Better by Measure: Two Tales of Disruption - Part Two (Class 4, SVA Products of Design 2014)
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What business models support the creation of value to civic society, the environment and human health? Better by Measure, a class from the Products of Design masters program at the School of Visual Arts (http://productsofdesign.sva.edu), explores how startups can build value by critically embracing civic, environmental, and human health challenges. The course is taught by Jen van der Meer (@jenvandermeer) and Rebecca Silver (@rgsilver).
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Better by Measure: Two Tales of Disruption - Part Two (Class 4, SVA Products of Design 2014)
- 1. BETTER BY MEASURE! TWO TALES OF DISRUPTION – PART TWO! Class 4 | September 25, 2014! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 !
- 2. OUTLINE! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 2! BUSINESS SCHOOL: LEAN CUSTOMER DISCOVERY – PART TWO! ! CUSTOMER DISCOVERY REPORT! ! SCIENCE LAB: TWO TALES OF DISRUPTION – PART TWO! ! ! !
- 3. LEAN STARTUP! BUSINESS SCHOOL! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 !
- 4. BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 4!
- 5. CUSTOMER DEVELOPMENT! Customer Discovery! Iteration! Execution! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! Customer Creation! Customer Validation! Company! Building! The first part of class: develop a hypothesis about each component of the business model.! Customer discovery = a set of experiments to test each hypothesis.! Our goal: find a market to fit your vision, with a large enough addressable market to fit your aspirations.! ! 5!
- 6. CUSTOMER DEVELOPMENT! What is your product or service? ! How does it differ from an idea? ! Why will people want it? ! Who is the competition and how does your customer view these competitive offerings? ! Where’s the market?! What’s the minimum feature set?! What’s the market type?! What was your inspiration?! What assumptions drove you to this?! What unique insight do you have into the market dynamics or into a technological that makes this a fresh opportunity? ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 6!
- 7. VALUE PROPOSITION! Product? Service? ! Ecosystem? ! All? BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 7!
- 8. TRANSLATING VISION INTO VALUE PROPOSITION! Your team values Your ! vision Why ! do you want to do this? Then find a segment, a market, and a value proposition that fulfills this vision. What do you put on the landing page – the single, clear, compelling message that turns an unaware visitor in to an interested prospect? BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 8!
- 9. ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! SOURCE: Value Proposition Canvas – Osterwalder ! VALUE PROPOSITION! 9!
- 10. VALUE PROPOSITION CANVAS! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! SOURCE: Value Proposition Canvas – Osterwalder ! 10!
- 11. PAIN DRIVEN DESIGN! “Design is not art. Design should solve a problem for humans. We can find the problems ! that we’re causing for humans by looking for pain points. Usability testing helps us understand ! the very obvious pain that we’re causing for users, which is fantastic. But beyond discovering user pain in our products, we should be doing user research on various demographics and understanding what in their lives is causing them pain.”! ! – Laura Klein, UX for Lean Startups! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 11!
- 12. WHY PAIN????! As a customer, it has to hurt enough that you would go out of your way to pay for it.! It has to feel way better than staying the course, stasis, or inertia (which make people sometimes feel warm, and comfortable, and your thing scary, and risky). ! ! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 12!
- 13. THE PAIN IN PAIN-DRIVEN DESIGN! How do you move beyond superficial needs?! ! How do you know when someone is telling the truth? ! ! How do you get to unspoken, deeper needs? ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 13!
- 14. PAIN DRIVEN DESIGN! ! ! Expressed Needs! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! Artifacts! Behavior! VISIBLE: IN AWARENESS! IN CONSCIOUSNESS! HIDDEN, INVISIBLE: ! OUT OF CONSCIOUSNESS! Norms! Beliefs! Assumptions! Values! Plans! Traditions! Attitudes!
