IDEO 2018 Designing a Business Assignments Workbook Course

© IDEO 2018 Designing a Business Assignments Workbook

Course Assignments KEY Business Design is an evolving, iterative craft. To help you get into this flow, each lesson contains distinct moments to stretch your thinking (diverge), frame a Question, build a Prototype, collect Evidence, and iterate and evolve your business model (converge). • Start your Business Blueprint E: Collect Evidence LESSON 2: LESSON 3: CREATING VALUE CAPTURING VALUE DELIVERING VALUE P P Q • Identify your business P: Build a Prototype LESSON 1: INTRODUCTION: REFLECT Q: Frame a Question DIVERGE E CONVERGE P Q DIVERGE E CONVERGE • Stretch your thinking about your value proposition • Highlight your business’s most important costs • Build a prototype of your value proposition and offer • Stretch your thinking about revenue model and price • Collect evidence about your value proposition • Build a prototype and collect evidence of your revenue model and price IDEO U • BUSINESS DESIGN • COURSE MAP • © IDEO 2018 CONCLUSION: Q DIVERGE E CONVERGE REFLECT • Stretch your thinking about your sales channel • Identify questions for the future • Build a storyboard prototype of your channel • Capture the story of your business • Collect evidence about your channel ideas • Update your Business Blueprint 2

Assignment: Introduction LESSON 0 What’s the new business or business line that you want to work on? It could be something from your current role at your company, or an idea that you are hoping to start from scratch. STEP 1: Identify your business. RECOMMENDED TIME 30 minutes minimum Think about the problem you’re trying to solve and who it will most benefit. Write and sketch your answers to the questions. 1. 2. What problem do you hope to solve? Why is it important? Who do you think your customers are? Who has the problem you’re hoping to solve? REMEMBER Consider these three criteria when selecting a business to work on: 1. The problem you’re trying to solve affects enough people to make a business out of it. 2. You have access to, or prior knowledge about, the people you’re hoping to serve. 3. The business you want to start relies on existing technology or capabilities. You’re not waiting for a breakthrough in science before it can come to life. My customers are universities. These institutions have contributed to the problem I hope to solve. As college students’ schedules get busier, their daily necessities are rearranged and often do not get completed. This includes exercising. Students with large class loads with accompanies assignments outside of school plus jobs often lack the energy to exercise, negatively affecting students’ health and well-being. 3. Fill in a sentence to introduce your business to the world. W E ARE LOCATED IN Bop. Up Atlanta, Georgia (location) (business name) WE'RE GOING TO , Create a platform to encourage accessible exercise (vision of the business, problem you’re solving) . FOR Busy college students. (ideal customers) IDEO U • DESIGNING A BUSINESS • LESSON 0 • © IDEO 2018 3

Assignment: Introduction LESSON 0 STEP 2: Start a Business Blueprint. Fill in what you think you know about your business. Even if you’re unsure about some of the elements, take some best guesses. Remember, at an early stage, you’re not supposed to know them all. We’ll help you refine your Blueprint throughout the course. PRO TIP We’ve provided a working copy of the Business Blueprint on the next page. CUSTOMERS: Universities and Colleges Treat it as a prototype–a worksheet for you to capture ideas, edit, and reference later. It’s not precious, so mark it up and print new copies as needed. Keep in mind: Even if you think some of these components are fixed or set in stone, they may not be. Throughout this course, we’ll explore ways for you to stretch your thinking. Be ready to iterate all parts of your Business Blueprint. OFFER Specialized app for your school/ a bash if your school accumulates enough steps towards the end of the semester VALUE PROPOSITION : will bring health and wellness to studetns REVENUE MODEL & PRICE App + offers on campus + perks (bash)/ $2, 000 per 5, 000 students COSTS estimate CHANNELS : an application connected to the universities: students log in with secure student ID and password PARTNERS: partner with oncampus restaurants/ stores/ organizations TEAMS & RESOURCES: team of app developers, team of outreach for students, team of outreach for university officials IDEO U • DESIGNING A BUSINESS • LESSON 0 • © IDEO 2018 4

