To realize that advantage, we need a framework in which to connect all the dots that will build a cohesive UX strategy. In this chapter, I’m going to break down the most important tenets that you need to understand in order to successfully implement the tools and techniques in this book. Think of it as a primer to get you and your team thinking like UX strategists.

How I Discovered My UX Strategy Framework

In the digital world, strategy usually begins in the discovery phase. This is when teams dig deep into research to reveal key information about the product they want to build. I’ve always liked to think of the discovery phase as similar to the pretrial discovery process used by attorneys in the United States. To avoid a “trial by ambush,” lawyers can request to see the evidence of the opposing counsel in order to prepare sufficient counterevidence. In this way, the attorneys try to avoid surprises, and you as a product maker should also want to strategically do just that.

My first chance to practice UX strategy occurred in 2007. At the time, I was the UX lead at a digital agency called Schematic (now Possible) working on the website redesign of Oprah.com. Along with the other team leads, I flew into Chicago to kick off our discovery phase.

Before that moment, my 15 years of professional experience focused on interface design and integrating new technologies such as Flash into interfaces to create “cutting-edge” products. Often, I was handed a massive requirements document that listed hundreds of “essential” features. Or, I was given a flimsy project brief with pretty comps that stated what the final product should look like and accomplish. Based on these documents, I made a site or application map that catered to a specific set of use cases that enabled those interactions. Because it was typically too late at that point to challenge the rationale behind the product vision, I could only hope that my creation delivered value for both the end users and the stakeholders. But I was just supposed to design on time and on budget. 

But in 2007, I watched our UX director, Mark Sloan, get a dozen contentious stakeholders—no, Oprah wasn’t there—on the same page. Mark used consensus-building techniques such as affinity maps, dot voting, and forced ranking to help us understand all the different pieces of content and critical functionality that would make up the system we had to revamp. This discovery phase helped us—the stakeholders and product team—examine our goals to make a better platform for the millions of devoted Oprah fans of the world.

After all the workshops, we were given one week to knock out a discovery brief including concept-map analyses, a recommended feature list, and user personas. We did request additional time and access to interview Oprah’s website users so we could learn from them firsthand. Instead we were told to just create the personas based on the demographic and psychographic marketing data provided. Since the process was entirely new to me, I naively fabricated three totally bogus personas. (To see what I should’ve done, check out Chapter 3.)

One week later, the product team and I presented the discovery brief defining the product vision. Because the stakeholders were eager to get started, they immediately approved it. Our digital team was off and running on an implementation phase that lasted over six months and contained many emotionally fueled hand-offs. There were hundreds of pages of wireframes and functional specifications traded between stakeholders, designers, and developers.

But this discovery brief was never referenced again. The personas and proposed solution were never validated by existing customers. The stakeholders went back to fighting for whatever prime real estate on the screen they could grab for their particular business units. But there was something good that came out of that discovery phase for me: I was a UX designer who finally got a taste of what a UX strategy could potentially be. I was ruined. I needed to be working on projects where user research and business strategy were given more weight.  

I couldn’t imagine just being
a wireframe monkey anymore.

 

The following year I started work for another digital agency (Huge) where I was able to focus my energy more directly on the discovery phase. I had a seat at the table to help shape the UX strategy and decide how best to validate that it was on target. I no longer had to feel fraudulent for spending so many waking hours building products for which I lacked a deep understanding of the customer segment and the business model.

Today, I run my own practice that specializes in UX strategy, and since my first discovery phase, I’ve learned a lot about how to make it an iterative, lightweight, and empirical process of intense collaboration among stakeholders, designers, developers, and so on. Because when everyone shares a product vision, you and your team have a greater chance at changing the rules of the game for your product, company, and future customers.

However, I do want to acknowledge that this methodology is my version of UX strategy and might be different from other strategists’ methodologies. That’s what happens when a new discipline or methodology arises; people will find their own approach, but even within those differences, we all have the same ultimate goal: to deliver a successful product that customers want.

So, with all that said, cue the drum roll to introduce my UX strategy framework as presented in Figure 2-1.
FIGURE 2-1: The four tenets of UX strategy

My formula is this: UX Strategy = Business Strategy + Value Innovation + Validated User Research + Frictionless UX.

These are the four tenets that make up my framework. You need to understand how each tenet interacts and affects one another. It’s not enough to research your marketplace if you can’t identify an innovative value proposition. It’s not enough to design a seamless UX if you can’t validate that users want your product. It’s like playing a game of chess. You want to be thinking several moves ahead and be aware of how all the pieces can be used to support your game-winning strategy. Using the techniques and tools in the subsequent chapters will help you in your quest to beat your opponents.

