Time trumps Money in Innovation

My mom always said you either have time or money but rarely both.   Silicon Valley advisor and Fast Company contributor, AdrianOtt’s award-winning book, The 24-Hour Customer, gets right to this point. Time has become more important than money.  Time is finite, money isn’t (though it may seem like it a times).  When we make a decision about a product or service, we are really evaluating our time versus our cost, not just the price.  We evaluate where we have to go, what else we need to do and when we have to do it.  We may compromise what we want if it’s on our way to where we’re going – because it’s just easier.

For companies today, getting a share of customers’ time is harder than getting share of their wallet.  Adrian eloquently points out that since no one is making any more time, it’s value continues to greatly increase.  We are witnessing a major shift in customer buying behavior and needs: from the Time Value of Money to the Money Value of Time.  The companies that understand and capitalize on this shift will bring tremendous value to their customers, and in turn themselves.

Adrian’s knowledge of customers’ perception of time and its implication for buying behaviors is grounded in experience, observation, empirical studies and neuroscience.  Traditional companies tend to view products and services as the basis of competition and a task as a discrete event.  Innovative companies view customer activity as the basis of competition and a task in the context of all the tasks that customer has to do before, during and afterwards.  This is a significant competitive shift – from tangibles to intangibles –Time.  Remember, you are competing for customers’ “X” minutes of activity – what else could they do? who else could they hire, instead of you?  Adrian’s Time-ographics Framework is a great tool to assess how customers allocate their time and attention among a variety of products and services.

Throughout the book, Adrian provides tools, examples, and situations to help you understand your customers’ needs, constraints, and frustrations around Time.  She elaborates on the motivations and the role of habits, which are very hard to break, which drive customers’ time and attention and how to create solutions based on those.  Sometimes, the status quo, the path of least resistance while maybe not better, is faster.  Key to learning about your customers is their willingness to share their information with you.  Take for example Nike+.  The Nike+ service changed the customer relationship from transactional and periodic to an ongoing, integrated relationship with the runner creating an online running community that shares their health and run statistics.

In addition to sharing the factors that go into buying decisions based on customers’ value of time, Adrian provides experientially based wisdom on how companies can leverage these factors and build organizational wisdom and competency around them.   Since behaviors shift over time, over product or service use and with emerging technologies and markets, the model Adrian provides is dynamic, allowing companies to continually adapt to the emerging customer needs, and wants.

At the end, Adrian sums up the entire challenge of servicing 24-hour customers with one word: Trust.   In order to continue to help customers’ do the jobs they want done in a time-effective and efficient manner, customers need to trust that companies have their best interests, including privacy and security, in mind.  So many aspects of our 20^th Century world are changing.  How customers decide what, where, and when to buy is one of the most significant in our market economy.   Adrian’s book helps you think about this new world in ways you haven’t considered.  If you have, the book provides tools and methods to create solutions that matter and competencies that can be sustained.

Creating Business Models in Real Time

In 2009,  I was privileged to co-create an awesome book, Business Model Generation, with Alex Osterwalder and Yves Pigneur.     Co-creating the book with Alex was an amazing experience, created some lasting friendships with other co-creators, and of course Alex.  After Angela Dunn's monthly twitter-chat, #ideachat, I decided to ask Alex what made him decide to do co-create this book:

Why did you decide to co-create Business Model Generation?

Several managers and consultants around the world were already using the content of my doctoral dissertation because I put it online. Yves, my former PhD supervisor, and I thought it would be great to involve these practitioners and their experience to evaluate our content and make the book more relevant. It would allow us to test each and every one of our ideas with practitioners immediately. Co-creation helped us assure we were on track in creating a useful book.

Of course we could only do this because we decided to self-publish at the expense of the comfort of the infrastructure of a publishing house.

How did you decide whom to invite?

I wrote a blogpost and anybody who paid our “entry fee” was able to join. Each member would become part of our so-called “Book Hub”, get access to content, be able to give feedback, and they would have their name in the book. The fee was first USD$24 and we raised it gradually to USD$243 to keep the community exclusive. We tested the limits.

How did you manage all the ideas and comments you received?

We posted our content continuously as so-called “book chunks”. These were raw and undersigned pieces of content. For each chunk we started a discussion thread and answered almost every comment personally. The comments helped us create better content. Sometimes we specifically asked people about their experience or about their opinion. For example, it took some iteration to get members of the Book Hub behind a title for the book.

What tools did you use to help with the project?

I customized a Ning.com platform – an online website to create communities. We had to do everything ourselves, since no publisher offered a platform to do this back then.

