Alexander Osterwalder – Value Proposition Design

good afternoon so let me is called business two buttons let me see who’s more on the button side who considers themselves a designer okay let’s see if we’re the business part is who considers themselves a businessperson and who is at the intersection and feels like they’re a great designer and they know something about business okay good that’s where you should be because I’m going to talk about value proposition design I’m going to be a bit more on the business side but I believe that today technology people and design should actually understand business and the why the goals extremely well how are you going to do good design if you don’t understand the why okay so we’re going to look at the value proposition canvas a tool that we made from one of these two books but I’m mainly going to share some of the lessons let me just see to get a feel for the audience who of you has ever heard of or used the business model canvas canoe of you has ever heard or used the value proposition canvas is a bit less we’re going to play with that a little bit later I’m going to share a couple of lessons most of my time I’m actually not speaking or writing I’m trying to be an entrepreneur as my side job we’re trying to create something crazy probably 20-year vision the strategic operating system for companies like Nestle ge you know the biggest companies in the world so completely crazy so we need to understand the why of our customers really well so when I got invited I thought wow that’s great but then I realized well buttons what do I know about design I’m a designer at heart but I don’t have a design profession and I wasn’t sure could I really deliver something of value to a design audience or design and business but design profession and then I fell into this you know the creative process as you’ve seen this slide it’s my favorite slide who’s ever been in this situation work begins you procrastinate months then you panic and say I gotta get it done you sweat being there okay so I did figure out but actually I have something to say even at the four o’clock in evening I hope I can keep you awake right so I think real magic happens value for customers but also to the business is at the end of the day you know we don’t we shouldn’t be just did business driven but we need to create financially sustainable organizations if we want to continue to create value for customers we shouldn’t forget of course ethics and morals in the process as we heard today which I fully agree with okay but I think this intersection between design technology customers and business is where real magic happens and I’ve been living at this intersection I’ve been trying to make tools so people from the different areas here can better collaborate and create value I don’t think these collaborations are great yet here’s some proof 72% of all new product and service launches flop 72 percent what does that mean let me translate 7 out of 10 new products or services they fail so look around you there are only three per 10 people to do the math look around you seven of you are working on something that’s going to fail hands up if you’re working on something that’s going to flop and some of you know it some of you can tell what it for your hand up because you don’t want to say tell the truth right now is it because people are stupid absolutely not it’s because the processes are often broken it’s how we work that leads to this it’s not the people themselves it’s the processes that we have in companies often in particular when we do new stuff okay so let’s get beyond this but I want to get us to discuss very quickly chat with your seat neighbor for one minute one minute have you ever been in this situation where a product or service has flopped because there was bad collaboration between the different stakeholders meaning design technology and business okay share one one of your strongest experience in this field just one minute with your seat neighbor let’s go with your CE neighbor come on one minute one minute okay okay brought my Swiss bail I’m from Switzerland can we agree on something that when I ring the bell that you put that you actually just focus on me again put your hands up if that’s okay with you Swiss timekeeping good I did this in Kuwait last week and then a Lebanese came up and said Alex you can’t do that we do that for the goats it’s disrespectful is that what it works okay so timekeeping because I’m do a couple of exercises like this afterwards okay so he said seven out of 10 products flop why is that since the Swiss are not very funny I’m going to show you a Silicon Valley parody telling us why do products often flop see if the sound works as usually when you test it it doesn’t work see nope okay so we won’t be funny because I can’t I’m Swiss we don’t do that even when I pay rise and here we go so you can laugh when you want to make me happy you don’t have to okay let’s if hey I’ve got a great idea for a business that’s exciting tell me about it I’ve developed a chemical isomer that links to volatile organic compounds causing carbon bonds corruptor and ramps them in a nanotube coating huh that’s a little confusing can you dumb it down for me sure what I do is I take a proprietary isomer that I developed with a picric acid wash that hollows out the carbon bonds and replaces them with a nanotube wrapping okay so I guess it’s pretty technical oh yeah I’ve been working on this isomer for nine years so what’s the business idea to sell it to who everybody will want one what for so they can wrap their volatile organic compounds in carbon nanotubes hmm I think you might need a target customer I don’t think I need to wrap my compounds in your nanotubes well maybe not you so for people who buy it what’s the value you are providing I’ve developed a chemical isomer that links to volatile organic compounds causing carbon bonds corruptor and ramps them in a nanotube coating you’ve said that already this is getting annoying why should anyone care about your isomer I spent nine years on this