from a good to an excellent product: achieving innovation

From a Good to an Excellent Product: Achieving innovation

with Living Labs and User Inclusion

January 2015, Sofia

Jens Schumacher SFC

Fostering students' entrepreneurship and open innovation in university-industry collaboration

You are not in an empty Space!

Neither is your Product or Service!

Fostering students' entrepreneurship and open innovation in university-industry collaboration Seite 3

Motivation

“Research is making knowledge out of money

- innovation is making money out of research” Per Eriksson, Director for the Swedish Agency for Information Systems

85 % of product development time is invested in products which never reach

the market. Reinhold Bauer: Kein Bedarf für Plastikräder. Freitag 43.

Only 18 % of the innovations brought into the market prove

sustainably successful. Innovation Network Austria Study. 2005.


“Given enough eyeballs,

all bugs are shallow.” Linus Torvald

“If I can tap into a million minds simultaneously,

I may run into the one that's uniquely equipped.” Business week 2005

“Crowds […] are smarter at solving many

problems than even the brightest individuals.” Business week 2005

Motivation


Leaders feel pressure for change – but also see opportunity in innovation

IBM corporation 2005


Sources of New Ideas and Innovation

IBM corporation 2005


Origins of the Living Lab Concept

MIT, Boston, Prof William Mitchell, MediaLab and School of Architecture and

City Planning.

“ Living Labs represent a user-centric research methodology for sensing,

prototyping, validating and refining complex solutions in multiple and

evolving real life contexts.”

Origins of the Living Labs approach:

- Smart/future homes

- Did not cater for wide multi-contextual aspects

- Various approaches to integrate citizen into value-creation process


Participation and Context

Ethnographical

Observation

Traditional

Empirical Social

Science Research

Low:

Observation

Living Lab

Experimentation

Traditional Lab

Experimentation

High:

Observation and

Creation

Multiple and

Emerging Contexts

Single and

Controlled

contexts

Knowledge Focus D

eg

ree

of

Pa

rtic

ipa

tio

n

cf. Scharmer


Bringing Product Development to the Customer

Tra

ditio

na

l L

ab

Real life Enterprise

C C

C

C C

C

C

C

C C

C

C C

C C

C

C C

C

C

C C Customer/Citizen

Liv

ing

La

b


Definition of Living Labs

“A Living Lab is a collaboration of Public-Private-Civic Partnerships

in which

stakeholders [enterprises, academia, public and civic bodies, customers]

co-create [collaborative product development from ideation to market deployment]

new products, services, businesses and technologies [enterprises, academia, public and civic bodies, customers]

in real life environments and [regions of with specific attributes – urban, suburban, rural, remote, …]

virtual networks [networks as regions in a virtual geography]

in multi-contextual spheres.” [in all roles and phases of the customers’ use]

Who

What

What

Where

When


European Network of Living Labs

A European Network of Living Labs will provide a research and innovation

platform integrating diverse social, cultural, regional and international

systems.


Benefits of Network Approach to Living Labs

_Extension of contextual possibilities by:

- Regional aspects

- Added context: urban, suburban, rural, remote, …

- Added context: multi-lingual and cultural context

_Higher comparability and thus value of Living Labs results.

_Harnessing regional sectorial specializations.

_Opportunities for customers to more easily enter new markets.

_Implementation of regional contact points for Living Labs

customers.


