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Module 1 – Creating social change by successful entrepreneurship Social business canvas
- 1. Tobias Joest /SAP, Mária Baracsi, Roxana Damian, Viktória Harta on behalf of IFKA Public Benefit Non Profit Ltd. for the Ltd. for the Development of the Industry 2018 Module 1 Design Thinking for Social Enterprises: The power of INSPIRATION, IDEATION, IMPLEMENTATION in success SENSES Strengthening Social Entrepreneurial Landscape through involving socially responsible corporate Practices in EntrepreNeurial CompetenceS and Skills enhancement in the DANUBE region Project co-funded by European Union Funds (ERDF and IPA)
- 2. Training summary • Module 1 - Design Thinking for Social Enterprises help social enterprises in establishing new commercial opportunities and access new markets in the Danube region; • Module 1 – Design Thinking for Social Enterprises produced together with aspiring social enterprises, corporate representatives and experts to guide you through social entrepreneurship – from idea to market; • Module 1 – Design Thinking for Social Enterprises applies the Social Business Model Canvas and Design Thinking tools to finalize your business plan and start or accelerate your operation! Project co-funded by the European Union funds (ERDF and IPA)
- 3. Who is this module for? Do you wonder … ? • How to make a difference in your community or in your field? Where to start in the first place? OR • Have you have run recently into buzz concepts like “social innovation” or “social entrepreneurship”? Did you wonder how your idea for solving a social problem would fall into place by using these concepts? OR • Did you ever ask yourself how did different social enterprises managed to make an impact and become sustainable? • If one of your answers is yes, then this course is made for you! The course will take you on a journey of exploring the complex problems that surround us and show you how to start thinking about solutions. Project co-funded by the European Union funds (ERDF and IPA)
- 4. Tobias JOEST, Design Thinking expert at SAP Mária BARACSI, project manager at IFKA Viktória HARTA, project manager at IFKA Your guides for this module: Project co-funded by the European Union funds (ERDF and IPA)
- 5. Video about the management of the course! Project co-funded by the European Union funds (ERDF and IPA)
- 6. What is social entrepreneurship? Social entrepreneurship is the use of start-up companies and other entrepreneurs to develop, fund and implement solutions to social, cultural, or environmental issues. Social entrepreneurship ≠ Charity Project co-funded by the European Union funds (ERDF and IPA)
- 7. How to be successful? feasibility viability desirability being successful Project co-funded by the European Union funds (ERDF and IPA)
- 8. What is Business Model Design and why it is important? • The exact structure of your business model • It describes how you create value for your startup • It helps you to understand your business environment Project co-funded by the European Union funds (ERDF and IPA)
- 9. Getting From Business Idea to Business Model https://www.youtube.com/watch?v=wwShFsSFb-Y Project co-funded by the European Union funds (ERDF and IPA)
- 10. What is Design Thinking? • The best way to understand human needs • An iterative approach to test your business idea • An intuitive way to come up with innovative solutions for a problem Project co-funded by the European Union funds (ERDF and IPA)
- 11. Visual Explanation • Video https://www.youtube.com/watch?v=wwShFsSFb-Y Project co-funded by the European Union funds (ERDF and IPA)
- 12. The Business Model Canvas Project co-funded by the European Union funds (ERDF and IPA) Key Partners Key Activities Value Proposition Customer Relationships Customer Segments Key Resources Channels Cost Structure Revenue Streams
- 13. The Business Model Canvas 1. Identify the customer segments What are the most important customers you want to reach and create value for? 1 Project co-funded by the European Union funds (ERDF and IPA)
- 14. 2. Identify the value proposition What are the products and services that reflect the needs of your customers and create value for them? 12 Project co-funded by the European Union funds (ERDF and IPA) The Business Model Canvas
- 15. 3. Identify customer relationships Which relationships – personal, direct, indirect - do you maintain with your customer segments? 12 3 Project co-funded by the European Union funds (ERDF and IPA) The Business Model Canvas
