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Where Do Killer Ideas Come From? Value Loops and UX Design Strategy

November 21, 2016

In UX and CX design, we’re all looking for the next killer idea—a project that could catapult our company and our career into the spotlight and, potentially, enable us to make a difference to a massive body of users. For many in UX design, such ideas seem almost mythical. How can you find your killer idea? How can you choose which projects to work on?

The anatomy of a great idea is actually quite simple. In this article, I’ll describe what makes a great idea and how they work.

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The Value Loop Model

As any UX professional knows, product ideas typically begin by defining a value loop—a critical part of the strategy stage in the UX design process. [1]¬†At the beginning of any design process, it’s essential to have a clear understanding of the problem that brings users and stakeholders together and establish the foundation for how our solution is going to work. Specifically, as shown in Figure 1, a value loop is a simple illustration that outlines the problem you’re addressing, what value a solution would provide to users, and what reciprocal value the marketplace would return to the organization that builds the solution.

Figure 1—The value loop model
The value loop model

How can we tell whether a simple value loop provides the basis for a great product idea? That depends upon three things:

  1. Significance
  2. Value to users
  3. Value to an organization’s stakeholders

In illustrating these different dimensions of a value loop, I’ll use an example from the online-banking industry.

Significance

When trying to discover whether a planned solution could be a killer idea, we need to take a long look at significance. How significant is the problem we are trying to solve? The simple rule of thumb here: the more significant a problem is for users, the more valuable the idea that solves it becomes. [2]

You have a simple example of this in your pocket. Take a close look at the apps on your mobile phone. Then think about all the apps you’ve tried. It’s common for users to try an app, decide it’s not worth their while, then delete it. While a variety of culprits may result in this decision, I’ve found that a lack of significance is often the main hurdle to users’ adopting a solution. If an app doesn’t solve a real and pressing problem for us, we get rid of it.

While the significance of the problem a product solves is critical, this is not a one-sided consideration. In addition to the significance of a solution to users, it is crucial to determine its significance to the stakeholders building that solution. Does the solution tie into an organization’s larger strategy? What are the potential returns for taking the potential risk of building the solution? Would the solution be viable in the marketplace over time, or would it die out quickly after a brief surge of initial popularity? As UX designers, we need to take heed of the business realities, realizing that what might become an earth-shattering idea to users would be possible only if the stakeholders building the product can survive long enough to bring it to market, then benefit from their work. (Anyone with startup experience knows this.)

As Figure 2—an example of finding significance in the online-banking industry—shows, our potential solutions must help users in ways that matter to them. Otherwise, they won’t care. The same holds true for the stakeholders in an organization.

Figure 2—Significance in an online-banking example
Significance in an online-banking example

Tangible and Intangible Value

Arising from a solution’s significance is the value it could potentially offer to users. Any product offering must provide two types of value: tangible and intangible.

Tangible value is what we deliver to users and exists when a product solves a problem for users by providing core features that support their key tasks. We can quantify tangible value—for example, the value of a physical product, a service, or our enabling users to complete a specific task.

Intangible value is different. It’s the feeling that accompanies a product experience and is typically about assessing how pleasurable or satisfying that experience is. While intangible value is harder to quantify, it determines the success of a product, solution, or brand. It is the intangible force-multiplier that makes good solutions into great ones.

Once we know that we have a problem worth solving, we can start to flesh out exactly what our value proposition is going to be. We must carefully consider both tangible and intangible value, as they flow from an organization to users and back again.

Let’s use our online-banking app as an example of identifying these different types of value:

  • The tangible value of an online-banking app is enabling users to perform banking-related tasks anywhere from a variety of devices.
  • Its intangible value is the feeling of ease, control, and security a great experience delivers.

The reciprocal value that a business needs to create to make developing a product or service worthwhile for the business comes from providing a solution to a problem. It also comprises both tangible and intangible parts. Going back to our online banking example:

  • Some tangible returns for a bank would be fees for the solution they provide and an increase in new customers.
  • The creation of positive sentiment and brand loyalty would provide powerful, but intangible value that could ensure the continued health of the organization.

Figure 3 illustrates all of these types of value creation.

Figure 3—Determining value
Determining value

The power of the UX-design process is in identifying a significant problem that exists for users and determining the significance of solving that problem to your organization’s stakeholders, then working out the value that flows from the organization to users and back again. With this value loop model, we have the broad strokes of our solution.

