Unit 4: Customers and Meaning
Summary
TLDRThis video script emphasizes the critical role of customers in entrepreneurship. It advises entrepreneurs to continuously engage with their customers and adapt to their evolving needs. The script also encourages focusing on a specific customer group to refine business ideas. It introduces concepts like market research, prototyping, and customer validation, highlighting the importance of service design in creating compelling experiences that differentiate products. The speaker uses the example of a mouse to illustrate how adding symbolic value and meaning can enhance a product's appeal, suggesting that successful entrepreneurship involves juggling ideas, customers, and the meaningful experiences they deliver.
Takeaways
- 🤔 The customer is central to successful entrepreneurship and should be a constant focus alongside the business idea.
- 🔄 Both the business idea and customer base are likely to evolve over time, requiring regular reassessment.
- 🎯 It's beneficial to start by focusing on a small, well-defined customer group with specific characteristics.
- 📊 Market research and prototyping are essential for understanding customer needs and validating business ideas.
- 🤝 Engaging with potential customers early can provide invaluable insights and help refine the business approach.
- 🛠️ Successful service design is about creating a compelling customer experience, which can be more impactful than a physical product.
- 🏆 The phases of competition typically progress from technological innovation to improvement, maturation, and commoditization.
- 💡 Introducing symbolic value and meaningful experiences can disrupt the path to commoditization and enhance product or service appeal.
- 🌟 Meaning can be a differentiator, providing a competitive edge by associating a product or service with deeper values.
- 🔍 Entrepreneurs should research their idea and the associated meaning online to understand the competitive landscape and potential for differentiation.
- 💼 The final challenge for an entrepreneur is to juggle the idea, the customer, and the meaning they aim to deliver to the customer.
Q & A
What is the importance of keeping the customer in focus during entrepreneurship?
-The customer is crucial to successful entrepreneurship. Entrepreneurs need to regularly address both the idea and the customer to ensure that the idea creates value for them.
How can entrepreneurs ensure their ideas are aligned with customer needs?
-Entrepreneurs should regularly ask themselves questions about their customers' problems, characteristics, and perceptions of their product or service to ensure alignment.
Why is it advisable to focus on a smaller, well-defined group of customers?
-Focusing on a smaller, well-defined group of customers helps sharpen thinking and most successful businesses start by serving a narrow group before expanding.
What is the role of market research in validating customer needs?
-Market research helps entrepreneurs understand customer views and validate whether their product or service will be valued by the target market.
What is prototyping and how does it relate to entrepreneurship?
-Prototyping is the process of creating a model or example of a product or service to test its viability and functionality, which is crucial in entrepreneurship to refine ideas.
What is customer validation and why is it important?
-Customer validation is the process of confirming that customers find value in an idea. It's important because it reduces the risk of developing products or services that don't meet market needs.
What is the significance of the 'experiment board' or 'validation board' in entrepreneurship?
-The 'experiment board' or 'validation board' is a tool used to systematically validate ideas and ensure they meet customer needs, enhancing the success of entrepreneurial ventures.
How does the concept of 'meaning' relate to entrepreneurship?
-In entrepreneurship, 'meaning' refers to the value or significance that a product or service provides to customers beyond its functional use, which can enhance its appeal and success.
What are the phases of competition as described in the script?
-The phases of competition are technological innovation, improvement, maturation, commoditization, and potentially a symbolic value phase where differentiation is based on experiences.
Why is it beneficial to create an experience for customers?
-Creating an experience for customers can lead to differentiation in the market and provide symbolic value, which can be a competitive advantage.
How does the concept of 'meaning' apply to services in entrepreneurship?
-In services, 'meaning' can be delivered through compelling experiences that are intangible and ephemeral, creating a unique value proposition that can set a service apart.
Outlines
🧩 The Importance of Customer Focus in Entrepreneurship
The paragraph emphasizes the critical role of customers in successful entrepreneurship. It stresses the need for entrepreneurs to continually balance their focus between their business ideas and their customers. The speaker warns against neglecting the customer and suggests that both the entrepreneur's idea and their customers are subject to change. Entrepreneurs are encouraged to ask themselves key questions about their customers, such as identifying their problems, demographics, and perceptions of the product or service. The paragraph also advises against a broad approach, recommending instead to focus on a well-defined customer group. The importance of market research, prototyping, and customer validation is highlighted, with the mention of tools like the 'experiment board' or 'validation board'. Lastly, the speaker introduces the concept of designing services, which is relevant to a large portion of the economy, and suggests that successful service design is about creating compelling experiences.