Layers of Networking Living Labs

Co

mm

un

ity

Te

ch

no

log

y Infrastructure network

Interoperable testbed and network

infrastructure

Application network

Common architecture (integrating all

stakeholders) integrating tools &

applications

Organisational network

Organisational and business structures

implemented, set of common

methodologies employed

„People“ network

Professional network of Living Labs

experts, regular workshops


Living Lab Country

Mobile City Bregenz Austria

Testbed Botnia Sweden

Mobile City Bremen Germany

Freeband Netherlands

Kenniswijk Netherlands

Cantabria Spain

Turku Archipelago Finland

Arabianranta Finland

i2CAT Spain

CASST Centre Ireland

Examples of European Living Labs


Living Lab Stakeholders

Living Labs

Stakeholder Mobil

e C

ity

Bre

gen

z

Tes

tbed

Botn

ia

Mobil

e C

ity

Bre

men

Fre

eban

d

Ken

nis

wij

k

Can

tabri

a

CA

SS

T C

entr

e

Ara

bia

nra

nta

Turk

u

I2C

AT

Public and Civic

Communities

X X X X X X X X X X

Public and Regional

Authorities

X X X X X X X X X X

Industry

X X X X X X X X X X

SMEs

X X X X X X X X X

Academia

X X X X X X X X

Investors

X X X X X X

Content Providers

X X X X X X X X X


Stakeholder Possible benefits of a Living Lab

Public and Civic Communities - Early access to innovative services

- Influencing the future of ICT

- Voice their needs before the product is developed

- Better quality of life by gaining better services and

infrastructure

Public and Regional Authorities - Direct investments – start up‘s

- Stimulates job growth in an innovative and creative

region

- Innovation Leadership

- Marketing aspects – publicity

Industry - End-user access

- Higher quality of products or services

- user-oriented products or services

- speed up of innovation

Benefits - Living Labs Stakeholder


Benefits of a Living Lab for the stakeholders


Content Provider - content evaluation

Service Provider - Evaluation of Services before market launch

- Usability improvement

- Ideas and/or concepts for new services

- better quality of the evaluated services

Infrastructure Provider -Fast deployment and uptake of Infrastructure



SMEs -Access to the network of the Living Lab (Academia,

Industry, Citizen…)

-Reduce financial risks by using the open testing

environment of a Living Lab

Academia - Research input

- Validation of research results in the Living Lab

- Partnerships/Access to the Living Lab network

Investors - Venture Capital for start-ups

Benefits of a Living Lab for the stakeholders


Main focus of the Living Labs

Main focus of the Living Labs

0

1

2

3

4

5

6

7

8

9

10

Technology driven Service driven Methodology Driven


Financing of the Living Labs

Financing of the Living Labs

0

1

2

3

4

5

6

7

8

9

10

Public-Private-Partnership


Duration of the Living Labs

Duration of the Living Labs

0

1

2

3

4

5

6

7

8

9

10

Permanent Structure Project orientated


Products & Services Living Lab Products & Services

Mobile City Bregenz

•mobile Broadband Infrastructure (e.g. UMTS HSDPA) •supporting the development of new innovative services for the citizens •Validation of the Services

Testbed Botnia

•Need finding services together with market stakeholders, end-users and evaluation. •Services for technical tests such as interoperability, conformance etc. Services relate to service platforms, access networks and terminals and include a range of technologies. •Usability testing supported by a variety of methods in labs or in real-world settings. •Full scale concept tests. This service supports the full concept test of a product or service including stakeholders, end-users in a real-world environment with an interactive evaluation.



Mobile City Bremen

Mobile Research Center: The MRC provides functional tests of mobile solutions in diverse hardware environments, product tests under lab and real environment conditions as much as ergonomic and usability tests. Mobile Solution Group: The MSG provides services regarding the sale and marketing of products developed within the Living Lab.

Freeband

The Freeband testbed provides testing, experimenting, validation, and an open playground for users, applications, middleware that support the goals regarding intelligent communication. Freeband enables support for (near) real-life validation and user experience measurement on services and/or products via sensing and logging of data from either a social context or hardware sensors, as e.g. generated by applications on mobile devices or by the underlying network.



Kenniswijk

•Creating and implementing a unique combination of Services and broadband infrastructure in order to break through the stalemate between infrastructure and services. •Strengthening The Netherlands’ international competitive position as a site for ICT companies. •Learning from the effects ICT has on spatial, social and mobility patterns and then sharing this knowledge with other municipalities (via the Stedenlink foundation (City Connections Foundation).

Cantabria

• Project office, in charge of management. • Evaluation activities, covering the validation

in the Living Labs from different perspectives.

• Dissemination and promotion • Infrastructures and services, meaning here

the flexible communication infrastructure • e-Administration and e-government specific

initiatives. • e-Health in rural areas. • e-learning and e-training in rural and

remote areas. • Other projects.