- 15. WAYS OF EXPLAINING REALITY: SYSTEMS THINKING ! PAIN DRIVEN DESIGN! EVENTS! What just happened?! ! ! PATTERNS! What’s been BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! happening?! TRENDS! What are the common forces at play? ! STRUCTURES! How do processes and organization impact? ! MENTAL MODELS! How does our thinking allow this to persist!
- 16. CUSTOMER SEGMENTS! Narrow down to the essential groups of people who will be your first customers.! ! Warning: this a a different process than brand segmentation, where you generalize customer types based on mindset, psychographics, demographics.! ! This is a tangible exercise – go out an meet these people, validate that they will be your customer (not just your user) – if you have a multi sided model, then great – validate the multi-sides.! ! ! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! ! 16!
- 17. REVENUE GAME – WHAT ARE THE MODELS?! Google ! Leapfrog! Foursquare! Fitbit! Facebook! Scholastic! Cherrios! Amazon! Lego! Salesforce.com! Kickstarter! ! ! ! Dropbox OpenTable Hootsuite Flickr Instagram WhatsApp Whole Foods Walmart Postmates Netflix Organic broccoli farmer BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 17!
- 18. REVENUE PATH: WHO IS YOUR CUSTOMER?! Users! Buyers! Influencers! Approvers! Blockers! ! How the target customer currently purchases goods and services and how much they currently pay for equivalent products! Their willingness to pay for value versus lowest cost?! How much budget they have for your type of product?! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! ! ! 18!
- 19. TYPES OF REVENUE: WHAT STRATEGIES WILL YOU TEST?! Selling physical goods! Selling digital products! Service per unit! Service for fixed prices! Sales of service for future use ! Daily deals/flash sales! Subscriptions! Usage fees! Rental! Licensing ! Certifications! Auctions! Interest/Mgmt fees ! ! ! Dynamic pricing Advertising Promoted content Sponsorships Analytics Databases Brokerage Transaction enablement Affiliate programs Marketplace Freemium –paid w/out advertising Freemium –paid w/out restrictions Freemium – paid with additional features BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 19!
- 20. REVENUE > PRICING! Users! Buyers! Influencers! Approvers! Blockers! ! How the target customer currently purchases goods and services and how much they currently pay for equivalent products! Their willingness to pay for value versus lowest cost?! How much budget they have for your type of product?! ! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! ! ! 20!
- 21. CHANNELS AND DISTRIBUTION! How does your product get from your company to your customer?! ! ! ! ! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 21! !
- 22. CHANNELS PRE INTERNET! What were the channels before there was the internet? ! ! ! ! ! ! ! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 !
- 23. CHANNELS POST DIGITAL! What are the many channels now? ! ! ! ! ! ! ! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 23!
- 24. CHANNEL ! CHANNEL / PRODUCT! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! ! ! PRODUCT ! Bits/Virtual ! Physical ! Physical ! Bits/Virtual ! 24!
- 25. HOW DO YOU WANT TO GET YOUR PRODUCT TO YOUR CUSTOMER? ! Product:! Virtual or Physical! ! Channel: ! Direct or Indirect! ! ! ! ! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 25!
- 26. WHAT CHANNELS WILL YOU TEST?! Direct sales through salesforce! Direct sales through web! Direct sales through mobile! Direct sales through mobile app store! OEM! Systems integrator ! ! What is the complexity of your product/service? ! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! Dealer ! Distribute to retailer ! Value added resellers ! Sell to distributor ! Aggregator! Other! ! ! ! ! ! ! ! ! 26!
- 27. BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 27 WHAT CAME BEFORE STEVE AND ERIC
- 28. SOCIAL & ENVIRONMENTAL DISRUPTION – PART TWO! SCIENCE LAB! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 !
- 29. BACK TO THE EARTH ON FIRE! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 29! ! ! ! !
