PBT Consulting

VIRGIN ATLANTIC'S GLITZY NEW FIRST-CLASS BAR IS A DREAM WHILE FLYING AT 35,000 FEET

YOU JUST HAVE TO FIGHT THE OTHER FIRST-CLASS PASSENGERS FOR ONE OF THE THREE SEATS.

On Virgin, I’ve appreciated my fair share of soothing purple lighting and touch-screen drink ordering. But for my next cocktail in the sky, I really want to visit their first-class cabin. In a design collaboration of Virgin Atlantic and VW+BS, first-class passengers from NYC to London will have the opportunity to walk not onto a plane, but into a glowing, spacious bar situated right inside the door, fitted like a Tetris piece against passengers’ seats.

Click Images To Enlarge

VW+BS’s Ian Macready tells Co.Design. 

“Air travel used to be exciting and rare and we wanted to bring some of that excitement back.  We were very much influenced by the rise of the pop up bar and the new speakeasy. We wanted to create a space that created a different dynamic for the passenger rather than just the straightforward bar shape. It should be a part of the aircraft that encourages interaction, that blurs slightly the boundary between the crew and the passenger, and that allows for places to stand, to sit, to lean and to perch.”

The atmosphere is meant to focus on the “immaterial” in which every surface reflects light like a JJ Abrams film, from the polished aluminum stools to the space’s champagne lacquered finish. It’s a mix of plastic, stone, and metal--all punctuated by color-changing LEDs to set the mood--combining to create an ethereal bar experience that might only make sense at 30,000 feet.

Click Images To Enlarge

Macready writes. 

“The futuristic aesthetic was very much influenced by aviation.  The way the project evolved was a very specific response to being up in the sky and does not necessarily work elsewhere, except possibly on a high-speed train or at the top of a new skyscraper. The language doesn’t have context to anything else on the ground.”

But the design isn’t just an opulent statement of aviation aesthetics; it’s a glitzy red herring for the entire clinical, safety-regulated flight experience. Few will even realize that the bar serves two lives, storing ice buckets, spirits, and stemware for entertainment, but also revealing oxygen kits and wheelchair storage for safety and comfort.

Indeed, what’s most impressive about Virgin’s new bar isn’t that it fits on a plane; it’s that it might not fit anywhere else.

COMMENTARY:    That's what I call a cool bar.  Drinking a Mai-Tai at 35,000 feet in a new Boeing 787 is going to be a thrill.   I would love to fly Virgin Atlantic.  All of their planes have names.  For some incredible images of Virgina Atlantic's planes and world routes, click HERE.

Courtesy of an article dated May 15, 2012 appearing in Fast Company Design 

DESIGNING BETTER PRODUCTS BY INTEGRATING SOCIAL FEATURES FOR TODAY'S CONNECTED CONSUMER

In the age of Apple, the importance of great products that surprise and delight has never been so top of mind.  Meaningful products are the personification of a brand and the essence of a company.

Although most great products are still locked up in company "real estate," i.e. retail stores, content databases, and e-commerce stacks, the lucky ones have been set free to thrive and explore the web, thus creating marketing opportunities while also altering the traditional dynamics between companies and their customers.

Today, the evolution of the Internet and smart devices has created an amazing fabric of connected lives and now weaves together people's connections with things. Products are starting to "participate" in social media in new and meaningful ways; they're taking on personas and social statuses all their own; they are igniting conversations, eliciting emotion, engendering loyalty and evangelism, and even forming new ways for individuals to express themselves. 

To generate this activity, a product persona must be inherently social. For brands, great products are the most authentic form of marketing content because they ARE the brand. They can be released, tracked, and with the right tools, managed across the entire social graph. As they've learned from early experimentation, retailers and brands understand they can't simply move their catalogs to Facebook and inundate fans with the same old direct marketing messaging. Social products need to live their own existence on the social graph.

The most innovative brands are creating product personas that embody characteristics of a strong social product. They are:

1. Simple. Online consumption patterns for social are short-format, activity-stream-oriented. Products that have multiple dimensions are harder to build a social experience around. Complexity from multiple options for color, size, version, pricing plans and so on can reduce impulsive sharing and purchase. The Pebble E-Paper Watch is an example of a simple social product, a great product set free to live and grow in the social world with 84,000 Likes on Facebook and $7.7 million in funding raised on Kickstarter and growing...amazing.
2. Emotional. Products or product experiences that create emotion with customers have better odds of developing a social identity and building momentum. Social products must be memorable and present a great experience. Kaenon's  G. Love & Special Sauce-inspirted sunglasses are a great example. 
3. Beautiful. Sharing is self-expression and expression is more powerful with images than with words alone. The explosion of Pinterest has proven that social consumers love to express themselves through rich product imagery.
4. Valuable. In the broadest sense of the word, valuable products mean something to their owners, whether it's a $30 Lego set that delights a 3-year-old or a $1,200 Sonos system that fills a home with music. Value does not necessarily mean discount. Products derive value when people trust the direct recommendations of people they know, whether explicit or implied through sharing. Value is a far larger driver of purchase decision than price.
5. Special. Products that resonate with social customers tell stories that are limited, different, new, or interesting. Nike, for example, has built a special experience around its Dunks shoes.

When a person recommends a product, it says as much about them as the clothes he wears or the car she drives. These interactions become a form of self-expression; brands need to understand their customers in this context and ask: What does it say about a person when he or she shares, wants, or owns a brand or product? What is the value of being the friend who discovers a great new product that delights? How can a customer provide value to their family, friends, and colleagues around a product? Is a customer depositing to, or drawing from, their social equity bank when they connect with a product? 

In addition to the marketing outcomes, social interaction activities generate incredibly valuable insights. With so much referral, recommendation, and social proofing activity now happening online, retailers and brands have true visibility into person-to-person purchase influence as well as share reach and frequency. Imagine a world where a marketer not only can identify which customers are their most valuable commerce influencers, but also can identify which products have the most influence and virality. With the right tools, this is possible.

Stephen Colbert might be upset to hear that companies are not people on the social web, but great products can be. When set free, products with personas contribute value, express emotion, connect to people, influence purchase decisions, and drive ROI.

COMMENTARY:  

Social/Product Trends

Social media is too often a marginal activity that people are happy to leave up to a dedicated team elsewhere in the organization, rather than embedded in everything we do.  Let's looked at ways how social media techniques can be applied to the process of product creation. Let’s start with some of the background trends:

• Transparency - Whether you have a great product or an awful one, prospective customers can get the information they need directly from unbiased peers. This means that traditional product sales and marketing is being marginalized, and that core product quality becomes even more fundamental: it has to "talk for itself".   A great product – one that customers are delighted to own and use, and talk about to other people – can now take off at lighting speed, with almost no promotional cost. And news about product problems or poor service can spread even faster.
• Direct Contact With Customers - Product creators can now interact directly with customers and prospects, rather than having to rely on research carried out by others. Vast numbers of potential users are only a few mouse-clicks away, participating in industry forums, complaining about alternative products, or talking about their favorite features.
• Network Leverage - There are now socially-enabled running shoes, socially-enabled cameras, socially-enabled toys, and socially-enabled enterprise software. Almost any product can now be “social”, and hence experience network effects that may outweigh the other product features.
• Extended Ecosystems: - By embedding more use of social techniques into product creation and selling, we’re inevitably creating more complex, interactive networks of ecosystems around our products, with customers, partners, suppliers of social networking, etc.

How To Interact "Product" and “Social”

There are three main ways in which we can create new or better products through social media techniques. 

Social-Improved Products 

First and most obviously we can use social media to improve the way we create existing products. New techniques include:

• Social Research - It’s now easy to find data about new opportunities, such as customers complaining about business problems or competitor products. And it’s easy to get customer feedback on problems with our own products. 
• Ideation - Product creators always face tradeoffs when creating products. New ideation platforms, such as SAP’s Idea Place offer an opportunity to ask customers and potential customers to give their feedback directly on possible new features and what compromises to make.   These opportunities are not limited to software or technical products – consumer goods companies can run surveys on online forums, authors can ask online discussion boards for plot ideas for their next book, etc. This gets us closer to “crowdsourcing” the creation and improvement of products.
• Social Prototyping - Product designers have great ideas of their own, based on their deep market knowledge. Using social media, it’s now much easier to create fast prototypes (mockups, concept version, wireframes, etc.), and then make them available to customers for testing and feedback -- or even investment, using platforms like kickstarter.

