Why the future often looks like a toy (and why that’s a problem for several companies)

Many products and services are conceived and developed in such a serious way that they end up being their own worst enemy. The path to a product-market fit is rocky, difficult and strenuous, but setting out with fun products can present a competitive advantage.

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Sep 3, 2018 · 7 min read
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Due to a paywall, only a screenshot from the Financial Times

Uber’s new strategy should have been VW’s old strategy. Uber recently took over the American bikesharing network JUMP, making the company a multimodal mobility service provider. It shows how hits are being taken in the medium term (a journey by bike is cheaper, but more than anything it is lost to the Uber driver, which can easily have a negative impact on the driver’s attachment to Uber) in order to develop relationships with users for the long term, and remain the first app people go to when it comes to getting from A to B.

Moving downwards in value creation, so to speak, is good: ultimately e-bikes and e-scooters are ideal for short trips and therefore in the way they operate are competing with cars in urban traffic while causing less sweat than a bike. The opposite direction is more exciting though: creating value from the bottom up, where increasingly valuable target groups (and therefore better profits) are being acquired out of a niche.

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Moia, here still with a driver in the regular VW bus, but soon with the self-driving car it has developed itself

The car-sharing market in Germany is a duopoly between Daimler with Car2Go and BMW with DriveNow (which have since merged). Many will have wondered where VW actually is in this race. With Moia Volkswagen is creating an entry into non-ownership concepts and because the concept itself is highly serious-cleverly calculated-logical-correct, it is a prototype of a pattern of thinking that too often curbs innovation and pulverises corporations internally. An alternative approach to this thought process needs to be understood.

Bridge to understanding 1: Play is fun and fun is a pretty good customer experience

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Offering fun is a good start to getting a flywheel going

The entire business world talks about platforms and networks, about customer experience and virtuous cycles — but hardly anyone understands that when firing up the virtuous cycle or unlocking the platform for others or even experiencing an experience, you have to start somewhere. Clay Christensen’s Disruptive Theory says at heart that technologies tend to get better at a faster rate than users’ needs increase. The conclusion drawn by Chris Dixon, General Partner at Andreessen Horowitz, is that products are processes and the next big thing often looks like a toy but is (harshly) dismissed by the competition because in its first version it is not particularly good at meeting user requirements.

However products that are initially dismissed because they look like a toy or for somehow being ridiculous are products that are part of everyday life, that are used and therefore developed further. A product that people wearily smile about is more valuable than a concept paper that rambles on and on.

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31.2K ratings and a 4.9 review suggest a pretty good product

Toys are first and foremost fun, and giving users a good time is not a bad start. An example: one of the New York Times’s most successful digital products is a crossword. It allows the NYT to reach two million people every month, with some 400,000 subscribers paying for the service costing around € 0.50 a week. The best journalism in the world is creating an entry to its content through a crossword app. Just imagine the learning curve of the editorial team who are understanding in quite a new way which themes interest readers doing puzzles or how to analyse the opening rates of newsletters in which crossword customers are offered digital subscriptions to the New York Times. Or how news is formulated while also offering newspaper subscribers a really good crossword.

With e-bikes and e-scooters Uber is also developing its own business with a means of transport that just a few months ago was to be found at Toys‘R’Us. E-scooters are fun and you don’t look as ridiculous on them as you do on a Segway. The new Uber strategy should also have been the old VW strategy for another reason.

Bridge to understanding 2: Good products are not replaced by better products

At the zenith of their development, products are not replaced by better products of the same kind, but by products that solve the same problem differently. The PC was not replaced by a better computer but by a smartphone that solves the same problem in a better way. Autonomous driving is perhaps better car driving (because it is more stress-free), but e-scooters are a better way of getting from A to B in urban areas (because there is less congestion and it is more entertaining and active).

The Volksscooter could have been yours.

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Dummy advert to give an idea

VW’s Moia feels like a product from a corporation’s way of thinking. That might initially sound negative, but it’s not meant to be. A self-driving bus can take people from A to B in a much more direct way and has realistic chances of poaching lots of people from metros, trains and buses. It is clearly better than any train, absolutely sensible and, as described above, highly serious-cleverly calculated-logical-correct. But how often will people use it every day? Much more importantly: How quickly can a service like this be rolled out? What will it cost to offer comprehensive coverage? At the start, how often will customers be standing there without a car coming because there are only 15 out and about in the city? How quickly will the Moia app be deleted again because of this? How prematurely/quickly will the business case be labelled unsustainable?

An e-scooter is more convenient than a self-driving bus. Cheaper too. An e-scooter is fun. And it solves exactly the same user problem in a much better way (unless it’s raining). A car is not being replaced by an even better car and products are processes, which means that VW with an e-scooter offer like JUMP could more easily have progressed upwards to more complex offers such as weekend rental of hire cars, offers like Moia or even car sales etc. The new Uber strategy should have been the old VW strategy, but it wasn’t, because an e-scooter looks like a toy and is not taken seriously.

About minimum viable products and gravitation in the company

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Perhaps the development of an e-car should also have started with a skateboard

This is a funny graphic illustrating to managers what an MVP is. Namely not a car with just one wheel, but first a skateboard, then a scooter, bike and moped, then a car. This graphic is good because it makes it clear that products are processes and people can also get from A to B on a skateboard (just not as comfortably), but it is also good because it shows that you have to start somewhere.

Start by starting. The toy idea lurks in the MVP approach and with it the insight that people only solve problems by starting to solve them. Thinking in play patterns helps companies put aside a fear of failure and not get stuck in a kind of perfectionism that forces companies to plan highly serious-cleverly calculated-logical-correct concepts that in the end cost a lot of money and yet somehow don’t work.

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Irritating until inertia is overcome: the idea behind gravitation projects

In the gravitation framework we have developed a model we use to actively seek out moments of “fun” along the respective company’s customer journey that we then accept or reject with the help of quick tests, such as design sprints or keyword tests, and only then do we take the step towards business case development (and then implementation). We seriously advocate toy products and systematically look for moments of fun — but somehow, of course, at child we have childish ideas of naive and fun in the company anyway.

(Volkswagen is not a child client)

child is a strategy consultancy in Frankfurt that solves key digitisation issues in corporations through radical simplification.

Say hi: hi@child.team

Originally published in German at medium.com on September 3, 2018.

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