Using Prototyping to Develop Services in Small or Medium Businesses

There are myriads of new interesting, innovative ideas how to help patience with various problems. However, much fewer ideas find their way to the market and become real innovations. Knowing that I am a Master´s student in business, a startup company has turned to me for help how to bring a new device to the market. Here, I share my ideas how to possibly approach this challenge. The Story Behind a New Device Back in October 2019 while attending a business event, I met a migraine care specialist who has dedicated 20 years of his healthcare career to creating safe and effective treatment methods for migraine care. Over these years, he has come to the idea of creating an anti-migraine device that could treat a migraine by placing the device on the patience´s head and repeatedly touching sensitive areas, similar to a massage, until the migraine disappears. The idea of the device is based on his experience of massaging head and neck, which he has proven successful in his practice as a physiotherapist when working with migraine patients. Now, after the idea have matured, the time has come to create this device that can mechanically treat the patient and reach to a much wider audience. Despite the previous experience of being an entrepreneur, the founder was in search of a team who could make the device launch professionally and enthusiastically. After some search, such a team was born: the founder himself; an engineer who has constructed the device prototype as his thesis work; another engineer who is focused on the computer side, and myself, responsible for exploring the best way of bringing the device to the market. Interesting, but Challenging After starting to work with this team as a consultant, I was simultaneously studying in a Metropolia’s Master´s program and searching for a good topic for my Master´s thesis. At first, the temporary nature of the migraine device project ruled it out for me as an option. But after diving deeper into the topic, after visits to business match-making events, conferences, and GE Healthcare Village in search of expert inputs, I have really fell in love with the challenge, and wished the best of success to this brilliant idea to revolutionize the migraine care with a hi-tech solution. And I decided to take it up as a Master´s thesis. My goal is to outline a roadmap how to bring this new medical device to the market. Such a roadmap will be used by the start-up team as a guide for bringing the low risk medical device to the market. What Business Gurus Say? After conducting the background investigation with the internal start-up team, a possible approach started to crystallize. My next step was to look deeply into what business literature say about launching new products. Surprisingly, there seems to be no single opinion on the topic. Some gurus put stress on a business model, others on cracking customer needs, still others on a clever Customer Value Proposition (CVP). And everyone seems to favor own perspective… There was nothing else to do but to structure all arguments, revise, re-think, and compile an end-to-end approach out of available suggestions. The draft of the roadmap to the market result looks like this: [caption id="attachment_3782" align="alignleft" width="620"] A Roadmap how to bring this new product to the market:Phase 1. Identifying Target customer group(s) & competitors; consisting Segmentation, Targeting, Positioning, and Competitor analysisPhase 2. Identifying Unserved Customer needs; consisting Functionality/ Performance, Price, Convenience/Usability (Reliability, Efficiency, Compatibility), Customer experience, and Product/service design etc.Phase 3. Defining a Value Proposition; consisting Jobs-to-be-done, Pain relieves, Gains (economic, emotional etc. benefits)Phase 4. Jobs-to-be-done, Pain relieves, Gains (economic, emotional etc. benefits); consisting Emotional design, Functional, Reliable, and UsablePhase 5. Creating a MVP prototype / Designing a MVS; MVP consisting Building, Measuring, Learning, and Developing; MVS consisting Design of features, Design of client experience, Design of processes & systems, and Design of strategy & policyPhase 6. Testing MVP/Designing & Testing MVS with customers; consisting Test plan: Customer interviews, Demo, Landing pages, Pre-order page Campaigns, Explainer videos, Surveys, # of new sign ups, etc.Phase 7. Developing a Business Model; consisting D2C canvas for: Physical product sales, Online sales, Renting service.Phase 8. Launching a Lean Start-Up & Brand; consisting Mission, vision, strategy, etc., Marketing & Branding, and Customer relationships.Phase 9. Market Entry & Operations; consisting Introduction, Commersialization, Distribution, Promotion, and Review of performance.