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Entrepreneurial Design: Building a business that customers love and with which you earn money

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Why should anybody care for your business? How do you find the right thing customers love and with which you earn money? What are the jobs-to-be-done for your customers. The presentation was held at the StartupCamp Switzerland 2014. It is all about finding the right business model and how to develop a real, customer tested business from your idea. Cases are blacksocks, Über, Mytaxi, AirBnB, Krinner, Geberit and many others.

Publicado en: Empresariales, Tecnología
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Entrepreneurial Design: Building a business that customers love and with which you earn money

  1. 1. Doing the Right Thing is the essence of entrepreneurship StartupCamp Switzerland 2014 Patrick Stähler, fluidminds
  2. 2. However, what is the right thing?
  3. 3. What are innovative companies that wowed you lately?
  4. 4. «To WOW customers and to earn MONEY is key»
  5. 5. Outside the box thinking We need new boxes for fresh ideas. We see only what we are able to see. What are the new boxes?
  6. 6. What is this?
  7. 7. What is this?
  8. 8. Same thing, different perspective!
  9. 9. „Which innovation expanded the global market for mobile communication the most?*“ *After the invention of mobile telephony itself
  10. 10. Which innovation made this possible? Dr. Patrick Stähler | 10
  11. 11. A small c ha opened n nge in billing ew mark ets in Africa, A sia, Lati n Americ Youths, e a, tc.. Prepaid
  12. 12. Innovation is all about being different
  13. 13. But if everybody is doing he same, you have to find something else
  14. 14. The best is if your customers love your business due to your fantastic value proposition and and your ability to deliver what you promise
  15. 15. Do you know this man? Hans Rausing = Inventor of the Tetra Pack Systems Dr. Patrick Stähler | 15
  16. 16. He could have sold his packaging machines, but…
  17. 17. But he sold packaged services Tetra Pack is not a product innovation but an implementation of a n innovative value proposition aka business model
  18. 18. The business perspective: Technology or a new product does not create value. It is the business model that creates value X product/technology value creates enables business model defines business strategy
  19. 19. The customer perspective: Technology does not create value. It is the value proposition the customer loves product/services X happy customers solves creates customer problem business model addressed by delivered by value proposition
  20. 20. „What is a business model? “
  21. 21. The business model is the DNA of your business Are you aware of your DNA?
  22. 22. The business model gives meaning to your employees and customers
  23. 23. 4 key questions for a successful business: What excites our customers? How do we create value for our customers? How do we earn money? Value Proposition Value Architecture Revenue Model Who is on our team? What values do we pursue? Team & Values
  24. 24. „ What industry are we in? Who are our competitors? “
  25. 25. „ In which industry are we in? “
  26. 26. „That was the job the customer wanted to do. “ Dr. Patrick Stähler | 26
  27. 27. Customer job to be done We do not need a drilling machine, screws and dowels. We want to hang up a picture. Customers hire a product or service to get a job done. The products are a means to an end, not an end in themselves. The value proposition creates the value for the customer, not the product!
  28. 28. Value Proposition The job-to-get-done is solution neutral. The job is to hang up a picture. Potential solution: §  The drilling machine, the dowel and screws §  Hammer and nail §  Powerstrips® by Tesa §  A friend with a drilling machine It is of uttermost importance to understand the core job we solve for our customers
  29. 29. What excites our customer? Value Proposition Customer •  Who is our customer? •  What job do we solve for them? Value •  What value do we create for our customers? What value do we create for our partners?
  30. 30. Customer job to be done Is it easy to put a Christmas tree straight up and keep it there safely and green?
  31. 31. There was no big market for Christmas tree stands until Mr Krinner saw the badly solved job
  32. 32. „What is the job customers want to get done in their vacation?“
  33. 33. Customer job to be done We want the perfect vacation. We want to relax and restore our batteries. We want to learn more about a country and enjoy life. What job did the travel agent solve in the past? What is today's job he gets done for the customer?