Business Blueprint CUSTOMERS Who are you serving? We are serving busy college students. OFFER REVENUE MODEL & PRICE CHANNELS Whatproductor service will you make and deliver? How will you make money? How and what will you charge your customers? How will you get your offer to customers? Bop. Up is an app guaranteed to encourage students to walk more through competitive tracking alongside their peers and other schools as well as incentive of on-campus perks My app will be sold to universities $2, 000 per every 5, 0000 students To students through their university. I will get my offer to universities by contacting school officials. VALUE PROPOSITION COSTS PARTNERS Whatcustomer need(s) are you fulfilling? Whatis the unique promise your offer provides? How much does it cost to create and deliver your offer? What keyrelationships and systems will help you create and deliver your offer? Giving students a unique, easy way to get in their necessary exercise they are lacking. Specialized app for each school and end of semester batches: 2, 0000+ The relationship of students to their phones/ students to their schools (school spirit) TEAM & RESOURCES Whatskills/capabilities/resources will you need? Teams to develop specialized apps for each school, Team of event coordinators, team of marketing people IDEO U • BUSINESS DESIGN • BUSINESS BLUEPRINT • © IDEO 2018 5

Assignment: Creating Value LESSON 1 Your value proposition is the essence of your business and helps your customers choose (and buy from!) you. Stretch your thinking about your business’s value proposition, build a prototype to test it, and collect evidence to refine it. STEP 1: Stretch your thinking around your value proposition. RECOMMENDED TIME INSIGHTFUL 1 hour minimum What do you understand about your customer's needs, that your competitors don’t? As a college student myself, I understand what motivates students to exercise and what does not. REMEMBER UNIQUE A great value proposition is: What do you do (or have) that no one else does, and can’t easily acquire? Insightful. It represents deep familiarity or insight into the people you serve and meets their functional and emotional needs. e. g. workout gear that not only wicks away sweat, but also looks good when you’re working out. Unique. It points to something that you—and only you—can provide. Customers simply can’t get it anywhere else. e. g. Revolution Foods’ unique advantages of resources and deep expertise in providing nutritious food at scale. Targeted. Better to have 100 people fall in love with your offer than to have 1, 000 people feel lukewarm about it. I have the answer to accessible exercise given pre-existing competition and school spirit of schools TARGETED Who will be super-passionate about your business? Students will love this! Everyone I’ve pitched to in school wishes they had it. STEP 2: Based on your thinking above, write down three different value propositions for your business. OUR CUSTOMERS W I L L CHOOSE OUR BUSINESS BECAUSE. . . Encourages health and wellness in a fun, accessible way . (version one value proposition) Creates cohesion amongst students (school spirit) especially for those who commute and may not feel like they are one with the school . (version two value proposition) Encourages students to walk with each other, see their campus, meet new people . (version three value proposition) IDEO U • DESIGNING A BUSINESS • LESSON 1 • © IDEO 2018 6

Assignment: Creating Value LESSON 1 PRO TIP If you're considering different value propositions, construct an ad for each to try them out. STEP 3: Build a prototype of your value proposition. Pick a value proposition to start with and construct a digital ad that brings it to life. Try to include details that help people understand why they should choose your business. Bop. Up Sponsored (Company name) (Attention-grabbing title) (Sketch an image that helps convey your value proposition) Students need a way to stay fit with their busy schedules (Call to action) We are offering accessible health and wellness for college students while 2 0 0 Likes 25 Comments 109 Shares encouraging social aspects of attending a university (One sentence that describes your value proposition) IDEO U • DESIGNING A BUSINESS • LESSON 1 • © IDEO 2018 7

