Rethinking Business Strategy for a Hyper-connected World

7/22/2019 Rethinking Business Strategy for a Hyper-connected World

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Rethinking

Business Strategy for aHyper-connected WorldA method for creating an ecosystem of connected products/servicesthat disrupt markets and create new value for users and business.

lvaro Rojo, Brand Strategist


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i Introduction:The Need for Change

2 Chapter 1:The Legacy 1.1 Creating value: the motor of business

4 Chapter 2:The Fuel of Transformation 2.1 Trend catalysts 2.2 A culture of change

11 Chapter 3:The Ecosystem Strategy 3.1 Characteristics of an Ecosystem strategy 3.2 The result: connected products/services 3.3 Types of connected solutions

17 Chapter 4:Breakthrough Value 4.1 Business Values 4.2 User Values

20 Chapter 5:A Method for Designing a Connected Product/Service 5.1 Week One: Empathize

5.2 Week Two: Define 5.3 Week Three: Ideate 5.4 Week Four: Prototype 5.5 Week Five: Test

28 Final Thoughts

29 Appendix A: Guidelines for Creating Disruptive Solutions

32 Appendix B: How to Prepare the Session

33 Appendix C: Guidelines for Defining a New Market Space

35 Further Reading

36 About the Author

Table of Contents


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Introduction: The Need for Change

There has been many changes in the businesslandscape forcing companies to rethink and

update their industrially grounded strategies.

Digital is transforming business models fasterthan ever. Whereas disruption was a slowerprocess in the past, its now accelerated. In everyindustry, companies are trying to undercutcompetitors disrupting the usual ways of doingbusiness. The music industry, the publishingindustry, the news industry have each learnttheir lessons about disruption. And now itshappening to every kind of industry. You can see

what happens with companies like Nokia, Kodak,Blockbuster, Blackberry, etc. Big companies cango from top to the bottom very quickly.

We are in the middle of a Connected Revolution,where new ingredients such as the number ofsensors in solutions like NestandJawbone Up,smartphone penetration, the amount of timespent in social media, the amount ofinnovationswith big data, and location-basedinformation likeFourSquareand Hailo, areexponentially growing.

There is more competition than ever.Globalization and collaborative economy1isweakening companies who aren't quickenoughto adapt their offering to emergentbehaviours. However, small startups, who aremore tolerant of risk and more agile at iteratingproducts, are taking established companies outof the game. Examples of those who have

succeeded includeAirbnband Uber. In fact, by2030 more than 75% of the S&P 500 will becompanies that we wont have heard of by now.

Companies need to be different more than ever.Mass consumption is making companies andtheir offerings increasingly homogeneous.Manycompanies struggle in established markets justto shave off minimal market share from itscompetitors.

The biggest fear of a company is that a more ablecompetitor is going to come along and radically

disrupt their business. So, how can companiesstay ahead and protect themselves?

Companies need to differentiate through theirbusiness models and redefine how they create,market, and deliver value; this is much harder tocopy than a mission statement, a product, apackaging, a communication, or a technology.

In this little book I present a strategy adapted toa fast moving and hyper-connected world where

every thing is beginning to be connected. Thestrategy is called 'Ecosystem of Digital Services'.The main purpose is to create a network ofInternet-connected products designed to helpusers achieve their needs by adding a digitalservice layer that empower physical products.The value is no longer in the product, its nowembedded in the data generated by user actions.

I am providing a perspective on the subject thatwill hopefully inspire decision-makers to createconnected products/services which disruptmarkets, generate new revenue streams, andcreate user lock-on. At the end of this book, Ihave arranged a structured method of working ina 5-week rapid design sprint.

This book is the summarized output of my Thesisfor the MA in Digital Media Management forHyper Island.

I hope you enjoy the journey as much as I did.

Footnote

1. Owyang, J. 2013. The Collaborative Economy. Altimeter

Research Theme: Digital Economies. [report].

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Stefan Olander, VP Digital Sport, Nike, and Bob Greenberg,Founder, R/GA, presented during the Cannes Lion AdvertisingFestival in 2012 an interesting talk about how and why the mostinnovativecompaniesof the worldare rethinking their currentbusiness strategies2.

During the talk, the presenters mentioned three different types ofbusiness strategies: 'Horizontal Integration', 'Vertical Integration',

and 'Functional Integration'.The first two traditional types of strategies are product-centric; thefirst one is called 'Horizontal Integration', where a company works insilos creating a large portfolio of products. Coca-Cola is possibly thebest example, creating many products under different brands. Thesecond type of strategy is called 'Vertical Integration', which consistsof creating value,finding new ways to affect the supply chain andsaving money to be more efficient3.In these two cases, the companies are building their strategies

inside-out, instead of users-in. These companies are focusing onsolving challenges of the organizations while users are sidelinedas extras.

Most of these companies focus on selling more stuff instead of betterengaging with users around how they are getting value. Companiesdon't focus as much during the post-sale experience. The truth is thatusers will spend, hopefully, more time using the product/servicepurchased than the time they will think about buying it.

2

The Legacy

1

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Footnotes

2. R/GA & Nike. 2012.Building A New

Ecosystem.[video online] Available

at:http://bit.ly/1fGPkBa[Accessed:

21 Feb 2014].

3. Odland, S. 2012. 5 Ways To Control

Costs.[online] Available at: http://

onforb.es/1fGPloR[Accessed: 21

Feb 2014].
http://onforb.es/1fGPloRhttp://bit.ly/1fGPkBahttp://bit.ly/1fGPkBahttp://bit.ly/1fGPkBahttp://onforb.es/1fGPloRhttp://onforb.es/1fGPloRhttp://onforb.es/1fGPloRhttp://onforb.es/1fGPloRhttp://bit.ly/1fGPkBahttp://bit.ly/1fGPkBa


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Furthermore, the market is becoming increasingly homogeneous,making companies invest bigger budgets on marketingcommunications to achieve differentiation.

Creating value: the motor of business

Value is defined as the equivalent return for something exchanged.The purpose of every company is to identify opportunities forbringing value to users and conduct value exchange for financialbenefits. It means creating something that costs less than themoney that users are willing to exchange.

Generally, companies occupy a position in the value chain wherethey add value before passing to the next actor in the chain. So, atransaction finishes when the product is bought. This is the classicway of doing business; the purchase is the end of the relationshipbetween the company and the buyer.

Michael Porter, one of the classic gurus of business strategy, wrote;

To outperform rivals it must deliver greatervalue to customers or create comparablevalue at a lower cost, or do both.4

This traditional thinking of identifying, creating, and delivering valueis grounded in assumptions of Industrial economy5, and today many

companies still view value creation narrowly, missing the mostimportant needs or developing products that dont completely matchuser expectations.