Lessons Learned • The discovery phase is where UX strategy begins. UX strategy is based on four tenets: business strategy, value innovation, validated user research, and frictionless UX. • The output of the discovery phase should be based on empirical evidence, such as getting direct input from target users before going straight from an idea to wireframes and development. • How a team executes a discovery phase can be the determining factor for whether or not a product will ultimately deliver real value for the customers and the business.

Tenet 1: Business Strategy

Business strategy is the top-line vision of the company. It ensures the long-term growth and sustainability of the organization. It governs the stakeholders’ decision-making process about which initiatives may lead to greater profitability and success. The business strategy is the basis for the core competencies and offerings, which are the products. In this book, I will use the term products to refer to digital products, services, platforms, and hybrid customer experiences with both digital and nondigital touchpoints, such as with Metromile. 

The business strategy identifies the company’s guiding principles for how it will position itself and still achieve its objectives while beating the competition. For this to happen, the business must continually identify and utilize a competitive advantage. A competitive advantage is essential to the company’s long-term existence.

Cost Leadership vs. Differentiation

In his classic book Competitive Advantage, Michael Porter lays out the two most common ways to achieve a competitive advantage: cost leadership and differentiation.

The advantage behind cost leadership comes from offering the lowest price for products in a particular industry. Whether it is the cheapest car, television, or hamburger, this was the traditional way that companies achieved dominance in the marketplace. In the past, we saw how it worked through ​pre-internet ​companies like ​Walmart and McDonald’s. However, we also see it today with companies like Amazon and Uber. One of the main reasons they remain dominant in the marketplace​ is​ that they offer consumers convenient services at low prices. That’s why they’re chosen over all the rest. Of course, these practices come at a cost— Amazon and Uber are often rightly accused of employee/contract worker exploitation and malpractice—but the rampant growth of these companies continues.

But what happens when prices hit rock bottom? Then, the battle needs to be about what makes the product better. This brings us to Porter’s second type of competitive advantage: differentiation. Because we are inventors planning to build breakthrough solutions, this is where our actual power lies. With differentiation, the advantage is based on a new or unique product or a unique aspect of the product for which customers will pay a premium because of its perceived value. 

As consumers, we choose one product over another based on the things we personally value, ranging from the product’s usefulness to how much pleasure we derive from it. That perceived value is very important, and it’s what helped transform a little cafe and cup o’ joe into the crazy success story of Seattle-based Starbucks at the turn of the century. It’s also the reason why people continue to pay ​up to $5 for a beverage. There’s an experience wrapped into the product. It used to start the moment a customer stepped into the store​ and smelled freshly roasted coffee​. But now ​the journey​ can ​span from the mobile app to when the customer picks it up at their local Starbucks to when that person tosses their cup and sleeve into the trash.

How UX Differentiation Relates to Business Strategy

Differentiated user experiences have completely revolutionized the way we communicate with the world. Consider what the world was like before microblogging. When it was released in 2006, Twitter confounded users with its initial 140-character limit. But the limit turned out to be a valuable perk, especially with respect to news updates. Today, many users don’t check traditional news outlets for instant updates; they check Twitter. When Hurricane Sandy pounded the East Coast in 2012, the power went out, but more than 20 million tweets occurred among users, residents in the storm, and media and government outlets. I know I spent some time on Twitter, tweeting to friends in New York about the hurricane updates I saw on TV from my home on the West Coast.

Another tool that has distinguished itself from the competition with a UX differentiation is the map app Waze. It combines crowdsourced data with GPS navigation, thereby allowing users to find the quickest route to their destination at that moment. By merely driving around with Waze open, users passively contribute traffic and other road data to the network. Users can also take a more active role by sharing road reports on accidents, police traps, or any other hazards along the way, helping others in the area with a heads-up about what surprises might be ahead of them. In June of 2013, Waze (an Israeli startup) was acquired by Google for $1.1 billion. Now, Waze still offers its distinct UX to its users, but its data is also channeled into Google Maps. Clearly, Google recognized Waze’s competitive advantage and chose to adopt Waze rather than compete against it. 

Products such as Facebook didn’t kick the collective asses of competitors like MySpace or Friendster because they were the cheaper alternative. Facebook won the field because it offered a differentiated UX that was perceived by users as more valuable and everyone adopted it. In 2007, Facebook leveraged their mass adoption into an innovative business model: monetizing user data to sell micro-targeted advertising. As Douglas Rushkoff wrote for CNN back in 2011, 

“On Facebook we’re not the customers. 
We are the product.”

