Business Model Innovation
How might we create a business model where D.S.C. can grow into a lean & profitable swimmer lifestyle company?
D.S.C. should shift business models and adopt a business model focusing on selling anti-chlorine body-care products to parents of swimmers in a monthly subscription model rather than to swimmers because 80% of swimmers surveyed didn't mention anti-chlorine as a factor in buying shampoo. D.S.C. should market their products as high-quality swim products that protect to appeal to parents looking to care and protect their children. Selling to parents has many benefits, including the potential to create on-going, long-term customer relationships through serving swimmers as children and continuing with them through adulthood.
Course: Business Models and Stakeholders - MBA in Design Strategy, CCA
Client: D.S.C., a two-person startup in San Francisco, CA
I collaboratively worked with a team and we took turns leading the team and leading facilitation with our clients.
I took the lead on developing several business models, facilitating the design criteria canvas, evaluating the problem-solution fit, and composing our presentations.
Design a business model so that the D.S.C. will grow into a profitable, lean business that sells anti-chlorine products through a monthly subscription.
Assess D.S.C.'s existing model to validate the target customers (active swimmers) would want to purchase anti-chlorine products in the format of a monthly subscription purchased online. Come up with additional business model options.
Business Model Innovation
Business Model Canvas
Design Criteria Canvas
We dove (no pun intended) right into understanding the target customers (active swimmers) and their body-care preferences. We conducted primary and secondary research to understand swimmers, their needs, and how they felt about anti-chlorine shampoo. We surveyed and interviewed swimmers, in addition to observing swimmer behavior at a public pool. We wanted to understand how big the problem was to assess the problem/solution fit before we got into designing business models. In addition, we researched the Dollar Beard Club because our clients were inspired to start their business based on their business model, marketing tactics, and success.
To understand swimmers’ attitudes towards and use of anti-chlorine body products, we
surveyed 55 active swimmers.
Initial Survey Findings
Only 7% of respondents use anti-chlorine shampoo and our client came to us with a business plan based on a subscription for anti-chlorine shampoo.
To better understand the trends around swimmers and swimming, we completed the Context Canvas. We looked into trends including swimming and triathlon demographics, pool chemistry, pool access, sport participation, shopping behavior for personal care products and
more. We assessed the opportunities and threats to swimming and to the DSC business model.
Given this information, and the information gathered through interviews, we began to ideate different business models and markets that might be a better fit for D.S.C.
We went through a freshwatching session where each teammate came up with over 50 ideas. We then clustered our ideas and made a list of the most exciting business model concepts. Freshwatching is an ideation method by which you mix and match (or overlay) business models from other companies, often totally outside of your business or industry, with your own business model to see what you can come up with.
Yellow Hat + Trigger Questions
Yellow Hat is having an optimistic, growth mindset and thinking of all the possibilities. The key to "what if" Trigger Questions is to come up with a list of questions that challenges what you do today. The combination of the two tools leads to outside-the-box thinking.
Our clients were pretty set in their original business model so taking them through Yellow Hat and Trigger Questions was important. I thought if we all wore yellow hats, the fun of it would help open their minds to new possibilities... and it worked!
This was a pivotal meeting because this way of provoking fresh ideas opened up possibilities and gave our clients a new perspective. They switched their mindset and became open to ideas beyond their original business model.
Obscured to protect the client's privacy
I facilitated a session with our clients to establish their design criteria that would act like a north star for decision-making. I led them through the MoSCoW Method Design Canvas to identify what must, should, could, and won’t be a part of the D.S.C. business model.
With established design criteria we set out to investigate over a dozen business models. We worked in pairs to map them on the Business Model Canvas. We did a SWOT analysis of the the strengths, weaknesses, opportunities, and threats of each business model we put together, and our analysis informed which models we wanted to move forward with.
The business models include:
Original D.S.C. Model
Class pass for pools
Gamification / Wearable
Parents as Target
Kiosk / Vending Machine
Aspirational Swimmer Kit
Birchbox for Athletes
We narrowed down the list of business models with our client, using the design criteria to guide our decisions, and we pushed forward with three models: an anti-chlorine subscription service targeted at swimmers, an anti-chlorine subscription service targeted at parents, and lastly an aspirational swimmer starter kit since swimming is the number one aspirational sport.
Key Assumptions + Findings
Swimmers want shampoo that is branded as anti-chlorine shampoo.
We recommend D.S.C. market their shampoo based on hydration, scent, and affordability because those are the factors swimmers care about when purchasing shampoo.
We recommend targeting parents of swimmers before swimmers because they are more willing than swimmers, to buy body-care products online.
Most swimmers and parents of swimmers want to purchase body-care products online.
Parents want to protect their children from the effects of chlorine.
We recommend D.S.C. market anti-chlorine related products to parents as a significant proportion of them notice how chlorine negatively affects their children's hair and skin.
Swimmers and parents of swimmers prefer a subscription service for anti-chlorine shampoo as opposed to another method of purchase.
We recommend targeting parents of swimmers before swimmers because they are more willing than swimmers, to buy body-care products through an online subscription service.
Lack of gear is the reason aspirational swimmers have not started swimming.
We recommend D.S.C. does not move forward with a swim kit targeting aspirational swimmers as this does not adequately meet the need of the customer segment.
Based on our analysis, we recommended that D.S.C. pivot and adopt a business model focusing on selling anti-chlorine products to parents of swimmers in a monthly subscription model through an online store. We recommended marketing their products as high-quality swim products that protect to appeal to parents looking to care and protect their children. The Parents Business Model has the potential to create on-going, long-term customer relationships through serving swimmers as children and continuing with them through adulthood.
The following are reasons to move to the Parents Business Model:
Parents are more likely to subscribe to online services than average swimmers
The value proposition of caring for and protecting children’s hair and body is strong
Parents are a more clearly defined customer segment and therefore easier to tailor marketing strategy and tactics towards
Introducing kids to anti-chlorine products while young could create life-long customers
It's a less crowded market
Parents are looking for high quality products
Parent Business Model
D.S.C. should create a strong branding strategy to build customer interest. We suggest creating a website and using a Kickstarter with a video that catches parents’ interest to drive pre-sales. Concurrent to driving pre-sales, D.S.C. should develop and A/B test branding, packaging, messaging, and the official website. We advise producing some samples and forging partnerships to reach target customers. Our suggestions also take into account the operations and product development needed to launch the business.
When we presented this shift in business model to our clients, they were very receptive and said they plan to follow our recommendations.