Now that we have seen how design thinking can be used to come up with new products, let’s take a look at how it can be used to formulate business models. The design process, in this case, is divided into five steps which we are going to look at in depth.
In this phase, the focus is to gather data. You want something that you can base your new business model on. As such, it is crucial to know where you are going to gather the data from. If you are clueless about this, start with your customers and try to have an understanding of their needs as well as frustrations.
There are many who are for the idea of looking beyond the walls of the company and into the needs of the customers as it leads to innovative ideas as compared to brainstorming within the company. This is because meeting the needs of the customer is key to the success of a business.
Also, stay clear of market research agencies or outsourcing this task. This is because it will prevent you from getting the first-hand experience. Instead, roll up your sleeves and talk to all kinds of customers, be it satisfied customers, discontented customers, people who would never consider buying your product as well as people you have never reached out to. Also, take a jab at your competitors’ customers.
Understand what makes them feel content with what the industry has to offer and why they opt not to buy from you and result in your competitors.
Another place to gather data is to look at the most popular business models within your industry and outside. This means understanding the workings of an industry and what its prevalent business models are. This will help you have a clear understanding of what model may not be working and why.
Apart from your customers and other companies, you might also gather data from your ‘internal customers’ by asking them to comment on what they think of the way you do your business and give an assessment of your business.
After you are done gathering data, the next step is to try and understand it. For that reason, the goal of this phase is to come up with a distinct and compelling opportunity that is in the market.
When trying to come up with a business model design, it is best to incorporate various design thinking frameworks when analyzing the data. You could, for example, map out the customer’s journey. This will help you in understanding their experiences, what frustrates and pains them and most importantly, identify blind spots in the journey that the current offerings or business models are not addressing.
Additionally, ensure you have a bearing of what the customer is looking to achieve, what job he wants to be done and what frustrates him about the current customer experience.
When done with this phase, you should be able to have on paper, opportunities for groundbreaking designs for your business model.
Once you have identified opportunities, the next step is coming up with ideas on how to take advantage of the opportunities. In most cases, having pinned down customer’s needs, struggles and coming up with solutions will lead you down Ideasville. Also, you can brainstorm by raising conversation starters such as ‘What of..’ or ‘How might we…’ Furthermore, you could cut to the chase by researching on other industries and other business model innovations to find inspiration for your own business models.
This stage is not about trying out different business models. Successful innovators have struck the most success by only experimenting with a single business model as opposed to trying out alternative models. Besides, very few companies have the resources to try out several model ideas.
And in most cases, if the research in previous phases was carried out satisfactorily and you came up with a viable idea, the real issue will be how to actualize the idea. And chances are, if you come up with a way to bring it to life, it will be successful.
This final stage entails going through the results of your experiences and the experiments you have carried out. In most cases, evolution involves going through the previous steps again as you ideate, put some touches and in extreme cases, re-designing the business model again.
When in this stage, keep reflecting on the success of your business model and whether it is of any value to the concerned parties. If it is not, then it might be the high time to start the journey of discovery.