Thoughts

Viabil*ty: Why is the design community making viability a dirty word?

June 15, 2020

Few artefacts have been indoctrinated into the innovation establishment quite as much as that venn diagram. Used in slides across the globe to represent the perfect balance of things people want (desirability), that are technologically achievable (feasibility) and make some money (viability), the framework has rarely been challenged as the motif for design thinking.

At some point, a subset of the design community has flipped the rules that make the framework so sensible. They have tweaked its application to serve their own purpose - intentionally or otherwise.

They will rightly tell us that we should focus first on customer value. But the initial idea - that innovation should start with the customer (and not a spreadsheet or a technology solution) has been lost along the way - distorted through the lens of desirability, feasibility, viability.

At some point, there was a sleight of hand, something that said "start with desirability". Desirability has taken a greater weighting than its less glamorous and more idea-limiting venn housemates. In some cases, desirability has become the lens through which to view feasibility and viability

Oh dear. 

It’s little wonder then that the innovation outputs of big corporates who have sipped the kool-aid, donned their best pair of Converse and hired astro-turfed design agencies have seen the same results again and again - “lovely interface, fun friends and family trial, not sure it will work in the real world”. 

Why?



Desirable enough - Yes or No?

A design agency might design a product and validate it with customers, they may even scale that testing, they may quantify it, they may get something live in market, and even show that they will pay for it.

They'll ‘prove’ desirability.

Right? ....Right?

But how desirable does it need to be? Are we creating enough value?

Here's the issue: Desirability isn't a hurdle, it's a spectrum. Asking 'is it desirable enough' is like asking 'how long is a piece of string'. Or asking ‘is the engine big enough’, when you don’t know if you’re building a Moped or Jumbo Jet. 

There is no way to answer 'is this desirable enough' by itself. "Desirable enough" is enough people paying a high enough price for us to make a profit over time, against the backdrop of a competitive market. .

Put that way, "desirable enough" starts to look a lot like "viability", doesn't it? 

You gotta capture what you create

Desirability, or value creation, isn't the limiting factor. Value capture is.

Value capture is what happens when your product or service leaves the nursery slopes of incubation and hits the real world. When you swap early adopters for real, fickle, customers with endless alternatives to your product available to them. When you swap closed tests for competitive markets. Value capture is making real customers pay real money for the thing that you've designed.

Can you capture enough of this value for this to be viable given the cost structure to deliver it? Can you scale, given competitive pressure on pricing, given your cost of acquisition, given retention rates?

Every business starts with creating value for a customer. That much is true. But when you're designing a business, you have to design it backwards from the viability you need to deliver. (As opposed to forwards from the product you’ve designed). 

This will tell you how much value you need to capture, it will tell you the cost structure required, it will tell you how much you have to invest, it will tell you where your key assumptions lie. And in doing so it will tell you how much value you need to create, the choices you have available to you, and what your product needs to achieve.

This may mean creating less value if the activities don't generate enough value in return. It may mean deliberately making it less desirable. Because desirability isn't a constraint. You're optimising for the minimum required return. You wouldn’t expect a steak dinner on a RyanAir flight would you?

Problem/solution fit isn't enough. Demonstrating a huge market of paying customers isn't enough. The point of a business - unfortunately or otherwise - is that it needs to return its cost of capital; i.e. make economic profit. So you need a business model that can work in a competitive market: the combination of your proposition, your delivery model, your commercial model.

Designers talk a lot about 'designing for constraints', but in business, the single constraint that matters most is "will this generate a financial return". This, and only this, is what makes the difference between a project and business. 

The design process isn’t: build a business model around this product. It’s design this product within this business model.

You can't focus group your way to a viable business model. You can't empathise your way to a profit model. Design thinking is not an excuse to abandon business fundamentals. Anyone who says it is doesn't understand the world of commercial design.

There's a thin line between "design-thinking" and designing for a perfect world that will never exist. And the difference is in the balance between viability, desirability and feasibility. If only there was a framework to visualise that...