The benefit is that it’s much clearer whether a product really does appeal to customers or not. The car industry has long done this with “concept cars”, and SAP has tested these techniques with through its SAP Research Prototyping group. 

Social-Enabled Products

Social media can be integrated into products to improve their usefulness or effectiveness. Games you can play with other people in your social network are more interesting that games you play on your own.

Consumer electronic devices are now designed to be able to share information – you can buy applications and shoes that share information socially on platforms such as RunKeeper. Runners can use the social-enabled devices to share data with a coach, boast of their achievements, embarrass themselves into improving their times, or let relatives track where they are during a marathon. And if you’re logged into Facebook when you visit the site, it will tell you which of your friends are already using the products.

Hybrid cars can keep track of your fuel consumption, so you can compete with your friends about who is the most sustainable driver. Restaurant guides can give us information based on the ratings given by our friends and other restaurants we’ve visited on foursquare or “liked” on Facebook. Enterprise software vendors can build collaboration into existing business applications, letting people apply social media techniques to supply chain collaboration or track the progress of sales deals. Even Lego is becoming social.

New Products On Top of Social

There are opportunities to create new products “on top of” social networks. Farmville has over 70 million users. Companies such as LinkedIn have been able to create new “products” based on the data gathered in their networks, such as “Talent Match” or “Jobs You May Be Interested In”.

New tools could help improve the success or failure of a big merger by analyzing the different social networks within the two organizations over time. Companies could develop more sophisticated “friends and family” offers for their products. Car-sharing services could leverage social networks to improve usage rates.

Courtesy of an article dated May 2, 2012 appearing in Fast Company  and an article dated February 12, 2012 appearing in Social Media Today

THE DESIGNERS BEAT OUT THE MBA'S AT TORONTO'S ROTMAN DESIGN CHALLENGE 2012, A LACK OF DESIGN KNOWLEDGE BY MBA-ERS BLAMED

NUMBERS AND BULLET POINTS AREN’T THE ONLY THINGS DRIVING EXECUTIVE DECISION MAKING. AND PRETTY PICTURES WON’T GET YOU THERE EITHER. BOTH DESIGNERS AND MBAS HAVE A LOT TO LEARN.

This year marks the third anniversary of the Rotman Design Challenge. It started out as a commendable experiment by the school’s Business Design Club to expose MBAs at the University of Toronto’s Rotman School of Management to the value of design methods in business problem solving.  This year, the competition drew teams from a few other MBA schools and some of the best design schools in North America. As a final-round judge, I had a front-row seat to the five best solutions to the competition’s challenge: To help TD Bank foster lifelong customer relationships with students and recent graduates while encouraging healthy financial behaviors.

Both this year and last--the two years that Rotman invited other schools to participate--business school students were slaughtered by the design school students. Of the 12 Rotman teams this year, not one of them made the final round. And while only seven of the 23 competing teams were from design schools (including California College of Arts, Ontario College of Art and Design, and the University of Cincinnati), design teams scooped the top three places in the competition, doing significantly better than their MBA counterparts. So what does this tell us?

Product design and development

It might tell us that MBAs significantly underestimate the skill and expertise a designer brings to the table. After all, about 80 MBA students volunteered their evenings and weekends, believing they had a chance of winning a design competition with minimal, if any, design training. Would you go toe-to-toe with even a purple belt in jiu jitsu having never taken a lesson? While the typical design-school competitor has (at the least) studied the design process in depth for several semesters and practiced it in co-ops and internships, for many MBA students, this was their very first exposure to the discipline. So while we should applaud the organizers’ efforts to open MBA eyes to the importance and value of design in solving business problems, it seems that even its most forward-thinking students may not have fully digested that design is a serious pursuit that requires serious training.

The competition outcome might also tell us that designers have reason to be encouraged. With only 15 minutes to convince a skeptical panel of experienced professionals about a new idea that doesn’t exist in the world today, they fared significantly better than their MBA counterparts. Why? Because they shared real user insights to engage us emotionally, used narrative and stories to compel us, drew sketches and visualizations to inspire us, and simplified the complex to focus us. It’s proof positive that numbers and bullet points, while important, aren’t necessarily what drive executive decision making.

Finally, it tells us that we still have a long way to go to develop business professionals who both appreciate and can engage the tools of design effectively. Rotman gets kudos for taking a step in the right direction. But a few workshops and an extracurricular competition won’t produce business leaders with real design-thinking skills. Business education must be completely redefined to include the best, most appropriate principles of design in every curriculum. Marketing classes should teach a deep reverence for the user in context and the power of observational research methods. Finance classes should teach the art of storytelling and information design. Strategy classes should teach systems thinking and synthesis. If the goal is to create great "hybrid thinkers" who will have real impact, design should not be tacked on to existing business education but infused throughout it. 

I’m not letting design schools off the hook either. While design students fared much better than their MBA counterparts that Saturday afternoon, I should point out that only the winning team from the Institute of Design at IIT actually charged a fee for the service they developed (a fact that was not overlooked by my final-round co-judge Ray Chun, the senior vice president of retail banking at TD). Some competitors were able to offer a vague notion that their ideas would generally create economic value, but crisp articulations of a profit model and underlying assumptions were hard to come by.

And I was less than impressed with the business-thinking skills of designers the following Monday morning, when I interviewed 10 of them at the Institute of Design in Chicago for jobs at Doblin. To most candidates, I asked of the ideas they presented in their portfolios, “But how does it make money? Who will pay for that? How much would you need to sell to be profitable?” and was met with far too many blank expressions when I did so. Design schools have a long way to go to integrate good business thinking into their programs. In order to make their value known to the world, designers need to speak the language of business--that’s where great ideas get funded and developed. Design education needs as much of an overhaul as business education if we are to benefit from the talents of design thinkers in the business world.

I hope that we see meaningful reinvention of both design and business education so that the business world can realize the true value of design thinking. Until that happens, Rotman’s Business Design Club would be wise to require challenge teams to comprise both designers and MBAs. At least it would level the playing field, and it may improve the educational experience for both--assuming each can decipher what the other is saying.

COMMENTARY:   I could've predicted that a designer would win a product design contest over an MBA, no matter what school he or she attended.  You're talking about two different brain types--Type A (serious business, marketing, lawyers)  versus Type B (creative types like musicians, artists, engineers and designers).  

I agree that combining elements of design into a graduate business program would be a great idea.   It would certainly open the graduate student in business, finance and marketing to the importance of good design in designing products, attracting the consumer and being able to compete in the marketplace.  

Graduate programs would certainly be more interesting than just debits and credits, and boring case studies.  Design is very important whether you are marketing a line of fashion apparel, accessories, or mobile devices like smartphones or tablet computers.  

I don't think you need too much proof to convince people that good design wins over the consumer. Apple has clearly demonstrated that simple, elegant and well engineered products increase perceived value and win over consumers, and that they are willing to pay premium prices.

I spent several years in the advertising agency business, and having worked in such a creative environment, learned the importance of design and creativity from an advertising perspective. Even an inferior product can be made to look and sound good, and from a marketing perspective this is very important in communicating with your marketplace.

According to the Rotman School of Management, a team from the Illinois Institute of Technology (IIT) emerged as the winner of the 2012 Rotman Design Challenge. The competition was held at the University of Toronto’s Rotman School on Management on March 24, 2011.   The IIT team narrowly edged out a team from OCAD University who won the competition in 2011.

Teams from the Darden School of Business, Massachusetts Institute of Technology, NYU Stern, California College of the Arts, Illinois Institute of Technology, OCAD University, the Rotman School and UofT’s Daniels Faculty of Architecture, Landscape and Design presented their ideas on developing concepts and products which will shape students’ financial behavior that will lead to a more sustainable and economically viable adult life.

Here are the Top 3:  

• Winner - Team Beta (Lauren Braun, John Shin, Helen Wills, Jorge Angarita, and Janice Wong) from Illinois Institute of Technology won the competition with their TD Stacks engagement model. 
• 2nd Place - The A-Team, (Jen Chow, Josina Vink, Jessica Mills, Martin Ryan, and Phouphet Sihavong), from OCADU, last year winners of the Rotman Design Challenge, placed second with their TD Table Talk platform. 
• 3rd Place - FabFore, (Ben McCammon, Uma Maharaj, Eric Leo Blais, and Ana Matic), also from OCADU placed third with TD BranchOut.

