Digital Products in Business

First chapter of The Paranoid Method book (Red)

Structure:
– DOOM and the new world
– What are digital technologies in business?
– The “Cargo Van Problem” and terminology
– What is a successful product?
– Techniques for finding technological solutions for business (Reference point, Mobile applications, Voice interfaces, Industry concepts)
– The dilemma of businesses and IT professionals

DOOM and the new world

We are those who professionally develop digital systems and see the world through the prism of technology. Most of us are interested in technologies themselves, so we look at digital products and services from the inside. We are more concerned with the internal structure, the elegance, and the beauty that complex systems sometimes have. The external side is often not so interesting. Moreover, this aspect is considered as something secondary. What sounds scary is that the applied value for the users to whom the product is intended is often considered secondary too. In a sense, the utility of the product is a tax that we must pay to have the opportunity to do what we love — design and develop. Even at the cost of the fact that users will not consider the result of our work useful. What the hell, it’s an engineering work of art!

For people from other fields, digital technologies are more like magic, because it is human nature to see magic in what is not comprehensible. Let me give an example.

Voice-based systems such as speakers, apps, chatbots, and virtual operators are now gaining popularity. The fact that the device can recognize speech and respond also with a voice creates the illusion that something with intelligence is interacting with us. And our human experience says that the very fact of having intelligence suggests that the one who has it can solve problems independently. As a result, people get the impression that devices and applications with a voice interface can solve any tasks they are assigned. Even if this possibility is allowed, the question of specialization of such a system remains open. Although everyone has intelligence, not everyone can be assigned an arbitrary task.

If you look from a wider perspective, such distorted expectations apply to any technology: mobile applications, cloud computing, blockchain, big data, computer vision, machine learning, computer-aided design, and, of course, “artificial intelligence”. And if this may be a funny misconception for ordinary users, such a mistake for a business has a greater value. From my project practice, I can say that the less experience businesses have in using digital products, the more often they consider IT technologies as a universal way to solve their problems, as a kind of pill for all diseases. Including organizational ones.

The problem of wrong expectations most clearly reveals itself in the situation when a new business is being created. It is assumed that the use of accounting, logistics, or any other system will automatically set up business processes within the company and that employees will begin to follow the implied rules that such an information system was created for. But, as those who have already gone this way know, such a thing never happens. The tool remains a tool that you still need to be able to use. In addition to the problem of wrong expectations from technologies, which we will cover up again further, there is another common misconception. We are talking about a lack of understanding of the reasons for the success of digital products.

I think everybody remembers the bright moments associated with mobile applications and services. The sale of WhatsApp for a billion dollars, the rise of Prism, and then FaceApp, even earlier — the booming popularity of Twitter, then Instagram. And this is only what everybody has heard of. But only a few people know that at the same time, the development companies began to receive mass requests with orders for the development of analogues of popular applications. People wanted to repeat their success, and they thought that by making them better, by addressing what they thought were the obvious shortcomings of these popular products, they could achieve success. Most of the time, even after spending an impressive budget and completing a high-quality project, such products failed even at the start.

Even then, I intuitively began to understand what the reason for this was. There are two sides to product success: one is to solve user problems, and the other is to be the first, to be in the right place at the right time, and to link the user’s idea of the task to this product when the product name becomes synonymous with the task itself. In my opinion, one of the creators of Quake, Michael Abrash, wrote the best about this in the article “Valve: How I Got Here, What It’s Like, and What I’m Doing”:

«Gabe tells it this way. When he was at Microsoft in the early 90’s, he commissioned a survey of what was actually installed on users’ PCs. The second most widely installed software was Windows.

Number one was Id’s Doom.

The idea that a 10-person company of 20-somethings in Mesquite, Texas, could get its software on more computers than the largest software company in the world told him that something fundamental had changed about the nature of productivity. When he looked into the history of the organization, he found that hierarchical management had been invented for military purposes, where it was perfectly suited to getting 1,000 men to march over a hill to get shot at. When the Industrial Revolution came along, hierarchical management was again a good fit, since the objective was to treat each person as a component, doing exactly the same thing over and over.