okay obviously this is just a parody would never happen to any of us right but the reality is we get so excited about what we’re doing and what we’re working on that we sometimes forget this very simple thing of you know mapping back to the customer how are we really creating value and why okay so while it’s common sense it’s not common practice so I think we can do better so I’m going to talk about a couple of things six things actually five six if I can make it the UX and UI of business tools my profession I make tools for business people designers technologists understanding value propositions you’re going to play with the value proposition canvas and then this Lean Startup thing who’s heard of Lean Startup so I’ll take this kind of an interesting angle on it build measure learn really you’ll see okay testing lessons from the field if we get there okay so let’s start with this one who have you has one of these in their pocket today one of these like this one but you’re a really interesting person like this is the first mobile phone ever it’s the Motorola DynaTAC you have one in your pocket can you pull it out out of your suitcase sorry so crazy right 1985 nobody has these things anymore would pull it out in a meeting well if we look at the tools we often pull out in business and design meetings they’re from 1985 like why the heck would you do that you don’t pull out a phone from 1985 so why is it when it comes to some of the business tools we use in design technology you know marketing etc where we work together they come from 1985 so well changed a little bit since then so I think that’s a bit of a problem so I love this quote from Marshall McLuhan our age of anxiety is the result of trying to do today’s jobs with yesterday’s tools so I think tools are not just a template I can make one and no I think these are serious things that help us do better work and they actually help us always focus on the why and they help us go beyond what I see a lot in meetings with business people of course but also designers a lot of blah blah blah how do we get beyond the blahblah with better tools when we started out when I started out working doing it doctoral thesis on this we came up with this one for the topic of business models and the idea was to create something that can tell the story talking about stories tells the story of how as an organization you create delivering capture value okay so that thing worked pretty well we’re pretty curious so a lot of use on YouTube but also millions of downloads so that made us curious when I say us it was then back then my former PhD supervisor and my close up co-author and friend beam yure we asked ourselves why and we did a little bit of research so we figured out business tools like that like the business model canvas work well because the visual according to the people we interviewed because they facilitate a group discussion okay which is very important in today’s world with a lot of people collaborate on products okay and they’re practical and simple conceptually sound which is actually something that’s pretty hard to achieve and the last one their intuitive we can pull them out in a meeting and we can start working with them we get better and better with them okay so that’s the first part then we ask well how did this thing actually create value for you and we figured out you’re a couple of things I’m going to emphasize just because it’s important for this audience well it creates a shared language better tools personas is one that you’re familiar with but I think we need to go beyond those right story mapping is another one there’s series of tools that we need to master because they create a shared language it’s incredibly important shared visual language they lead to better teamwork and very important for us better collaboration across disciplines because design alone business alone technology alone can’t do it and we know that but we don’t have yet the right process is to work well in these multidisciplinary teams so we need to get there okay so this was where we started out and the idea was okay people are going to map their business miles and they did millions literally millions of people did that but then we saw another phenomena like often when you design well the reality look different who’ve used a lot of you have your hands up who have used done this terms of sticky note in that value proposition block right but you were using the wrong tool for the wrong job and we realized that that well maybe we’re doing something wrong here we need another tool one for those of you who know the business model canvas this is the box for the value proposition maybe we need another tool not to tell the story of how we create value as a business but how we create value for customers so we said ah let’s come up with another tool one that goes hand in hand right so we focused on here the value proposition for specific customers we wrote a new book we came up with this framework which we’re going to look at a little bit later on just okay we have customers could we go beyond the persona and really understand their jobs pains and gains and then map back to that how our products and services are actually creating value and use it as a map that explicitly shows throughout a project from the idea to the implementation how we’re creating value for customers and it’s literally a map because this will change with your customer understanding we heard a lot about talking to customers and understanding it’s part of your profession right okay gives you the fit allows you to tell the story the story of how you create value for customers it answers the why again and again and again so it’s different from the business wide this is the customer why how are you creating value for your customer okay so we came up with this tool the value proposition canvas and we started using it what we realized is there is actually some value in these business tools so at that point we had to and what I realize is there’s a UI and a UX to business tools most frameworks they stay frameworks