#microbusiness,@claropartners,

Claro Partners – Business Innovation Jam Innovating services for the NEXT wave of micro-business Doing Good Doing Well Conference at IESE Business School 21 February 2014

#microbusiness,@claropartners,

,

,

11:45 ,Introduc8ons,

12:00 ,Ge<ng,to,know,the,next,wave,of,MicroEbusinesses,and,their,challenges,

13:00 ,Lunch:,form,team,and,pick,your,challenge,

14:00 ,Small,group,work:,idea8ng,services,for,real,microEbusiness,needs,

15:00 ,Share,back:,1,pitch,minutes,per,group,

15:30 ,End,

,

Innova&ng(services(for(the(Next(Wave(of(Micro5Business:(Workshop(Agenda(

Share(your(thoughts?(@claropartners,

#microbusiness,,

##IESEDGDW,

#microbusiness,@claropartners,

MBAs,,clients,and,tradi8onal,consultants,,are,dominated,by,business,thinking,

!  Breaks,things,down,

!  Exhaus8ve,analysis,and,priori8es,

!  Customer,validated,

!  Linear,,defined,approach,

!  Priori8ses,to,close,

!  Circumvents,constraints,

!  Minimises,risks,through,thorough,

analysis,

BUSINESS(THINKING(

MANAGEMENT'CONSULTANCIES'

Poten&al(clashes:(Not,userEcentered,,profit,focused,

No,real,new,,relevant,ideas,

Only,works,for,tech,push,

Generates,copy,cats,,incremental,

innova8on,

#microbusiness,@claropartners,

Design,agencies,offer,a,different,approach,,

!  Builds,things,up,

!  Lateral,associa8ons,,intui8on,,stories,

!  User,inspired,

!  Itera8ve,,frequent,adapta8ons,

!  Keeps,op8ons,“alive”,

!  Integrates,constraints,

!  Embraces,risks,and,fails,early,through,

prototypes/tests,

DESIGN(THINKING(

DESIGN'AGENCIES'

Poten&al(clashes:(,Rejec8ng,quan8ta8ve,approaches,

,,Too,crea8ve,,not,concrete,,,

No,realis8c,business,model,

Doesn’t,consider,ecoEsystem,issues,,

#microbusiness,@claropartners,

Claro,combines,two,tradi8onally,opposed,schools,of,thought,

!  Builds,things,up,

!  Lateral,associa8ons,,intui8on,,stories,

!  User,inspired,

!  Itera8ve,,frequent,adapta8ons,

!  Keeps,op8ons,“alive”,

!  Integrates,constraints,

!  Embraces,risks,and,fails,early,through,

prototypes/tests,

BUSINESS(THINKING( DESIGN(THINKING(

!  Breaks,things,down,

!  Exhaus8ve,analysis,and,priori8es,

!  Customer,validated,

!  Linear,,defined,approach,

!  Priori8ses,to,close,

!  Circumvents,constraints,

!  Minimises,risks,through,thorough,

analysis,

#microbusiness,@claropartners,

Claro,helps,corpora8ons,

and,startups,to,navigate,

disrup&ve(shiIs(in,society,and,business,,

delivering,service(design,and,business(innova&on(

Jiri(Belgium,

Aldo(Netherlands,

Rich(USA,

Megan(UK,

Mandy(Lebanon,

Elisabeth(Netherlands,

Michael(USA,

Gunes(Turkey,

Abby(USA,

#microbusiness,@claropartners,

Our,approach,

Approach,

,

We,balance,experience,design,,social,

science,and,business,strategy,to,translate,

deep,insights,into,meaningful,and,relevant,

solu8ons,that,deliver,value,for,people,and,

business.,,

,

#microbusiness,@claropartners,

With,s8muli,and,methods,from,social,science,we,gain,deep,understanding,into,

people’s,context,and,unmet,needs,

Approach,

In5context(ethnographic(interviews(to,understand,unmet,needs,,and,observe,

people’s,context,

Genera&ve(exercises(with,users,to,express,their,desires,,mo8va8ons,and,

frustra8ons,

“Show(&(Tell”(where,people,show,us,how,they,do,certain,things,,for,how,

they,interact,with,technology,

#microbusiness,@claropartners,

DISCOVER) )) )TRY ) )))))))))USE ) ))))EXTEND)

