Tag Archives: startups

What is Business Design?

Business Design is an emerging commercial discipline. The best definition of business design that I have seen comes from IDEO, the company that first introduced me to the concept:

“Business designers take juicy, creative, human-centered innovation and make it succeed out there in the real world. We [IDEO] use strategy, analysis, and financial modeling as generative design tools, and help organizations turn their biggest, wildest ideas into businesses with long-term viability.”

Source: Rotman School

The Rotman School of Business at the University of Toronto defines it as follows:

“Business Design is a human-centred approach to innovation. It applies the principles and practices of design to help organizations create new value and new forms of competitive advantage. At its core, Business Design is the integration of customer empathy, experience design and business strategy.“

What does a Business Designer do?

During a discussion with Lorenz Koder Fort at IDEO, I learned that the key activities of a business designer are:

  • understanding the business and the competition
  • providing industry perspectives
  • designing experiments for prototyping
  • measuring the results of those experiments
  • identifying risks and mitigating strategies
  • identifying differentiation strategies
  • developing business models/cases with financial models to support investment

Source: Medium post from Misa Misono, ex-IDEO

In particular, he intimated that Business Designers are focussed on the Viability segment of the Feasibility, Viability, Desirability nexus (diagram above). As such, IDEO assesses potential Business Designers along 4 core pillars within that:

  1. Market Navigation
  2. Prototyping & Offer Design
  3. Business Modelling
  4. Storytelling

There’s also a great summary of the typical work of a Business Designer given in the LinkedIn bio of Alvaro Rojo, Business Design Lead at Fjord:

  • Disruptive trends & competitive forces
  • Discovery-driven planning
  • Customer experience strategy
  • Value proposition design
  • New product/service development & execution
  • Market size & growth
  • Ecosystem mapping
  • Roadmapping
  • Go-to-market strategy & international expansion
  • KPIs modeling & tracking
  • MVP & in-market prototyping
  • Product/market fit optimization
  • Business model design & monetization opportunities

Finally, Tsukasa Tanimoto’s informative Medium post contains this succint explanation of the difference between a Business Designer and a Management Consultant:

Source: Medium post by Tsukasa Tanimoto

Who offers Business Design services to their clients?

Many companies offer Business Design-type services to their clients, but here is a selection of some interesting companies in this space:

  1. IDEO
  2. Fjord (owned by Accenture)
  3. EY-Seren (owned by EY)
  4. MAYA Design (owned by BCG)
  5. PA Consulting
  6. frog design
  7. SYPartners
  8. Fahrenheit 212
  9. ?What If! Innovation

How can I learn Business Design?

You can study an MBA with a major in Business Design at the Rotman School of Management at the University of Toronto.

The Stanford Hasso Plattner Institute of Design, or “the d.school“, seems to be a renowned institution for the discipline. This makes sense, as David Kelley, one of IDEO’s founders, founded the d.school as well!

IDEO offers a lot of related short courses through their IDEO U website, but Designing a Business hits the nail on the head!

How can I become a Business Designer?

A lot of job ads state that MBAs are a “huge plus”, but in reality, it seems to me that they are pretty much a pre-requisite. In some ways, this makes sense, as a holistic view of a business is crucial to designing a good one! However, it does exclude the autodidacts among us.

Entrepreneurship experience is highly valued, as entrepreneurs have lived and breathed the design, prototype, and test cycle.

There’s further discussion of the role and what companies are looking for in a potential recruit on this post from an ex-IDEO Business Designer and the previously mentioned in-depth post from Tsukasa Tanimoto, a Service & Business Designer at Spotless.

Insight from IDEO: How to Prototype a Business

There’s a great post on IDEO‘s website on a topic that is fascinating to me: How to Prototype A New Business (from their Creative Confidence series).

The post is based around an interview (audio below) with Joe Gerber, the MD of IDEO CoLab, which is “a collaborative R&D Lab exploring emerging technologies and its future impact”.

