Two guys come up with product idea – a “kickstand” for the iPhone than can be used to add value to the product. But to manufacture the “Glif“  they need to raise $10,000 to make the plastic injection moldings. So they turn to a fundraising website, Kickstarter to “pre-sell” the product, hoping to get 500 people to pledge $20 to buy one. (If they don’t raise the $10,000 commitment, then people who pledged don’t have to pay their $20.) Their fundraising period just ended; they raised $137,417 from 5,273 people. The Economist has just published a great story about this experience.

Our three takeaways from this story:
1 – The iPhone is a whole economic eco-system until itself.
2 – Anything can always be made better thru good design.
3 – Create value and money will follow.

Kickstarter – as a web service – is a great example of service design facilitating product design.

A recent article in the Wall Street Journal, entitled “The New, Faster Face of Innovation” points out that technology is transforming innovation because it allows companies to test new ideas at speeds – and prices – that were unimaginable even 10 years ago.

Changes implemented on websites or even in-store promotions can be launched, watched and analyzed all within a 24 period. In turn, the authors believe that innovation is becoming a “way of life” at more and more enlightened companies, and we say it’s not a moment too soon. Companies will (or should) be willing to try new things because the price of failure is so low.

In turn, customers should be getting better tailored services, products and offers. This is all good news for service design. These are the types of clients we love to work with; they think big, start small and act fast. And in the end, they win because their customers win.

During the dot com meltdown and the resulting economic "correction," companies cut everything they could think of in order to stay afloat. Many were over-leveraged and had to stop all forward-thinking momentum just to keep the lights on.

Sound familiar?

There were a very few companies, however, that took every dollar they could get their hands on to create in the midst of the downturn. They hired the innovative creatives and put them to work. The goal was to come roaring out of the recession with some new service or product (or both) that would take some existing something and make it new again.

Case in point?

Apple’s iPod and iTunes.

Love it. Hate it. It doesn’t matter. That product and the service that accompanied it changed everything.

The iPod took an existing idea, the "Walkman " and more modern "Discman " and made it smaller, gave it better battery life, and created rewritable capacity that was far larger than a CD or cassette tape.

iTunes tapped the vast but complicated world of online illegal music sharing, gave it an intuitive interface, charged a reasonable amount of money, and set it free in the wild. (DRM is another issue entirely that crossed the minds of  few at the time.)

As the iPod made the Discman a relic of the past, iTunes made illicit music sharing the realm of only the most die hard of pirates.

This is service design. Seek out that sweet spot where product and service meet customer reality. Then innovate. It’ll blow things wide open.

So where do you think all this financial mess is headed? These are traumatic times because people are losing their jobs and companies are going under and money is being lost. But these are also very exciting times because of out of this chaos will arise new business opportunities.

How do they arise? By accident? Yes, some lucky folks will be in the right place at the right time. But those who have a framework in which to think about these changes – people and firms who can understand how the tetonic plates of technology, globalization, culture, business, government, etc. all move and shift – have a significant advantage over those that don’t. Some very enlightened people think this way intuitively. For others, service design provides a framework in which to understand their business as it is today, but more importantly – how it could be in the future.

In his book,  "The Frozen Water Trade" the author Gavin Weightman tells the story of Fredic Tudor, a 19th century Bostonian who came up with the idea of shipping ice from his hometown of Boston to the Caribbean, South America and ultimately India. Of course, in the early 1800s his friends and neighbors thought he was insane. But Tudor persevered over the next few decades, through debtor’s prison, technical challenges, warm weather, pirates, crooked business partners and even yellow fever to create an entirely new industry and a great deal of personal wealth.

The lesson of this book is to look at those things we take for granted or consider by-products of something else, and to see how they could add value to others. Ultimately, Tudor was in the service business. Mother Nature manufactured his product without any capital or management required. He didn’t need to enhance or modify it in any way. He simply needed to harvest it, and find a way to keep the ice cold enough so that he could deliver it to warmer climates before it melted back into New England lake water.
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This past Saturday night I went to a wedding at The Church of the Holy Trinity on Rittenhouse Square in Philadelphia. It’s a beautiful Episcopalian church, built 150 years ago. At the reception, I ended up sitting next to the Rector, Reverend Alan Neale, who performed the wedding ceremony. Over the course of the evening he asked me what I did and I explained that Frontier works with clients in a burgeoning discipline called service design.

“Essentially, we ask questions like, ‘What if?’ and ‘Why not?’ to design new services – and new sources of revenue – for our clients,” I explained over the second course of dinner. The Rector is a smart guy and he “got it” immediately. Born and educated in London, his first degree was from the London School of Economics and a degree in Theology from Oxford University followed.

He leaned in close and said, “Yes, that’s exactly what we did here when I first arrived four years ago. Previously, this church would only marry those people who were parishioners at the church. I came along and thought that was ridiculous so we opened up the church to anyone who wanted to be married. I meet with the couple four times prior to the wedding to provide counseling to get them off on the right foot, and now we do about 40 weddings a year. (more…)

A lot of folks on the client side don’t know this yet, but most traditional advertising agencies – even ones with a shiny new “digital/on-line/interactive” department – are headed for a world of hurt.  Why?  Three reasons.

HISTORY
For more than 100 years, ad agencies have all operated pretty much the same way. Be clever, know how to sell, and get in deep with the client. Being clever is a good thing, as is getting in deep. But ad agencies are so focused on selling the client’s stuff – and have been for so many years – they are not very good at figuring out what people want to buy.  Consider the very terms that are used in sales and marketing: “taking market share,” “grabbing eyeballs,” “capturing customers,” etc. Even the word “brand” originally meant a red-hot piece of metal used to burn the identity of the owner into a horse or cow’s rump. Barring a few bumps in the road (like when big media mark-ups went away) the ad agencies have pretty much continued on status quo. But now that the power has shifted to buyers (as opposed to sellers), ad agencies continue to tap dance on an ice-berg that is slowly – but surely – melting.  So why can’t they change? (more…)