Monday, December 3, 2007

Value Proposition Life Cycle

Alex Osterwalder, the author of Business Model Design and Innovation Blog shares this amazing framework to communicate the various phases of the value proposition life cycle. Design has always been able to create values through intuition, based on the desire to improve the quality of things, that feel wrong or can be better. Now we need to clearly deliver the message that the possibilities we explore can make a tremendous difference in all of these areas. Then let's talk about strategy...

8 Phases of Value Proposition:
  1. Evaluation Process: A company can create customer value by making the evaluation process as easy as possible. In the phase of the life cycle a customer will try to understand if a company's value proposition satisfies its needs.
    Example: Software companies often allow their customers to freely and easily test their products.
    Example: Ski gear companies organize special camps to allow their best customers to test all their newest material.
  2. Value Co-Creation: Through various technological advances the integration and participation of the customer in the value creation process is increasingly possible.
    Read more: Frank Piller of TU Munich and MIT writes a lot of interesting material on mass-customization.
    Watch more: Eric Van Hippel of MIT outlines in a video how customers can be integrated to design new and innovative products that correspond to their needs. You can also download his book on democratizing innovation.
  3. Purchase Process: Customers highly value an efficient, simple and convenient purchase process.
    Example: Amazon's "one click shopping" makes buying on its website a very quick and efficient process.
  4. Set-up/Installation: In some cases set-up or installation is necessary. The simplification of this process is of enormous value to the customer.
  5. Use & Operation: In many cases most of the value in a value proposition comes from the use or operation of an actual product or service. However, to differentiate themselves companies try to create value beyond a simple product or service.
    Example: For customers the main value from's value proposition comes from the use of its hosted sales force solution. Yet, Salesforce is carefully creating additional value by offering continuous updating "behind the scences" and providing easy access to complementary products by third party vendors.
  6. Complementary Products/Services: Value is also created if a value proposition boosts the value of complementary products and services or is itself a platform for valuable complementary products/services.
  7. Maintenance & After-Sales: Value is often created during the maintenance and after-sales phase. This can be either by offering high quality service or by offering a value proposition that minimizes the need for maintenance & after-sales.
    Example: The attractiveness of's value proposition essentially comes from the fact that the hosted software model (application service provider - ASP) minimizes the need of software maintenance by the customer.
  8. Ending & Value Transfer: In many cases once a customer does not need a product or service anymore he has to terminate the service or dispose of the product.
    Example: ending the subscription of a magazine
    Example: disposing of batteries
Categories of value creation:
  • Productivity & Returns: value is created by increasing a customer's productivity, his returns and his utility.
  • Simplicity: value is created by making each phase of the value proposition life cycle as simple as possible to understand. For example, a software company can make the parametrization of its software as simple as possible.
  • Convenience: value is created by making a customer's life as convenient as possible. For example, an online grocer creates value by delivering goods at the time the customer desires.
  • Risk: value is created by minimizing a customer's various risks. For example, a customer risks choosing a product/service that does not satisfy his needs, or he may incur a physical risk by using the product (e.g. lawn mower) or he may risk choosing a product at the wrong moment (e.g. buying a plasma TV just before an important price decrease).
  • Image: value is created by the image a product/service gives its purchaser (e.g. iPod)

Tuesday, November 27, 2007

The Idea of Differentiation

Nintendo Wii has a fascinating story to tell. It's a story of doing it differently rather than better. "Re-thinking, re-minding, re-approaching and re-discovering" what gaming is about. I can picture the excitement of those who envisioned it, pitched it, and worked on it. But I question what they had to go through to make it happen. The end result, a modest video quality and picture definition gaming opposite of what gamers seek. But it didn't matter. We were given the opportunity to discover something else. A different twist in gaming experience with motion sensing technology. People bought into it. So how do you create something that would put a company in such a trouble (a good trouble) of being short satisfying demand? My life's journey is to explore, learn, enable and practice the art of disruptive innovation. I'll continue posting topics related to this.