Among some of the useful points, there is a nice lens that can be used to assess new businesses: Viability, Feasibility, and Desirability.

Source: IDEO

Prototyping is a key part of the Design Thinking process and this podcast shows how important it is in Business Design. This is because the hardest thing to predict is the desirability, so you have to test this empirically.

In the podcast, Joe goes into great detail about how you can do this by trying to sell the concept as if it were already a product to see if there is genuine customer appetite (he refers to setting up a “lemonade stand”).

There are some amazing resources linked on there such as Tom Hulme’s Business Model Canvas and a list of Prototyping Tools that can be used (both physical and digital).

Google to acquire Dyson?

Back in 2014/2015, I wondered whether it would make sense for Google to acquire Dyson.

Growth of Alphabet/Google hardware presence

In order to keep their advantage in the search and data sphere, Google (now Alphabet) ramped up their presence in lots of emerging hardware spaces via acquisitions such as Motorola, Boston Dynamics and Nest Labs. Also, Google has developed their own technology innovations at Google X (now simply X), such as the world-leading autonomous vehicle company, Waymo.

In order to fully commercialise such acquisitions and innovations, Google needed to have access to an abundance of world-class hardware product development and marketing experience.

Google made a step towards this in 2014 when they acqui-hired a design firm based in California called Gecko Design. However, I believed Gecko Design was not big enough to fill this void alone.

This left me wondering whether Dyson would be a good fit to help satisfy this need for design engineering firepower.

Dyson’s common interests with Google

Dyson was rumoured to be working on an electric car after it acquired battery company Sakti3 (which has now been publicly confirmed) and also invested £5m with my alma mater, Imperial College, to develop next-generation robots, resulting in the Dyson Robotics Lab.

Given Alphabet’s world-leading autonomous vehicle project, Waymo, and it’s previous interest in robots, I thought that an acquisition of Dyson would give Alphabet/Google a huge advantage with its massive team of 4,800 design engineers.

Dyson and Alphabet have other visions of the future in common. One notable example is Halo (see right), Dyson’s previous prototype of a Google Glass-type device that they built 10 years before Google launched it!

Would Sir James Dyson sell?

As of 2018, a tie-up between the two companies has not yet emerged. In many ways it is unsurprising, as Sir James and his family appear to own 100% of Dyson, so why give up control? (On that topic, there is a great interview with Sir James on NPR’s How I Built This podcast about how he grew his business which explains that surprising fact).

Also, Sir James is a vocal advocate of keeping engineers in Britain and growing British talent to boost industry and our economy.

His leadership on this issue includes launching his own university with a £15m investment, called the Dyson Institute of Engineering and Technology, and his £12m donation to Imperial College to launch the Dyson School of Design Engineering (as well as the previously mentioned Dyson Robotics Lab).

In short, I’m not going to hold my breath for this one. However, it will be fascinating to see how Google and Dyson both fare in the autonomous and electric vehicle markets. Perhaps future collaboration or a joint venture could be on the cards?

MirrorMirror: booth-based 3D scanner for online shopping

During the final year (2007-08) of my Physics degree at Imperial College, we studied a module called Research Interfaces (RI). This was a team-based module that focussed on transforming scientific research into commercial business propositions.

This was a highlight of the degree for me: I loved the collaborative nature of it and the entrepreneurial challenge was much more aligned with how I wanted to live my future life.

Our product design: MirrorMirror

Our team designed a product with the working name of MirrorMirror. It was a booth containing a network of cameras with a central computer that would stitch together the images to create a 3D scan model of the user’s body.

This would then be used to generate an avatar that would help them choose clothes that fit and suit them perfectly when shopping online.

Additionally, they could see their body on a screen in real time with different clothing options projected over the image as if they were wearing it (so-called “Augmented Reality”). This reminded us of the magic mirror from the Disney film, Snow White (hence the name MirrorMirror).

There could also be other uses like tracking weight loss for dieters and muscle gain for bodybuilders (if a new scan was made regularly to show the incremental changes) or the visualisation of the results of cosmetic surgery.

