Starcher Group                                                                  Linking User Experience and Business Model...
Background   Starcher Group            10 years of business model innovation consulting   Across industries            Hew...
Function and Experience   Starcher Group             Function                              Experience             3.5mm ja...
Consumer Experiences   Starcher Group                                                                       Awareness     ...
Linking Use Cases and Experiences   Starcher Group     Use Cases (What)                             Value Delivery System ...
Consumer Experience Choices   Starcher Group                                                                              ...
Business models at the intersection of Customer, Technology and Business   Starcher Group            • What high-value cus...
The evolution of business model thinking   Starcher Group                                                                 ...
Moving towards network centric business models   Starcher Group      Shift in dominant profit models                      ...
Total economic equation   Starcher Group                                                                                  ...
The “job to be done”   Starcher Group                                                                                     ...
Business Models   Starcher Group                               The Business Model process ties symptoms &/or opportunities...
Business Models   Starcher Group                                                                  Context                 ...
Business Model Alignment   Starcher Group                             A well designed Business Model aligns the entire sys...
20121006 slp experiences and business models
20121006 slp experiences and business models
20121006 slp experiences and business models
Upcoming SlideShare
Loading in …5
×

20121006 slp experiences and business models

532 views

Published on

Presentation made to Start-up Leadership Program (SLP) in Chicago October 2012

Published in: Business
2 Comments
1 Like
Statistics
Notes
No Downloads
Views
Total views
532
On SlideShare
0
From Embeds
0
Number of Embeds
5
Actions
Shares
0
Downloads
14
Comments
2
Likes
1
Embeds 0
No embeds

