Sunday, April 7, 2013

Making and breaking assumptions- Discovery driven innovation

The discovery driven process makes sense to me because it aligns with my idea of how designers work when they work on products (as opposed to concepts which will not become tangible products). With all live projects I liked to create the basic structure of the design with the user flows for the interactions and start the implementation while I start working out the details. This helps me in two ways
1. Helps the design draw from technology and vice versa, helping the design become better
2. In terms of time and effort, roping in the developer earlier ensures that it the product is on its way to completion and the final beautifying details can come in later. It also makes sure that you have a good rapport with the developer because without him/ her your design wouldn't have much substance.

I think for social ventures specially entrepreneurs should be flexible enough to learn and adapt on the way because you can never fully predict the outcome. Living in the US and trying to design for a population I have no access to, I have based my entire concept on a few key assumptions. It makes me feel better to know that I am on the right track. My major assumption is that I will be able to reach and sell to my target market.

I start my venture in Bangalore and the population is approximately 8 million.
Research shows that bicycle ownership in Indian cities is between 35%- 65% depending on the size of the city. Let us assume that for Bangalore it is about 35% which is about 2.4 million people over the age of 6 who have cycled in the past. Using a conservative estimate if I reach 50% of these people  through marketing which is about 1,200,000 people but only 10% of these people decide to buy my bicycle helmets then about 120,000 people will buy bicycle helmets in the first year. The biggest assumption is of course that 10% of the people reach through marketing and educational programs will buy the helmets. I don't know if there is anyway for me to verify this right now. If only 1% of the people decide to buy a helmet then I would have sold only 12,000 helmets in the first year. My estimates for the cost of the helmet comes from Bicycle Helmet Safety Institute which says that if you produce 250,000 helmets, it can probably bring down the cost to $4.85. Of course none of their figures are justified but it gives me a sense of what to expect. With companies in the US like ProRider that are providing children's helmets for $3.95 in bulk, their production cost must be much lower than than. If I am selling less than 250,000 helmets a year, the cost of each helmet will up, which is something I cannot afford to do.

I am of course not going to stop at one city. In year two or three I would target all the metropolitan cities like Delhi where the cycling population can be as high as 5million people.

Next steps: Continuing my research on the cost of materials to prove that this helmet can be made within my budget so that I can make a profit from the sales which I would then put back into research and expansion.

No comments:

Post a Comment