Martin Ryan of The A-Team said.

“Competitions like the Rotman Design Challenge are vital to the future of graduate education in business and design. They are the closest students get to real life experimentation with the evolving mindsets and toolsets of innovation, and how they can be best put into practice to deliver both human and business value.“  

This was the first year participants, visitors and judges were also able to cast their vote as part of the people’s choice awards for:

• The Best Story, won by OCADU’s FabFore. 
• Most Fun Presentation award to Team Beta from IIT. 
• Most Disruptive Idea won by OCADU’s The A-Team.

Lauren Braun speaking on behalf of the Beta team said.

“We're so grateful to have been part of the event this year. The chance to compete against such a diverse group of schools was both challenging and rewarding. The exposure to different perspectives and problem-solving methods left a lasting impression.” 

Plans are already underway for the next Rotman Design Challenge as it continues to develop as one of the premier international venue for sharing best business design practices and solving wicked problems.

Josina Vink of The A-Team said.

“There is so much we can gain from sharing our unique approaches to thinking through these sorts of complex challenges.” 

TD Bank Group was the lead sponsor of the 2012 Rotman Design Challenge 

The Rotman School of Management at the University of Toronto is redesigning business education for the 21st century with a curriculum based on Integrative Thinking. Located in the world’s most diverse city, the Rotman School fosters a new way to think that enables the design of creative business solutions. The School is currently raising $200 million to ensure Canada has the world-class business school it deserves. For more information, visit http://www.rotman.utoronto.ca.

Courtesy of an article dated 

http://www.fastcodesign.com/1669544/need-to-solve-a-tough-business-problem-dont-hire-an-mba?partner=homepage_newsletter

THE TOP 10 PRICING MODELS USED TODAY AND HOW TO PRICE YOUR PRODUCT OR SERVICE TO MAKE MONEY AND COMPETE EFFECTIVELY

 

One of the toughest decisions for a startup is how to price their product or service. The alternatives range from giving it away for free (like Twitter), to pricing based on costs, to charging what the market will bear (premium pricing). The implications of the decision you make are huge, defining your brand image, your funding requirements, and your long-term business viability.

The revenue model you select is basically the implementation of your business strategy, and the key to attaining your financial objectives. Obviously, it must be grounded by the characteristics of the market and customers you choose to serve, the pricing model of existing competitors, and a strategy you believe is consistent with your future products and direction.

So what are some of the most common revenue models being used by startups today? Here is a summary, with some of the pros and cons or special considerations for each:

1. Product or service is free, revenue from ads and critical mass. This is the most common model touted by Internet startups today, the so-called Facebook model a.k.a. ad-supported revenue model, where the service is free, and the revenue comes from click-through advertising. It’s great for customers, but not for startups, unless you have deep pockets. If you have real guts, try the Twitter model of no revenue, counting on the critical mass value from millions of customers.  NOTE: This is incorrect.  Twitter is also utilizing the ad-supported revenue model and has revenues.
2. Product is free, but you pay for services. In this model, the product is given away for free and the customers are charged for installation, customization, training or other services. This is a good model for getting your foot in the door, but be aware that this is basically a services business with the product as a marketing cost.
3. “Freemium” model. In this variation on the free model, used by LinkedIn and many other Internet offerings, the basic services are free, but premium services are available for an additional fee. This also requires a huge investment to get to critical mass, and real work to differentiate and sell premium services to users locked-in as free.
4. Cost-based model. In this more traditional product pricing model, the price is set at two to five times the product cost. If your product is a commodity, the margin may be as thin as ten percent. Use it when your new technology gives you a tremendous cost improvement. Skip it where there are many competitors.
5. Value model. If you can quantify a large value or cost savings to the customer, charge a price commensurate with the value delivered. This doesn’t work well with “nice to have” offerings, like social networks, but does work for new drugs that solve critical health problems.
6. Portfolio pricing. This model is relevant only if you have multiple products and services, each with a different cost and utility. Here your objective is to make money with the portfolio, some with high markups and some with low, depending on competition, lock-in, value delivered, and loyal customers. This one takes expert management to work.
7. Tiered or volume pricing. In certain product environments, where a given enterprise product may have one user or hundreds of thousands, a common approach is to price by user group ranges, or volume usage ranges. Keep the number of tiers small for manageability. This approach doesn’t typically apply to consumer products and services.
8. Competitive positioning. In heavily competitive environments, the price has to be competitive, no matter what the cost or volume. This model is often a euphemism for pricing low in certain areas to drive competitors out, and high where competition is low. Competing on price alone is a good way to kill your startup.
9. Feature pricing. This approach works if your product can be sold “bare-bones” for a low price, and price increments added for additional features. It can be a very competitive approach, but the product must be designed and built to provide good utility at many levels. This is a very costly development, testing, documentation, and support challenge.
10. Razor blade model. In this model, like cheap printers with expensive ink cartridges, the base unit is often sold below cost, with the anticipation of ongoing revenue from expensive supplies. This is another model that requires deep pockets to start, so is normally not an option for startups.

Your business model interacts closely with your marketing model, but don’t get them confused. Marketing is initially required to get visibility and access to the opportunity, but pricing defines how you will actually make money over the long term.

Overall, I’m a huge fan of the “keep it simple (KISS)” principle – customers are typically wary of complex or artificial pricing. Your challenge is to set the right price to match value perceived by the customer, with a fair return for you. It’s not a game show, so don’t guess - do your research early with real customers.

Marty Zwilling

COMMENTARY:   Developing a revenue model requires a thorough understanding of competitors, your competitive strengths and weaknesses and those of your competitors, how products or services in your industry are distributed, how those products and services are priced, factors affecting product production costs, types of customers who buy the products, trends in the marketplace, and other factors.  

Strategic Innovation In Developing A Pricing Model

Most companies compete on the basis of price, differentiation or product niche.  I am of the opinion that you should try to compete on three fronts by striving to differentiate yourself from the competition and lowering costs simulataneously, then if possible, expand the existing market by targeting a different class or type of customer not presently being served by the marketplace. This strategy requires excellent strong leadership abilities with the ability to convince the members of your management team to pursue this three-prong strategy.

The three-prong approach described above does not necessarily mean adding more features to the product or service in order to differentiate.   In fact, the reverse maybe true.   Sometimes it is best to "Say no to 1,000 things" something Steve Jobs said, and reduce the number of product features, product sizes and colors.  A testament to the wisdom of this strategy is what Steve Jobs did upon his return to Apple in 1996.  He reduced the number of Apple products to about a dozen by drastically cutting back their numbers or totally eliminating them from the inventory.  Product accessories were eliminated from production, and outsourced through third parties.  Reducing the number of products reduced Apple's production costs, warehousing and inventory carrying costs. Steve also differentiated itself by redesigning products so that they were easier to use by eliminating nearly all buttons, levers and dials.  Apple products also came in only one color:  white. This strategy has been continued through today, with all iMacs, iPods, iPhones and iPads coming in white.  Product accessories that give each product different colors and personalities are still produced by third parties. 

In 1998, Steve Jobs hired Tim Cook to manage Apple's product manufacturing.   One of the first things Tim did was to outsource the manufacturing of all Apple products to third-party vendors, a practice which continues to this day.  This strategy allowed Apple to eliminate plant and equipment capital expenditures and maintain the highest product margins of any consumer electronics company in the World. 

CEO's should not be afraid to make bold, game-changing strategic innovations that disrupt industries when the opportunity presents itself, rather than making small incremental changes.   Steve Jobs did this at Apple by:

1. Disrupting the portable music player industry when Apple introduced the iPod. 
2. Disrupting the digital music industry when Apple launched iTunes.
3. Disrupting the smartphone market when Apple introduced the iPhone.
4. Disrupting the computer industry when Apple introduced the iPad.  

Apple is reported to be working on an Apple television set that could disrupt how we consume television content in the home.

Apple clearly implemented a three-prong strategic innovation approach when it reduced or eliminated products from its inventory, reduced product external features and produced everything in white, outsourced all product manufacturing to third party vendors, entered new markets where it had never competed in by introducing four new consumer electronics products that disruped entire industries.  These changes differentiated Apple from the competition, created higher perceived value, reduced its operating costs and greatly improved profits margins.   In doing so, Apple clearly adopted the Value business model.  Its customers are willing to pay premium prices for its products because they believe Apple delivers greater perceived value in terms of design, engineering and performance.