The success of Doom made it obvious that this was no longer the case. There was now little value in doing the same thing even twice; almost all the value was in performing a valuable creative act for the first time. Once Doom had been released, any of thousands of programmers and artists could create something similar (and many did), but none of those had anywhere near the same impact. Similarly, if you’re a programmer, you’re probably perfectly capable of writing Facebook or the Google search engine or Twitter or a browser, and you certainly could churn out Tetris or Angry Birds or Words with Friends or Farmville or any of hundreds of enormously successful programs. There’s little value in doing so, though, and that’s the point — in the Internet age, software has close to zero cost of replication and massive network effects, so there’s a positive feedback spiral that means that the first mover dominates.»

Of course, here we are talking about business and products directly related to digital technologies. If your business is more traditional, then most likely you are engaged in position wars with your competitors, working to win a few per cent in profit or market share. In this case, you try to use the same approaches as others, going toe to toe.

And here I would like to show what digital technologies really are. One might say that these are just tools that are used in business. But what does it mean? What exactly is their nature and how can they be used to gain an advantage which would let radically change the rules of the game by which the business operates.

What are digital technologies in business?

The world of people is driven by competition. Using technology in business is one way of playing this game. This is not just about companies competing for customers, but also about competition between individual employees and groups of stakeholders. Everyone tries to get the best conditions, certainly in the way they understand it. If you do not do this you end up in the most unprofitable position, because everyone around you is focused primarily on their own interests.

For example, several cafes are operating on the same business model. It seems strange that a cafe may have a business model. Just make coffee and breakfast. But it is there, just like in any business. The cafe explicitly earns money from the fact that the bartender and the chef cook, and implicitly on the rental of seats in the hall for visitors. You may have noticed that when you take something out, you can get a discount. This is because, in addition to the services of the chef and the cost of the products from which the dishes are prepared, the price includes the rental of the table where you sit. After all, you pay for the pleasure of spending time in a pleasant place where someone also cooks for you.

In this business model, the following parameters are relevant:
– rental price (preferably lower)
– total amount of employees’ salaries (preferably lower)
– average time of visit (preferably shorter)
– average order price (preferably higher)
– the number of visitors per day (preferably more, so that there are no gaps between the periods of using tables and, respectively, receiving orders)

Usually, the competition is driven by affecting these parameters. Advertising and working hours are used, as well as renter negotiations and clarifications on the menu. After balancing the parameters and adjusting them to their top possible values, the business will work. But if a similar cafe appears on the next street, then one or several parameters will change — for example, the number of visitors per day, and you will have to do something to continue working.

But what if a technology emerges which will let you go beyond the limits of possible parameter values or even introduce new ones? The business model will change, changing the scheme of work in a way previously impossible. What can this mean in our example?

Say, you connect the waiter with the cook so that he does not need to go to the kitchen every time to pass a new order. When communicating with customers, waiters instantly select the chosen meals in a mobile application, and the chef immediately sees what he needs to cook. Such a system works in a lot of cafes and compared to the traditional model of work it can sufficiently reduce order preparation time. Therefore, it can affect at least one business model parameter, in this case, the number of visitors per day. Indirectly, you can reduce the total amount of employees’ salaries, since fewer waiters are needed to process a larger number of orders. Of course, this works in combination with other factors, in this case with a sufficient flow of visitors that can fill all the available time.

Let us go further and, for example, allow the cafe visitors to choose meals and place orders by themselves. They will be able to do this through a mobile app or, as it happens at McDonald’s, through special self-service terminals. As a result, salary costs are significantly reduced and the number of visitors also increases.

The next logical step may be the ability to make orders with delivery, when people, in order not to waste time walking to the cafe at lunchtime, make their choice through a mobile app. In this case, the cafe’s business model changes even more radically. Some parameters lose their meaning, for example, the cost of renting a hall for visitors, also a part of the staff is no longer needed at all but some staff members, on the other hand, appear — for example, couriers. After going all the way from a regular cafe to a network of local kitchens present in all city areas, and having mobile apps and a delivery service, the business model has changed cardinally.

These three steps show what happens when a technology emerges which allows doing something differently. Every time before its appearance, it was essentially impossible to do so. As soon as a technological change occurs, a business can rebuild its model and gain a radical advantage over its competitors. All this means that digital products and services, as a spawn of technology, provide opportunities that allow you to change existing or create new business models. This is how you should treat them.

This has been the case with all technologies throughout human history, and the same applies to digital technologies. With their appearance, almost all branches of human activity have changed. Name any of them and compare how they were arranged in the first half of the 20th century. In everyday life, we face this on a household level, calling a taxi through mobile apps and sending photos via messengers to our friends. But the changes are deeper.