🛒 Phases of Competition and the Evolution of Products
This paragraph delves into the concept of the phases of competition for products or services, starting with technological innovation and moving through improvement, maturation, and commoditization. The speaker uses the example of computer mice to illustrate how a new technology is developed, improved, and eventually becomes standardized. The discussion then shifts to the symbolic value phase, where differentiation is based on the experience a product can provide. The speaker shares a personal anecdote about purchasing a mouse, highlighting how the choice of a mouse with a unique design provided a moment of introspection and personal meaning, thus demonstrating the power of experience in product differentiation.
🎨 The Power of Design in Creating Meaningful Experiences
The speaker explores the idea of designing experiences that can provide symbolic value and meaning to customers. They recount their experience at Target, where the choice between a basic mouse and a more expensive, aesthetically pleasing one led to a moment of personal reflection and satisfaction. This narrative illustrates how products can transcend their functional purpose to offer a deeper, more meaningful experience. The paragraph also references Pine and Gilmour's concept of the experience economy, which outlines a progression from commodities to services to experiences, suggesting that the ultimate goal is to create poetic, memorable interactions for consumers.
🔍 Juggling the Three Pillars of Entrepreneurship
In this concluding paragraph, the focus is on the three key elements an entrepreneur must juggle: the business idea, the customer, and the meaning that the product or service delivers. The speaker advises entrepreneurs to research their ideas and the associated meanings to understand the competitive landscape. They emphasize the importance of differentiating one's offering by providing a unique meaning that sets it apart from competitors. The paragraph reinforces the idea that incorporating meaning into a product or service can significantly improve its success in the market.
Mindmap
Keywords
💡Entrepreneurship
💡Customer
💡Market Research
💡Prototyping
💡Customer Validation
💡Experiment Board
💡Service Design
💡Experience
💡Symbolic Value
💡Commoditization
💡Meaning
Highlights
The importance of keeping both the entrepreneurial idea and the customer in focus at all times.
The necessity to regularly address the idea and the customer to ensure the idea creates value for the customer.
The evolution of ideas and customer segments as entrepreneurship progresses.
The recommendation to focus on a smaller, well-defined group of customers with specific characteristics.
The advice to conduct market research and prototyping to understand customer needs and validate ideas.
The significance of customer validation in confirming the value of an entrepreneurial idea.
The introduction of the concept of the 'experiment board' or 'validation board' as a tool for systematic validation.
The discussion on the design of services, which constitute a significant portion of the economy.
The proposition that successful service design creates a compelling experience for customers.
The explanation of the phases of competition, starting from technological innovation to commoditization.
The concept of a 'symbolic value phase' as a potential speed bump to commoditization, based on experiences.
The story of choosing a mouse based on color and pattern, illustrating the power of experience in decision-making.
The idea that the creation of experience is ephemeral and may not always happen, but is worth considering.
The mention of Pine and Gilmore's 'experience economy' model, which includes the staging of experiences as the highest level.
The argument that including meaning in a product or service can increase the odds of entrepreneurial success.
The suggestion to Google ideas and their meanings to assess competition and find a unique competitive advantage.
Transcripts
[Music]
now that we've thought about ideas for
entrepreneurship and reflected them
against current trends it's time to
bring in another key component of
entrepreneurship namely the customer the
customer is absolutely crucial to
successful entrepreneurship but
unfortunately some entrepreneurs make
the mistake of taking their eye off the
customer remember our juggling metaphor
we need to keep both the idea and the
customer up in the air at all time and
address each one regularly so that we
can make sure that the idea actually
creates something of value for the
customer keep in mind also that both the
idea and the customer can and will
change your idea will evolve as you
refine your thinking in the process of
entrepreneurship and although you may
have started out with one customer
segment in mind you may change that and
don't forget your customers may also
change with new norms and trends so
let's think about your customers what is
the customers problem that you're trying
to solve who exactly are your customers
what do they look like what do they
think where are your customers how many
are there how do they view your product
or service and how do they believe your
product or service is different from
what's already out there there are a lot
of questions you should be asking
yourself at this point and it may be
tempting to take too broad a view when
answering these questions and assuming
that everyone or at least a whole lot of
people will want to buy your product or
service but it's usually a better idea
to focus on a smaller well-defined group
of customers with very specific
characteristics because thinking about
these characteristics will help to
sharpen your thinking most successful
businesses start out serving a narrow
group of customers and gradually grows
that they can serve several larger
groups
it's going to be absolutely impossible
for you to answer all these questions
once and for all before you develop and
launch your new product or service
that's why it might be a good idea to
get out there and talk with some
perspective customers and get their view
on things this is what we call market