The important point is to never stop innovating or take your competition for granted.  The innovation strategies that made Apple into the largest and most valuable (in market capitalized value) consumer electronics company in the world, and has allowed Apple to maintain its competive lead in its markets, must not be taken for granted.    

Value, Perceived Benefits, Price and Why Consumers Buy

Customers do not make their purchase decisions based solely on price. They select the best value for themselves.  To increase your customers' perceived value of your product or service, either increase the benefits or decrease the price.   Surround your product or service with so many benefits of such great value to your customers, that they will pay a higher price, and you will attain a greater market share profitably.

Developing Prices For Products or Services

To help you decide what to charge for your product/service you must know the following:

• What are your costs to produce a service, or buy a product? (Direct and indirect) 
• What is the customer willing to pay? (The urgency of market demand)
• What are your competitors charging? (Market research data) 
• What do you need to charge to make a profit. (How much do you want to make?) 
• These factors must be balanced.  

There are a variety of pricing methods in use.  One of the most common is Formula-Based Pricing.

• This method is widely used by consultants.
• It is vital to research the competition and have set guidelines.
• Do not undercharge.
• Invoice customers at the end of the month for work in progress.
• Multiply salary by 3.  If you want to earn $20 per hour, you charge $60 per hour.  This figure covers salary, overhead and profit.

The Product Pricing Formula

(Direct Material Costs + Direct Labor Costs + Overhead Expenses) / No of Items Produced = Cost Per Item.

Let's look at each component of the Product Pricing Formula:

• Direct Material Costs. 
  • The raw material and component costs to produce a single item or unit.
  • OR Divide the total direct material and component costs of a batch of the same item, by the number of items produced to obtain an average direct material cost per unit.
• Direct Labor Costs.  
  • The direct labor costs to produce a single item or unit.  
  • OR Divide the total labor costs you pay your workers to produce a batch of the same item, and divide it by the number of items produced to obtain an average direct labor cost per unit.
• Indirect Costs or Overhead Expenses.
  • This includes expenses that are not directly incurred in the production of the product, but are never the less necessary and incurred by the business like rent, utilities, telephone, cleaning, insurance, depreciation, office supplies, postage, repairs, maintenance, research and development, warehousing and storage, delivery and freight charges, packaging and shipping supplies. TIPS:  1) If you are renting or own a building used to produce the item or items, you should allocate the indirect costs incurred on the basis of square footage allocated to production and non-production areas. 2) For accounting purposes always segregate business expenses by department (manufacturing, sales and marketing, warehousing, research and development, general administration, etc) so that you can allocate indirect costs more accurately.  
  • In some cases, indirect costs can exceed the direct costs. This is often the case for startups because they incur very heavy initial startup capital expenditures for plant, equipment, tooling, initial research and development costs and legal costs for patents that can be tied directly or indirectly to the product.       
  • If you are working from home calculate a portion of your total rent or mortgage payment, in proportion to your workspace, or assign a reasonable figure.
  • List all indirect costs or overhead expense items and total them.
  • Divide the total overhead figure by the number of items produced per month.  This amount will be your overhead cost per item. 
• Profit.
  • Your profit will depend on whether you are selling your product direct to the consumer or selling your product through authorized resellers.   
    • Direct-To-Consumer Prices - If you are selling your product direct to the consumer, multiply the cost per item (see the Product Pricing Formula) by 2. If you have a unique product and the competition is not offering anything similar to it, you may multiply your cost per item by 3, 4 or even 5, but don't get carried away.  The prices you set will depend on market conditions, alternatives and the costs to produce the item.  If you have very low production costs, a superior design, better features or game-changing technology, you may be able to charge premium prices.  Whatever you do, always research your market for competing products and market trends that could affect the demand for your product.       
    • Wholesale Prices -  If you are selling your product through authorized resellers your wholesale prices should be sufficient to yield a minimum profit margin of 65%.   

The Service Pricing Formula

(Hourly Rate + Hourly Overhead Expense) * 2 = Price per Hour

Let's look at each component of the Service Pricing Formula:

• Hourly Rate - Your time is valuable whether you work for yourself or someone else. Decide on what you are worth taking into account your industry experience, education, training, special knowledge and contacts.  Establish a reasonable hourly rate based on the above factors.   Compare your hourly rate to industry averages to insure you are within the ballpark.
• Hourly Overhead Expense Rate - Calculate all the costs related to operating your business from home or private office, and arrive at a total cost per month.  Divide this by the average number of hours worked per month, to obtain your hourly expense. 
• Price Per Hour -  Add your hourly rate and hourly overhead expense rate, then multiply the result by a factor of 2, to yield a Price per Hour.    Your competition, market conditions and demand for your services will dictate how much you can reasonably charge per hour.   The effects of the Great Recession, high unemployment rate and global economy means you may have a lot of competition from within your industry and from moonlighters and independent consultants.  

Price Ranges

Prices for products and services can vary greatly based on brand recognition, geography, knowledge and expertise, economic conditions, scarcity, monopolization and other factors.  The global economy means that you must compete not only locally or even nationally, but internationally as well.   The internet now makes it possible to quickly compare prices, find the lowest price and obtain product reviews.  The Great Recession reduced the prices of just about everything.  Real estate values in many parts of the country are still down, and many homeowners are underwater, owing more than their property is worth.  Due to high unemployment rates in many parts of the country, average hourly rates in many industries are down.  It's a buyers market. Having said this, prices generally fall into three categories:  High-end, Mid-range and Low-end.   Let's look at the characteristics of each price category:

• HIGH-END
  • Prestige and Image.  
  • Strong brand name. 
  • Numerous features.
  • Known for high quality.
  • Warranty.
  • Uniqueness.
  • Novelty. (price is not a major factor.)
  • Scarcity (valuable earth metals, diamonds, gold, real estate, etc.)   
• MID-RANGE
  • Good quality. 
  • Features. (Value is critical.  Trade off with Price)
  • Warranty.
  • Practicality.
  • Serviceability.
• LOW-END  (Caution.  In a service business, people tend to think that something is wrong, if your prices are too low.  They assume that the services are of inferior quality.) 
  • Inferior or poor quality.
  • Less features or services provided.
  • No customer loyalty.
  • Unknown brand name.
  • Competitors compete almost solely on the basis of price.  

Competing in the Mid-Range price range could be an advantage for some brands, especially during the Great Recession, because they can get customers from the High-End looking for a bit lower price and comparable quality and can get customers from the low-end spectrum who are looking to upgrade in quality and pay a bit more.  This has actually happened a lot with packaged goods manufacturers who have produced their products in smaller sizes to appeal to thrifty consumers looking for better quality and a prestige brand.  The same thing has happened in fashion apparel and accessories, with many designers producing mid-range fashion apparel and accessories to appeal to consumers looking for a prestige brand at a bit lower price point.  '99 cent stores' exploded during the Great Recession to meet the needs of the low-end consumer who just wants the lowest price possible while sacrificing quality and features.  

As an alternative to lowering prices, many producers have turned to discount coupons to lure customers.  This tactic allows them to keep customers loyal to their brand from buying mid-range brands.  This also allows mid-range consumers to upgrade to high-end brands.  This is a win-win for the consumer and keeps the producer's volume high enough to keep production costs under control.

 

Courtesy of an article dated April 21, 2012 appearing in Startup Professionals Musings

 

HOW JAPAN'S TENGA REINVENTED THE ART OF MALE MASTURBATION THROUGH TECHNOLOGY, SLICK DESIGN AND ELEGANT PRODUCTS

TENGA, the "New Adult Concept" was created in Japan by Mr. Koichi Matsumoto to satisfy the needs of every man.  Cosmetically elegant and stylish, TENGA produces the latest in disposable masturbation technology that stands out when compared to traditional male masturbation products.

TENGA promises a new level of sexual sensation to its users. Tenga's popular line-up of disposable masturbation products includes Tenga Onacups: (top row, from left-to-right) the Deep Throat Cup, Soft Tube Cup, Rolling Head Cup, and (bottom row, from left-to-right) interior view of the Deep throat Cup, Air Cushion Cup and Double Hole Cup.