[/caption]   Identifying the Target Customer Groups & Competitors Step 1: As soon as the idea of a new product has emerged, the start-up team should look into Identifying the target customer groups & competitors. In other words, the team needs to clearly identify who are the main potential customers; and carefully check potential competitors. From the business science perspective, the team will need to do segmentation, targeting, positioning and competitor analysis. Segmentations distributes the customers into segments, while targeting and positioning outlines the proposition idea for each segment. Finally, competitor analysis checks competitor products. It is the target customers who will ultimately decide if the product meets their needs; therefore, the start-up team should start with the cusomers. (There are multiple gurus who promote these views, but we especially relied on Osterwalder 2014 (1), Leibson 2018 (2)). Identifying the Unserved Customer Needs Step 2. When the target customer groups are defined, the next step is to look into Identifying the Unserved Customer Needs of these customer groups. In other words, the start-up team should look into the factors that are critical for the target customers but currently are unrecognized, unserved, or underserved. The unserved needs most typically concern functionality/performance, convenience/usability (ease of use, reliability, efficiency, compatibility etc), customer experience (especially!), product/service design, price, and other needs. The unserved needs will pave the way for success of the new product since the current products do not meet them fully (inspired by Leibson 2018 (2), Breschi 2020 (3)). Define a Customer Value Proposition Step 3. As soon as the needs to be served by a new product are identified, the solutions to meet them are compiled to Define a Customer Value Proposition (CVP). It means formulating a clear and appealing offering for the target customers. The offering is typically structured into: “the jobs-to-be-done” (what customers need to achieve), “pain relievers” (what resolves customer problems and makes their lives easier), and “gains” (what customers gain in terms of economic, emotional, convenience etc. benefits). These elements will determine the strategy how to present and price the new product, and how to win customers. For example, in marketing, it will help to name the exact customer problems and offer clear solutions to them. The primary focus is placed on offering those things that will please the customers most. (Inspired by Osterwalder 2014 (1), Leibson 2018 (2), and Gierej, 2017 (4)). Minimal Viable Product Step 4. As soon as the CVP is defined, it is the time to establish and Refine the feature set for the intended Minimal Viable Product (MVP). In other words, at this stage the start-up team should be able to say: “This is our product! This is the list of features that own new product will include”. It means selecting those features (based on emotional and functional design, usability and reliability) that will create the necessary minimum package of a successful new product. Naturally, some customer needs and desires cannot be met at this initial stage, and they should wait for the future. However, the trick here is to clearly select which features (i.e. addressing customer needs) should absolutely be present in the new product, and which could appear later, but the new product will still be headed into the right direction. To implement it, the start-up should test the MVP idea with customers, and make sure that they agree on the viability of proposed MVP product. This stage will save time and cost for the start-up by carrying out a thorough customer research on a new product. Additionally, at this stage, it is also beneficial to collect ideas on a possible service around the new product when researching the MVP with customers. (Inspired by Leibson 2018 (2), (Gierej, 2017 (4), Walker 2018 (5), Ries 2011 (6)). Create a Prototype Step 5. After agreeing on the feature set for a MVP, the “paper stage” of the new product development is over. The next step is to physically Create a prototype and test it. The prototype is implemented through a cycle of building, measuring, learning & developing, and repeating the cycle until the prototype is ready. At this stage, when it becomes clear that the prototype is soon to appear, a possible service around the new product can be designed. It was not feasible to do earlier, since the fate of the prototype was not yet fully clear. Now, the Minimum Viable Service (MVS) can be developed. The MVS is co-designed with customers and discussed in detail to collect valuable feedback. The stages of MVS design include: (1) design of features (with customers), (2) design of client experience (with customers), (3) design of processes and systems (with customers), and finally (4) design of strategy and policy (based on customer insights and the start-up goals). (Inspired by Leibson 2018 (2), Ries 2011 (6), Pierini 2019 (7), Moritz 2005 (8)). Testing Step 6. Next step is to Test MVP/MVS with customers. Feedback and discussions are good, but not really enough. There must be interaction between the users and the product/service and the producer, so that