Bobbing and Weaving through Venture Studio
Customer insights leads to a novel business concept merging the benefits of online and offline shopping into a unique offering.
A little over a year ago, I completed a graduate program that takes the foundation of business management and strategy and applies a layer of design methodology – customer research and iteration. It’s called the DMBA and is part of California College of the Arts in San Francisco, a leading design school.
The DMBA’s final course is called Venture Studio, and it’s where we put our learnings into action by turning an idea into an executable business plan and strategy. I’ll never forget day one of that class.
Our professors were an interesting pair. One was a creative who had spent his career in advertising before moving to Google to work on strategy in the Android Group. The second was a successful entrepreneur who made a fortune in high-tech and now spends his time vetting startups as an investor.
The duo spent the morning giving us an overview of the course. We had just returned from our lunch break and were comfortably seated in a circle. That’s when they struck, ok let’s hear your business ideas? The blood rose around the circle. No one was prepared to talk about their business ideas; some people didn’t even have one. Our professors were relentless, one after the other, pressing us to divulge our entrepreneurial musings. As soon as we did, they interrogated us on feasibility and entry barriers.
“I need to get thicker skin,” I thought walking from the class on that foggy day in January.
One month later, we had formed teams and were presenting our preliminary concepts to the class. My teammate and I had honed in on the fashion industry by mutual interest and problem. If you saw us together, you would understand why. Briana was tall, VERY TALL; next to her my petite frame looked like an espresso shot along side a grande latte.
Together, we were a glaring metaphor for the fit problem in the U.S market.
And although Briana and I were outside of what one might think of as average build, we quickly learned that almost every woman struggles to find clothes that fit. In fact, the average woman tries on 15 pairs of pants before finding something that works. It’s a chore our research interviewees echoed as they described the inevitable process of trial and error.
For women, size labels are almost completely irrelevant. As I’m writing this, I have a Theory pant in 0, another from the same brand in a 2, and an Armani top in a size 4. Sizing is always in flux as retailers try to balance consumer psychology with intelligible labeling.
The complexity of this issue is why Briana and I avoided tackling fit head on for our first concept. Instead, we focused on what we thought we could change: the poor in-store experience and online returns. A wall of sticky notes and an espresso later, we had the makings of a concept based on our research findings which included fifteen in-person interviews, two mass surveys, and a stack of academic research papers. Our proposed solution: a bridge merging the benefits of online and offline shopping.
We christened it, the Fit Shop.
The premise of the Fit Shop was simple. We knew consumers loved the convenience of purchasing online but deplored the hassle of returns yet they dreaded going in-store. What’s wrong with in-store? Long lines, messy dressing rooms, limited stock, unknowledgeable and/or pushy staff, and the fact that many people just don’t have the time. In response, we devised a universal fitting room. A place where consumers could try on clothing from numerous brands, get expert advice and sizing suggestions, and offload any returns. Think of it as a luxury fitting room married with Mail Boxes Etc.
Idea in hand, we needed a way to make money, a business model. Our initial thought was to charge consumers an annual subscription fee. But before we looked into pricing our subscription service, we sat down to tell a story of our offering with four pictures. Each picture depicted a woman interacting with our Fit Shop. We had her making an appointment, trying on clothes, handing off returns, and leaving the Fit Shop.
This tool is called a scenario, and we emailed it along with four simple questions to about thirty people.
Knowing that consumers will say one thing and do the other, we weren’t looking for what people said they would do but rather why they felt the way they did.
We spent the next morning reading over their responses and found insight in statements like these, I don’t shop often enough for this and I am not sure I would use it enough to cover the subscription. Now, it was clear that something was amiss with our revenue model. These people were rationalizing their subscriptions through frequency of use. Yet, how many consumers can rationalize their shopping habits? It’s rather obvious now, but when your to-do list is knee deep (as every entrepreneur’s is), it’s easy to make a misstep.
That’s what makes the iterative approach so valuable. It exposes those cracks before money falls through.