[Click Image To Enlarge]

TENGA also produced  the ultra popular TENGA Flip Hole, a line of reusable masturbators, and the next step in the evolution of male masturbation technology.  With an all new set of interior structure including the Waving Ball, Cross Wall, Brushing Edge, and Moving Ball, it is designed to be different from the standard TENGA onacups and the original TENGA Flip Hole. Also as the second reusable TENGA product, it uses the the same revolutionary flip design for cleaning and the expandable mid-section for different sized girth. TENGA has included a mini set of 3 different lotions named “real”, “mild”, and “wild” for further customization of the ultimate experience. 

 

Tenga's winning product is the Tenga Egg, an egg shaped disposable masturbator.  It comes complete with everything needed for one masturbation session. The discreet Egg shaped packaging comes with one Egg masturbator and a lubricant packet. The Tenga Egg offers extra stimulation and joy to the traditional "hand job" for men that are busy and on the go.

The outside of the Temga Egg, looks like an egg.  It is a very smooth and silky texture. The inside of the egg is packed with clusters rounded nubs. The entire egg is white and made of 100% Silicone. Silicone is free of Phthalates and Latex. It is food grade material and hypo-allergenic. The Egg is tasteless and odorless. The inside of the Egg is mildly sticky, but goes away once lubricant is applied.

The Tenga Egg comes packaged in a white plastic egg covered with a plastic wrap. The wrap has small silver designs on the package to show the texture of the masturbator. The front has the name on the product in English. The back of the packaging is in Japanese.  

The plastic wrapping can be torn off. Next the plastic Egg pops open at the middle to expose the masturbator. The masturbator can then be removed from the egg. It has a small plastic spacer inside the egg to keeps its shape. And the lube package is placed inside the plastic spacer. 

The Tenga Egg comes in six inside textures: Twister, Spider, Wavy, Clicler, Silky and Stepper. Each inside texture is unique and printed on the packaging.   

Tenga uses a slick water-based lubricant that works well with the Tenga Egg. It is single use as is the Egg. Both work well together. There is about a tablespoon of lubricant in the package. It provides enough to cover the inside of the Egg.  It lasts for about a 20-minute session. 

 

It took years of engineering to develop the right design that delivers the ultimate experience. TENGA uses soft, skin-like materials in combination with soft foam creating not only the most comfortable, but the most ergonomically correct masturbator on the market. Massage nubs of different size and shapes are used in all the different models to create an unique experience for each model. Select a product below and find out how different they are.

 

COMMENTARY:   Tenga is the first adult wellness company that has brought dignity and class to male masturbation.  Masturbation is a natural human biological function that is often viewed as taboo, ridiculed and even frowned upon by some cultures and religions. 

At the age of 34, Koichi Matsumoto, the founder of Tenga, left his job as a used car salesman to start his own company.  With 10 million in yen he had saved, he began to work on designing his own products.  After various ideas, he picks “This one! This is what I am going to revolutionize!” That product theme was adult goods.

Three years after becoming self-employed, with various trials and errors behind him and his self funding starting to reach an end, March 2005 saw the birth of TENGA Inc.

July 7th of that same year, the fruits of his blood, sweat and tears, the products which he put his heart and soul into, the original 5 types of “TENGA” were released.

Tenga became virtually an overnight sensation in Japan through its unique product designs.  In its first year of operations, Tenga sold over 1 million units without media coverage or Japanese celebrity endorsements.  

Tenga has really differentiated itself from competitors through the unique designs, shapes, colors, materials, textures, packaging and functionality of its products.  For Tenga, "The Future of Masturbation is Now".  Tenga has truly brought high-technology to male masturbation.  Tenga is the first company to develop the single session or disposable masturbator.   

Since 2007, the TENGA brand is available globally, and is now sold in over 40 countries worldwide, including among others, the USA, the UK, Spain, Australia, Brazil, Russia and Singapore.

TENGA Co., Ltd. has collaborated with Japan’s largest condom manufacturer OKAMOTO to produce the “OKAMOTO x TENGA” CUP series of products available in pharmacies and drugstores across Japan since September 2007.  

In November 2010, TENGA Co., Ltd. collaborated with Japan borne clothing labels Roen, VANQUISH, SWAGGER, XLARGE® and roar for a Limited Edition product line up to raise money for the STOP AIDS fund for World AIDS Day.  

Now in their seventh year, TENGA has sold over 15 million units worldwide, and is currently the number 1 brand of male masturbation products by units sold.

I love happy endings, don't you??!!

REDSHIFT: AN ALL-ELECTRIC MOTORCYCLE THAT BREAKS THE RULES (AND SPEED LIMITS)

HOW DO YOU SELL RIDERS ON ELECTRIC MOTORCYCLES? JUST SELL RIDERS ON A FASTER MOTORCYCLE.

When most consumers think “electric car,” they’ve been conditioned to think green, to think “Prius” and “limited range” and “braking efficiency.” But electric’s greatest advantage isn’t necessary an environmental one; it’s that an electric motor isn’t limited by the physics of combustion. Rather, just like an electric screwdriver, an electric car can go full throttle, instantly, without switching gears. Smart designers can take advantage of that.   Marc Fenigstein, CEO of motorcycle startup BRD says. 

“We didn’t set out to build a bike for the masses.  We set out to build a bike for a very specific format where we knew electric was the best option.”

 

BRD developed a groundbreaking electric motocross bike called the RedShift. Fenigstein tells Co.Design.

“It looks familiar because in function it is the same as gas motocross bikes.  It looks different because it doesn’t need an exhaust or gas tank anymore.”

Some may see the bike as green. Others may recognize its economic savings--despite the relatively high $15,000 price tag--as an electric bike pays for itself by sidestepping oil changes and constant engine rebuilds. But instead of using these features as a marketing crutch, BRD designed and sold for speed. 

Fenigstein writes. 

“The major breakthrough is simply the approach.  BRD doesn’t assume that anyone needs electric. Gas bikes kick ass, and none of us would trade our gas bikes for anything that is slower, uglier, or less fun. We set out to build a bike that was prettier, faster, and more fun than what was in our garages.”

BRD RedShift all-electric motorcycle (Click Images To Enlarge)

By using gas performance as their design standard rather than some arbitrary engineering metric, BRD created a bike that was 100lbs (or 30%) lighter than competing electrics in their class and a bike that one-ups gas competition by putting out peak horsepower at will and requiring no shifting. It’s also just a beautiful vehicle to look at, with a surprisingly unique, almost anime color scheme in a field filled with eye-punishing chroma.

Fenigstein writes. 

“The motorcycle market has very strong brand associations for the primary and secondary colors (Red = Honda and Ducati, Green = Kawasaki, Yellow = Yamaha and Suzuki, Blue = Yamaha, Orange = KTM) so we had to find something off the beaten path.  We drew from some of our favorite racing liveries and played around until we found something that stood out for its subtlety, rather than competing for ‘OMG LOOK AT ME AAAAAAHHHH.’"

 

I’m not sure that you can call anything about the RedShift subtle, but it is a gorgeous bike that’s hiding at least one awesome feature that your eyes can’t see: It sounds like a Star Wars podracer in action.

COMMENTARY:   Now that's what I call a super-cool all-electric motorcycle for the masses.

About BRD

"BRD is a team of riders, racers, designers, engineers, makers, builders, thinkers, mechanics and troublemakers. We build motorcycles because it's what we were born to do."

"We love motorcycles. The best ones make you tingle when you look at them, giggle when you ride them, and scare you just a little bit (i.e. score a 90 or above on the Tingle-Giggle-Scream Index). We love going fast. And we love finding new ways and new places to go fast. Our goal from the beginning was to create motos that are easier to ride fast than anything else out there. We build electric bikes because we are in love with instant throttle response and flat, endless torque. Because we want the next bike we purchase, gas or electric, to be faster than our last one."

"Though it didn't yet have a name, BRD began in about 2007 when two riding buddies, Derek Dorresteyn (CTO and co-founder) and Jeff Sand (CDO and co-founder), who happened to have an unbelievable amount of fabrication, engineering and design experience and expertise between the two of them, fell in love with the idea of the smooth, perfectly responsive torque curve of an electric motor and started kicking around the possibilities for building their own electric motorcycle... a motorcycle that could be faster and more rideable than their gas bikes."