the needed changes are spotted and well understood. In the test plan, customer should physically try the demo product, followed by in-depth interviews to identify customer perceptions. It will be more challenging to organize a demo service, therefore various service design techniques will be employed to “test” customer perceptions of the intended service. On the enterprise level, the gurus´ advice is to organize the landing web-pages to drive customers to these pages and test the demand for the new product (and service) via early marketing. Pre-order page will help customers to indicate their interest and order the product or service before it is launched into the market. The web-page should have explanatory videos showing how the users can operate the product. This stage will also – once again – include customer surveys to check and identify any possible issues in reliability or usability of the product. (Inspired by Leibson 2018 (2), Ries 2011 (6), Moritz 2005 (8)). Developing a Business Model Step 7. This step is focused on Building a viable Business Model for the start-up. “Startups don’t fail because they lack a product; they fail because they lack customers and a profitable business model”, Steve Blank (9). At this stage, when the start-up has built the prototype, interacted with target customers, and ensured the interest from the market, it is time to focus on earning money and a more long-term perspective. The start-up cannot any longer use the enthusiasm of its teams and investment money from business angels. The business life should start as soon as possible! The business model will reflect the key business choices (how to sell and what are the channels, physically or online, how to deliver the service, how to pay, how to repair, who are the partners etc), and most importantly, what is the profit logic for the product. (Inspired by Osterwalder 2014 (1)). Launching a Lean Start-up and Brand Step 8. Next step is to Launch a lean start-up and brand. Why not earlier? Because the reason for existence of a start-up is the new product and the business model. There is no meaning in a start-up that does not have them. Why lean? Because a small and innovative team has no time to tangle itself into “red tape”, and simply does not have resources for anything bigger than a micro – but very enthusiastic – company. The lean start-up will have a mission and vision that state the direction to head for. Also, marketing and branding strategy will aim at building a strong brand (i.e. strongly preferred by customers). The marketing strategy will reflect the views of the stakeholders, and customer relationships will aim to fulfill the customer promise and support engaging communications towards the target customer group. (Inspired by Reis 2011 (6), Rus et al. 2018 (10)). Market Entry and Operations Step 9. After that, off we go into the full-size market entry and operations! Successful market entry will be based on a detailed plan of how run, finance the operations, and grow. Here, many different factors must be taken into account: the size of the market, current and future trends, competition, regulatory policies of the host environment etc. The first step is to introduce a product into a new market for penetration. The next step is commercialize where the conditions facing a business are best for customers. Distribution will grow as the number of users increase and they follow. Simultaneously, all the time a review of the product and service performance is collected from customers who have experience in using them. (Reis 2011 (6), Datta 2014 (11)). Next Step: Seek Opinions of Business Practitioners As we noticed when reading literature, there are many approaches how to bring a new product to the market. This summarized approach relies on the concepts from business gurus published by Leibson, A. Osterwalder, E. Ries and many others. It is possible that some of the outlined steps should be done simultaneously, or some steps are missing, or need to be done earlier. With this initial draft of the roadmap how to bring a new product to the marker, we are now actively seeking comments from business practitioners before applying it into practice. The more valuable opinions from Yrityskeskus organizations, individual entrepreneurs, and business communities I can collect, the more robust the roadmap can be. I am early looking forward to your opinions, experienced business practitioners! Suggestions can be millions, but you have seen how successful solutions work in practice. Your option is sought after and highly appreciated! About the author [caption id="attachment_3783" align="alignleft" width="310"] Elizaveta Berezkina.