howdy Here I am again with another portion of the business model generation text to talk about and this is the design section of the text that I'll be talking about now this section is large enough that it will need more than one recorded lecture for you to watch excuse me but this first quote all life is an experiment more experiments you make the better from Ralph Waldo Emerson a good quote for entrepreneurs yeah you are going to be experimenting a lot entrepreneurs like to use the word pivot you're going to be pivoting you know you keep one foot in place on the things that work but then you pivot in a different direction and do something new because what you were doing wasn't really working the way that you wanted it to so we talked about pivoting a lot and you're going to be experimenting a lot and it is true that you know probably the more experiments you make the better because trial and error eventually you know you land on something that works the goal of course is to learn your lessons as quickly as possible and not over invest in something that isn't going to work so ok design I do have some extra information just general information about entrepreneurship when you're thinking about designing your business please realize that that the success rate for entrepreneurship is not that great these statistics on this slide are actually more positive than a lot of statistics that you will find out there there is difficulty in measuring how successful entrepreneurs are you know why businesses closed and if they're not closed if they're really functional if they're really successful or not so you always have to take these numbers these statistics with a little bit of skepticism but you know even these which are on the more positive side yeah um it's hard and the general rule is you're probably going to not make it you probably are gonna have troubles with having enough capital you're probably going to have troubles with knowing exactly what you need to do that doesn't mean you shouldn't try it so of those that do fail management related you know people not knowing how to run a business people not having a good idea of how to put together a good business model and a lot of that comes down to not having good design from the very start so that leads into the design section of the chapter here well okay how do we go about getting our business model going how do we come up with the core of how we are going to create value for other people well one good place to start is with your customers and I am sure that I have said that already in a prior video when we were talking about just the business model canvas you have to understand your customers because value lives inside your customers heads it's an intangible thing yes they're looking at how shiny it is or big it is or blue it is or whatever is important to them but ultimately it's a subjective assessment in your customers head and so you have to know your customers really well so a good idea for generating ideas and beginning the design process is get to know your customers and what they really want now there's a quote down here at the bottom of this slide that says from Henry Ford if I had asked my customers what they wanted they would have told me a faster horse see it is true that while you need to get inside your customers heads you need to understand what they really want and they they may be thinking about the world as it exists today but you're trying to think about the world as it exists tomorrow so in the case of Apple and music and unbundling songs away from the traditional method of distributing through CDs or LPS well what customers really wanted was they wanted to be able to manipulate their music they wanted to be able to get exactly what they wanted put it in a form that they wanted it mix it with other songs and then be able to have access to it whenever they wanted to they didn't necessarily want a CD they didn't necessarily want an LP they just wanted access to that particular song so when you're trying to get customer insights yeah you've got to get inside your customers heads but you also have to think about what could the world look like it doesn't have to look like it looks today it can look different so how do I take what my customers want into a new world now this is a customer empathy map it's it's out of your text it's also part of the value proposition design text which there's going to be some more slides on that a little bit later but you're trying to understand what's inside your customers head so you have to ask how they're thinking what they're feeling you have to listen to what they're saying you have to see what they're doing you have to understand what they actually are hearing and seeing in their worlds and you have to understand their pains and gains okay entrepreneurs like to use that terminology of pain and gain what's causing them to be irritated what's causing them to to not be happy that's a pain and what would they be excited about receiving and getting that would be a gain so this is a six different category thing to help you ask the right questions about what's inside your customers and what they really find to be valuable the next thing that is discussed in the text besides going out and trying to get customer insights and by the way I guess I should say this before we move on to ideation when you go try to get customer insights you don't just go up and ask them what do you think or what do you feel or you know no you you need to get them talking and one of the worst things you can do is walk up to somebody and say hey I've got this new product or this new service and it's supposed to do this for you would you buy it because they're gonna say yes because they don't want to offend you or they just want you to go away and so they're gonna