What I see Wii differentiated:

1. Brand: Very friendly, playful, short, quick, easy to say (for everyone) and remember. It also sounds like "we" as all of us, it's inclusive and brings people together. The promise and value proposition speaks for itself.
2. Audience: It's for everyone, not just for traditional gamers (kids and enthusiast adults)
3. Affordable: Wii $250 (well..$549 because of shortage), Xbox 360 $349+, Playstation 3 $399+ (
4. Ease of play: Simple and easy to play, easy to learn and get into the game within seconds. Make mistakes in the beginning but quickly becomes a -aha! moment when you learn.
5. Interactive: You need to get up and move your entire body, not just fingers.
6. Changing Behavior:
Every game is different, you need to move differently to control. It's contextual and sensitivity changes based on situation.
7. Expandable: You can plug in the controller into a steering wheel and drive, plug it into a gold club and swing, plug it into a tennis racket and hit the ball, a guitar, a shooting gun, lightsaber, you name it...
8. Personalization: Mii allows you to create personal avatars
9. Freshness: It's new, never experienced before, eye opening, mind blowing, stimulates your senses, body and mind, create laughter, it's wow.

Sunday, November 18, 2007

A Periodic Table of Visualization Methods

I think this is a really good place to start thinking about how you plan to visualize your communication and when anyone sees the information, make them say Ah! I get it.

Visual has provided this beautiful tool to help you choose the right method to make you an effective communicator.

Friday, November 16, 2007

Navigating the sea of innovation

Philips Design - New value by Design Magazine- Issue 34, Oct 2007

Key point here are:

1. "Effective innovation is about managing the entire approach in a non-linear, holistic way and finding the right path to solve an innovation challenge"
2. "Innovation can be seen as a network of opinions" Identifying the right mix of competencies a team must possess is key.

3. Competencies and roles needed:
  • The Pathfinder: The Pathfinder must be clear about the end goal or destination. They plan the journey and anticipate all the kinds of expertise that will be required.
  • The Interpreter: The Interpreter can see things from different perspectives and build bridges between new combinations of disciplines to create collaboration. They are also responsible for communication of information and the sorting out of what is relevant.
  • The Catalyst: Philips Design maintains the creative red thread for the organizations with which it works to ensure it doesn't get watered down. It inspires confidence and motivation; encouraging organizations to get out of the box and embrace the new.
  • The Alchemist: The Alchemist synthesizes the right insights and the right chemistry of the team. Whilst there is no set formula, there are three key factors for success: embrace trial and error, allow creative breathing space, enrich initial ideas. "Not every person in the team needs to have these competencies," Taylor explains, "but the team in total should cover them all."
4. Innovation Matrix model:

Thursday, November 15, 2007

PARK:Developing Young Design Managers

Every month Park sends out a statement on a burning design management issue to 50 international senior design directors. They collect and share their opinions. This issue is about whether organizations should hire design managers straight from school and position them as design leaders. 68% agree, 19% don't agree and 13% don't know.
It's an interesting discussion and myself being a recent graduate of Design Management, understand that education in school is just the tip of the iceberg. But you know what, I got the foundation and have a lifetime to work on getting to my new goals that otherwise whould have not thought of. Some people go to have a higher education with a lot of professional experience under their belts. Education definetely challenges your mind and makes you think deeper. Daily professional job in a way prevent you from being able to be visionary and think about the higher level issues and work on it unless you get upthere and able to have the strategic conversations.

Wednesday, November 14, 2007

Ideas about the discipline of Innovation

Doblin has some very interesting ideas about the types of innovation, ways of identifying patterns, and conceptualize businesses. They not only show metrics about innovation but also came up with a visualization tool that make it clear when you see it in a new perspective.
Basically businesses can innovate in one or more in the areas of Business Model, Networks and Alliances, Enabling Process, Core processes, Product Performance, Product System, Service, Channel, Brand and Customer Experience. So where are you trying to innovate? Pick your value add and drive business success!

Designing Workspace

Jump Associates put together some thoughts for making a great creative environment, a place where it's not only to work but also to play. Flexibility and interactivity is key to a living environment.
"A great environment can lift us up, make us better at what we do, and inspire great thoughts. A lousy place can leave us depressed, tired and dull individuals, dying to go home."
If you are leading a creative workforce and want to inspire, thinking about the environment, activities, behaviors, interactinos are imperative. The goal is to make the designer say I love working here, it's fun, spark a lot of creativity and positive energy that we really can make a difference.