 

What Rushkoff meant was that users should be aware that products that seem free do come with a cost. And the cost is our privacy, among other things. Since 2007, this business model has only become more prevalent. Numerous corporations today monetize the data exhaust of users, though both governments and mainstream media worldwide are finally taking action against these types of questionable practices. 

User versus Customer

The traditional definition of users are people who use something, and customers are people who pay for something. But this bifurcation becomes convoluted when trying to apply it to modern business models.

For some B2C (business-to-consumer) solutions, the users of the product or service are the customers. An example of this is Dropbox. Users who subscribe to one of Dropbox’s paid plans are paying customers, while those using the free version are nonpaying customers. Both paying and nonpaying customers need to find value in the cloud storage platform for it to be successful. 

But this premise breaks down when you introduce third parties like advertisers. As mentioned previously, Facebook sells its users to its customers (advertisers). In this case the users and the customers have two distinct experiences with the product. Like with traditional media, if you don’t have users or an “audience,” then you can’t sell advertising. So the user experience is still mission critical for Facebook, but it is optimized to sell advertising.

For B2B (business-to-business) solutions, the users of the product or service are not the customers. The customer may be the CTO who decides what software products to purchase for the company, while the user is the employee who will be using the products. This is why in certain chapters, I will specifically call out how my techniques need to be modified. 

The Business Model Canvas

A business model describes the rationale of how an organization creates, delivers, and captures value. I’m going to dissect this common definition in the context of digital products. By create, we are talking about the thing that our entire product team designs and implements—i.e., mobile app production. By deliver, we are talking about the way that thing is put in front of our customers—i.e., smart phones, the app store, and the internet. By capture, we are talking about the way that thing ultimately generates something deemed worthy—i.e., tons of users to monetize. The logic that explains the workings of all of these elements is our business model. 

The process of business model construction is foundational to a business strategy. As Steve Blank writes, a business model describes the “flow between key components of the company.” This quote comes from Blank’s customer development manifesto in which he challenges product founders to stop writing static business plans. Instead, he encourages them to adopt a flexible one-page business model that requires all of the key components to be validated using empirical, customer-facing discovery methods. To get a sense of these key components, let’s take a look at a tool called the Business Model Canvas and apply it to the company Metromile from Chapter 1.

In their seminal book Business Model Generation, authors Alexander Osterwalder and Yves Pigneur deconstruct each of the nine essential building blocks of a business model so that visionaries can systematically think through the logic of how the company will eventually make money. Blank also refers to this tool in his own work on business-model creation. What’s relevant to us in this book is how many of these components will align with the UX strategy for a digital product. 

They are as follows (see Figure 2-2) and listed below the diagram in the logical order in which the components should be tackled:
FIGURE 2-2: Business Model Canvas: Nine business model building blocks, Osterwalder, Pigneur, et al. 2008

1. Customer segments

Who are the primary customers? There may be more than one customer segment, each requiring a distinct offering. What is the simplest way to describe each segment? 

For Metromile: The primary customer segment is low-mileage drivers based in states in the USA where Metromile insurance is offered. 

2. Value propositions

What is the core value of the service or product that the business promises to deliver to the customer?

For Metromile: The biggest thing they are promising is savings on insurance through their pay-per-mile pricing model. They also promise a frictionless claim-processing system and features like trip and fuel summaries, street-sweeping alerts in certain cities, and an engine-code decoder. Additionally, they offer insurance to short-term car renters who need fractional insurance policies.

3. Channels

How will we reach our customer segment? What are all the customer touchpoints when they come into contact with the product? 

For Metromile: They reach their potential and acquired customers through their online website, mobile app, social networks, and their 24/7 claims team and customer support available by phone, email, and a variety of digital channels like SMS, Facebook Messenger, etc.

4. Customer relationships

This describes the type of relationship that the company is going to have with the customer. It can range from a personal concierge service to impersonal self service where the customer never actually comes into contact with a human being. 

For Metromile: They offer personal service or automated assistance. Like traditional providers, they offer a white-glove phone-based sales team for those who prefer to speak to someone when signing up. But I personally onboarded myself through their website. I never spoke to a human until after I had filed my car accident claim.

5. Revenue streams

A revenue stream is how the company makes money. There are numerous ways for a company to make revenue, including advertising, subscriptions, direct sales, premium features, and transaction fees.

For Metromile: They charge customers a monthly base plus a pay-per-mile usage fee.

6. Key resources

What strategic assets must the business have to make the product work? The assets can be human, financial, intellectual, or physical. It can be something that needs to be developed.

For Metromile: Their first key resource that needed developing was a team of humans to build their Metromile Pulse device for accurately capturing and synthesizing their customers’ driving data. Then they needed to build a platform for more efficiently processing claims through artificial intelligence and machine learning. They also needed the people who developed and designed the platform as well as the claims team members to make sure their customers were getting handled properly. 

