The 3 business models in design

Learn

1) what a design outcome is and why it’s hard to understand the strategy behind it

2) what the 3 design business models and 3 design values are

3) how to construct a product to serve the needs of people who want to teach their pet gecko how to dance

4) where the 3 business values are instrumentalized on a businesses experience map

5) the shape of organizations that serve needs of their users and mechanisms to achieve it

Design outcomes — they are our world

They can be anything starting from a simple thought to change something. Anyone produces them.

various design outcomes

A design outcome influences its environment

Example how a design outcome influences its environment

The result and impact of a design outcome is confusing and complex to understand. The problem is any design is impactful in so many ways — you cannot measure just a couple of indicators. The impact of a design is n-dimensional where n is always at least 1 larger than you’re able to imagine. “I know that I know nothing” only seems about right. Only the aspects you consider can be manipulated.

Producing a design outcome is embraced by a before and after state

A designed outcome consists of a blurry entanglement of prioritized ideas to achieve considered goals. Creating a designed outcome is a task of manipulation where there is a before and after.

Why is understanding the implications of design not obvious?

The comparison to understanding foreign languages is quite fitting to understanding the implications of design.

Good luck with that!

If you listen to a foreign language being spoken for 1 year without ever being told the meaning of a given word or ever being able to put the heard into context — chances are zero you won’t be able to catch up and learn the language.

If you were to learn a foreign language, the fundamental principle to learning is by being taught the direct meaning of a thing in both languages allowing you to bridge context.

Journey to artificial intelligence

Training neural networks

In machine learning (a field of artificial intelligence) scientists use supervised learning: teaching inputs with the translated answers is to train neural networks to understand data. Compared to the method of just giving data to the same neural networks and waiting for it to understand it itself (unsupervised learning) the labeled method is incredibly much faster.

Sometimes the lack of data even determines wether something can be learned after all. Could this mean for us that without the right learning settings we might not be able to understand certain things within our short lifetime? I believe so.

Setting for “intelligent” outcomes

Comparison

Now when comparing the visualization of how I demonstrate the act of doing design and the act of neural networks learning something, they both have the before and after state on a linear time scale. This could mean an insufficently long learning phase, not enough research informations or too much data without context might lead to a lower form of “intelligent” design outcome
Which also means the a longer learning phase, more research informations and more contextual data (substance) lead to a higher form of “intelligent” design outcome.

The rules for unsupervised learning apply
If we know less meanings of something in our environment it gets harder to understand the whole.

The definition of starting

Imagine you’ve officially started writing on a document yesterday. 
Did you really start from 0 yesterday?
Most individuals have a broad palette of experiences and skills allocated in their mind and body that influence what they do. You haven’t learned your language by yesterday, that’s for sure. Some of your ideas and thoughts should be older than 24 hours aswell. So while we like to say: “I started 2 weeks ago” you’ve actually passively prepared with the first sensoric input stored in your memory cells, meaning since you’re alive. Your DNA is a format of information storage meaning the document you’ve been writing on since yesterday could have been prepared since very existence… kind of.

Using memory to yield better outcomes

The preparation is also used in training AI for neural networks are designed to understand the world of images, but should understand animals especially well, always have a pre-trained memory of other images as a basis and/or a use a neural architecture with pre-trained weights that suit especially well for image recognition.

With infinite resources: more = better

More of each → better outcome

Assuming we had a slider to add time, data and increase the percentage of labeled data inside the data this would all positively impact the outcome. No exceptions.
In the world this happens with the big problems: thousands of people working full-time on the same thing instead of just a single individual.
The biggest existing economical challenges (market demands) can often be found tackled by the largest corporations, because it’s worth throwing more people at and there is a return of time, energy and salary investment.

Let’s look at what I call the 3 values of design with which every designed outcome can be torn apart to understand it so you can understand the same topic in a lower amount of time.