Businesses often spend a lot of resources looking at how to reducecosts and how to optimize processes of creating and deliveringvalue; they also spend much energy thinking about how usersaccess, receive and interpret value through communications.

The problem with the conventional approach is that products/services and the strategies designed for them are too easy forcompetitors to copy and improve. Current research suggests thatfocusing user-loyalty based on this conventional approach only leadsto short-term gains6.

Footnotes

4. Porter, M. 1996. What Is Strategy?.

[online] Harvard Business Review.

Available at: http://bit.ly/1ijebcf

[Accessed 21 Feb 2014].

5. Normann, R., Ramirez, R., and

Others. 1998.Designing Interactive

Strategy: From Value Chain To Value

Constellation. Wiley New York/

Chichester.

6. Liabotis, B. 2007. Three Strategies For

Achieving And Sustaining Growth.[online] Ivey Business Journal.com.

Available at: http://bit.ly/1mpJAe3


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The world is in a transition where social change will no longer bedictated by centralized process of industrialization, but byinformation: generated by everything people do in search of relevant,alternative, authentic, and immediate experiences.

While the world simultaneously enjoy but struggle with the fruits ofindustrialization, many technological changes are converging; butIoT (Internet of Things) is the technology that will completely

transform the way that users interact with products/services.

As defined by Cisco Systems, IoT is the network of physical objectsaccessed through the Internet7.

Internet and ubiquitous technologies are making possible theaddition of a layer of connectedness to products/services.Nowadays, companies are already adopting this technology, andstarting to commercialize products that sense, track, measure, andcontrol information in limitless forms.

IoT allows people and products to be connected anytime, anyplace,with anything and anyone, ideally using any network.Life will besomething like: as soon as you wake up, the coffee is brewing, thehouse is heated,the car already knows the best route to work,aconnected refrigerator sends to your smartphone the updatedgrocery list

When objects can sense and communicate, it changes how andwhere decisions are made and who makes them. Information

4

The Fuel of

Transformation

2

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Footnotes

7. Cisco. 2014.Internet of Things (IoT).

[online] Available at: http://bit.ly/

1neRisN[Accessed: 21 Feb 2014].
http://bit.ly/1neRisNhttp://bit.ly/1neRisNhttp://bit.ly/1neRisNhttp://bit.ly/1neRisNhttp://bit.ly/1neRisN


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generated by the usage of products/services is letting people takebetter and faster decisions, helping them improve their lives.

Trend catalysts

Below, I will explain the technology and business drivers that may

trigger the success of IoT-based solutions.

1. A business opportunity for investment

Computer chips are becoming increasingly cheap.In his seminal1965 paper, Intels founder coined Moores Law to predict that thenumber of transistors on a chip would double every 18 months (lateradjusted to two years) and that the cost would fall off at a similarrate8.

Seventy-five percent of companies across industries are already

exploring IoT9

. Cisco Systems predicted in 2011 that there will betwenty-five billion devices connected to theInternet by 2015 and fiftybillion by 202010. By 2025 IoT has the potential to create an economicimpact between $2.7 trillion to $6.2 trillion annually11.

Examples:Nike+ FuelBand, Google Glass, Amazon Dash,etc.

2. Business solutions are becoming mobile

Thanks to accessible Internet data plans, a mature market, and goodmobile computing power, companies can build reliable solutions

around smartphones. As a result, the mobile device is becoming aremote-control device for products/services/information12.

Example:Phillips is piloting a project where iBeacons accuratelytracks the movements of users who are searching for a product andprovides the correct direction on their smartphones.

Example:Google Walletand PayPal Beaconare examples of howcompanies are using smartphones to unify users everyday gadgets(cards), adding new value (security).

3. The body is able to control products/services

Companies are starting to design gesture and speech controlsolutions, connecting bodies with the Internet (Natural UserInterface). The goal is to give a natural, easier and comprehensiveway to control products/services.

Example:Microsoft Kinectis a classic example of controllingsoftware using the body.

Footnotes

8. Moore, Gordon E. (1965).

"Cramming More Components Onto

Integrated Circuits".ElectronicsMagazine. p.4. Retrieved2006-11-11.

9. The Economist. 2013. The Internet Of

Things Business Index. A Quiet

Revolution Gathers Pace.The

Economist Intelligence Unit.

[report].

10. Evans, D. 2011. The Internet of Things.

How The Next Evolution Of The

Internet Is Changing Everything.

[report].

11. McKinsey Global Institute. 2013.

Disruptive Technologies: Advances That

Will Transform Life, Business, And The

Global Economy.[report].

12. Crocombe, I. 2014.2014 Trends

Digest Deck For Digital Leaders.[ebook] http://slidesha.re/1fFNWzi

[Accessed: 21 Feb 2014].

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Example:Ringis a wearable device recently funded on Kickstarter,letting users send texts, control home appliances, etc., throughgesture control.

Example:WorldKitis a system which connects users palms with adepth camera and a projector to make ordinary surfaces instantlytouch-based.

4. Users demand personalization

Big data is playing a greater role on how companies fine-tune theirtargeting and storytelling strategies. Companies are learning how toeffectively exploit userdatabases in real-time to make personalizedpropositions.

Example:Hellmann's brand teamed with supermarket chainSt. March and turned grocery store receipts into personalizedrecipes combining products users bought.

It has become a powerful source of knowledge when companiesknow how to interpret behaviour patterns and improve their currentoffering.

Example:IBMs Dublin research lab used cell phone data to aid theredesign of bus routes. Researchers used time and location data,collected from calls and SMS, to assess commuters frequent routesand then compared these to the existing public transportinfrastructure. The results shown sixty-five possible improvements

that could reduce travel time by ten percent.

Another technology, the cloud, has made a fundamental shift in theway businesses operate during the last few years. The key of somedisruptors companies was to offer an instant access to their serviceswith tools that enhance individual interests.

Examples:Spotify, MIT OpenCourseWare, Netflix, etc.

Increasingly, users are demanding products/services which providea unique experience and a personalized solution.

Example:Nesthas built high levels of engagement around energyusage and cutting air conditioning consumption. These services usehistorical data, shared by users of the thermostat, in order to "auto-tune" and optimize theirenergy consumption.Example:In exchange for inserting a connected device into a carsdiagnostic port, Progressive InsurancesSnapshotprovides adiscounted policy rate based on how an insured driver drives,

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including how hard he/she brakes, and the time of day his/her caris used.

5. Companies are more open for collaboration

To deliver a coherent and full user experience, companiesof different categories are cooperating and partnering to build

products/services that can be integrated and used together.