No notes for slide

20121006 slp experiences and business models

  1. 1. Starcher Group Linking User Experience and Business Models Startup Leadership Chicago, October 6, 2012 Bruce Starcher | Managing Director, Starcher Group LLC | 312 823 7065 | bruce@starchergroup.com | www.starchergroup.com© Starcher Group LLC For the sole use of client
  2. 2. Background Starcher Group 10 years of business model innovation consulting Across industries Hewlett Packard - Imaging and Printing Group Mobile Devices Motorola Mobility Digital Imaging ACCO Brands Digital Entertainment Starcher Group LLC Consumer and Commercial Printing Print Finishing Medical devices With different business groups Hospitality Cosmetics CEO Program Management Office Advanced Research Lab At different levels Research and Development Marketing Product Product Discovery Business Innovation Ecosystem© Starcher Group LLC For the sole use of client
  3. 3. Function and Experience Starcher Group Function Experience 3.5mm jack I can use any headphones 10,000 songs I can load my entire collection 5 Mp camera I want to post of Facebook Site landing page ______________________ Should we design the function or the experience?© Starcher Group LLC For the sole use of client
  4. 4. Consumer Experiences Starcher Group Awareness Dispose Choose Customer Experience is the customer’s physical and Support emotional memories created over Order time, based on their interactions with employees, products, services and partners across all touch points and every consumer lifecycle. Replenish Install Use Learn© Starcher Group LLC For the sole use of client
  5. 5. Linking Use Cases and Experiences Starcher Group Use Cases (What) Value Delivery System (How) Experiences Consumer goals Business System Functional What are our consumers trying to How the organization works It Works accomplish? Activities What are the activities that our consumers have to perform in order to meet their goals? Total Product Solution Emotional How the organization creates It brings me emotional Scenarios the solution satisfaction What different choices do our consumers have for each activity? Use cases Channels Social What are the ways to use the How the solution gets to market I want to belong site, device, accessories, services and/or … to accomplish the different scenarios?© Starcher Group LLC For the sole use of client
  6. 6. Consumer Experience Choices Starcher Group The business perspective Awareness & Selection & Initial Usage & Repurchase & Consideration Purchase Experience Learning Recommendation Functionality Does it perform the functions that the consumer wants it to? Usability How do consumers interact with the solution and accomplish goals? Interoperability How well does the solution communicate with software and hardware from multiple vendors? Emotivity How well does the solution evoke feelings?© Starcher Group LLC For the sole use of client
  7. 7. Business models at the intersection of Customer, Technology and Business Starcher Group • What high-value customers (or potentially • What technology exists today to enable high value customers) are targeted? my business model? • For what reasons will customers pay a • What likely technology premium, switch suppliers or increase their innovations would enable loyalty? business model innovation? Customer Technology Is it desirable? Is it possible? Is it viable? Business • What is the differentiated Business Model value proposition? • What profit model is used to capture value? How does high profit happen? Where are or will the Profit Zones” be? • How can we maximize the sustainability of out-year cash flows? • What economics and performance systems are required to execute?© Starcher Group LLC For the sole use of client
  8. 8. The evolution of business model thinking Starcher Group Rotma n DesignWorks Schools of Osterwalder Business Model Canvas thought Adrian Slywotzky Business Design, Profit Models, Value Migration 1990 1995 2000 2005 2010 2015 Joan Magretta: Why Business Models Matter MIT: Do Some Business Models Perform Better than Deloitte: Gerry Lameiro: A Others? Deconstructing Guidebook for the Formula for Contributions Designing Business Models Business Model Innovation KPMG: Rethinking HBR: How Chesbrough: The role of the the to map business models in capturing the business your value of innovation model industry profit Afuah: Business Models: A pools Strategic Management Approach Christensen: Skate to Chesbrough: Open Business where the money will be Models© Starcher Group LLC For the sole use of client
  9. 9. Moving towards network centric business models Starcher Group Shift in dominant profit models Log IBM Mainframe Intel, Microsoft Skype, eBay Customer- scale centric 3000 Stages of IT industry expansion users, m Network-centric 1000 PC-centric Information content and transaction standards 100 De facto De jure hardware and internet Systems-centric software standards standards 10 Proprietary Systems 1 1960 1970 1980 1990 2000 2010 2020 Source: David Moschella, The Economist “A survey of the IT industry© Starcher Group LLC For the sole use of client
  10. 10. Total economic equation Starcher Group Moving beyond the traditional product mindset. Ecosystem Solution Experiences Regulatory Consumer Goals Customers Outsource Partners Complementary Technology Partners Products Non-customers Stakeholders Consumer Insurance Suppliers Economics Acquisition Monitoring Flexibility Systems integration Substitute Installation Applications Products Service Related equipment Financing Product Operation Competitors Repair Training© Starcher Group LLC For the sole use of client