Management Team

• Derek Dorresteyn, CTO and Co-Founder
• Jeff Sand, CDO and Co-Founder
• Marc Fenigstein, CEO and Co-Founder

BRD Bike Models

The RedShift MX is barely legal - a race bike with lights. Designed for MX2/Lites class racing, the MX light and quick, without the lost seconds from hunting through gears trying to find torque. With 200 hour maintenance intervals, you'll also spend more time riding and less time wrenching. 

Specifications

Power (hp):  25/40 hp *

Battery capacity (kWh):  5.2 kWh

Est. range:  2 hours **

Top speed:  80 mph ***

Street weight (lbs):  260 lbs +

Race weight (lbs):  250 lbs ++

Front suspension:  12" fully-adjustable

Rear suspension:  12" fully-adjustable

Front wheel:  21" spoked

Rear wheel:  19" spoked

Wheelbase:  57.3

Seat height (in):   37 ins

* Continuous/Peak (10s)

** Based on recreational trail or mixed road use

*** Redline based on standard gearing;

+ With lighting and switchgear

++ With lighting and switchgear removed

Estimated retail price:  $14,995

The RedShift SM is a race sumo without the oil changes. It is designed for everything a city can throw at a bike. Because of its off-road roots, it may be pretty but it's not precious. Feel free to beat on it, but remember: just because it is fully capable of launching stair gaps and airing out the crests of San Francisco hills does not mean we condone that use or behavior in any way.

Specifications

Power (hp):  25/40 hp *

Battery capacity (kWh):  5.2 kWh

Est. range:  50 miles **

Top speed:  85 mph ***

Street weight (lbs):  265 lbs +

Race weight (lbs):  255 lbs ++

Front suspension:  12" fully-adjustable

Rear suspension:  12" fully-adjustable

Front wheel:  17" spoked

Rear wheel:  17" spoked

Wheelbase:  56.6

Seat height (in):   35.5 ins

* Continuous/Peak (10s)

** Based on recreational trail or mixed road use

*** Redline based on standard gearing;

+ With lighting and switchgear

++ With lighting and switchgear removed

Estimated retail price:  $15,495

BRD is now taking advance orders for delivery in 2013.

Courtesy of an article dated April 25, 2012 appearing in Fast Company Design 

9 PRINCIPLES FOR GREAT BRANDING BY THREE OF THE WORLD'S BEST PRODUCT DESIGNERS

We all know great design has a critical role to play in building a great brand. But how do we go about making that happen? I recently had the opportunity to speak to three top designers about that very question: Robert Brunner, founder of the design shop Ammunition and author of Do You Matter: How Great Design Will Make People Love Your Company; Joe Doucet, founder of Joe Doucet Studio and David Hill, vice president of design at Lenovo and author of the Design Matters blog.

Through these conversations, it became clear that the link between design and branding is important, and that having a top design team is to crucial to having a winning brand.

Here's what I learned:

1. Branding and design are, to a large extent, inseparable.  Brunner says.  "A brand is not your logo or ID system.  It's a gut feeling people have about you. When two or more people have the same feeling, you have a brand. You get that feeling via smart design, which creates the experiences people have with the brand. Everything you do creates the brand experience, ergo design IS your brand."
2. If design is the brand, stop thinking of branding and design as distinct disciplines.  Doucet says.  "It's all about integrating design and brand.  We need to cease thinking of them as different disciplines. The essence of the Apple brand comes through its design. Take the logo off a BMW and you still know it's a BMW."
3. Brands need to create an emotional relationship with people.  Brunner says.  "We are all emotional beings and we have emotional relationships with brands we trust. Designers need to make that happen. A designer must take the values and assets of a company and transform them in a special way that connects with people emotionally."
4. Designers need to "get" the essence of the brand.   Hill points out.  "For designers to build a great brand, they have to understand it.  You need to understand its history, its values, and what it means to people. Can you imagine designing the latent Jeep without understanding the brand archetype of what it means for a product to be a Jeep?"
5. Design needs to be strategic from the outset.   Hill said.  "For design to have a major impact, it's got to get involved at the strategic level.  It can't be an afterthought or superficial trappings to be put on post product creation. Samsung's brand became powerful only after they put a Chief Design Officer in place and made it a priority for the company."
6. Integrate design early in the process to drive innovation and create solutions. Doucet says.  "Good designers approach design as an opportunity to ask questions.  Solution generation starts by questioning initial assumptions. Rather than ask myself 'How should I design Widget X?' I need to be asking 'Do we really need Widget X or is there a better solution to this customer problem? So a designer needs be there at the beginning and be connected to the decision-makers. For example, at Braun, Dieter Rams sat across from the owner of the company."
7. Don't overdesign.   Hill says.  "With the increasing emphasis on design in the world today, it's important to avoid the 'over-designed syndrome.  A simple, well-thought-through, authentic design is often the best. Everything doesn't need to be redesigned; sometimes what we have in hand is better than what we seek. It's not all about being different; it's about being better. If Levi Strauss wanted me to redesign the patch on the back of their jeans, I would look in their archives for the original."
8. Use design to continually reinvent the brand.  Doucet says.  "Some folks think they know branding.  Figured it out long ago. 'Hi. I'm someone you'll like. You'll know it's me because I always wear a red polo shirt (pantone 185 to be exact) with blue pants and a yellow belt.' You can't think that way today. Brands need to allow themselves to constantly update, and be much more fluid. Look at Google; they morph their logo for special occasions. Constant change is a big part of who they are."
9. Use design to make a difference.  Brunner says.  "Design can make a difference in how we live.  Take sustainability. A lot of what is done in that area is 'making bad, better.' We're taking wasteful things and seeing how we can make them not so bad. We need to start thinking about how we can use our design tools to encourage people to change. You do that by making 'doing better' also be fun, interesting and (importantly) the path of least resistance. And you do it in an encouraging, not controlling, way. Design needs to do that in order to reach a larger audience than just the small group that is socially driven."

While these steps may require a new way of thinking about design for some, they're key steps to the path for those who want to build a great brand and make life better for those who experience them.

COMMENTARY:   In order for a brand to be successful, it must make a powerful emotional connection with the consumer.  When branding is executed to perfection, the brand and the product become one and the same.  In commodity industries some brands have developed such strong emotional ties that they become brand loyalists or evangelists.  They live and breath that brand.  If you say tablets, an Apple brand loyalist will say 'iPad'.  If you say smartphone, an Apple brand loyalist will say "iPhone."  When emotional connection with a brand has become that strong, you have a landmark.   A lovemark is the brand that comes to mind immediately and foremost when you mention a product.  Whether its a tablet soft drink, those brand loyalists will almost universally say, "iPad" and "Coke."  If you are No 2 or No 3, it no longer matters how much you spend on branding.   I think this is what you are seeing with Apple products.  All of them have become lovemarks.  They have become inseparable from the brand and the product. To the consumer they are one and the same, and that is the strongest type of branding that can be attained.  

Courtesy of an article dated Aprilo 16, 2012 appearing in Fast Company

UNREASONABLE AT SEA, THE FIRST OCEAN-GOING STARTUP INCUBATOR WITH A CAMPUS-ON-A-SHIP BEGINS SAILING IN 2013

The ship MV Explorer will serve as a Semester at Sea and Unreasonable at Sea's tech incubator floating campus beginning in 2013 (Click Image To Enlarge)    

Last year, we wrote about Blueseed, an incubator-on-a-ship that is anchored near Silicon Valley.

We think we’ve found something cooler. Check out Unreasonable at Sea, an accelerator program geared towards tech entrepreneurs who want to take their products to different shores.

Unreasonable at Sea will make port at 14 different countries and circumnavigate the globe during its 100-day incubator program aboard the MV Explorer (Click Image To Enlarge)

They are doing it quite literally too: Ten teams from around the globe will participate in a 100-day program aboard a ship that will port at 14 different countries (subject to changes):

• EMBARK: San Diego, CA, USA
• Hilo, Hawaii
• Yokohama, Japan
• Kobe, Japan
• Shanghai, China
• Hong Kong
• Ho Chi Minh City, Vietnam
• Singapore
• Penang, Malaysia
• Cochin, India
• Port Louis, Mauritius
• Cape Town, South Africa
• Tema (Accra), Ghana
• Casablanca, Morocco
• DEBARK: Barcelona, Spain

Curious? Watch this 3-minute trailer:

 

If you think this is some kind of extended cruise trip, you’re wrong. Teams will be expected to perfect, tweak, and adjust their business model and product. Daily workshops will be held by mentors on the ship.

