Model #25: The Einstein Factor/Think Like Leonardo da Vinci Model

Complementary models: Ghost Whisperer/Matrix

The Einstein Factor, by Win Wenger and Richard Poe, provides several general-purpose tools for increasing anybody’s intelligence and creativity. Several techniques are provided, but a significant portion of the work focuses visualization and journaling. Visualization is the foundation of intuition, and Win Wenger maintains that it can be taught. How to Think Like Leonardo da Vinci, by Michael J. Gelb, draws on Leonardo da Vinci’s own notebooks to provide seven principles that anybody can use to be more creative.

These methods proposed in these two works for boosting creating can definitely be taught, and creativity in the general population can be cultivated.

An entire sub-industry to education can be built and integrated under this model, using a variety of different approaches. One compatible model for implementing this model is the Ghost Whisperer/Matrix model.

Model #24: The Instant Messaging Model

Those who use Instant Messaging (IM) will immediately understand the power of this model. For those who use IM, it usually runs at all times on their computers. When a contact sends a message, the message immediately pops up. Contact is instantaneous.

Compare this to e-mail and most, if not all, RSS readers. If you don’t check your e-mail or RSS reader, then you don’t know that anything is happening. It is true that Outlook displays a temporary Tooltips-style message, but those are subliminal (out of the corner of your eye), and you never see them if you’re not at your machine. With Instant Messaging, you see your message the moment you walk back to your computer or turn your computer on.

Why don’t e-mail readers and RSS readers use immediate notification? Think about it: Would you want a pop-up every few minutes or possibly every few seconds?

The product that is missing is an automated interface that classifies the importance of input and draws it to your attention accordingly. High importance items (not necessarily those flagged as high importance, since spammers have discovered that they can claim high importance) would receive immediate attention, while others can be lumped into folders, with a dashboard indicating when folders are becoming more “interesting” to the user.

Instant messaging means instant communication. Communication—and therefore action—happens without delay. All of our life’s activities should have the benefit of continuous communication and action.

This endeavor is wide-open for creative companies to tackle head on. The opportunity is there. Regardless of your industry, you can define what you can do to make life easier for your customers via the computer. Think about it: What would you like to have the computer do for you? Living Widgets provides you with the tool you need to get started.

Model #23: The Treasure Hunt Model

Complementary models: Adventure Game

Like the Adventure Game model, the Treasure Hunt model provides a way for customers and prospects to explore your offerings. The key difference is that, in the Treasure Hunt model, you direct your customers’ exploration process.

Vendors have made a practice of using pseudo-clues as part of what are essentially random drawings tied to ad campaigns. Customers and prospects find obvious “clues” which deliver marketing messages. While these promotions may be considered one type of Treasure Hunt model, a genuine Treasure Hunt model expects customers and prospects to demonstrate real detective work and deduction skills. Everyone participating in the Treasure Hunt should be expected to grow in some way as a result of the event. A true Treasure Hunt is an entertaining form of education.

The Treasure Hunt and Adventure Game models work extremely well together. Properly constructed, the Treasure Hunt creates an entertaining venue—with guaranteed rewards—for customers and prospects to explore open-ended Adventure-Game options. Even if they never discover any new options, they are at least rewarded for finding the “planted” Treasure Hunt rewards.

An example of a Treasure Hunt/Adventure Game pairing might be to offer a reward for identifying three documented applications for your new product, with a description of the applications spread throughout the online documentation. The reward program provides your Treasure Hunt. However, readers will undoubtedly discover additional applications and report them to your company, for incorporation into your marketing materials, supporting your Adventure Game.

Your Company’s Greatest Strength

Michael Tracey and Fred Wiersema, authors of The Discipline of Market Leaders, researched successful companies and discovered that—without exception—successful companies focus on only one of the three key business disciplines:

1. operational excellence
2. product leadership
3. customer intimacy

The Living Widgets Global Supply Network therefore asks each of its vendors to declare its greatest strength. Each vendor should focus on that one strength, while not neglecting the other disciplines. For the secondary disciplines, however, the vendor should count on partners to excel for them.

Operationally excellent companies, such as Wal-Mart, use internal operating efficiencies to “deliver a combination of quality, price, and ease of purchase that no one else in their market can match.”

Product leadership companies, like Nike and Apple, focus on creating and delivering the “best product, period.” This requires continual innovation, with newer designs making earlier designs obsolete before the competition makes them obsolete.

Companies focusing on customer intimacy, like Nordstrom, Ritz-Carlton, and L.L. Bean, emphasize customer relationships and “total solutions,” reducing emphasis on operational efficiencies and product innovation, which can actually endanger the customer intimacy.

Decide where your company’s strength lies, then pursue it passionately. If you find the need to focus on either of the two secondary disciplines, seriously consider locating a partner that excels in that discipline.

Your Company’s Offerings

Your company can provide any or all of the following types of offerings:

• products
• services
• information
• experiences
• transformations

For most companies, it is desirable to expand into all five types of offerings for maximum coverage. If you choose not to, then you should have partners complement your offerings for full coverage.

