Bounty vs. Snickers and the behavior of milkshake buyers

It turns out that if you apply this framework to chocolate bars you discover that customers “hire” chocolate bars for completely different reasons . While Bounty is hired as a sweet delight that melts in your mouth, Snickers is hired by customers as a substitute for a real meal. Therefore the experience of eating a Snickers is different and consists of biting and chewing that gives you the impression you are eating something real.

Reframing the marketing positioning challenge

As it turns out Tony’s vision is much bigger and what started as a book named “Delivering Happiness” is slowly turning into a real-world movement. After disrupting the online shopping world with Zappos, one of his latest ventures aims to disrupt an industry that is huge but ripe for disruption.

Delivering Happiness on Very Light Jets

Peoples perceptions about private jets today is similar to the the perception about cars 100 years ago: expensive, not very reliant but certainly a status symbol. NetJets has already improved private jet charter economics through fractional ownership programs and membership programs that give access to its fleet of private jets. This is certainly an innovation, but at the core it is an incremental innovation that made it cheaper to get access to a private jet. Nevertheless it has not yet completely removed the barriers.

Very Light Jets (VLJs) might just be the technical innovation that is paving the way for a disruption in air travel and private jet charter. Very Light Jets are private jets that are single-pilot operated, weighs less than 10.000 lbs (~ 4500 kg) and cost less than 5 million USD. Philipp Greenspun created an excellent overview of current models and there is also a comparison of models and prices. The trade-offs that passengers have to accept with VLJs  are that the you can only bring limited luggage on board, you might have to bring your own catering and there is only a very limited bathroom/toilet.

But these trade-offs bring a major cost benefit: direct operating costs are in the range of 300 – 800 USD per hour. The jet engine also allows higher flight levels and flight speeds which creates significant time savings. This makes a private jet that seats four passengers a very compelling mode of transportation.

VLJs have the potential to disrupt air travel and could enable an increase of air taxis – companies that offer privat jet charter with prices that match traditional airlines but with the flexilibity of a taxi.

JetSuite is one such company that is operating a fleets of VLJs and the company has recently been bought by David Neeleman, the founder and former CEO of JetBlue – also known as one of the companies delivering extraordinary customer experiences.

New Technology + Authentic Service = Remarkable Customer Experiences

Back to Tony Hsieh. He has recently invested 7 million USD in JetSuite and is now on the board of directors. Jetsuite has also repainted one of their Embraer Phenoms to match the branding of the “Delivering Happiness” movement. The real innovation and revolution are the prices: with advance booking, an Embraer Phenom 100 jet from San Francisco to Los Angeles can be booked for USD 1499 – not just a seat but the entire jet with four seats. And selected offers are already availabe for just USD 499 – once again the entire jet not just a seat.

Such a price combined with authentic customer service that creates a frictionless travel experience could be the trigger for the next innovation in air travel: low-cost, no-frills private jet charter. Sounds too far away? One could have believed that about low-cost, no-frills airlines some 20 years ago as well – and we all know how this turned out.

So according to this video, in the future we will be flying in airplanes with transparent ceilings, automated luggage storage and an area that can change from a bar to golf putting area.

Futuristic concept designs distract from the immediate problems

There was a time when I watched videos like this without giving it a second thought but recently I have reflected more on these videos. I have a very strong feeling that futuristic concept videos could be counterproductive because they distract from the immediate problems that customers want to have solved. The list of them in the case of Airbus is easy to create:

1. Find a way to control cabin pressure so that you don’t have to “pop” your ears
2. Increase air quality and humidity in the cabin
3. Internet and power outlets at all seats
4. Reduce the engine noise inside the cabin
5. Increase legroom and make seats more comfortable
6. Get passengers to the destination faster and without delays

These are the real problems that should be solved and a video like this is merely a nice marketing and promotion video. Airbus is not the only company, Microsoft released a new video envisioning what the future of productivity will look like.

Nokia released a video showing a futuristic concept for smartphone that uses nanotechnology to change its shape and surface.