Experience,design,provides,inspired,crea8vity,to,reveal,new,and,unique,

opportuni8es,

,

Approach,

Service(design(journeys(to,ensure,a,consistent,user,experience,in,line,

with,business,processes,,

Concept(scenarios(to,make,

concepts,concrete,and,8e,the,

solu8on,to,real,needs,and,contexts,

Experience(principles(based,on,user,insights,to,guide,idea8on,and,

concept,development,

#microbusiness,@claropartners,

We,leverage,business,strategy,to,validate,if,and,how,a,concept,translates,into,

real,value,for,customers,and,company,

Approach,

Opportunity(mapping(to,show,different,strategic,direc8ons,and,spark,new,ideas,,

(

Business(valida&on(to,assess,the,value,and,feasibility,of,concepts(

Business(modeling(to,generate,new,value,proposi8ons,and,value,

exchange,mechanisms,

#microbusiness,@claropartners,

(

Delivering(business(innova&on(and(service(design(in(the(context(of(disrup&ve(shiIs(

Access,

,

,

Services,delivered,

through,value,

exchange,networks,

,

Small,data,and,

personalised,

experiences,

,

Internet,connects,

everything,

,

Microbusiness,

,

Ownership,,,

,

,

Services,

delivered,

by,companies,

,

Big,data,and,,

aggregated,,

resources,,

,

Internet,connects,

everyone,

,

Big,corporates,

,Request our point of view papes on each of these topics at POV@claropartners.com

#microbusiness,@claropartners,

Change,photo,

•  Comprise more than 95% of all businesses

•  Employs 60-80% of the global workforce

•  Fastest growing segment in both emerging and developed markets

•  Significant part of the 10 trillion dollar informal economy

•  40% of Americans predicted to be freelancers by 2020

Micro-business is rising globally:

#microbusiness,@claropartners,

Micro-businesses arise amidst the same shifts that disrupt large enterprises

A new business context

#microbusiness,@claropartners,

Micro-businesses arise amidst the same shifts that disrupt large enterprises

Uncertainty Informality Immediacy

Volatility Experimentation

!  Seeking a new lifestyle !  Generation Flux !  Unemployment/accidental

entrepreneurship

!  Networked society !  Collaborative consumption

& peer-to-peer exchange !  New models of work

!  Accessibility/usability of technology

!  Mobile technology & payments

!  Platforms

!  Economic & corporate crisis !  Alternative payments & funding !  Lengthening of the long tail

#microbusiness,@claropartners,

We conducted fieldwork and one-on-one contextual interviews

#microbusiness,@claropartners,

We used various tools and exercises

#microbusiness,@claropartners,

Renato Fonseca Andrade Development and Innovation Manager at SEBRAE

Ben Lyon Director at Kopo Kopo

David Li Founder of China’s first hacker space- Xin Che Jian

Leif Krinkle Director at Visible Futures Lab

Althea Erickson Policy Director at Etsy

Jessamine Buck Director of Program and Member Services at Freelancers Union

OUR APPROACH!

Suraj Sudhakar Regional Fellows Manager at Acumen Fund

Robert Neuwirth Journalist, Author

We had conversations with experts, thought leaders and professionals"

#microbusiness,@claropartners,

We conducted workshops, discussions and site visits

#microbusiness,@claropartners,

OUR APPROACH!

Throughout the project, we researched micro-business more broadly using a range of secondary resources"

#microbusiness,@claropartners,

We interviewed and learned from key stakeholders within our partner organisations

OUR APPROACH!

#microbusiness,@claropartners,

Micro-businesses are not a new phenomenon, but this next wave is now appearing in new places and new forms. They are online and offline; entrepreneurs and mom and pop

businesses; micro-manufacturers, crowd-funded, networked and global.

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While they exist everywhere, micro-businesses are often misunderstood. And their needs are underserved.

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Micro-businesses are misunderstood and underserved Narrowly defined by size and income

Homogenized and lumped together

Not easily categorised or recognised as they blur personal and business

Formal steps and processes do not match their reality

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COMMON MISCONCEPTIONS Micro-businesses are tiny versions of big enterprise ‘Micro’ means isolated and constrained Micro-businesses strive to grow Micro-businesses exist on the extreme edges Micro-business owners lack processes and skills

1 2 3 4 5

PROJECT OVERVIEW!

5

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Micro-businesses are tiny versions of larger businesses

Micro-business are not shrunken enterprises. They have unique business models, motivations, attitudes and needs.

1 MISCONCEPTION

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‘Micro’ means isolated and constrained

Micro-businesses operate through expansive networks and cannot be treated as distinct from them.

2 MISCONCEPTION

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Micro-businesses strive to grow !

Many micro-business owners are content with their size. Conventional metaphors of linear growth obscure their real experiences and desires.