We’re all familiar with the phrase “products and services.” Many businesspeople take for granted that those are the only two types of offerings that companies provide.

Information should be treated separately from products and services, although the defining lines can be drawn in a variety of ways. Here’s how Living Widgets defines it:

1. If information is packaged up, for example, on a CD-ROM or in a book, then it is a product.
2. If information is used by employees to solve problems, then it is a service.
3. If information is available without any intervention from an employee for each transaction, then it is pure information. This distinction has the virtue that we can state unequivocally that the incremental cost for the delivery of information is always $0.

Information will typically be provided via the Internet. However, notice that this is not the only option. For example, if you give users permission to copy content from a CD-ROM, then the information is stand-alone. You might do this for free information, but you could also use a registration system, requiring new users to register online, paying a fee to take full advantage of the information provided.

The concept of offering an experience was first formally described in the 1999 book The Experience Economy, by B. Joseph Pine II and James H. Gilmore.

Although experiences were originally conceptualized by futurist Alvin Toffler as something extremely valuable, an experience is now considered anything that a customer is willing to pay for that goes beyond the products, services, and information delivered. Customers pay for feelings of wonder, excitement, belonging, security, and much more. An experience results from a combination of tangible and intangible actions. Often, marketing contributes to the experience.

A trip to Disney World is not just a series of services (rides) and products (food and merchandise). Disney knows how to implant a memorable experience in the consumer’s mind. Attention to tangible details pertaining to timing, cleanliness, friendliness, and more create the setting for the experience. However, Disney employees then immerse themselves in the environment, providing countless subtle (often intangible) contributions to the experience. Smiles, thoughtful gestures, and so on all add to the base experience that Disney engineered.

In The Experience Economy, the authors explain how experiences are becoming pervasive as a means of adding value to what would otherwise be a commodity. Many people pay high prices for coffee at Starbucks not so much because they appreciate the fine distinction in the coffee, but because they have bought into “the experience” of Starbucks.

Using traditional terminology, The Experience Economy defines a commodity as an undifferentiated product, where competition is purely price-based. For Living Widgets, there can be commodity services and information as well.

The Experience Economy also defines transformations, describing them as transcending experiences. A transformation creates more than a feeling in the customer, as in the case of an experience; they create an actual transformation in the customer, providing long-term benefits.

Each level of offering has an implicit warranty. If someone pays for a birthday party experience, but the children are not satisfied with the quality, then the experience has not been delivered, even if the cake, refreshments, decorations, and activities have all been provided as per the contract.

If diligent customers pay for and commit to a transformation, such as education, and they keep their end of the bargain, they will not consider the transformation to be delivered unless they are indeed transformed in some measurable way, such as finding employment in a new field.

Because of these implicit warranties, higher-end offerings cost more. If a warranty is not met, then the customer may end up receiving lower price products, services, or experiences at no cost. The goal is to provide free products, services, or experiences until the warranty has been met. This approach generally lets everybody win, since the vendor can keep the revenues and the customer gets the promised deliverable. In most cases, this approach is even preferable if it would be cheaper to just return the customer’s money, since it maintains the vendor’s reputation.

How to Use the Living Widgets Global Supply Network

The Living Widgets Global Supply Network is a general-purpose tool, similar to the way that the Internet is a general-purpose tool. To identify ways to use Living Widgets, you need to identify how your company operates. For the purposes of Living Widgets, your company has three dimensions:

1. Offering types: products, services, information, experiences, and transformations. Initially you probably have some subset of these five types of offerings. Ultimately, you may want to provide all five.
2. Strength: innovation, customer satisfaction, operations. You would probably like to say that your company is strong on all three. Certainly you should not ignore any of these business components. However, studies have shown that truly successful companies put most of their efforts into one of these three strengths, partnering with other companies who are strong on the other two components.
3. Business models. Companies operate implicitly according to a certain set of rules. Living Widgets defines dozens of such sets of rules. You are encouraged to choose several complementary business models.

Inevitably, you can think of countless additional dimensions for your company. Under the Living Widgets Global Supply Network, however, these three dimensions determine all the other dimensions: marketing approach, logistics, human resource policies, and more.

Model #22: The Adventure Game Model

Complementary models: Treasure Hunt

The 1970’s computer game Adventure spawned the “adventure game” genre. Early adventure games were purely text-based, like an interactive book, although they evolved into 3-D video-style adventure games. Adventure games, then, are interactive stories, where the user decides what happens each step of the way. Those who became proficient at adventure games found that maps were often useful. What happened when you went North, South, East, or West? What about NE, NW, SE, or SW? Up? Down? Could you do anything else? Don’t give up. Do you know any magic words? Try them in this room.

Adventure players, then, were very good at exploring options, and keeping track of which options worked in which circumstances.

