these two modes of thinking, starting with divergent thinking to generate a large quantity of ideas, and then moving to convergent thinking to evaluate, select, and refine the most promising ideas. This iterative process allows teams to continually build on and refine their ideas until they arrive at a viable and effective solution.

Overall, the divergent and convergent thinking approaches used in ideation complement each other to create a well-rounded and robust ideation process.

In the context of business model design, the divergent process encompasses many different techniques to help us create new models which challenge the status quo and suspend concerns of operational challenges, the main focus is to dream during the divergent phase.

when rethinking business models we can focus on four primary sources of innovation, and of course there is always the exception:


Resource driven: innovations originate from an organisation's existing infrastructure or partnerships to expand or transform the business model.




Offer-driven:
Innovations create new value propositions that affect other business model building blocks.



Customer-driven: innovations are based on customer needs, facilitated access or increased convenience. Like all innovations emerging from a single epicentre, they affect other business Model building blocks.



Finance-Driven: Innovations driven by new revenue streams, pricing mechanisms, or reduced cost structure that affect other business model building blocks.



Multi-Epicenter driven: Innovations driven by multiple epicenters can have significant impact on several other building blocks.

The Ideation process:

Leveraging design thinking to solve a problem is best described as structured chaos, it is important to start from a seemingly chaotic place, cast a wide net and then wrangle the chaos to something cohesive. Design thinking can be thought of as a controlled brainstorming session:
  • Team composition: Have a diverse team, different ages, genders, career levels, left and right brained people, the more opinions the better.
  • Immersion: live and breath the model, do the research, speak with customers, try the product or service, feel what works and what doesn't, understand the pain and pleaser points, empathize with the customer segments.
  • Diverge: iterate through each of the 9 business model building blocks, grow them, push them to their limits and beyond, go for quantity, do not limit yourself with feasibility. 
  • Converage: go through all of the ideas, the team came up with during the divergent phase and begin to focus to the most impactful and feasible ones (3 to 5), one caveat is to not discount crazy ideas, but instead refine them into feasible ones, use them as a starting point; try to redefine each solution to an actionable one before discounting it.
  • Prototype: After the converegent phase is complete aim to prototype the new business models.
During the design thinking process keep the following in mind:
  • Stay focused: Have a strongly defined problem statement around a specific customer need.
  • Prepare: Get the group into the right headspace, immerse the team in the problem, interview customers, go to the physical location, use the product or service, experience it from the perspective of the user.
  • Wild ideas welcome: Don't worry about feasibility, think crazy and wild, be divergent.
  • Quantity over Quality: During the divergent phase aim for as many ideas as possible as long as they meet the problem statement.
  • Defer judgement: During ideation do not discourage or discount any ideas, have an open mind.
  • Respect the speaker: One conversation at a time, one of the strongest ways to develop an idea is with the 'yes and' paradigm, for this to work, everyone must hear the idea.
  • Sell your idea: sketch the idea out, define the process with stickies, draw it out on a storyboard, act it out in a one (wo)man play, whatever it takes to convey your idea.
  • Think visually: Once your idea is understood define it as a sticky, don't lose it once the group understands, document it onto a board, move it around, combine it with other ideas, often times crazy ideas lead to solutions.

In short:
  1. Start by defining a problem statement
  2. Think of dozens of solutions, crazy, wild ideas,
  3. Converge on a 3 to 5 feasible solutions.
  4. Prioritise them, by some rubric that makes sense, then for each viable idea
    1. Design it
    2. prototype it
    3. test it
      • if the test fails, learn from your mistakes and prototype again.
      • if the test succeeds, validate it on a larger scale
Rinse and repeat till you are satisfied with a solution.