- 30. EXERCISE: EXTERNALITIES & FEEDBACK LOOPS! IN TEAMS OF TWO OR THREE MAP A FEEDBACK LOOP WHICH CONNECTS THE IMPACT TO THE ACTOR. YOU HAVE 5 MINUTES.! 1. IMPACT: Micro-bead water pollution; ACTOR: Johnson & Johnson! 2. IMPACT: Rana Plaza factory collapse; ACTOR: Walmart! 3. IMPACT: Worker abuse; ACTOR: Mattel! 4. IMPACT: Sup-prime mortgage crisis; ACTOR: Lehman Brothers! 5. IMPACT: Forced child labor use in Cote D’Ivoire; ACTOR: Hershey! 6. IMPACT: Children picking through e-waste in China; ACTOR: Apple! 7. IMPACT: Obesity; ACTOR: The workplace! 8. IMPACT: Human drug resistance to illness; ACTOR: Tyson ! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 30! ! ! ! !
- 31. WHERE WE CONNECT BUSINESS TO SYSTEM! Customer Discovery! Iteration! Execution! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! Customer Creation! Customer Validation! Company! Building! Customer Discovery: Defining the problem to solve – going deep and getting to a real pain point for humans on this earth. Considering users that are more marginalized, under the radar. What is possible with the mass adoption of technology. Do we still have to cross a technological chasm?! Customer Validation: Prove that the time is now for these new business models to exist. ! Customer Creation: Build a tribe, not just a customer. ! Company Building: Build a purpose-driven organization. ! 31!
- 32. EXTERNALITIES GONE WILD! How culpable is an individual actor playing by the rules of a faulty system for the negative externalities their actions beget? ! What happens when individual actors/companies are able to change or innovate faster than the systems from which they sprung can correct?! What happens when global dynamic systems spiral out of control?! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 32! ! ! ! ! ! ! ! !
- 33. ‘WICKED’ AND ‘SUPER WICKED’ PROBLEMS! “WICKED” PROBLEMS HAVE NO SOLUTION, YOU CAN ONLY MOVE THE NEEDLE.! • There is no definitive formulation of a wicked problem! • Every wicked problem is essentially unique! • Every wicked problem can be considered to be a symptom of another problem! ! SOURCE: Rittel & Weber, Dilemmas in a General Theory of Planning. 1973.! ! “SUPER WICKED” PROBLEMS SUCH AS CLIMATE CHANGE ARE CHARACTERIZED BY FOUR ADDITIONAL FEATURES:! • Time is running out; ! • The central authority needed to address it is weak or non-existent; ! • Those who cause the problem also seek to create a solution; and ! • Hyperbolic discounting occurs that pushes responses irrationally into the future! - SOURCE: Environment.research.yale.edu! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 33!
- 34. WHAT WICKED PROBLEMS DO WE HOPE TO SOLVE FOR?! Climate Change! ENVIRONMENTAL ! IMPACTS! SOCIAL ! IMPACTS! Infections Disease! HEALTH! IMPACTS! Child Slavery! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 34!
- 35. KEY ENVIRONMENTAL IMPACTS CATEGORIES! AIR POLLUTION! LAND/BIODIVERSITY LOSS! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 35! ENERGY & CLIMATE CHANGE! RESOURCE USE & WASTE! WATER POLLUTION! WATER USE! NOTE: This list is not conclusive, but represents some of the key priority issues of concern across NGO, governmental, citizen, activist and for profit communities.!
- 36. KEY ENVIRONMENTAL IMPACTS CATEGORIES! AIR POLLUTION! LAND/BIODIVERSITY LOSS! Particulate matter pollution! Atmospheric pollution! Indoor air quality! Hazardous substance releases! ! ! ! Fossil fuel combustion! Glacier/ice/tundra melt! Ocean acidification! Global warming! ! ! ! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! Overfishing! Deforestation! Topsoil loss! Invasive species! Species & ecosystem collapse ! ! ! ! 36! ENERGY & CLIMATE CHANGE! RESOURCE USE & WASTE! WATER POLLUTION! WATER USE! Rare earth minerals! Hazardous substance releases! ! Fossil fuels! Acidification! Precious metals! Eutrophication! Landfills! ! E-Waste! ! ! ! ! ! Drought! Ground water exhaustion! ! ! ! ! NOTE: This list is not conclusive, but represents some of the key priority issues of concern across NGO, governmental, citizen, activist and for profit communities.!