  34. 34. How do we create the value? Value architecture Offer •  What is our offer? Distribution & Communication Channels •  How do we reach our customers? •  How do we communicate with our customers? Core Capabilities •  What are the core capabilities we need? Partner •  What partners do we need? Value Chain •  What activitites do we have to do to produce our offer? •  How does our value chain look like?
  35. 35. Architectural innovation Customers have to transport and assemble the furniture by themselves, thereby saving IKEA two expensive steps in their value chain Value Proposition A new value proposition beyond price and good design is created: Instant satisfaction without waiting for the later delivery of the furniture
  36. 36. How do we earn money? Revenue Model Cost Structure •  Cost structure is defined by your value architecture. Revenue Sources •  With what do we earn money?
  37. 37. Revenue Model Innovation Power-by-the-hour: Jet engine maintenance paid by the hours in service Value Proposition Airlines get variable costs that depend on their business success.
  38. 38. Who is on our team? What values do we live? Team & Values Team •  Who is in our team? •  What competencies do we have in our team? Values •  What values do we life in our team? •  How do we interact with each other and with customers?
  39. 39. Questions for a Successful Business Model Value Architecture Offer What is our offer? Value Proposition Distribution & Communication Channels How do we reach our customers? How do we communicate with our customers? Value Chain What are our value creating steps? What is our value chain? Core Capabilities What are the core capabilities we need? Customers Who are our customers? What job do we solve for our customers? Customer Benefit What benefit do we create for our customers? What benefit do we create for our partners? Partner Which partners do we need? Revenue Model Cost Structure Cost structure is defined by the value architecture. Revenue Sources With what do we earn money? Team & Values Team Who is on our team? What competencies do we have on the team? Values What values do we pursue? How do we interact with each other and the customers?
  40. 40. Questions for a Successful Business Model Value Architecture Offer What is our offer? Value Proposition Distribution & Communication Channels How do we reach our customers? How do we communicate with our customers? Value Chain What are our value creating steps? What is our value chain? Core Capabilities What are the core capabilities we need? Customers Who are our customers? What job do we solve for our customers? Customer Benefit What benefit do we create for our customers? What benefit do we create for our partners? Partner Which partners do we need? Revenue Model Cost Structure Cost structure is defined by the value architecture. Revenue Sources With what do we earn money? Team & Values Team Who is on our team? What competencies do we have on the team? Values What values do we pursue? How do we interact with each other and the customers?
  41. 41. usiness Model Questions for a Successful Business Model In the end the Value Architecture value proposition Offer bution has to work. &What is our offer? Communication els o we reach our customers? Value Chain o we communicate with steps? What are our value creating What stomers? is our value chain? Core Capabilities What are the core capabilities we need? Value Proposition Distribution & Communication Channels How do we reach our customers? How do we communicate with our customers? Value Proposition Customers Who are our customers? What job do we solve for our customers? Customers Who are our customers? What job do we solve for our Customer Benefit customers? What benefit do we create for our customers? What benefit do we create for our partners? Customer Benefit What benefit do we create for our Partner Which partners do we need? customers? What benefit do we create for our partners? Revenue Model er Cost Structure Cost structure is defined partners do we need? by the value architecture. Revenue Sources With what do we earn money? Team & Values Team Who is on our team? What competencies do we have on the team? Values What values do we pursue? How do we interact with each other and the customers?
  42. 42. Geberit – a product innovator or is there more? From plumber supply to under-the-wall systems for baths
  43. 43. Customer job to be done Geberit understood that the badly solved job in the sanitary industry was, how fast a bath room can be renovated. With Geberit’s products you can renovate bathrooms faster and in Geberit is the better quality. And they master in understood that plumbers understanding how to build and use are their core sales bathrooms. channel.
