How to test your business hypothesis
By Ignacio Pérez
Introduction and statement of the problem / aims of the study:
The following paper shows the practical method of co-design of a business model. The result was a feasible and realistic business model with information obtained through a collaborative work, involving potential customers and users, for an AAL project (June-2011): Vaalid1
Literature review and/or conceptual approach:
According to the ISO 9241-210 (ISO, 2010), user centred design is the iterative process by which products or systems are developed so that the user of the product or system is taken into consideration at all stages of the design process including active user participation.
Osterwalder and Pigneur (2010) define an easy-to-use model to design a business model. This model allows building different prototypes of business model to be asset within a multidisciplinary context.
This process consists of seven steps. The first one (1) is to understand the user’s context. Contextualization leads to a clear understanding of what the market segments are and the relevant stakeholder. (2) Social research techniques help to understand stakeholder’s perception of the value proposition within a workshop, which allows a first business model using Osterwalder’s model (Business Model Generation, 2010). Thus, we get a first qualitative picture the market perception. (3) The business model is refined and (4) introduced in a second iteration to the market representatives for further development: real pricing, forms of payment and conditions of service start to emerge. A business analysis (5) is done in order to bring up the market conditions. A last iteration (6) with management takes place to management to present results. Finally, the market evidence based action plan (7) is delivered.
Two business models have been identified: one based on OPEN SOURCE and other based on the INNOCENTIVE model. Thus, A business model based on product has been turned into TWO business models based on SERVICES. This means that TWO lines of alternative revenue streams have been designed. FOUR different market segments have been identified. Specific needs and expectations were even gathered for them. There has been a significant qualitative change in the value proposition, identifying, at least, SIX value-propositions -a quantitative value increase of 400%.
Discussion, conclusions, implications for practice:
The identified value propositions, as well as market segments and revenue streams, have been achieved working with stakeholders and users, which brings the character of EVIDENCE. Participatory design techniques and the generation of business model tools have been used in a cyclical and iterative manner. Contacting participants was the most time-costing task during the contextualization phase.
A list of references (also in APA style) will be added on a fifth page:
ISO 9241-210:2010(E) (2010). Ergonomics of human-system interaction – Part 210: Human-centred design for interactive systems. Geneva: International Organization for Standardization.
Osterwalder, A. and Pigneur, Y. (2010) Business Model Generation. New Jersey: John Wiley & Sons, Inc.
Keywords: business, design, iterative, user, centred, model, context, market
1 Accessibility and Usability Validation Framework for AAL Interaction Design Process (2008). Research area: ICT-2007.7.2, Accessible and inclusive ICT. The consortium consists of 7 complementary partners from 4 European countries (ITACA, UPM-LST, Fh-IGD, UID, Centro Volta, UNIPR, SPIRIT). http://www.vaalid-project.org/default.aspx