research or get out there and conduct
some experiments to find out what
actually works
this is what we call prototyping and
we'll be talking about that later in the
course leading on from the idea of
market research with customers and
experimentation Lisa's natural to
thinking about customer validation it's
very important to get validation that
your customers are actually going to
find value in your idea there are some
very good tools out there to approach
this in a systematic fashion one such
tool is the experiment board or
validation board I'm now going to ask
you to watch a presentation I made a few
years ago to a conference of designers
in this presentation I talked about the
phases of competition and the importance
of creating an experience for customers
this leads us to the next important
component of entrepreneurship which is
meaning oK we've been talking about
design here today and I want to try to
stretch your thinking a little bit to
what some people have alluded to but not
really discussed in a great length and
that is what do you design when there is
nothing no thing to design so namely the
design of services we've already heard
today that services are 70 80 % of the
jobs in Europe the economy I've been
doing research on Icelandic
technology-based firms 95% of them
gained at least half of their income
from services so this is very relevant
for Iceland and so the question I want
to try to talk about for a few minutes
is what do you design if there is no
thing to design
my proposition is that successful
service design yields a compelling
experience and an experience I mean
that's even worse than designed there's
no definition it's very ephemeral it it
could happen it may not happen I mean
you're all sitting here but that doesn't
necessarily mean you're listening to me
it's that kind of thing it's it's
something that you really don't have
control over so starting off with some
of the background for this if we think
about the phases of competition of
course I'm talking about this as a
person from business not a designer so
I'll take you through a little bit of
business speak for a moment the phases
of competition for products or services
starts in the upper left hand corner
where we have the technological
innovation phase this is where a new
technology is created or developed and
adopted by the market let's think about
computer mice I'm sure you've all I'm
sure you all own a mouse who doesn't own
a mouse everybody has a mouse back in
the day when this was the new technology
this was in the early 80s I guess first
of all there was the development of
course of the mechanical object itself
which used to have a ball inside that if
it accumulated late you had to take it
out and clean it otherwise nothing
worked but the most important technology
that was kind of the cornerstone or the
reason why we have mice is the the
ability to move a cursor on a screen and
the fact that you can actually move a
cursor on the screen and the stuff
underneath doesn't disappear that took a
lot of technology so anyway everybody
started buying mice mice were expensive
at the time they were not organ Amish
they were ugly they had first just one
button but people became enamored of the
idea of being able to move cursors on
screens it just gave a new level of
control to the computer then we moved to
what's called the improvement phase this
is where things start to become more
reliable and more consistent
like I said the first mice or the first
my mouse I had which was on an Apple 2e
I believe it was rather than a Macintosh
it had one button then there was the 2
button Mouse 3 button mouse there was
buttons with scroll bars we've gone
through a lot of it's basically
experimentation with what's the best way
to design a mouse but nowadays pretty
much you buy a mouse and you know what
the what the left buttons going to do
for you what the right buttons going to
do and that's because that we have
created norms for what the mouse should
do so it's consistency there they became
more reliable the linked problem for
instance was gradually fixed by going to
new technologies next is the maturation
phase this is where differentiation is
based on convenience this is where we
get the first we get carpal tunnel
syndrome and then we get organic mice so
we got larger mice that are specially
shaped to fit the human hand and as that
those became more and more popular and
more accepted basically now all mice are
to some extent ergonomically formed so
what happens in the lower right hand
corner is you know right there the
category with death and taxes is the
commoditized phase it's where
differentiation quite frankly is based
on price only so you you will need a
mouse and the only issue you know is
what what does it cost because you can
expect a mouse to do certain things in
certain ways and provide a certain level
of ergonomic excellence so based on some
research that I did along with my my
colleague who talked about the
assignments on we we develop this
concept of a possible speed bump on this
way to death taxes and commoditization
which is the what we call a symbolic
value phase where differentiation is
based on experiences and I'm going to
continue with my mouse and I realize
this is not a service example but it's I
believe it's a very tangible example
that will help you understand what I
mean I was in the US last year for a
conference and I was you know ever at
the last minute ever Icelandic working
on my presentation late
the night before I was going to present
8 o'clock in the morning and I have a
mouse crisis my mouse literally dies
there was nothing I could do for it
I had the computer I usually travel with
which has a really really bad thumb pad
I just can't can't deal with it and I
was setting up a diagram something like
this one and I needed a mouse so I jump
in my rental car and I go out to the
local target for those of you who
haven't been in a target it's huge
store American store that sells
everything from aspirins to tires for
your cars I go into the target I know
they have mice I have seen mice in
target after getting lost a few times
and asking around you know finally I'm
