Why Understanding Business Models is Important to Ix Designers

24 Sep 2008 - 6:23am
6 years ago
13 replies
2090 reads
Jared M. Spool
2003

Interaction design is hard enough to do when the business model is
clear. When the designer knows exactly how making a better design will
increase the value of the company, (thereby increasing the chances
they'll get a raise if they do a good job,) it's still hard to know
what to do.

All one has to do is look to Apple to see how this works. When iTunes
6.0 came out in January of 2006, they introduced a feature called the
mini-store, which, for all practical purposes, bombed. (http://tinyurl.com/4snt6f
)

This past month, in iTunes 8, they reintroduced the same business
model, this time with a different interaction design called the
Genius. It looks like this new design of the old mini-store is going
to be a big contributor to Apple's next year of revenues. (How much?
Well, they are now selling more than 1 billion songs each year. The
Genius functionality could easily add another 20%-30% on top of that.)

Some model, different design, huge increase in revenues.

When the business model doesn't match the user experience or (as we've
been "discussing" in the insane-people's-death-match thread, aka
"Facebook Redesign") when nobody seems to understand what the business
model is, the designer can't know if they are helping or hurting the
company by creating a better experience for the user.

Creating a great experience can be an expensive investment. Unless the
designer can clearly show the value of that investment, they'll be
constantly fighting the forces of reducing costs to increase
profitability. It's always cheaper to produce crap, so if you don't
understand how quality factors into long term profitability, crap is
what will win.

Designers that can't talk to value in the business model also can't
explain why they themselves should be on the payroll.

This is why understanding the business model is essential to good
interaction design.

[Sorry if you feel this was an obvious missive, but, from other
conversations on this list, I felt it's something that needed to be
said out loud.]

Jared

Jared M. Spool
User Interface Engineering
510 Turnpike St., Suite 102, North Andover, MA 01845
e: jspool at uie.com p: +1 978 327 5561
http://uie.com Blog: http://uie.com/brainsparks

Comments

24 Sep 2008 - 6:39am
Steve Baty
2009

Jared,

Here here.

The lack of a clear business model - both cost and revenue components -
removes one of the key directions provided by the business to the design
team. Without it, we're shooting in the dark, basing our design decisions on
altruism or a popularity contest.

And it's just as important for us to be able to specifically target and
address cost-centric issues as it is revenue-centric ones. We need to be
able to speak to both types of design considerations. But it's not always a
question of 'quality versus crap' except in the most general terms.
Sometimes, its about creating a defensive position to stave off competition
rather than delivering some measurably or demonstrably positive result to
the business.

It's worth reiterating, and reiterating. And then reiterating some more.

Steve

2008/9/24 Jared Spool <jspool at uie.com>

> Interaction design is hard enough to do when the business model is clear.
> When the designer knows exactly how making a better design will increase the
> value of the company, (thereby increasing the chances they'll get a raise if
> they do a good job,) it's still hard to know what to do.
>
> All one has to do is look to Apple to see how this works. When iTunes 6.0
> came out in January of 2006, they introduced a feature called the
> mini-store, which, for all practical purposes, bombed. (
> http://tinyurl.com/4snt6f)
>
> This past month, in iTunes 8, they reintroduced the same business model,
> this time with a different interaction design called the Genius. It looks
> like this new design of the old mini-store is going to be a big contributor
> to Apple's next year of revenues. (How much? Well, they are now selling more
> than 1 billion songs each year. The Genius functionality could easily add
> another 20%-30% on top of that.)
>
> Some model, different design, huge increase in revenues.
>
> When the business model doesn't match the user experience or (as we've been
> "discussing" in the insane-people's-death-match thread, aka "Facebook
> Redesign") when nobody seems to understand what the business model is, the
> designer can't know if they are helping or hurting the company by creating a
> better experience for the user.
>
> Creating a great experience can be an expensive investment. Unless the
> designer can clearly show the value of that investment, they'll be
> constantly fighting the forces of reducing costs to increase profitability.
> It's always cheaper to produce crap, so if you don't understand how quality
> factors into long term profitability, crap is what will win.
>
> Designers that can't talk to value in the business model also can't explain
> why they themselves should be on the payroll.
>
> This is why understanding the business model is essential to good
> interaction design.
>
> [Sorry if you feel this was an obvious missive, but, from other
> conversations on this list, I felt it's something that needed to be said out
> loud.]
>
> Jared
>
> Jared M. Spool
> User Interface Engineering
> 510 Turnpike St., Suite 102, North Andover, MA 01845
> e: jspool at uie.com p: +1 978 327 5561
> http://uie.com Blog: http://uie.com/brainsparks
>
> ________________________________________________________________
> Welcome to the Interaction Design Association (IxDA)!
> To post to this list ....... discuss at ixda.org
> Unsubscribe ................ http://www.ixda.org/unsubscribe
> List Guidelines ............ http://www.ixda.org/guidelines
> List Help .................. http://www.ixda.org/help
>