  11. 11. The “job to be done” Starcher Group The consumer perspective What is the relevant Gap in customer customer context e.g. experience where they Time, Money and Home, Driving, Airpor will “pay”? Ease of Use t, …. Customer Value Gaps Customer Economics Customer Context Job to be done Customer Motivations Customer Choice Customer Social Networks What outcome is desired, whether What is motivating the What choices does What customer social networks functional, emotional customer to get this job the customer have? are relevant to the job to be or social? done? done? In this slide, I use Customer to mean both customer and/or consumer© Starcher Group LLC For the sole use of client
  12. 12. Business Models Starcher Group The Business Model process ties symptoms &/or opportunities to actionable operating plans. The outcome cannot be known at the outset so we focus on a repeatable process that yields excellent results time after time. Business7 Model7 Process Customer Ac/ onable Symptoms Context Value Business Strategies Opera/ ng Models Plans Opportunity Gaps Opera/ ng Plans How do I develop Where is there a gap What strategies What tactics context around the in customer articulate the operationalize the opportunity? experience, where implementation strategies? the customer is options? willing to pay to close the gap? What Business Model will best leverage the value described by the customer value gaps?© Starcher Group LLC For the sole use of client
  13. 13. Business Models Starcher Group Context What is the broader business context and where is the value? Customer Selection How do we select profitable customers for our value proposition? Context Customer Value Gaps Why will customers pay a premium, switch suppliers or increase loyalty? Profit Models How does profit happen? Profit Revenue Scope Models Models Revenue Models How will we generate revenue and further enable the profit models? Scope Strategic Customer Customer What activities must we perform & what assets must we own? Control Value Selec6on Points Gaps Strategic Control Points How can we maximize the sustainability of out-year cash flows? Economic Opera6ng Organiza6onal Economic Model Model Model Model What are the economics of the business model? Operating Model What operating model is required to execute? Organizational Model What organizational design is required to execute?© Starcher Group LLC For the sole use of client
  14. 14. Business Model Alignment Starcher Group A well designed Business Model aligns the entire system, from customer value gap through implementation, and ensures that there is internal consistency. Business Implementation Business Model Elements Models Strategy Elements Business Model Strategy Brainstorm Options Customer Value Gaps Business Models Brainstorm Game elements Games Strategy elements Strategy tree Implementation options (short description) Customer Technology Cost Mfg strategy Distribution Sales&Marketing Channel Service&Support Strategic Control Point SCP strength Profit Model Alliances/partnerships Aligned with Business Design Low End Consumer 0. Invest in China •printer/pen price is not competitive (8) •installation is the #1 customer complaint (7) Olympics games 2008 1B •not enough channel coverage--city store location (6) - lock in early with HP as the 2008 Olympics partner 1A. Shift market sensitive functions to China Franchise •media coverage not extensive enough to give necessary information to consumer--reach and media cost (5) - partner, not just sponsor – one of the government‘s priorities is to make the Olympics a success 1B. Differentiated national government partner 1. Competitive advantage through Chinese intimacy Refill Service w/ warranty HP branded Retail •current channel behavior is not trustworthy (3) 1C. Differentiated local government partner •product availability --especially for new products and supplies (3) 1. Enhance/Capture Value from Distribution Channel Original HP ink Vending machine •inability and confusion over how to get necessary pre-sales information in IT mall, retail store (3) TIJ2.0 Refill service •printer has basic functionality (2) Individual entrepreneurs •channel reps do not have adequate knowledge (2) - Go after china in the way where you are part of the culture 3E prebate program Franchise •friendly shopping experience (1) - Door to door like Avon (Wall Street Journal Brazilian market about indigenous sales force) Non-HP Retail •Four "p" information availability (1) branded •simple user guide; tutorial for printing activities; info on how to use special features with application (1) Microenterprise model Vending machine •out of warranty repair price close to new printer price (1) Become a major employer via microenterprise -- let them find niches of what is successful 6F Customer Implementation •recycling/trade-in program for supplies (1) Kodak model ($12,000 puts you into a franchise business) High end consumer 2A. HP branded retail •printing purchase doesnt seem exciting enough (I dont look forward to it) (7) 2B. Partner with Large format stores 2. Compress/Capture channel margin •cutting edge photo software bundle together with media solution for photo/vertical users (6) 2. Create profit from low-end ink 2C. Extend to grocery/convenience channels •installation is the #1 customer complaint (5) •friendly shopping experience (4) Refill service kiosk 3B •driver should scan PC and know how to install (3) HP provides the complete station •Four "P" information availability (3) Refill kiosk or Re-man kiosk (or both) •product availability --especially for new products and supplies (3) Can re-fill be free vs. being for money? •not all products have path for disposal of old machine and replacement; trade-in/trade up (2) (like the free soda refills when you‘re in McDonald‘s dynamic) •media coverage/aos not extensive enough to give necessary information to consumer (reach and media cost) (2) Ink delivery + pen collection system (keep the old one) •inability/confusion over how to get necessary pre-sales information at shop front (2) Should we be selling new cartridges? •fuzzy logic, auto