in aisle you know 39f the mouse aisle
and at this point you know it's it's
late and evening I have a presentation
to prepare my sole purpose with my trip
to target was I need to get a mouse fast
my mouse is a mouse I don't care I just
need a mouse so I go and this is you
know last year so the Icelandic króna as
we've all talked about today is it's not
the best thing to have in your pocket so
I also had the the objective of buying
something for not a lot of money so I
there's i/o 39f the mice I've quickly
zero in on the laptop mice the the
smaller mice and I quickly scan the
prices
there's $19.99 there's $29.99 okay
$19.99 that's me
and look at the mice okay what do I want
here I want cordless what's cordless all
of a sudden my eyes strays like it never
should to the $29.99 area what what are
they offering and you know the sudden
all of a sudden the the urgency slows
down a bit I wonder what you get for an
extra 10 bucks in a mouse and I look at
this display of mice from Logitech and I
see the brand is completely by by the
way here and they had a lot of mice like
this one this is this is the mouse I
bought and they were in different colors
which is you know they were all
available in colors but they not only
had different colors but they also had
different patterns
front now this is interesting color and
pattern so all of a sudden I shift from
my target oriented get it for a little
as little money as possible and do it
quickly mode into quiet introspection
and I start thinking about now if I were
picking one of I have it selling it made
the commitment to spend the extra ten
bucks plus tax but I think if I were
picking one of these mice which one of
them would would I pick you know which
which one of them says marina and and
all of a sudden your complete mind shift
complete I start thinking about well you
know what what would I like my life to
be well who would I like to think people
to think I am and I have these wonderful
five minutes there on Io 39f and target
picking out you know a my mouse in my
favorite color and that has a pattern
which for those of you who can see it
probably not nobody it's kind of like
the pattern of a pebble falling in a
calm pool of water so kind of Zen kind
of peaceful kind of a life where I don't
have to rush out to Target to get a
mouse almost in the middle of the night
so I walked out of there with $29.99
plus tax
instead of $19.99 plus tax and it was
money well spent because I got that
little bit of time of introspection now
think about it
the people at Logitech who designed
these mice were they thinking about this
were they thinking about this
possibility there's 39f fild possibility
I don't know I hope they were but think
about all the other people who also went
to Target and did not get the ten-minute
bonus so like I say the whole creation
of experience is very very ephemeral it
may not happen but you can still think
about it no discussion of experience is
legal unless pine and Gilmour are
mentioned and they came up with the idea
of the experience economy and they're
basically their model looks like this in
the lower left hand corner you had
corner you had the extraction of
commodities this is like
pumping oil from the ground there is a
market price we all know about the
market price of oil we here in Iceland
at least we know whether it's going up
or down and we look at the gas stations
to see if it's being reflected there's
really no differentiation I'm not a
petroleum engineer so I'm not sure
there's really a difference between what
you pump out of the ground in Texas or
what you pump out of the ground in Egypt
I just don't know but the
differentiation is not huge then we got
to manufacturing products this is where
you create you know fuel for cars and
you create these super H fuel and you
brand it shale or something I don't know
anything about you get a little more
opportunity for premium pricing you get
a little more opportunity for
differentiation then you go up to
delivering services this is the gas
station ranging all the way from the
self-service gas station where it's just
between you and the pump and the your
credit card to the full-service gas
station where you know you can also buy
something to eat and there's a human
being who you can talk to if the pump or
the credit card doesn't work but
basically they're all delivering the
same service at different prices they
differentiate depending on how much the
service they're delivering and I think
they can do various things to make I
mean you gas stations are different yeah
they're that depends on who's running
them and where and so on and then at the
top is staging experiences and this is
where be buying gasoline from your car
becomes poetic okay I don't know what
that looks like it's a thought exercise
you can take home what would it take to
make buying gas poetry I still have that
mouse by the way in the presentation I
talked about symbolic value and
experience a term we can use to cover
both of those is meaning a product can
have symbolic value which gives it
meaning if you include an experience in
your service it also delivers meaning
now I realize that you could create
product or service without giving it any
particular meaning and in some cases
that may make
but I would argue that in most cases
your odds of success are better if you
include meaning think of it as wrapping
your product or service in meaning so
now you have three things to juggle as
an entrepreneur your idea your customer
and crucially the meaning that you will
deliver to your customer at this point
in the entrepreneurship process it might
be a good idea to spend some time online
Google your idea or words that describe
it does it look like somebody else is
providing a similar product or service
next Google words that describe your
meaning
does it look like somebody else is
already providing this meaning if you
realize that you have some competitors
and you probably will you need to give
some serious thought to how your product
or service can be significantly
different from what's already out there
what is your competitive advantage
[Music]
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