Arabianranta

Existing Services: •WLan Hotspots •Housing company homepage and eModerator •User studies Future services: •Multi Channel Mall (MCM) •Internet Protocol TV (IPTV) •IP based housing services

Turku Archipelago

The main services of Turku Archipelago are:

• Planning services

• Project management

• Interaction with users (citizen, educational

institutions)



i2CAT Catalonia Digital Lab

The services are: •Capacity of managing and supporting large ITC projects •access to high tech infrastructure like Internet2 Network of advanced media, grid or mobile services

Arc Labs Waterford

The centre offers: • Full remote access, allowing organizations

to gain direct access to distributed resources

• Access to all major mobile network and emerging technologies

• Access to a variety of service platform environments

• Solid evaluation of accuracy, reliability and performance of components installed and analysed

• User validation community • Showcase for services


Geographical Alignment

Geographical Alignment of the Living Labs

0

1

2

3

4

5

6

7

8

9

10

Regional National International


technology view

user

involvement co-creation evaluation

low tech

high-tech

Testbed

Botnia

Cantabria

i2CAT

Mobile City

Bregenz

CASST

Freeband

Mobile

City

Bremen

Turku

Archipelago Arabianranta

Madeira Kenniswijk

Wirelessinfo

Living Lab - Categorisation


Multi-Stakeholder

involvement

Focus

methodology

driven

technology

driven

low

high

service driven

Mobile

City

Bremen Turku

Archipelago

CASST

Kenniswijk

i2CAT

Testbed

Botnia Mobile City

Bregenz

Freeband

Cantabria

Arabianranta

Madeira

Wirelessinfo

Living Lab - Categorisation


User integration in existing Living Labs – Methodes & Methodologies

Product/Service

Idea

Product/Service

Concept

Product/Service

Development

Market

Launch

traditional methods:

_Customer complaints

_Interviews

_Focus Groups

_Empathic Design

_Participatory Design

_Story Telling

_Customer Suggestions

_Idea Generation with

Lead-Users

_Creativity Groups

eMethods:

_Online Interviews

_Online Focus Groups

_Online Suggestion Box

_Online Creativity Groups

_Market Intelligence Service

_Experience Sampling

Method

_Innovation portal


_Conjoint Analysis

_Quality Function

Deployment

_Concept Tests with

Lead Users

eMethods:

_web-based Conjoint

Analysis

_User Design


_Workshops with

Customers

_Prototype Testing

_Usability Tests

_Engineering Contests

eMethods:

_Dynamic Social Network

logging

_Virtual Prototype Tests

_User Toolkits

_web-based CAD


_Product Testing

_Test Markets

_Usability Tests

eMethods:

_Virtual Reality

_Augmented Reality

_Eyetracking

_Virtual Product Tests

_Virtual Test Markets

_Virtual and web-based

Prototype Tests

Product/Service

Idea

Product/Service

Concept

Product/Service

Development

Market

Launch

Product/Service

Idea

Product/Service

Concept

Product/Service

Development

Market

Launch


_Customer complaints

_Interviews

_Focus Groups

_Empathic Design

_Participatory Design

_Story Telling

_Customer Suggestions

_Idea Generation with

Lead-Users

_Creativity Groups

eMethods:

_Online Interviews

_Online Focus Groups

_Online Suggestion Box

_Online Creativity Groups

_Market Intelligence Service

_Experience Sampling

Method

_Innovation portal


_Conjoint Analysis

_Quality Function

Deployment

_Concept Tests with

Lead Users

eMethods:

_web-based Conjoint

Analysis

_User Design


_Workshops with

Customers

_Prototype Testing

_Usability Tests

_Engineering Contests

eMethods:

_Dynamic Social Network

logging

_Virtual Prototype Tests

_User Toolkits

_web-based CAD


_Product Testing

_Test Markets

_Usability Tests

eMethods:

_Virtual Reality

_Augmented Reality

_Eyetracking

_Virtual Product Tests

_Virtual Test Markets

_Virtual and web-based

Prototype Tests


Product/Service Idea

Product/Service Idea

0%

20%

40%

60%

80%

100%

Cus

tom

er C

ompla

ints

Interv

iew

s

Focus G

roup

s

Empat

hic Des

ign

Partic

ipat

ory D

esig

n

Story

Tel

ling

Cus

tom

er S

ugges

tions

Idea

Gen

erat

ion

with

Lea

d Use

rs

Cre

atvity

Gro

ups

Mar

ket I

ntelli

gence

Ser

vice

s

Onlin

e In

terv

iews

Onlin

e Foc

us Gro

ups

Sugges

tion B

ox

Cus

tom

er A

dviso

ry P

anels

Onlin

e Cre

ativ

ity G

roups

Log B

ehav

iour


Product/Service Concept

Product/Service Concept

0%

20%

40%

60%

80%

100%C

on

join

t

An

aly

sis

Qu

ali

ty

Fu

ncti

on

Dep

loy

men

t

Co

ncep

t

Test

s w

ith

Lead

Use

r

Web

-base

d

Co

njo

int

An

aly

sis

Use

r D

esi

gn

Eth

no

gra

ph

y


Product/Service Development

Product/Service Development

0%

20%

40%

60%

80%

100%

Work

shops

with

Cus

tom

ers

Produc

t Tes

ting

Proto

type

Tests

Usa

bility

Tes

ts

Engin

eerin

g Cont

ests

Web

-bas

ed C

AD

Dyna

mic

Soci

al N

etw

ork lo

gging

Use

r Too

lkits

Virt

ual P

roto

type

Tests


Market Launch

Market Launch

0%

20%

40%

60%

80%

100%

Product

Tests

Test

Markets

Usability

Tests

Eyetracking Time-

motion

studies

Augmented

Reality


Summary

• A product/service can‘t stand on it‘s own

• The Triple Helix is not enough

• There are enough methods to deal with stakeholder integration

• LLs have been sucessfully deployed all over Europe

• The combination of the LL methodology with Incubator/Accelerator promises a better market potential

From a Good to an Excellent Product: Business Canvas

Model

January 2015, Sofia

Martin Dobler SFC



Structure of the Business Model

• Representation and visualization of business ideas and business models

• Takes in account the four key elements of a business model – Who? The customer

– What? The offer

– How? The infrastructure

– How much? The finance

• “Canvas“ = inspired by artist who goes his artwork on a canvas paint


9 blocks to express the business model

• The nine blocks describe how a company makes money

• By editing the 9 fields it is possible to document a business model, to describe, analyse, and understand relationships


“9+2“ blocks

Next to the 9 blocks of Osterwald

Living Lab Approach

Cross Regionality

adjusted!


Implementing the business model

• Turning a business model into a sustainable enterprise, or implementing it in an existing organization

• To illustrate, the Canvas with Jay Galbraith’s Star Model is combined to suggest aspects of organizational design

• Galbraith specifies five areas: – Strategy

– Structure

– Processes

– Rewards

– People

• The business model is placed in the middle of the star as a “centre of gravity” that holds the five areas together.


THE “9+2“ BLOCKS


1. Customer Segments

• Questions to answer: – For whom are we creating value? – Who are our most important customers?

• Elaborate: – Common needs of customer – Common behaviors – Other attributes – Reasons why this segment is chosen

• Define type of customer segment: – Mass market – Niche market – Segmented – Diversified – Multi-sided platforms (or multi-sided markets


2. Value Propositions

• What value do we deliver to the customer? – Which one of our customer’s problems are we helping to solve? – What bundles of products and services are we offering to each Customer Segment?

• Define how value creation takes place (characteristics): 1. Newness 2. Performance 3. Customization 4. “Getting the job done” 5. Design 6. Brand/status 7. Price 8. Cost reduction 9. Risk reduction 10. Accessibility 11. Convenience/usability


3. Channels

• Questions to answer:

– Through which channels do our customer segments want to be reached?

– How are we reaching them now?

– How are our channels integrated?

– Which one works best?

– Which ones are most cost-efficient

– How are we integrating them with customer routines?

• Description:

– Actual interface with customers (communication, distribution, sales channels)

– Which functions are carried out in the channels?(exemplary)

• Raising awareness among customers about a company’s products and services

• Helping customers evaluate a company’s Value Proposition

• Allowing customers to purchase specific products and services

• Delivering a Value Proposition to customers

• Providing post-purchase customer support


• Define actual channel phase:


4. Customer Relationships

• Questions to answer: – What type of relationship does each of our Customer Segments expect us to establish and maintain

with them? – Which ones have we established? – How are they integrated with the rest of our business model? – How costly are they?

• Elaborate motivation: (exemplary) – Customer acquisition – Customer retention – Boosting sales (upselling)

• Define: – Type of relationship (personal, automated, etc.)

• Categories of relationships: – Personal assistance – Dedicated personal assistance – Self-service – Automated services – Communities – Co-creation


5. Revenue Stream • Questions to answer:

– For what value are our customers really willing to pay?

– For what do they currently pay?

– How are they currently paying?

– How would they prefer to pay?

– How much does each Revenue Stream contribute to overall revenues?