Technical Design

We produced several outputs for the class including this Technical Design Review.

In that document, we estimated the cost to build the prototype of £1.45m, a total future manufacturing cost per booth of £13,900, and a price point of £50,000.

This is exceptionally high and I believe it is a result of the fact that we were not actually required by the course to do any prototyping work. If we had, I think we would have focused on looking for a cheaper way to execute the plan.

Our original design required a screen behind a half-silvered mirror. I think in 2018 this would not be required as screens are not of incredible quality and image processing technology has come on exponentially in the last decade.

User experience

We believed that there are many high-end lucrative markets (such as wedding dresses, evening wear and saris) where a quicker and less stressful garment trial process would greatly add to the shopping experience.

Our team also saw the potential for future uses such as generating an accurate avatar of the person that can be used as a little virtual model for the clothes that are being selected. Imagine being email a picture of yourself wearing the latest items from your favourite designer and a link to buy exactly the right size for you?

We envisioned that booths could be installed in shopping centres, allowing customers to create a 3D image of themselves which they could then use to shop online. Additional lucrative applications could also include high-fashion hairdressing.

Our plan of the user journey is mapped in the image below:

User Journey for MirrorMirror

Business Case and Financial Model

You can see the basic financial model we generated here: MirrorMirror Costing.

When I say we, it was actually me that had the responsibility for putting it together and I could have circulated the draft to my team-mates before the deadline so we could have had more eyes on it before submission. We got our lowest grade by far for this part of the module, so I did feel a bit guilty! However, it was apparently the same for all the other teams, so my guilt was slightly assuaged.

After 10 years working in and around startups and scaleups, here are what I see as the big errors and omissions:

  • No time series for the values (everything is static)
  • Lag time between initial burn and revenue
    • A proper cash-flow model would have helped clarify this
  • Significant errors on the business model (i.e. how we could get paid)
    • For example, would we really want to make money on the hardware, or would we prefer to make money on the service provided by the software (i.e. charge money for every image processed – a digital version of the Nespresso model)
  • No R&D tax credits, Government grants, or other potential subsidies included
  • No marketing and sales budget included at all!

It is quite satisfying to look at old work such as this and compare it with what I have learned since then!

Final Pitch

At the end of the 3-month module, we had to deliver a pitch to a packed auditorium and a simulated panel of investors (made up by the professors from the Business and Physics department that ran the course).

You can see our final pitch document here.

This was a really enjoyable part of the course. I delivered it with 2 other teammates and we got everyone in the team up on stage for the Q&A at the end.

Outcome

We actually won the Elevator Pitch Prize at the end of the module which was a very personally satisfying way to end the project. We all received a good first for the course (>85%) which was very satisfying for all of us.

We entered into the wider university’s Business Challenge entrepreneurship competition, but we didn’t get past the initial screening phase. As a result, we all agreed to disband the project outside of the RI module and did not take it any further.

What didn’t we do?

It is quite telling that we didn’t build a prototype!!!

The reason that we didn’t build anything is that we didn’t have anyone that is super-focused on the tech side i.e. that could be a CTO. I also believe it is because we all saw this as a purely academic exercise and not as a true opportunity to start an entrepreneurial endeavour and make a return with it.

This tinkering on a prototype would have actually helped us see the true costs, challenges around manufacturing, and gaps in the business model. In fact, IDEO’s Design Thinking methodology (diagram below) expressly integrates prototyping as part of the design process. This project was perfect evidence of why that is the case.

I wonder if the Blackett lab requires the students on the RI course to build a prototype as part of the course nowadays?

Design Thinking Source: IDEO Mydhili Bayyapunedi @myd | @Young_Current

Hyperloop Alpha project concept

In 2012, Elon Musk and SpaceX published this project concept document for Hyperloop Alpha, a radical new method of intercity transportation.

