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DG512 Designing Tangible Business Models Assigner: Camilla van den Boom24-03-’14

Rosa Hendrikx, s128521Vera van Ommeren, s126228Piet Overgoor, s128891Veerle Wijshof, s126228 Silvin Willemsen, s120954

EindhovenThe Lab of Innovation

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Foreword

Foreword.

Before you is the final report of the as-signment DG512 Designing Tangible Busi-ness Models. We are five second year stu-dents Rosa Hendrikx, Vera van Ommeren, Pieter Overgoor, Veerle Wijshoff and Sil-vin Willemsen and and we worked togeth-er through the whole process. The assign-ment was given by Camilla van den Boom.

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Abstract

Abstract.

The case of this assignment was to create a tangible business model of Eindhoven; a complex ecosystem instead of a normal business. Design and business thinking had to be combined in a short time without too many literature studies. At first the custom-ers were analyzed and a clear view of every-body that enjoys the value of Eindhoven was made. After that the whole business model canvas with all the segments was filled in. This model had to be presented to a pan-el of experts in a tangible format. The met-aphor of Eindhoven being a laboratory of innovation fitted best so a tangible labora-tory and a video was made and presented to the panel, which was very enthusiastic.

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Introduction

Introduction.

This assignment is all about seeing the world through the eyes of business models. It is taught in a practical way so not too much literature studies but a hands on approach and a rel-evant subject. In this case it was the City of Eindhoven from a business perspective. Our task was to ‘crack’ the code of the city and figure out the strength of Eindhoven. The city became 3rd in the FDI ranking of Euro-pean cities with the best invest-ment climate. Why is Eindhoven so innovative? That was the question we had to answer.

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Customer Segments Empathy MapBusiness Model Canvas Key Resources Key Activities Value Channels Relations Partners Cost & RevenueTangible Model Process ResultConclusion Experts GroupAfterword

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6Customer. The first step in making a business model is to understand your

customer really well. Know what he or she feels, thinks, hears, does and most important what are her pains and gains?

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Define the customer segments in Eindhoven wasn’t easy. There are many different people involved with this city. They all have different needs, wishes, channels, pains and gains. Because there is more than a single group of customers in Eindhoven we sep-arated them in five different groups which are the tourists, stu-dents, companies, expats and the government. All the people who get value from Eindhoven are within these groups.

Segments. Government.

Tourists.

Students.

Companies.

Expats.

8 Customer Empathy Map of the Customer of Eindhoven.

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Empathy Map. After that, a customer empathy map was made to find out what the relation is between Eindhoven and the customers and to know if the five groups shared similarities in the way they experience Eindhoven.

As you can see in the customer empathy map there are a lot of different ways of experiencing Eindhoven. Although the map looks like a chaos but there are a lot of similarities be-tween the five customers. All the information was extracted so the fields of the empathy map only contain a single statement that summarizes the different experiences of the groups. This gave us the chance to define only one customer who experi-ences all these elements. The customer of Eindhoven creates its own value, it feels pressure, it is inspired, it wants to inno-vate, it sees possibilities and it wants to distinguish itself.

Inspire

DistinguishPressure

Possibilities

Value Creation

Innovate

10Business Model.

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Customers. The customers of Eindhoven are students, companies, tourists, expats and the government. They all profit from the activities and the value in Eindhoven. Stu-dents do this by going to university, or other schools, where they gain knowledge or creativity. The tour-ists come to Eindhoven to go to the events that are organized here because they are interested in Eind-hoven and what it is doing. Expats come to this city to learn about a different culture, a different way of education or working and take this with them to the countries where they came from. The companies that are vested in Eindhoven use the ground they build their companies and make sure that research is pub-lished. The government profits from the activities that are organized in Eindhoven and the students that come to study here.

Government.

Tourists.

Students.

Companies.

Expats.

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Key Resources. The most important resources of Eindhoven are net-work, knowledge, creativity and infrastructure. A net-work between companies, students and other cus-tomers and partners are important to make events in Eindhoven happen. Knowledge is needed to do research and to educate other people in Eindhoven. Creativity is necessary to create events like the Dutch Design Week and Glow and to get new ideas to make Eindhoven a better city. It is also important for inno-vation; without knowledge and creativity this can’t exist. The infrastructure is needed to bring all this in-formation, knowledge and creativity to everywhere in Eindhoven and outside Eindhoven.

Knowledge.

Infrastructure.

Network.

Creativity.

