Happi Case Study
Project Happi has been a great example of how the design process can lead a project down an unexpected path. Phantom Design worked with Switch Innovation to take an idea through validation and into product prototypes. Through understanding the target market, their real problems and priorities, we were able to use quick and dirty testing methods to iterate towards a pilotable solution.
The Idea
As is the case with most new businesses, Happi started off with a problem to be solved. Two successful fintech entrepreneurs set out to find a way that ‘Dead Capital’ could be untapped to assist low income individuals in moving up the economic ladder through financial inclusion. Considering the RDP housing backlog in South Africa, this form of capital seemed like a good place to start. The entrepreneurs we were working with had a background in debt collection, and they’d seen how much traditional affordability assessments were failing regular people. Ten million South Africans are over-indebted, meaning that loan businesses are not doing a good enough job making sure that people can afford to repay their loans.These problems seemed to feed one another as South Africans were being given assets in the form of RDP houses but were unable to use them in order to obtain lower interest rates through secured lending.
We started off with a Design Thinking workshop. We used tools such as journey maps and customer profile in value proposition canvasses to form hypotheses around the major challenges and driving motivations in the current context of RDP deeds issuing and lending to low income individuals. The hypotheses would feed into ‘How Might We’ questions to brainstorm around possible ways of addressing problems in this space. This helped us shape a research plan for our first round of customer interviews.
Customer Discovery
In order to better understand the problem,we chose a few different types of people to talk to.
- RDP home owners
- Lendees that were unable to pay debt
- Financial institutions
- Intermediaries like conveyancer attorneys, technology suppliers, NGO’s and debt collectors
These interviews had some surprising outcomes! They allowed us to invalidate some of our original hypotheses, identify the main pain points for each of the groups and also gain a better understanding of the context in which each of our stakeholders was operating. Some of the most impactful findings were:
- RDP homeowners are concerned about the inheritance of their new legacy
- A significant amount of our interviewees had used unsecured lending at high interest rates or lent money from ‘Mashonisas’ for various reasons
- Home owners had resorted to informal methods of selling their houses without a proper deeds transfer
- Banks were not completely comfortable using RDP homes as security from an ethics perspective
- The current conveyancing process is not well suited to high volume low value transactions
Developing the Opportunity
Armed with rich insights and a better understanding of the stakeholders in this space, we prioritized getting a prototype into the hands of people who could guide us in the right direction. Design Thinking requires a project to constantly diverge and converge through various iterations of a solution. We had diverged by opening up our interviews to varying stakeholders. It was now time to converge our learnings into possible solutions that could be discarded or further developed.
We decided that sales decks would be the best fit for this phase. These presentations could be easily thrown away if our ideas were a bad fit or easily built onto in higher fidelity if we were on track. The prototypes would also serve as conversation starters that could lead into further understanding of this complex space. Focusing on 4 problems, we created high level solutions that could (in theory) provide a solution:
- Inheritance anxiety: A DIY will solution could help individuals to formalise the estate management of their new assets in a simple way.
- RDP deeds distribution: An alternative deeds registry that leverages decentralised technology like a blockchain to transparently make asset ownership and transfer accessible
- Asset transfer complexity and cost: A simple way to automate the document gathering phase of asset transfer, allowing for a high volume of transactions at a lower cost
- Backyard lending: Helping new homeowners to leverage their new asset to build an income generating asset that provides lower cost accommodation
Taking our decks out into the wild quickly showed us that there is an active eco-system forming around solving issues in the inclusivity space. Getting expert eyes on the sales decks made us aware of holes in the value propositions as well as valuable elements that could solve real problems. We spoke to NGO’s, municipal representatives, tech startups and other relevant organisations in order to prioritise the most relevant solution. Backyard lending came out on top.
Validate the Solution
It was now time to dig deeper into the practicalities of forming a business around this concept. Using a Business Model Canvas proved useful in ironing out the finer details like revenue streams and distribution channels. This also pointed out a few risky assumptions that would need to be validated for the business to be successful. These assumptions would be the basis for the next higher fidelity prototype and testing process.
The chosen prototype for this round was a clickable iPad interface and cards that could be used for prioritisation exercises with the target market. Using the iPad interface, our potential users could interact with our proposed solution and provide feedback on what parts of it were and weren’t attractive. After testing the general solution, users were asked to choose their favourite options for different features. This type of testing was inspired by card sorting where users cluster and prioritise different parts of a solution.
The Numbers
Now that we were sure that customers wanted the solution, we needed to ensure that there was a big enough market to make it feasible as a business. We did this by sourcing data from various surveys and reports in order to understand the likely size of the market from both a demand and supply perspective. By playing with a few variables like market penetration level and geographies, we could see possible routes to grow the business in different ways.
The Outcome
The product of this validation process is a business model that will now be released into the world through a ring-fenced pilot. Following the build, measure, learn loop as a principle; this pilot will provide further data points that we can use to optimise the offering. Design often appears to be about making pretty stuff but a process like this reveals the science behind creating solutions. While learning more about this market, there were also a few lessons learnt by the team, these included:
- Innovation isn’t always about technology: Yes, tech can be applied to optimise or scale a solution but the underlying value proposition needs to be validated first.
- Trust the process: It can sometimes be hard to let go of an awesome idea and let a new concept take its place as your focus. Through validation and testing, we came up with a more refined and quite different solution to what was originally envisioned.
- Learn from others’ schools fees: In the ‘Developing the Opportunity’ phase, we were exposed to all sorts of war stories where other organisations had tried different solutions and failed to solve a problem. These saved us time and money by preventing us from making the same mistakes.
- Don’t build in stealth mode: If we hadn’t been willing to share our ideas with other people, we would have never been able to benefit from their experiences and build a more future proof business.