- 37. LENS: Predominantly consider through the lens of human utility (i.e. the parable: if a tree falls in a forest and no one is around to hear it, does it make a sound?)! ! ! SCOPE: Traditionally consider issues in siloes – we manage water and air pollution as independent issues rather than interrelated systems for example! ! PROCESS: We have the benefit of scientific process of evidence building to “objectively” evaluate impacts (though not everyone believes in “science”)! ! MANAGEMENT: Central authority lacking – existing structures lack teeth and/or are non-inclusive (consider the history of UN climate negotiations, including what happened this week). Only have effective mechanisms (i.e. regulations) to address ! point sources of impact, when a clear case of cause and effect can be determined (i.e. tragedy of the commons). ! ! ! ENVIRONMENTAL IMPACTS FAQ! ! PRIORITIES: Climate change & water shortages (water use)! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 37!
- 38. CLIMATE CHANGE IS THE DOMINANT ISSUE OF OUR TIME! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 38! WHICH COUNTRIES ARE RESPONSIBLE FOR CLIMATE CHANGE? CLICK HERE FOR VIDEO! SOURCE: The Guardian, September 23, 2014!
- 39. CLIMATE CHANGE IS THE DOMINANT ISSUE OF OUR TIME! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 39! CLICK HERE FOR BETTER RESOLUTION! SOURCE: Ecofys!
- 40. PUBLIC INTEREST IN THIS ISSUE HAS WANED! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 40! ! ! ! ! Our priorities toward addressing these issues have shifted over time; interest peaks around pending regulation and natural disasters! ! Trends demonstrate that U.S. citizens/residents lag behind other countries in terms of interest in climate change and other environmental issues! SOURCE: Google Trends!
- 41. KEY SOCIAL IMPACTS CATEGORIES! ECONOMY & FINANCE! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 41! EMPOLYMENT ! & WORKERS’ RIGHTS! EDUCATION! HUMAN RIGHTS & JUSTICE! POLICY & ADVOCACY! SOCIAL RIGHTS & SAFETY! NOTE: This list is not conclusive, but represents some of the key priority issues of concern across NGO, governmental, citizen, activist and for profit communities.!
- 42. KEY SOCIAL IMPACTS CATEGORIES! ECONOMY & FINANCE! Economic prosperity! Resilient economies! Access to capital! Income equality! ! ! Access to/universal education! Cost of education! Quality of education! ! ! ! ! ! ! ! Slavery ! Representation! ! Human trafficking! Awareness of issues! Sexual crimes! ! Discrimination! ! Free speech! ! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! Job creation! Unionization & representation! Worker safety! Minimum age requirements! Minimum wage requirements! ! ! ! Clean/safe drinking water! Housing! Public safety! Cultural preservation! ! ! ! ! 42! EMPOLYMENT ! & WORKERS’ RIGHTS! EDUCATION! HUMAN RIGHTS & JUSTICE! POLICY & ADVOCACY! SOCIAL RIGHTS & SAFETY! NOTE: This list is not conclusive, but represents some of the key priority issues of concern across NGO, governmental, citizen, activist and for profit communities.!
- 43. LENS: Often addressed through the lens of policy and advocacy… sometimes to move the needle in the wrong direction (think of lobbying efforts over social issues)! ! SCOPE: Only have effective mechanisms to address point sources of impact (meaning you can attribute impact to a specific actor)! PROCESS: No benefit of scientific or coordinated process to manage impacts! MANAGEMENT: Similarly there is no central authority to coordinate efforts; Traditionally address issues in siloes, leading to redundancy in funding and management, and ineffective use of funds! ! ! ! SOCIAL IMPACTS FAQ! ! ! ! ! PRIORITIES: Employment and job creation; measuring outcomes! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 43!
