“Welcome to the Square Apple Show. I’m Hsin Ning and in this episode I’m going to share how my students achieve a paradigm shift from being problem-focused to being customer-focused after 3 months of experiential learning.
Although this sharing is around my teaching experience, it is equally applicable if you are just starting up your business and trying to figure out an optimal business model
I enjoy teaching immensely. Now, I teach undergraduates about Business Model in the local university, and I usually teach 1 to 2 classes each term, which spans across a 3+ month period. In this course, we help clients with real business problems to diagnose their issues and then develop new ideas for their business models to address these issues. Even though I only start teaching from 7 at night for 3+ hours, sometimes after working for a full day. I nevertheless feel very energised interacting and engaging with them.
My biggest satisfaction from teaching this class is when I see that the students have a paradigm shift in how they think about the process to innovate on a company’s business model.
The most common question I hear from my students at the beginning of the course is “Prof, like that can or not hah?” or “You think the client will like this or not?”. To which, I also replied “I don’t know leh, you tell me lah”. So, from expecting to rely on my subjective opinion as the beacon of truth, they eventually evolved to being able to confidently justify their recommendations to the client, based on a robust process of validating their ideas with relevant stakeholders.
So how did that transformation take place?
Let me give a little background of the course so that you understand the context of the paradigm shift.
As I mentioned earlier, I teach a course around the design of business. In this course, final year business students will spend about 3 months helping a client solve their business issues. During the course of the 3 months, they will learn frameworks like the business model canvas, design thinking, which they will apply to the business problem. During the 3 months, they will also interact with the client and then present their findings via an interim and a final presentation.
For the students, it is a particularly challenging course because there are many ambiguities which they are not used to handling.
Imagine you are in an Accounting course where you learn the principles of accounting and then you immediately apply them to the questions that the teacher sets for you, either as part of your tutorial or assessments. So, theoretically, if you understand your principles and you work hard to prepare for these assessments, you will be able to do well. The cause and effect in such a closed system curriculum is clear, which means that the students have higher control over the outcomes.
However, the Business Model course that I teach models after what happens in the real life, which is an open system where there are many more variables that determine whether a solution is viable or not. The ideas that the students initially come up with very often gets negated either in whole or in part when they start the validation process. And this makes them very anxious because they are used courses in a closed system where there is a clear right or wrong in their answers.
So what paradigm shifts took place and how did they happen?
From problem focused to people focused –
The students that I come across are typically very focused on solving the problem at hand which is largely influenced by their experience in close-system courses. So, when they first get the client brief in Week 2, they believe they can already start developing the solution, and maybe short cut the whole project by 10 weeks.
Oh, so what is our client’s problem now? Low sales? Low visibility? Oh ok, let’s do re-packaging or invite some micro-influencers, or do facebook advertising. Oh, and let’s do some roadshow too! Oh, so your problem is that you do not have a steady stream of income from your business? So, how about let’s do subscription-based model?
To these ideas, I always said “you can have the right answers, but if you asked the wrong questions in the first place, then your answers don’t matter any more”.
And part of the right question is asking for whom we are trying to solve the problem for. This is also the first mindset shift, which is to be customer-focused instead of being problem-focused.
To seed this mindset shift, I start by teaching the students the concept of Customer Empathy Map where the students need to step into the shoes of the customer and identify their pain and gain.
In the beginning, the exercise of standing in the shoes of the customer is almost always a theoretical exercise. Because the students are not familiar with the business and very often they are not the target customers of the business, and therefore, they are unable to go down into a next level of detail.
If we’re doing a business on fresh produce, they may have something very generic like: young millennials with children, or health conscious millennials, or working millennials who have no time to cook, young married couples with no children.
However, when they needed to take their business ideas to validate with specific target segments, they realise the meaning of “if you sell to all, you sell to none”. The mental image of the original customer now disintegrates into many different sub-profiles, or in some cases, the hypothesised customer segment is totally invalidated and they discover a new customer segment.
They now realise that they need to first know who are the customers and what are their needs and wants before they build out the solution.
The invalidation of their initial idea and target segment is one of the biggest worry of the students. So here comes the second most comment questions from the students. “So what if my idea is wrong? Like the target segment doesn’t like my idea? Will we fail?”
This is the second mindset shift that I need to work on the students. To be learning focused rather than solution focused. Like many singaporeans who thrive on being efficient, students think that the final outcome of the project is to find THE solution for the client. So they are very worried that the idea that they have uncovered in the first place is WRONG. I said that there is no right or wrong.
Just imagine that your idea is a hypothesis, and what you need to do is to validate. Whether it is right or wrong, there is something that you can take away make something useful with it.
For example, one of the clients that we took on was in the business of retailing unprocessed grains. This company was fairly new player in an already saturated market. One group of students had initially suggested targeting F&B outlets which served healthier options, and in turn they could market the grains to the customers of the F&B outlets, and thus creating demand in both B to B and B to C segment.
However, they soon found that such an idea was idealistic because most F&B outlets were resistant to take a new supplier for just one kind of product. This is because most of them interviewed already had existing suppliers who was their one-stop shop for providing numerous items. As such, they had to go back to the drawing board to figure out who could be their board.
Eventually the team re-pivoted numerous times before finding pockets of offline communities who liked the grains which the team cooked for them to sample, and the health benefits of the product resonated with them. They then came up with very targeted offline to online acquisition and conversion programs which were low cost and easy to implement.
Because the nature of the customer segment was well-defined, it was also easy for the team to recommend scaling the solution to other segments which shared the same characteristics.
It was a project outcome that I was satisfied with. Not only because I felt that the recommendation was robust, grounded and had opportunities to scale, it was because I could tell that the students have experienced the mindset shifts that I had intended for them.
Conclusion
The lesson of putting customer before idea and the focus on learning rather than solution are the top learnings that students document in the reflections paper. As part of their final assignment, students were asked to reflect and document what they took away from this project.
I would like to share an excerpt of the reflection from a student about her takeaway on being customer focused. It reads:
“Perhaps due to stress and time constraint, our team had the tendency to work backwards – create an idea followed by pain points to justify. Through guidance, we have learnt that a good business model generation should always center around the customers’ real needs and we should not approach this project with an end goal in mind.
Therefore, the challenge was to stay focus on identifying the consumers’ pain points first then propose a solution targeting their needs. Once the team managed to overcome our anxiety to derive on an idea as soon as possible, coupled with a well-designed Customer Empathy Map and survey, we managed to correctly identify and gain deeper insight into our customer and propose an appropriate recommendation.”
So for those of you who are starting up your business because you have a great idea, I hope that you can also glean some insights from the 2 mindset shifts my students go through:
- Firstly – customer before idea
- Secondly – learning before solution
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.