Example:To meet the needs of runners, Apple and Nikepartnered in2006 with the launch of Nike+iPod products, bringing the worlds ofsports and music together.

Another form of collaboration is the way that companies are openingtheir APIs to encourage developers to modify and improve theoriginal software in order to offer customized solutions.

Example:Nike+ Acceleratorprovides development tools, technicalplatforms and support hardware for companies who want tointegrate NikeFuelinto their own products or wearables.

6. Products/services are becoming social

Social media communication tools have profoundly changed the wayusers interact with each other. Based on that, companies areconnecting products directly to social media in order to fuelconversations around product purpose13.

Example:The Natalia Projectis an alarm-band system designedto protect someone who's being assaulted by sending a messageonto his or her social media network providing time and location ofthe attack.

Some companies are building collaborative networks wherecommunity participation influences and improves the resultingproduct/service.

Example:Wazeis an app which creates a constantly updatedrepository of traffic information through collaboration of drivers who

share road information.

A culture of change

Many well-known innovators are genuinely interested in 'change' aswell as understanding the real motivators for doing what people doand why people change.

Footnote

13. Bonchek, M. and Choudary, S.

2013. The Age Of Social Products.

[online] Harvard Business Review.

Available at: http://bit.ly/1hnTuJG


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The only thing that is constant is change Heraclitus.

People use technology to accomplish everyday tasks. Technology isan accelerator of innovation; it's a factor that enables companies todisrupt markets. However, technology by itself doesn't disrupt anymarket; its people who disrupt them. People who have tounderstand, buy, adopt, and use technology in their everyday life.

Although this sounds obvious, sometimes companies just equateinnovations to new technologies. Companies must prioritizeunderstanding emerging needs and consequence of new habits,behaviours, priorities and social patterns, over technological-hypes.

Our focus should not be on emerging

technologies but on emerging culturalpractices. Henry Jenkins14.

The following is an extracted summary from the book MetaProducts15, about why user aspirations change and make them lookpast technology in search of new experiences.

Through time, we have used different ways

to deal with change. Someone in the 19th

century, for instance, would probably haveresponded to change very differently fromthe way we do today. Traditions, religions,ideologies, national identities, geographicalcontext, available resources, serendipity,distance, and time, were constraints thatwere all new. Todays filters to constraint

influences are more porous. All this makes itdifficult for us to realize what exactly ischanging today.

A handful of major changes in history haveinfluenced people's mindset today. Forinstance, Francis Bacon'sreflection of theAge of Reason was thatmachines would

Footnotes

14. Jenkins, H. 2006.Eight Traits of the

New Media Landscape.[online]

Confessions of an Aca-Fan. http://

bit.ly/1iWuWfe[Accessed 21

Feb 2014]

15. Crdoba Rubino, S., Hazenberg, W.,

and Huisman, M. 2011.Meta

Products.Amsterdam: BIS

Publishers.

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liberate mankind and they would savelabour.It was just a matter of time beforescientific efforts and intellectual aspirationscombined in 1750 to produce the steamengine. It was not just an invention, but a

platform of knowledge, ideas andtechniques, allowing established industriesto grow exponentially affecting people's livesall over the world. In fact, a new idea ofprogress was born: machines wouldproduce a better society. This aspirationcaused people to look for ways to helpindustrial society flourish. Thanks to this

historical factor, new products were in thehands of the majority instead of the elites.

In the 1970s, industrialization also enabledand defined relationships between countries.It made people conscious of the concept ofglobal economies. At the very beginning of theglobalization movement in the 1970s, Daniel

Bell foresaw that it was no longer industrialprocesses that dictate social change, but thecreation of a service economy was making aself-sustaining technological growth possible.The last big moment of the history with animpact on people's aspirations was the birthof Internet. For businesses, the Internet erabrought on changes like the eliminationgeographical barriers to competition, thedemocratization of goods, the fulltransparency of pricing, the transparency ofqualityIt was in 1991 when the World WideWeb was first introduced to the public. Andwith this, the start of a new society.

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"You have to make a distinction betweenwhat technology makes possible and howsocial developments happen to adopt thattechnology. Maddy Janse, Phillips15.

How different are our aspirations now, compared to the Industrial Age?

Whether centuries ago or today, peoples aspirations are still drivers

of change. While it's generally accepted that technology changes our

lives, the reality is more complex. The process could be called an

aspirational cycle; people experience the past and present in a

certain way, causing them to build their aspirations. Through this

whole process, they learn and create new aspirations, which again

motivates them to materialize them.People have aspirations thatare constantly changing when they are fulfilled,and through thesenew interactions,potential new meanings arise, and ultimately newbehaviours.

Example:When the iPhone was launched, the tactile screen was a

relative novelty, but within a few short years, it became the standard

expectation for buying a new phone or tablet.

Only businesses that proactively alter user aspirations will be

disrupters.

You cant just ask customers what they wantand then try to give it to them. By the timeyou get it built, theyll want something new. Steve Jobs.

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We can see how users are increasingly searching for meaningful,emotional,immersive, entertaining, and personalizedexperiences,not just products. Free time and memorable experiences are valuesthe new economy has brought to society and for which users arewilling to pay.

In his 1971 book Future Shock, Alvin Toffler predicted the upcomingexperiential industry", in which people in the future will agree to

spend lot of money living experiences16

.

"Emergent technologies and their fastadoption are clearly calling for new businessmodels Companies must hold a people-centric view of the user not only as a passivespectator and consumer but also as anactive inter-actor, creator and producer

Companies must develop products andservices connecting the scientific and socialdimension in a relevant way considering theemotional dimension and its impact andrelevance to people's value universe. Anne Lisa Kjaer, CEO at Kjaer Global15.

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Ecosystem

Strategy

3

Footnotes

16. Toffler, A. 1971.Future Shock.New

York: Random House.

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Some companies are updating their industrially grounded strategiesfor a new one adapted to this fast-moving and hyper-connectedworld.

Stefan and Bob called the latest type of business strategy'Functional Integration', and thanks to the Nike+case study, R/GAhas re-branded it as an 'Ecosystem of Digital Services'2.

Cindy Chastain, Creative Director at R/GA, defines an Ecosystem asa business strategy that seeks to leverage digital technology tocreate dynamic, interconnected touchpoints and product extensionsthat provide additional value to customers, deepen their connectionwith a brand, and, ultimately, feed business growth17.

The main purpose is to create a network of Internet-connectedproducts designed to help users achieve their needs by adding adigital service layer that empower physical products. The value is no

longer in the product, its now embedded in the data generated byuser actions.

Below, I have listed characteristics of an Ecosystem strategy.