[/caption] Elizaveta Berezkina – a Master´s student in Business Informatics, has expertise in business administration of established organizations and international startups. After graduating as a Bachelor in Hospitality Management in 2014, has travelled the world, lived as expat in UK, and worked for various international companies in real estate, retail, management consulting, business concept development etc, which she is doing with an entrepreneurial mindset, positive attitude and curiosity, especially for innovations. Contact email: Elizaveta.Berezkina2@metropolia.fi References Osterwalder, A., Pigneur, Y., Bernarda, G., Smith, A. and Papadakos, T. (2014). Value Proposition Design: How to Create Products and Services Customers Want. Wiley. Leibson, H., 2018. How To Achieve Product-Market Fit. [online] (Jan 18, 2018). Breschi, A. (2019). 16 Types of Customer Needs (and How to Solve for Them). [online] Gierej, S., 2017. Techniques for Designing Value Propositions Applicable to the Concept of Outcome-Economy. [online] Walker, T. (2019). Persuasive Power Derived from the Benefit Pyramid+™: In Medical Device Marketing. [online] Ries, E. (2011). The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation To Create Radically Successful Businesses. 1st ed. United States of America: Crown Business New York. Pierini, P. (2019). Don’T Fall In Love With Your Prototype. [online] Moritz, S. (2005). Practical Access to Service Design: Handbook. London. (PDF) Blank, S. (2009). The Customer Development Manifesto: Reasons For The Revolution (Part 1). [online] Rus, M., Konecnik Ruzzier, M. and Ruzzier, M. (2018). Startup Branding: Empirical Evidence Among Slovenian Startups. [online] Datta, A., Jessup, L. and Mukherjee, D. (2014). Understanding Commercialization Of Technological Innovation: Taking Stock And Moving Forward. [online] Image: Minnamoira (Pixabay License).

Where to get help with children and house work, if you are a busy professional? Who to ask for help? Where to get reliable help? Where one can offer own help, if there is a wish to help others? - These questions were at the center of many student projects in “Service design” course held at the Summer Business School-2019 at Metropolia UAS. A Finnish service enterprise, Onnexi, was invited to the course as a successful example of an enterprise solving this puzzle. Challenges of a busy professional This summer Master’s students participated in “Service Design” course where student teams conceptualized own ideas for new or improved services. Not surprisingly, most of the students - who work as employees for companies and study alongside full-time work - were keen to explore and design daily services that they urgently need yet missing in their own lives. Young mothers proposed a service concept for a platform to contact other mothers for exchange of free babysitting services. Parents of school children proposed improvements to WILMA. Those who experienced long queues in hospitals proposed improvements to emergency visit notifications and queuing. The project that found most interest, however, was an imaginary service of “Buying & selling time”. The proposal was to launch a service platform where clients can ask for and find almost any services that a family may need - starting from organizing a children’s birthday, looking after a child or an elderly person, and up to lawn mowing, or carpenter work. Busy professionals admit that this type of service is highly needed yet missing in their lives! To address this interest, a special guest, Onnexi Oy, was invited to the course and share their know-how in this service area. Onnexi.fi - a Finnish example of solving a “busy professional” problem When looking for a real example of such a “buying and selling time” service, one can be surprised that it is almost missing or extremely scarce in Finland. This also struck attention of Ulla-Maija Soininen, now CEO of Onnexi Oy, when she herself was in search of a similar service. Ulla-Maija, not long ago an employee of KONE and a specialist in industrial process development, was in search of helping hands to look after her lonely mother who lived in Northern Finland, a long way away from Hyvinkää. No one in the family lived in the North anymore, and no search for a reliable aid could help Ulla-Maija to solve this puzzle. Ulla-Maija, with her background in process development, invested a great deal of her time to conduct a systemic search only to discover that there is no one to help her. It soon became evident that, if she wanted to get help, she would need to organize such a service herself. After some deep thinking and attending short-time entrepreneurial courses, Ulla-Maija decided to bravely try and start her own service enterprise, firstly in small steps, alongside her main work. As many other entrepreneurs, Ulla-Maija soon discovered that her project takes much more time that she expected, but it also started becoming more and more important to her as her true heart was put into the job. Knowing the global trends for ageing population (1), and the Finnish trend for more unemployment in the older groups (2), Ulla-Maija decided to match the needs with the demand - and base her service on the most reliable employee group, the older people themselves. Services by older employees As she tells herself, Ulla-Maija never previously suspected that there are so