Assignment: Capturing Value LESSON 2 With your value proposition and offer in mind, it’s time to think about revenue model and price. In this lesson, first take stock of other businesses that produce an offer similar to yours. Next, review some of your business’s most important costs and then stretch your thinking about your revenue model and price. Then, build a prototype and collect evidence to help you further refine how and how much your customers will pay. RECOMMENDED TIME 1 hour minimum STEP 1: Identify businesses that produce an offer similar to yours. To begin to think about revenue model and price, look out to the world to understand how other companies are charging for similar products or services. Research three companies, and capture what you learn below. SIMILAR PRODUCT OR SERVICE REVENUE MODEL ( W H O PAYS, W H E N ) PRICE RANGE NOTES (What are moments of friction in this payment process? Who are other stakeholders who might provide revenue to this business? ) Sweat coin Partnerships with 300+ brands, insurance companies Free: everything bought with points earned by walking Limits people eligible for certain offers: users must upgrade to be able to earn more Runtopia Virtual coin system/ rewards are fitness gear Some features premium membership but most free Daily tasks and inviting friends = rewards Lifecoin Brand partnerships Must pay to upgrade IDEO U • DESIGNING A BUSINESS • LESSON 2 • © IDEO 2018 Similar to sweatcoin but requires real money 8

Assignment: Capturing Value LESSON 2 STEP 2: List and prioritize your business’s most important costs. At this early stage, take a first pass at listing your business’s most important five to ten costs. Getting these out of your head and onto paper will help you see some truths about your business. Then designate the ones that most differentiate your offer (D), feel flexible (F), or feel set, outside of your control (S). If you worked on the spreadsheet included in this lesson, you should have this information on-hand. PRO TIP Create your offer CREATE YOUR OFFER GET YOUR OFFER TO CUSTOMERS Think about: (the resources and people needed to build or create your offer) (the resources and people needed to distribute and sell your offer) • Equipment, components, and/or ingredients • Space for building/creating/ storing your offer • People to build or produce your offer • New or existing technology, processes, and infrastructure Get your offer to customers Think about: • Moving your offer to where it’s purchased • Rental, ownership, licensing, or partnership costs to distribute your offer • Displaying or housing of your offer COST DESCRIPTION D F S COST DESCRIPTION D Existing tech (health app) Investors to fund trails to gauge success (possibly) Each school should have specialty look of app Connections with heads of universities Different outreach for every school $ for end of semester bashes F S REMEMBER You will start with getting some idea about your business’s most important costs. As you develop your business, you will continue to estimate all of your costs and research and prototype to learn more about them. Now fill in the following. TO FULFILL OUR VALUE PROPOSITION, OUR MOST IMPORTANT COSTS INCLUDE App development , (costs) University outreach , AND (costs) IDEO U • DESIGNING A BUSINESS • LESSON 2 • © IDEO 2018 . University bashes (costs) 9

Assignment: Capturing Value LESSON 2 STEP 3: Stretch your thinking about revenue model and price. Pick three different revenue models that are ‘Typical’, ‘Stretch’, and ‘Wild Idea’, either from the ones below or from others out in the world. Try to think as expansively as possible, even if you feel like they might be crazy ideas —that's the point! For each, fill in your price range, frequency, and paying customers/stakeholders/partners. PRO TIP To expand your thinking on price, consider what other companies charge for similar offers and what your business’s most important costs will be. Also consider the deeper emotional or social needs that your offer serves. Could you charge more for fulfilling these needs? If you look outside of your industry and can identify other companies who are serving similar needs, you can see what they’re able to charge relative to their competition. e. g. Cirque du Soleil providing entertainment that feels more like a highend theater experience than a circus. ONE-TIME CHARGE SUBSCRIPTION ADVERTISING (cup of coffee) ( Netflix) ( Instagram) FREEMIUM PAY-AS-YOU- G O (New York Times online) (Metromile) One time payment for semester TYPICAL STRETCH REVENUE MODEL: W E W I L L GET PAID 2, 000 for every 5, 000 students REVENUE MODEL: W E W I L L GET PAID (price range) PER universities IDEO U • DESIGNING A BUSINESS • LESSON 2 • © IDEO 2018 Pay for new features REVENUE MODEL: BY universities (customers/stakeholders/partners) If Bop. Up seeks partnerships W E W I L L GET PAID Depend on offers (price range) PER (frequency) . (customers/stakeholders/partners) 15, 000 per academic year ' W I L D IDEA' (price range) (frequency) BY One time payment for year (frequency) . BY Universities . (customers/stakeholders/partners) 10