- 16. 4. Identify the channels What communication, distribution, and sales channels do you use to deliver your value proposition? 12 3 4 Project co-funded by the European Union funds (ERDF and IPA) The Business Model Canvas
- 17. 5. Identify key partners What are the key partners you work with? 12 3 4 5 Project co-funded by the European Union funds (ERDF and IPA) The Business Model Canvas
- 18. 6. Identify key activities What are the key activities you need to perform to deliver your value proposition to your customers? 12 3 4 5 6 Project co-funded by the European Union funds (ERDF and IPA) The Business Model Canvas
- 19. 7. Identify key resources What resources do you require to offer and deliver your value proposition to your customers? 12 3 4 5 6 7 Project co-funded by the European Union funds (ERDF and IPA) The Business Model Canvas
- 20. 8. Identify major cost factors What costs are involved to create your value proposition and deliver it to your customers? 12 3 4 5 6 7 8 Project co-funded by the European Union funds (ERDF and IPA) The Business Model Canvas
- 21. 9. Identify revenue streams How do achieve revenue with your value proposition? 12 3 4 5 6 7 8 9 Project co-funded by the European Union funds (ERDF and IPA) The Business Model Canvas
- 22. (OFF) The Business Model Canvas 10. Describe the social impact What is the social impact for the community? Social impact defines actions which have a positive impact on communities. 12 3 4 5 6 7 8 9 10
- 23. (OFF) The Business Model Canvas 10. How do you measure your social impact? Ízlelő is a restaurant that is primarly staffed by people with intellectual or physical disabilities. Here are their indicators: • Rate of earned income • Reach of break-even point • Sold portion/day • Disabled employee • Salary of co-workers 12 3 4 5 6 7 8 9 10
- 24. (OFF) The Business Model Canvas 11. Beneficiaries Who could benefit from a social entreprise? (Additional to the identified customer segments above) Who are the beneficiaries at Ízlelő restaurant? • Disabled employees • Families of the employees • Local famers as suppliers 12 3 4 5 6 7 8 9 10
- 25. Design Thinking Project co-funded by the European Union funds (ERDF and IPA)
- 26. How to be successful? Project co-funded by the European Union funds (ERDF and IPA) feasibility viability desirability being successful
- 27. Source: Cropped screenshot of Charlton Heston from the trailer for The Ten Commandments (1956) Project co-funded by the European Union funds (ERDF and IPA)
- 28. Project co-funded by the European Union funds (ERDF and IPA)
- 29. What is Design Thinking? Design Thinking is a mindset, culture and process to create products, services and business models based on extensive human-centered research and iterative prototyping. Prof. Larry Leifer, Stanford UniversityProject co-funded by the European Union funds (ERDF and IPA)
- 30. What is Design Thinking? Source: Design Thinking at the University of St. Gallen Project co-funded by the European Union funds (ERDF and IPA)
- 31. What is Design Thinking? Source: Design Thinking at the University of St. Gallen Project co-funded by the European Union funds (ERDF and IPA)
- 32. Design Thinking A short story Project co-funded by the European Union funds (ERDF and IPA)
- 33. Design Thinking ☹️ Project co-funded by the European Union funds (ERDF and IPA)
- 34. Design Thinking Project co-funded by the European Union funds (ERDF and IPA)
- 35. Visual Explanation Project co-funded by the European Union funds (ERDF and IPA) • Video https://www.youtube.com/watch?v=iA5MVUNkSkM
- 36. What is Design Thinking? Source: Design Thinking at the University of St. Gallen Project co-funded by the European Union funds (ERDF and IPA)
- 37. What is Design Thinking? Source: Design Thinking at the University of St. Gallen Project co-funded by the European Union funds (ERDF and IPA)
- 38. What is Design Thinking? Source: Design Thinking at the University of St. Gallen Project co-funded by the European Union funds (ERDF and IPA)
- 39. What is Design Thinking? Source: Design Thinking at the University of St. Gallen Project co-funded by the European Union funds (ERDF and IPA)
- 40. What is Design Thinking? Source: Design Thinking at the University of St. Gallen Project co-funded by the European Union funds (ERDF and IPA)
- 41. Visual Explanation • Video • https://www.youtube.com/watch?v=7O36YBn9x_4 Project co-funded by the European Union funds (ERDF and IPA)