7. Key activities

What are the key activities the business must do in order for their business model to work? This includes activities that enable them to acquire customers and ensure that they experience the value proposition. The behind-the-scenes activities are also identified to ensure that the company functions to deliver those promises.

For Metromile: They need strong marketing and sales, product, design, engineering, efficient claims processing, and so on.

8. Key partners

What partnerships and suppliers does the business need in order to deliver the value proposition?

For Metromile: They rely on partners for different aspects of their value proposition, such as auto repair shops, car rental providers, roadside assistance, glass repair, and short-term car rentals.

9. Cost structure

What are the major costs that will be incurred to make the business model work? Are there fixed costs that won’t go away? Are we trying to cut costs by throwing out the frills?

For Metromile: Their biggest cost is for the repair of vehicles from customer claims. Fixed costs include employee salaries, rent, computers, internet hosting services, and insurance. 

By using the canvas, product makers can systematically collect all their hypotheses about their product in one place. They then revise it as they move through the discovery phase, and it’s something you’ll see as we go through all the techniques in this book. For this tenet, however, it is another place in which we can see how business strategy and UX strategy intersect. So many of the concerns of the Business Model Canvas—customer segments, channels, value propositions, revenue streams, and customer relationships—are elements that are essential to creating a product’s online and offline experience, which as you’ve learned, is key to our competitive advantage.

This leads us to how the Business Model Canvas also calls out the importance of collaboration among stakeholders and team members in the discovery phase. Categories such as key resources, cost structure, and partnerships aren’t something that a product manager or designer should think up in a vacuum. Rather, these categories are where the stakeholders can offer a wealth of insights. 

The Lean Canvas

Another great tool for testing business model hypotheses is called the Lean Canvas. It was created by Ash Maurya in 2010—about two years after the Business Model Canvas was put forth. Maurya said, “My main objective with Lean Canvas was making it as actionable as possible while staying entrepreneur-focused.” It’s also more self-explanatory, and it focuses on the problem that needs to be solved. Let’s take a look at the Lean Canvas (see Figure 2-3) for Metromile to compare it to the Business Model Canvas. The numbers represent the logical order to attack each component.FIGURE 2-3: Lean Canvas: Adapted from The Business Model Canvas, Ash Maurya, 2010

The Lean Canvas replaces four components (key activities, key resources, key partners, and customer relationships) from the Business Model Canvas with the following:

Problem

These are the top three problems that the customer segment faces.

For Metromile, there were three problems to solve: 

1. My car insurance is too expensive for me considering how little I drive.
2. Whenever I have to file a claim, it’s a terrible experience.
3. My car insurance provider does nothing but put me on hold forever when I call.

Solution

These are the top three potential solutions to the problems.

For Metromile, there were three solutions to strive for: 

1. Pay-per-mile pricing
2. Frictionless claims processing system
3. High-touch customer service, frictionless user experience (desktop + native app) with helpful features that go beyond just viewing the policy

Unfair Advantage

An unfair advantage is something that can’t be easily copied or bought.

For Metromile, they have these unfair advantages:

1. AVA Claims Automation System
2. Market leader in pay-per-mile
3. Telematics data for all of its policyholders as opposed to just a segment of them

Key Metrics

Key metrics are the activities that drive retention and revenue.

For Metromile, they are:

1. New customer sign-ups
2. Overall satisfaction with the claims experience 
3. High NPS and CSAT scores
4. App engagement 

There are other canvases out there as well, but these two are the most well-known. What matters most is that you have malleable documents that track your business model assumptions and learnings so they can be shared and discussed with other people. These tools serve as starting points for relevant conversations about the business model and product strategy. They are not foolproof executable plans for your business strategy. 

Also, as the product scales and the market evolves, the business strategy must be nimble. For a new product, a strategy probably revolves around just getting enough product/market fit to raise financing or grabbing enough market share so that they can leverage their user base into a competitive advantage. But, for a more mature company, the strategy is about building on the company’s core value proposition while trying to evolve the company’s infrastructure and internal processes to support that growth, often called digital transformation. Netflix is a great example of a company that has gone through more than one digital transformation. Netflix started out delivering DVDs in the mail, but then it became a major video streaming service. Now Netflix’s original content has become an even bigger part of its business. Imagine how their infrastructure, systems, and workforce has had to change to do all of this. 

It is in this way that what might have been the business model or competitive advantage in the early life cycle of the product might not be the same in later phases. Nevertheless, in chasing this moving target, companies must continue to experiment with varied offerings so that they can scale, remain competitive, and continue to offer value to users in an ever-changing marketplace.

