Better service through business design

@cathycracks
better services through
business design
UXIstanbul
2016
Cathy Wang
@cathycracks

Problem Solution SolutionUnderstand Problem
Abductive  
Thinking
Business Thinking Design Thinking
The difference between business thinking and design thinking as per Tim Brown

@cathycracks
in this talk:
How to do ﬁnancial modelling
How to use excel
How to apply design thinking to
businesses

@cathycracks
Cathy Wang
@cathycracks
Nomadic Vancouverite found mostly in Europe.
Business Design & Transformation.
London. UK
I spend a lot of time thinking about the future,
systems, and the interconnectivity of world
around us.

Building market ready products
Digital Transformation
Startup Incubation
Founded in 2000
280+ employees in 6 cities
30%+ year-on-year growth for 15 years
Best place to work in Europe 2012 & 13

@cathycracks
Always design a thing by
considering it in its next larger
context —  
a chair in a room, a room in a house,
a house in an environment, an
environment in a city plan.
Eliel Saarinen

@cathycracks
design thinkers treat
businesses the way
designers treat users

@cathycracks
Seeing Design Thinking in its core elements:
• design thinking framework  
• design process 
• design rationale

@cathycracks
applying design thinking is like
painting a picture…

@cathycracks
frame canvas brushes
credit: @folletto
Context Project Tool
The framework for design thinking…

@cathycracks
the design process
Understand Design Iterate
Regardless of what we are designing, we go through a similar design thinking process.

@cathycracks
Yes, delete it No, keep itNo, keep itYes, delete it
Do you really want to delete this? Do you really want to delete this?

@cathycracks
The spectrum of design
Management
consulting
Visual
design
UX
design
Service
design
Business
design
If we look at the spectrum of our design competency, design thinking can be applied in all of it.

@cathycracks
A BUCKET FULL OF
PETROL OR A MONTH OF
SOLAR POWER?
Become the king of solar power in your neighbourhood.  
Get a share of the solar power plant.
Read more:
Framing the problem
Helsinki Energy
Once upon a time, there was Helsingin Energia, 3rd biggest energy
producer in Finland. Every year they talked about building a solar
power plant, but someone always said: "No one will buy expensive
electricity. We can produce cheaper juice by burning coal."
Futurice launched a test marketing campaign to engage with potential
customers. It turns out, a huge amount of the existing Helsingin Energia
customers would happily pay a higher price for solar power.
Because of that, Helsingin Energia realised that people don't want to
buy expensive electricity. They rather invest in green power.

@cathycracks
SELECT AND ORDER YOURSELF A DESIGNATED SOLAR PANEL
FREE SOLAR PANEL (10) PUCHASED SOLAR PANEL (1184)
Prototyping a
business model
Helsinki Energy
Futurice built a web page where people could buy/rent their own solar
panel on the large rooftop of their solar power plant, and nothing else.
In two days the whole power plant was sold out.
"We have sold the whole solar power plant. Should we build it now?"
Because of that, the executives could say nothing except: "Yes!"

@cathycracks
What is a good service?
meaningful
When I think about what a good service means, I start with it being “meaningful”. But what does “meaningful” mean?

@cathycracks
What is a good service?
meaningful
scalable
ﬂexible
adoptable
proﬁtable
sustainable
desirable
learnable
approachable
useful
feasible
viable
usable
enjoyable
sensible
There are many different ways to justify “meaningful”, from different point of view.

@cathycracks
Startup Corporation
Thinking of business, on a scale
Startup as a very beginning / shell of a business. On the other spectrum there’s the large corporation.

@cathycracks
I was involved in a project to craft out the business and service for a music related startup. The client needed business design, but they
were asking for design execution.

@cathycracks
How should
we design it?

@cathycracks
What are the
driving forces
behind MVP
and roadmap?

@cathycracks
Why are we
designing this
service?

@cathycracks
How is this
startup going
to sustain
itself?

@cathycracks
why are
we doing
this?
the client asked us to.
This is the wrong answer.

@cathycracks
why are
we doing
this?
I want to meet Bruce
Springsteen.
The client also said this as a reason at some point…

@cathycracks
why are
we doing
this?
Build a business that
can grow into something
more.
We want to answer the question with our business hat on.

@cathycracks
why are
we doing
this?
We want enable users to
capture, collect and
share personal
moments, reliving those
memories from different
events in life.
Put on our product hat and answer the question.

@cathycracks
the product development strategy
= why are we doing this?
We needed a driving force to drive the product development.
This strategy will have to balance all the needs for business, design, and technology.

