“Speed of learning is the new unfair advantage.” In early March this quote opened our three-day training by Ash Maurya, the founder of Lean Stack, at our Direct People office. At the time it sounded like a good catchphrase. They often sound much better in English than in Czech. They are appealing but we are often unsure what they truly mean. But fast forward three weeks and the meaning of the quote could not be clearer to me.
The general opinion is that we are currently facing one of the greatest challenges of our generation. Even if the lockdown ends tomorrow, things will not be the same for a long time. Maybe never. Although many associate this notion with a big “unfortunately”, I sense a certain degree of “fortunately”. For years, many certainties were taken for granted or as difficult to disrupt. Today, these certainties are being shaken to their core. Only few of us believe that everything will return to the original state of things. In September 2008 when thousands of people were carrying their belongings in cardboard boxes out of the Lehman Brothers headquarters, we were told to remember it, because “history was written” that day and “nothing will be the same”. Many people panicked, sold everything they could, many thought the end of the world was coming. Some people really did lose everything. For others, it was an opportunity of a lifetime.
We feel that a similar mentality is creeping into business these days. As if we were at a tipping point. We’ve awaited “a crisis” for a long time but now it’s here and nobody knows what’s going on. Maybe we imagined it differently. Some might think: “It was supposed to come from the big banks again. But a virus? That’s like from a lousy catastrophic movie.” Crises, however, can never be planned and they never follow the same path.
The current situation offers us great opportunity for self-reflection and shows us what is not essential. Every day of our projects is dedicated to researching and thinking about what people need, want, what motivates them to get over barriers, etc. In the last few years, we were all overwhelmed by the amount of choices. For years, finding a crack in the market was not easy and innovations were mostly incremental. But now we are entering an unprecedented time, when people will reassess what they need, what they want and how they want to get it.
For many organizations, business has gone from 100 to 0 within a day. Others have jumped from 100 to 200. If you find yourself in the former group, don’t get discouraged. Instead of panicking, spend your energy on quickly understanding the new order of things. Familiarize yourself with the situation and invest in business models that make sense. Here is an example of how our innovation designers think about the ongoing changes.
Digitalization or digital transformation are buzzwords that have been present in all corporations, small businesses and government services for a long time. Pretty much every corporate project that I took part in in the past 7 years had something to do with it. The main goal was usually to automate, simplify, go paperless, add another distribution channel, make something mobile, etc. Although many organizations tried to take digitalization seriously and they poured a lot of money into it, the result often was that “digital” became a minor, additional channel. Many people in these corporations remained convinced that people don’t want to do certain things digitally. They talked about the force of the habit, they didn’t want to change. But now with everyone on lockdown, all organizations have a unique opportunity to experiment with their digital channels and implement even those use cases that they were afraid to digitize for whatever reason.
Online experiments do not mean dropping everything and building digital channels costing millions of dollars. It’s better to start with easy experiments: testing the service on a smaller scale to find out if it’s a move in the right direction. For example, March and April are the perfect season to replant plants and gardens after winter. Under normal circumstances, gardening supplies shops would be packed. If you have a gardening supplies shop and you don’t have an e-shop, before you build one, you can first try accepting orders via email or phone. You can use an existing delivery service or a few seasonal workers to cover the logistics at the beginning. You can first launch the service in close proximity to your shop and watch if it catches on. Or try selling your goods through an existing eshop first. You can even test multiple ways and compare which one works best. Similar tendencies are apparent in car dealerships that started delivering cars to people’s homes during lockdown. Real estate agencies try to minimize the number of physical home tours using virtual home tours. As they say, 80% of success is showing up and the timing for getting into digital has never been better.
Obviously, people are more willing to solve their needs online when they are forced to stay home. It’s also evident that such experience will shift the demographics of those shopping via your online channel. If you already have a running online channel, now is the time to focus on who uses it and think about how you could grow this particular customer base. Look at Rohlík, the grocery home delivery service, as an example. Just as the lockdown hit, they created a separate service designed specifically for older people. The main goal being, of course, helping old people who are the most endangered group among us. At the same time though, setting up such a service can significantly help Rohlík attract new groups of customers to their service. Customers who had not trusted online food shopping and they simply for whatever reason had not been motivated to give it a try. It’s clear that once the lockdown ends many people will return to their original habits and continue to handle things offline. However, we can also assume that some will retain their newly acquired habits from the lockdown because they will have had at least one (hopefully) good experience with your online service. That’s why the current state presents a great opportunity to get certain people over these barriers and you can benefit from it in the future.
Bringing your business model into the online world seems to be an obvious step in the current situation. However, it’s also worthwhile to think more broadly and evaluate very honestly what “purpose” is your service or product helping people achieve and look at it from a new perspective. As a simplified example, imagine that you own an average restaurant. Suddenly you have to shut it down because of the lockdown and you feel the impact on your finances immediately. To keep your business above water, you know you have to act. And that’s a great opportunity to look at the “job” your restaurant normally helps people complete in more detail and maybe you discover a new service which you can offer at this time and get paid for it. Because solving the problems for others will always work better for your business than only looking for solutions to your own problems.
The most important step is not asking just yourself, but asking other people, your current and past customers. If we simplify this for argument’s sake, why do people go to restaurants? Mainly because they want to eat. Why do they want to eat? So that they would not be hungry. And how else do they solve their hunger problem, especially now when they are locked at home? They either cook themselves (or someone else from the household does) or they order a food delivery. And what are some problems with these solutions? Some people can’t cook, some people don’t have time to cook, others don’t have anyone who would cook for them, some locations are not covered by food deliveries and for many people, food delivery is expensive and they can’t afford to pay the fees every day. So with all these barriers, what could a restaurateur offer to solve these problems for people in the lockdown? A clear solution seems to be bringing the food to the people through a food delivery. Many restaurants that refused to follow the food delivery trend before this crisis ended up giving it a try when they were forbidden to let people in their branches. However, simple food delivery will not make up for all of your losses. The competition in food delivery apps becomes enormous within a few days and for many people, the fees associated with food deliveries will still be too high. Therefore, when trying to solve your situation, it’s important to inspire yourself by the less obvious problems of your customers.
Your fictional restaurant could for example make an online course for complete beginners (start with simple Youtube videos). Because what better time to learn to cook than during a lockdown? You could add advice about what ingredients to buy. You can focus on cheaper food deliveries, making it cheaper by letting people choose their meal one day ahead or letting them vote which meal will everyone get the next day like in a school cafeteria. You can introduce meal subscriptions where people don’t have to manually order their meal every day (what, when, how much), but they simply get a meal delivered at a specific time slot every day without having to think about it. You can also start covering locations that are underserved by current food deliveries. There are many ideas and approaches but the bottomline is: the better and more openly you listen to people’s problems, the better chance for your ideas to be successful.
Some of you might say that none of this will work and list many reasons why. We prefer not to build our decisions on assumptions. We test ideas before we “kill them”. If there is existing competition, learn from their mistakes and do it better. All ideas mentioned above can be tested on a smaller scale, quickly and simultaneously. If you have one hundred ideas, choose those that you believe in the most and start with those. Choose those that you can test quickly and cheaply, using your existing or easily accessible tools and competencies. Test if anyone would be willing to pay for your idea on a small scale.
Don’t assume that you will get it right the first time. Learn from customer feedback, tweak your solution and test it again over and over until you fine-tune a new functional business model. This is exactly the learning that Ash talked about. The learning that will move you forward. It’s the way our innovation designers think and how we built dozens of new products and services. You can apply the same way of thinking to any industry and walk out of this crisis perhaps shaken, but richer in a new “unfair advantage”.