and they suck us to using them in the meeting great good ideas but nobody worked on the user experience of using that tool in a business meeting or in a design meeting or in in a technology meeting so we started like insanely working on this for the tool you’ve just seen the value proposition canvas which I’ll explain in a minute it worked it started out like this we had the concepts we had to put them together it looked like this it was something that in a talk at Stanford I drew on the iPad it looked like this when people said oh that’s an evolution from your first tool that replaces the first one then oh you don’t get it but we also realized maybe which is too stupid in terms of tool design to not make it explicit what this thing is for so we went through all of these design iterations with Allen Smith my co-founder and designer then all of a sudden this circle and square started to emerge okay I realize hmm we’re on to something that could work and it became the value proposition canvas so we worked on the interface of the business tool the concepts were right we knew that but we had the interface wrong crazy right interface of the business tool who would think that well it turns out if you get it right people use it which led to a great user experience okay so that’s why the tool kind of took off and then the other thing why these this circle and square work is because it’s an and all of this then you can say oh I can put my customers in to this bigger picture and my value proposition oh maybe I have two customer segments and have two value propositions so it’s like Lego you can put them together and that’s the way you want to use all kinds of tools that you use in design you want to use them together and you want to figure out what are the API the application programming interfaces between your tools so to a certain extent we need to become surgeons of business tools and design tools okay so let’s go into the value proposition canvas and I’ll quickly show you a video I’ll give you an example and then I’m going to get you to start working with a little exercise okay because only about a third as has heard of the tool or use the tool every day companies design products and serve is to improve their customers lives 72% of new products and service innovations fail to deliver on expectations this means that customers don’t care about 7 out of 10 new products introduced to the market it doesn’t have to be this way just like you create value of your business with the business model canvas there is in fact a tools intentionally visualized design and test how you create value for customers it’s called the value proposition canvas the value proposition canvas is composed of two parts the customer profile and the value Maps with a customer profile you describe the jobs your customers trying to get done jobs can be functional by getting for me to be socials like impressing friends and colleagues or emotional like gaining peace of mind you highlight your customer pains which annoy customers watch them to get a job done pains and negative outcomes that customers hope to avoid like dissatisfaction all of the solutions and challenges frustrations risks or obstacles related to performing the job and you outline customer gains which describe how customers measure the success of a job well down gains are positive outcomes if customers hope to achieve my concrete results benefits and even aspirations it’s the customer profile to visualize test and track your understanding of the people or companies you intend to create value for it’s a map that becomes clearer the more you learn about your customers the second part of the canvas is the value map with it you list the products and services your value proposition builds on you describe in which way these products services and features are pain relievers how they eliminate reduce or minimize pains customers care about making their life easier and you outline in which way they are game creators how they produce increase or maximize outcomes and benefits that your customers expect desire or would be surprised right the value map makes explicit how your products and services relieve pains and create gains use it to design test and iterate your value proposition until you figure out what resonates with customers you achieve SiC by creating a clear connection between what matters to customers and how your products services and features these pains and create games great value propositions target essential customer jobs pains and gains and do so extremely well your customer profile may contain countless jobs pains and gains but your value map highlights which ones you intend to focus on don’t forget an outstanding value proposition can still fail if your business model is flawed successful companies embed outstanding value propositions scalable and profitable business models ok so on the right hand side we understand the customer different versions l but that’s a persona well now you look at the actionable stuff that really matters to customers for your product jobs pains and gains what are they trying to get done what pisses them off and what are they trying to achieve ok and on the left hand side you map you make explicit what exactly are we addressing which pains are we addressing which gains are we addressing so you make a selection over here understanding over here design and that goes from the strategic design of the products and services the value proposition all the way down to website design all the way down to designing certain aspects of a website because all of those things have one purpose to create value for the customer and if we think the bigger picture value for the business right and hopefully you’re in a business that allows you to participate so value proposition canvas so we’re going to work on a little bit but first I want to want us just to look at this thing called jobs to be done customer jobs who’s worked with jobs the jobs to be done concept okay if you haven’t I would highly recommend you look at it there couple of authors out