3 MISCONCEPTION

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Micro-businesses exist on the extreme edges

Micro-businesses are often discussed in the extreme: as either very poor, even illegal, or highly entrepreneurial and profit-seeking “start-ups”. The reality is most are in the middle.

4 MISCONCEPTION

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Micro-businesses lack processes and skills !

Micro-businesses learn by doing. Their experimentation is often misrepresented as frantic, reflecting a lack of knowledge of what one is doing. Yet, their trial-and-error practices fit their context.

5 MISCONCEPTION

#microbusiness,@claropartners,

Shanghai PLATFORM ENTREPRENEURS

Nairobi PARALLEL ENTREPRENEURS

São Paulo ELASTIC MICRO-BUSINESS

New York City MAKERS

Exploring stories of microbusinesses around the world

#microbusiness,@claropartners,

Corporate Partners example: Whole Foods Odesk Dabbawallas

Elastic micro-businesses are micro-businesses that are able to quickly rescale and adapt to the changes in their environment.

ELASTIC MICRO-BUSINESSES

#microbusiness,@claropartners,

Arduino Fablab Etsy

Makers leverage new technologies, work spaces and platforms to create physical products, and are part of a global movement.

MAKERS

#microbusiness,@claropartners,

Task Rabbit Kabbage Vayable ,

Parallel Entrepreneurs are entrepreneurs who are running more than one business activity at the same time.

PARALLEL ENTREPRENEURS

#microbusiness,@claropartners,

Shapeways Ebay Alibaba

Platform entrepreneurs use platforms to connect, extend their reach and quickly react to market changes and demands.

PLATFORM ENTREPRENEURS

#microbusiness,@claropartners,

•  Redefine Business Fundamentals •  Operate Through Networks •  Driven By Freedom •  Face Multiple Challenges

Despite this diversity, micro-businesses share a set of needs and characteristics

#microbusiness,@claropartners,

•  Growth is not always desirable •  Value is more than profit •  Competitors are also peers

Micro-businesses share a set of needs and characteristics

Redefine business fundamentals

#microbusiness,@claropartners,

Micro-businesses share a set of needs and characteristics

Operate through networks

•  Spread operations throughout networks

•  Gain form and flexibility •  Blend personal and business

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Pyramid of motivations and needs for business

MASLOW’S PYRAMID

SECURITY

BELONGING

EXTERNAL ESTEEM

SELF-ACTUALIZATION

PROJECT OVERVIEW!

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Micro-businesses: operate through networks, driven by freedom

MICRO-BUSINESS

SECURITY

BELONGING

EXTERNAL ESTEEM

SELF-ACTUALIZATION

PROJECT OVERVIEW!

Flexibility and Options

Adaptation

Visibility

Freedom

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The experience of micro-business owners is chaotic and uncertain !

EXPERIENCE MODEL | EXPERIENCES AND CHALLENGES!

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EXPERIENCE MODEL | EXPERIENCES AND CHALLENGES!

However, under the chaos, they have a simple mental model - comprised of two sides !

PATH TO MARKET OVERHEAD

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PATH TO MARKET OVERHEAD

EXPERIENCE MODEL | EXPERIENCES AND CHALLENGES!

Owners feel pulled apart and do not treat these two sides equally !

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EXPERIENCE MODEL | EXPERIENCES AND CHALLENGES!

They are more comfortable with their path to market…!

PATH TO MARKET OVERHEAD

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(image)

EXPERIENCE MODEL | EXPERIENCES AND CHALLENGES!

Micro-business owners find overhead a burden…!

PATH TO MARKET OVERHEAD

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EXPERIENCE MODEL | EXPERIENCES AND CHALLENGES PATH TO MARKET !

DEFINE

MAKE / PROCURE

MARKET / SELL

DISTRIBUTE / DELIVER

CUSTOMER SERVICE

PATH TO MARKET

The path to market is reconfigurable, giving micro-businesses many options for delivering their offer!

OVERHEAD

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ORGANISATION"

INFRASTRUCTURE"

PAPERWORK"

REVENUE & COST"

EXPERIENCE MODEL | EXPERIENCES AND CHALLENGES OVERHEAD !

Overhead can be feel rigid, lacking in options and overwhelming !

OVERHEAD

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EXPERIENCE MODEL | EXPERIENCES AND CHALLENGES!

The micro-business experience is comprised of two sides !

PATH TO MARKET

DEFINE

MAKE / PROCURE

MARKET / SELL

DISTRIBUTE / DELIVER

CUSTOMER SERVICE

ORGANISATION"

INFRASTRUCTURE"

PAPERWORK"

REVENUE & COST"

OVERHEAD

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WHY DOES Micro-Enterprise matter FOR YOUR BUSINESS?

