Lately I've found myself particularly interested in the processes by which new ideas are developed. The "Like X for Y" process is one of my particular favorites. It's a a methodology that instigates new ideas by creating unexpected combinations. More specifically, it is the application of a business, product, or service model applied to a different domain or purpose. If you've read The Nature of Technology (W. Brian Arthur) or Thinkertoys (Michalko), you'll know re-purposing is an incredibly powerful technique for developing innovative solutions.
X = Groupon
Consider Groupon's business model. If you're not familiar with Groupon, it's a one-deal-per-day site that utilizes a mechanism from game theory called an "assurance contract". In english, they offer a daily deal, but the deal does not become a reality until a certain number of people sign up for it.
Now how can we apply Groupon to another domain? Consider the fact that company that's offering the deal essentially says "It's not worth it for me to offer this deal to one customer because I don't make enough on the sale, but it is worth it for me if a large number of customers take the deal because of the high quantity of small profits (and the positive exposure that comes from it)."
Y = Niche Product Design
I don't think it's a coincidence that Groupon deals tend to come from restaurants or service providers, such as spas. I assume it just isn't economically feasible to offer incredibly low price-points on tangible products. However, what if you just focused on the buying power of the assurance contract model and applied that to the purchasing of custom products. If I want a translucent snowboard at a specific custom size with a particular graphic set designed by a specific local designer, I may not be able to get it as it may be too much of a niche product for snowboard manufacturers to build a market around. Or, perhaps I could get it custom- made, but it would be far too expensive to do so.
In steps the Groupon model.. What if I could socialize my niche product idea and build a tiny market of people who also want one. At what point is it worth it for us and for Burton? 10 people? 40? 200? I'm sure every market, product, and manufacturer has their tipping point where it's beneficial for both the producer and the consumer, but this space is worth exploring as "mini markets" could enable people to get their own custom products without the traditionally exorbitant costs. Plus, from a manufacturer's perspective, this is a nice little market research mechanism. Personally, as a product designer, I love this idea as a platform for showcasing and "selling" (designers would have to make commission) their designs. Now where's my custom-designed translucent snowboard!!?!?
by the way, if you're interested in clear snowboards, check out what Makboard has brewing:
http://www.makboard.com/products.php
I don't think it's a coincidence that Groupon deals tend to come from restaurants or service providers, such as spas. I assume it just isn't economically feasible to offer incredibly low price-points on tangible products. However, what if you just focused on the buying power of the assurance contract model and applied that to the purchasing of custom products. If I want a translucent snowboard at a specific custom size with a particular graphic set designed by a specific local designer, I may not be able to get it as it may be too much of a niche product for snowboard manufacturers to build a market around. Or, perhaps I could get it custom- made, but it would be far too expensive to do so.
In steps the Groupon model.. What if I could socialize my niche product idea and build a tiny market of people who also want one. At what point is it worth it for us and for Burton? 10 people? 40? 200? I'm sure every market, product, and manufacturer has their tipping point where it's beneficial for both the producer and the consumer, but this space is worth exploring as "mini markets" could enable people to get their own custom products without the traditionally exorbitant costs. Plus, from a manufacturer's perspective, this is a nice little market research mechanism. Personally, as a product designer, I love this idea as a platform for showcasing and "selling" (designers would have to make commission) their designs. Now where's my custom-designed translucent snowboard!!?!?by the way, if you're interested in clear snowboards, check out what Makboard has brewing:
http://www.makboard.com/products.php
Todd,
ReplyDeleteHuge potential; I like it. The value to a product developer of having a pre-assured market would take much of the risk out of developing something new. Because that risk has a cost associated with it, eliminating risk can mean that the products themselves are better-designed and come at a lower final cost to the purchaser.
How does this dovetail with the T-Shirt model we discussed a while back - where a company posts a design online and if a sufficient number of people are interested then the company makes a run of them. Similar?
Could this be a new avenue of innovation for fashion companies? Think of Zara's "fast fashion" model, but where people order something that hasn't even been built yet. Imagine combining this with location-based services on a cell phone timed to coincide with a popular event. Scenario: 30,000 screaming teenage girls get a text message on their iPhones at the end of a Lada Gaga concert offering to have her outfit delivered to them within 72 hours. Whoa.
hadn't thought of it that way, but you're spot on with the fashion industry. this model could be extremely agile and reward fast of-the-moment industries like that. great idea.
ReplyDeletein terms of the t-shirt model, this exactly dovetails with that. in fact, Shirt.Woot! (shirt.woot.com) does something exactly this where the design must built up a small market before the company will invest in printing. It's an optimal use of web technologies.
the cool thing here is the alignment of the producer of the product and the consumer. the consumer takes on that "prosumer" role where they're just as motivated and invested in sales as the primary producer.