@cathycracks
the product development strategy
growing the user base for a
year before monetization is
turned on
It wasn’t easy coming to this ”conclusion”, and i am going to tell you how this come to be.

@cathycracks
why are
we doing
this?
Does it help us grow the
user base?
With the strategy in place. we had better answers. when planning the sprints, even the developers asked business oriented questions.

@cathycracks
The paralleled process
product design v.s. business design

@cathycracks
evaluate the market / context

@cathycracks
Who are the competitors?
What’s the market like?

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What’s the size of the market?
Served market?  
Served market growth rate?
Target market?

@cathycracks
how will the users behave

@cathycracks
Key audience 18 -25 year old
Personality descriptors include:
Passionate
Curious
Genuine
Warm
Fun-loving
Explorative
Connected
Energetic
Caring

@cathycracks
Amount of active users
Drop out rate
Engagement rate

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discover the values proposition

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Following the user journey

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Revenue hypothesis
Revenue streams
Secondary market

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how to make it run

@cathycracks
What’s the best tech stack?
What tools will we use?

@cathycracks
Expense projection
Operating expenses
HR

@cathycracks
different set of tools,
same process
A lot of the business design does happen in excel in order to quantify decisions. But the application of design thinking is the same.

@cathycracks
the overall plan
2015 2016 2017 2018 2019
Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
ProductKPIsOperationFinancial
app launch
Ticket & Merch launch
Native Advertising launch
Musician subscription
Tip the musicianPRS
Direct booking with venue
The designer / normal people friendly plan

@cathycracks
the overall plan
2015 2016 2017 2018 2019
app launch
Tip the musicianPRS
CMO hired CTO hired
Community manager x 2 hired
Admin hired
Developer x 2 hired
Internationalisation x 1 hired

@cathycracks
the overall plan
2015 2016 2017 2018 2019
app launch
Tip the musicianPRS
CMO hired CTO hired
Admin hired
Developer x 2 hired
CAC goal: £2
ARPU goal: £2
CAC goal: £1.5
ARPU: £4
CAC goal: £1.3
ARPU: £7
CAC goal: £1.2
ARPU: £8

@cathycracks
the overall plan
2015 2016 2017 2018 2019
app launch
Tip the musicianPRS
Total active users: 200 Total users: 5K Total users: 14K Total users: 384k
CMO hired CTO hired
Admin hired
Developer x 2 hired
CAC goal: £2
ARPU goal: £2
CAC goal: £1.5
ARPU: £4
CAC goal: £1.3
ARPU: £7
CAC goal: £1.2
ARPU: £8

@cathycracks
the overall plan
2015 2016 2017 2018 2019
Monetization turned on
High level strategy: Growing the user base before monetisation happens.

@cathycracks
the overall plan
2015 2016 2017 2018 2019
Primary user
Secondary
user
Projected revenue Streams
revenue
scale revenue by
targeting
secondary users
for added value

@cathycracks
the overall plan
2015 2016 2017 2018 2019
ARPU
(Primary
users)
ARPU
(Secondary
users)
Less secondary
users but they
generate more
revenue per user
Primary user
Secondary
user

@cathycracks
the overall plan
2015 2016 2017 2018 2019
Primary user
Secondary
user
Primary
user CAC
Secondary
user CAC
Costs less to
acquire
secondary users
as well
CAC. gives insight on what “users” mean to the business.

@cathycracks
the overall plan
2015 2016 2017 2018 2019
revenue
Headcount
team ramp
up for
features
Operational cost

@cathycracks
the overall plan
2015 2016 2017 2018 2019
revenue
Headcount
team ramp
up for
features
hire more
operational staff &
international team
Operational cost

@cathycracks
the overall plan
2015 2016 2017 2018 2019
revenue
headcount
cash in bank
Seed round A round
How fast are yo spending your money and how soon do you have to raise more money?

@cathycracks
the iterative balancing act
Product
Strategy
Operation
Financial
This is an iterative balancing act between all the different consideration. it would give us a MVP roadmap, a ﬁnancially sustainable
business, and a reasonable operation.

@cathycracks
In the end, better services
new revenues streams
more value provided for users
self sustaining
The business perspective has given us more context.

@cathycracks
Thank you
UXIstanbul
2016
Cathy Wang
@cathycracks

https://vimeo.com/95734218
References
Helsinki Energy
Cathy Wang
@cathycracks
Wildlife Turst UK & Mental Illness
http://www.wildlifetrusts.org/tackling-mental-illness
http://designthinking.ideo.com/?p=49
Design Thinking
http://ux.stackexchange.com/questions/49991/should-yes-delete-it-be-red-or-green/
Red or green button

Better service through business design

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