May 27, 2005

Death Throes of a Business Model

If the announcement today that Snapfish will be dramatically lowering prices on prints isn't a harbinger of a business model's doom, I don't know what is.

Snapfish, Ofoto, and Shutterfly have been playing a sucker's game, trying to generate revenue from prints of digital images. The not-so-secret secret -- most people don't want prints of most images. But they were so locked into a model of "paper", of "rolls of film," -- it's getting about as antiquated as typewriter ribbons.

On a sales call with a potential client, I tried to impress upon her the need to fundamentally reconsider how her company approaches what they do, and I used the analogy of Snapfish/Ofoto/Shutterfly and Flickr. The former were stuck in pre-Web, pre-networked-world ways of thinking about people, things, and relationships. The latter is built, ground-up, *of* the Web, and recognizes that the "value-add" (as business types like to call) lies not in the production of things (which inevitably get commoditized and provide negligible margins), but in the provision of services that provide an experience you simply can't get anywhere else.

Posted by peterme at 02:59 PM | Comments (1)

IDSC Followup Thought - Bringing the Disciplines Together

One topic among the many discussions going on at IDSC was the degree to which business types should know design. Do we want the business types to be designing? If not, just how far along that path should they go? The flip side came up, too -- just how much "business" stuff should designers be doing, be aware of?

And, we didn't even mention other people who should be involved, most obviously the technologists/engineers.

For me, I have no interest in seeing business people become designers, designers become business people, engineers become designers, etc. etc. BUT, obviously, all these groups need to meaningfully interact, they do need to work together, and they need to understand the value that each brings to the table.

I identified three key points at which all these disciplines should be working together, side-by-side.

Developing Intent

This is the outset of any project or process. WHY are you engaging in this project. What is hoped to be achieved? What hypotheses are you bringing? How will you go about challenging them. It's crucial that all voices are brought to bear here. Bad things happen when one group (usually a "business owner" or "product manager" or some such) defines everything for the rest of the organization. All parties have something to contribute here, and this is most definitely one place where no one group has more to offer than any other

I suspect this is pretty obvious. Nothing shocking there. Get the team together at the start. Great. But then what? Typically, either disciplines go off and do their own thing and come back together, or there's a series of handoffs as the project moves from one group to another.

This is where the two other key points come in.

Observational research (aka "ethnography")

As Harry Max put it in a talk he gave at the IA Summit Redux, there is only one thing that every business needs - customers. And this means that everyone in that business should be interested in and concerned with those customers.

This is all about empathy, people. And everyone in the organization should be encouraged to be as empathetic with their customers as possible.

The one key place where this appreciation can happen is through observing and interviewing customers. This should not be the purview of some small group in the organization. There's no reason that everyone can't engage in this practice. Yes, it might take some practice to learn appropriate ways to observe and interview, but, really, this isn't a highly specialized skill to only be practiced by vaunted experts. Everyone is better off when everyone observes and listens to customers. It's essential for getting everyone to recognize what is going on with the customers, what's working and not working for them, and to really feel what it is like to be a customer.

(I'd also like to note that, contrary to some recent "design thinking" hagiography, that empathy and ethnography are NOT elements of design thinking. In fact, when I first started working with designers, they proved to be among the least interested in truly engaging with customers. And if designers try to claim ethnography, they will be doing it, and their colleagues, a disservice.)

I don't think that everyone needs to be involved in all forms of customer research. Surveys, market analysis, user testing, trends, etc. etc., can be performed by specialists. But I do think watching and talking to customers is something everyone should do.

Generate Insights from models

This is the one that's probably the least obvious, but I think potentially quite powerful. After the customer research has been gathered (and not just ethnographic research, but all the awareness that has been built up around the customer), it should all be laid out in front of the entire team. And the entire team should be involved in figuring out what all that research means, what models can be developed to tease out patterns and stories, and what the implications are on the project.

Insights can and should come from anywhere on the team -- in fact, this is one of those situations where the more perspectives there are, the better. This is brainstorming. This is generative. This should be about coming up with ideas. This won't be untethered brainstorming or blue-sky -- the customer research should provide a foundation, and a boundary, that insures relevancy. But, again, this shouldn't be "owned" by any one group. This should be a joining of hands, as the team understands the implications of the research, and agrees upon the most appropriate direction for the project to take.

It is at this point, with a fair amount of shared, common understanding about the problem to be solved, that people can once again firmly put on their discipline cap and focus on execution. The idea being, since the strategy and direction is shared, the disciplines, even as they do their own thing, or working toward a common goal.

Posted by peterme at 12:00 PM | Comments (7)


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