Using service design to find a business model

The conjunction of free apps, open & big data, and rising digital talent means consumers and businesses are experiencing a 21st century rush of new exciting technology. But many new technologies don’t last for long - they just don’t find a business model that works - and with the failure rate at 90% we’re working hard on this to avoid being just another statistic.

More specifically we need a business model that competes. With many large cashed up information service providers such as Google, Apple, Moovit, City Mapper, et al, doing journey planning the benchmark is high. And consumer revenues are low - they can get these services for free. We did consider a free app model by taking advertising revenues but for transport planning we find that ads conflict with more pressing user needs, in particular for simple and clear journey information. Users just don't need ads using up screen space with confusing information - and paying to have ads removed puts the App in the non-free category so it doesn't compete. We also considered free download with in-app purchases but it's problematic - the very fact that value is withheld means for some users the app won’t meet their needs unless they pay. Free doesn’t actually exist here - it is a sales ploy - and many users simply experience an app that fails to meet their needs. 

So where to from there? And why do we want to compete with this smart journey planner thing again? 

Our project partners have a common shared mission in meeting user needs with innovative technology. Going back to these roots reminds us that our differentiation has to come from providing services that answer unmet needs, and these must equally drive both our proposed business model and the products we create. The importance of this service design approach is that we won’t simply invest in technology products only to find they have no marketplace need, or sustainable revenue stream, both the key reasons stated for startups to fail at the above 90% rate.

Over the last three months our service design work has pinpointed where several business models would fail us in the medium to long term, but also uncovered a business model that could give us a way to compete with the big players. And it has highlighted product features that we can use to address existing pain points and unmet user needs. In this way new product investment can be justified using the business model, and both are linked and grounded in measurable value using our service design.

Of course user research and market engagement only tell us so much so we're looking forward to trialling our new services with users and finding out if the business model is going to work. That's all planned for later this year so we're working on implementing these new service features over the coming few months of the project.