  44. 44. Business Model: Why homeowners love Geberit? Value Architecture Offer Value Chain Value Proposition Distribution & Communication Channels •  Plumbers are the sales channel •  Architects are used for direct communication with homeowner Customers •  Homeowners Job-to-be done: •  Get my bathroom renovated very well (design & quality) with as little hassle as possible Customer Benefit Core Capabilities •  Faster and more convenient renovation of baths •  Actually, it needs a lot of initiative not to get Geberit (Plumbers offer only Geberit) Partner •  Deep understanding how baths are •  Architects renovated & used •  Plumbers •  Understanding how homeowners decide to procure sanitary equipment Revenue Model Cost Structure •  Installation systems are more expensive than pure toilette tanks Revenue Sources •  Willingness of homeowners to pay more is higher due to the benefits speed & design Team & Values Team •  Plumbers, Engineers, Marketeers •  Diverse team Values •  high quality •  long lasting products •  looking for better solution. Always!
  45. 45. Business Model: Why plumbers love Geberit? Value Architecture Offer Value Proposition Distribution & Communication •  Planning tools (CAD, product Channels •  Plumbers are reached with direct handbook) sales, classical marketing •  integrated logistics •  trainings, material, certificates •  via training Value Chain Customers •  Plumbers Job-to-be done: •  Have little hassle as possible with a customer job and still earn a high margin Customer Benefit Core Capabilities •  Easy to plan, order, prefabricate and install all components •  All components from one supplier •  Satisfied homeowners that pay a higher price •  New products for upselling Partner •  Deep understanding how plumbers •  trade schools work and think about their business (Handwerkerkammern) •  Training know-how •  Partner & eco system mgm’t Revenue Model Cost Structure •  All these tools for plumbers cost money Revenue Sources •  Geberit earns money via end customers •  Some income for trainings Team & Values Team •  Plumbers, Engineers, Marketeers •  Diverse team Values •  long-term thinking, willingness to invest long-term in relationship with plumbers •  innovative solutions
  46. 46. Let’s be a traveler. You arrive at Cairo Airport. What are your first thoughts? “Is the taxi driver trustworthy? Does he know the way? Will he take the direct and safest way?”
  47. 47. “Ok, I found a taxi I like, but I just have no local currency. Does he take credit card? Does he give me a proper receipt for my company expenses?”
  48. 48. Many badly solved jobs in taking a taxi in a not wellknown city. Is there not a better solution than taxi queues or a taxi call with a different number in every city?
  49. 49. Customer job to be done Get safely, without any hassles, with an acceptable level of quality and for a reasonable price from A to B in a city
  50. 50. „What could be a solution for all these badly solved jobs of a customer?“
  51. 51. Just an app or a business model innovation? Über or m yt solve the axi job to fin d a trustw orthy ta xi
  52. 52. What’s in for the customer? With a simple app he can solve his job of simple traveling with a taxi
  53. 53. Easy receipt management On a business travel you have one receipt for all your taxi expenses during a trip.
  54. 54. Easy Expense Mgmt for firms mytaxi makes life of big business customers like consultancies easier by central invoices and central analysis of travel expenses (if integrated into AirPlus account)
  55. 55. Integrated payment processes Easy pap erl process w ess payment ith online receipt f or handling expense . Easy tip pin Wow, gre at for dr g. ivers!