Assignment: Capturing Value LESSON 2 STEP 4: Build a prototype of your revenue model and price. Create a rate sheet for your business by filling out information you compiled earlier, and the features of your three revenue models and prices. You will use this to test with potential customers. W E ARE. Bop. Up LOCATED IN. . Atlanta, Georgia (business name) WE'RE GOING TO. (location) , Create an accessible way to encourage physical activity (vision of the business, problem you’re solving) FOR. . Busy college students (ideal customers) OUR CUSTOMERS W I L L CHOOSE OUR. App BECAUSE (offer) It engages students together amongst school spirit, increases their exercise and allows students to be explore their campus and meet new people. (value proposition) Pay for each semester Pay once an academic year Partnerships (plan one) (plan two) (plan three) YOU GET The specialized app for your school, a bash for your school if your students get enough steps, a platform to promote student organizations or on-campus platforms (features of the plan) A N D THIS W I L L COST students 2, 000 per 5, 0000 A N D THIS W I L L COST 15, 0000 A N D THIS W I L L COST Depend on partnerships. with what you are wanting to promote on the app (price range) IDEO U • DESIGNING A BUSINESS • LESSON EVERY 2 • © IDEO 2018 (frequency) (price range) EVERY. . (frequency) 11 EVERY (frequency)

Assignment: Delivering Value LESSON 3 Often, we think of channel as locked, with no room for creativity. But this is a moment that’s so close to your customers! Design it to unlock more value for them and your business. Stretch your thinking about different ways that you could use your channel. Sketch a storyboard prototype that captures key moments around your channel and collect evidence about which ideas most resonate with people. RECOMMENDED TIME STEP 1: Stretch your thinking about your sales channel. 1 hour minimum Answer the questions below, using the guiding statements and examples to help you think differently about your channel. PRO TIP At this stage, stay open to possibilities to stretch your channel, knowing that not all of these innovations can be done right away. Don’t ground your ideas before they get a chance to take off. If a good idea surfaces, you may be able to unlock new ways to bring it to life. H O W MIGHT YOU MEET MORE CUSTOMER NEEDS? H O W MIGHT YOU MOVE DIRECT TO CONSUMERS? Create new contact with customers at different times or places, or use your existing channel to meet other needs for your customers. Bypass intermediary channels to capture more revenue and have a closer relationship to your customer e. g. , breakfast at Taco Bell, Dollar Shave Club for other products beyond razors. Social aspect of the app: can show you where you are amongst leaderboards of your friends e. g. , Casper mattresses selling and shipping direct to customers and avoiding mattress retail stores. Promotions directly through the app to unlock if you get required amount of steps H O W MIGHT YOU BUNDLE A N D PARTNER? H O W MIGHT YOU CONSIDER THE FUTURE? Find new ways to bundle your offer with others, or work with partners to provide completely new offers that make use of your complementary strengths and assets. Envision how you might deliver your offer to customers in the future. e. g. , smart home devices, 3 D manufacturing, autonomous delivery. e. g. , NY Metropolitan Opera delivering live streams to movie theaters. Universities will be the main partner- will work with them to promote their schools. Will give them access to health stats of students IDEO U • DESIGNING A BUSINESS • LESSON 3 • © IDEO 2018 Would love a more precise tool than an app to calculate steps 12

Assignment: Delivering Value LESSON 3 REMEMBER All of your ideas for your channel may have value for your customers. Keep them handy, because you may return to them in the future. Also, some of your moments may start to feel more like marketing and less like sales. That's okay; All of these ideas have the same goal: to deliver more value to your customers. STEP 2: Sketch a storyboard prototype that captures key moments of your channel innovations. Write and sketch the most important moments for two of your channel ideas. These might be moments when customers consider, buy, or use your offer. Be sure to include compelling, surprising, or joyful moments that will bring more delight to your customer’s experience. CHANNEL IDEA 1: Universities will buy the product per semester CONSIDER: BUY: Trying this out for students and seeing how it catches on CHANNEL IDEA 2: The application that will allow you to know and encourage your students USE: Health stats of students and the platform as a way to promote your schools Universities will buy the product per year CONSIDER: Using the system over academic yearly bases for ultimate tracking IDEO U • DESIGNING A BUSINESS • LESSON 3 • © IDEO 2018 BUY: The application that will allow you to know and encourage your students USE: Health stats of students and the platform as a way to promote your schools 13

