You’ve just created the last slide detailing an amazing product experience that is sure to delight users. It took months of understanding the technical limitations; and even more blood, sweat, and tears to get the design patterns down. Your visual design is swelling with sexy, and you’ve even managed to prototype the interaction for the final delivery. After an epic presentation, of plot twists and role play, you see smiles, hear laughs, and witness awe within the crowd. But then, six words give way to an air of collective capitulation:
“That's not how we make money.”
As designers move beyond wireframes, we will butt up against supply chains, distribution channels, partnerships, any of which can constrain or shape the way a product or service is delivered. Increasingly, design is being heralded as powerful lens to reexamine how businesses evolve. Without the necessary tools, those who are tasked with redesigning businesses will come from the boardroom rather than the studio. Design is a process more than an output, as so many great designers have shown. By learning the language of business models, we can answer those six words with six of our own:
“Well, let's explore how you could.”
We’re good at wireframing for engineers, but less so for financiers. Technical constraints can be specified, but the activities of a business are often intangible. That's why it helps to work with a shared understanding of what a business does; then we can begin to propose trade-offs.
By modeling how businesses work now, and by explaining how they might achieve viability differently, we can hit on big wins for the customer experience. Even beyond the customer, there is an opportunity to improve the lives of employees, suppliers, partners by redesigning how industries work together. But, if you don’t consider financial viability as a constraint, you’ll never know why your design fell short. If you instead consider viability as a goal, you’ll face allies in your path to implementation.
So what's an example of a redesigned business?
Coffee trading companies were among the first corporations and their model hasn’t changed much over the centuries. Driven by an urge to improve the lives of farmers, Fair Trade was born to connect farmers more directly to consumers. At first, Fair Trade approached the consumer with a proposition: "You pay a bit more for your coffee, and we’ll ensure there are good labor practices on farms. We'll ensure that farmers are not exploited by middlemen and that you receive high quality coffee." Not only do customers get the products they want, but they also feel great about having a positive impact in the world.
The pivot from consumer to brand
Being a learning organization, Fair Trade realized that only a small percentage of the consumers of coffee would buy based on this social proposition. But, in the process they realized that brands were willing to pay more to ensure their raw inputs were going to be available for years to come. A sustainable farm means a sustainable supply of coffee. For now, Fair Trade’s customers are brands more than coffee drinkers. Let’s look at how that works.
Ok, what did this look like before?
Brands in the coffee industry have little coordination between partners:
Now, what does it look like when Fair Trade is available?
Next week, Joe sees another option for his coffee, a little label saying it’s Fair Trade certified. Let's walk through how it got there:
But why stop there?
The extra money from Joe's purchase goes back to the Fair Trade organization for reinvestment in the partners below to support a financially and socially sustainable industry:
By inserting itself between existing businesses and producers, Fair Trade USA has created more transparency in the supply chain and has done something helpful for everyone along the way. Fair Trade arrived at its business model by working with suppliers and retailers over many iterations. It took time to prototype, adjust, and ultimately scale their approach. With the business model canvas, we can map out these relations within a standard set of building blocks:
As you can see, a number of building blocks are empty. We’ll tackle the canvas above this Thursday, and offer designers a tool to explain how our industries might create better experiences for customers and more viable models for businesses.
Want to learn more? Come out Thursday February 21st!
If you’d like to get more into business model design and expand your design toolkit, come out to the next Cooper Parlor. On Thursday we will explore existing business models designed to help consumers put their money where their heart is. We’ll begin by learning a bit more about how the Fair Trade business model was formed. Then, we'll dive into how you can incorporate business model design into your practice. If this topic really resonates with you, join us in March at the UX Boot Camp: Fair Trade USA.