This is from 2014 | 9 minute read
Running an Entrepreneurial Pilot to Identify Value
Over the past decade, design has become more user-centered, as designers champion a process that focuses on people, and stakeholders increasingly realize the benefits of including the people they are serving throughout the process of design. This shift began with a broad acceptance of evaluative research, where designers worked to ensure products were usable, and gained momentum with generative research, where designers spent time with users to identify latent wants and needs and to drive innovation and usefulness. Most recently, designers have utilized behavioral research in order to identify levers for engagement or to support behavior change through service design.
As designers now find themselves in product management roles in entrepreneurial contexts, there is a new way we can leverage our user-centeredness: in understanding if the products and services we are making are valuable. Just as a user test is a way of assessing usability, a pilot test can be a way to assess value—to understand if people find your product valuable and are willing to spend their resources (money and time) to use or experience it. Value is a measure of worth, but it's more complicated than simple utility, because value is relative to both a user's context and a larger market landscape. To be user-centered in assessing value, designers need to consider a broader array of attributes (like awareness, immediacy, delivery channel, and brand promise or value proposition) than are typically part of their creative sphere of influence or training.
Learning to Pilot
Students of design typically learn methods, process, and theory in order to conduct usability testing and assess usability. They can also learn methods, process, and theory in order to run a pilot test aimed at assessing value. Students at Austin Center for Design spend three quarters leveraging a user-centered design approach to build a new product or service, and then spend their fourth quarter planning and conducting an entrepreneurial pilot study. Over eight weeks, students follow a process that looks like this:
- Create a form of prototype, suitable for use. As a prerequisite to running a value-oriented pilot, students need to build a manifestation of their vision. Sometimes this includes working code or actual built-out technology. More frequently, it includes creative human shortcuts that simulate technology. For example, one group of our students envisioned a tool to help K-12 educators communicate with parents through automated SMS messages. Rather than build a functioning automated server to send and receive these messages, the team manually sent text messages from their personal phones each day at a certain time. It's clearly not a scalable solution, but it allowed the team to focus their time on other aspects of the tool, such as the user interface or service model.
- Identify target users and target buyers, recognizing that they may not be the same people. Many of the services that are developed by students realize their value by connecting multiple constituents or stakeholders, such as teachers and parents, or healthcare professionals and patients. We urge students to establish a very clear definition of who will use and benefit from the product, and who will pay for the product.
- Tell an engagement and go-to-market story. Students often view their work as self-explanatory—that the value and allure of what they have made will be obvious to people, and that it will spread organically and quickly. As an early entrepreneur, the lines between product, brand, and sales are very fuzzy. We teach students to tell stories about how they will reach customers, how they will communicate the promise of their product, and how they will react to issues like customer service or support. Role playing and method acting help students explore various scenarios by urging them to consider non-perfect situations that are sure to arise ("What happens if you put up a website and no one visits it?" or "What happens when someone wants a refund?").
- React to a deadline. We create an artificial sense of urgency by requiring that students acquire one engaged customer by a certain deadline (typically within two weeks), and that they consider that flagship customer as a co-designer. Engaged means that they are trading their resources—their time or money—in order to recognize the value provided by the service. Without such a deadline, students work to polish and polish their idea, never considering that it may be the wrong idea, the wrong manifestation of the idea, or the wrong communication of the idea.
- Scale. We create additional urgency by requiring that students identify and acquire 10 subsequent customers by another deadline, typically six weeks after the start of the quarter. This requires students to explore both traditional and non-traditional forms of advertising and networking, as well as other ways of articulating their value proposition to a potential audience.
- Build a financial model. While students are working to acquire customers, they are simultaneously refining a business model that focuses on pricing, customer acquisition, and high-level business expenditures (salaries, rent, utilities), in order to understand the scale at which their enterprise becomes operationally self-sufficient.
Running an entrepreneurial pilot presents students with tactical challenges as well as emotional hurdles. Here are some of the most frequent issues we encounter, and ways we attempt to mitigate these challenges.