  56. 56. There is a big fight in the moment between mytaxi and drivers due to new auctioning pricing model
  57. 57. Business Model: Why do customers like mytaxi? Value Architecture Offer •  taxi app to connect passengers with drivers Value Chain Ordering taxi Core Capabilities Value Proposition Distribution & Communication Channels Customers •  local mytaxi offices for drivers •  word-of-mouth/ Online Marketing Matching passenger & taxi Payment passenger & taxi Receipt mgmt (business) Customer Benefit Partner •  optimal organization for matching drivers and passengers incl. payment process. •  Passengers •  Passengers Driver • •  Businesses with Job-to-be-done Job-to-be-done travels many business Getting rides and • •  Finding quick a good •  Drivers passengers taxis without hassle •  Mgmt of receipts •  Hotels, Restaurants with many guest who order taxis •  Bringing ordering a taxi into Direct booking without • •  Direct booking with push of the digital age dispatch center one button •  Passenger: Easy to get a taxi of No entry fee, contract • •  Known quality no taxi driver good quality of obligation Easy payment • •  Driver: Easy to get passengers •  Easy receipt management Simple payment process • •  Simple & integrated processes Revenue Model Cost Structure •  asset light. No ownership of taxis or other transportation means Revenue Sources •  Takes a cut of 2.75% from direct payments via mytaxi, base fee 0.79 € •  no entry fee, no contract obligation Team & Values Team •  Entrepreneurs, User interface designer, marketeers, actually at beginning nobody with knowhow of the taxi industry Values •  Entrepreneurial drive •  Don’t ask for permission ask for forgiveness
  58. 58. Business Model: Value Architecture Offer •  taxi app to connect passengers with drivers Value Chain Ordering taxi Core Capabilities Value Proposition Distribution & Communication Channels Customers •  Passengers •  Businesses with many business travels •  Drivers •  local mytaxi offices for drivers •  word-of-mouth/ Online Marketing Matching passenger & taxi Payment passenger & taxi Receipt mgmt (business) Customer Benefit Partner •  optimal organization for matching drivers and passengers incl. payment process. •  Hotels, Restaurants with many guest who order taxis •  Bringing ordering a taxi into the digital age •  Passenger: Easy to get a taxi of good quality •  Driver: Easy to get passengers •  Simple & integrated processes Revenue Model Cost Structure •  asset light. No ownership of taxis or other transportation means Revenue Sources •  Takes a cut of 2.75% from direct payments via mytaxi, base fee 0.79 € •  no entry fee, no contract obligation Team & Values Team •  User interface designer, marketeers, actually at beginning nobody with knowhow of the taxi industry Values •  Bringing «ordering and Entrepreneurial drive •  paying taxis» to ask fordigital Don’t ask for permission the forgiveness age
  59. 59. mytaxi is not the revolution of the taxi business. However the new model addresses many deficiencies of the old experience Job-to-be-done •  Get safely, without any hassles, with an acceptable level of quality and for a reasonable price from A to B "Old" experience "New" experience •  Queue in line, hail a taxi on street or find a number to call a taxi •  Request taxi via app •  Taxi ride starts with unknown driver, quality experience may vary •  Customer knows which taxi & driver will arrive at what time •  Cash payment required (and maybe driver tries to rip client off…) •  Automated, cashless payment •  Client has to ask for receipt •  Online receipt for expense handling •  Client has to hand in receipt to employer to get expenses back •  Easier expense report handling •  Complain with driver (or company) if service was not satisfying •  Easily rate/review experience via app
  60. 60. Customer job to be done I want a very special place to stay, at a good price, and want get local insights where to go out, to eat and to shop. Of course, I want to know if I can trust the person I stay with.
  61. 61. AirBnB opened a whole new segment of offers to the individualistic traveler of today
  62. 62. Would yo ud this? Wha are to say t would b e answer o f your bo the ss? “Well, I know we are in a commodity market where the price is key, but I believe we can sell the good for 10x as much as before.”
  63. 63. mytaxi is not the revolution of the taxi business. However the new model addresses many deficiencies of the old experience Job-to-be-done •  Get safely, without any hassles, with an acceptable level of quality and for a reasonable price from A to B "Old" experience "New" experience •  Queue in line, hail a taxi on street or find a number to call a taxi •  Request taxi via app •  Taxi ride starts with unknown driver, quality experience may vary •  Customer knows which taxi & driver will arrive at what time •  Cash payment required (and maybe driver tries to rip client off…) •  Automated, cashless payment •  Client has to ask for receipt •  Online receipt for expense handling •  Client has to hand in receipt to employer to get expenses back •  Easier expense report handling •  Complain with driver (or company) if service was not satisfying •  Easily rate/review experience via app
  64. 64. Customer job to be done I want a very special place to stay, at a good price, and want get local insights where to go out, to eat and to shop. Of course, I want to know if I can trust the person I stay with.