- 44. 2013 GAVE RISE TO UNREST AND INSTABILITY! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 44! ! ! ! ! Delays in feedback loops, civil unrest and natural disasters have caused new issues to arise around the globe ! “By the end of 2013, a record high of 51 million people were displaced forcibly worldwide as a result of persecution, conflict, generalized violence and human rights violations”! - The UN, Millenium Development Goals Report 2014! http://www.ussif.org/files/publications/ 12_trends_exec_summary.pdf!
- 45. INCOME INEQUALTIY IS A GROWING DESTABILIZING FORCE! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 45!
- 46. INVESTMENT IN SOCIAL IMPACT IS INCREASING, BUT HAS A LONG WAY TO GO! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 46! ! ! ! ! The number of funds and the amount of money invested in Sustainable and Responsible Investing (SRI) has increased over time.! However SRI is often through the lens of cutting the bad rather than doing good (aka a negative vs. positive “screen”)! SOURCE: http://www.ussif.org/files/publications/12_trends_exec_summary.pdf!
- 47. KEY HUMAN HEALTH IMPACTS CATEGORIES! COMMUNICABLE DISEASE! FOOD & NUTRITION! MATERNAL & CHILD HEALTH! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! WATER & SANITATION! 47! OCUPATIONAL & ! ENVIRONMENTAL HEALTH! NON-COMMUNICABLE DISEASE! NOTE: This list is not conclusive, but represents some of the key priority issues of concern across NGO, governmental, citizen, activist and for profit communities.!
- 48. KEY HUMAN HEALTH IMPACTS CATEGORIES! COMMUNICABLE DISEASE! FOOD & NUTRITION! MATERNAL & CHILD HEALTH! Water-borne diseases! Lack of vaccines! Managing disease spread! AIDS! Ebola! ! ! ! ! ! Drought & food scarcity! Access to food! Obesity! ! ! ! ! ! ! Heart disease! Diabetes! Cancer! ! ! ! Trans-dermal exposures! Indoor air quality! Hard labor! ! ! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! Infant mortality! Prenatal care! Family planning! ! ! ! ! WATER & SANITATION! 48! OCUPATIONAL & ! ENVIRONMENTAL HEALTH! NON-COMMUNICABLE DISEASE! Access to water! Clean water! Sterile sanitation! ! ! ! ! NOTE: This list is not conclusive, but represents some of the key priority issues of concern across NGO, governmental, citizen, activist and for profit communities.!
- 49. LENS: For global health, started with a focus on tropical and infectious disease (mostly neglected conditions not in the wealthiest of countries) and has expanded to be more encompassing of broader issues! ! SCOPE & MANAGEMENT: People have been thinking about health systems for a long time, but funding in the sector has been siloed into specific disease/impact buckets (i.e. Gates foundation). No central authority in charge of health (the WHO has said they’re not a coordinating agency, in this recent Ebola outbreak)! PROCESS: Every place in the world handles health issues differently (which makes it difficult to manage international health concerns and transfer technologies)! ! ! • Global Health: Improving access, oversight, regulation and coordination! • In US: Improving access, reducing spending, move toward more ! patient-centered holistic care! HEALTH IMPACTS FAQ! ! ! ! PRIORITIES: ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 49!
- 50. HEALTH SPENDING AND ADJUSTED D.A.L.Y.! The U.S. spends more on health (as a function of GDP) than almost all other countries, but has a worse daily adjusted life years rate (DALY) rate than European countries, Australia, Canada, and Japan.! And we attempt to export our methods & technologies to other countries. ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 50! ! ! !
- 51. MANAGEMENT OF GLOBAL HEALTH! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 51! ! ! ! ! The global north determines health priorities for the global south and funding is allocated based on these determinations.! This leads to failures when importing fixes and/or myopic planning, causing often devastating outcomes (like the Ebola outbreak).! SOURCE: http://gamapserver.who.int/mapLibrary/Files/Maps/ ExternalResourcesUSD_2012.png!
