“Hi, I’m Hsin Ning, welcome to the Square Apple Show. Today, I’m going to talk about why I see value in having business undergraduate students undertake the exploration of new business ideas for your organisation in lieu of consultants. So, if you are a student aspiring to be a consultant, or you are already a consultant, or you are a business owner contemplating to get some external help, this podcast is for you.
First let me set some context. Those of you who have been following my podcast will know that I am an adjunct lecturer teaching business model design in a Singapore university. In this class, over a span of 13-weeks, a class of 40-45 students will be unleashed to solve the business problems for a real client. The nature of the problem usually requires coming up with new business ideas which would require a re-orientation of the client’s entire business model.
This course is conducted like a consulting project. The client will give a brief, laying out the nature of its business, its current operations, challenges faced, the impetus for embarking on the project and their expectations of the outputs. The students will then conduct secondary and primary research based on principles of design thinking and the business model canvas framework. In week 7 and week 13, the students will give a verbal report to the client on their findings and get feedback.
Sounds pretty straightforward right? But I know what you are thinking right now, and it’s exactly what the students think when I meet them for the first time.
“This all sounds a bit dubious. How can undergraduate students without any industry experience do any form of real consulting. You mean they know more than the clients to advise them? I think they are just a form of cheap labour.”
You are absolutely right that undergraduate students do not have any experience, and therefore they cannot advise the clients. But they are not cheap labour. Their value is precisely because they don’t know. Let me explain how this can be an asset when combined with the structure of the course.
- I don’t know but the methodology leads me to the answer
The first thing I tell my students is that it’s not your ideas versus the client. Because you will never be able to know more than the clients in 13 weeks. So, we need to rely on what the target customers feel about the idea, so that the discussion with the client is centred around what research method you used, and how can we tweak the idea to get better response from the customers.
So let me give you a preview of the methodology and how it predicates on the assumption of “I don’t know”. Students typically identify the target customers through their personal experience or through secondary research. Or the clients specify a set of audience that they would like the students to work on. They then need to find ways to validate their understanding of the target customers, specifically whether they have any real needs that the company can offer.
It doesn’t really matter how they obtain the target audience at the early stage because it’s a hypothesis, most of the time, the identified customer segments will change because they will realise that it’s too generic, or the segments are not really interested in the products.
There are largely two stages of validation that the students need to go through. The first step is to make sure that the customers that they identified have a real problem that needs to be solved. For example, if the customer is in the business of selling rice, which is such a commodity product, the students will investigate their prospects’ current interaction with rice in various context, from how they make buying decisions, how do they process the rice, who cooks it, how do they cook it, and what would influence them to buy certain brands again, or not. In the process, they also talk to people who do not use the products at all and understand why. From the process, they will gather data points of the real needs, and prepare to develop solutions that addresses these needs.
The second step of validation takes place after the students have developed some business ideas based on their understanding of the customers. They will use different research methods to find the answer to a single question: do you like the product enough to buy it? The students use a wide-array of techniques to validate the minimum viable product ranging from the usual interviews, surveys, and focus groups to using A/B testing on social media platforms and landing pages, taste testing, shadowing consumers using the MVP etc. It’s amazing what the students can come up with.
It may seem that these two steps are linear steps but they are not. When step 2 is built on a weak step 1, there is a risk that the students become very product centric. The entire validation for step 2 will be built upon asking people about functions and features, but missing why do people even need them in the first place?
The valley of despair for the students is typically when I ask them the question “Imagine if your product doesn’t exist. What is the impact to the lives of the target audience?”
That is the moment where the light is switched on for many groups.
When the product offers a very strong value proposition, it becomes a must have for the customers. However, if the value proposition is weak, it becomes a nice to have for the customers. Meaning it’s good that it exists but even if it doesn’t nobody really cares, it’s not a game changer.
Some teams need to go back to the drawing board at this juncture to re-visit step 1 because they haven’t really identified a real problem to solve for.
In this iterative process of validation, some students become very frustrated and sometimes tension rises within the teams because of differences in how to take the feedback forward. However, most students realise at the end of the journey that this is necessary. It just takes a lot of hard work to develop a product that people want on a sustained basis.
So, first point can be summarized as “I don’t know but the methodology leads me to the answer
- I don’t know therefore I have no fear
Secondly, students do not carry any baggage of things that may work or not within a particular industry. They also have no need to prove that their past experiences of consulting with a 100 previous clients would also work with the current client. Since they are a blank slate, they are also less likely to be blindsided by assumptions that incumbents hold as a scared cow or didn’t even know existed. They are also more open to cross pollinating ideas from other industries into the that of the current client.
So, to be blunt, they have the license to be a little reckless and daring in their ideation.
So, my second point can be summarized as “I don’t know therefore I have no fear”.
- Together we are strong and unstoppable
You may thinking now, “wah, like that also can, then anybody you put through the course also can come up with good business ideas lah! Wah, like that you win already lor!”
Yeah, I wish it is that simple but it isn’t. Till now, I have only told part of the story where “I don’t know” is a key asset. I haven’t told you what the students need to know before they come to my class.
All the business students coming into the class must have fulfilled certain pre-requisites because this is the final module that they will take before they graduate from the university. This is why it is called a capstone course.
So, each team will be like a 十兄弟or ten brothers team where they are very well equipped with diverse talent in all aspects of business ranging from marketing, operations management, finance, HR, analytics, you name it, they have it.
These competencies are critical because the course is not just a market research or a design thinking course. We are also concerned about the viability of the business based on the ideas validated by the market. So we need to ensure that the business model is designed such that it is robust, scalable and sustainable. So students will need to develop a holistic model including the revenue and cost model. For example the whole business model should be financially resilient and scalable, so this translates potentially to recurring revenue through subscription model. Or the business can have a cost structure that is much lower than the existing market through may be the use of technology or re-wiring the operations.
So, my summary for the last point is: Together we are strong and unstoppable.
Conclusion
I’ve personally asked myself the question whether does this mean getting students from this course to develop your new business is better than getting external consultants? After reflecting on it many times, I realized that I’m asking a wrong question. The key insight here is that when companies want to seek a breakthrough in their business, and create a new S curve, they should consider adopting a “I don’t know” mindset. Yet, it cannot be “I don’t know” all the way.
Consideration needs to be holistic to ensure that the business model is robust and can withstand the dynamic environment to create the next S curve for the company.
If hope you have taken away something useful today. If you have questions or thoughts on this episode, please connect with me on LinkedIn at bit.ly/squareapple. That’s bit.ly/squareapple. Thank you and see u soon.