Characteristics of Ecosystem strategy

1. Every new product/service creates a newmarket space

The way that most companies stay in business is by launching newproducts/services to existing markets and making incrementalimprovements to them. The problem is the time that a company cancontinue making sustainable growth from doing essentially thesame. In fact, recent research indicates that most companies can'tsustain robust growth for more than a few years18.The Ecosystem strategy is aboutcreatingsolutions around the userto open new markets. To know more about it, go to the Appendixsection and read Guidelines for creating disruptive solutions.

One of the things Apple has demonstrated over its lifetime is that itis a great disruptor. Since Steve Jobs returned to the company in1997, the cycle of creating disruptive solutions is around three tofour years, on average. While pirating music was a real disruptor tothe music industry back in the late 1990s, with its iPod and iTunesApple moved from the computer industry to the music industry,disrupting the entire market. The iPod itself was a cool device newto the market, however adding iTunes as a service layer was whatreally drove Apples success. In the second quarter of 2012, iTunesclaimed 64% of the entire digital music market19.

Footnotes

17. Chastain, C. 2013. 6 Ways Ecosystems

Have Changed Our Roles And The Way

We Work.[e-book] http://

slidesha.re/KTeZZn[Accessed: 21

Feb 2014].

18. Christensen, C. M., Raynor, M. E.

and Anthony, S. D. 2003. Six Keys To

Building New Markets By Unleashing

Disruptive Innovation.Harvard

Management. EEUU.

19. Ingham, T. 2012. iTunes Owns 29%

Of US Record Market.[online] Music

Week. http://bit.ly/1rQgdTF


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2. Products/services are connectedamongst themselves

It is totally possible to implement the logic of the Ecosystemstrategywithout developing connected products. In that case, thecompany is only taking half the advantage of this strategy.Connecting products with Internet and each other forms a wholenetwork of always-on information users can access through eachdevice.

3. Value shift from product to service

To return to the Apple case study, while the initial purchase is for atraditional device (in the form of an iPod, iPhone, iPad, iMac...), theongoing purchase relationship between company and user is rootedin whatever digital service is needed (iCloud, iTunes, App Store,Genius). The service-added layer shifted value to content, ratherthan to the object itself.

Some companies known for their hardnosed approach to businesshave already embarked on this strategic path. Apple is not the onlycompany unique at excelling with an Ecosystem strategy. Some arestarting to build a mixed portfolio of traditional and connectedsolutions, like Nike, Google, Amazon, BMW, Philips, Samsung, andLego. Other tech-savvy companies, like Fitbit, Withingsand Nest, arecreating an Ecosystem embedding IoT in all of their products.

The result: Connected products/services

The products/services that are produced by the first two types ofbusiness strategies have a risk of quickly become commodities2;however, the network of solutions produced by the Ecosystemstrategy and IoT add new value extendable throughout a long-termlife cycle.

How can IoT transform the actual concept of products20?

1. Web-connected products can interact with the user

and sense the surrounding environmentProducts/gadgets/devices are typically passive. Users normallyactivate them to perform a certain task. But we are starting to seedifferent solutions that initiate communication with users, sendingmessages and alerts based on habits, decisions, preferences, andlocation.

Footnote

20. Lord, B. and Velez, R. 2013.

Converge. Transforming Business

At The Intersection Of Marketing

And Technology.Hoboken,

New Jersey: Wiley.

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2. Web-connected products can interact with eachother seamlessly

Web-connected products can automatically communicate with eachother, transferring information and delivering a seamless andintegrated experience.

Web-connected products have infinite possibilities in the wholebusiness landscape. As an overview, I will present some examples:items at home can be controlled, monitored and even connected toeach other;connected cars can improve traffic flows or allowfunctions to be controlled remotely;weather-related sensors couldhelp agriculture by monitoring moisture in the air or ground andwarn farmers about droughts; heart sensors could give patients anddoctors data to prevent diseases; sensors that monitor white bloodcells could alert cancer patients of a relapse; etc21.

Users are demanding solutions that make their lives a little bitbetter, while telling engaging stories that works through everytouchpoint. A touchpoint is a point of interaction involving a specifichuman need in a specific time and place. It could be a device, a webinterface, a mobile app, a sensor, or a RFID tag.

As Helge Tenn remarked during the IAB Think Digital ConferenceBrssels in 2013, we are in an era when users expect products to bemore than tangible objects. Companies need to adapt and think witha service mindset to enhance their offering and connect with theirusers in more personal and immediate ways22.From now on, I would like to make a distinction between IoT andconnected solutions. While the two concepts have been usedinterchangeably between the authors I quoted, I would encourageyou to remember this: while IoT is the phenomenon of connectingeverything with Internet, connected solutions is the result in whichbusinesses addadigital service layerto a physical product.Connected solutions are going to radically change entire businessmodels and current product design strategies. The potential value isno longer in the physical product; instead it will be embedded in theinformation generated by user actions.

Footnotes

21. Smith, I. G. 2012. The Internet Of

Things 2012.Halifax (UK):

CASAGRAS2.

22. Tenn, H. 2013.IAB ThinkDigital

2013.[video online] http://bit.ly/1mpKkzK[Accessed 21 Feb 2014].

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The core of the IoT is to seamlessly gatherinformation about objects in the physicalworld and using the informationin multipleapplications. Information collection aboutthe origin of goods, location, movements,

properties, usage, and context can helpenterprises to improve business, and alsocreate new ones. Anne Lisa Kjaer, CEO at Kjaer Global15.

Nike+has proven to be a hallmark of generating long-term valueusing IoT in appropriate context. The Nike+experience connectsshoe sensors, iPod and a web application to create a multi-dimensional running experience which motivates new and seasoned

runners.The devices track user activities and help them achievetheir goals.

Types of Connected Solutions

Technically, there are three different types of connected solutions,their nature depends on the goal of the communication stream inthe network15:

1. Between information from the physical world and

a touchpointInformation flows from a physical, web-connected product to anonline interface.

Example: Withing Blood Pressure Monitoris an armband thatpresents statistical health results in the iPhone interface.

2. Between a touchpoint and a physical product

Information flows from an online interface to a physical product.

Example: The Olinda Radiosends streamed music generated viamusical taste acquired from users online social network to aphysical radio.

3. Between a touchpoint and a touchpoint

The products don't have a direct information flow between physicalproducts and online interface.

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Example: When users get a Webkinztoy, they also get a code thatenables them to unlock a pet in the games online counterpart.

In the next few years, connecting and creating a meaningfulrelationship between users and brands means blurring the lines ofadvertising, product design and technology.

The product is the marketing, and themarketing is the product. Ted Booth, Managing Director at Method Inc.23.

It's not difficult to imagine an insurance company offering a single-day car insurance, purchased via the vehicle's dashboard, withprices set daily based on any number of factors (from weatherconditions to location or traffic levels).