- 52. THESE ARE NOT MUTUALLY EXCLUSIVE BUCKETS! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! IMPACTS FOR ALL ! CATEGORIES! • Water Use & Pollution! ! 52! ENVIRONMENTAL IMPACTS! • Habitat/Biodiversity Loss! • Resource Use! SOCIAL IMPACTS! • Economy & Finance! • Education! • Employment & Workers’ Rights! • Human Rights & Justice! • Policy & Advocacy! • Air Pollution! • Environmental ! • Health! HEALTH IMPACTS! • Communicable Disease! • Maternal & Child Health! • Non-Communicable Disease! • Occupational Health! • Food & ! Nutrition! • Occupa-! tional! • Health ! Climate ! • Change!
- 53. BUT MANAGEMENT OF THESE ISSUES IS SILOED! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 53! Activism! Mehdiganj citizens against Coca Cola! Corporate CSR! Nike’s The Girl Effect! Legislation! Temporary Protected Status for Immigrants! Academia! African Studies! Industry Orgs.! Factories in Bangla-desh ! NGO! The Ice Bucket Challenge!
- 54. MECHANISMS TO ADDRESS IMPACTS ARE NOT FULLY EFFICTIVE! COURT OF PUBLIC OPINON! ! VOLUNTARY STANDARDS! ! OFFSETTING IMPACT! ! ! DIVESTING FROM IMPACT (Screens/avoidance, divestment, outsourcing)! ! PRICE (Global/local market mechanism to internalize externalities)! ! ! LEGISLATION/TAX (Global/local regulatory mechanism)! ! ! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 54!
- 55. WE LACK A SYSTEM-WIDE PERSPECTIVE ON THESE ISSUES! SYSTEM DELAYS: System delays are inherent in environmental, social, and human health issues, as many impacts such as drought, climate change, and poverty are cumulative rather than acute. Thus more immediate issues often consume both attention and capital from business, governmental, and NGO, and citizen/community sectors. ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 55! ! NON-HOLISTIC THINKING: Addressing these issues challenges actors to reconsider core system-wide beliefs, creating barriers to change from those benefitting from or comfortable with current paradigms.!
- 56. OUR CURRENT SOCIO-POLITICAL PARADIGM HAS GIVEN RISE TO THESE MECHANISMS! 1.0 ) STATE-CENTRIC (1 sector) > Hierarchy & Control! Traditional BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 56! ! ! ! ! awareness! 2.0 ) FREE MARKET (2 sectors) > Markets & CompetitionEgo-system awareness! 3.0 ) SOCIAL MARKET (3 sectors, conflicting) > Networks & Negotiation! Stakeholder awareness! - SOURCE: Otto Scharmer, Leading from the Emerging Future!
- 57. OUR GOAL: DESIGN FROM THE EMERGING FUTURE! 1.0 ) STATE-CENTRIC (1 sector) > Hierarchy & Control! Traditional BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 57! ! ! ! ! awareness! 2.0 ) FREE MARKET (2 sectors) > Markets & CompetitionEgo-system awareness! 3.0 ) SOCIAL MARKET (3 sectors, conflicting) > Networks & Negotiation! Stakeholder awareness! 4.0 > CO-CREATIVE (3 sectors, co-creating) > Seeing & Acting from the Whole! Eco-system awareness! - SOURCE: Otto Scharmer, Leading from the Emerging Future!
- 58. EVOLUTION OF ECONOMIC THEORY ! FROM: “The social responsibility of corporations is to increase profits.” ! – Milton Friedman, 1970! ! ! TO: Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center. We believe that it can give rise to the next major transformation of business thinking.! – Michael Porter, Harvard, Author – Creating Shared Value! ! $ FOR PROFIT! for… profit! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 58! $ FOR PROFIT! out to change the world!
