1. During the summer, Forbes magazine interviewed Jeffrey Housenbold, Chief Executive of Shutterfly, the online supplier of customized photo-based goods. It provides an interesting overview of the way the company addresses the question of ‘how much choice is enough choice?’ and preventing situations where customers get overwhelmed by the level of choice.
It (the degree of customization available) is a balance between providing the flexibility and the choice, but also making sure customers are going to be delighted with the end product. So, in our photo books, we offer a custom path [that lets] you change every background, template, layout, font. But then we also offer express books, or locked books, where we’ve actually chosen all that, and all you have to do is put a picture in.
It depends on the use occasion, the sophistication of the customer. In stationery, we want to make sure they’re following the appropriate etiquette. That the font is going to apply to the background. That the end product is going to be beautiful and delightful. And so, in that case we’re limiting the choice, so that we increase the overall satisfaction.
He goes on to describe how the company engages with its customers to research the questions described above:
Q. What kind of testing do you do? Do you get 20 people in a room together and have them fiddle with this stuff for an afternoon and figure out if they like the end product? How do you find that perfection?
A. It starts with involving the customer throughout the whole process. We do a lot of upfront prototyping and testing with customers. Then we actually create the creation paths, and we do usability studies. We’ll do in-home ethnographic studies. How people are using stationery in their lives? Where do they have trepidation or anxiety? Where [do] they want to be creative?
Then we put it out there, and we see how it works. Right, we’re a Web company, so our ability to change on the fly and move more quickly than the established commercial printing industry is much greater. And so we can be more responsive. But involving the consumer in the whole process is key to success.
This description reflects very closely the idea of ‘building a learning relationship with the customer’, which is seen in academic literature as an important component in the information cycle between the customer and the enterprise that uses mass customization.
2. The WATBlog, which provides news and information to connect the web, advertising and technology sectors in India, recently ran a ‘Saturday Startup‘ article which examined an Indian t-shirt company called Scopial that uses the crowdsourcing business model. In Scopial’s crowdsourcing system, submitted designs are voted by the community members on a scale of 1 to 5. Every fortnight, a design is declared winner and the respective designers get a reward of Rs. 20,000 cash. The designs are printed on T-shirts and made available on the website for sale.
This article is a little eye-opener to those of us in North America and Europe who perhaps limit our horizons sometimes when looking for examples of enterprises that use interesting business models.