there that talk about Otoniel wick and clay Christensen really go a bit deeper because at the end of the day you’re in helping customers get something done you don’t ask them what do you want you ask them what are you trying to get done and you’re helping them that get that done now let’s look at this for a second in the music industry jobs actually don’t change very much but the solutions do so I like this just as an illustration of how a good customer understanding is more important than looking at the solution all the time so if we look at the music industry so the job to be done is listening to music the solutions were what in 1983 we had records anybody remember records I tell my kids from a record what again the museum then over here we have so that was a big part we have the cassettes okay that was 47% and here we have the CDs which was only 0.5% now let’s look at what happened here over the next couple of decades so what happens is the cassettes eat up the vinyl the LPS right cassettes get bigger and CDs at the same time eat up cassettes okay CDs take over everything many of us remember that and then what happened all of a sudden in 2003 CDs they dominate the market and then it changes okay well the internet became big download a lot there okay albums on the internet music videos so it goes away paint goes away and in 2013 the picture is very diverse so see how fast the solutions can change so if you have a fundamentally good customer understanding it will be a lot easier in terms of jobs pains and gains of staying up to date with the technology solutions it’s pretty amazing thing how fast that goes and we see that in many many different industries in areas okay so if we look back at the bigger picture I’m going to give you one example and it’s not at the level of user experience design it’s at the level of business design okay I think it’s good for us to think business because together as collaborators from those four areas remember that I mentioned we create value together I think business people should become better designers and designers should become better business people okay who agrees with that receipt took a little bit of risk I see nobody put their hand up I should’ve just left the stage so let’s look at this thing called Hill t anybody of you ever heard of heel T funny right none of using the construction industry that’s their customer segment I’m always amazed they have a wonderful brand what did Hill T do well there were a manufacturing company focusing on selling light machine tools for builders like drills ok then they asked themselves a couple one two decades ago man we make great drills but they’re so good the customers never replace them how can we continue to exist not even to grow but just to sell enough so we could pay our people so they had to kick-start growth and they said well we need to understand customers good news is they had a direct sales force that could really talk with customers deeply and what they figured out is the biggest job to be done is obviously not to buy a drill not even to make a hole what was the biggest problem of these construction workers and their companies the biggest job was this managing maintaining and replacing the tools meaning having the right tool at the right construction site at the right time what do you think that’s such a big issue for a construction company right tool right place right time and it needs to work because if it doesn’t this small silly tool teams might stop the whole construction site might stop and it becomes very expensive for the construction companies you have to pay penalties that was the big job the big pain so the question is okay how does a customer profile then look like so he’ll be started not just mapping out the customer profile of construction workers but they said let’s try and understand the construction companies and in particular their CEOs okay so who you target is important so they started to understand I’ll keep it high-level if you do this for real you would go a lot more in detail okay so the examples are relatively high level so take a CEO of a construction company medium small would be finding and executing contracts respecting deadlines planning to sleep that’s what they’re trying to get done what are the pains related to that well they want the news tools but they don’t want to invest in tools they definitely don’t want broken tools stolen tools or delays resulting from that because that leads to penalties leads to stress leads to financial problems so we have the pains and when you think of pains is not just stuff that doesn’t work its risks that customers users might have that they fear okay real or not doesn’t matter it’s a fear of a custom that we should understand now what were the objectives obviously they want to have profitable contracts they want access to newest tools because that leads to safety most important they want 100% uptime and predictable cost thanks you can already see their conflicts here newest tools but they don’t want to invest in them so what could heal to do what could they do in terms of product or service design how could they create value would another drill do it another better drill faster more precise better looking wouldn’t work right so they ask themselves well if we prioritize here most important they started to prioritize these jobs pains and gains they ask themselves what could we create what’s the value proposition to help these people the new thing that they could create to create more growth and they came up with this thing here sir briefly have you ever wanted to just focus on your work and forget about administrative issues and managing your tool fleets if so tool fleet management Hill sees long term tool usage service is for you we take care of your tools while you focus on the job GUILTY helps assure that your team will have the best tools each unique and labeled using RFID and an inventory number that you can maintain control of your tool fleet if something breaks down no problem you’ll see has another way to make your work easier