many active, motivated, physically well-fit retirees, who are looking for a meaningful job, which they can do excellently. Being a busy professional herself, she was on the other side of the puzzle for most of her life. Now, when she discovered her own new meaning in life, Ulla-Maija decided to focus fully on her service idea. She finds great joy in helping to match the right people - those who are full of energy, experience and motivation to help, with those who are in need of help and have multiple tasks at their hands. As for the client base, the picture has turned out to be not so black and white as it was initially expected. The older age groups also make a big client segment themselves - for the household routines, cheering-up visits, help with IT and use of tools, and nowadays even for professional medical services by the older nurses! This latest demand came as a surprise for Ulla-Maija as a client organization turned to Onnexi for help. Onnexi was able to provide them with older nurses. Following this success, more and more organizations are now turning for help to Onnexi’s older workers. Currently, Onnexi, a Finnish enterprise that operates in Kanta-Häme, Turku, Pori and Tampere, offers services provided by the older age groups to families and other elderly. In other words, Ulla-Maija was able to realize her dream and successfully launched a new service, where the support is provided only by the older-aged workers. The service offerings are now growing fast, and Onnexi started arriving also to other Finnish regions. [caption id="attachment_2705" align="alignleft" width="620"] Happy group of Onnexi people meeting customers at Hämeenlinna market. (Photo: Onnexi).[/caption] Social entrepreneurship as a trend The trend for social entrepreneurship and business with meaning has grown visibly since early 2000s. It has become a popular topic in business literature, and the “social value” of business is now discussed by big business names such as Michael Porter (3). Business with a social meaning is now a well-recognized trend, and as an entrepreneurial activity it is often defined as “an innovative use of resources to explore and exploit opportunities that meet a social need in a sustainable manner” (Sud et al. 2009) (4). Social media and internet often serve as the main channels for promoting and selling such services, getting the word-of-mouth across, as well as for immediately publishing feedback and reviews, and thus providing a platform for both finding and offering social services. The business model by Onnexi seems to offer something that is yet new in Finland but somewhat familiar in other countries (such as a famous example of “German grandmothers”). In the case of Onnexi, the service seem to tap those sectors that previously were not considered for service work - the older workers domain, even for traditionally “younger” employment sectors such as nursing jobs. In addition to social entrepreneurship, this service idea can be considered from the perspective of Sharing economy, since it places the use of untapped resources at the heart. Offering better than Sharing economy: “Service Design” lessons of Master’s students Sharing economy is generally defined as a model to use the underused resources. “Sharing economy is the product of a new age where underutilized assets become peer-to-peer services for hire, enabled by the internet and smartphones”. (5) Thus, key ingredients in Sharing economy are: (a) identifying and creatively re-thinking the available resources for sharing, (b) use of service platforms. A though-provoking example from Onnexi shows how “the puzzle of a busy professional” can be approached via sharing of under-used resources. Moreover, another learning from Onnexi comes from solving “the Sharing economy puzzle”. (The Sharing economy puzzle is created by its two biggest concerns, trust and taxes, that come as a result of direct peer-to-peer sharing, and they bother potential customers very much). In both respects, Onnexi sets a unique example of solving these concerns and provider important learning for others in this sector. For Master’s students, the biggest learning came from inspiring deep reflection on the role of service design for conceiving successful services. While students in their imaginary projects had challenges in providing security for a free-access “Buying & selling time” service, Ulla-Maija approaches trust and security as the corner-stones of her service idea. Her service is designed in such a way that all workers at Onnexi are full-time employees, not volunteers. They make an indispensable part of the enterprise, all of them are well-known in Onnexi, and thus the clients can trust them. Ulla-Maija invests a lot of her time matching the talents and interests of her employees with the needs of the clients, with the aim of building long-lasting ties between the families and their aids. In other words, the sharing problems get solved! Regarding other learnings, this year’s service design projects showed a