New partners New customers New competitors,

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Economies of scale Available capital Broad customer base Established infrastructure Hierarchical organisation Process efficiency

Slow pivots Wasteful spending Lack of customer understanding Legacy infrastructure Low customization

Higher costs Lack of resources Difficult to scale customer relationship management Dependent infrastructure Low reach

Customized offers Lean organization Deep customer relations Reconfigurable infrastructure Networked organisation Experimentation capacity

CORPORATIONS! MICRO-BUSINESSES!

STRE

NGTH

S!W

EAKN

ESSE

S!

ENTERPRISE PERSPECTIVE !

Corporations and micro-businesses have complementary strengths and weaknesses for the emerging context !

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ENTERPRISE PERSPECTIVE !

There is a growing amount of activity around micro-business!

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ENTERPRISE PERSPECTIVE !

We identified four models of engagement for enterprise to harness the elasticity of micro-business !

LEARN!

SERVE! ENABLE!

PARTNER!

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ENTERPRISE PERSPECTIVE !

SERVE!

ENABLE!

PARTNER,

LEARN,

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ENTERPRISE PERSPECTIVE | SERVE MICRO-BUSINESSES!

SERVE MICRO-BUSINESSES!

!  As-you-go services !  Micro-business specific !  Curated solutions

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Task Rabbit allows micro-businesses to outsource small tasks at reasonable prices, greatly freeing up their time while still getting things done.

As-you-go services

Square offers a payment solution that allows micro-businesses to take payments at any location or time.

ENTERPRISE PERSPECTIVE | SERVE MICRO-BUSINESSES!

!  Micro-entrepreneurs constantly learn and make decisions with direct impact on their business

!  Offers are flexible, immediate and easy for micro-business

By,Todd,Plif,,USA,TODAY,

Vistaprint provides a complete set of products that can be ordered separately or combined as micro-businesses need.

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Wave apps understands that the lines between business and personal are often blurred for micro-businesses, that’s why they provide personal financial management tools in parallel with their micro-business toolkit.

Kabbage is an online financing company that specifically lends to micro-businesses selling on eBay, Amazon, Etsy and Shopify. The company meets a lending gap left by traditional debt sources due to higher risks.

Planet Soho provides a free, business-management suite designed specifically for micro-businesses. “My favourite part about PlanetSoho is the streamlined and intuitive organization it provides.” - Sean Hilty (user)

Micro-business specific ENTERPRISE PERSPECTIVE | SERVE MICRO-BUSINESSES!

!  Micro-businesses are not scaled-down versions of large corporations !  Traditional management theory is not necessarily applicable !  Offers designed specifically for micro-businesses are more relevant

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Taobao University by Alibaba Group partners with institutions like Institue of Suzhou Software to teach Taobao sellers how to improve efficiency in processing orders and speed of delivery.

Intuit Quickbase catalogues and provides templates for custom applications. Members from the community can use and share templates that best meet their specific. needs

Etsy apps is a collection of third-party apps enabled by the Etsy API that provides solutions to sellers.

Curated solutions ENTERPRISE PERSPECTIVE | SERVE MICRO-BUSINESSES!

!  Micro-businesses often reconfigure solutions to meet their evolving needs !  Solutions come from a range of providers that solve specific issues !  Platforms that curate solutions connect micro-businesses with solutions that

best meet their needs

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ENTERPRISE PERSPECTIVE | SERVE MICRO-BUSINESSES!

Offers serve micro-businesses in both path to market and overhead !

PATH TO MARKET

DEFINE

MAKE / PROCURE

MARKET / SELL

DISTRIBUTE / DELIVER

CUSTOMER SERVICE

ORGANISATION"

INFRASTRUCTURE"

PAPERWORK"

REVENUE & COST"

OVERHEAD

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ENTERPRISE PERSPECTIVE | SERVE MICRO-BUSINESSES!

GUIDELINES TO SERVE!! Provide when and how is needed !

! Design for micro-businesses, not yourself!

! Act in their best interest !