- Building awareness is hard and, for many design students, awkward. Products rarely sell themselves. Students learn this quickly, and they often learn it the hard way. We encourage students to explore popular forms of online advertising—Google Adwords and Facebook Ads—and to juxtapose these with more traditional relationship-selling that might leverage networking or in-person meetings. Students learn the trade-off of a breadth/funnel approach to marketing, as compared with the longer selling strategy that often results in a stronger relationship and aligned interests. Both models require perseverance, and students begin to develop a level of professional rigor as they watch their deadline loom closer.
- The fidelity of the technology generally doesn't matter. The fidelity of key interactions is critical. Most of the students have comprehensive design visions for a service-based delivery model that includes one or more digital artifacts as part of an experiential ecosystem. For example, a group working to help people take care of their elderly family members developed a service that includes a website, an iPhone application, and various automated interactions between family members that occur over time or that are based on geolocation. It's unlikely that they will be able to prototype all of these components at a functional level of fidelity, and they may lack the technical expertise to implement even the most basic parts of the automated system. But in thinking creatively about their solution, they can leverage simple tools (Google Forms, text messages, paper printouts, and human-to-human interactions) to simulate how the service may work. The technical fidelity of their prototype is largely irrelevant, because they are testing their value proposition, which can be delivered in an entirely analog fashion.
But when students substitute duct tape and glue for a solid foundation, it's likely that a key behavioral interaction will be negatively impacted. The real-time nature of text messaging may not matter for the majority of their service, but it matters a lot when it's time to pick grandma up from her doctor's appointment. If this is going to be a manual process, the team needs to understand what they are getting into (such as manually sending a slew of text messages throughout the day). In order to ensure that value is delivered, the team needs to critically analyze their design to identify the pieces that are "fundamental to success" and spend extra time refining those at a higher level of fidelity or technical detail. We sometimes call this the "soul of the product"—the rest of the details can slip, but if there is no soul, there is no value.
- Asking for money is scary. No matter how confident a student is with their design solution, they always seem to shy away from asking for money. One of my students was shocked to find himself leaving a meeting where he had successfully pitched his service but had forgotten to mention payment. Since he didn't discuss money, the customer simply assumed it was free. It takes confidence—which is developed through practice—to ask for money and to see financial worth in creative work.
- During the process, students feel emotionally vulnerable. In a design critique at school, everyone knows the rules, and there's a moderator—the teacher—who keeps things from flying off the rails. But when you open yourself and your work to public critique, the rules become much more ambiguous. Students fear this, and consequently, the process of publically launching a product is filled with excitement and a huge amount of anxiety. This is somewhat ironic, considering that the general public is usually much more forgiving than a room full of designers, and it's worth reminding students of large-scale product launch failures.
Identifying Social Value
Design students are increasingly taking on entrepreneurial roles, in which they apply user-centered methods of creation in the context of a self-sufficient pursuit of risk and reward. The process described above can be used to help students test the value of their product or service, in order to understand if people are willing to exchange their valuable resources—time and money—in order to gain a new ability or have a new experience.
Students studying social entrepreneurship are often pursuing a double bottom line, attempting to drive both profit and positive social impact. This form of social impact can also be tracked and measured through a pilot but presents new complexities. For example, NGOs and nonprofits are often tasked with conducting expensive, reductive longitudinal studies in order to justify their efficacy and to truly understand the causality between a social intervention and a desired impact. In an educational setting, it's difficult to replicate this type of study, and so there exists a need to develop a lightweight, user-centered design approach to understanding social impact.
Theory of change, a method that helps translate inputs and activities to outputs and outcomes, provides a scaffold for thinking about causal-chain relationships in this way, but it is not sufficient for students who are learning method, theory, and process in a practitioner-focused program. These students need a variety of methods and techniques, and this highlights a gap in our collective set of teaching and learning tools. The pilot engagement model described here helps students understand the consumer value of their creations, serving as a bridge between user-centered design and entrepreneurship. I look forward to seeing new methods developed that help social entrepreneurs better pilot products and services in a user-centered fashion and really, richly understand the social value of their creations.
Kolko, Jon (2014), "Running an Entrepreneurial Pilot to Identify Value". In interactions magazine, July/August, 2014.