Tenet 2: Value Innovation

As product inventors, we must be hyperaware of all the changing market dynamics. We must understand how and why people use their devices and what defines a successful and a failed UX. The reason is that a user’s first contact with the interface generally determines success or failure. It provides the user with their first impression of your value innovation, and it is value innovation that creates new mental models for people. 

Before we dig into value innovation, let’s discuss the word value. The word is used everywhere. It’s found in almost all traditional and contemporary business books since the 1970s. In Management: Tasks, Responsibilities, Practices, Peter Drucker discusses how customer values shift over time. He gives an example of how a teenage girl will buy a shoe for its fashion, but when she becomes a working mother, she will probably buy a shoe for its comfort and price. In 1985, Michael Porter defined the term value chain as the chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product that serves the business model and its customers. Figure 2-4 illustrates a traditional value chain for a physical product manufacturer.FIGURE 2-4: The traditional value chain

That is the business process that Toyota uses to make vehicles and that Apple uses to make computers and devices. During each of the activities in this value chain, opportunities exist for companies to identify and outperform their competitors. But, the left-to-right linearity of this chain was originally intended for physical products. By contrast, digital products—Dropbox, Pinterest, Slack—allow for a value chain to potentially flow in nonlinear order. They have faster repeat loops, and in some cases, the activities happen in parallel. In two-sided markets (see Chapter 3) revenue and cost move both to the left and right, as there are users on each side of the platform. The product accrues costs in serving both groups while also collecting earnings from each. Or companies start at the market or sell link in the value chain by using a landing page experiment to test the waters before they design or manufacture the product. (See Chapter 9.) 

This is part of why traditional business strategy principles do not perfectly map to the digital world. When producing digital or hybrid (i.e., Nest thermostat) products, we must continuously research, redesign, and remarket them to keep up with the rapidly evolving online marketplace, customer values, and value chains that are required to keep our products in production.

In 1988, Michael Lanning first coined the term value proposition to explain how a firm proposes to deliver a valuable customer experience. However, for a business to generate wealth, it needs to offer a superior product to that of its competitors but at a manufacturing cost below what customers pay for it. This brings us to another challenge of designing digital products: the software, apps, and other things that users find on the internet and use every day. As mentioned, a product needs to be valuable to users to entice them to use it continually. It also needs to be valuable to the business so that the business can sustain itself. If a business model is supposed to help a company achieve sustainability, how can you do that when the online marketplace is overrun with free products?

Value innovation is the key. In the book Blue Ocean Strategy,  authors W. Chan Kim and Renée Mauborgne describe value innovation as “the simultaneous pursuit of differentiation and low cost, creating a leap in value for both buyers and the company.” What this means is that value innovation occurs when companies align newness with utility and a lower cost structure (see Figure 2-5) to the benefit of the customers and stakeholders. FIGURE 2-5: Value innovation = the simultaneous pursuit of differentiation and low cost

Innovation means doing something that is new, original, and important enough to shake up a market. In the book, the authors discuss their studies of 150 strategic moves spanning more than 100 years and 30 industries. They explain how the companies behind Cirque du Soleil, Viagra, and the iPod won because of how they entered blue-ocean markets instead of red-ocean markets. The sea of other competitors with similar products is known as a red ocean. When an ocean is full of competitors circling around the same customer like sharks, the waters get bloody; survival in the marketplace is cutthroat. In contrast, a blue ocean is uncontested territory. It is free for the taking. You don’t just beat the competition, you make them completely irrelevant. 

In the corporate world, the impulse to compete by destroying your rivals through a competitive advantage is rooted in military strategy. In war, the fight typically plays out over a specific terrain. The battle gets bloody when one side wants what the other side has—whether it be oil, land, shelf space, or eyeballs. In a blue ocean, the opportunity is not constrained by traditional boundaries or business models. It’s about breaking a few rules that aren’t quite rules yet or even inventing your own game that creates an uncontested new marketplace and space for users to roam. This is also known as category creation.

When we transpose Blue Ocean Strategy to the world of digital products, we must admit that there are bigger opportunities in unknown market spaces. A perfect example of a company that took advantage of a blue-ocean market is Airbnb. It’s core business is serving as a “community marketplace” for people to list, discover, and book sublets of practically anything from a tree house in Los Angeles to a castle in France. It’s given homeowners a safer and easier way to sublet rooms or their entire homes when they are looking for additional revenue. It’s given travelers a safer and easier way to sublet a place to stay that is less touristy and more affordable. However, it’s also had unintended consequences that the founders did not foresee. It’s negatively impacted the daily lives of people who rent apartments in cities across the globe, and it’s driven the rental market up so high that only wealthy people can afford to live there. For better and for worse, its value proposition completely disrupted the travel industry and housing market. 