- 42. Design Thinking: Needfinding • Decide who you want to observe • Define the questions you want to ask • Observe at the place where things happen • Be open, listen and observe Project co-funded by the European Union funds (ERDF and IPA)
- 43. Design Thinking: Synthesis • Find pain points, needs and insights • Structure your information • Define opportunity areas Project co-funded by the European Union funds (ERDF and IPA)
- 44. Design Thinking: Ideation • Define personas • Create a Point of View • Brainstorm great ideas Project co-funded by the European Union funds (ERDF and IPA)
- 45. Design Thinking: Prototyping • Choose the best ideas • Create a low fidelity prototype • Do not invest much effort Project co-funded by the European Union funds (ERDF and IPA)
- 46. Design Thinking: Testing • Gather early feedback from users, stakeholders and experts, to be able to iterate • Learn about your ideas‘ strengths and weaknesses • Take the chance to fail early Project co-funded by the European Union funds (ERDF and IPA)
- 47. Visual Explanation • Video https://www.youtube.com/watch?v=-2gd_vhNYT4 Project co-funded by the European Union funds (ERDF and IPA)
- 48. Design Thinking: Iterating • Design never ends • Get better and better • Come closer to the final solution Project co-funded by the European Union funds (ERDF and IPA)
- 49. Summary Source: Design Thinking at the University of St. Gallen Project co-funded by the European Union funds (ERDF and IPA)
- 50. Visual Explanation • Video • https://www.youtube.com/watch?v=SshglHDKQCc Project co-funded by the European Union funds (ERDF and IPA)
- 51. Thank you for watching! Project co-funded by the European Union funds (ERDF and IPA)
- 52. Thank you for your attention! Project co-funded by the European Union funds (ERDF and IPA)
Editor's Notes
- Let‘s start with the definition of social entrepreneurship. Being a social entrepreneur means that you find solutions that tackle social, cultural or environmental issues. However, a social entrepreneur is always a businessman that has to consider costs and revenue. No matter who is paying for the costs, someone has to. At the end costs of the startup have to be covered. If people in the startup work for free it‘s more a charity rather than social entrepreneurship.
- Social entreprenuers have to take care of three major factors to be successful. Click 1: First of all there is the technical feasibility of their business. That means the technical needs and the processes have to be available. For example if your idea needs zero gravity on earth it will not be possible as of now. The technical requirements are not available. Usually the technical feasibility is not a big challenge for social startups. Click 2: Then there is the business viability. Social entrepreneurs tend to be in love with their idea and with doing something good for the society. However, don‘t forget that you have to earn money in order to run your business. You need to pay your employees, your rent and other costs. Also you need to understand the market you are workiung in, whoy are your competitors, your partners and your customers. To make it easier for you to understand your environment we will show you how to use the business model canvas. Click 3: Las but not least the human desirability is a major success factor for your social startup. You need to understand the needs of the people you design your solutions for. If there is no need there is no solution. And thus there is no business. Later in this course we will show you, how Design Thinking helps you to understand people‘s needs and how to verify if your idea is the right one. Click 4: If all three factors come together, technical feasibility, business viability and human desirability, you are on a good way to found a successful social startup
- Remember, to be successful we need three factors coming together. One of them is the business viability. To design our buisness model we use the business model canvas. It‘s a very good way to structure your business model in an easy intuitive way. You have a look at the value you want to create and it helps you to understand your business enviroment.
- Another important factor to be successful is to understand the people you provide solutions for. Design Thinking is the most prominent way to understand human needs and feed them with innovative solutions. It also helps you to test your initial business idea and adapt it to the real needs.
- So let‘s start with the business model canvas that helps you to understand your businees environment.
- Remember from the video, this is the busxinesds model canvas. Let‘s have a closer look at the 9 fields.