How did you decide which ideas to use?

We selected content and ideas based on the strength of the argument or the relevance of the experience. We already did research on business models for 10 years, so it was easy for us to weed out pure opinion. I believe every co-creation project needs an experienced core team that makes final content decisions.

Was most of the input valuable or was there a lot of “noise”?

Well, even when it was “noise”, it was usually a good indicator that our ideas were not clear enough or our arguments too weak. Very little content was useless. Of course some of the co-authors were more experienced than others and their comments were naturally more relevant. However, since we wanted to create an inclusive book we carefully listened to every single comment in order to sense what people were concerned about, what they wanted (or needed) to learn, and to learn how we could best convey our ideas.

What were the benefits of co-creating the book?

• It forces you to make every idea you write about relevant. Feedback is immediate, which makes you vulnerable as an author in the short term, but the long-term benefits outweighs this: it forces you to do your best for every piece of content you submit to co-creators.
• We could immediately test what would or would not work/resonate with our audience.
• Co-authors brought in a lot of experience and good comments that guided us throughout the writing process.
• The 470 co-authors became a powerful global sales force, because each and every one of them had their name in the book, contributed to it, and believed in the final outcome.
• It helped us pre-finance the expensive design and production of the book, since we managed the whole publishing process from A-Z on our own with a core-team of 5 people.

What were the limitations or obstacles, if any?

Co-creation is much more work than writing somewhere in a hidden corner and then publishing your content. However, the benefits outweigh the costs.

It was hard, hard, hard, to set-up everything ourselves and do something totally new and different. We were running the project on a shoestring budget, but aimed at creating a global management bestseller.

Nobody believed this could work: Two no-name authors who wanted to create a visual management bestseller and get people to pay to help him or her write the book. People thought we were crazy. All of them probably thought we were totally naïve.

Now publishers are studying our project to learn how they can set-up co-creation platforms for authors who want to go down a similar path.

What did you learn from the experience?

You need to be naïve enough to do things differently. No big publishing house would have allowed us to co-create a fully designed, four color business book in landscape format – because it was contrary to the publishing industry logic. However, we thought of Business Model Generation as a product, not just a book – similar to Apple products.

Our goal was to create the same kind of “unboxing experience” you have when you buy Apple products. This obviously meant breaking with most of the rules of traditional business book publishing. That’s exactly why it became a bestseller. Yves and I created a book on business models that we would have loved to buy ourselves. Since nobody had done it, we did it ourselves.

Would you do it again? And if so, what would you do differently?

We made countless errors on the way, but they were not foreseeable, since we created something totally new. We needed to make the mistakes to learn and iterated.

However, our biggest mistake was not sticking to our plan A of using Fulfillment by Amazon to distribute the book. We wanted to save the margins and went for plan B, which was partnering with a Dutch direct mailing company. That was a painful experience that I really wouldn’t want to live through again. After switching back to Plan A we got back on track again. After a couple of months of proving the success of the book we sold the publishing rights to Wiley – a big publishing house – in order to get physical distribution as well. Now it’s Wiley’s best selling international book.

What advice would you give someone who was thinking of co-creating/co-reviewing?

Don’t look at it as a pure marketing stunt, because it’s trendy to do co-creation. Ask yourself how the process of co-creation can help you craft a better product. Also, be aware that it’s much, much more work to co-create.

Note: Last year, I was honored to co-review Steve Denning's book, Radical Management.  An interview with Steve will be coming shortly.

Invent, but Don't Innovate?

When I was at Bell Labs, my job was to invent and create, dream up solutions to problems that did and did not exist.  Some of these problems we thought up ourselves, others were ‘given’ to us by AT&T corporate product management and marketing.

For the most part, though, we didn’t get to see problems firsthand--as in, real live customers. At that time, corporate didn’t understand the need for us to see, hear and learn through people. We worked only with empirical data.

This led to a tense relationship between our two organizations – a lack of trust on our part and corporate’s frustration with our constant questions.  The result? Products and services designed more for us than for real customers.

Not a good thing.  There was a clear gap between invention and innovation.

Eventually, for one exciting, highly competitive project, I was able to visit a real live customer – and what a difference that made!  How did this happen? The product manager and I were friends.

It all started with a trusting relationship, at a very fundamental level. It was that simple.  And the project resulted in a patent and a very profitable service for AT&T.

Where are the disconnects in your organization? How can you leverage existing relationships between people in difference functions and areas to increase communication, knowledge flows and learning?

Please share your thoughts and experiences!