  65. 65. AirBnB opened a whole new segment of offers to the individualistic traveler of today
  66. 66. Even more individual choice for the traveler who looks for the special place to stay AND connect to the people of the place he visits: AirBnB
  67. 67. Easy to book, transparent pricing: AirBnB
  68. 68. Building trust by very personal reviews (peer-topeer social control mechanism plus insurance coverage)
  69. 69. Business Model: Why do customers like airbnB? Value Architecture Value Proposition Value Proposition Distribution & Communication Channels Channels Offer •  Website, App to connect B&Bs with customers Value Chain Build up BnB offer Help find right spot •  word-of-mouth •  sales crew for BnB owners Match needs & offer Core Capabilities Core Capabilities •  Acquisition of BnB places •  Quality & Trust Mgmt •  Know-how of locations Payment & GTC Reputation & Trust Mgmt Partner Partner •  n./a. Customers •  Customer (Travelers) Households that offer •  • Customer (C) looking BnB Job-to-be-done Job-to-be-done to for special place •  Finding a special place to Earning money • stay Have •  •  stay the world at home Private households • (PH) who to know the Getting offer BnB hidden gems of destination Customer Benefit Customer Benefit •  PH: Income and international •  Offer very rent Refinancing • contacts for special places that BnB owners •  cannot booked by platform Trust provided anywhere else •  C: places to stay that are •  Connect with locals that share Risk of damage • outside the norm is insured •  their insights Connecting with people from •  Contacts with locals abroad Revenue Model Cost Structure Cost Structure •  running site & acquisition costs of BnBs (PH) •  asset light Revenue Sources Revenue Sources •  Customers pay BnB owner •  Takes services fees from the rent the households get (app. 15%) Team & Values Team & Values Team Values •  n/a Travel like a human
  70. 70. Business Model: Why do customers like airbnB? Value Architecture Value Proposition Distribution & Communication Channels Offer •  Website, App to connect B&Bs with customers Value Chain Build up BnB offer Help find right spot •  word-of-mouth •  sales crew for BnB owners Match needs & offer Core Capabilities •  Acquisition of BnB places •  Quality & Trust Mgmt •  Know-how of locations Payment & GTC Reputation & Trust Mgmt Partner •  n./a. Customers •  Customer (C) looking for special place to stay •  Private households (PH) who offer BnB Customer Benefit •  C: places to stay that are outside the norm •  Contacts with locals •  PH: Income and international contacts for BnB owners Revenue Model Cost Structure •  running site & acquisition costs of BnBs (PH) •  asset light Revenue Sources •  Customers pay BnB owner •  Takes services fees from the rent the households get (app. 15%) Team & Values Team Values •  n/a Travel like a human
  71. 71. Finding a place to stay in a city and connect to locals Client problem •  I want a very special place to stay, at a good price, and want to connect with locals to get their insights where to go out, to eat and to shop. •  Of course, I want to know if I can trust the person I stay with. "Old" experience "New" experience •  Having friends in a city where you can stay •  (Not) Finding via web offers directly from BnB owners •  Asking tourist information at your destination •  Read Lonely Planet or visit Tripadvisor •  Go to Interhome to find flat and holiday homes •  Stay in overpriced, commodity city hotels AirBnB offers everything on one site •  Finding the right neighborhood in a city •  Find & book the right place (room, local person) •  Payment Settlement •  Trust & Reference Building
  72. 72. Customer job to be done I want to fly conveniently from A to B for a good price.
  73. 73. Southwest: the innovator of the no-frill business model for airlines Client problem •  I want to fly conveniently from A to B for a good price. "Old" experience "New" experience •  Flights go often via big hubs where transfer is a hassle •  You pay for services you might not need (like baggage, food, lounges, credit card payments, etc.) •  Intransparent pricing, different prices per sales channel •  Direct flights. No hassle for catching connecting flights •  Pay for what you want and value (Check-in bags, reserved seats, SMS Flight Details) •  Direct sales via Internet, no travel agencies Customers just pay for what they really want!
  74. 74. Would yo ud this? Wha are to say t would b e answer o f your bo the ss? “Well, I know we are in a commodity market where the price is key, but I believe we can sell the good for 10x as much as before.”
