Summary of “Design a Better Business” by Patrick Van Der Pijl, Justin Lokitz, Lisa Kay Solomon (2016)

Innovation and Creativity Entrepreneurship and Startups Design Thinking Disruptive Innovation Business Model Innovation Technological Innovation Idea Generation Business Models Lean Startups Business Planning

Introduction

“Design a Better Business” is a practical guide that merges aspects of business planning, lean startups, business models, design thinking, and disruptive innovation to help entrepreneurs and business leaders create robust, innovative, and sustainable business models. The book is packed with useful tools, methodologies, visual aids, and real-world examples to facilitate idea generation, business model innovation, and technological innovation.

1. Design Thinking for Business

Major Points:

Empathy & Insight: Understand customer needs and redefine problems with empathy.
Prototyping & Testing: Quickly create prototypes to test assumptions and iterate.

Example:

Procter & Gamble: Used design thinking to reimagine consumer needs and ended up with new cleaning products that better matched user behaviors.

Actions:

Conduct Customer Interviews: Gain insights by talking directly to customers about their challenges.
Build Low-Fidelity Prototypes: Utilize tools like paper sketches or basic digital mock-ups to test your ideas before full development.

2. Lean Startup Principles

Major Points:

Build-Measure-Learn: Create a minimal viable product (MVP), measure its success, and learn from the results.
Validated Learning: Continuously gather data to verify business assumptions.

Example:

Dropbox: Started with an explainer video as its MVP to gauge interest before developing the full product.

Actions:

Launch an MVP: Create a basic version of your product or service to test the market.
Set Metrics: Define clear, measurable goals to track the success of your MVP.

3. Business Model Canvas

Major Points:

9 Building Blocks: Value Propositions, Customer Segments, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partnerships, Cost Structure.

Example:

Airbnb: Utilized Key Resources (platform), Partner Network, and Unique Value Propositions (affordable, local experiences) effectively to disrupt the hospitality industry.

Actions:

Map Your Business Model: Use the Business Model Canvas to visualize and plan all aspects of your business.
Iterate on Your Model: Regularly update the canvas to reflect what you learn about the market and your customers.

4. Value Proposition Design

Major Points:

Value Proposition Canvas: Focus on understanding customer pains, gains, and jobs-to-be-done to create compelling value propositions.

Example:

Square: Identified that small businesses needed an easy way to accept card payments and developed a simple card reader that could be used with smartphones.

Actions:

Engage in Customer Discovery: Talk to potential customers to uncover their true needs and pains.
Develop & Test Multiple Propositions: Create different value propositions and test them for resonation with your target market.

5. Ideation Processes

Major Points:

Divergent & Convergent Thinking: Use divergent thinking for idea generation and convergent thinking to narrow down choices.
Brainstorming Techniques: Use structured brainstorming sessions to generate a wide array of ideas.

Example:

IDEO: Famous for using “Yes, and…” technique to keep ideas flowing during brainstorming sessions.

Actions:

Host a Brainstorming Session: Encourage free-thinking and build on each other’s ideas without criticism.
Use Idea Sorting Tools: Categorize and prioritize ideas using impact-effort matrices.

6. Prototyping & Testing

Major Points:

Fail Fast, Fail Cheap: Create quick, inexpensive prototypes to test ideas rapidly.
User Feedback: Engage with users continuously to refine and enhance prototypes.

Example:

Zappos: Founder Nick Swinmurn started by taking pictures of shoes at local stores to test online interest before creating a full-scale operation.

Actions:

Develop Rapid Prototypes: Use materials like cardboard, paper, or even simple digital tools to create quick prototypes.
Conduct User Testing: Obtain feedback from real users to guide product development iterations.

7. Business Model Patterns

Major Points:

Types of Models: Recognize and leverage different business model patterns such as the long-tail, multi-sided platforms, and freemium models.
Adaptability: Understand that business models are not static and may need to adapt over time.

Example:

Amazon: Utilizes a platform model allowing countless third-party sellers, thereby creating immense variety and fulfilling a long-tail strategy.

Actions:

Study Successful Models: Analyze existing successful business models and patterns to see what could work for your business.
Adapt & Evolve: Continuously test and evolve your business model to respond to changes in the market.

8. Storytelling for Business

Major Points:

Narrative Arc: Use storytelling techniques to communicate your vision and business model effectively.
Emotional Connection: Create a strong emotional connection with customers and stakeholders.

Example:

TOMS Shoes: Built a compelling story around their one-for-one donation model, creating a strong emotional bond with customers.

Actions:

Craft Your Story: Develop a narrative for your business that clearly communicates your vision and values.
Use Visual Aids: Enhance your story with visual tools like storyboards or journey maps to make your message more compelling.

9. Co-Creation and Collaboration

Major Points:

Inclusive Innovation: Involve customers, employees, and partners in the innovation process.
Leveraging Networks: Use external networks and ecosystems to enhance innovation.

Example:

P&G’s Connect + Develop: An initiative that invites external innovators to contribute ideas, resulting in increased product innovations.

Actions:

Engage Stakeholders: Involve varied stakeholders in brainstorming and development processes to generate diverse ideas.
Expand Collaboration Networks: Partner with other companies or inventors to access new ideas and capabilities.

10. Scaling and Sustaining Innovation

Major Points:

Iterative Scaling: Scale your business incrementally based on validated learning and market feedback.
Sustainability: Build processes and cultures that sustain long-term innovation and adaptability.

Example:

Tesla: Scaled production of electric vehicles iteratively, starting from the high-end Roadster to the more affordable Model 3, ensuring each step was based on clear market demand and feedback.

Actions:

Plan for Scale: Develop a scalable business model that allows for growth without compromising quality.
Build an Innovative Culture: Create an environment that encourages continuous innovation and improvement.

Conclusion

“Design a Better Business” provides an actionable framework for building and sustaining innovative business models. The combination of design thinking, lean startup methodologies, and comprehensive canvases allows businesses to rapidly prototype, test, and iterate their ideas. By applying the principles and techniques outlined in this book, entrepreneurs and business leaders can better navigate the complexities of modern markets and design robust, innovative businesses that meet real customer needs.