Time for conscious manipulation

Doing the “design” is the art of prioritizing different goals to manipulate input informations towards a new output information.
Prioritization is needed in every scenario of limitation.

Design Value 1 — Usability

Usability describes how good something is at what it’s intended to do.
As a designer you design usable products, 
by estimating the users capabilities and understanding the intended function to produce a tool that serves its purpose.
Usability describes the attribute of any object that is perceived to have a purpose.
Focused human interference in designing the relationship between the user, the medium and the purpose can impact the usability of an object, product or service.
I like to use the word “tool” which requires a situation of use to be a tool.

What can you achieve with usability?

You can go out into the woods, break a branch and form a stick –
look at it and say: “I am going to perceive your purpose to hammer other objects into the ground” –

then proceed to add a piece of cloth where your hand is grabbing the stick to enhance the object to your human capabilities of grabbing the object –

then proceed to tie a rock to the end of the stick to increase the force of impact with which the stick will hit the future object that should be hammered into the ground.

You’ve just worked in a user centric way, by optimizing the grabbing point for your hand and in a functional way by increasing the efficiency output of performing the act of hammering.

Usability is always bound to how we see objects and their functional purpose.

A stick can also be seen as a weapon to beat someone while still keeping its attributes as a hard-to-use hammer.

It is part of good usability to give tools the form that intuitively indicates their function. Symbolism usually catches on this moment in design and injects sales accelerating strategies.

Why is usability important?

Depending on how easy-to-use the tool is designed, it will be engaged with by people. Every tool has to be designed according to the capabilities of its user.

Depending on how functional the tool is designed, it will impact the effect it has when it’s used.

The business model for Usability

As a designer

you get paid for knowing how to adjust a tool to its users capabilities and increasing the effect it has when it’s used by investing your personal time producing a designed outcome (see intro) that is better than the status quo.

Business model of monetizing usability design

The value of the tool increases, allowing your client/company to lose less users using the product and referring the product for its quality, increasing the customer lifetime value and therefore the economic value produced, allowing your client/company to capture more of this produced value allowing you to capture some of this value for yourself.

Increasing usability in the world is often seen as the “true” way to improve the quality of the world. 
If only it weren’t for the following 2 other design values.
Maybe you’ve once heard something like “The best product never changes the world, the best marketed product does”.

Design Value 2— Symbolism

As a designer you enforce symbolism,
by taking a thing and wrapping it in a new meaning and communicating these meanings. Symbolism happens passively with or without human interference. In our world we constantly alter the meaning of the things in our environment. Focused human interference can impact the symbolic meaning of an object.

Connecting the emotion freedom to the object car

What can you achieve with the skill of manipulating symbolism?
You can turn an object like a “Car” –
that is designed to supply the need of human individuals to go from A to B –
and repeatedly manipulate people with your communication strategy –to perceive this object “Car” not as a vehicle to go from A to B –
but as the emotion of freedom.

Why would you want people see “freedom” instead of “solution from A to B” when looking at a car?
Because “freedom” is a very powerful emotion.
This emotion “freedom” makes people think differently when thinking about purchasing strategies. The behavior is less rational in terms of budgeting this purchase.
And the question “Do you want to be free?”
Is a much easier “yes” answer than
“Do you need an A to B tool alternative to borrowing your friends car, taking the public transport, joining a car sharing club or not going from A to B?”
This is one example of how a car can be branded to an emotion.
Any object can be branded to any emotion.

Symbol comparison

A wine bottle is a volume made out of glass to contain rotten grape juice, sealed with a cork to prevent the liquid from reacting with oxygen in the air and losing its taste. It’s also an ancient technique to store liquids in glass and cork.

The impact of the same product with a different packaging design

A wine tetra pak is a volume made out of a paper-aluminium-polyethylene mix to contain rotten grape juice, sealed with a plastic lid to prevent the liquid from reacting with oxygen in the air and losing its taste. It’s also a progressive and new technique to store liquids in tetra paks.

Let’s compare what we feel when we see these two objects.

