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Business models for designers

About every third or fourth design student I meet has a concept for helping the elderly call for help from their homes. I just saw another one last night at the Parsons show. One might wonder why such devices aren’t widespread by now.

I ran into my friend Bill recently who works as a CTO for a company that sells such a system. He says the challenge isn’t at the device level, it’s downstream of the device: having a widespread network of installers who understand the system and who have an incentive to sell the system, maintenance, infrastructure, and so on. The device is the easy part.

Reinventing this wheel isn’t all bad, it probably helps students learn a lot about device design. But solving this problem (which is what design is all about) won’t happen until one considers the whole system and also designs a business model within which the device operates.

To quote John Thackara, “…connectivity is at least as much about [the design of clever business models] as it is about the private ownership of technological devices. The Doors crowd learned this lesson ten years ago when the extraordinary Sam Pitroda spoke at Doors 4, in 1996. Pitroda enabled hundreds of millons of people to gain access to telephony in India by designing the Public Call Office (PCO) concept – a low-tech, high-smarts system based on the clever sharing of devices and infrastructure.


  1. So much to problem framing ;-) Unfortunately, nowadays we are still mainly trained as domain specialists with narrow views (IT, product design, process, marketing), while the world requires cooperative specialists that understand the big picture…

    That’s why I usually propose multidisciplinary teams for business model design and innovation – it’s the only way you get the best from specialists when you design a customer value proposition and when you want to put all the bricks of your business model together in a useful way…

    Cheers from Lausanne, Alex

  2. Hi Victor, I just started reading your site recently, and I really enjoy the material, so thank you, and keep it up! This post caught my attention immediately because I consider myself a creative social entrepreneur– I am trying to justify to those close to me (and myself a little bit) that I want to attend the Institute of Design (Chicago) in the fall, rather than a top tier business school.

    In your multitude of experiences working in interdisciplinary teams, did you feel that you had the license to discuss not only device innovation (design of the actual product), but also the design of the corresponding business model? Do you have an ancillary MBA degree? If not, does business experience compensate in most cases? I struggle with the fact that most people’s perception of designers is merely focused on the aesthetic, visual facets of creating a product– and the fact that few top MBA Schools (Stanford, Sloan, and Tepper, somewhat excepting) have design programs makes this a very tough decision. At the end of the day, I want to be able to command respect from socially responsible investors and VC firms, as my goal is to complete BOP (Bottom of the Pyramid) work.

    Sorry for the long post. Would love to hear your thoughts on this.

  3. Hi Ash,

    It sounds like the content of the program you attend is not as important as the perception people have of you afterwards. That perception is formed based on what you say and do, I think. I rarely mention to clients what degrees I have, and they rarely ask.

    I know someone who likes to wear purple suits. When someone asked him how he gets clients to take him seriously he responded, “I open my mouth.”

  4. Victor,

    Can I add one more design issue here… my grandmother has one of these devices. She recently fell and should have used it. She didn’t because:

    A) the box where the voice comes out was in her bedroom, she fell in the bathroom
    B) she didn’t want an ambulance to come to her house because of the kerfuffle it would cause in the neighborhood AND because of the costs involved

    I think A) can be/has been solved by a designer. B) is much more complex because the bigger system in which the device is located has its own design flaws that hinder a good outcome. (Health care system in which ambulance service is located).

    So, when you talk about considering the “whole system…” in this case we’re probably looking at designing a whole system, not just considering it.


  5. Hi Terri,

    Regarding A, my friend’s system is designed to deal with that, by using video cameras to monitor the person rather than rely on them to activate a device. So this also assists in B, by letting the person monitoring the customer call for an ambulance as well.

    This not only speaks to the importance of designing the whole system, it also speaks to the importance of the multidisciplinary team working together, as they’ll generate new ideas that synthesize all the available information to create a new system rather than a combination of disparate ideas, e.g. designer may not have thought of a video-based device by herself (none of the student projects I’ve seen have).