--
----------------------------------------------
Steve 'Doc' Baty B.Sc (Maths), M.EC, MBA
Principal Consultant
Meld Consulting
M: +61 417 061 292
E: stevebaty at meld.com.au

UX Statistics: http://uxstats.blogspot.com

Member, UPA - www.upassoc.org
Member, IA Institute - www.iainstitute.org
Member, IxDA - www.ixda.org
Contributor - UXMatters - www.uxmatters.com

24 Sep 2008 - 8:27am
Dave Malouf
2005

I didn't find it obvious at all. So thank you!
-- dave

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Posted from the new ixda.org
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24 Sep 2008 - 10:19am
Andrei Herasimchuk
2004

Precisely.

Just as important, if you as the designer disagree with the business
model, then you should consider switching jobs or companies. I can't
tell you how many times I watch designers argue with business folk
over what the user wants as if what the user wants always trumps the
business model. (Again, why I hate the term "user-centered" design.)
Part of the job of design is reconciling the two, and perhaps, even to
offer more options or informed opinions to execs so they can correct
or modify their business models as they deem appropriate.

But to sit there and dictate to the person who understands the
entirety of the business, which includes paying you and everyone else
in the company, how they absolutely must change their business model
is hubris.

--
Andrei Herasimchuk

Principal, Involution Studios
innovating the digital world

e. andrei at involutionstudios.com
c. +1 408 306 6422

24 Sep 2008 - 10:52am
Nicholas Iozzo
2007

When I see my team falling into this trap, I reference the design of
seats at fast food restaurants. They are designed to only be
comfortable for a short time, they want to get you out as fast as
possible, but not so bad that you will not come back.

I have no problem calling it user-centered design if we are designing
something to be uncomfortable after 15 minutes.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Posted from the new ixda.org
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24 Sep 2008 - 11:35am
bminihan
2007

This comes at a particularly apt time in my career, as I'm the
CTO/lead designer for PrepChamps.com, a startup company intended to
help high school athletes get recruited into college. In such a
respected crowd as IXDA, I won't pretend it's my best design work,
but just wanted to provide context for the rest of this post, should
you happen to take a look.

The most difficult position to be in, as a designer in a pre-funded
startup company (we love our angels), is when the business model is
100% geared toward acquiring VCs. This is my third such startup, and
it's always a challenge to reconcile the need for the design to
simultaneously be enjoyable by its members (so they come back and
want to use the site) AND for the design to over-inflate metrics that
no one in their right mind really cares about anymore: page views and
click-throughs.

When the business model doesn't truly require the core business's
application (in this case, our web site) to achieve its technical
objective, designing for either users or administrators can get
extremely difficult.

On the other hand (I'm happy to report), we recently shifted our
objective entirely toward improving the technology to more
effectively meet its stated goals, rather than just pumping thousands
of page views at an app that isn't finished yet. I helped make the
case that if our application truly excels at its intended purpose,
we'll actually spend far less money acquiring and keeping members,
and be more attractive to VCs by our app's own merits. It took
awhile to get here, but I feel much better now to be working within a
company where all of us are focused on satisfying our user's needs
(including partners and advertisers), rather than trying to invent a
better way to attract VCs (I'm convinced there really is no easy way
to do that, until you don't need them anymore).

Related to another discussion: We auto-play videos on our home page.
I'm not a big fan of that, but when they brought me on to build this
version of the site, I insisted that wherever we auto-play a video, we
have to turn the sound off. Folks can still turn it off, or stop the
video with an obvious Play link, but since making the change, we've
received no ill feedback regarding the design, nor that the videos
are intrusive in any way.

As for fighting with the business about user needs: Yes, we often
argue about our member's needs vs the need to attract more members
and drive revenue. However, I try to justify all of the risks in
terms of revenue costs and benefits. That is, rather than argue,
"we can't force athletes to pay for contact with coaches", I state
that our stated mission is to level the playing field for all athletes
to get recognized and recruited for college. If we prohibit the
crucial piece of that process by charging membership, we have reneged
on our promise and will drive away athletes in droves. We found a
compromise that meets our business goals while allowing free contacts
throughout the site.