The document is a 58-page proposed solution with rigorous calculations on all socio-techno-commercial aspects of the idea.

Hyperloop Alpha concept sketch (Source: original Hyperloop Alpha concept document)

How does it work?

Hyperloop Alpha is a public transport system that sends people in pods at high speeds through a tube kept at low pressure to reduce air resistance.

By using an electric fan at the front, you can mitigate the Kantrowitz Limit (think of the maximum speed limit of a liquid pushing through a tube such as a syringe). It also has the unique benefit of creating a low-pressure air cushion for the pod to ride on – known as an air bearing.

The design envisages using linear accelerators on the bottom of each pod to achieve a target speed of 760mph (1,2220 kph or Mach 0.99 at 20°C), albeit lower at points where there is a curve in the journey so that the g-forces experienced by passengers are lower.

On the topic of renewable energy, Elon mentions that the installation could be self-powered using solar panels installed on top of the tube. He also mentions that LightSail could provide energy storage, but this shows the age of the document as in late 2017 they all but went bankrupt. Perhaps Elon could consider Highview Power’s Liquid Air Energy Storage technology now!

Future of Hyperloop

SpaceX hosted a 1-mile long test track to help incubate Hyperloop technologies around the world. Now there are several organisations developing Hyperloop solutions, including Virgin’s Hyperloop One and a team from MIT.

Inspiration for me

The Hyperloop Alpha project concept was actually one of the main inspirations for me to create and write this blog, along with a previous thought of mine about Leonardo Da Vinci.

By publishing open source project concepts like this one, Elon found a neat solution to one thing that has always bothered me about Da Vinci’s notebooks.

The ever-creative Da Vinci noted down his abundance of ideas in personal sketchbooks that were way ahead of his time. However, as he didn’t always have the time or resources to follow them up and connect them with the right people that needed them, many of them represent lost opportunities for technology to advance.

Publishing an idea in an open source format, allowing access for others that are better placed to work on it, ensures that technology moves forward in a way that benefits humanity (even though the ideator as an individual may not benefit directly).

I am not assuming that anything I put on this modest site will be anywhere near the same league as those guys, but given that good ideas can come from anywhere it is a possibility that something I put up in my Ideas section may be useful to somebody, somewhere.

The Hyperloop Alpha concept document is more detailed than any of mine, but Elon Musk does have a big team of world-class engineers to draw from as needed!

Tom Hulme’s Business Model Canvas

I’ve stumbled upon an intriguing version of the Business Model Canvas, courtesy of Tom Hulme (link here).

Below is a 15-minute video as he explains it visually:

HackFwd: Visualize Your Business Model in 15 Minutes Flat from IDEO on Vimeo.

You can download a clean version here:

Tom Hulme’s Business Model Framework (clean)

TRMH: Social Impact Bonds for mental health

The case for improved mental health services

The consequences of poor mental health on human well-being are becoming more widely understood, as are their impacts on other areas of society such as use of drugs, violence, lack of productivity, obesity, lack of creativity, unemployment, smoking and other addictions. Improvements in mental health can cause a cascade of positive multiplier effects throughout society.

Social Impact Bonds as a concept

As noted in my recent post on tackling homelessness, I am fascinated by the potential of Social Impact Bonds to help drive positive social change.

One idea that really resonates with me is the use of Social Impact Bonds to drive positive change in people’s mental health.

Inspiration for the idea

I was inspired by the potential for improvements years ago after reading Healing Without Freud or Prozac by the late Dr David Servan-Schreiber (which was once lent to me by the late Ismena Clout).

In the book, Dr Servan-Schreiber talks about combatting depression with the following:

  1. Meditation and heart coherence
  2. EMDR (Eye Movement Desensitization and Reprocessing)
  3. Maximising exposure to natural light
  4. Acupuncture
  5. Omega-3 Fatty Acids
  6. Exercise
  7. Social Interaction and Emotional Communication

Most of these activities can be undertaken by a beneficiary without any qualified medical assistance, which made me think that this would be an ideal area for a for-profit company or social enterprise to provide a service that would support sufferers of depression.