All of these videos present wild ideas packed into a nice presentation using computer-generated 3D animations that are nice for marketing aspects but useless to facilitate innovation processes. They talk about a better future far out and miss out solving real problems today. If everybody is aware that these videos are just a marketing stunt – fine. But I can’t help and feel that these videos are used to distract from the fact that maybe there is nothing really new you have to show off. I think this is an inherent danger when one focuses on giving a nice talk about the next wild idea, instead of delivering a solution today to a real problem.

Is Apple a counterexample?

Now you might have seen another concept video that is already a little bit older. In 1987 Apple produced a video about the so-called Knowledge Navigator and in 2011 this vision has at least partly become reality with Siri. So is this an example that videos like this might indeed not be completely useless?

It turns out that the Apple in 1987 was completely different from the Apple we know today. Apple in 1987 was unable to compete in the changing market and focused primarily on marketing instead of building extraordinary products. I am quite sure that there was no plan in 1987 to nearly bankrupt the company, bring back Steve Jobs, secure financing from Microsoft, reinvent the mobile industry, acquire a DARPA financed research project and then launch the personal assistant Siri 24 years after the initial Knowledge Navigator concept was presented. The video turned out to become reality but it did not contribute meaningfully on the journey to get there.

Marketing tool but not an innovation tool

From this reflection I have come to the conclusion that such highly futuristic videos can be useful when they are used as marketing tools but they should never be used to distract from a lack of innovation and new products. Instead of telling customers what they will get in 10, 20 or 50 years down the road the focus needs to be on real problems in the next product cycle. That might not be that visionary, but most probably more successful.

This article is a guest post from Tamara Carleton, Ph.D., Senior Researcher at the Center for Foresight and Innovation at Stanford University. I have been working with Tamara and Prof. Bill Cockayne on several occasions and Tamara has just been granted a research grant from ThinkSwiss, an official program of the Swiss Confederation. She will be in Switzerland from end of November until early December 2010. Tamara is interested in connecting with researchers and practitioners from Europe, and she can be contacted at carleton@stanford.edu.

Many organizations make the common mistake of designing a future product or service for today’s user. The user today will not be the same user you want to target in two or three product cycles.

Who is your Future Customer?

Let’s say that your target user is a 25-year-old male consumer in Germany. If you are planning a new product (or service) to launch in 10 years, then the 25-year-old consumer today will be 35 years old in 2020. And a 25-year-old of 2020 will look at his middle-aged counterpart and likely see little similarity in values, beliefs, and spending habits. A small generational gap just weakened your R&D strategy.

There are ways to overcome this discrepancy. At our lab at Stanford University, Professor William Cockayne and I have introduced three foresight tools that take a user-driven approach in innovation. These tools have been field tested rigorously and used by companies around the world from Microsoft to Tata to Volvo. You can use these same tools to understand the future customer experience.

Tool #1: Demographic Curves

The first tool, called Demographic Curves, looks at the future user in terms of meta data. Demographic data identifies changes within a population segment or specific group over time. Some experts say that demographics is destiny. By analyzing changes in demographics, you can track generational needs, anticipate population losses or booms, and ultimately plan for major workforce changes.

For example, here in the U.S., the single largest birth year to date was 1990, and those born in this year are part of the Millennials generation. Simply by sheer numbers, the Millennials impact every market through their purchasing decisions. They typically entered college in 2008 and will likely graduate from 2011 to 2013. You can imagine the spike they will create looking for the first jobs, housing rentals, new cars, and other lifestyle products.

Tool #2: Future Users

The second tool, called Future Users, uncovers user needs at the individual level. This tool fundamentally compares two user personas in terms of their life timeline, and personas are a powerful way to bring segment data to life. In our work, some companies have adapted the Future Users tool to describe and compare business roles and even products.

Tool #3: Futuretelling

The third tool, called Futuretelling, brings tacit user needs to the surface. Futuretelling are short and dramatic performances that illustrate a particular user need as a scene from the future. This is active storytelling at its best, and psychology studies have proved time and time again why stories work. Often it is difficult to articulate the exact nature of a future need, and instead, we have found that it is easier and more compelling to present the broader context. As we like to say at Stanford, show, not tell.

Additional Tools Online

The combination of these three tools helps companies to prepare and design for the real user of the future. Applying foresight thinking can turn a complex and unclear world into a map of new innovation opportunities and possibilities. Additional methods and tools for Foresight Thinking can be found online at http://foresight.stanford.edu/.