we repair or replace your tools quickly and no additional cost Hilti will also update your tools on a regular basis always with the latest generation models all this on a single monthly invoice okay see how that works so let’s map this out here we have the service but the service alone doesn’t matter it only matters if it addresses jobs pains and gains so let’s make this mapping explicit okay well no cost for repair and replacement all we saw something over there subscription model oh so I get access to the newest tool and I don’t have to pay an upfront investment huh that sounds like a interesting thing relieving some of my headaches let’s look at the game creators oh I now really get access to the newest tools helps me with safety and you replace my tools if they’re broken I don’t have to take care of shipping them around he’ll be took over the entire logistics which is a pain reliever and a game creator at the same time okay and all of that leads to what sound cost management so you need the same kind of thinking at the strategic level like here or at the tactical level where are you making things happen because behind this there was service design there was an online fleet management system but you can only make that when you understand the real motivations of your customers so you need to go deep and again sounds like a common sense not common practice if you don’t map this you won’t get it right because you don’t understand customers and you won’t get your team’s to understand because the technology people the business people and design people don’t speak together based on the same understanding of customers you ever seen that not having a shared understanding of customers somebody smiling right never happen in your company right so let me get you to work so we’re going to do a little exercise I believe in learning by doing so we’re going to distribute now I’m going to explain how all of you if we can get started yet all of you are you going to actually work in groups of two let me correct you’re going to work in groups of two as groups of two you’re going to get one value proposition canvas so when you get the pile please hand it over to the next people okay they’re free to downloads only one for two I know people start grabbing them you also get a set of stickers okay you get a set of stickers and on those stickers you have the elements of the customer profile you should normally of the customer profile and the value map of Tesla what you’re going to do first everybody listen what you’re going to do first is you’re going to take the stickers the yellow ones the customer profile and you’re simply going to map out the customer profile of a Tesla buyer that was the initial customer that Tesla targeted for the Model S upper middle-class American male higher income the last conference somebody said why do you put mail there well because that’s who they targeted they sorry they didn’t target women there so that was the segment that they were targeting so use the yellow stickers the yellow stickers here and map out the customer profile okay just the circle with the yellow stickers Tesla now to make it competitive I have Swiss chocolate with me the first team gets a wonderful little box of access to heaven okay so let’s go you got three minutes no no you can’t have it yet you need to get it done first oh thought your turn about the chocolate it’s just a circle just a circle is it a job is it a pain is it again jobs pains gains of a Tesla Barchester the yellow ones let’s see if you paid attention you’re going to get grades at the end of this done okay we got the first team gets a chocolate everybody else hurry up let me see if it’s right close you go okay it’s already gone the chocolate sorry there’s no no second price we had some laggards got it good no more chocolate okay ten more seconds ten more seconds for those who are not done so much chocolate okay okay Shh let’s look at this together so you got a slightly simplified version I’m going to give you the jobs pains and gains one or two more here so if we look at at this customer segment we have commuting to work conveying an image of success so again there’s one or two more here differentiating from others occasional long distance trip being in sync with personal values remember in the video we said there are functional jobs social jobs and emotional jobs what would be a social job here convey an image of success right that’s not a functional job okay so even when you design you need to ask yourself what are the functional jobs really purely technical and which ones are the social jobs or the emotional jobs nobody buys a Swiss watch to read the time right you buy Japanese watch for that okay so that joke sorry told ya so here now let’s look at the pains we have charging time frequent charging fear of dead battery lack of space geeky perception this one’s interesting I did this with with 700 engineers at sa P and they said Alex geeky perception is good right then look at the customer segment who what’s good in one segment is not is the pain for another okay these people do not want to be perceived as as geeks okay so then we have the gains what are they trying to achieve well they want performance they want attractive design they want a certain range they want safety and they want the latest features actually talking more about a car this piece of software okay so what I want you to do now based on this is the next step okay we got the jobs pains and gains and now you need to come up with the value proposition you got the stickers so it’s pretty straightforward you put the stickers on the square I got one more box of chocolate let’s see okay let’s go over here was first sorry let me check it’s kind of right there close enough close enough close enough there you go already done no more chocolate no more chocolate sorry okay okay let’s look at this together now you know what it actually doesn’t matter that much where you put them because at the end of the day when you work as a team you just need to get two things right everybody in