Footnotes

23. Booth, T. 2013.The Experience

TellsThe Story. From AdvertisingProducts ToProductizing Adverts. n.p.[pdf]http://bit.ly/1cThYZe[Accessed:21 Feb 2014].

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All kind of companies, whether new or established, startups orFortune 500, business-to-business or business-to-consumer, inindustries from consumer goods to finance, can benefit from theEcosystem strategy.

This strategy will help companies achieve a longer, deeper, wider,and more diverse share of user spending. Moreover, they canincrease the probability of long-lasting competitiveness for getting

and staying ahead in ways that make it difficult for competitors tocatch up.

Value is a complex concept that has amultitude of faces; but perhaps in the overallscene of the IoT there is value in the possibilitythat it gives us to measure, manage and beingtold if what we are doing is less efficient thansomething else. Especially when effects are onlarger scales, such as the consumption ofenergy, for example. So, when this value isrecognized it actually changes behavioursIf I know that I can take two minutes lessshowering than usual, I can actually saveresources The IoT offers a possibility to notonly measure and track my personal

17

Breakthrough

Value

4

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information, but to act in intelligent ways.So for example; how much I run, how muchsugar is in my blood, how much energyI consume and gives the intelligent tools tomake good decisions about ourselves. Alexandra Deschamps-Sonsino, Entrepeneur15.

In order to show the benefits, I have collected and synthesized thevalue that this strategy can add to businesses and users:

Business Values

1. Companies become killer entrants when they open opportunitiesin new markets or existing ones.

2. The product/service offers a potential shift of the revenue andcost dynamics. Whereas a typical product might have one revenuestream, a connected product can leverage multiple revenuestreams.

3. The product learns and improves from themselves, whichimply a long-term competitive cost advantage in the value chain.

4. Through captured data, companies identify patterns from thepast, and predict new aspirations and emergent behaviours evenbefore people become aware.

5. Companies market to users more precisely and directly via thedigital service itself.

6. The product/service/network can grow, expand and connect withother solutions of the network.7. Companies create a user lock-on by building trust with users and

having a memorable effect in the user's mind (this means thatusers choose the company because of the ongoing superior valueit provides against the competitors).

8. By opening up the API to partners they continue evolving thefuture of the company.

User Values

Lean thinking defines value as providingbenefit to the consumer, anything else is

just waste. Eric Ries24.

1. The resulting information allows users to be more efficient and totake better decisions in real-time.

Footnotes

24. Ries, E. 2011. The Lean Startup.

New York: Crown Business.

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2. Users find products/services/experiences increasinglycustomized for their needs, aspirations, habits, preferences,mood, and location.

3. The service enables more shared knowledge and cohesion withinthe community.

4. Users find it emotionally valuable to share and spread theirexperiences with their communities.

5. Users could pay for service usage instead of product usage.

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In this How to Guide, I will explain a methodology for defining,designing, and developing connected products/services. The aim ofthis method is to help teams become innovative by making aMinimum Viable Product in a rapid design sprint of 5 weeks.

This method is the resulting process of working with a mix of toolsand exercises from different disciplines; these include ServiceDesign Thinking, Product Design, and Innovation processes.

I have arranged my advice in the form of something that innovation

teams can quickly work through to ensure that they can be wellprepared and organized to achieve a successful result. By no meansis this intended to be a definitive method. However, dipping into thepractical tips that follow should provide the team a structured wayof working.

I hope this method can help companies who want to take the path ofimplementing and developing an Ecosystem of connected products/services strategy.

It's not about making a new device, it'sabout figuring out the interconnectivitybetween the device, the platform, thenetwork, the user, the community, etc. Aaron Dignan, Undercurrent25.

Before starting the project you can find some tips on How to preparethe sessionin the Appendix section.

20

A Methodfor Designing

a ConnectedProduct/Service

5

Footnote

25. Dignan, A. 2014.Digital Isn't

Software, It's a Mindset. [video online]

http://bit.ly/SlW8u1[Accessed 3

May 2014].

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Week One:Empathize

Goal:To gain a deepunderstanding of theuser and problemspace.

1Step A Frame the context

It is important to frame the problem the group needs to tacklecorrectly. This sounds quite obvious, but when the challenge iswrongly formulated, incorrect input for ideation will be formed also.

In this step the team only needs to start framing the context while

exploring the situation. It's all about bringing clarity.

1. When the team starts the project it needs to identify who are themost important users for whom the solution will be created, thencollect them into different groups. I recommend using a personadocument.Personas are fictional charactersrepresenting aparticular segment of society. Later on this exercise will helpgenerate ideas empathetic with user needs.

2. Depending on resources, rich insights can come from observingand engaging with potential users during focus groups or one-to-one interviews, in order to interpret what their aspirations are. Incase the team doesn't have this possibility, they need to go backto existing research and make their own assumptions about whatare the users desires.The term that describes this idea is known as Customer's DesiredOutcome26.

3. The team needs to adjust the Customer's Desired Outcome toa market space where the company is perhaps not operating

right now.

I have written my advice in the Appendix section called Guidelinesfor defining a new market space.

Example:

Brand

User

Customer's

Desired Outcome

Market space

Pedigree

Dog owner

Make the most of my relationship with

my dog.Promoting better relationships between

people and their pets.

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Footnote

26. Ulwick, A. W. 2002. Turn Customer

Input Into Innovation.Harvard

business review, 80 (1), pp. 9198.


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Step B User activities

This is the beginning of the journey. The team needs to mapeverything that is going to happen from now on.

1. The following process is known as the Customer's Activity Cycle27.This tool is an existing methodology that helps to assess

opportunities for providing new kinds of value for the user. Towork with this tool the team needs to get a big piece of paper,draw a big circle and divided it into three sections: The first phase is Before (past): when users are deciding what

to do to achieve their desired action. The second phase is During (present): when users are doing

what they decided on. The third phase isAfter (future): when users are keeping their

desired action going by maintaining, reviewing, renewing,updating, upgrading, and stopping it.

2. Now the team needs to write down all the activities that the userdoes in his/her life in order to achieve the desired action. Irecommend to write one idea per Post-It Note and place each intothe three 'before', 'during', and 'after' areas. The only skillsrequired in this activity are common sense and empathy.

To facilitate Step D, it's better to write actions starting with verbs;like getting a phone. Keeping each action abstract will help theideation phase.

Example:

Before

During

After

Looking for a puppy to adopt.

Taking my dog to the vet.

Giving away puppies after my dog gives birth.

22

Footnotes

27. V, Ermerwe, S. and Ra. 2000.How

Increasing Value To Customers Improves

Business Results.Sloan Management

Review, 42 (1), pp. 2738.