#microbusiness,@claropartners,

PATH TO MARKET OVERHEAD

Exercises introduction

Customer(awareness(and(reputa&on(depends((on(word(of(mouth(

Business(and(personal(networks((are(intertwined(

Struggle(to(define(their(focus((while(keeping(op&ons(open(

Personalized(customer(service((is(&me5consuming(

Fluctua&ng(cash(flow(

Lack(of(capital(to(buy((what(they(need(

Poorly(defined(pricing((and(revenue(models(

Must(wear(all(hats(

Prefer(to(learn(by(doing(

Development(not(aligned(with(bureaucra&c(or(legal(procedures(

Hard(to(Priori&se(tasks(

#microbusiness,@claropartners,

,

,

11:45 ,Introduc8ons,

12:00 ,Ge<ng,to,know,the,next,wave,of,MicroEbusinesses,and,their,challenges,

13:00 ,Lunch:,form,team,and,pick,your,challenge,

14:00 ,Small,group,work:,idea8ng,services,for,real,microEbusiness,needs,

15:00 ,Share,back:,1,pitch,minutes,per,group,

15:30 ,End,

,

Innova&ng(services(for(the(Next(Wave(of(Micro5Business:(Workshop(Agenda(

#microbusiness,@claropartners,

#microbusiness,@claropartners,

WHAT ARE WAYS TO SOLVE THIS CHALLENGE?

HOW DOES THIS SERVICE SUPPORT MICRO-BUSINESS NEEDS?(We find it easiest to start from the bottom)

PLACE THE MICRO-BUSINESS CHALLENGE HERE

FREEDOM

VISIBILITY

ADAPTATION

FLEXIBILITY AND OPTIONS

How can this service give micro-businesses freedom to set and navigate towards self-defined goals?

How can this service increase micro-businesses’ visibility?

How can this service allow micro-businesses to quickly respond to changing circumstances?

How can this service provide micro-businesses with flexibility and options?

WRITE YOUR SERVICE IDEA HERE

Brainstorm potential service ideas to meet this challenge. Micro-businesses operate through networks. How can networks be part of your solution?

#microbusiness,@claropartners,

WHAT ARE WAYS TO SOLVE THIS CHALLENGE?

HOW DOES THIS SERVICE SUPPORT MICRO-BUSINESS NEEDS?(We find it easiest to start from the bottom)

PLACE THE MICRO-BUSINESS CHALLENGE HERE

FREEDOM

VISIBILITY

ADAPTATION

FLEXIBILITY AND OPTIONS

How can this service give micro-businesses freedom to set and navigate towards self-defined goals?

How can this service increase micro-businesses’ visibility?

How can this service allow micro-businesses to quickly respond to changing circumstances?

How can this service provide micro-businesses with flexibility and options?

WRITE YOUR SERVICE IDEA HERE

Brainstorm potential service ideas to meet this challenge. Micro-businesses operate through networks. How can networks be part of your solution?

#microbusiness,@claropartners,

WHAT ARE WAYS TO SOLVE THIS CHALLENGE?

HOW DOES THIS SERVICE SUPPORT MICRO-BUSINESS NEEDS?(We find it easiest to start from the bottom)

PLACE THE MICRO-BUSINESS CHALLENGE HERE

FREEDOM

VISIBILITY

ADAPTATION

FLEXIBILITY AND OPTIONS

How can this service give micro-businesses freedom to set and navigate towards self-defined goals?

How can this service increase micro-businesses’ visibility?

How can this service allow micro-businesses to quickly respond to changing circumstances?

How can this service provide micro-businesses with flexibility and options?

WRITE YOUR SERVICE IDEA HERE

Brainstorm potential service ideas to meet this challenge. Micro-businesses operate through networks. How can networks be part of your solution?

#microbusiness,@claropartners,

VALUE PROPOSITIONWhat is your service’s value proposition to micro-businesses?

VALUE EXCHANGE MODELIllustrate the business model for your service. What value (resources, knowledge, skills, connections,…) is exchanged between service providers, microbusiness, customers and others?

Example:

WRITE THE FINAL NAME OF YOUR SERVICE HERE

#microbusiness,@claropartners,

VALUE PROPOSITIONWhat is your service’s value proposition to micro-businesses?

VALUE EXCHANGE MODELIllustrate the business model for your service. What value (resources, knowledge, skills, connections,…) is exchanged between service providers, microbusiness, customers and others?

Example:

WRITE THE FINAL NAME OF YOUR SERVICE HERE

#microbusiness,@claropartners,

VALUE PROPOSITIONWhat is your service’s value proposition to micro-businesses?

VALUE EXCHANGE MODELIllustrate the business model for your service. What value (resources, knowledge, skills, connections,…) is exchanged between service providers, microbusiness, customers and others?

Example:

WRITE THE FINAL NAME OF YOUR SERVICE HERE

#microbusiness,@claropartners,

759(March!Join strategists, developers and designers all across the world come together in one weekend to explore, create and prototype a service – mentored by Claro Partners, their clients and other professionals"

Register NOW at barcelonaservicejam.org!"