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Delivering Value Made Simple

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“The rationale behind how a business creates, delivers and captures value.”

That’s the short version definition for the term ‘business model‘. For those with no background in economics or commerce (read techies) all this talk about ‘value’ can be too vague to be much good. It leaves too much to subjective interpretation. It needs to be less so. Less subjective interpretation on the innovators end and about the same as before on the consumer end. For purposes of this post, techies include those who make things like handbags, solar panels, furniture…as well as computer programmers.

Design Workshop Participants

Participants at a Semacraft Design Thinking workshop.

Tech innovators typically need to ideate less from the comfort of their space (workshop/keyboard) and more from the environment their clients will be using their product or service. This means clients continue to judge the performance of the product using their existing schema and the innovator adopts their own interpretation of value to the users subjective interpretation.

So what does delivering value mean for a techpreneur in Africa? It boils down to job descriptions. What job is the client trying to get done and how does your new app/service/magic help them do it better, faster, cheaper and/or cooler? When clients choose to take the risk of investing money or time (or both) in trying your technology, they expect something to happen. Delivering on that expectation is your easiest definition of delivering value. It means innovators need to spend lots of time with the people they expect to serve with their technology in order to understand what this expectation would be.

But when is value actually delivered? Is it at point of sale? Is it at point of use? Is it at point of disposal? Is it at multiple areas? Social enterprises and civil society led projects generally tend to lose sight of this resulting in huge amounts of wasted resources and a muddied view of their sector in the public domain. For-profit organizations can be just as guilty of failing to understand their clients. Financial services businesses can be notorious for creating products that are poorly distributed or whose value is eroded at the point-of-use such as low density of ATMs resulting in long queues and high charges for clients wishing to close their accounts (point-of-disposal).¬†Some products are essential enough and common enough to be almost impossible to differentiate at the product level. However, new value can be delivered through better distribution, better packaging, easier disposal or better branding that taps into the client’s aspirations.

So before you spend too much time building out some amazing new app, chair, bag or drone make the time to listen and watch your clients to understand what their lives are like and how your product can make a part of it better by helping them get a job done; or to put it in buzz words we all understand…

“Understand how your product or service empowers users across the value chain by synergistically delivering new value through innovative business models.”¬†

or get more buzz words here :)

Written by Muchiri Nyaggah

August 1st, 2012 at 1:13 pm

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