Disruptive innovation is a term that was coined by Clayton M. Christensen in the mid-1990s. In his book The Innovator’s Dilemma, he analyzed the value chain of high-tech companies and drew a distinction between those doing just sustaining innovation versus those doing disruptive innovation. He described sustaining innovation as any innovation that enables industry leaders to do something better for their existing customers. However, this is where disruptive innovation can blindside established competitors. Christensen said that disruptive innovation usually is “a process by which a product or service takes root initially in simple applications at the bottom of a market and then relentlessly moves up market, eventually displacing established competitors.”

Disruptors disrupt markets and ultimately create new segments of winners and losers. This is why the word disruptive has become quite provocative. If the companies don’t self-regulate, the “losers” start complaining until hopefully the government steps in to pass new legislation. This is why Silicon Valley’s mantra “Move Fast and Break Things” is ethically flawed and outdated. (See the Ethics & Compliance Initiative website for tools and Mike Monteiro’s Ruined by Design for more.)

But before its disruptions caused all these issues to bubble to the surface, Airbnb achieved its value innovation by coupling a frictionless UX design with a tantalizing value proposition. And, as I mentioned earlier, true value innovation occurs when the UX and business model intersect. In this case, they intersected in a blue ocean because of how Airbnb broke and reinvented the rules.

For example, before Airbnb, Craigslist was the primary way for people to find and list sublets, but it could be a creepy and uncertain endeavor. Today, we might take verified user profiles and listing reviews (see Figure 2-6) for granted, but back then, the only information about the listing was whatever the lister decided to post. Airbnb, however, required customers to change their mental models. They put the social etiquette of being a good host and good guest at the center of their experience. By facilitating this user experience in which both parties felt good about staying in a stranger’s house or hosting a stranger, Airbnb enabled a new subeconomy in which quality and trust became the dominant indicators of value.FIGURE 2-6: Airbnb reviews on the listing page for my studio apartment rental unit in Los Angeles

Unlike Waze or Google, Airbnb’s business strategy also ensured that there would be parity among users. They catered to a two-sided market in which people who listed their home served the people who booked them and vice versa. They continue to offer value through feature sets that facilitate the business model and UX, like calendar tools, map integration, and a seamless transactional system that had not been offered by competitors like Vrbo, HomeAway, or Craigslist. Ultimately Airbnb offered a more usable platform that minimized the risk of dealing with scary people coupled with fair-market pricing. All of this added up to some serious disruption through value innovation for customers, users, stakeholders, and even the entire travel and real-estate industry. Its competitive advantage works online and offline.  

When we consider Metromile’s value innovation, it also couples a frictionless UX design with a tantalizing value proposition. In terms of bringing down the cost, they have it nailed for both the customers (drivers) and the business’s key activities. As mentioned in Chapter 1, the cost per month of what my monthly premium was with a traditional insurer was decreased by 40%. And the cost for their business to run is also lower because of their automated AI claim system called AVA, which leverages artificial intelligence and machine learning for optimizing claims processing. As explained by Matt Stein, the VP of Product at Metromile, “One of the main costs for drivers is what is called the Lost Adjustment Expense (LAE). It represents the amount of money the insurer has to spend on processing and settling a claim from the claim adjusters to the tools they use.” And when you actually need to file a claim, their turnkey system is truly frictionless. All of this added up to serious disruption through value innovation for all customers and stakeholders in the online and offline experience.  

There are many other companies and products causing widespread disruption to the status quo through their combined value innovation of cost leadership and differentiation in blue-ocean marketplaces. And through their UX strategies, they are ultimately making people’s lives easier, bringing together customers in new ways and smashing legacy mental models. Companies such as Waze, Spotify, and Eventbrite have completely upended how people drive to their destinations, discover new music, and organize events, respectively. In fact, Eventbrite is how I tested my hypothesis that there were people out there with a thirst for knowledge about UX strategy. Using its interface, I quickly set up a 60-seat lecture at the price of $40 per person and sold it out. If I didn’t have Eventbrite to experiment with as a promotional platform, I may not have gotten a book deal because it was this evidence that I presented to potential publishers to make my case. Thank you, Eventbrite, for enabling the one value innovation that other platforms like Meetup failed to offer at the time: the ability to host paid ticketed events.

Tenet 3: Validated User Research

Not realizing a product’s value is one of the primary reasons why products will fail. Stakeholders are dreamers in that they assume what customers value instead of verifying it. Much like Kevin Costner in the movie Field of Dreams, these entrepreneurs believe that if they build it, they—the users—will come. But the truth is that any new product is a risk. 