• Generating value streams per:

– Asset sale

– Usage fee

– Subscription fees

– Lending/Renting/Leasing

– Licensing

– Brokerage fee

– Advertising

• Type of pricing mechanism defined:

– Fixed pricing

• List price

• Product feature depended

• Customer segment depended

• Volume depended

– Dynamic pricing

• Negotiation

• Yield management

• Real-time-market

• Auctions


6. Key Ressources

• Questions to answer: – What Key Resources do our Value Propositions require? – Our Distributions Channels? – Customer Relationships? – Revenue streams?

• Define types of resources: 1. Physical 2. Intellectual 3. Human 4. Financial

• Getting resources by: – Ownership – Leasing – Acquired from key partners


7. Key Activities

• Questions to answer: – What Key Activities do our Value Propositions require?

– Our Distribution Channels?

– Customer Relationships?

– Revenue streams?

• Categories: 1. Production

2. Problem Solving

3. Platform/Networking


8. Key Partners

• Questions to answer: – What are our Key Partners? – Who are our key suppliers? – Which Key Resources are we acquiring from partners? – Which key Activities do partners perform?

• Define type of partnership: 1. Strategic alliance between non-competitors 2. Coopetition: strategic partnerships between competitors 3. Joint ventures to develop new businesses 4. Buyer-supplier relationships to assure reliable suppliers

• Describe motivation for partnership: (exemplary) – Optimization and economy of scale – Reduction of risk and uncertainty – Acquisition of particular resources and activities – …


9. Cost Structure

• Questions to answer: – What are the most important costs inherent in our business model? – Which Key Resources are most expensive? – Which Key Activities are most expensive?

• Drivers for business model: – Cost driven

• Leanest cost structure • Low price value proposition • Maximum automation • Extensive outsourcing

– Value driven • Focused on value creation • Premium value proposition

• Set characteristics: – Fixed costs (salaries, rents, utilities) – Variable costs – Economies of scale – Economies of scope


10. Living Lab Approach

• Questions to answer: – How are the users/citizens involved? – What participative LL Models/Methods will be used? – How is the LL financed?

• Stakeholder Involvement – All Stakeholders are involved – A participative innovation approach is chosen – Users/Citizens are involved in all phases of the project – IPR is defined

• Living Lab difference: – Why is LL approach suited for this project? – Will the LL approach affect the product/service outcome – How to sustain the LL after the project is finished


11. Cross Regionality

• Questions to answer: – Are Partners from Different Regions involved? – Is there a symmetric distribution of resources? – Is this planned as one- cross regional LL or with two independent regional Living Labs?

• Define characteristics of the cross regional partnership.: – Other region is used to expand the market – Customization of product/service to regional specialties – Co-development and deployment of cross-regional product/service

• Motivation for cross-regional approach: – What is the Value-added for the Partners in the different regions – Are the regional contexts addressed? – Is the cross-regional management addressed?


12. Advance over SOTA

• In which respect are you improving over the sectorial state of the art? – Technology innovation – Market innovation – Social innovation – Institutional innovation – Other

• Describe the characteristics of the thematic domain you are acting within: (exemplary) • Too few innovations are reaching the market • Too few innovations survive after marker launch • The potential of people’s involvement is largely ignored or discarded • Market size is too tiny • There are institutional barriers, local markets • Language and cultural issues prevent the formation of a European single market • …


13. Sustainability and Impact

• Will the consortium form a permanent Living Lab? If so, how shaped? – As a business/technology service provider to third parties – As a high-tech, R&D laboratory – As a University spin-off – As a Government initiative – As a single enterprise – As a business association – Other

• Will the LL be sustainable after the trial is finished? • Will the successful trial impact on:

– The economy – Society – Public Administration – The Academic Sector – Etc. – Of the Regions involved?

Key Partners

Key Activities

Key Resources

Value Proposition

Customer Relationships

Channels

Cost Structure Revenue Streams

Customer Segments

Customer Offer Infrastructure

Profit equation

Advance over the state of the art

Sustainability and Impact

Living Lab Approach

Cross Regionality

LL Dimension


Summary

• Canvas Business model well accepted and deployed

• LL has been deployed all over Europe

• The adapted Canvas Model takes into account the particularities of

Living Lab innovations

• Innovators often lack the skill to fill out the Canvas properly

• LL provide the resources and knowledge needed to fill the non-

technical areas of the Canvas model

• The „LL Canvas“ has been successfully demonstrated and deployed

in the Alcotra Project (Interreg)

Thank you for your attention!

January 2015, Sofia

Jens Schumacher [email protected]


from a good to an excellent product: achieving innovation

Documents