I feel the vine bottle is an object that symbolizes a quality, classy, cultural way of consuming a delicacy.

I feel the vine tetra pak is not a quality vine, to drink it is not a classy and cultural act.

If you want learn about the philosophy of the things, read about Vilém Flusser “Dinge und Undinge” – he is an absolute genius.

If you want to learn about the importance of binding a brand to a need in order to become category king, read the book “Play Bigger” about category design by Christopher Lochhead.

The business model of symbolism

As a designer
you get paid for knowing how to craft a communication strategy that manipulates people into buying more, cancelling less, or similar. Because your client makes more revenue, he can pay you. You’re manipulating the way your clients/companies customers think, hijacking powerful needs and binding them to your clients/companies product.

You produce economic value for your client/company and capture some of this value for yourself.

There are 3 methods to monetize symbolism as a designer, two of them are competitive scenarios.

The first one only really applies to satisfying needs in markets where customer groups aren’t fought over.

Capturing new markets using symbolism

The second one highlights competition where symbolism is utilized to gain a competitive advantage over customers.

Gaining competitive advantage utilizing symbolism

The last one shows a competitive scenario where customers are fought over a car customer who has to decide based on symbolized needs.

Competitive scenario where symbolism is used to fight over customers

If you understand that symbolism is heavily used in a competitive environment you might also find it interesting that brands that don’t really have a unique product/service utilize symbolism the most. Look at mobile network providers, energy companies or crypto startups.

Design Value 3 — Entertainment

Entertainment describes the situation where physical sensoric stimulation triggers chemical compound releases that affect emotional state of the conscience of creatures. 
We feel alive. 
We feel: “This is worthwhile.”
We usually don’t actively think about wether we’re entertained or not. 
We just leave the website, close the app, look away from the poster, stop to read, drift towards other thoughts.
We want to be entertained — to avoid confronting ourselves with what’s in us and maybe… find true happiness and what not. Better get entertained.

entertainment is all about perceived time
Perceived time is the currency of entertainment.
With our body we can’t sense time by analyzing half-time periods of identified isotope molecules in our environment.

Entertainment is the art of keeping us in the now and holding a dialogue. What value to a message if nobody listens more than 1 sentence?

same message

As a designer you entertain,
by manipulating a medium containing informations to appear attractive to their audience.
Entertainment happens passively with or without human interference. Focused human interference through manipulation can impact the entertainment value of an information.
What can you achieve with it?

Imagine this story is a movie that is happening and everyone is invited to buy a ticket.
You can turn the information of the upcoming movie into a visual medium of such beauty and attractiveness –
and put this medium out there where people can see it –
to have them perceive the event as an event where they should go to.
You’ve created an experience for these people during the moment of consumption, a medium that talks to them and influences their opinion about the original information of being an event of 3 hours length to buy a ticket and watch a movie.

The entertaining experience triggers positive reactions of the consumer and raises a moment of emotional decision making and like in the first business model of symbolism, emotions that are in the core of decision making.

Perhaps you’ve never looked at it this way:
Everything is entertainment.

If a typeface doesn’t suit me for reading, it reduces the entertainment.

A typeface of a book has an entertainment value. If it’s ugly and bad and you’ve a hard time to read, the information and story to be told gets harder to consume, making it more painful for a potentially great story to be consumed.

An artwork has entertainment value. If it speaks to you and you can engage with it, if it has something to it you like or tells a story you’ve never heard before, you will spend more time looking at it and he emotionalized about it.

Entertainment of a landing page

Boring content — beautiful information design

Imagine you are visiting a website which happens to be a single-page landingpage.
The content itself can be uninteresting for you to read, because you don’t want to buy what the website is selling, but because it’s been made very nicely and there are these beautiful icons and illustrations and the layout is appealing you get a positive feeling about spending your time here.

Entertainment of nature

A look out of the window into the skyline of a city is just a 3-dimensional visual perspective of civilization and nature in a unique place and time. No human has designed it intentionally for you to have the whole thing look good in this exact moment and from this point.