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Week Two:Define

Goal:To transformresearch intoinsights.

2Step C Filling value gaps

This step takes time. The team needs to be persistent andmeticulous.

1. Write down every action performed by all actors involved:people, spaces, organizations, etc., and the resources of value

users are willing to exchange: knowledge, money, time, emotions,services, etc.

2. Looking now at the whole network, the team needs to identifyuser pain points and unmet or emerging needs, also known asvalue gaps:

All things user do not want Things being done expensively. Things not done.

Things done badly.

Things that waste their time or energy.

Every value gap has to be highlighted and clustered. A good toolto identify value gaps is the Value Proposition Canvas28.

3. Good ideas come from provocative prompts. All value gaps needtobe synthesized into multiple How might we (HMW) questionsfor each insight, maintaining focus on innovative ways to helpthe user.

How might we is a creative problem-solving tool that IDEO usuallyapplies for their business design challenges that encouragecreativity through positive language29.

How

Might

We

Provides the creative confidence needed to

identify and solve for unmet or emergingneeds.

Encourages creativity.

Signals that the team is going to collaborate

and build on each others ideas to find asolution together.

Example: How might we help a dog owner have immediate andongoing feedback around the needs and emotions of his/her dog?

4. Before the ideation, set aside a clean space and write down all theHMW questions. Select one which inspires the team and which isnot too narrow or too broad.

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Footnote

28. Osterwalder, A. 2012. Test Your Value

Proposition: Supercharge Lean StartupAnd Customer Development Principles.

[online] Business Model Alchemist.

http://bit.ly/1d0F809[Accessed 21

Feb 2014].

29. Berger, W. 2012. The Secret Phrase Top

Innovators Use.[online] Harvard

Business Review. http://bit.ly/

1coiOzA[Accessed 21 Feb 2014].
http://bit.ly/1d0F809http://bit.ly/1d0F809http://bit.ly/1coiOzAhttp://bit.ly/1coiOzAhttp://bit.ly/1coiOzAhttp://bit.ly/1coiOzAhttp://bit.ly/1coiOzAhttp://bit.ly/1coiOzAhttp://bit.ly/1coiOzAhttp://bit.ly/1d0F809http://bit.ly/1d0F809


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Week Three:Ideate

Goal:To uncoverunexpected areasand move beyondobvious solutions.

3Step D Idea generation

Now it's time to create solutions for the problem framed by thefocus question. In order to create breakthrough value, the questionneeds to be answered by keeping the user at the centre of the ideas.

To encourage creativity during the session, the team might bring in

random influences to prompt for original ideas.

IDEO Method Cards30is one of several examples of creative tools thatthe team can use during idea generation31, 32.

1. Create as many ideas as possible, exploring a range of differentsolutions. Dont stop until the group has fully exhausted thepossibilities.

2. Take the ideas, mix and combine them to generate new ones.Every member should build on other's to create better ideas.

3. The participants can then cluster ideas into bigger and better ones.

Step E Idea selection

1. Capture the ideas in structured templates. The use of templatesis recommended to provide focus and enable comparabilitybetween alternative ideas. Write them in a format that includesthe users, actors, actions, and ways of exchanging resources.

2. Once all the ideas are collected, the team has to select the bestidea.

The team can use a selection method which suits best for theirrequirements.

Examples for selecting the idea include choosing the mostdisruptive, most practical, and most voted ideas.

Another more complex method is to select ideas depending onthe user's motivation for exchanging resources. To do that, all

ideas must be organized and prioritized from most to leastimportant, depending on whether the user would be motivated toexchange. This is a simple way to predict where the revenueresides and tovisualize business potential.

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Footnote

30. Ideo.com, 2014.IDEO Method Cards.

[online] http://bit.ly/1lMsRTF


31. Plattner, H. 2014.Ideate Mixtape.[pdf] Institute of Design at

Stanford. http://stanford.io/

1kH7TEs[Accessed 21 Feb 2014].

32. Sherwin, D. 2010.Better Ideas Faster.

How To Brainstorm More Effectively.

[e-book] http://slidesha.re/Oo2ab6

[Accessed: 21 Feb 2014].
http://bit.ly/1lMsRTFhttp://bit.ly/1lMsRTFhttp://stanford.io/1kH7TEshttp://stanford.io/1kH7TEshttp://stanford.io/1kH7TEshttp://slidesha.re/Oo2ab6http://slidesha.re/Oo2ab6http://slidesha.re/Oo2ab6http://slidesha.re/Oo2ab6http://stanford.io/1kH7TEshttp://stanford.io/1kH7TEshttp://stanford.io/1kH7TEshttp://stanford.io/1kH7TEshttp://bit.ly/1lMsRTFhttp://bit.ly/1lMsRTF


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Week Four:Prototype

Goal:To gain adeep understandingof the idea viaexperimentation.

4Innovation is 1%inspiration and99% perspiration.Thomas Edison.

Step F Concept creation

At this juncture, the team needs to think about how to make the ideahappen. The team doesnt know if an idea will work until they makeit real.

1. Knowledge gaps always exist, so the team needs to identifyresearch evidence, if possible, to substantiate the legitimacy ofthe idea.

2. Map the user experience in a Service Blueprint33. This techniqueshows, from outside-in, the journey of the user through different

touchpoints that afford and characterize his/her interactions withthe business.

A few questions to consider at this stage:

How much is the user concerned about the value gap? How would the solution change user behaviours? How could the solution continue evolving in the future? How could the solution allow others to develop and enhance it? What kind of issues would make the user return the product? What would be the return process?

How can the business support the user? What would make the user more likely to use the product? What would make the user share his/her opinion? How would the business know if the user is satisfied? Are there products/services likely to be used in conjunction

with the solution? Which touchpoints (devices, web interfaces, mobile apps,

appcesories, etc.) are involved in the delivery of the products/services?

3. After developing concept and communication flow, storyboardingcould help the team to solicit external feedback, generatingconversation about potential problems and opportunities. Whenasking for feedback, they should ask for two things that peopleliked and one thing that could be improved.

The idea should be presented clearly to avoid being lost throughbad communication. Sometimes teams waste weeks recoveringfrom side effects of have poor communication.

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Footnote

33. Risdon, C. 2011. The Anatomy Of An

Experience Map.[online] Adaptive

Path. http://bit.ly/1iIdnNw

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Step G Interaction design

1. Here the team has to specify and design for the touchpoints theyselected in the previous step.

Consider...

How much learning should the product/service take from theusers end?