Let’s get back to your business…

Do you have a lot of customers that “know their way around”? What can you—and perhaps your competitors—do to make it easy for customers to explore their options?

For example, it is common practice for engineers to purchase multiple brands of software for finite element analysis stress tests. Such engineers want to make certain that their work meets all possible criteria for safety. If you and your competitor make it even easier for customers to mix and match your features, then even more engineers would feel compelled to buy both brands and explore the options. You would earn your competitor’s customers while your competitor would earn yours. If you’re the smaller competitor, then you would benefit more, gaining more customers than your competitor gains. If you are the larger competitor, then you can pick up additional customers, and you shouldn’t have to worry about losing your customer base to your competitor.

Of course, there are plenty of options that you can provide alone, without cooperating with your competitors.

As with adventure games, if you reward your customers for their efforts, as they regularly discover hidden “treasures” of one type or another, then they will continue to “play the game.” If, on the other hand, they find themselves hitting the same dead ends, with no further options to try, then they will lose interest.

With a little creativity, generating options is easy to do. If one parameter offers 20 values and another parameter also offers 20 values, most of which are compatible with all 20 values of the first parameter, then customers have almost 400 pairs of options to try. Create a third parameter, and you could have almost 8,000 option triplets. Show a few obvious combinations and encourage your customers to discover the rest.

Model #21: The Consumer Investment Model

Complementary models: Retail

When a company considers its investors, it often overlooks the fact that customers can have as much of a stake in the company as the shareholders, and perhaps even more of a stake.

Do you treat your customers as investors? A customer’s entire business can revolve around your product. Even if there are alternatives, your customer might have to make a considerable expenditure to redesign their procedures and retrain their employees to switch to another supplier.

By reworking your business model to fully incorporate the role of your customers as investors, you may discover valuable sources of revenue.

One obvious option is to ask your customers to invest in R&D. If you have a track record, then customers may be willing to pay you up front in exchange for a significant price reduction. Since they know they will be purchasing your new product, they can lock in their savings, guaranteeing a greater return than they might by spending the money elsewhere. Some customers might want to earn a share of the revenue from a product that they invest in. Such an arrangement can work, especially if you tie the greatest portion of their revenue to sales that your customers earn without your direct involvement. They would be earning a sales commission, which they would certainly be entitled to.

Many creative arrangements are possible. The key is to keep your customers’ perspectives in mind at all times.

Model #20: The Sears Catalog Model

Complementary models: Amazon.com

The value of the Sears Catalog has been lost amidst a sea of imitators, and the now the Internet poses an even larger challenge to its competitive value. Nevertheless, the creation of the Sears Catalog represents a powerful business model worth imitating.

At its inception, Sears, Roebuck, and Co. comprehensively served a large, underserved market, namely rural America. The Sears catalog allowed rural dwellers to shop for items not available in their general store, or only available at a high price. It was the Internet of the nineteenth century!

Recognizing the nature of their market, they focused on quality and customer satisfaction. Undoubtedly, the hard workers in rural America would have been skeptical of mass produced, mass distributed products. This well deserved reputation for quality and customer satisfaction stayed with the company (at least within certain market segments) until the 1980s.

What underserved markets can you serve? In some industries, it’s African-Americans or women who are underserved. In many industries, it’s still rural America that remains underserved. While Walmart stores dot vast portions of the landscape, there are still many products and services which are not readily available to rural dwellers. “Displaced northerners”—especially those with specific religious and cultural needs and desires—are often underserved. Clearly the largest underserved market in this global economy is the billions of people living in undeveloped and underdeveloped nations.

Can you find a unique way to reach out to the vast underserved populations? There are fortunes waiting to be made by those who do.

The Sears Catalog tried to be all things to their targeted market. Initially, you can target one aspect of your chosen market, growing later. However, those seeking to aid those in dire poverty often find that they need to be comprehensive. For example, you can’t teach students who are hungry and ill, living amidst crime or war, without parents or proper parental guidance. Working with partners, can you deal comprehensively with all the observed needs, the way that the Sears Catalog admirably addressed virtually all the needs of rural dwellers at the end of the nineteenth century and well into the twentieth century?

Model #19: The Lillian Vernon Model

Complementary models: Retail, Wedding Planner, Wholesale (but virtually any, even Amazon.com)

Small companies, of necessity, seek out niches, finding whatever needs are not being met. Lillian Vernon, even with its 3,000 employees, still maintains a niche focus. Recognizing that shoppers crave uniqueness, its catalog does not focus on all the products that are typically available, but rather on all the products which are not readily in the public eye. Sometimes practical, sometimes purely esthetical, Lillian Vernon products are always eye-catching. Long before computerization made personalization trivial, Lillian Vernon was a leader in personalization, consistent with the goal of providing genuinely unique products.

In 1951, the Lillian Vernon model contrasted from the Sears Catalog model. Now, more than half a century later, they stand out against the Amazon.com model.

What can you do to stand out from the crowd, when everything seems to be available one place or another on the Internet?