You might feel a certain emotion looking out of the window on the calm city in the late afternoon and be entertained by it.

The business model of entertainment

As a designer
you get paid to reduce the amount of people not reading and memorizing the message of your client/company.
You increase the effectiveness of entertainment in a message your client/company is communicating to her consumers.
More consumers reading the message until the end have a multiplication effect of the goal the client/company wants to achieve making the act of communication more valuable.
You reduce perceived time in an experience and increase chances of users reaching the end of the experience triggering a key action.

Because your client/company makes more revenue, loses less revenue or increases in any important number in the business ecosystem, he can pay you.

You produce economic (or social, or cultural) value for your client/company and capture some of this value for yourself.

Usability - Symbolism – Entertainment

Making use of USE

Need satisfaction — designing a product

Let’s go through this step by step and create a product.
Imagine you start our own personal blog website.

Your product idea

Let’s say you’re full of know-how about a particular topic: You’re a master at teaching geckos how to dance. And you’ve done it for the previous 2 years knowing every bit and detail of how you can get geckos to dance.

Your dancing Gecko

Since you’ve realized your Gecko pets are very happy when they dance you want every home owned Gecko in the world to dance. 
You then talked to some friends who own a Gecko who told you they want to teach their Geckos, too. So you’ve identified a potential need for Gecko owners wanting to know how to teach their Gecko dancing tricks.
You want to share the knowledge to all other Gecko pet owners in the world to teach their Geckos to dance and be more happy.
You’ve also done some research and found out there are over 1 million Gecko pet owners on the internet who would potentially be interested in learning how to teach their own Geckos to dance.

Sharing the knowledge with the world

Since you also know from your friend pet owners that Gecko pet owners typically buy live insects over the internet you are thinking of creating a partnership with an online live food delivery service for Geckos to have a way to monetize the server costs if thousands of Gecko pet owners would be on your blog every day reading how to teach Geckos to dance.
The affiliate link is the second need identified from the same user group of Gecko pet owners.

Partnership banner with a tracking link

You’re also continuously creating new Gecko dance moves every 2 weeks and could theoretically provide ongoing new content.
Knowing you’re going to release a new story every 2 weeks allows you to think about attracting Gecko owners not only once, but in the set interval to your blog.
Which leaves you with the first prototype for your core product: a blog featuring stories how to teach Geckos to dance with an affiliate partner to have a source of income for your efforts.
Now you’ve set the goals for a designable outcome of the overall product: traffic and affiliate revenue.

core product

With product and business model in place, the only missing thing is the marketing. You’ve been lurking the Gecko channel on reddit for a long time and know you can make a post every now and then to gain attraction. So that would serve as the first initial source of traffic.

initial marketing strategy idea

You would be super happy to get to 50 new visitors every 2 weeks and want as much as them to return for ever and ever with every new story on your blog.
If you could bond with those Gecko owners who also teach their Geckos to dance — that would be a very valuable thing.
Any business is a number of relationships between the business and its users/customers/consumers (or the relationships between users in marketplaces and market networks).

User perspective of relationship with your product

For products you typically don’t aim for one-night-stands. With few exceptions like gas stations on highways and stuff like that, it is much more interesting to extend healthy relationships than to build new ones. The keyword here is “retentive experiences” and in marketing language, retention increases the customer life time value. If you later-on plan to reach real revenue goals with your product, the success measurement happens in those terms.

The perfect experience

Brian Chesky, CEO of AirBnB was inspired by how Disney creates their movies using storyboards. He introduced this technique to the product departments at his company and they created the perfect experience an AirBnB traveler should have when using the platform. Amongst many other improvements, this perspective to build products lead to the new AirBnB experiences feature on the platform.

Now let’s think of the relationship map as a linear time progression and put ourselves in the shoes of the Gecko owner on the internet who will soon learn to teach his Gecko to dance via your blog. Imagine — what could be the most satisfying experience your user could potentially have? How will this experience look like?