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Key Activities. In the part about the key resources was already some information about what the activities in Eindhoven are; innovate, educate, expose and doing research. These are necessary to create the value of Eindhoven. Innovation can be done on places like the High-tech Campus and companies like Philips. Education is giv-en on the TU/e, Fontys, Design Academy and other education institutions. Research is done on the uni-versity and in different companies to make Eindhoven a more innovative city. All these findings and creative ideas also have to be exposed so people know what Eindhoven has been doing. This is done through dif-ferent events for example, like Glow, Dutch Design Week, Dutch Technology Week and more events.

Expose.

Educate.

Research.

Innovate.

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Value. The value of Eindhoven can be summarized in one sentence: ‘the possibility of innovation and crea-tion which creates an energetic environment where customers get inspired to add their own value’. This means that people want to add their own creativity and knowledge to Eindhoven because they get in-spired by its energetic environment. This energetic environment exists because Eindhoven makes sure that there is a possibility of innovation and creation. Everything is possible in Eindhoven; this is what it makes it inspiring.

‘The possibility of in-novation and creation which creates an en-ergetic environment where customers get inspired to add their own value’

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Channels. The channels to bring the value of Eindhoven to the customers are the news, events, and viral marketing. One of these channels, the events, is also an activity of Eindhoven. Eindhoven reaches customers through events because they show what Eindhoven has been doing and in that way customers get attracted to Ein-dhoven. The city talks about new innovations and ide-as on the news and in different articles. Viral market-ing can be divided in worth of mouth advertising and social media. Customers like tourists and expats tell other people about Eindhoven and why you should come to this place. They also spread these things through social media and the internet.

Events.

Viral marketing.

News.

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Relations. The reason why customers keep coming back to Ein-dhoven and why new customers get attracted to it is because of the attractiveness of Eindhoven and its en-ergetic environment. Eindhoven is attractive because it is an innovative city and there is a lot of opportunity to create and innovate. This makes it also an ener-getic environment where everything constantly keeps growing. This means the relationship with the cus-tomer is a lot like the value proposition of Eindhoven.

Attractiveness

Energetic Environment

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Partners.In Eindhoven the customers are the same as the part-ners. This is because the students, companies, tour-ists, expats and the government both profit and put effort in Eindhoven. The students share their crea-tivity and knowledge they gained or already had to the world by showing it on events such as the Dutch Design Week. The tourists and the expats make sure other people know of Eindhoven so that new custom-ers will come to the city. The government puts money in the activities that are done in Eindhoven. The com-panies also take a part in making sure that there is something to expose to the world.

Government.

Tourists.

Students.

Companies.

Expats.

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Cost &

Revenue.To make Eindhoven a city that grows, a lot of ener-gy, money and innovation has to be put into it. These are all necessary to make events, education and other important things in Eindhoven happen. Without these activities the value of Eindhoven doesn’t exist. Be-cause in Eindhoven an ongoing process of innovation is happening, more customers get attracted which means more resources are available and thus more activities can be executed. This is why Eindhoven keeps growing and the revenue of this all is twice as much energy, money and innovation.

Energy.

Innovation.

Money.

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Flow. Below, the flow of the business model is written, where is explained how all these different segments create an ongoing loop.

Eindhoven is an environment that enables value crea-tion through experimentation, innovation and design-ing. This value cannot be created without people who are inspired to experiment, innovate or design.

In a usual business model the value flow goes from left to right, from partners to customers, and stops at the customers. In Eindhoven this is an ongoing pro-cess where the customer returns as a key partner and in this way adds his or her own value to Eindhoven.

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Flow. The customer segments of Eindhoven are students, companies, tourists, expats and the government. These customers are quite different from each other but they all share the same feelings about Eindhoven and what they want to add to this city, as you can see in the customer empathy map. They all gain knowl-edge and use it to make Eindhoven a better and more innovative city.

These customers are very important but the value of Eindhoven doesn’t exist without the key activities and the resources that are needed to create these activi-ties.

The key resources of Eindhoven are a network, knowl-edge, creativity and the infrastructure. These things together are used to create the activities of Eind-hoven. These activities are innovating, educating, doing research and exposing these things, like in the Dutch Design Week or Glow.

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Flow. We think that the customers, the resources and the activities together form the value proposition of Ein-dhoven; “the possibility of innovation and creation which creates an energetic environment where cus-tomers get inspired to add their own value.”

For the value of Eindhoven to reach its customers, channels are needed. These are viral marketing, the news and events such as the Dutch Design Week and GLOW. As you can see, some activities of Eindhoven are also channels to reach the customers.

The reason why customers keep coming back and the fact that Eindhoven gets new customers is because of the energetic environment and the attractiveness of Eindhoven that is created by the customers that have become partners of Eindhoven.