Final Reflection CONCLUSION The world needs more great businesses that are committed to creating, capturing, and delivering real value for their customers. To wrap up this course, answer questions about the future, and return to your Business Blueprint and the story of your business. STEP 1: Answer questions about the future of your business. Think about the next big assumptions you have about your business. Reflect on everything you have thought about, built, and learned. What’s next? What big questions do you still have? How will I show universities that this will be successful What prototypes can you build to answer them? Trying out the concept of the app between on-campus organizations What evidence will you collect? What will need to be true to continue to bring this business to life? Evidence that the steps of students increased and their feedback on how the experience went for them (seeing the campus more, meeting new people, etc) IDEO U • DESIGNING A BUSINESS • CONCLUSION • © IDEO 2018 14

Final Reflection CONCLUSION STEP 2: Update the story of your business. Fill in the next version of your business narrative. If you’re feeling up to it, read it aloud to people! This is a great way to get initial reactions and start to hear yourself talk about your business. W E ARE Bop. Up LOCATED I N A t l a n t a , G e o r g i a . (business name) (location) , WE'RE GOING TO Provide a tool to encourage students to exercise. (vision of the business, problem you’re solving) . FOR busy college students who are often wrapped up in their own schedules. (ideal customers) OUR CUSTOMERS W I L L CHOOSE OUR application BECAUSE (offer) it allows for universities to tailor the app to their students and school . (value proposition) W E W I L L GET PAID 2, 000 EVERY 5, 000 students per semester BY universities across the united states (price) . (frequency) (customers/stakeholders) TO FULFILL OUR VALUE PROPOSITION, OUR MOST IMPORTANT COSTS INCLUDE Funds to throw bashes App developmemt (costs) . , AND university outreach (costs) PEOPLE CAN BUY OUR OFFER A T / O N / I N , (costs) Bop. Up. cpm (what channels, where) DURING summer and winter academic calendar breaks. (when) IDEO U • DESIGNING A BUSINESS • CONCLUSION • © IDEO 2018 (bundles or partners) 15

Final Reflection: Conclusion Revisit your Business Blueprint. Reflect on what you learned about your value proposition and offer. CONCLUSION STEP 3: Update your Business Blueprint. If your blueprint is starting to show wear and tear, great! It's serving its purpose. But if you want to keep things orderly, print another one, and capture your latest thinking. But don’t throw away your old versions, they may come in handy down the road. REMEMBER Your Business Blueprint isn’t meant to be framed and put on the wall, or to collect dust high on a shelf. It’s a living document —so keep working on it until you’ve thought through, prototyped, and tested all of the parts of your business. CUSTOMERS: Universities and collges OFFER: Service thst will motivste students to be active/ offering student health VALUE PROPOSITION : fulfilling student needs to be active between their busy schedule/ unique promise- students will engage in healthy activity, engage with each other and this will curate unity within the school REVENUE MODEL & PRICE Universities get the app for students with personalized health stats, leaderboards, competition between rival schools and daily offers. Also, they get a bash at the end of the semester with vendors, giveaways and music COSTS 2, 000 for every 5, 000 students per semester CHANNELS I’ll get to the universities by setting up meetings with health professionals, business model people, cost experts and the head of the university PARTNERs: the universities will provide the discounts and oncampus service -on campus restaurants and stores TEAMS & RESOURCES App developers, university outreach, event plannerd, student ambassadors IDEO U • DESIGNING A BUSINESS • CONCLUSION • © IDEO 2018 16