What emotions should be experienced? What kind of perceptions could best be utilised to stage the

experience (visual, pressing, smelling, imperceptible, etc.)? How would the solution interact with other products/services

of the company? How could data be designed and presented clearly? How could data be used to make the solution more effective? What could be sensed, tracked, categorized, and interpreted?

Is the tracking, sensing or organizing performed by consciousdecision of the user? Or should it be totally automated?

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Week Five: Test

Goal:To improve thesolution iteratively(prototype, test andimprove).

5Step H Rapid iteration and improve

Testing is a crucial moment to take before the company will makebig investments. Market testing, financial modelling andimplementation planning are time-consuming and expensiveactivities that should only be invested in opportunities with genuinevalue creation.

This is all about learning quickly from rough prototypes andembracing failure in order to improve the solution.

1. Make a real version of the idea. The barrier to physicalprototyping is now so low that sketching in electronics is veryachievable. Lo-fi, cardboard, hacked products, Arduino,Raspberry Pi are all good options for prototyping the concept.

Consider this...

What level of detail is required for testing? Which elements of the solution could/couldn't be tested?

2. Test the solution with real users. Put the prototype in usershands and dont explain everything (yet). Then carefully listen toall the qualitative feedback they have.

After a few rounds of testing, if the team got everything right, theyshould have a MVP of a user-centric connected product on theway to creating a new market space for the company.

Congratulations!

Example: Recently, Philips developed Hue, a connected lightbulbset. Understanding why consumers would want a connectedlighting was the first major step to building a great platform. Inthe early phases of the project, the Hueinnovation team identifiedhundreds of use-case scenarios, which were repeatedly exploredand tested until four user value propositions (ambience creation,security, biological benefits, and gentle reminders) wereidentified. These value propositions, not the technology itself,established the direction for product development efforts.

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Final Thoughts

This project has allowed me to delve into an innovative subject inwhich I am personally interested. I decided to write about this topicbecause although there are some very innovative companies whoare putting the Ecosystem concept into practice, at the time ofwriting, it was not possible to find any available material whichdiscuss what is driving the need for change and the value fordeveloping this strategy along with IoT.

Personally, I predict that market leaders will only include companies

who are brave enough to believe in change favourable to users astheir unique raison d'tre. Therefore, companies shouldn't stop theirrelationships with users after purchase, but instead engage withthem; they shouldn't think about product category, but about valuegaps instead; they shouldnt blindly follow technological hypes,instead they should put the strengths of digital logic at the heart oftheir strategy; they shouldn't believe that strategies that worked sowonderfully in the past will continue working in the future, insteadthey need to create innovation-driven growth businesses again andagain; and they shouldn't do the same for a long time, rather theyshould dare to provide a holistic user experience through new

markets. Companies who accomplish these rules are those who willenjoy a sustainable profit growth and who will initiate potentialchange in society.

I would like to see this book as the first step toward a dialogue. I amaware that there are many open questions after reading, so myintention is improving it with the feedback from my readers. I hopethis book becomes a helpful, collaborative guide to openingcompanies eyes and waking them up from lethargy.

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No company has ever succeeded in innovation just by following thebest practices of its sector. Companies need to explore new territoriesin order to create new-growth businesses again and again.

I encourage you to research outside of this paper about disruption,transformational change,and the latest examples of how digitalmindset is changing the world. You can find some good readings inthe Further Readingsection that will hopefully stimulate your owntheory.

Below, I will summarize five essential points companies need toconsider when they decide to implement an Ecosystem strategy anddesign digital solutions which are potentially disruptive:

1. Learn how digital can transform the industry

The term digital disruption is used in professional literature only forthe last couple of years34. No matter how analog the industries are,its rapidly transforming them left and right. In fact, digitaldisruption's power multiplies precisely because it can apply toindustries that are not even digital. Media publishers, travelagencies, photography companies, the music industry, etc. It is not aquestion of whether it will happen or not, but when and who willcause it.

To act disruptively, companies must not simply use digital-physicalsystems to improve todays products/services/processes; they have tounderstand how digital can add new value, and how they can attract

new users by designing a new value exchange in the digital space.

Example:Google and Nissan claim their driverless cars are just fiveto six years away. When driverless cars become common, not only willthey change commuters experiences, they are expected to reduce thefrequency of traffic accidents, to improve the density of road use, tosmooth subsequent planning for maintenance and new roadconstruction, etc. Overall, driverless cars will radically disrupt theshipping and logistics industries, fleet services, public transportation,taxicabs, rental cars, agriculture, mining industries, etc.

2. Be patient for growth but impatient for profitability

Companies have two options when they seek to build new-growthbusinesses: low-end disruptions or disruptive solutions.

Low-end disruptions take an existing market with incrementalinnovations, stealing low value users from themarket dominators.These solutions dont create new markets, but they can create newgrowth. Incremental innovations are easy for competitors to respond.

29

Appendix AGuidelinesfor CreatingDisruptiveSolutions

A

Footnotes

34. Van Nouhuys J. R. 2014. Short Fuse,

Big Bang: 4 Ways That Digital

Disruption Will Change Your Industry.

[online] Whiteboard. http://bit.ly/

1rQgGVM[Accessed 3 May 2014].

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Disruptive solutions don't limit opportunities to the category inwhich the company currently compete. The company looks at threatsin other industries in which it intends to dominate users activitiesand spending. These solutions can't get big very fast, and often,disruptive solutions initially result in worse performance comparedto established products/services in mainstream markets.In the study Value Innovation: the strategic logic of high growth, Kim &Mauborgne identified that companies tendencies towards user anddemand driven innovation strategies resulted in them investing 86%of their work in low-end disruptions, but only generated 39% ofprofits. On the other hand, disruptive solutions which accounted forthe remaining 14% generated 61% of profits35.

The aim of the Ecosystem strategy is to use the benefits of disruptivesolutions the cheaper, simpler, and more agile ideas to createnew markets for users who are looking for new ways to solve their

problems.

3. User-centric solutions come from user-centriccompanies

Clearly, transformational change can be hard to spark and achieve.There are two main reasons companies resist the user-centricchange. The obstacles are rooted in business and human nature;like employees come and go, budgets typically go to what's alreadyproven, people are paid to hit certain revenue targets, etc.36.

To create and implement a user-centric company, where everythingis based on user needs, it needs to rumble through the companyfrom the top down, with strong support from senior management.

4. Disruptive solutions require a different process

When companies have a single process for all the various forms ofinnovations, the output of the process looks like something done inthe past. Disruptive ideas stand a small chance of ever seeing thelight when they are evaluated with the lens of a company whos usedto identifying and shaping incremental innovations.

The process of disruptive solutions relies more on patternrecognition rather than on data-driven market analysis. After all,markets that do not exist can not be analyzed. Even when numbersare available, they are never clear.