When porting at the different countries, events will be held to put these entrepreneurs in front of their land-based peers, as well as investors, politicians, and philanthropists. An opportunity will also be presented for them to test their products in various markets.

Which is a lot of hard work.

General Requirements To Quality 

To be eligible for this accelerator your company must meet the following requirements:  

• Your company must be for-profit. 
• Your company must be technology-based. 
• Your company should consist of at least two people. 
• You must also have a prototype, and prove that it is highly-scalable and has the potential to gain user traction. 
• Being revenue-generating is a plus. 

This accelerator, a collaboration between Semester at Sea and Unreasonable Institute, will start in January 2013. Applications close on 15th May 2012.

Some of the mentors that will join the program include: Ben Casnocha, co-author of The Start-Up of You, as well as George Kembel, who leads the Institute for Design at Stanford.

I guess spending 100 days out at sea is an experience very few have gone through, so expect some tough competition for a place.

Here’s the kicker: The cost of attending the program, estimated at US$120K per team, will be sponsored. On top of that, you’ll get a US$500 stipend for the whole trip.

But if you’re prone to sea-sickness, perhaps you should look elsewhere.

COMMENTARY:    If you read through the Unreasonable at Sea website you will find that this is a very serious incubator program, and it is going to be very selective.  You will be expected to meet ALL the criteria (see below) in order to quality for selection.   

Unreasonable at Sea is looking for entrepreneurs using technology to address massive social or environmental problems and using certain types of technologies.  This incubator program is not for social networks, mobile app developers, game makers, and so forth.   

The selected entrepreneurial teams will be quite unique and will undero brutal schedules that will include long hours in the class room and mentoring, meetings and presentations at each port of call, and very little sleep.   This is not your normal party boat.

This would be a perfect situation for a reality TV program.  Wish I had the time and financial resources to do it myself. 

Full Criteria To Qualify

You Must Answer YES to All The Following

• Is your company using technology to address a massive social or environmental problem?  We are looking for ventures focusing on telemedicine, mobile banking, clean-tech, democratized education, disaster relief…etc. In short, we are searching for companies leveraging technology to have significant impact.
• Is your company at a stage where it is strategic to work  internationally?  Unreasonable at Sea presents an incredible opportunity to leverage technologies that are already working in one market, and help move them globally. We are looking for companies who can convince us that their company will benefit wildly from the experience of an international accelerator at sea.
• Are you currently working full time on your venture?  A full-time commitment is defined as a minimum of 40 hours per week.
• Do you have at least one team member who is currently working full-time with you?   We believe in the power of teams and will only accept applications on behalf of teams that are at least 2 people in size. If you have 100 employees and individuals on your team, that is ok with us, but if you are going at this alone, we will not read your application.
• At minimum, do you have a prototype to market or have you run a pilot?  We do not select ventures at an idea stage. You must have a prototype or have completed a pilot program at minimum to be accepted. As noted above, we prefer to work with companies ready to scale internationally and who have already gained significant traction in at least one market.
• Is your venture a for-profit company?  We are capitalists at heart in that we believe in the power of markets to solve needs at scale. Consequently we do not work with NGO’s or non-profit organizations.
• Has your venture generated at least $1 in revenue from selling a core product or service?  We hold all companies who apply to this standard unless there is a compelling reason they have not yet sold their product or service (for example, many bio-tech companies need to run years of trials before they can sell a product).
• Do you have a relentless entrepreneurial spirit & are you hungry to take your venture to global scale?  You get where we are going with this.
• Are you 18 years of age or older?  You could be 80 years old, but due to a number of legal issues, we can’t accept applications under the age of 18.
• Are you a Founder or Co-Founder of your organization?  Although we will be accepting 2 to 3 individuals from each company selected, we insist that the founder or co-founder joins us on the voyage.
• Are you able to make key, high-level, direction-shifting decisions?  (such as investment and major partnerships) on behalf of your organization? Typically, this is the role of a CEO or CTO, but doesn’t necessarily have to be.
• Can you read, write, and speak in English fluently?  The entire program will be taught in English. English doesn’t need to be your first language, nor do you need to be prolific in English, but you will need to be able to read, write, and speak in English. 

If accepted, will you be able to attend the ENTIRE Unreasonable at Sea program from January 6, 2013 –April 25, 2013.

Semester at Sea

The mission of Semester at Sea is to educate individuals with the global understanding necessary to address the challenges of our interdependent world. Established in 1963, Semester at Sea is the only study abroad program of its kind in the world. Using a ship as a traveling campus, undergraduates, lifelong learners, faculty, and lecturers live and learn together while circumnavigating the globe each fall and spring semester and exploring a world region each May and summer term. To date, Semester at Sea has launched 100 voyages, educated more than 50,000 students from 1,500 universities, and traveled to more than 60 countries.

Unreasonable Institute

The Unreasonable Institute is a mentorship-driven acceleration program for entrepreneurs tackling social and environmental problems. Each year, the Institute unites 25 entrepreneurs from every corner of the globe to live under the same roof for six weeks in Boulder, Colorado. These entrepreneurs receive training from 50 world-class mentors, ranging from the Former Director of Google.org, to the CTO of HP, to an entrepreneur who’s enabled over 19 million farmers to move out of poverty. In the process, they form relationships with 20 investment funds, receive legal advice & design consulting, and pitch to hundreds of investors and partners. 

After seeing the success of the model of the Unreasonable Institute, it’s founder,Daniel Epstein, is eager to launch Unreasonable at Sea with a new approach. Instead of uniting entrepreneurs in the entrepreneurial Hub of Boulder (as Institute does), this accelerator will take place on a ship as it travels more than 25,000 nautical miles around the globe to 14 international destinations. 

Courtesy of an article dated April 18, 2012 appearing in SGEntrepreneurs

BLOOM CHIPS, A NEW PRINGLE'S PACKAGE DESIGN THAT MAKES THE OLD TUBE UNFURL INTO A BOWL FOR EASY SERVING

The new Bloom Chips package unfurls into a serving bowl to replace the old boring Pringle's potato chip tube (Click Image To Enlarge)

ONE DESIGNER’S FURY AT PRINGLES BLOSSOMS A BRILLIANT IDEA IN SNACKING.

Young designer Dohyuk Kwon encountered the same problem we all have before: He was enjoying a package of Pringles potato crisps until, suddenly, he found the chip level had sunk to a critical expletive-laden stage just below the reach of his fingers.  He tells Co.Design.

“So I sketched a more convenient package of chips.” 

His concept is called Bloom Chips, and it won a Red Dot Award for its obvious brilliance: Bloom Chips is a wrinkled cylinder that unfurls to create its own bowl.   Kwon says.  

“Its mechanism is more complex than it looks.  Simply speaking, it’s like a blooming flower.”

The idea is so instantly impressive that it’s impossible to imagine why no one at Procter & Gamble thought of it first.

Bloom Chips packaging concept for Pringle's boring packaging (Click Image To Enlarge)

Though, there is some precedent in the world of self-contained snacking: The design reminds me a bit of Jiffy Pop, which uses a similar, expandable packaging to make its own container. Kwon responds.

“I didn’t know Jiffy Pop until a few minutes ago, It’s very, very interesting. I guess once there was a man who complained about existing popcorn package, so he made the package for Jiffy Pop.”

(Interestingly enough, Jiffy Pop really was the project of one man! Frederick C. Mennen, a chemist and inventor from LaPorte, Indiana, developed the product in 1958. But actually, another man invented Jiffy Pop first. An identical predecessor was called E-Z Pop, developed by a Michigan-native named Benjamin Coleman. Coleman sued for patent infringement in the 1960s, but the case was turned over in appeal.)

Bloom Chips will likely never convince Pringles to change their cans, but that’s okay. For one thing, we really don’t need to be enticed into eating a whole package of chips every time we pop open a new can. But more importantly, pouring those unreachable Pringles crumbs straight from the can into one’s mouth is one of the simplest, most wonderful pleasures in life. And really, it’s a delicious byproduct of design gone wrong.

COMMENTARY:   Now that's what I call a cool design that really makes sense, but I doubt that Pringles will change their old packaging just to add a convenient serving bowl.  I do love the design, though.  