- So let‘s start to fill the business model canvas. The canvas allows you to frame a hypotheses which you then test with customers until you get to the point in the validation process where you have enough feedback to go on building a minimum viable product. Start by identifying your customer segments. It can be organizational or individual customers. Also keep in mind that for social startups customers are not necesarily equal beneficiaries.
- A ggod value proposition is the foundation of a good design for your future solution. It is also the promise for the value to be delivered. Finally, the value proposition is a product, service, or experience that creates desired gains or relieves existing pains. All of these definitions should show you, how important the focus on the value you want to provide is. After each activity, each new insight you gained you have to re-think if the value propostion is still valid and iterate all other fields in the business model canvas accordingly.
- Now it‘s time to think about how you search your beneficiaries and customers. What‘s the type of your relationship do you have with the customers? Do you provide additional services after purchasing? Name all kind of relationships and put them in the canvas.
- In the fourth step you identify the channels that are easy for your beneficiaries to access. Access limitations are easily overlooked so consider these from the beginning. You can start by asking basic questions about your beneficiaries: are they literate? Do they use mobile technology? Do they have reliable access to electricity, public transport or computers? Are they physically impaired? All those questions help you to find the possible channels to deliver your value proposition to the customer. Some examples are virus marketing, social media, e-mail marketing, on-line events or on site events
- In this step, think through the whole spectrum of partners: central and local authorities, NGOs, other social enterprises, business partners, banks, partners who facilitate production, exclusive suppliers, potential investors, stable customers or multinational companies etc. Again, all the partners you need to deliver your value proposition to your customers
- The next step is to define the key activities. These are the most important tasks a company must carry out in order to fulfill its business purpose. For example McDonalds key activity is running fast food restaurants. Microsft‘s key activity is developing software. Don‘t forget that the key activities have to deliver the value to your customers.
- Social enterprises must think about their “resources” as “inputs” for the change they want to create. That is, what will be the necessary resources to create both, impact and business value. Key resources could be physical or intelectual assets, workforce, capital and so on.
- In this part you need to consider all costs that are incurring to create the value you want to provide to your customers. This can be direct costs such as production, consulting, sales or indirect costs such as administration, building rent or marketing. This is where most startups are too optimistic and underestimate their costs. Consider to discuss this part with colleagues to not forget any major cost factors.
- In this last building block you have to think about for which values are the different cusotmer segments willing to pay and how much. Also consider how they will pay (cash, credit, lease…). Each Revenue Stream may also have different pricing mechanisms, such as fixed list prices, bargaining, auctioning. Contrary to the cost factors most startups are too optimistic evaluating the possible revenue streams. This is also strict team work. Let other look over it and ask the uncomfortable question about if this revenue will really happen as assumed.
- Describing the social impact of your business is not part of the business model canvas. However, it is important to understand the factors how your businesses actions affect the surrounding community. The social impact of your organization goes along with the value proposition. The value you provide to customers influences the socail impact it has. So note down the social impact for each value proposition. At the end this is important to explain why your idea is good for the community and why other should support it.
- In the first part we focussed on business viability. The business model canvas helped you to understand your business environment and to define the value you deliver to your customers. In the second part we will focus on human desirability. You will learn how design thinking helps you to understand your customers‘ needs. Let‘s start with a short story.
- Let‘s first do a quick definition of what is Design Thinking. Larry Leifer, founding director of the Center of Design Research at the Stanford Ubniversity, describes Design Thinking as „a mindset, culture and process to create products, services and business models based on extensive human-centered research and iterative prototyping“. Putting humans in the center of your research, understand their needs and provide solutions that solve their problen. Let‘s have a look at how it works:
- Have you heard about Desing Thinking before? What comes to your mind if you her „Design Thinking“? Let us help you a bit.
- First of all you have to understand the need of the human beings you want to design a solution for. We all tend to believe that we already know what our users want. But do we really know what they need?
- Let us tell you this story: Imagine you are ther owner of a carpenter‘s workshop. One day I come to you as a customer and say make me a chair. Click 1: You are happy about the job and start building the chair.