adjust for good photo quality borderless printing in all sizes (2) out of warranty repair price close to new printer price (1) •printer/pen price not competitive (1) Good/better/best solution in one kiosk 3B •difficulty to understand which product meets my needs (1) - Refill – good - Reman – better Low End Business - Original – best 3A. HP Manual DIY refill ink •not enough channel coverage (9) 3B. HP self service ink kiosks Value Gaps Options rd •inability/confusion over how to get necessary pre-sales information at shop front (5) Sell HP ink in smaller portions – use the multi-chamber technology to just do a 1/3 refill 3B 3C. HP refill service 3. Extract value from ink •keep installation simple--install application separately (4) 3D. HP direct delivery service •mixed quality needs (4) Total print kiosk 3E. MED: door to door supplies sales/service (Avon) •effective GTM model to serve SMB customer --repeat purchase; loyalties discount (4) - Smart kiosk (add digital photo printing to the refill/reman/original Dotted line connecting 3B to •looking for prominent brand to re-affirm safe purchase (3) - Offer a stripped down kiosk as well 6C •out of warranty repair price close to new printer price (3) - What can we do with the with the pay phone/hot spots technology analogy? •AiO application advice for vertical market (3) 3B, 3C •customer relationship marketing --if you run out of ink: where and how much to buy; reseller information (2) Work with banks to make refill/reman/purchase as easy as the ATM (only 3 banks that matter in China) •fuzzy logic, auto adjust for good photo quality borderless printing in all sizes (2) - what about lack of credit cards? Do they have enough bank cards? •cutting edge photo software bundle together with media solutions for photo/verticals (2) •refillable supplies (2) Work with others who have high foot traffic Not explicitly included. Could be investigated later as part of •outbound sales lacks focus on peripheral products (1) - internet cafes 4A. Move production to China 3B or 6C - power companies 4B. Align low end printer and pen performance /price with High End Business - dry goods grocery stores (moms and pops) where people already go customer demand 4. Squeeze margin out of low end printers/pens •need to have evaluation units to demo products (8) (do the grocery shoppers also buy the printer cartridges or the refills? – would they?) 4C. Outsource low end printer/pen to local OEM •not differentiated support for HE business (5) 4D. "HP Inside" for white box printer/pen OEMs. •keep installation simple--install application separately (4) Where do people go daily where we can print for them? 6C, maybe 6D 4E. Global printer/pen recycling •difficulty to understand which product meets my needs (4) - Mom & pop grocery markets •AiO application advice for vertical market (3) •print gauge senses high user and prints coupon for cartridge/media. Gauge indicates how much time left and link to URL or 800# (2) Partner with infrastructure companies •printer/pen price not competitive (2) - Banks Not explicitly included. Could be investigated later as part of •convenient recycle center/recycle bin (1) - Electrical companies 3B or 6C •no on-site service available for HE business (1) - Pay phones •hp brand awareness (1) 5A. Business specific inkjet products Sell HP media with advertising printed on the back as cheap media, use it to lower ink prices 5B. Vertically focused SW applications and channels 5. Maximize SME/Enterprise value capture (or even print ads on the back side of the paper) Not explicitly included. Could be investigated later as part of 5C. Expand enterprise/SME services 6A, 6B, 3E 5D. HP document/photo service shops. Shift who pays for ink - print on backside of paper coupons – misc printing - like grocery store receipts here - banner ads or printing on the back of the paper Barter for ink…. 3C - what else could people for alternatives to cash and ink? Sell HP ink to refillers - franchise it 6A. Flank Epson in level 1/2 photo printers/suplpies 6B. First mover photo in select level 2/3 cities 2.5 Total Supplies Hybrid Ideas (combinations of 2 + 5 + media + content) 6C. HP self service photo print kiosks 6D. HP photo print service 6. Increase share of digital photo printing value ―Music match‖ lifetime free level of service (2 and 5) 6E. Electronic hosting/distribution These could be tactics - free black ink forever but buy into the photo option 6F. MED: digital photographers for any number of - ideas –4B, 5A, 6A, 6B always free – not limited time free Buy more/save more (2 and 5) - use more ink, save more - make visible up front -- how far from the next level the customer was - get usage from printer to get price cut on ink Coupons (2 and 5) - after 3 refills you get a coupon - let printer printout 25% off after it senses 3 rd refill Trust smart ink - printer recognizes authenticity of cartridges/ink - something in ink to provide authenticity Ink tester - Create ink tester to test ink in home Media value chain - Image cards - media is the ticket - ―Daily frame‖ snapshots – every day in Britney‘s life - Take image to friends - Printing trading cards - HP provides printing content Could be patr of 3B downstream Create a coalition with other vending machine players (Coke, other) to create a ―vending machine destination center‖ which, with shared vending machine service, can create greater proximity to the customer (2 and 5) Avon lady system Could be patr of 3E - door to door printer cart refill - home service – cleaning, dusting, and delivery downstream Dry powder tank packs - put in the ink powder - add water to get it to work Perfume printer; scented media for each season/holiday (2 and 5) Print on rice paper - is tree-based paper the most effective in china? - Hemp paper? Emphasize photo quality on plain paper – lower cost media (2 and 5) Get our ink