The design process in construction has completely changed. Now a single person can make calculations and create a building plan which in the past took months or years of work by a large group of specialists. Bank payments are made instantly, and even just to get money, digital technologies are used, because each ATM is a computer with money storage. Probing for valuable mineral deposits relies on computer analysis of satellite images, allowing you to identify places for drilling. Processing of data arrays obtained during scientific research is impossible without computers. And I have not said anything about the military industry yet.

In short, if you try to do business according to the old scheme, you will not succeed. In the best scenario, you will earn less profit, but most likely, you will simply not have customers.

But to take advantage of the opportunities offered by technology, it is essential to understand the business model. This is most evident in exclusively digital products without any obvious connection to the real world, such as social networks. They are free for the users and at the same time their development and support cost astronomical amounts of money, but the business is considered successful. This is all because the source of business income can be advertising or the user information itself but, what is less obvious, the owners can earn from investment founds while the product itself simply gives such opportunity without an explicit payback plan.

Let me repeat it again for clarity. Technology is a tool for running a business. At the same time, tools without business are just tools. As my nutritionist puts it, “the most important word in the term “biologically active food supplements” is the word “food”. Some tools limit possibilities, while others create them. The key task is to select the right tools, understand the opportunities that can be obtained with their help, and be able to apply the selected tools. Period.

The “Cargo Van Problem” and terminology

Before continuing with the story about the impact of technology on business, I would like to focus on terminology. Professionals use their own jargon that people in other industries do not understand. Often, professionals themselves confuse terms or, what is more common, argue on their meanings with each other.

It is possible, in my opinion, to make mistakes in the meaning of the words denoting different types of products and technologies, but there is one important point which tells more about the maturity of a specialist that all the others. I call it the “Cargo Van Problem” and will come back to it more than once in this book.

The “Cargo Van Problem” is named after a commercial vehicle, like Ford Transit made by the Ford Motor Company. Its essence is to understand the difference between a transport company that uses cargo vans, and the car itself. I think no one doubts that a single car or even a whole fleet of vehicles is not a business. Cars are used as a business tool to provide a service. But business becomes a business on account of all the other infrastructure: sales department, driver staff, an accountant, a base of customers who want to transport something, and, of course, money used for mutual payments. Moreover, if a car is something static (even though it drives), business is a process. Most importantly, by removing the car and replacing it with some other business tool, such as movers or planes, the business will remain a business. But by removing the business infrastructure, the car will no longer be even a tool. The whole meaning of its existence gets lost.

In addition to the fact that the value of a tool appears only when it is used, its characteristics are also defined by business needs. In the given example it may be, for instance, the load capacity or dimensions associated with the nature of transportation. In other words, the tool is subordinate to the business.

More formally, I refer to these phenomena and the relationships between them as “technology product” and “business product”. The first is a tool created with technologies. The second is the entire set of business infrastructure used to perform the task solved by the business and presented to the client in the form of a job or service. A business product includes a technology product. In the example of a transport company, the technological product is a car, and the business product is a service for transporting cargo from point A to point B.

Oddly enough, what seems obvious concerning traditional technologies and types of business becomes not so clear if we switch to the IT sphere. The concepts get mixed here, and while working on a project, it is often considered that a mobile app or website is already a business product. And while for IT professionals this may be excusable, because they are usually focused on the technology product creation and imply that after release the business will take it over — on the business side, this lack of understanding usually leads to the fact that the business infrastructure is not ready by the time development is completed. As a result, there is either a serious delay in using a finished business tool, or the project is closed, because, in the process of belated configuration of the business infrastructure, real requirements for the technological product are revealed, which require its serious rework. As will be discussed in the following chapters, constant work ahead of the curve is just one of the basic principles of the “paranoid method”. In this case, the main point is that the business infrastructure must be created along with the technical product development and thus identify and formulate the requirements to it.

By the way, this is the reason projects of digital product creation for the running businesses are more often successful. In this case, we have a large part of the needed infrastructure, the specialists know the subject area, and there is a sufficient level of understanding of the product requirements. For example, it is easier for a bank that already interacts with its customers via a website to adapt to communications via a mobile app. If we open a new direction or create a brand new company built around a technological product, then the chances for such a project to succeed are much less. Most likely, there is not even a person who is personally interested in such a business, and his role is executed by the development project manager.