- At the same day you call me, telling me my chair is ready. I am excited, drive to your workshop and want to pick up my brand new chair. Once I arrived I am looking at the chair and I start being very dissapointed. Click 1: This is not what I meant when I asked you to build me a chair. So, what happened? You built what I wanted but I am not satisfied. Why is that so?
- Well, when you asked you to build me a chair you listened to what I want. But is this what I really need? Click 1: Where do I want to use the chair? Indoors? Outdoors? Click 2: For what purpose do I need the chair? Relaxing? Working? Click 3: How about myself? Am I tall? Short? Heavy?
- What a human wants is not always what a human needs. During Needfinding you use different methods to understand your users‘ needs. All your results from Needfinding will be strucutred and and analyzed during the Synthesis.
- Once you got more knowledge about you user‘s needs and after defining your design space, you start brainstorming ideas how to feed those needs with creative and useful solutions.
- The best of your ideas go into your prototypes. Uncomplicated, cheap prototypes to show your users. Prototypes are also the first test for youself if your ideas are feasible
- Your prototype is there to test your idea. Gather feedback, observe reactions and note down every information you can get.
- Design Thinking is an iterative way of working. So use all your infromation you got from testing and start over. Again and again. Iterate until you get the test results you want to have. Then you are on the right way to creat something that really has an impact and solves someones problem.
- Let‘s have a closer look at the first step, needfinding. First you must decide who is your target group you want to understand. If you decide to enter the office chair business, office workers, assistants and their managers might be the group of people you want to observe. Think about the qiestions you want to ask them. Define open questions that animate your users to talk a lot. Go to their work place to observe their habits and behaviours. Write down everything you experience, take pictures. This part is so important as it is the foundation for the solution you will provide later on.
- Once you come back from a lot of user research you have to structure your information. Go through your notes and find pain points, needs and insights. It is important to write each of them dowm separately on post its. This way you can move and cluster your information easier. Try to find core areas which the derive into opportunity areas. Those opportunity areas are the ones you want to design solutions for.
- Once you have found your opportunity areas, define the persona you want to design a solution for. A persona is the archetype of a group of people that represent the typical nature and behaviours of them. After define the Point of View. The Point of View is your unique design vision that you created based on your discoveries during your needfinding. Both, the persona and the point of view help you to focus on solving one problem of one group of people at the same time. Once you have your persona and point of view, you start brainstorming ideas on how you could possibly solve the presona‘s problem. Don‘t be biased by restrictions or by budget. Every idea is a good idea. You can select later on what is possible and what isn‘t.
- Now it‘s time to choose the best and most promising ideas from brainstroming and combine them in a low fidelity prototype. Your frist versions of the prototype should really be simple and cheap as there is a very big chance you will throw it away after testing it. User paper to describe a service, think about role play to express your solution, skribble your workflow. There are many ways to create a prototype. The most important criteria is that you can interact with your users and let them experience your idea.
- Once you finished your prototype you want to test it to gather early feedback. It is key that you try to receive open feedback and not to sell your prototype. Of course this is your baby and no one likes to hear that your baby is bad or ugly. But this is the unique chance to really junderstand if your solution hits the problem or not. Try to find critcal testers, note down what the like and what they dislike. What was uncler? Did you get new ideas? All this information is very important for the next step.
- This next step is to start over and to re-design your solution based on the feedback you gathered during testing. Sometimes you really have to start over from the beginning, sometimes you are already closer to a real good solution and only have to re-think smaller parts. However, as mentioned at the beginning, Design Thinking is an iterative way of working so each time you get some more feedback or insights you iterate and improve your solution.
- Let‘s summarize what we‘ve learned: Design Thinking is an iterative way to understand human needs and provide them with the right solutions. As you can see on the picture, the process you follow is shown as a circle. That means you can basically start everywhere you need. If your idea for a product or a service is already there, maybe start with a prototype and test this. As long as you are open for feedback and open to change things accordingly it will help you to make the right decisions and come up with a really useful solution after some iterations.