  6. The supply chain aspect of bringing innovation to market is where MANY new products fail — the act of innovation for innovation’s sake, or even (in this case) innovating without accounting for the establishment and maintenance of the supply chain, is historically one of the main reasons for an innovation’s failure. This is what doomed the Kitty Hawk project at HP, a hard-drive so small, fast, indestructible, and all-around bad ass that it should have taken the world by storm… but nobody bought it, because doing so would have caused the entire downstream chain to re-structure. Understanding the chain needs to be a focus for designers, strategists, designo-strategists, and stratego-designers.

  7. I’d go much farther and say that tech is not the main issue in the design of care. Too much research tends to focus on science and technology: Biologists and geneticists and Assisitive Technology (AT) designers attract substantial resources because they offer a ‘we can cure this’ approach – which, frankly, is not true. Studies in Europe confirm that the prospective market for AT is not principally among elders, but among their children: they want to buy a tech-enabled service rather than do it (look after old people) themselves. What’s missing is not a better supply chain for gadgets, but an innovative care process driven – and owned by – people with difficulties (such as dementia) and their carers. That process needs to focus on enhancing social support networks. Tech can of course be valuable, but only as support.

  8. RE>Studies in Europe confirm that the prospective market for AT is not principally among elders, but among their children: they want to buy a tech-enabled service rather than do it (look after old people) themselves.

    That’s just the approach my friend’s company takes:

  9. Thanks for the plug, Victor! (We sell into both aging-in-place and institutional settings – for the former, our new site is better done.)

    A few random bits:

    * The WholeProduct concept is important to thinking through the barriers to adoption of a new product GeoffreyMoore does an excellent job of covering it. Any design student who doesn’t read CrossingTheChasm shouldn’t be given a diploma. Or, rather, that school should be shut down.

    * There are some people trying to set up buddy teams, sometimes between seniors and juniors, sometimes between seniors themselves, depending on their level of functioning. It takes a lot of time/effort to build such labor-driven networks, though, regardless of the level of AT.

    * “Designing” such a network (or any other human system) is easy to do at some unknown level of quality. It’s the implementation that’s the relevant piece. Which makes it a poor fit for design school projects.

    * How many new operating systems, computer languages, and compilers, designed and built by students for projects, have you seen adopted in RealWorld? Perhaps the goal for design projects need to change, though I find that it’s usually more palatable to keep such things unstated because the only realistic/explicits goal of such a process are “learn something for the sake of learning” and “develop some skills which might help you deliver some bit of value once you’re on a team for a RealJob”, neither of which is sufficiently inspiring for a lot of people.

    * I think Thackara himself deserves some last words (pardon the mis-spelling of the page title, JT):

  10. Another problem specific to senior-services and business models: a huge stumbling block is that most such services have been shunted into a medical model by the government reimbursement systems (Medicare/Medicaid). Thus

    * everything gets thought of as “health care”

    * not many people really pay for their own “health care” directly, which creates a large barrier to adoption (“if the gumint or my HMO won’t pay, then neither will I”)

  11. A couple notes specific to senior-call systems:

    * seniors don’t want to wear/carry a device

    * seniors don’t want video cameras in their homes

    * you’d need a video camera in almost every room, including the bathroom

    * there is definitely a “I don’t want any help, I don’t want to bother my kids, I don’t want to display my sliding functionality because I don’t want my family to force me into a home” set of fears/behaviors.

  12. Another challenge in this space: nobody really wants to *increase* their personal involvement in it.

    The senior doesn’t want to acknowledge (and thus adapt to) her sliding functionality.

    The family caregiver doesn’t want to spend even more time on caregiving, and doesn’t want to acknowledge her parent’s sliding functionality (for a wide variety of practical and emotional reasons).

    Thus making such systems as “passive” as possible (or rather, the systems are active, so that the humans are passive) is key. The applies to both ongoing behavior and to up-front training. Simplicity and “encalming” are key values.

  13. A follow-up to the simple/encalming and business models intersection… I suspect that, if my last comment is true, then (a) the Kathy Sierra “passionate user” model isn’t applicable, and (b) the Viral Marketing approach that is so talked-about (at least until Bubble2.0 inflates enough to make more money available for “brand building”) may not be possible…

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