5. Design for help, not for change

Most companies who want to launch a new product/service, definemarkets in terms of product categories, demographics, etc. When

Footnotes

35. Kim, C. W. and Mauborgne, R.

2004. Value Innovation:The StrategicLogic Of High Growth. [online]

Harvard Business Review. http://

bit.ly/1iWvQIJ[Accessed 21

Feb 2014].

36. Shapiro, A. 2013. Users, Not

Customers.New York: Portfolio/

Penguin.

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companies only apply these marketing segmentations to theirstrategies, they have a potential risk of not designing a solutionwhich fit users' lives. If a product/service requires a behaviourchange but only partially unlocks the problem, it risks being beatenby competitors in the long-term.

What companies need to do is dig deeper into users' lives andunderstand them in every minute detail. Sometimes society is notprepared enough to adopt a huge change. That's why a sense ofcorrect timing is really important. Coming back to theaforementioned example of Apple, the iPad may look like anovernight success story; but it actually traces back to a failedproduct in the early 1990s. Apple refined its technologies andlaunched it when the world was ready for a tablet solution37.

The ultimate goal, therefore, is not to create a great solution, but todevelop a great solution that solves the problem users are willing to

pay for.

Footnotes

37. Honan, M. 2013.Remembering The

Apple Newtons Prophetic Failure And

Lasting Impact. [online] Wired.

http://wrd.cm/1rQgK7Z[Accessed

21 Feb 2014].

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Tips

1. Get the right people for the team. The team needs to be a mix ofcreatives, analytics, makers, and a subject matter expert. In termsof team size, aim for a maximum of about eight participants. Themore people involved, the slower and lower the productivity.

2. Be clear with the aims and deliverables. Have a conversation withthe owner of the challenge to understand expectations. Identifywhat success looks like from both a rational and emotionalperspective.

3. Trigger ideas with inspiring stimulus for the room; use posters,video, music, etc.

Common issues and solutions

1. Misinformation. Before starting, the team needs to collect all

possible information about the user. If there is a lack ofinformation, several problems can occur:

Assuming a marketing segmentation model. This will not helpdetermining what is valuable for the user.

Assuming that the team is accurately representing the actor. Assuming that everyone has the same level of access to the

technology.

2. Participants cant grasp the method. Prior to starting, it'simportant to demonstrate the tool with a simple warm-up example.

3. Risk aversion. Make it easy to take risks in a safe way.

4. Participants arent willing to collaborate. Good ideation requiresan open and collaborative atmosphere. Illustrate the differencebetween positive behaviours such as building on each othersinput (yes, and), and destructive behaviours such as rejectionand judgment.

5. Low energy levels. The dynamics of time, tiredness and

engagement can introduce erratic elements into the ideationprocess. Take a break and recommend participants get somefresh air.

32

Appendix BHow to Preparethe Session

B

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When a team wants to define a new market space for a company,they need to think outside-in; this means not only looking at what thecompany is doing now, but also at opportunities related with theCustomer's Desired Outcome. The team should start askingthemselves:

What businessisthe company in? What businessescouldthe company be in? What is going to change in the next 5 years?

To define a new market space, I recommend considering thefollowing37, 38:

1. Take a fully integrated view of the user

Market spaces are articulations of results that the user wants. Theyare not products like cars, but activity arenas like personal mobility;not personal computers, but global-networking capabilities; notsneakers, but healthy lifestyles.

2. Look for arenas that are greater than the sum ofthe core items

Market spaces absorb a higher proportion of the user's activities andconsequently, spending. And the user's spending for activities oftenexceeds the spending for concrete products/services.

3. Find market spaces with growth opportunity

over timeThe market space in which Lego is working with is family edu-tainment. Working with the MIT, Lego has brought together virtualand physical worlds. Using Legos interactive software, children builda model and program it to act a certain way. The goal for Lego is to getan increasing share of the user spending over their lifetime, asusually children become young adults and then parents.

4. Stretch the market space across activities

As example, cleaning is only one market subspace of home-caremanagement. Here Unilever would be able to extract yet more valuefrom the user because once they have locked onto cleaningmanagement, the company will be able to move into more spacesrelated to saving time in the home; like gardening, security, do-it-yourself, decoration, insurance, shopping, etc.

5. Look across complementary products/services

If you want to watch a movie at the cinema, the costs babysitting andparking are both factors that affect the value of this action.

33

Appendix CGuidelines forDefining a NewMarket Space

C

Footnotes

38. Kim, C. W. and Mauborgne, R.1999.

Creating New Market Space.[online]

Harvard Business Review, http://

bit.ly/1iXsZ3a[Accessed

21 Feb 2014].

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34

Untapped value is often hidden in complementary products/serviceswhere the competitors converge. Companies can create new marketspaces by absorbing the peripheral needs before, during, and afterthe offering is used to reduce user pain points. It's key to keep thevision in the context, not just in the product/service.

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Further Reading

Connected by Design: Seven Principles of Business Transformation

Through Functional Integrationby Barry Wacksman andChris Stutzman.

The Lean Startup: How Constant Innovation Creates Radically

Successful Businessesby Eric Ries.

Blue Ocean Strategy: How to Create Uncontested Market Space and

Make Competition Irrelevantby W. Chan Kim and Rene Mauborgne.

Business Model Generation: A Handbook For Visionaries,Game Changers, And Challengersby Alexander Osterwalder andYves Pigneur.

Experience Design. A Framework For Integrating Brand, Experience,

and Valueby Patrick Newbery and Kevin Farnham.

Meta Productsby Sara Crdoba Rubino, Wimer Hazenberg andMenno Huisman.

Smart Things, Ubiquitous Computing User Experience Designby Mike Kuniavsky.

How To Spotify Builds Productsby Henrik Kniberg.

The 10x Workshopby Joanna Beltowoska.

What Hackers Should Know About Design Thinkingby Chris Dannen.

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About the Author

lvaro Rojo is a friendly Spanish living in overcast London. Strategistwith 7 years of experience generating ideas at the intersection ofadvertising, businessinnovation, product design, and technology,lvaro is passionate abouthelping companies create meaningfulvalue. He has worked on bothagency and client sides across Spain,Italy and the UK.

[email protected]@hyperalvaro hyperalvaro.com

This book was written in February 2014 and edited in May 2014.

Design by Mia J. Chuang.

Illustration Credits

Cover Scienceby Fabricio MarquesChapter 1 Brijanby Brijan PowelChapter 2 Cuadrosby Natalia de FrutosChapter 3 Mazeby Julian BaillyChapter 4 Leatherby Claudio GuglieriChapter 5 Geometricaby Guy Moorhouse
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Rethinking Business Strategy for a Hyper-connected World

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