It might look like this. Note how they can be categorized in 4 categories that are essential in any need-satisfaction construct.
The blue area can often have a lot of parallel experiences for different channels, each continuously being improved.
The red area is one that usually requires designers to make it really easy to get their need satisfied, but also slide into the retentive loop.
The yellow area is the place where successful products require a lot of time improving this to perfection — having lots of people in here is what impacts the world with a product, so to say.
The green area is one that’s really nice to have and get, but is more or less dependent on how big of a need you’re satisfying for your users and how good of an experience you’ve created.

Second need satisfaction

You will also be adding the online insect food purchasing experience into your teaching Geckos to dance experience that can be navigated by the user at step 2, 4 and 8. This will allow you to monetize your blog while satisfying an additional smaller user need increasing the overall complexity a little bit for the obvious upside.

The perfect experience with user feedback loop

To take this model a step further, a guy named Ryan Walsh was in charge of marketing a to this time unknown speaker headset. He introduced an experience timeline sort of like Brian Chesky’s storyboard but with an y-axis of how happy the user is at each step.
Of course at his company they didn’t make up how happy their users were at each step, but integrated continuous user feedback to measure and improve each and every step over time working with their customers to deliver the best possible experience.
The brand and speaker headset “Beats by Dre” became world famous and was acquired by Apple who has built its organization around the user experience of its customers and where the acquired organization had a good cultural fit.

How little you control as a creator

The real competitors of your ambition to reach this person

Putting the need you’re solving in relation to the other needs and problems your user has always helps keeping it realistic.

The following 50-day schedule of a user with the blue dots highlighting where he’s been engaged with your new product is another visual explanation of what you should understand:

User actions contextually relevant to your product

And to demonstrate unpredictable onboarding and marketing experiences here’s this experience of a user getting into a web application:

example journey of a user ending using a web app product and then leaving

A drop out of the user can happen at each step.

With these unknowns and uncontrollables that apply in every step of the experience you are offering, it is of certain importance to make the best out of each touch point you can actually control.

Utilizing USE

What’s Usability, Symbolism and Entertainment on an experience scale of a product?

How the USE design values can impact a user experience

Usability is about reducing input time to achieve satisfaction to a minimum while increasing satisfaction effectiveness to a maximum.

Entertainment is about making the user perceive as little time as possible when going through the experience or reward him with satisfying quality to gain motivation for the next step and not drop out.

Symbolism is educating the user in the long-term that your brand represents the satisfaction of the communicated need.

USE design values — prioritization in the experience timeline

The above chart is an example for a rough design value prioritization based on the strengths of each design value.
This is about how product experiences are constructed right now.
But I’m pretty sure there is no reason to not completely rewrite the logic of design value prioritization. 
For example: 
Why are budgets for symbolism mostly spent outside of the core product in campaigns?
Why is entertainment generally ignored or completely underprioritized in user products or services? Aren’t there people using the products?
What if entertainment in the retention loop is identified as a large factor for long-term competitiveness?
What if you have a product that solves a huge optimization need for businesses, but the employee users also have a lot of spare time and everyone of them would vote to buy it if it had procrastination content in form of entertainment value —solving a hidden need for the real user?

Fractalization of need satisfaction experiences

Earlier I stated: The biggest existing economical challenges (market demands) can often be found tackled by the largest corporations, because it’s worth throwing more people at and there is a return of time, energy and salary investment.