Courtesy of an article dated April 9, 2012 appearing in Fast Company Design

DUTCH FIRM ANNOUNCES THE SUCCESSFUL MAIDEN FLIGHT OF THE PAL-V, A SPORTY 3-WHEELED VEHICLE THAT CAN FLY LIKE A GYROCOPTER

The Personal Air and Land Vehicle or PAL-V One can be configured as a three-wheeled automobile or flying gyrocopter (Click Image To Enlarge)

Flying Car Makes Successful Maiden Flight

In early April 2012, the Dutch company PAL-V Europe NV announced that it had successfully concluded test flights of its flying car, PAL-V One or Personal Air and land Vehicle.  Two weeks prior to the announcement, several test flights were conducted at the Gilze Rijen Airport (The Netherlands).  The PAL-V One flies in the air like a gyrocopter with lift generated by an auto-rotating rotor and forward speed produced by a foldable push propeller on the back.  On the road it drives like a sports car.  No new infrastructure is required because it uses existing roads and airstrips. 

PAL-V One during its maiden flight (Click Images To Enlarge)

 

This unique PAL-V One marks the beginning of a new era in flying automobiles.  The first deliveries of the commercial version are expected in 2014.

Video below.

 

About The PAL-V One 

The PAL-V ONE is a two seat hybrid car and gyroplane: a personal air and land vehicle. What makes the PAL-V ONE attractive is the convenience of fully integrated door-to-door transportation.

On the ground this slim, aerodynamic, 3-wheeled vehicle has the comfort of a car with the agility of a motorcycle thanks to its patented, cutting-edge, ‘tilting’ system. It can be driven to the nearest airfield and take off just like any other airplane. The single rotor and propeller are unfolded to make the PAL-V ONE ready to fly.

PAL-V One during its maiden flight (Click Images To Enlarge)

When airborne, the PAL-V usually flies below 4,000 feet (1,200 m), the airspace available for uncontrolled Visual Flight Rules (VFR) traffic; so there will be no interference from commercial air traffic. Furthermore, the PAL-V is powered by a very robust, flight certified aircraft engine. It runs on gasoline. It can reach speeds of up to 180 km/h (112 mph) both on land and in the air.

The PAL-V ONE has a very short take off and landing capability, making it possible to land practically anywhere. When not using controlled airspace, you can take off without filing a flight plan. Flying a PAL-V is like a standard gyrocopter. It is quieter than helicopters due to the slower rotation of the main rotor. It takes off and lands with low speed, cannot stall, and is very easy to control. The gyroplane technology means that it can be steered and landed safely even if the engine fails, because the rotor keeps auto rotating.

The PAL-V One Experience

On the road, the PAL-V ONE accelerates like a sports car. The razor sharp cornering makes you feel like you are skiing elegantly and effortlessly down a beautiful mountain. When flying, the PAL-V is very safe and easy to handle, opening up new dimensions of the personal freedom you have always wanted to experience. Fly-drive to an island, soar over that traffic jam, sail above water, create your own virtual bridge, cross that mountain range as freely as a bird. Go wherever you want to go whenever you feel like it and… fully enjoy the new experiences your PAL-V ONE offers!

Transformation From Airplane To Automobile

Converting the PAL-V ONE from airplane to automobile is a very easy process which takes about 10 minutes. Once the engine stops, the propeller folds itself automatically into the driving position. Pushing a button then lowers the rotor mast into the horizontal position. The same motion lowers the tail. The outer blades are folded over the inner blades via hinge mechanisms. The last steps in the process are to push the tail into its driving position and secure the rotor blades. This conversion can be executed by the driver/pilot after just a short training lesson. To convert from driving to flying mode, simply reverse the sequence.

Styling and Design

The distinctive look of the PAL-V is the result of an uncompromising design approach that integrates both aerodynamic and stylistic requirements. It is dynamic without being overbearing and delivers elegance rather than extravagance. The result is a timeless exterior that maintains excellent aerodynamics. What the driver/pilot sees, hears, and feels is all in harmony. The reward is total involvement: a level of engagement and experience that truly stimulates the senses.

PAL-V DVC Tilting Technology

The PAL-V drives using the patented DVC™ tilting technologies invented for the Carver ONE (a two-passenger land vehicle). Watch movie: “carver driving”

Steer it like a car and it banks like a motorcycle. It sounds deceptively simple, and it truly is! At the heart of the PAL-V lies the Dynamic Vehicle Control (DVC™) system which automatically adjusts the tilt angle of the vehicle to its speed and acceleration, enabling a plane-like ’tilting while cornering’ performance.

The driver’s input via steering torque is distributed between the front wheel steering angle and the vehicle tilting angle. This distribution is automatically adjusted to varying speeds and road conditions to ensure an optimal balance at all times. At lower speeds, the steering torque is directed to the front wheel angle and the passenger compartment remains upright. At higher speeds the steering torque is mainly directed to the tilt angle of the cockpit.

The genius of the DVC™ technology is in its simplicity: essentially a mechanical-hydraulic system. It relies on proven technology resulting in a reliable responsive, and above all, extremely safe steering system.

With the PAL-V ONE, tilting in corners becomes second nature.

Technical Specifications

Click Image To Enlarge

Pricing

Not Available Yet

COMMENTARY:   PAL-V Europe NV was started in 2001 by Ir Robert Dingemanse co-founder and CEO to design a roadable aircraft.  It evaluated many potential technologies and created numerous concepts in cooperation with well-known research institutes and universities. The most important breakthrough was the maturing of the DVC tilting technology in 2005. This brought into reach the design of a real flying car instead of a roadable aircraft. This technology allowed for safe driving without compromises while having a high centre of gravity and a narrow aerodynamic shape necessary for flying. The first real “flying car” concept was born!

Having designed and patented their findings and concepts, PAL-V Europe NV hired a team of very skilled engineers with automotive, aviation and motorcycle backgrounds and started the engineering of its proof-of-concept prototypes. World-class partners were selected and contracted for several system elements. This led to the first flight of PAL-V’s proof-of-concept prototype in 2012.

Since then the company entered the next phase of development, engineering the first commercial version, optimizing the design, and starting up production. This will result in the market launch of the first model: the PAL-V ONE: the first, exclusive, limited, historic edition in its line-up of flying car models. The next chapter in the history of mobility is being written, by PAL-V, today!

A team of top engineers has been working on the first prototypes since finalization of the design concept in 2008. Renowned institutes such as the Dutch National Aerospace Laboratory and Delft University have also been involved in the development. The driving prototype was fully tested in 2009 and now the flying-driving prototype has made its first flights. The PAL-V complies with existing regulations in all major markets, which means that the vehicle is allowed both in road traffic and in the air.  Robert Dingemanse, CEO and co-founder of PAL-V commented:

“We are very proud to announce this successful maiden flight of the PAL-V and we now invite investors to create the future with us. We know there is a lot of interest for the PAL-V. Prior to announcing these test flights, we were already approached on a daily basis by potential customers and dealers wanting to be part of this exciting project.” 

A PAL-V offers the choice of flying like a plane or driving like a car. This means fast door-to-door mobility for private individuals as well as professionals and organizations. The flying range will be between 350 (220 miles) and 500 km (315 miles), depending on the type, pay load and wind conditions. Driving, a PAL-V will have a range of about 1200 km (750 miles). It runs on gasoline like a conventional car and there will also be versions that use biodiesel or bio-ethanol. It can reach speeds of up to 180 km/h (110 miles/h) both on land and in the air.

On the ground the slim, aerodynamic, 3-wheeled vehicle combines the comfort of a car with the agility of a motorcycle thanks to its patented, cutting-edge, ‘tilting’ system. Driving, a PAL-V accelerates like a sports car and drives through curves like a motorcycle.Flying, a PAL-V is like a standard gyrocopter. It is quieter than helicopters due to the slower rotation of the main rotor. It takes off and lands with low speed, cannot stall, and is very easy to control. This makes a PAL-V one of the safest types of aircraft. Obtaining a licence requires only 20 to 30 hours of training.Thanks to its very short take off and landing capability, it is possible to land a PAL-V practically anywhere. For take-off, a strip of 165 meters (540 feet) is enough and it can be either paved or grass. Governments are already preparing for increasing traffic with Personal Air Vehicles like the PAL-V. In the United States and in Europe government-funded development programs are determining the infrastructure of ‘digital freeways’ to provide a safe corridor using GPS technology. The technology is available today to allow personal air traffic to grow safely. PAL-V Europe N.V. is determined to play a leading role in this market.

Courtesy of various press releases issued by PAL-V Europe NV