Relative costs

Why are shoes so expensive? 

Shoes - $149.99

Bike - $209.99

The Economist on design thinking

A nice article in the Economist that highlights design thinking in business and philanthropy and Embrace (the baby incubator company):

http://www.economist.com/businessfinance/displayStory.cfm?story_id=15060706

BMW’s Electric Mini Rollout Yields ‘Painful’ Lessons

http://www.bloomberg.com/apps/news?pid=20601109&sid=aeQwon7TV3Fo&pos=10

BMW has begun to rollout it's electric mini in select cities. Several major problems including having a battery in the back seat and day long charging times became immediately apparent to early adopters. After reading the article, it seems as though executives expected this. Executives don't seem to be worried about damage to the MINI brand with a crappy initial launch. I'm looking forward to when BMW works out the bugs and this product becomes as mainstream as the Prius.

Cool product blog

As in, a blog of cool products (rather than a cool blog of "eh" products):

http://www.kk.org/cooltools/

the blog covers lots of stuff outside of just products, too, if you look on the menu on the left.

Tirzah

Flowboards and the Multiplication Template

Flowlab is an interesting company built completely around the "multiplication template" of ideation. They took a traditional skateboard and added 10 additional wheels (14 total) in two arcs. This new configuration allows the rider to "carve" with the skateboard in a motion more reminiscent of snowboarding and surfing.

Much like the rollerblade (originally designed as a crosstrainer for hockey players), the flowboard has the potential to become the next big thing in extreme sports - assuming the start-up's owners and investors can figure out an advertising and distribution plan that will actually be able to get it off the ground. (note* when I worked for them back in 2004, they had basically no clue what they were doing, but they seem to be figuring things out now with the help of a more engaged board of directors).

http://www.flowlab.com

http://articles.latimes.com/2008/sep/08/business/fi-flowboard8

Rapid prototyping...

Even the biggest yacht ever built requires a scale 1 prototype.

Check out this amazing project: why-yachts.com

Car racing and NPD

The Importance of Framing in Product Choice

Dan Ariely, a behavioral economist from Duke, has done some pretty interesting research to show how consumer preferences can be manipulated by the way choices are framed. He makes an argument that most consumers don't know their absolute preferences, but rather only their relative preferences.

Here is his TED talk on the subject, which gets into the implications for product choices at about 11:10 into the video.

Presumably well-designed conjoint would not be subject to confounding by Assymetric Dominance, as long as it had enough variation and options.

Better Place Best Practices

Company Background

Better Place was founded in 2007 and is headquartered in Palo Alto. The company is creating and deploying electric vehicle (EV) services, systems and infrastructure across the world. Better Place plans to first launch its services in Israel in 2011, followed by Denmark, Japan, Australia, United States and Canada. For the past 2.5 years Better Place has been in the process of developing EV charge spots, switching stations and software with a strong emphasis on consumer needs.

Product Development Mindset

In an interview with a Better Place representative I learned that Better Place is attempting to offset consumer’s aversion to change by taking an extreme focus on familiarity needs. Better Place is asking people to take a large leap of faith on a technology that many view with some skepticism. By taking on such a mammoth task the company has realized along the way that they must take an extremely focused approach on ease of use for the consumer. This focus on customer needs is reflected in the creation and design of the Better Place Switching Station seen here: http://www.youtube.com/watch?v=KKA4GhVn0a4&feature=player_embedded.

Switching Station Product

The company has decided to create the switching station in order to allow those users who want to drive long distances without recharging at a parked charge spot to have the ability to drive longer and further. In discussing the need for this service, I learned that Israel is roughly the size of New Jersey and that an overwhelming majority of Israeli drivers do not drive far enough in one day to exhaust an EV battery’s charge. However, Better Place recognized that the handful of days out of the year when a driver will actually drive 100+ miles in a day will be at the forefront of consumer’s minds when they are deciding to buy an EV and find there is no solution for rapid charging on the go when the battery is dead. This thought process bred the creation of the idea of a switching station where EV drivers can drive into a car wash-like structure and swap their low charge battery for a fully charged battery. Since the switching station is essentially a substitute for the petrol car’s gas station, Better Place went to a considerable effort in designing the switching station in such a way that it can complete the battery switching process and get the driver back on the road in 80 seconds. Since buying an EV vehicle and opting into the Better Place network requires a behavioral shift on the part of the consumer, Better Place wanted to make sure the process of switching the battery was as easy, if not easier, than filling up your car at the gas pump.