The below chart is still a reduction of how it should look like in reality:

a typical product/service is always an experience system

If the produced value by a product of a business grows, the leverage of optimization grows, opening up opportunities that promise to be ROI positive:
- Employees get hired for optimization to reduce the users time & energy effort to satisfy his/her needs
- Employees get hired for entertainment decreasing the perceived time for process steps
These two are actually capable of decreasing the complexity of a product/service.
It goes on:
- Employees get hired to find and integrate new marketing channels increasing the acquisition experience complexity
- Employees get hired to create onboarding experiences that suit the communicated need satisfactions better, increasing the amount of existing parallel onboarding experiences
- Employees get hired to identify and implement additional needs that can be satisfied, developing and introducing new features, moving from linearity to a network of interaction complexity
- Employees get hired to break down needs into smaller needs to be satisfied increasing the precision of the product/service, but also its complexity
- Employees get hired to produce content to bind the brand to the need
- Employees get hired to detect new needs that can be merged with the existing need-satisfaction ecosystem and integrate these experiences into the existing ecosystem
- Employees get hired to tweak the existing retention model introducing more mechanisms to activate users to use the product/service
- Employees get hired to break down the satisfaction effectiveness into different product packagings increasing captured value

Now it would be time to ask if an increase of complexity in the ecosystem with the side-effect of serving a larger addressable market and having a higher gross value production output is a 100% good thing?

Everything in life is always a trade-off. The natural expansion of a product ecosystem with growing value for a user has the negative effect of
- maintainability complexity by the employees
- confusion by the employees, lack of understanding the entire thing
- increase in complexity (additional need-satisfaction experiences) leading to an overall negative output in gross value production
- dilution of brand symbolism, needs not directly addressed to the brand anymore
- entropy of problems in the surrounding system in which a product is embedded, technical limits, interface limits… (more in the next paragraph)
- emotional disconnection between the employee and the user needs by information loss
- unclear understanding of objective implementation, critical for organizations keeping everyone going in the same direction

So where is the sweet spot between complexity and simplicity of a business?
I don’t know.
I think the nature of capitalistic contructs (for-profit organizations) is they all want to eat their market, in the best case monopolize and kill everyone who tries to enter. Decision makers usually don’t decide to enter fields that are too far away from the core business. Even the largest insurance company knows it doesn’t make sense to build luxury yachts. But I would limit the field to what’s in the ecosystem of the symbol they represent. If a luxury yacht and an insurance product are on the same wavelength in the need they are satisfying, it might be considerable.
Companies die when symbols lose value because people grow up in different worlds developing different values.

Unifying experiences without harming the need-satisfaction loop is the hardest thing and also the best thing you can do for your business.

Satisfying peoples needs extends to building the organization

The chart shows the layers in which a created experience is embedded and highlights 4 parts that are interesting for this subject.

The blue area is a part of organization design responsible to keep aware of how well designed every step in the experience storyboard currently is.

The yellow area is a part of organization design responsible to keep individuals emotionally connected to the users needs – the main ingredient for mission critical objective implementation in any department.

The red area is a part of organization infrastructure to keep information loss low and internal effectivity of building the experience high by using systematic approaches, scalable infrastructures, processes and investing in consistency

The green area might be interesting for those who wonder: What if people are the experience? This would be any human service delivered. For example in a barbers shop. The barber working in the barbers shop would be located in the experience system circle. Building these experience systems is called service design.

When returning to Apple after an enjoyable time building Pixar, Steve Jobs stated in an interview: “One of the things I’ve always found is that you gotta start with the customer experience and work backwards to the technology. You can’t start with the technology and figure out where you’re trying to sell it. I made this mistake probably more than anyone in this room.”

I believe the best thing we can do is putting organizations into perspective focused on the customer experience and constructing it to embrace this experience by building the system for it that allows for the best way possible to achieve it.

All three design values Usability, Symbolism, Entertainment practised in excellency — are expressions of achieving a better user experience.

Now you should know

1) what a design outcome is and why it’s hard to understand the strategy behind it

2) what the 3 design business models and 3 design values are

3) how to construct a product to serve the needs of people who want to teach their pet gecko how to dance

4) where the 3 business values are instrumentalized on a businesses experience map

5) the shape of organizations that serve needs of their users and mechanisms to achieve it

Contact
Any further questions/feedback/ideas — daniel@daniel-seiler.com