The same pitfall could have happened to Metromile, but they chose to literally chase their potential customers down. When the company soft-launched in Portland, they went to a place where bicyclists often rode. They stopped cyclists to see if they were interested in this new pay-per-mile insurance. Using iPads, they gave these potential users quotes and made some of their first sales. It was through this first cohort that they could start tweaking the user experience and business model in real time.

User research is how you verify that you’re on the right track with understanding your potential or existing users’ goals and needs. There are lots of ways to do it—ethnographic field studies, contextual inquiries, focus groups, diaries and journals, card sorting, eye-tracking, user surveys, and more. But I don’t want to talk about any of these traditional methods. Instead, I want to talk about Lean Startup.

It’s weird to admit, but before 2011 when Eric Ries’s Lean Startup (which you should have read by now) went critical mass, founders didn’t make it their mission to confront customers “early and often.” The empirical, fast-moving, and transparent nature of lean startup riffed on ideas from Steve Blank’s customer development methodology and design thinking principles. Sure, organizations had UX designers around to do “user-centric” design (as opposed to engineer-centric), but lean startup made conducting validated user research a make-or-break aspect of moving forward on a product’s strategy.

Lean startup forced user research to become measurable. This leads us to our third tenet—validated user research. Validation is the secret sauce of the lean startup business approach. Validation is the process of confirming that a specific customer segment finds value in your solution. Without validation, you are simply assuming that customers will find a use for it. Validated user research goes beyond just observing and establishing empathy for potential users; it forces direct engagement. It helps your team to determine if the vision of your product is a dream or a potential nightmare.

Eric Ries popularized the term Minimum Viable Product (MVP), which he describes as “the smallest build that allows the team to collect the maximum amount of validated learnings about customers.” By getting early customer buy-in, you de-risk your product. And if users don’t like what they see, we need to either “pivot” to a different customer segment or pivot to a different problem that our value proposition can address.

Iterations like the MVP require your team to conduct research and gain validation before the product’s implementation phase. It helps your team verify that it is targeting the right customer and not just a general persona. When you’ve validated a specific pain point that needs addressing, you can continue to add features and then test those features using the same research methods. This is known as the build-measure-learn feedback loop, which will be discussed later on. Use your research to validate your decisions and ensure that the product vision is aligned with the end user’s needs.

Validated user research is a collaborative process that should involve as many members of the product team as possible. Collaboration will actually help organically build consensus on the value proposition and any pivots that follow. Now, this might sound naive given that we are all working in different environments with a range of folks with dynamic personalities who are in various positions of power. In an enterprise environment, there are typically many stakeholders who each have a say on the product requirements based on their personal agenda or preference. I have had agency clients where the product requirements were locked in stone during a requirements-gathering phase that I was not involved in. For me to suggest conducting validated user research or creating an MVP to test during the design phase was blasphemy because it was counterintuitive to their fixed-fee pricing model. 

If you happen to find yourself in this familiar position, that’s the exact moment that you need to become intrapreneurially. Intrapreneurship is the act of behaving like an entrepreneur while working within a large organization. You need to decide to take the fate of the product into your own hands through assertive risk-taking and innovation. Stand up and ask for the extra week or two to conduct validated user research. Or employ some guerrilla methods that are low effort to start, like grabbing people from the cafeteria that fit the persona or running a quick online survey.

Most people are afraid to be either entrepreneurial or intrapreneurial because they are risk averse. But I take a more existential viewpoint on the concept of risk-taking. I see the risk of doing nothing as a far greater threat to our career path and other passions. This is exactly what I didn’t do on the Oprah project when I was creating the bogus fictional personas. If had a do-over, this is what my 2007 process would have been: 

1. Reach out to friends-of-friends who were Oprah Winfrey Show fans. 
2. Ask them for 10 minutes of their time in exchange for a $10 gift card. 
3. Interview 7–10 of them on the phone while they surf the current website. 
4. Synthesize my findings into my personas and ultimately into the project brief.

Yes, it would have been a small sample set. Yes, it would have personally cost me $100 and two of my weekday evenings. But that would have been a small price to pay for the user research experience and insights I could have gained.

The bottom line is that confronting your target customers is nonnegotiable. We must learn as quickly as possible if the idea we are working on is stupid and worthless. We need to have an open mind to experiment and to fail. That’s right, we are betting, and the odds are against us. In the end, though, this lean approach is more cost-efficient, meaningful, and swift.

Tenet 4: Frictionless UX

The “user experience,” or “UX,” is how a human experiences a digital product while attempting to accomplish a task or goal. Was it easy or difficult to use? Was it pleasing or frustrating? Was it useful or useless? The UX of a product can be the differentiator used as a battering ram against the competition. 