say yes and be done with you right they're not they're not necessarily gonna give you an accurate response so when you're going out there for customer insights you have to get people talking talking about how they live their life and what kinds of pains and gains they're experiencing and companies like Procter & Gamble are known to actually embed people within customers homes to observe how they use products how they use soap how the hey he whose dish towels how they use their stove I mean you know that they actually put people inside of other people's homes just to watch them and take notes and see how they actually live their lives so when you're trying to get customer insights you got to be creative about that you got a you got to really get people talking and communicating and and giving you accurate information and do not try to just you know beam them over the head with I got this this new shiny gadget don't you love it because they're gonna say yes and try to get away from you okay so we can talk more about dealing with getting customer insights and focus groups and things like that you know in a synchronous zoom meeting or in a discourse discussion forum setting let's go on to ideation here you know this is where you are essentially you know trying to know you know brainstorm a lot and yeah the the text gives you some example of companies that have done different innovative things with their existing resources and capabilities that perhaps were not obvious from their basic business model you know the the fact that Amazon realized at some point that it could do cloud servicing you know it could actually be a provider of server farms to other companies that was when Amazon finally started making money to this day it still struggles to make money with its online retail AWS Amazon Web Services that's the real moneymaker for Amazon it realized that it had something different that it could bring into the marketplace using existing resources and capabilities that it had had developed you know okay so you want a lot of different ideas you want to think what if you want a brainstorm you know all that kind of good stuff so how do you go about getting that process going in a good way all right so diversity and on the private print prior slide it said you know heterogeneity is involved in this you do want to try to get people with different perspectives different education different backgrounds involved in this because they they see things in a different way if if you're only talking with people who have your same perspective you're going to keep coming up with the same ideas over and over and over again it helps to have somebody who can say well that's not the way I see that or that's not what I experience or that's not what I learned or that's not the way that I feel okay you know having some diversity in this process is a really good idea it's probably a good idea to not have too much diversity it can become counterproductive counterproductive but I don't know exactly you know what the right level is nobody does but none is bad too much is bad having a good healthy level somewhere in the middle that's what you're going for yes you want to use the empathy map yes you want to generate a lot of ideas not necessarily good ideas when you're in an ideation process you're not going for the quality of the ideas as much as you're going for let's just get a bunch of ideas even if they're crazy we can worry about the quality later let's just keep you know riffing on this idea what can we do what would dizzy and what world look like if people did this or you know one silly question that I some colleagues of mine have used in the past to get people thinking creatively you know in an ideation sort of way is you know what would the world be like if we woke up tomorrow and all all of the dogs around the world could speak in human language you know and they would speak in whatever language wherever they were it wasn't like you know English everywhere but what if what if all the dogs could talk to us tomorrow what kind of products and services might develop as a result of dogs being able to talk okay that's a silly idea but it gets you thinking and it gets you going what if what if what if and you know we could do that and dogs we want this and and people would want to invest in it okay and and so it's about getting you thinking not necessarily the quality of the ideas all the time um when you are trying to winnow things down in your ideas yes it is true that you've got to at some point even though you're generating a lot of ideas you got a winnow it down and you got to start thinking about quality and you got to start thinking about what is going to be the most important thing that you're trying to accomplish here so again this is a a non formulaic process and so I don't have a formula for you I wish I did if you ever come up with a formula for this like you know spend this many minutes with this many people with this much diversity and generate this number of ideas and then reduce it to this number of ideas if you ever come up with a formula like that you know let me know we might want to start a consulting business together but figure out what are your most important criteria for what would make you know an idea worth fleshing out more and narrow it down so that you've got a set to work with now you're gonna be doing this for this class in terms of coming up with a team project you know I I hope that you're throwing out a bunch of different ideas and then winnowing those down until you get to one that your team really likes and can get behind I'm visual thinking you know I think that this this particular recording has gone on long enough that I think I'm going to break here and then I'll pick up the next video with this visual thinking section okay