Switching Station Product Development

In developing the concept and design of the switching station, Better Place has taken a number of steps to build their product. Initially the company came up with the idea of building the switching station by observing the status quo and driver’s expectations around driving. The company refined the product by enlisting the help of a small pilot group of Israeli drivers in Jerusalem to take part in testing their products and services. Participants in this pilot program have played a large role in determining the customer needs for the switching station. In addition, Better Place identified the heaviest users of switching stations to be taxis and has agreed to a partnership with Tokyo’s largest taxi operator to test a switching station in Tokyo to help refine the product specifically for their biggest target customer.

-Brent Perez

Sony as Best Practice Company

Television production is an important business for Sony. After identifying European customer needs to have more energy efficient television by observing and interviewing customers, Sony Japan invented outstandingly environmentally friendly televisions. On the basis of the interview with a former employee of Sony, I will report how Sony successfully translated the customer needs into the new televisions. The below practices for this television case are used in many other cases at Sony, although not for all.

Brainstorming

Sony is well known for coming up with innovative idea including portable CD players and Beta (video). Sony’s practices of brainstorming make Sony excel in this area. What were some practices of the brainstorming at Sony for the television case? First, the brainstorming was conducted by diverse team members. The team included former engineers, designers, marketing employees, employees with the knowledge for international markets, and employees at the product safety division. Men and women as well as senior managers and junior employees equally contributed to the discussion. Indeed, Sony ended up realizing second-year junior employee’s idea of using sensors to switch-off televisions when nobody is in front of the televisions. This is rare in the Japanese senior-oriented society, where junior employees typically do not make strong comments in front of senior managers. Second, to enhance the diversity, each employee was assigned a different task before the brainstorming. Because of this, different employee brought different ideas and thoughts on the day of the brainstorming. Third, there were principles for the brainstorming such as: defer judgment (not criticize ideas at the brainstorming); focus on a small section of the product at a time; and sketching ideas (be visual). Please note that these principles are similar to those of IDEO. Another principle was to focus intensively for two entire days to generate a large number of creative concepts, get rid of weak ideas, and draw pictures of the concepts. This is similar to the Deep Dive approach at IDEO.

As a result of the brainstorming, the team came up with a large number of ideas to enhance the energy efficiency including: using sensors to switch off the televisions when nobody is in front of the televisions; a technology to reduce energy consumption of stand-by mode; and replacing lamps at the back of liquid crystal televisions with more energy efficient lamps. Using its market data which was gathered through its television business, Sony narrowed down the ideas and came up with its initial product concept.

Concept Testing

Sony is good at testing its innovative concepts. In the television case, Sony used its concept testing method similar to what we learned in the class. Specifically, it showed its prototype to customers and systematically asked the following questions:

1. Would you buy this product? Please rate it on 5 scales.

2. How much do you think you would like or dislike the product?

3. How would you rate the product in terms of being new and different from other products currently available?

4. How well would the product solve a problem or fulfill a need for you?

5. Would the product solve a problem or fulfill a need for you better than, not as well as or about the same as others?

6. How do you feel about the believability of the product?.

Interestingly, Sony did not show a potential price to its survey participants. According to its former employee, Sony did not believe customers’ opinions on price. Instead, they believed the opinion of its distributors (dealers and retailers) because the distributors’ opinion is based on their data. In addition, Sony did not use the conjoint analysis in this case.

Sony also conducted depth interview to customers, presenting its prototype. As a result of the concept testing survey and interview, Sony modified its prototypes and completed its innovative energy efficient televisions with the sensors to switch off the televisions when nobody is in front of the televisions.

Yohei