Traditionally—if I dare use that word for a discipline barely three decades old—UX design is associated with artifacts for development and design execution: site maps, wireframes, user flows, and functional specifications. Recruiters for enterprises and agencies identify UX design with the job titles that create these deliverables, including interaction designer, information architect, and product designers. These definitions are used by large enterprises and agencies and are pretty much how UX design is currently practiced. Yet, what ultimately happens in this “traditional” system is that the UX designer is forced to focus more on output deadlines rather than on increasing customer loyalty by designing the most important thing that the product does incredibly well.

Novice product leaders often fail to recognize the correlation between UX decisions and customer acquisition, retention, and monetization systems—basically how much their UX matters to their business strategy. Think about any transactional website or even a simple sign-up process. The UX design should be very concerned with barriers to entry that can prevent potential first-time users who have just heard about the product from converting to customers. UX strategists should be doing everything ethically possible to keep them coming back. 

Interfaces and user flows should be geared toward successful outcomes. It’s all about simplicity, engagement, and the practical usefulness of the product. This is what distinguishes a novice UX designer from an expert UX designer. Expert UX designers know how to guide the value innovation of a product in the following ways:

•   They talk directly to potential users or existing frequent users of the product to discover and validate its primary utility with respect to the problem that must be solved. We’ll learn more about talking to both customers and users in Chapters 3 and 8.
•   They conduct competitive research and analysis on the existing market space to identify opportunities for solutions that make people’s lives more efficient. We’ll learn more about investigating market spaces in Chapters 4 and 5.
•   They help determine the key features that are absolutely critical to your product. They use techniques such as storyboarding to weave key features together in simple and elegant ways. We’ll learn more about tactics for helping you discover value innovations in Chapter 6.
•   They can rapidly create prototypes that are geared for testing business ideas. They design and run structured experiments for validating hypotheses. We’ll learn more about all of this in Chapter 7. 
•   They work collaboratively with stakeholders and teammates at the idea’s inception. Using measurable results, they make product strategy decisions based on real evidence rather than hunches. We’ll look at both qualitative and quantitative research techniques in Chapters 8 and 9.

Removing Friction from Everyday Life

A successful outcome is when a product empowers a user to do something that will make their life easier or better. Our goal as product designers is to remove or reduce the friction across all the essential interactions so that users always feel like they are in control of their destiny. People are enabled to do all kinds of things with technology now that in the past were a lot more challenging. 

I, for one, was never good with maps or public transportation for getting around a city. This is especially true when I am traveling in a foreign land where I do not speak the language. That is why the public transit app Citymapper that was created by a startup in London is my favorite example of frictionless UX. The product gives me the freedom to use multiple modes of public transportation to efficiently navigate new cities without getting lost. 

Over the next 12 screens (see Figures 2-7 to 2-18), I would like you to join me on a recent journey I took in Berlin. It was a sunny Sunday afternoon, and I wanted to hang with my friend David, an expat writer from New York City. In less than an hour, I needed to get from Prenzlauer Berg to Kreuzberg, where he and his daughter were waiting for me at a flea market. Here’s how it went. 

As you can see, each step of the way I knew where I was, what I needed to do next, and almost exactly when I would get to my destination via one tram, two trains, and a short walk. Along the way, the app held my hand, making suggestions about where I should sit on a train and what station to exit from to optimize my route. For many years, Citymapper has been an indispensable part of my life.

Products like Citymapper got to where they are not by execution of a static business plan, a one-week design sprint, or a two-week UX discovery phase but through experiments, failure, and iterations over months and sometimes years. It was the insights born out of strategic meanderings that blossomed into awe-inspiring product design. It’s how the founders and teams behind the scenes took risks while assembling the building blocks of their products’ business models. They fine-tuned their strategy and acquired fervent customers.

Over the course of the book, I will discuss other products that have frictionless user experiences. These are UX designs that didn’t just “happen” through good luck, ideation sessions, or “genius design.” They’re frictionless through the manifestation of the four tenets. It’s only with practice and mindfulness that we will come to understand the product as a sum of both its tangible and intangible parts.

Recap

UX strategy is an empirical practice. It’s not a means of formulating and executing a perfect plan; rather, it’s about being able to research what’s out there, examine the opportunity space, test hypotheses, fail, learn, and iterate until you devise something of value that people truly want. You will need to take risks and accept failure. You’ll learn how to fail smartly by doing rapid experiments to validate that your strategy is moving your team in the right direction.

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Curious about the 1st edition (2015)? Read the first two chapters here.