Indeed, people like Tony Robbins have companies focussed on this area with many of these areas being employed.

However, with Tony Robbins, the emphasis is on the beneficiary directly paying for services themselves. This means that many people that are not currently in a financial position to access the services can benefit.

Use of Social Impact Bonds to reward positive outcomes

What if a company or social enterprise could provide beneficiaries with all the benefits of this approach at no cost at the point of use but instead could be rewarded by a government or health service for delivering the beneficial outcomes?

I drafted this paper below on the back of the idea that Social Impact Bonds could be used to reward social enterprises for just this:

Concept Paper_ Social Impact Bonds for Improved Mental Health

Originally I designed this business so that it could be implemented by a Tony Robbins company because I am a big fan of the work they do to help people achieve transformational change in their lives. However, it could be undertaken by any organisation with a mission to help people make positive change in their own lives.

Below is a diagram explaining the value flows in the concept (note in this diagram I referred to beneficiaries as “patients”, which is not a terminology that I would use anymore):

Diagram: Social Impact Bonds for Mental Health

Risks and risk management

One major risk of this approach is that it could contribute to “privatisation of the UK’s National Health Service (NHS) by stealth”, with private sector organisations slicing off more and more of the NHS’ workload and sweating the assets for profit in the way that UK train franchises have done.

This could be mitigated by the fact that a lot of these activities are things that can be undertaken by individuals without any form of medical intervention, such as regular exercise, socialising, and improved diet. Therefore these would fall outside of current NHS services and would carry a low risk of this.

Another challenge is whether or not the activities would count as, or have the perception of, being medical treatment and therefore need to be regulated.

For the same reasons above, I think a strong argument could be made that this is not the case. Effective protocols that signpost beneficiaries to NHS services should be in-built so that the NHS and other authorities can have confidence that the social enterprise is not masquerading as a healthcare provider, but a “wellbeing-support provider”.

UK Government support

It’s interesting to see that the UK Government also sees the potential for Social Impact Bonds to stimulate change, as they have launched an Inclusive Economy initiative that includes a funding stream for Social Impact Bonds.

Contact me to discuss

I’d welcome any contact via my contact page from anyone interested in starting a social enterprise in this field. I’d be happy to share my ideas for potential methodologies that exist for the service, as well as potential funding streams to launch a pilot project.

SecondChance: reducing retailer waste

The inspiration: Dumpster diving

I recently read this excellent WIRED article on a professional “dumpster diver” in the US.

Matt Malone makes $65,000 dollars a year as a part-time scavenger from dumpsters behind retail stores in Austin, Texas.

Diving has yielded many interesting and lucrative finds for Morgan, such as printers, laptops, and gifts,  with office supplies being (somewhat counter-intuitively) one of the most profitable sources.

It’s a great way to reduce the amount of waste going to landfill, but this is a niche hobby so the impact on landfill volumes will be minimal. This got me thinking.

What if there was a way to monetise this? Instead of having dumpster divers, could there not be a profitable business or social enterprise that would systematically give retailers the ability to reduce the amount of potentially-valuable waste from going to landfill?

Existing enterprise: FoodCloud

There is an existing version of this in the food retail industry: FoodCloud.

FoodCloud connects supermarkets and food retailers to local charities that can make good use of the food before it becomes unfit for human consumption.

This a win for the charity beneficiaries, environment and retailers alike.

If this could be done with other resource-intensive goods such as computers and printers, it would be like having an army of Matt Malone-style dumpster divers all over the country!

SecondChance: reducing retailer waste

The idea of SecondChance would be a for-profit version of FoodCloud for non-food products.

It would need better branding as that’s just a shorthand, but here’s how it could work:

  1. Retailers would upload any unsold goods that would otherwise be thrown away to the site.
  2. SecondChance would collect the goods for free and warehouse them.
  3. Local organisations or maybe even individuals could browse the site to look for bargains.
  4. They would buy them from SecondChance’s site.
  5. SecondChance would facilitate delivery to the end user after taking payment.