The problem is that the task is initially formulated at the technological level, for example, “we need a website and mobile apps for ticket sales”, instead of looking at the business level and understanding how the process will be built as a whole and what the role of technology is in it. To make sure you are on the right track, you should look at the business model, removing the technology product away from it. For example, you are organizing a logistics company and rely on a computer system to track transport movements, to optimize the load by dynamically distributing the orders, and to interact with clients. Try to model the work without the system by putting all the functions onto the people using phone and spreadsheets. If you are still able to imagine such a business, although extremely ineffective, you are thinking in the right direction. There is no sense in waiting for the developers to implement business logic if you cannot formulate it yourselves.

Now that we understand the basic concepts of “business product” and “technology product”, let us look at other parts of the semantic field. I often use the “digital product” term and it is also important to be explained. In fact, the term “digital” began to be actively used quite recently, while previously it was more often used in concern of data transmission formats, paired with the term “analogue” — for example, “the difference between digital and analogue sound”. But for some time now it has come into use as a term to describe everything computer systems related. Previously such systems were called “computer”, “informational”, “automated”. Something tells me that after some time this term will also be replaced by something else, as it often happens.

With the “product” word everything is not easy also. “Product” is the term that is very much loved by marketers. It allows to “pack” the service of, for example, insurance, into a complete offer for the client. But whichever name you call the service, it remains a service. In our case, we talk about a “digital product” as a generalizing term which can relate to just the technological product or to describe the whole business product. In the second case, we talk about a product implemented on digital technologies.

Apart from the “digital product” term also the “digital service” term can be used. To some extent these are synonyms, but the latter is more indicative of the nature of user interaction. For example, for online accounting, it would be more correct to use the “digital service” term while for the automated design engineering application a “digital product” would be suitable more.

What is a successful product?

I have already used the word “successful” many times speaking of both products and projects. Now I would like to stay on this topic a bit more. What is this thing — a successful product? And a successful project? How does it reveal itself and what are the criteria to be able to talk about success? It is not a pointless question because apart from the feeling of pride for one’s work there are often conflicts arising in the process of project work, between the business and the IT professionals, regarding the results of their work. And it is important to make sure that everyone speaks the same language. Let us start with projects of design, development, implementation, launch, support etc. of digital products and services. We will use an intuitively understandable meaning of the word “project”, but in the next chapter I will name the types of projects that exist.

The easiest way to determine success is through the fact of goal achievement. This means that you need to understand what the project’s goals are. The answer seems simple — “create a product following the requirements, meet the deadline and budget”. And the difficulties begin right from here. What if the product is created and meets the requirements, but when used does not give the business the expected result? Can such a project still be considered a success? Or you can look at it from the other side. Let us suppose that a project, as it often happens, was initiated by one of the company’s top managers, not for business purposes, but because of personal ambitions. It is a great way to level up by telling about a great project at the board meeting. And in this case, even if the requirements, deadlines and budget are met, but the impression is not made, then probably the project cannot be called successful, can it? And it is even harder (or easier) to talk about success when the goal of the project was to get a budget and distribute it among stakeholders.

Whether you are looking at the situation from a business or professional point of view, it is critical to be aware of the true goals of the project. If you, as a specialist, misinterpret the goals, you will inevitably end up in a situation of conflict with the business. In turn, the business is more likely to get the desired result if the goals are openly indicated at the beginning of the project. This is so important that in my project practice, I reject projects when it is not possible to agree on goals, or when a manipulation attempt is seen, that is when there are some other intentions of project participants disguised as business goals.

From the first rule of project success — finding out the goals — follows the second, which is as important as the first one. It says that there are always two sides working on the project — the business and the specialists who design and develop the product. There are several reasons for that. Firstly, it is impossible to formulate goals without interacting with each other. Unlike the purchase of goods or traditional services, where the assortment and characteristics can be determined in advance, the very nature of project work is so that many circumstances, such as technical limitations or business process properties, become clear in the process of project work. It is not possible to imagine a situation where at the very beginning of the project such goals and requirements are formulated, that do not go through changes along the course of the project.