shift in student interest from developing industrial services towards testing out own service ideas, especially in social and shared services. As such, their service design projects focused on exploring the opportunities how to launch new service platforms, exchange baby-sitting services, make WILMA user-friendly, spent less times in hospital or hotel queues, and - especially frequently - how to get & offer reliable and safe help for homes and families. In Metropolitan area UAS universities, this growing trend has been recognized and recently turned into a new learning module “Sharing economy” based on 3AMK cooperation between Metropolia, Haaga-Helia and Laurea. (6) The learning journey will continue into a new, inspiring direction! ========================== About the authors Ulla-Maija Soininen is a CEO of Onnexi Oy that she founded to address a growing need for finding reliable help. Zinaida Grabovskaia is Metropolia’s instructor in Service Design and Head of Master’s programme in Business Informatics, who is welcoming innovative service businesses to share ideas with the students and learn together. References Bughin, J. and Woetzel, J (2019). Navigating a World of Disruption. McKinsey Online. Yle uutiset, Lahti, 28.8.2019. Väestö ikääntyy ja työttömyys kasvaa – Lahdessa huollettavien osuus väestöstä lisääntyy. Driver, M. (2012). An Interview with Michael Porter: Social Entrepreneurship and the Transformation of Capitalism. Academy of Management Learning & Education, Vol. 11, No. 3, 421–431. Sud, M., Van Sandt,C.V., and Baugous, A. (2009). Social Entrepreneurship: The Role of Institutions. Journal of Business Ethics, 85: 201-216. Paajanen, S. (2016). Business-to-Business Resource Sharing: White Paper. VTT: Business Innovation & Foresight. - Definitions of Sharing Economy. A New Learning Lane: Circular Economy for Sustainable Growth 15 credits (5.11.2019). 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I’m studying Master’s degree in Design at Metropolia University of Applied Sciences. I am in the last stretch of my studies and in the spring I was missing just one last course when I saw an early introduction to the CERN Bootcamp  -study concept. I stopped looking for other courses, since I knew this was the one for me. I put the date in my calendar and waited for the application period to start. CERN Bootcamp offered a perfect crash course for service design process, methods and tools. As a designer and design student concentrating in service design and design management, jumping in to the deep end felt easy. I would emphasize the easiness of the jumping with no fear. Swimming in the design current was as stormy and joyful ride as most design projects I have ever been involved in. Solving Huge Challenges The kick-off weekend in May showed us just how crazy this study period was to be. A crazy amount of work and a huge challenge. At the kick-off we the course students formed teams and chose the challenges to be solved during the Bootcamp. My team’s challenge was to find a solution for how to make climate change effects visual to consumers in purchase decision situations. No more or less than to have positive influence on climate change. No more or less than to influence people’s behaviors. It seemed overwhelming at first, but fortunately my whole team had their brains set to design thinking mode and we were ready and happy to jump in with full of curiosity. We could not wait to start the work. Different Expertise Was Our Strength The big push for me to apply to the CERN Bootcamp was to test my understanding and implementing skills of service design and mostly to work with new people. How would I work with totally new people? As I look back, throughout the whole experience, the greatest lessons I got out with was from the teamwork with my wonderful multidisciplinary team at CERN. My team worked really well together. We were students who all came from different fields and had different backgrounds and work experiences. Everyone was one hundred percent committed to the task and everyone brought in all their different expertise to the table.  We worked really hard within an incredible workflow spiced with humor and good spirit. In addition to becoming acquainted with all these wonderful people in my team, I also had an opportunity to meet with other great people that I would have never met otherwise. Such as a physicist at Cern, experts on climate issues, consumer behavior and activism, as well as all the customers at Cern-cafeteria. All random people who were interested in our project and would stay with us and stir our views. And not the least the teachers and mentors without whom we would not have found the right tools and methods during the project and come up with a solution to the problem at the end. Having the chance to meet so many interesting people with fresh viewpoints and the opportunity to visit and stay at the incredible and almost surreal CERN made my CERN Bootcamp the most rewarding learning experience in my studies. Heidi Mäkelä