-- Bryan

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Posted from the new ixda.org
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24 Sep 2008 - 11:57am
Andrei Herasimchuk
2004

On Sep 24, 2008, at 8:52 AM, Nicholas Iozzo wrote:

> I have no problem calling it user-centered design if we are designing
> something to be uncomfortable after 15 minutes.

But can you at least see the ridiculousness of the statement itself?
The contorted logic to make the thought work? It's a means to an end
where the means doesn't even matter to the end.

It's needlessly complicated. Just drop the concept of "user-centered"
and treat design as what is: a problem solving activity regardless of
the constraints, be they technical, business or customer related.

--
Andrei Herasimchuk

Principal, Involution Studios
innovating the digital world

e. andrei at involutionstudios.com
c. +1 408 306 6422

24 Sep 2008 - 2:50pm
adamya ashk
2004

"Designers need to understand the business model to create effective
designs". Right on. Completely agree.

However, embedded in Jared's original post are two ideas that are a
frequent source of fun.

1. The business model is clear.
2. We can show that investment in the user experience adds value to
the business model.

Let's take the first. In my experience, business models go through a
certain 'evolution' in the process of being implemented (they evolve
later as well but that's another discussion). So, often, the folks who
came up with the cool idea need help in refining and understanding
certain ground realities. Knowing how users might react is a crucial
part of the process and the earlier this exercise in usability and
possibly IxD conceptualizing is undertaken, the better.

Why? Because it puts two very important tools in the hands of the
business; voice of the customer (usability) and a picture of what is
possible (IxD). I am generally open to questioning the business model
a bit if it helps us get to these faster. This is generally OK in well
mannered teams and should be encouraged as long as it doesn't derail
the process. If it irritates the business then you should evaluate the
reasons and proceed accordingly.

Now the second one, which is tougher. The history of our profession is
littered with dialog about the value of user centered design and what
it adds to the process. It's both external and internal. We are
comfortable selling it, yet constantly question it within. It's
tempting to say that it's a matter of showing the value of a good
experience. But that experience is rather intangible at first and the
result of an iterative process.

If it's difficult to show the benefit of a good experience how do you
make sure you're included? The one truth is that it's based on the
culture and makeup of the team. Build credibility and a reputation for
seeing 'reason' and they will flock to you. Putting in place a program
of regular usability testing goes a long way in educating people. And
nothing but nothing beats skin in the game (can be tough for
consultants :)

Sometimes, we have to be involved in projects where the business
objectives are a bit unclear or where we cannot with certainty say our
inclusion will add value. We should remember that every little bit
takes us forward.

-Adamya

24 Sep 2008 - 3:22pm
Anonymous

Adamya,
I am in that very position right now. I have been asked to come on board an
agile project where the system is exceptionally convoluted and I am denied
the privilege of training for the purposes of understanding the system.
The justification behind this is that the BAs want a 'fresh pair of eyes'
untainted by the system, it's habits and behavior.
I feel mislaid and am amalgamating to the best of my abilities my craft with
bits and pieces of the project. I'm trying to devour as much as I can simply
by listening to the team speak. I have been told not to try to understand
the system and that the system will 'snap' with me in due time (9-13 months
or so).
Even after reading Jared's opening statement and requesting and justifying
the need for the company's business model, it has been denied.
I have never been in a situation like this before, but my very presence
seems to be a source of inspiraton for the company.
I'm asked my opinion on everything and to justify data- which I do, but I
feel like a blind man leading someone with sight.
Any thoughts? Anyone?

On Wed, Sep 24, 2008 at 3:50 PM, adamya ashk <adamya at gmail.com> wrote:

>
> Sometimes, we have to be involved in projects where the business
> objectives are a bit unclear or where we cannot with certainty say our
> inclusion will add value. We should remember that every little bit
> takes us forward.

24 Sep 2008 - 3:48pm
Paul Eisen
2007

Closely related to this thread (and terminology), there is a posting by Jess McMullin on Boxes and Arrows reinforcing the necessity of balancing the value exchange between the business sponsor of an application and its end users: http://www.boxesandarrows.com/view/searching_for_the_center_of_design.

I found it by a web search on the term "value centered design".

Paul Eisen
Principal User Experience Architect
tandemseven

24 Sep 2008 - 4:34pm
Anonymous

Thank you gentlemen, (adamya for your private message)
I definitely going to run with your ideas. It's good to know others can
relate to me on this.

