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Tag: #ideation

  • Ideas– Understanding the Audience

    Ideas are a dime a dozen! This is clear from the earlier discussion. Now, in addition to the role of framing the situation discussed earlier, are there certain patterns that we spot in the way entrepreneurs think of the idea? Definitely!

    Most ideas we receive are thoughts from the user or consumer perspective. The product or service offering, that is being imagined is addressing a specific pain of a user or consumer. This is so for two reasons at least. First, if you are the user of an offering, do you have reason to feel unhappy about using it in some way? Also, there would be others who face the same problem and a quick discussion with them would confirm this. Second, even if it is not a first-hand experience of the problem, a detached observation of a few challenges is enough to trigger potential solutions, when we begin racking our brains.

    Embedding the problem in its context makes it easy to generate solutions for users. However, starting a business making this solution the central aspect is not enough. One would need to step away and ask – who would pay for solving this problem? Is it the user/consumer himself? If that is the case, it is a great way to get to doing business. However, it’s not often the case and the customer needs to be thought of as distinct from the user/consumer.

    In addition to this, we also find it easy to spot users of the potential solution, but spotting customers – a group of people who would pay for the customized offering is relatively challenging. An example of this is the way we use ‘internet search’ today. Almost everyone today searches for a variety of information on the internet, and the number has been growing. If people were to pay for the search service, the present-day search behavior would not have been formed. This is despite a large number of people searching! To make monetization possible, the search engine providers have had to rely on alternate ways to generate a revenue stream for the business.

    These customers may not aggregate at one place and even if they do aggregate, reaching them when they are experiencing the issue becomes important. If you can do both – what would be the cost of converting each customer? Can you do it on a scale? A case in point here is the story of a mentor at NSRCEL who built an on-demand tech-support service for computers in the late 1990s. With the relatively low penetration of computers, it was difficult to find potential customers in one place! And with those who had a computer, it was difficult to be remembered when the issue was raised. Our mentor devised a simple solution to overcome the challenge – a sticker. This sticker would be stuck on the side of the device he would have serviced, or on the telephone!

    Finally, it may be easy to develop ideas thinking about the user/consumer. However, customers are central to the creation of the business too. Given that customers pay the money, it is ensured that there is cash flowing in, and your offering is being sold. It is now time to begin focusing on your business, don’t leave it to the end.

    Ask yourself:

    Am I merely thinking in terms of users/consumers?

    Who would pay for the solution offering that I intend to create? Are they distinct from the user/consumer?

    What is the cost of converting a customer? How do I begin thinking of solving the business challenges at scale?

  • Business Model Innovation Strategy

    I recently completed reading the book “Business Model Innovation Strategy: Transformational Concepts and Tools for Entrepreneurial Leaders” by Raphael Amit and Christoph Zott and thought of resuming my age-old habit of writing up book reviews.

    I had picked up this book to read for two reasons:
    1. First, as a mentor, I generally prefer using the business models as a background framework (while sprucing it with the concepts from effectuation and the lean start-up method) when I am working with early-stage venture ideas. I felt there could be something this book could contribute additionally to my practice.
    2. And second, as an academician, I have extensively studied some of the papers that Amit and Zott have been developing as a stream of literature on business models. I was curious to observe how they would stitch their years of academic work into a book that a broader audience would read.

    I feel the book has done justice to the academic work on which it has built its help, and I see a lot of integration with several strands of literature from strategy, innovation, effectuation, opportunity discovery, lean, and many more. This got me to enjoy the book as an academic reader.

    Wearing the practitioners’ hat, the book does a decent job of communicating the broad ideas and seems to have structured the flow well. The numerous examples are well placed in illustrating the concepts. However, I would have liked a few linkages to tools and material that would have elaborated the ideas for application. In some ways, I feel the book let go of the chance of delivering a higher value to the practitioner audience as the blue-ocean strategy had done. I guess this may have been because the practitioner variant of business models had come into the market several years ago, as the book – Business Model Generation.

    Personally, for me this book has provided some useful concepts that in collate my desperate thoughts from my application during mentoring sessions, and also highlighted new ideas of how I could present some of my learning to the audience of entrepreneurs. I promise to work on this one soon.

    Overall, I think if you are willing to do the hard work to connect the concepts to the application. This book is a good read. Otherwise, it leaves a wide-open space for practitioners like me to extend its application and utility into our own domain areas.

    I got my copy of the book from: https://amzn.in/d/6xVSMgN

    Happy Reading!