the team needs to agree that it should be there on that side and on that side and what else even more important it should correspond to the reality that those are the jobs pains and gains of your customers and you need to test that we’ll get to that so let’s look at this side here I just put the car here okay just the car but there are other things that we could also put as services if we want but here most important well we have some of the kind of headache pills for this over here battery capacity high speed charging free charging stations think of it that’s not made charging stations available throughout the US and in Europe for free it’s as if that Volvo journal would have gas stations that’s an incredible investment right so that you could say could be a service I put it here as a as a pain reliever because these are fears that these people have even if it doesn’t correspond to the reality okay then we have two more the luxury image okay these guys and guys literally they don’t want a geeky perception they want an image that corresponds to hey you know this is a real car this is like a German car and it’s Silicon Valley kind of interesting right and then the last one the space that blew me away kind of quite a lot of space because there’s no engine now let’s look at the gain creator so I think the Tesla did what they had to do to take away the fears but they where they really excel is at the top okay so here we have the performance first then obviously we have the range which is important still okay but together with the performance I think the second most important is the award-winning design turns out Tesla for their designers and for their engineers they put German cars BMW and BMWs and Mercedes is in the courtyard so every evening they could drive home with a car it couldn’t keep them how to bring them back it was a German car to get the experience not a French car okay not an American car sorry not a Swedish car not Swedish anymore if I understood right so a real performance engine okay then this becomes a lot more of a software product it’s not just hardware anymore cars actually get better if the software gets better okay luckily most cars are not powered by Microsoft yet right but can we trust that’s not we’re not so sure yet right but it turns out even though what we’ve seen the press they’re trying to kind of create some fear around it Tesla is rated as the safest car not the safest electrical car the safest car by the US government agencies okay so gives us this connection between what matters to customers and how we actually create value so the question is is there a fit between the two again this is what we observe we don’t design a customer here there are a lot of sticky notes over here is where we make design choices on the strategic level and on the implementation level okay if you use this as a communication tool you will get a lot clearer so if we look at did this work well it’s one of the most innovative companies but also in terms of sales but all the numbers from last year that’s not outsold all other electric vehicles by far but they also outsold other cars which they consider as competitors Audi BMW and Mercedes okay now that was in the US on the global stage for a very long time there were number two they were behind the Nissan Leaf until you might remember this they launched the new model and they pre-sold in one week three hundred and twenty five thousand cars they didn’t even have the factories to do it and not even the design the car wasn’t done and three hundred and twenty five thousand people put money on the table to get that car guess what Elon Musk took that money went to the banks or that proof that evidence and said hey Bank can you give me a couple of billion dollars so I can build the factories here’s proof pretty strategic pretty interesting right but fit right real fit love mark brand so when we look at fit we actually want to go beyond the kind of high level that I showed you we want to be able to quantify gains and pains in terms of money percentages or time go to a bank how long do I have to wait investment product how much do I expect in terms of performance here percentage etc okay that means us as designers of value of value proposition designers we need to ask how can we eliminate decrease reduce or minimize the pains over there and that goes at the strategic level and at the implementation level and everybody should understand what we’re trying to achieve as a team as an organization okay goes even beyond companies it’s for governments not for profits the same thing how do we create value then on this side it’s about how do we create increased improve or maximize gains again if we can quantify we should because if you can’t quantify over here how are you going to judge if your design actually creates value you said I mean we’re often very fuzzy over here personas from your two fuzzy the sense that how am I going to make a good design design decision if I don’t know what jobs pains and gains really mean in a hardcore way okay so it makes those things practical and it’s not either/or it’s personas and this kind of tool okay so not one or the other so what we’ve seen in the other example is simply just something like this what kind of range do these customers expect what kind of range do we deliver we should be able to do that for our products waiting time on a website etc etc etc okay good now you’ll have a lot them a lot of time left do more things to say first build measure learn really who performs build measure learn who does this stuff Lean Startup it’s not a trick question you can put up your hand if you do it who does it who tests their designs their user experiences who I was getting a bit nervous here so we can just use a different word right but here’s the thing so of course this is important I’ll give you a counter example of Tesla anybody remember better place okay better place what did they try to do said what we want to take away the biggest pain of electric vehicles what’s the biggest pain charging time right what if I