how to design a billion dollar company — life hacks for business — medium

8/10/2019 How to Design a Billion Dollar Company — Life Hacks for Business — Medium

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How Does Design Fit Into a Multisided Business Model?

Let’s start with a quick history of ‘Design Thinking’.

Design Thinking was created to be a step-by-step method to creative

thinking and innovation by using a user-centered approach. Unlike

analytical thinking, which is often associated with “breaking down” ideas,

Design Thinking is a creative process based on the “building up” of ideas.

Design Thinking has evolved throughout the years, from Human-Centered

Design focusing on customer experience, to Service Design focusing on

customer journeys and touch points between a business and its customer.

Depending on who you talk to, Design Thinking generally follows a five-

step approach:

This process has worked very well for traditional products and services.

However, designing a business that will succeed in this new economy

requires us to take Design Thinking one step further. We call this Platform

Design.

Platform Design isn’t about making it look pretty. It’s about nailing the

experience of user-to-user interactions and making the exchange of value

really, really efficient.

Is this similar to Design Thinking? Yes, but a successful multisided

business needs to build for both consumers and producers. If you fail to

http://www.sapdesignguild.org/community/design/design_thinking.asp





attract either group, your platform won’t succeed. Your platform creates

value to one group of users only if the other group of users is also present.

The good news is that thanks to the network effects between your

different user groups, you can enjoy exponential growth if you succeed in

getting both sides on board.

But for Platform Design, this interdependency between user groups makesthe task exponentially more complex than traditional product and service

design. That’s why I say that:

Platform Design = (Design Thinking)^2

What do I mean by this? To explain, let’s go through each of the stepsassociated with Design Thinking and see how Platform Design is different.

1. (Empathy)^2 = Understand those whoproduce the value and those who will

consume the value

—

and why and howthey need each other As Lean Startup pioneer Steve Blank put it:

“Get out of the building and talk to customers.”

Innovation is not possible without stepping into someone else’s shoes and

finding out what they see, feel and experience.

So if you’re building a platform or thinking about creating one, stop staring

at this screen and start engaging with potential consumers and producers.

Focus on finding groups that have some attraction to each other.

Understand who needs who, and why.

Next, synthesize this information by taking it out of your head. Putting it

up on a physical wall is highly recommended. This could take the form of

an empathy map, or you can create user personas.





Airbnb founder Brian Chesky has been “mostly homeless” since 2010. He

rents Airbnb apartments while hosting other users at his apartment. This

practice has helped him empathize with both renters and hosts and

experience the quality of consumer-producer interactions first hand. He

regularly receives insight into potential problems and pain points, which

enables him to continually innovate and improve on his company’s core

interaction. This approach has worked out pretty well so far. Airbnb has

disrupted the hospitality industry and is now worth $10B.

2. (Define)^2 = Identify the problems thatexist for those who produce value andwith those who will consume that value Are there any companies (traditional or startups) that are trying to solve a

similar problem? What are some common problems with existing

solutions? How could they be improved?

Define the problems that you identify into clear problem statements.

Figure out how your user groups interconnect and what pain points there

are in their interactions. Will you be able to provide value to both

consumers and producers?

Group your findings and identify patterns that you see. Bridge the gap

between problems and identify commonalities between the two groups.

Consider how this may have looked for Uber in the beginning.

http://www.businessinsider.com/airbnb-takes-new-funding-at-a-10-billion-valuation-2014-4

http://www.smh.com.au/travel/travel-news/the-homeless-founder-of-airbnb-20130311-2fv3e.html





help put abstract ideas into a context that people understand, since stories

are tangible. They inform, inspire and engage.

For example, sketch out a storyboard for producers and consumers and

identify the interactions. How can these touch points be made easier and

more exciting? How can the value being exchanged be of higher quality?

Are there any instances of wasted interactions? A variety of basicprototypes like this will iron out a lot of these questions before you start

building your platform.

Airbnb is a company that lives by this. Their CPO, Joe Gebbia, describes

their process well:

So how do we bridge from our script to these real world experiences? We

storyboard. And we storyboard like crazy. Last year we embarked on an

ambitious project to map the entire guest and host terrain of Airbnb and we did

it through illustration. We looked at key emotional moments of the journey and we drew them. We visualized them. And what it’s done for us, it’s allowed our

entire company to achieve a whole new level of empathy with our customers.

5. (Test)^2 = Assess the desirability of the

prototype from the point of view ofconsumers and producersTraditionally, there are three factors that need to be analyzed when

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qualifying a new product or service:

Feasibility from a technological perspective

Viability from a business perspective

Desirability from a human perspective

Unfortunately, the third point is often overlooked when a new product or

service is launched. Businesses will spend huge sums of money to ensure

that their idea is technologically feasible. And there is always someone

crunching the numbers to work out whether a venture is viable and can

make a profit.

But too often businesses will skimp on the human element and fail to see

their platforms through the lens of their producers and consumers. They

do not try and understand them and find out what is meaningful to them.

This brings us full circle back to (empathy)^2

As I discussed earlier, for a multisided business, understanding its users is

more important than ever. The interdependency of each user group also

makes innovation even more complex since you now have to balance

technological feasibility, business viability, producer desirability and

consumer desirability.

•

•

•





As we’ve seen, entrepreneurs who are taking a human-centered approach

to designing their platforms have seen enormous success. For future

platforms to be successful, aspiring entrepreneurs should be doing

everything they can to walk in the shoes of their producers and consumers

and experience the core interaction through their eyes.

Remember that this process is different than designing a product or

service for a traditional, one-sided business. You need to learn both what

each user group values individually and how they relate to each other. This

interdependency is key to figuring out how you can create value for both

groups by bringing them together.

This task requires a new way of approaching the problem: (Design

Thinking)^2. Only then will you understand what each group values and

how you can truly delight them.

I’m the Director of Operations at Applico, a Platform Innovation

Company.

This post originally appeared on PlatformInnovation.com. Read there for

more insights into Platform Design or follow me on Twitter and LinkedIn.

Illustrations by Applico Designer Matt Kofman.

http://www.linkedin.com/in/patrickjstewart/

https://twitter.com/palpatrick

http://www.platforminnovation.com/




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