Learning the Essentials of Business — Part II

Photo by Stephen Dawson on Unsplash

Session II: Prototyping with Numbers

  • Market Level: How might we estimate a potential market size?
  • Business Level: How might we estimate profitability?
  • Feature Level: How might we estimate ROI?

Market-level prototyping

A diagram gives context around TAM.
  • Top-down macro view: Start with the total population at the “top”, then apply demographic, geographic, and economic assumptions to eliminate non-relevant segments
  • Bottom-Up: Look at subsets of a localized situation, then extrapolate the results to the wider market opportunity
  • Third-party research: Draw data and insights from other companies like Forrester
  • Value theory: Focuses on the positive value and features derived from an innovative new offering versus incumbent options

Business-level prototyping

Sample financial model for a lemonade stand

Feature-level prototyping

Formula for calculating ROI

Session III: Business Value of Design

Maslow’s Hierarchy of Needs

Case Study: Airbnb

  • >1b people with cognitive and/or physical constraints
  • Travel segment growing 22% per year, outpacing other segments
  • Unhappy guests mean an increase in customer support tickets, churn rate, and negative stories online
  • Make money by increasing TAM and repeat customers
  • Save money by decreasing customer support tickets and increasing retention
  • Reduce risks by avoiding pr/brand costs to inaction
  • 2.7 Million searches in the first year of launch
  • 40 people across product, design, research, & legal collaborated to build
  • More people feel a sense of belonging within the airbnb community
Redesign of Airbnb’s search feature

Takeaways

  • Speaking the language of business translates into developing empathy for the business
  • The business model canvas can inform strategy, tactics, and tradeoffs, influencing business decisions
  • Collaborating with your key stakeholders improves with a shared vocabulary, helping create alignment
  • Supporting your decisions with data and dollars meaning greater influence on product direction
  • Aligning the value of your design work with the business goals drives the

Resources

  • d.MBA: If money and time are no object, take a look at this program.
  • Coursera has tons of course and certificate options
  • Udemy has a handful of classes that may get the job done
  • edEx has a certificate course for business fundamentals

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Digital product designer at Dialexa, advocate for BIPOC, speaker, and hustler.

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Shara Rosenbalm

Shara Rosenbalm

Digital product designer at Dialexa, advocate for BIPOC, speaker, and hustler.

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