In 2011/2012, when Pinterest started fully and was growing its user base, the Founders and co-builders of the platform drove people to the site through social media platforms like Facebook. And in the literal, general sphere, it made sense to do so after all, Pinterest was an image-heavy, photo-looping platform. Facebook seemed like a great place to build a growth metric around. That is until Facebook pulled the plug on the ‘auto-share’ feature that it used to have. This put Pinterest in a search for a better way to build a growth engine.
After much ado about how users were engaging with the platform, the Growth team led by Casey Winters realized that Pinterest users were already creating boards full of pins and repinning content from other users, while also culling images found on the Internet on their boards. This led to a redesign of Customer Acquisition, engagement, and retention at Pinterest because they looked at the data on how users were interacting.
Data makes the world of commerce go round! It’s the literal fuel for turbo-charging and driving your business, platform or community forward. Making decisions, boosting revenue, and understanding how the market you are in works – are all products of a data-driven mindset and business. Even if you simply want to launch an idea and see how it goes, an understanding of data gathering and analysis will help you test that idea successfully, so you don’t end up expending energy in the wrong place.
In the early days of the dot com boom, you could get away with launching, rolling out and bingeing on ideas and products without having a data-driven mindset. But in the last 10 years, it has become nearly impossible to do so. You’d probably get away with it in the first few weeks/months of a new product, but after a while, you are expected to do better. It’s like having an algorithmic disposition. Your life, business, and mode of operation are made simpler and easier with algorithms. The sheer manner in which the human mind works is through data and pattern recognition.
To buttress with another example, when Payal Kadakia of Classpass saw that the initial plan of getting people to do a trial of sampling classes was being manipulated by customers who would sign up with different email addresses because they wanted to keep sampling different classes, she and her team decided to design the business around this hitherto negative feedback, they created a subscription offering. This is because their data showed a different use case from what they had predicted and prescribed.
Defining Business Design
Rotman School of Business defines Business Design as “a human-centred approach to innovation. It applies the principles and practices of design to help organizations create new value and new forms of competitive advantage. At its core, Business Design is the integration of customer empathy, experience design, and business strategy.”
As more people and organizations come to see Design in light of producing great ROI, it has become essential to apply design and design thinking to business problems to bring innovation to life.
David Schmidt in this post looks at Business Design in four ways:
- the application of design methods and processes to the development and innovation of business models.
- value creation and value capturing.
- transforming a value proposition into real business value.
- making sense of new value creation by thinking in relations.
Cleantech Business Design’s, David John Kaye reiterates that during a discussion with Lorenz Koder Fort at IDEO, he learned that the key activities of a business designer are: understanding the business and the competition providing industry perspectives designing experiments for prototyping measuring the results of those experiments identifying risks and mitigating strategies identifying differentiation strategies developing business models/cases with financial models to support investment.
The LinkedIn profile of Alvaro Rojo, Business Design Lead at Fjord gives a good breakdown of what Business Design means to him – applying proven and emerging methodologies from design thinking, business strategy, and learning entrepreneurship.
Getting Started with making Data-driven decisions in business design
As you build your business process, create products and improve upon them, it becomes imperative to collect data and use the data to improve the different aspects of your business. Intuition, as you grow your business, is no longer enough, you’ll need to inculcate insight garnered into your decision-making. The facts that come from data-driven insights can be used to guide operations, iterations, and changes that’ll catalyze things.
Product managers can use the insights gotten from data to improve products, cut down features that are bringing less impact to the bottom line and focus on what users are using. Sales Managers and representatives can use customer insights and persona information to increase sales and cut down losses.
Related Post – How to Inculcate UX (User Experience) into Your Marketing Process
How do you then embark on making data-driven decisions?
First, identify your data sources. If you have analytics set up, you can hone in on where customers and users are coming from, which part of your platform they interact with the most and where they drop off. For example, if you notice that 80% of customers leave your platform at the point of purchasing an item listed on your website, you can tell that there is something wrong. So, you give a percentage of them a call to know why they don’t purchase. Is the pricing too steep for the market you are targeting? Or are you targeting the wrong set of people? How are these users being acquired, perhaps that’s the problem?
Identifying how to get data is a very important step in making decisions.
Then you gather the data (can be quantitative or qualitative) you’ve gotten, clean it up and try to see if a pattern has formed. If you notice a pattern – a certain age group, how users are using your product or how they are interacting with your business, why they are buying – then you know you’ve hit something tangible that can be ploughed into how your business is designed.
An important note is to let your users’ and customers’ insight guide you. Don’t get hung up on being prescriptive and stubborn on the manner you think your product should be used as opposed to the insight that shows you how it is being used.
Map out the patterns you’ve seen graphically so that it’s clear and descriptive and everyone who sees it understands.
Then begin to strategize with your colleagues or employees on iterations that need to be done based on the pattern that you all have seen.
This piece was first published on Acumen Digital’s blog.