- 59. HOW YOUR BUSINESSES CAN INTERVENE IN THE SYSTEM! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 59! 2. DIRECTLY MITIGATE NEGATIVE ! IMPACTS! 1. HELPS SOCIETY ADAPT TO NEGATIVE IMPACTS (CAUSED BY OTHERS) ! 3. INDIRECTLY MITIGATE NEGATIVE! IMPACTS! 6. AND AVOID CREATION OF ! NEW IMPACTS! 5. DIRECTLY CONTRIBUTES TO POSITIVE IMPACTS! 4. INDIRECTLY CONTRIBUTES TO POSITIVE IMPACTS!
- 60. TAKING A SYSTEM-WIDE VIEW! DELAYS: System delays are inherent in environmental, social, and human health issues, as many impacts such as drought, climate change, and poverty are cumulative rather than acute. Thus more immediate issues often consume attention and capital from business, governmental, and NGO, and citizen/community sectors. ! • CHALLENGE TO YOU: Can shorter-term value be derived from “adapting” to or “mitigating” long-term environmental challenges? Can you design for the emerging future?! NON-HOLISTIC THINKING: Addressing these issues challenges actors to reconsider core system-wide beliefs, creating barriers to change from those benefitting from current paradigms. ! • CHALLENGE TO YOU: Can you envision your team’s and company’s values to be inclusive of broader environmental/social values in a way where the environment/ society as stakeholder is an inherent, positive force in your company’s ecosystem?! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 60! How might this be realized in your business model? !
- 61. TURING IMPACT ON ITS HEAD – METHODOLOGY! CHANGING VALUES FRAMEWORK (ADAPTED)! ! 1. Define goals: Outline your desired financial, environmental, social and health outcomes/goals. Be specific in terms of what social/environmental/health issues you think you might be able to address and how these can POSITIVELY relate to each other (these should inherently align with your company’s values & value proposition).! 2. Determine preconditions: Via your systems map and through customer discovery, determining which preconditions need to be achieved to reach the desired outcome. Consider where tradeoffs might occur.! 3. Define interventions: Evaluate the preconditions to see which leverage points are ripe for business intervention; build a hypothesis about which opportunity should your company/organization should engage in and test it.! 4. Define metrics: Determine which metrics or indicators you’ll use to test your hypothesis, and ultimately to measure progress toward the outcome.! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 61!
- 62. NEXT WEEK PRESENTATION – FULL ASSIGNMENT! Prepare a presentation – guidelines below:! • Cover slide – describe your business concept concisely ! • Latest version Business Model Canvas with changes marked before and after ! • Market size (TAM, SAM, Target Market)! Total addressable: how big is the universe! Served available market: how many can I reach with my sales channel?! Target market: who will be the most likely buyers?! • Propose 2 experiments to test elements of your business model, starting with the value proposition and customer segments. Talk to at least 10 people in your intended segment. What constitutes a pass/fail signal for each test?! Social/environmental values:! • Define goals: outline your desired financial, environmental, social and health outcomes/ goals. ! • Build a hypothesis: by delivering your value proposition, what ecological/social values are created/eroded and how does this effect the customer? (be specific in terms of what social/environmental/health issues you think you might be able to address; these should align with your company’s values & value proposition). (Note we will explore how to model and test these next week)! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 62!
- 63. RESOURCES FOR FURTHER UNDERSTANDING! LEAN & CUSTOMER DISCOVERY:! • Value Proposition Canvas: Business Model Generation! • Legal Zoom Kauffman Foundation Startup Environment Index 2012! • Interviewing Users: How to Uncover Compelling Insights: Steve Portigal! • Universal Methods of Design: Bella Harrington, Bruce Hanington. ! • DSchool Bootcamp Bootleg! • Founder’s Dilemmas Noam Wasserman. Anticipating and Avoiding the Pitfalls that can Sink a Startup! THEORY OF CHANGE:! • Theory of Change: A Practical Tool For Action, Results and Learning: The Annie E. Casey Foundation! ! ABOUT KEY ISSUES:! • Millenium Development Goals! ! ! ! BETTER BY MEASURE | WEEK 4: SEPTEMBER 25, 2014 ! 63!