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Flow. The partners of Eindhoven are the same segments as the customers. The special thing about the business model of Eindhoven is that the customers become partners if they participate. The customers thus add their value to the partners. The partners, on their turn, add their value to both resources and activities clos-ing the loop.

This all can be possible of the innovation, energy and money that is put in Eindhoven to make it an innova-tive city. Because new customers keep getting attract-ed to the value of Eindhoven, the city keeps growing and more energy, money and innovation will be cre-ated.

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Tangible Model.

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After completing the business model canvas, it was time to come up with a metaphor for the tangible business model. A presentation needed to be given in the first week of the assignment concerning our first business model. As a metaphor, a flashmob was used. In a flashmob, customers get inspired to join. This happens through the by the energy of the activity and the customers who are already participating. The more people join, the larger the value of the flash-mob.

The next step now was to pick a metaphor with which a tangible model could be explained. To make a start, a brainstorm session was performed by the whole team. Taking the value proposition from the business model as the main core of the metaphor, it was pos-sible to come up with multiple possibilities. A harmo-ny, a heart and a laboratory were the best metaphors that came out the brainstorm session.

Process.

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The harmonyA harmony wants to inspire people and to motivate others to join. Every musician in a harmony contrib-utes an individual part to the whole. This is also what happens in Eindhoven. In Eindhoven you cannot reach your goal on your own, you have to possibility to use the great network and environment that Eindhoven provides. When you play together in a harmony, you are able to make great inspiring music by contribut-ing your own value and to work together.

The heartYour body can’t work without your heart. Eindhoven was seen as a working heart providing blood (value) to the other organs (businesses). The cells of the heart were the customers as well as the partners making up the heart: without people Eindhoven wouldn’t ex-ist. Blood without oxygen entering the heart would leave the heart oxygenated. This was compared to Eindhoven, where value entering the city without in-spiration, creativity and motivation (oxygen) would become ‘oxygenated’ and leave Eindhoven with inspi-ration, creativity and motivation. Eindhoven : lab of innovation

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Laboratory of InnovationThe best metaphor for the business model of Eind-hoven was to see Eindhoven as a lab of innovation. In a laboratory people work together, they experiment and they create new possibilities. All resources are available and without people value cannot be created. Representing the value flow of Eindhoven, liquids were used. Customers that come to Eindhoven be-cause of the many exposures that Eindhoven offers, get inspired, fascinated and motivated to join in Eind-hoven. By making a big aquarium were coloured liq-uid made beautiful patterns, the visualization of the inspiration and fascination that customers get from Eindhoven was made.

The different compartments in our business model, the partners, the activities and the resources are all standing on their own rack. With a laser cutter, name tags are made to clarify the meaning of the vases. The customers were presented by a bit smaller vases and by pouring the liquid in the vases trough a funnel, the channel is illustrated.

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Group.

Experts.At the very end of the course, the tangible business mod-el needed to be pitched to an external panel. The panel consisted of the following persons: Peter Kentie, Marieke Rietbergen, Mark de Greeff and Mimoun Oaïssa. Mimoun Oaïssa gave an important point of feedback. In the pres-entation, it was stated that a movie would be shown ex-plaining our business model, because otherwise it would become a “long and boring story”. Mimoun said that peo-ple tend to do this sometimes but it will only undermine a presentation.

Also all panel members agreed that the printed out busi-ness model canvas itself could be more professional. The rest of the feedback was very positive!

Mark the Greeff: “I think you truly, truly, truly under-stand the mentality of Eindhoven.”

Peter Kentie: “Overwhelmed, spot on, really good.”

Marieke Rietbergen: “I think you did a great job in making the intangible tangible. (…) What you did really well, how you formulated the value proposition. I have seen so many bad ways of writing down the value proposition and I think you did really well there.”

The most important conclusion that can be drawn is that Eindhoven is nothing without people. Because the customers of Eindhoven come back as partners and ‘return’ their value to Eindhoven, little to no value is lost. As new customers continuously arrive in Eindhoven, the value keeps on growing. The costs that are put into Eindhoven, which are energy, money and innovation, also come out at the end as revenue but then in a greater amount. This proves that Eindhoven acts as a value catalyst.

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Although we worked hard and spent more time on this assignment than any other until now, we definitely enjoyed working on it. We are very proud of our end result and very satisfied by the feedback we received from the external panel, Camilla and the rest of the class. Through this as-signment Camilla has taught us that with the right mindset everyone can get a 9,5 as long as you are doing what you like and strengthen what you’re good at. We would also like to thank Iris Ritsma for providing the value container of our model.

Without a doubt, we are now able to work with the business model canvas and apply this in our future studies and careers.