Yet this argument completely misses the point of what is unique about this approach called Design Thinking. Design Thinking (or any innovation method or approach that utilizes these techniques) is not about the techniques, but the context in which these techniques are applied.

The essence of Design Thinking is the context in which these techniques are applied. If you over-control, over-manage, and over-plan, you won’t have the freedom to stumble upon breakthrough ideas. It’s the culture and leadership in and outside the design team that allows you to experiment with ideas and prototypes; that defines "how" user research is done, and "what" kind of prototypes are created.

When you talk with design agencies, they see this the same way. At the DMI Conference 2009, Tim Brown, CEO of IDEO, Sohrab Vossoughi, Founder & President of Ziba Design, and Jesse James Garrett, the President of Adaptive Path were in attendance. The conclusion between these three leaders:

“We all have the same processes and apply the same techniques. What differentiates us is our culture and how our culture shapes how we structure the design process and apply different techniques”

This statement was quite an eye-opener for me and confirmed my belief that a good design process is not about the techniques and methods, but the culture, context, and leadership within that team that leads to breakthrough innovation.

Here are two videos of iPad users who you would probably not include in the typical group of users for such a device. Nevertheless the experience that this 2 year old kid and the 99 year old grandmother have with the iPad is once-in a lifetime experience. I think it is well worth your time if you invest the 10 minutes and just observe how they interact with the device.

A 2,5 Year-Old Has a First Encounter with An iPad

iPad Helps 99-Year-Old Woman Rediscover Writing

There is also a longer version available with an interview with Virginia.

After watching these clips of “extreme users”, you have observed two humans whose life has just changed:

• A 2 year old child who will never know what a world without tablet computers is like, and
• A 99 year old grandmother that becomes an active, creating part of a digital society.

And the core learning is: Contrary to many industry pundits and technology experts, users don’t care about multitasking or a webcam because the iPad opens up so many new opportunities for them that the device becomes a life-changer. These two videos are also an excellent starting point for a conversation in your organization what this new device category ultimately means for your business.

Nevertheless the question is not what application you could transfer to the iPad in the next 3 months. The ultimate question is: How can you solve your customers problems with this new device category? Which business opportunities will emerge with this new category of devices in the coming 18 to 24 months? How can you trigger new business opportunities and leverage existing ones?

New iPad applications: An opportunity for Customer Co-Design?

I have run several customer co-design workshops and the experiences I have made during these workshops confirmed that this is a useful approach to identify opportunities for product and service improvements.

In a customer co-design workshop you bridge the gap between designer (product management, software development, product design) and the customer by integrating the customer into the actual design process. This has the benefit that you don’t need to “extract” implicit knowledge from your customer but instead give him the tools and method to express his requirements.

The iPad is an an excellent opportunity to integrate customers into the design process and develop new ideas with your customers. And the best of all, you can probably do this by yourself:

1. Buy at few iPads – If you are not in the US you can either wait until they are available in Europe or tap into other sources (eBay, friends, your next business trip) to get a device.
2. Invite a few customers and use the iPads together with your customers, let customers explore the device and imagine how the iPad and applications on the iPad could help them solve their problems, run their business and enjoy life.
3. Brainstorm ideas, sketch prototypes for new applications and imagine different business models that utilize the iPad.

This is not a guarantee that you will indeed find the next breakthrough idea after one event, but it is a big step into that direction. Certainly the selection of customers is important and the workshop itself should not become an “all you can wish for” event but with the right approach it will help you find answers to the biggest question: How will the iPad impact your business?

If you want to innovate, you should prevent such discussions because they lead nowhere. Of course there is a difference between a well-founded feedback session and polemic argument, but even the value of feedback is limited when you are truly innovating. Could anyone have imagined a situation like the one below?

Who would have thought that one day we would be communicating 140 characters at a time? At least not Mike Arrington, founder of Techcrunch, the largest technology blog online, who wrote in his first post about Twitter (which was still called Twttr at that time):

There is also a privacy issue with Twttr. Every user has a public page that shows all of their messages. Messages from that person’s extended network are also public. I imagine most users are not going to want to have all of their Twttr messages published on a public website.