On Wed, Sep 24, 2008 at 5:03 PM, luke ryerson <lukeryerson at gmail.com> wrote:

> I was actually in a very similar situation like the one you described. My
> advice, continue to be the outsider. I know you feel like you would better
> serve with the knowledge and insight that the rest of the team has, but I
> garantee you this, they want 'Fresh Meat'. I'm sure they're all tired of
> listening to themselves say the same thing.
> Let your ignorance be your strength. As you slowly become more aware of the
> system, open the flood gates and let your true and natural ideas flow.
>
> On Wed, Sep 24, 2008 at 4:22 PM, Brett Lutchman <brettlutchman at gmail.com>wrote:
>
>> Adamya,
>> I am in that very position right now. I have been asked to come on board
>> an
>> agile project where the system is exceptionally convoluted and I am denied
>> the privilege of training for the purposes of understanding the system.
>> The justification behind this is that the BAs want a 'fresh pair of eyes'
>> untainted by the system, it's habits and behavior.
>> I feel mislaid and am amalgamating to the best of my abilities my craft
>> with
>> bits and pieces of the project. I'm trying to devour as much as I can
>> simply
>> by listening to the team speak. I have been told not to try to understand
>> the system and that the system will 'snap' with me in due time (9-13
>> months
>> or so).
>> Even after reading Jared's opening statement and requesting and justifying
>> the need for the company's business model, it has been denied.
>> I have never been in a situation like this before, but my very presence
>> seems to be a source of inspiraton for the company.
>> I'm asked my opinion on everything and to justify data- which I do, but I
>> feel like a blind man leading someone with sight.
>> Any thoughts? Anyone?
>>
>> On Wed, Sep 24, 2008 at 3:50 PM, adamya ashk <adamya at gmail.com> wrote:
>>
>> >
>> > Sometimes, we have to be involved in projects where the business
>> > objectives are a bit unclear or where we cannot with certainty say our
>> > inclusion will add value. We should remember that every little bit
>> > takes us forward.
>> ________________________________________________________________
>> Welcome to the Interaction Design Association (IxDA)!
>> To post to this list ....... discuss at ixda.org
>> Unsubscribe ................ http://www.ixda.org/unsubscribe
>> List Guidelines ............ http://www.ixda.org/guidelines
>> List Help .................. http://www.ixda.org/help
>>
>
>

--
Brett Lutchman
Web Slinger.

24 Sep 2008 - 5:28pm
netwiz
2010

On Wed, 24 Sep 2008 07:23:51 -0400, Jared wrote:

>Interaction design is hard enough to do when the business model is
>clear. When the designer knows exactly how making a better design will
>increase the value of the company, (thereby increasing the chances
>they'll get a raise if they do a good job,) it's still hard to know
>what to do.

I think it's pretty obvious, but worth stating nevertheless.

I think it's interesting to use an example, and I'd use The Home Page.
On ba.com and I'd guess many sites, there's a lot of competition for
what goes on the homepage. Different business areas all want their
stuff front and center (or top). We could design many homepages, but
we need to know what the business priorities are, and it's not always
easy to get clarity.

We know pretty well what the company is there for, but I think it's a
useful discipline for any page you design to have a clear statement on
what the page is for. It forces some of the debate around business
priorities, and flushes out assumptions and misconceptions. We don't
do it enough. The homepage is often taken for granted, but if you ask
people what it's for, you get different ideas, and some just don't
even think about it.

* Nick Gassman - Usability and Standards Manager - http://ba.com *

25 Sep 2008 - 6:19am
dszuc
2005

If you have piss off your customers, you have no business.

The magic is when you can achieve a delightful UX and make money for
the business.

Customers also have to understand the value a product or service
brings to their life and how its different to what they are using
now. If you cant do this, again you have no business.

Value - Tick
Usable - Tick
Delightful - Tick
Better than my alternatives - Tick
Stable - Tick
Secure - Tick
Friends rave about it - Tick

Where do I sign up?

rgds,
Dan

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Posted from the new ixda.org
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25 Sep 2008 - 6:28am
Kontra
2007

> If you have piss off your customers, you have no business.
>
> Value - Tick
> Usable - Tick
> Delightful - Tick
> Better than my alternatives - Tick
> Stable - Tick
> Secure - Tick
> Friends rave about it - Tick

Microsoft called, they want the '90s back.

--
Kontra
http://counternotions.com

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