At this point, we know the significance of the overall problem, what tangible and intangible value we can offer to users by solving that problem, and what reciprocal tangible and intangible value our organization needs to receive. So our product strategy is shaping up nicely, and we’re ready to go. Right? Not quite.

For simpler solutions that involve only two parties—users and the solution provider—we’re all set. But what about more complex problems and their solutions? Let’s take a look at one of these now.

Complex Value Loops: Creating a Solution Ecosystem

In some cases, value loops flow from a solution provider to users and back, but involve several other parties as well, each of which adds its own value. This creates an interlocking ecosystem in which value flows back and forth in several different directions. When your solution offers tangible and intangible value to users and other organizations simultaneously, an entire ecosystem exists around the product you’ve built. These are products that change the way the world works in some crucial way. What might this look like? Let’s consider YouTube as our example.

As shown in Figure 4, YouTube is a service that provides the tangible value of allowing people and organizations around the world to share and monetize video content. It offers entertainment, reviews, how-to guides, commercials, and more. I could argue that one form of intangible value it provides to users is the confidence that comes from being able to express themselves creatively before a worldwide audience. YouTube has literally been the big break that many artists and small-businesses have been seeking.

But, when we examine reciprocal value, things get a bit more interesting. YouTube gets the tangible value of massive amounts of data about users’ searches and viewing habits—for example, keywords, SEO indicators, metadata, heuristic-pattern data. You name it. It also receives the intangible value of the public’s attention and dependency on their platform. YouTube can use the tangible data that we leave behind when using the service to improve the platform. Its parent company, Google—which funds the servers YouTube employs—can use all that data to refine its search algorithm. Commercial companies and advertisers can use the data to better direct their marketing campaigns, and so on. I’ll stop there to keep things somewhat simple for this example, but we can start to see a larger, interlinked system of value taking shape.

Figure 4—Complex value loops in a solution ecosystem
Complex value loops in a solution ecosystem

A complex value loop forms a chain of interconnectivity between several parties, each sharing value with the others. In the world of killer ideas, such ecosystems can be earth shattering and change how the world works in some key way. Imagine if YouTube vanished tomorrow or social media disappeared from our lives. Many industries would grind to a halt because organizations have formed critical dependencies on these solutions. With each new solution ecosystem that we create on the foundation of a complex value loop, the world changes.

The Bottom Line

So, after examining the significance and tangible and intangible composition of value, as well as the different types of value loops, we have the beginning of something tremendously powerful.

The proper development of a value loop is a key step in devising any UX or CX strategy. The value loop forms the bedrock for a product’s future success. Even if you’ve created the best user interface, information architecture, content, and visual style when implementing your solution, without the solid foundation of a killer idea, things will likely quickly fall apart. Run every project you work on through this value-loop process. See what things work, where there are gaps, and what you can improve. Users, stakeholders, and your development team will thank you for it.

Before concluding this article, there’s a cautionary note I want to share with you. You’d be amazed at how many UX professionals and organizations skip this crucial step and wing it. My advice: Don’t ever, ever, ever do this. Even if you just bulldoze your way through this process in your own head, that’s an inherently selfish approach. You’re potentially leaving everyone else who’s working with you in the dark. Plus, you never know where a game-changing idea will come from or who might see the larger picture a bit differently.

Having a basic strategic roadmap allows everyone on your team to understand and contribute. This kind of professional synergy results in better solutions. A great idea that you’ve fleshed out by carefully considering significance, tangible value, and intangible value can net huge returns for everyone involved in your next project.

Until next time, keep making cool stuff. 

Endnotes

[1] For more information on this multistage UX-development process, check out the excellent “The Elements of User Experience,” (PDF) by Jesse James Garrett.

[2] For an in-depth examination of the components of significance to users and organizations, take a look at Joe Natoli’s workshop “User Experience Design Fundamentals,” on Udemy.

Independent UX Design Consultant

Toronto, Ontario, Canada

David ServiceAfter graduating from the University of Toronto in Psychology, David began his career as a content and design specialist for several successful startups and quickly became responsible for running content and production teams. Once David had crafted experiences for several aggressive, small businesses and agencies, he decided to specialize in UX design as a way of helping people to accomplish more in their day-to-day lives. He has worked across service, product, and technology industries. David is an enthusiastic advocate of UX design as the best way to turn good ideas into great experiences.  Read More

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