Any more or less complex project gains such a so many clarifications that, if the relations between sides do not assume a certain kind of flexibility, an inevitable conflict arises. By the end of the project business more clearly understands the goals and the ready product does not meet them, or the contractors should implement changes along the process by going far beyond the initially agreed budget and deadlines.

Secondly, as it was mentioned before, the “technological product” creation should be conducted in parallel with the work on the creation of a business structure, and those actions should be coordinated between each other. From my own experience, I can say that attempts to work on these processes separately always lead to the situation when some of the parts are not ready on time or one part does not match the other.

Thirdly, and most importantly, project work is a collaborative work of a group of people united by a common goal. In contrast to production activities, the human factor is crucial here. Each team member has their own goals, ambitions, complexes, communication techniques, professional skills and interests. Only dilettantes build their project work from the point of pure roles not taking each member’s specifics into account, forgetting that in one case people will spend their efforts on confronting each other and in the other case they will spend them on pursuing common goals which in turn will help them achieve their own goals. Both business representatives and IT professionals make up a large team together, which means that the personal characteristics of all parties must also be taken into account, which can only be done by working together.

This time I would like to stop discussing the success of projects to continue it in the following chapters. But without this introduction, it is impossible to get close to the topic of digital products and services success. The reason is that I wanted to identify and discard the projects in which the final goal is not the creation of products as tools for business but something else, and the initiators of the project pursue completely different goals, for example, the realisation of personal ambitions.

Now we can talk about products. And if for projects the sign of success is in reaching their goals, then the main criterion for the success of products I would call the fact that they are being used. This follows from their very nature. Any software product, IT system, everything that lies in the basis of a digital product is a set of repeating algorithms. To put it short, a database with a list of orders is not a product but a system for working with that list is already a product. It means that if no one uses the products they are dead.

Everything else — usability, audience reach, service cost, and other things are the qualitative and quantitative measures of success. You cannot say that a product is good but not successful. Its quality is coming out through its success. So, the next time someone says they had done a cool mobile app but had problems launching it for users, it will mean that your companions confuse quality programming with the creation of working products.

What else makes the product successful aside from the fact that you were the “first mover” as Michael Abrash from Valve put it? The undeniable value for the users. If you think only of business interests it is easy to make a product which the users do not need. But it is not the digital products’ problem, it is a general problem. You can fall into this situation with any other instrument or a whole business process. I love to illustrate this with an example of a vending machine which I found in one of the books on design engineering.

The idea is that if you design the machine only with business goals in mind, it will have only banknote receiver, since receiving money from the clients is the ultimate goal of a business. On the other hand, if you look at the task from the users’ point of view, the device will only have storage of goods and a button for receiving them — for free, of course. And only in the case of crossing both sides’ interests we gain a working business model and an instrument for its realisation — a vending machine receiving payment and giving out items in response.

The same way the technologies in business are an instrument of business model realisation, the digital products for users are the instruments for their private and professional tasks. The tasks can be different, from fulfilling one’s ego in social networks up to building reports when making an accounting report. This should be held in mind and one should focus on what tasks as a user instrument are solved by the digital product that is being created.

Techniques for finding technological solutions for business

It is often thought that being a visionary, the ability to see things unobvious for others is an important, if not a defining trait for entrepreneurs. It is hard to argue with this, especially after myself telling about the role of technology in business. If you can find a new approach to how to organize your work, changing traditional business models using digital products, you have higher chances to succeed than others.

Even if a single story of finding new opportunities can radically change the way you work, why not do it regularly? Probably right now you have the possibility to change the business, but you do not know about it. It is worth thinking about.

The thing is, it is in human nature to notice only what is changing. Our senses better react to contrast. This is easy to check by putting your hand in the water. If the water is not very cold or hot, then after a while you will no longer perceive its temperature. What is more interesting is that it relates not only to things you can touch or see but also to the things you may think of. A business, for example.

What state is the company in? Everything seems to be fine until something starts happening that changes the way things are. Did one employee quit? It happens from time to time, nothing special. But what if he was the CFO or the entire team that held the job left the company at once? This will probably be noticeable by now. When we talk about financial indicators represented in report numbers not influencing each employee then the changes are even harder to notice. Did the revenue fall by 7%? It happens. Has it been happening for several months straight? It is already more noticeable. But what if it happens with the other parameters’ change? Then the trends are not so obvious.

