Design is the new black
Design is the new black

By now, pretty much anything has a design perspective. Companies no longer limit themselves to designing their products or the corporate website; they also design their business model, their organisation or their strategy. Design is so black, in fact, that sometimes the actual meaning of the word seems lost in the gloom, writes Peter Svarre, newly appointed global marketing director for Bang & Olufsen.

If we can design business models, does that mean you should have graphic designers creating your business model? And do you want it delivered in InDesign or Photoshop?

Hardly! Business is still business, and design is still design!

Nevertheless, we are currently seeing some interesting developments. With the advance of the Internet and the accelerating innovation rate of the digital economy, we are seeing design and business models becoming increasingly mutually dependent. It is thus becoming increasingly difficult to imagine a business model without a design, or a design without a business model.

Airbnb revolves around trust. Here, the design is the business model, and the business model is the design. The company has completely wiped out the competition. Photo: Airbnb.

Ten years ago, when I travelled to New York, I would use the online service Craigslist to find cheap private accommodation that I could rent for a week or two. Craigslist was mostly just a digital bulletin board with blue text on a white background. It might take days or weeks to find the right flat, and even when the search was successful, there was every possibility that the ‘host’ was really a crook who asked you to transfer a deposit via Western Union, after which transaction you never heard from the alleged host again.

Today, I go to Airbnb, where I can find a flat in the right location at the right price in a matter of minutes. The host has been reviewed by other guests, and anyway, he is not going to see a penny until I am inside the flat. In principle, the basic business model is the same as Craigslist: advertising available accommodation. However, the design of Airbnb makes for a radically different experience. In fact, Airbnb’s business model is less about advertising accommodation (which many others do too) but generating convenience and trust. And throughout, Airbnb’s design revolves around these two parameters: providing frictionless interactions in a universe where everyone can trust one another.

Airbnb has completely knocked out Craigslist (and other competitors) by means of a unique design that redefines the business model for private accommodation. The original business model was all about visibility. In Airbnb’s redesigned business model, the emphasis is on trust and accessibility. The design is the business model, and the business model is the design.

Everybody loves MobilePay. It makes money transfers as simple as texting. Here, business model and design are fully integrated. One of the explanations for the success is that the business model is not new but relies on functions that are already familiar to the users. Photo: Flickr

MobilePay is another example [Ed.: The author of this article was involved in the company that designed the user interface for Mobile Pay]. Before MobilePay, in principle, it was possible to transfer amounts via mobile phone by logging onto one’s mobile bank app and transferring money to another bank account. Except, nobody ever did, because it was wildly cumbersome and required the exchange of multi-digit account numbers.

The business model for peer-to-peer payments never really took off until the design for the transfer was completely rethought. The reason why MobilePay has become so successful is that it integrated business model and design from the outset. The designers behind MobilePay knew that the business model could only work if a transfer only required very few clicks and if it relied on functions and concepts that were already familiar to the users. For example, instead of designing a ‘virtual wallet’, they chose a design where the user sends money in much the same was as they send a text message.

Essentially, MobilePay did not represent a new business model, but because of the radically different design principle, it nevertheless became a brand-new business model, which is now setting the standard – not just for money transfers between private users but also between private consumers and companies.

Tinder has created a brand-new, snappy swipefied business model. Simple and straightforward, this is casual dating, and you swipe as you go. Photo: Colin Charles, CC By

One last example is Tinder, which in many regards has redefined the dating app genre. Dating sites used to be cumbersome affairs that required users to fill out a minor erotic CV to even be in the game. Tinder has swipefied the category, creating a brand-new business model for dating: casual dating, where everything is much faster, and where no one is too concerned with the risk of swiping or hooking up with the wrong person. The perky swipe, which is the mainstay of Tinder, is also the mainstay of their business model: keeping things snappy and casual.

Much of Apple’s historical success seems to stem from Steve Jobs’s eye for both design and business models and his ability to combine the two. Photo: Chris Jagers, CC By

The increasing interweaving of design and business models requires companies to organise their activities in accordance with this trend. Not all companies are blessed with equally versatile personalities, so instead, many companies position the design function close to the executive suite. Big corporations, such as Philips and PepsiCo, have established Chief Design Officer positions to ensure that design is included in the companies’ key business strategies.

Today’s successful companies are the ones that understand that business is business, and design is design, but also that the two are becoming increasingly intertwined. We are living in a world where a revolutionising new design combined with a new business model has the power to make traditional business models obsolete in a matter of months. If you want to be on the winning team – the ones that redefine the world and create new design business models – it is high time you embraced a business structure way where design and business models are two sides of the same coin.

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