  75. 75. The magic formula for great firms Customer utility + customer value price + company profit costs
  76. 76. A deliberate change of a business model is a great strategy Starting points of business model innovation §  Business Model: Value Architecture Offer Value Proposition Distribution & Communication Channels Customers All components of a business model are starting points for innovation §  Value Innovation §  Architectural Innovation §  Revenue Model Innovation §  Value Chain Cultural Innovation Customer Benefit Core Capabilities Partner Revenue Model Cost Structure Revenue Sources Team & Values Team Values §  At the end, all business model innovation must create more value to the customers
  77. 77. StartupCamp Switzerland 2014 Dr. Patrick Stähler, fluidminds Entrepreneurial design – how to bring it alive?
  78. 78. Tools for Entrepreneurial Design Business Model Canvas Business Model: Value Architecture Offer Design Thinking Process 1 Use the canvas to develop your business Distribution & Communication model Channels 2 Customer Insight Value Proposition -  Customers -  -  Value Chain -  3 Ideate Understand Observe your customers What job is not yet or badly solved? How does the Customer Experience Cycle look like? On what customer insights is your idea based? validate customer insight -  -  -  Develop as many ideas as possible in the area of -  customers/ value proposition -  value architecture -  revenue model understand the current solutions and their strength & weakness understand how the potential customer thinks and decides understand the market & market mechanism Customer Benefit Core Capabilities Partner 4 5 Design -  -  Revenue Model Cost Structure Revenue Sources -  -  -  Team & Values Team decide for three or four options design the business models for the options check the interdependencies in the business models work on the uniqueness (positioning) optimize the building blocks 6 Decide & Prototype -  -  -  -  -  decide for the best model to go for build prototype test prototype with customers write business case decide again or work on different option Build & Learn -  -  -  execute business model learn continuously from customer feedback and control KPIs adjust and refine continuously the business model Values Multidisciplinary Teams The right culture & values
  79. 79. 1 2 Customer Insight -  -  -  -  Understand Ideate -  Observe your customers What job is not yet or badly solved? How does the Customer Experience Cycle look like? On what customer insights is your idea based? validate customer insight 4 3 Develop as many ideas as possible in the area of -  customers/ value proposition -  value architecture -  revenue model -  -  understand the current solutions and their strength & weakness understand how the potential customer thinks and decides understand the market & market mechanism 5 Design -  -  -  -  -  decide for three or four options design the business models for the options check the interdependencies in the business models work on the uniqueness (positioning) optimize the building blocks 6 Decide & Prototype Build & Learn -  -  -  -  -  -  -  decide for the best model to go for build prototype test prototype with customers write business case decide again or work on different option -  execute business model learn continuously from customer feedback and control KPIs adjust and refine continuously the business model
  80. 80. Designing is a process of opening your mind and focusing at the end Point of View 1 2 Customer Insight 4 3 Understand Ideate 5 Design 6 Decide & Prototype Build & Learn
  81. 81. Creating Business model design is a creative and analytical process at the same time. There is a reason why god gave us two brain hemispheres
  82. 82. Innovation Culture & Diversity
  83. 83. Where do we get a Value Innovation from? Let‘s find new customer insights as a starting point Business model innovation New value proposition Customers’ insight
  84. 84. 1 Customer Insight -  Observe your customers What job is not yet or badly solved? -  How does the Customer Experience Cycle look like? -  On what customer insights is your idea based? -  validate customer insight
  85. 85. Value Proposition Customers Who are our customers? What job do we solve for our customers? The best way is to start with the job we solve for our customers?
  86. 86. How can we find systematically new customer insights? Customer Experience Map Buy Delivery/ Assembly Usage §  Understand how the customers are buying, using and disposing the product §  Understand the whole lifecycle of customers‘ utility Complements Service Disposal §  How can we improve the buyer‘s utility cycle? §  Can we do more for the customer? §  Can we leave something to the customer? Source: cp. Kim, W.C., Mauborgne, R., Knowing a Winning Business Idea when you see one, HBR Sep-Oct. 2000
  87. 87. Unsolved job-to-be-done What is the biggest problem with socks?
  88. 88. Blacksocks – we save the world from socks problems Starting

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