If this was a new startup, a one or two person shop, I’d give it a thumbs up for innovation and good execution on a simple but viral idea.

But the fact that this is coming from Odeo makes me wonder – what is this company doing to make their core offering compelling? How do their shareholders feel about side projects like Twttr when their primary product line is, besides the excellent design, a total snoozer?

Today Twitter has become a global phenomen with 75+ million users and aims to become the number one platform for real-time conversations on the web.

Apple is the company that usually receives pretty bad feedback when they are releasing new products. Let’s have a look at the first comments about the iPod in the MacRumours forums, the number one outlet for Apple news:

Great just what the world needs, another freaking MP3 player. Go Steve! Where’s the Newton?!

I still can’t believe this! All this hype for something so ridiculous! Who cares about an MP3 player? I want something new! I want them to think differently!

Why oh why would they do this?! It’s so wrong! It’s so stupid!

We have all experienced the revolution of the music industry that was triggered by the iPod. Not much more needs to be said.

Fortunately, Marc Zuckerberg, the founder of Facebook, did not listen to his Harvard Professor’s recommendation either, who told him sincerely, that it doesn’t make sense to further pursue Facebook.

Of course, at that time I thought that social networking sites were a complete waste of time — both for the users and those developing the sites — so I earnestly tried to talk Mark out of squandering his precious Harvard education on such a frivolous endeavor. "You think you’re going to compete against Friendster and Orkut?" was the general outline of my argument. There were already too many social networking sites out there, I claimed, and building yet another one was clearly a waste of time. After all, didn’t he want to graduate? And make an A in CS161 while he was at it?

What is the key take away?

Nobody can predict the future and even the "experts" will never fully grasp the impact of some innovations when they where interacting with them the first time. You will always find somebody who can give you hundreds of reasons why it will not work. But the goal is not to find the idea that is not facing any obstacles – the goal is to find an idea that is worth overcoming these obstacles.

But maybe even more important: What does it mean when even pundits fail to predict the success of breakthrough products and services like Twitter, the iPod and Facebook? How much can you really trust the naysayers?

Innovation leaders and entrepreneurs need to be aware of this, ignore the pundits and focus on building traction for their ideas. While others are discussing, the leaders are acting. And even though one might fail, only by trying to invent the future you can achieve success. Solely discussing and predicting what the future might hold will never lead to a different future.

This award is given each year to the authors of the article published in the preceding volume of the California Management Review that has made the most important contribution to improving the practice of management.

About the Article

In their article, Beckman and Barry outline four core elements of design thinking — observation, framing, imperatives (needs or design principles), and solutions.
They ground these elements of design thinking in models of how people learn, describing which learning style is best suited to each element of design thinking. By doing so, they provide a model for achieving innovation among members of a team with different learning styles. Their model can be applied across a wide range of sectors, from hardware and software products to services to architecture.

“The innovation process as a learning model suggests that teams be composed of individuals who are polar opposites in how they take in and transform information,” Beckman and Barry write. They add, “Good teams behave like bicycle racing teams, where individuals are assigned positions in the race because of their strengths, not because of seniority or some other measure.”

And here is a video that summarizes the core ideas from the article. This is also an excellent example how you can condense information from a 30 page article into a compelling 5 minute video.

Innovation as a Learning Process from Roger Shealy on Vimeo.

The best about this award is that the article is now available as a free download, so you can access it even if you don’t usually have access to the California Management Review.

Unfortunately the download is not free anymore, but you purchase a copy here, it’s a must read. You could also try to use Google with this search query and see if you find a copy online somewhere.

As a reader of this site I would like to invite you to join our presentation and experience the design process and the prototypes that our student design teams have developed for our corporate partners.

Our students and corporate partners

The course is based on the Stanford ME310 course that has been taught at Stanford University for more than 30 years and which has been adopted to meet the special environment and requirements at a business school. A team of students together with a corporate partner will work on a problem statement to develop a conceptual solution by following a methodology that focuses heavily on prototypes. This year’s corporate partners were BASF, Lonza and Swisscom and our students have spent the last 10 months to solve the given problem and come up with innovative solutions.