Risks and challenges

  1. It would probably be too tricky for individuals to be allowed to use the site, as it would be too expensive to have proper consumer rights for the goods sold.
  2. SecondChance would presumably have to have some smart buyers (or a very smart algorithm) to weed out the unprofitable goods as each collection would have a cost associated.
  3. The business model would be highly dependent on having no procurement costs at stage 1. As SecondChance takes off though, would the retailers want to charge for this?
  4. The business model is highly linked to the fees charged to retailers for discarding high-value items. If there are no fees or other penalties mandated by government in the area of the retailer, then the business case for participation in the SecondChance ecosystem would be diminished.

Potential entrants

1. Amazon

This is essentially a version of the Amazon business model but plugged into the back end of the retailer business process rather than manufacturers. Could it be something that Amazon would be interested in pursuing?

Without modeling the business directly, I suspect the margins would be too low to justify it for Amazon unless the cost of all goods were to remain at (or very near) to zero.

However, it is a good fit for their existing business model, with warehouses, delivery, and online retailing being the key infrastructure. It also marries well with their mission to bring goods to consumers as cheaply as possible.

2. eBay

Could an eBay business model work better? Would it make more sense to have the retailers simply auction all goods to consumers directly?

I personally think this would be too much of a challenge, as it would require a totally new shop area to handle the turnaround for the unwanted goods.

Arguably, why would the retailers even bother with listing the items online and then handling the traffic, when they could just resort to the low-cost alternative of having a very-steeply discounted bargain bin?

N.B. The name for this idea was changed from TrashNet to SecondChance on 11/02/2018 as I thought it better reflects the mission. Nobody wants to buy trash, so it shouldn’t be reflected in the company name!

Farewill: a great business idea!

I recently came across this amazing idea for a business: Farewill.

What is Farewill?

Farewill is an online service that helps you to make a last will and testament for £50.

Farewill claims that the wills are legally binding, takes 15 minutes, and will be reviewed by experts. For an additional £10 a year, you can also get coverage for updates to the law and unlimited revisions.

This is a really important idea as dying without a will (“intestate”) can cause major problems for your family and can cause major confusion over who inherits your estate. I know this from first-hand experience, as my father passed away suddenly without a will when I was 16.

Why write a will?

Leaving your loved ones with the burden of complicated legal procedures at a time when they are least able to carry them out causes a lot of anguish. Anything that gets more people to write a will gets my approval.

Providing this service makes fantastic business sense for Farewill, as around 60% of British adults do not have a will written up. That is an extremely attractive market size.

WillAid – cheap wills from a solicitor

Previously I had referred people to WillAid, a partnership between the legal profession and 9 UK charities. The participating solicitors draft your will for free in exchange for a donation to the targetted charities. £95 is the suggested donation but it is voluntary. It’s a great way to get a will at a cheaper rate than normal from a solicitor (usually around £200) and it runs every November.

However, this Farewill service has got my attention.

It’s one of those rare occasions where I see a new business and I am genuinely annoyed I didn’t think of it!

Nesta Inventor Prize

Nesta, a UK-based innovation foundation, has just launched the Inventor Prize.

It’s a new challenge prize aiming to support and inspire inventors to come up with physical and digital solutions to 4 major challenges in UK society:

  1. Financial Inclusion
  2. Mental Health
  3. Ageing
  4. Air Quality

The finalists get a £5,000 grant and mentoring support to help develop and test their invention. At the end of the competition, the top prize is £50,000.

The inventor must have a working model of their idea and it must have a clear market to improve lives in the UK. The final version will be developed through the prize with extensive user testing.

The deadline for submission of ideas is 11 pm on 22nd October 2017.

If their previous Dynamic Demand Challenge is anything to go by, this new Inventor’s Prize will be a great little initiative to support upcoming inventors.