could drive in a battery swapping station change the battery and drive out wouldn’t that be great of course so what did better place to they started building that infrastructure because they raised a lot of money because they had a senior executive who was going to be the CEO of SA P so very experienced he could sell to investors and then they went bankrupt how much money can you lose with this kind of idea what do you think quite a bit right their case it was 850 million dollars like put a pilot or some bags here just light them okay it was because they didn’t test nor their value proposition or their business most so of course this doesn’t work so ok let’s use this Lean Startup thing testing our business ideas build measure learn write build a prototype or a mock-up or a wireframe measure with customers and learn guess what happens if you should tell people build measure learn designers and technologists they’re going to build something but what you want to first do is actually think dream conceptualize and hypothesize and ask yourself the why so basically before doing all of this you need to shape your business ideas and ask one thing what needs to be true for my idea to work you come up with hypothesis and then you can maybe build something but probably not we’ll see that in a second so we can switch to the iPad for a second so your job is not actually to build but when you go from idea to you see what this is if you my drawing skills are good enough from idea to this is a hundred million dollar business if you haven’t seen it flags on the rooftop and so on okay don’t laugh it’s not very flattering okay what’s it what’s at its maximum when you do that it’s uncertainty and risk okay uncertainty and risk is that its maximum should you build something to test now no you should do something else the only thing you need to do in you may build maybe not is to reduce uncertainty and risk how do you do that well it could be that we build something but what if you talk to customers first before you build anything before you do a mock-up etc well practice this in a second you’re very likely to be wrong that’s okay ten customers said you don’t understand their business you don’t know what they want you failed okay we reduced risk okay we do that again we do a wireframe whatever okay we fail again because they say you still don’t get it what is important is that we respect this we start very cheap and we increase our investment over time and for me I think even a wireframe is sometimes too much of an investment if I didn’t understand the jobs pains and gains of my customers yet okay so this is a really important drawing that you should also use with business people because testing and wireframes they don’t give a but when you talk about risk and uncertainty and how to reduce that then you got the rear okay so we can switch back please so what I like here if we can switch back to the slides please is this idea bring it back to we heard about into it before let’s bring it back to better place most companies can say for every one of their failures they had a spreadsheet that looked awesome what does that mean can always make the numbers look good but if you don’t test the numbers mean nothing okay so the blank we’ve certainly heard of Steve Cain Venter of the Lean Startup before Eric Ries made it popular because you need to get out of the building and talk to customers so why don’t we do that and ask ourselves that concrete thing so do a little exercise with you what you really want to do before you build or wireframe anything is this ask yourself what are the hypothesis and which ones are the most important ones and then you wireframes you test something maybe you don’t need to okay so I do likes to talk about design thinking and how you actually test things so they talk about desirability should should we build it feasibility can we build it viability so do people want it and should we do it from a financial point of view or can we build it so the same thing for business models and value propositions okay interesting thing here desirability feasibility viability do customers want it can I build it should I build it from a financial point of view okay same thing same thing here for the right-hand side for those of you know the business model canvas for the value proposition tennis same thing now what I want you to do for one minute it’s an exercise customer discovery normally you should be good at this right it’s part of your job doing customer discovery who’s ever done customer discovery talk to customers to test things great let’s see how good you’re at it so in groups of two one of you is an entrepreneur innovator okay not a designer for a moment entrepreneur innovator or intrapreneur you’re actually going to talk to a customer think of it this way you are at Colgate an innovator and you go gate you know Colgate toothpaste toothbrushes you just invented a new tooth whitening device great technology you can make up the features the design whatever you want okay that’s up to you your only task is to go talk to customers it’s your first series of customer discovery interviews to figure out is there a market for this tooth whitening device got it so in groups of two same groups one of you is the Colgate innovator and tries to figure out is there a market for this device you can make up the features everything let’s go one minute one minute exercise so turn it off you’re doing okay I’ll have another five minutes is that okay okay okay so let’s see how good you were let’s see how good you were at this so normally you should not ask for opinions like would you buy this do you like this device how much would you pay that’s not good why because you’ll get opinions what you should have done better a lot better Zack for ask a fact when is the last time you googled white tooth whitening when is the last time you spoke to your dentist about tooth whitening coming on this you get facts you get evidence customer discovery is not about opinions it’s about evidence that’s facts okay second little trap here who