The project proposals

• BASF: Total Packaging Design for Printers
• Lonza: Harvest the creativity and the knowledge of the scientific community
• Swisscom: Services for Enabling Home Networking Adoption

The end of a exciting journey for this year’s class

At the final presentation the student teams are going to present their final conceptual prototype as well as the milestones that lead them to this prototype and the learnings and considerations that formed their decisions. Our students have been working long hours and many nights to find the most promising solution and they have once again shown the great results that a team of motivated student is able to achieve.

Join our presentations!

One month after the presentations and EXPE in Stanford, on Monday July 6th 2009 , the students will present their projects in St.Gallen. They will show their developed prototypes, insights, results as well as the design development process. After the presentation there will be an exhibition (EXPE) where visitors will be able to experience the different prototypes and talk to the student designers.

The event takes place at the University of St. Gallen in the Temporary Teaching Buildings (Lehrprovisorium, see campus map) on July 6^th. Reception starts at 12:00, presentations start at 12:30 and the exhibition is scheduled to start at 15:30. For detailed instructions please have a look at the campus map.

Please RSVP if you are planning to attend, you can reach me at bernhard@customer-experience-labs.com

Not your typical student project

The cooperation with corporate partners gives students the opportunity to work on real-world problems while learning how to successfully run their own design and engineering consultancy. The results are definitely interesting and inspiring; the following video resulted from a project with Nokia in 2006/2007 which showcased the future of “Open Internet Communication Culture”.

Another great example is a prototype that was built in 2006/2007 that re-imagined the center-console of a car as a massive touch screen. Some pictures of the prototype, the Pangea Interface:

Too futuristic? Not really. In March 2009, a similar concept was introduced in the new Tesla Model S, the much anticipated electric car.

If you would like to have a glimpse at the future, you are invited to the join us at Stanfor Design EXPE09. More information and registration is available at http://expe.stanford.edu/The preliminary program for the day:HSG310: Design Thinking & Business Innovation, University of St. Gallen

• BASF: Total Packaging Design for Printers
• Lonza: Harvest the creativity and the knowledge of the scientific community
• Swisscom: Services for Enabling Home Networking Adoption

ME310: Project-Based Engineering Design, Innovation & Development

• AUDI AG: HMI 2020 in collaboration with TKK (Helsinki, Finland)
• Autodesk Inc.: Exploring the Opportunities for Collaboration between architects, manufacturers, and contractors in collaboration with UNAM (Mexico City, Mexico)
• Foundation of Finnish Security and Safety Industry Development: Intelligent Fall Protection in collaboration with TKK
• Naked Green: Leveling the playing field for Alternative Fuel Vehicles in collaboration with TKK
• Panasonic: Making Dental Care More Fun & Effective in collaboration with HPI (Potsdam, Germany)
• Panasonic: Supporting Social Bonds and Friendship with Wearable Technology in collaboration with PUJ (Cali, Colombia)
• Robert Bosch GmbH: A Sensor System for 3D Measurement and Reconstruction in collaboration with UNAM
• SAP AG (Germany): Innovating the Work@SAP Experience in collaboration with HPI
• Telefonica (Germany): Mobile Pursuit of Vital Signs in collaboration with PUJ

CS210: Project-Based Software Design, Innovation & Development

• Microsoft: Making satellite imagery available for climate modeling
• Yahoo!: Improving the Internet Search Experience
• Facebook: Making the Facebook platform a more viable option for the enterprise
• John Gardner Center: Identifying opportunities for and implementing software to improve after school programs for youth

As you can see, these student projects from around the world are definitely not your typical student project. A large part of my activities at the University of St. Gallen are around a course called “Design Thinking & Business Innovation” that we have setup in a cooperation between Prof. Larry Leifer, Director at the Stanford Center for Design Research and Prof. Walter Brenner, Director of Institute of Information Management. Our students will be there as well, presenting their conceptual prototypes

Let’s get in touch!

If you are planning to visit the Stanford Design EXPE please drop me an eMail at bernhard@customer-experience-labs.com . Together with Sushi Suzuki, Ph.D. student at the Stanford Center for Design Research, we would like to give you a behind the scenes look of the design research and teaching at Stanford University. You should also have a look at the new course website at http://me310.stanford.edu/