near other cheap liquids ….gasoline, water, etc. Make them associated with an impulse purchase , a ―daily addiction‖ and away from the positioning of a major purchase. Starbucks Could be patr of 3B - Create an emotional attachment to printing – make it a part of regular ―addiction‖ downstream - Mileage plus – the more Starbucks you buy, the less you pay for ink – collect cross credits - Is Starbucks catering to Westerners? How can we be culturally sensitive Combine ink cartridge and money within ATM‘s…. print the money(!!) (serious profit zone) 3. Squeeze profit from low-end printers Sell re-man printers using the printers that we have in the US as our low cost printer 4E - pre-certified printers, like BMW does with its used cars - legitimize ―Ink-bay‖ version of E-bay Utility model – disposable, reusable; These could be tactics - get 10% profit @ point of sale for any number of - + lifetime supply of ink + pop ideas –4B, 5A, 6A, 6B Lifetime upgrade offer – if you buy again, you get a discount Take a different direction: Single use cartridge – we work with a partner and their cartridge on the low end Play the Intel game (printer chip or printer head with our ink) with the white box manufacturers 4D – like Intel has done with its white box – reference the market share of ―others‖ in PCs – HP inside co-branding Modularize printer - just upgrade individuals parts These could be tactics for any Sell the parts to the consumer and let them make their own printers - reference the china consumer love of constructing their own technology items number of ideas –4B, 5A, 6A, 6B Leverage innards of PC into the printer - low cost results 3.2 Combined Low-end Printer and Cartridge Systems Innovation (ideas from 2 + 3) China as a collection point for TIJ 2.0 pens. Ultimate POP by using all of the TIJ 2.0 models from Europe and the US plus all of the unwanted cartridges and put them into china - put high volume product lines there - call it something other than HP (or sub-brand it with HP) 4E - dirt cheap - endorsed by HP but known for lower quality - Chinese partner involved - cut barriers to entry - cost near zero HP participate in the whole value chain Ink part in 3C - supplier of ink to refillers - spare parts - a little profit in all pieces rather than high profit in just one - prices low but volumes high OEM - pen tech available to all printer manufacturers 4D? - we supply consumables and ICs Don‘t try to make money in China - WW system – everything that needs recycling gets funneled into China - Solve environmental issues for HP in Europe - Give them great value - Slow other companies down - Cheap re-man. - Eventually make money (or not) - Free initial = in follow on == second product - But…. we want to avoid being know for the low end - Sell in the US and Europe as green products 4. Defend/Grow SME and Enterprise Value Bimodal supertanker for SME 5A – please let me - high speed draft mode - very fast know the costs of the - super economy mode lab version of this! - high quality output mode - high capacity ink Case parts for business furniture solutions Sort of in 6A – - woodworking custom cabinets Lifestyle, - cheap labor BMW oil change - pay one price with ink included - pay x and get y copies 5A – please let me - gets cpp down, even if POP is higher know any thoughts on - get backend payments right up front cost! - eliminates bad experience and hassle - lease model – connect to service/warranty - this was tested on low end consumer but didn‘t play – would it play in SME? The up front payment with a club is critical Market differently - like shampoos – normal, dry, frizzy - right printer to the right segment - segment based on use If we knew high use – based on usage we rebate - Actual vs. assumed usage These could be - Make sure to get someone the right printer at the right price tactics for any number of ideas High use segment based on use knowledge of the customer –4B, 5A, 6A, 6B - if we knew who the high user was, we could rebate prices of products based on usage - actual vs. assumed usage - make swre to get the right printer One stop shopping - Understand needs and then become the printer of choice Non – classical partnership - office equipment (steelcase/herman miller) - built in printer - take advantage of infrastructure - drawers and shelves optimized for our form factor Government 1A/B – but quid pro quo is dead – sweetheart deals - give them free printers if they outlaw competition being appealed around the country , Pepsi in Sichuan example Utilities - meter reader for printer ―ink in basement‖ Printer design for China (non Western) Printer design for - what does it take to print asian characters? Swath width China in 4B, 5A, - red – communist/mao red – no one has done a good job of achieving it yet 6A, but not the - China‘s commitment to communism is closely tied to nationalism and community specific red, etc. (vs. real economics), so there is nothing that prevents HP from supporting its symbols Network - can we/should be we more of a solutions player to these companies, not just a cross business printer? 5C - can we get into business with Legend? If we want to be perceived as an appropriately Chinese company, 1A© Starcher Group LLC For the sole use of client we have to look like more than a Western group trying to beat the Chinese groups Should we buy Legend? That is a long-story, we have a history that goes way back. We need to get over that history. High end print heads - 2x (more advanced) print head technology built @ lower cost thatn TIJ2.0 Help? - Small PEN body - Sell for $5 - Get a cheap ink cartridge 5B Software for vertical industries in order to drive relevance and ink usage (we use in the US already) 5. Grow Share of Photo Printing Market Photoprinting meteor pack - Paper link pack – Astro/meteor - Does this make refill harder? Does it become a barrier to refill?

×