have you focused on the solution the product right would you buy this device well I told you it’s the first batch of customer discovery interviews maybe you didn’t hear that or you didn’t listen you should have first focused on the circle remember the circle then the square what are the most important things you’re struggling with how does your tooth hygiene look every day okay customer first jobs pains and gains you don’t need to build anything you don’t need even to have a drawing of that device your first series of customer discovery interviews is focused on the circle okay that’s the first thing you need to do simple lesson again common sense but not common practice okay so when you have this thing you know this map you have three goals invalidate what was wrong on your map you may even have seen more and more people taking these this value proposition canvas into customer discovery interviews you cross out after 10 20 what was wrong okay or you validate after ten twenty hundred five hundred interviews you start to see well those are patterns you might say oh maybe I see the pattern in that segment in that segment you so you start segmenting based on jobs pains and gains and then of course while you’re doing this you will see a lot of new things and I know you do this in your job but do you map it explicitly and share with everybody else in your team in other disciplines that’s the tricky thing okay we need to go beyond disciplines and share if we don’t have visual tools we’ll remain in the blah blah blah and continue to create seven out of ten products that fail okay so here you can see some from a real project where this is actually an industrial company where they start putting this on the wall and they have a series of this and if we look at it more concrete one this was a customer profile they put this number here so they kind of repurposed the tool which means eleven out of the twenty interviews that they did had exactly this kind of pain okay simple stuff against common sense but mapping is not common practice yet so powerful to discuss with business people and technology people in the whole process then we had another one here that we saw people labeled it see this is the job and these are the pains related to the job so they would put letters on it so simple stuff to have a shared language and a better understanding in this case of the customer before the design even and the last thing I’ll leave you with that we need to stop after this is working visually which you and the design profession do really well but you need to do this with business people display all of the customer interviews organize find pattern and patterns in those jobs pains and gains synthesize and come up with those new things okay and then you can make your persona after that I think that’s great but not before and then you start designing okay if you don’t have this good understanding design makes no sense even wire framing makes no sense okay you need to start from a good understanding here and all I wanted to give you this idea of visual tools you can use hours you can use others it’s extremely powerful you already have a tradition of using this do this more with business people that will help the whole kind of organizational space go beyond what I like to say blah blah blah we can’t live with blah blah blah thank you very much for your attention thank you please say thank you so much Alex and oh so you got a two of us several questions yeah so we’ve had a full day we have been inspired I have lots of ideas how to make this last what would your advice be I told conference experience doing it I think you know finding projects where you can actually almost infiltrate and start using these visual tools with you know people in your team with business people using their language so remember I used uncertainty and risk I think the big thing is we know and when I say we I’m a designer at heart you know belong in this community and when we use our jargon people will go like this if we start using business words then design will come here if we’re open to business people and don’t vilify them I heard today a couple of you know all these business people and I think we’re in it together right we’re in it to create value so we need to use each other’s vocabulary and create a shared language let’s just kind of my take on it any design words that are you know like really horrible to hear for business people design words yeah people cringe up prototyping back up yeah I think so like you know in a workshop they’ll like it okay but not in a real meaning it’s ain’t gonna be now true okay so if we have a look at the broader picture like we’ve been here for full day at this conference and we’ve had it eight speakers yeah from you know sharing different perspectives and insights and some of them really gave us some shivers and tomorrow we go back to our ordinary jobs so how do you take action on on all the inspiration and insight to you can turn from today like what would be your tips two things one I found it fascinating the passion at this conference you know just also you know from the topics but also the audience really we want to create value we believe in the Y we want to go beyond all making money you know that kind of stuff I think that’s great and we should bring that back and we should spread that passion but again kind of you sleep okay that will get people in as partners not as enemies I usually like when people after a conference they say they make a contract with themselves take a piece of paper write down what’s the one thing you’re going to do differently tomorrow the one thing just start with one if you have five you’re never going to do them and then sign it okay sign it because otherwise it’s not a contract I think it’s as simple as that and maybe not think that everybody in your company is in the same mindset when you get back that is so great thank you so much Alexandra Walker is volume Thank You Anthony here and here of course it gets for you

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