And what if nothing changes? The employees continue working and the company turnover stays on the same level. Nothing seems to be worried about. But perhaps everything around is changing, and you just do not notice it. For example, other companies have increased their turnover and the market is growing, this means your business is losing positions and you will feel it after a while, but it will be too late. Nassim Taleb calls this a “black swan” which is an event that happened unexpectedly due to your being inattentive or not being able to understand the meaning of the events.

In the fourth chapter I tell about the product designer’s triad as a means of professional development, but this approach is also applicable for the possibility analysis of technology implementation in business. Shortly, the basis of the approach is to train your eyes by expanding the knowledge sphere. Then — choosing from all this variety the things you find interesting and explore more carefully. This should be a regular job built into the very core of the business when such possibility analysis happens on an ongoing basis and the business is always developing.

I like this approach for its lack of fuss. When you act at the last moment, you do not have enough room to manoeuvre. Behaving proactively, you have the opportunity to take the best position without extra expenses and without turning your life and the lives of your colleagues into an everlasting race.

Next, I will show you how to use this approach in practice.

Reference point

When you look at other industries you are not limited by professional blindness which hides new opportunities simply because “no one does it like that”. For example, you work in the construction industry and you have heard something about computer vision systems. How can such technologies help you? Perhaps you should look at the restaurant business! Some time ago there appeared systems for monitoring the waiters’ work. Using image analysis technologies from the CCTV cameras in the customer hall and the kitchen one can track the whole process of order fulfilment, payment and whether the available meals match the ones listed in the menu. Instead of watching all recordings or reacting to customer complaints, the manager receives a report from the system about suspicious moments that are worth paying attention to. What if you use a similar approach in construction, for example, to control safety? Or to check whether the quantity of supplied materials is as expected? At least it can be a reference point for new possibility search.

Next, using the example of several technological areas, I would like to discuss current trends and their examples in different industries.

Mobile applications

The moment we started working on mobile apps happened to be a bit before the first iPhone launch, and the irony was that there was already an established market for pocket PC’s based on Microsoft Windows CE. The applications that were developed for this operating system were mainly designed for administrative and production tasks within companies. And if you watched from this perspective you would not tell which possibilities the new Apple technology gave while being oriented on private users. A sufficient amount of time should have passed for businesses and developers to make a lot of attempts and find working models of mobile apps utilization.

At first, mobile apps were perceived as the next step in website evolution. This point was promoted mainly by advertising agencies which always try to use new communication channels to interact with the audience. Any event or ad campaign has support in the form of a website, and with mobile apps emerging, the advertising agencies wanted to try this possibility. There were few mobile apps at that moment and the users were willing to install something new just to entertain themselves. The development cycle of such applications was very short, the complexity was low and the user interface looked very much like the websites did. Further on such distorted perception had played its role in businesses’ expectations from mobile app development.

But if you speak about modern apps used by businesses to work with their clients, they are much more like classic desktop programs with advanced functionality. Such apps are also called as service applications. The complexity between a website and a mobile app development can vary up to several times. Almost every time they rely on server infrastructure, and there are demanding requirements for usability and design quality. This is because nowadays people choose a service, say, for banking or ticket purchasing mostly by orienting on the quality of mobile apps. Agree, this is a strong argument to pay enough attention to the process of future app design engineering.

At the same time, there is one more question which should be asked when planning any such project, which is — is it worth building the mobile app or going with just the website will be fine. The fact is that not every task suits this format and often after the company has spent a reasonable amount of money on app development, yet nobody uses it.

In the simplest case, the criterion for developing a mobile app is how often it can be useful for the customer. Every one of us uses messengers and social apps — these are everyday apps. The same can be said about banking apps, carsharing, maps, task management services and, of course, gaming apps. But whether to install the app of the mall you visit once a month is already a dilemma. And also, what are the tasks solved by such an app — is it finding out the working hours and locating the store? This can be perfectly done with Google Maps or TripAdvisor. Therefore, the mall will mostly be fine having just a website with an adaptive smartphone version.

People perceive mobile apps in a vastly different way rather than websites. In one of his interviews, Steve Jobs shared the iPhone usage statistics. It turned out that unlike on computers, people using smartphones are less likely to launch a browser to find something on the web: instead, they immediately turn to the right application. This happens because mobile apps localize certain functions and are the starting point for any contemporary service. They have the possibilities that are hard to implement within websites: binding to a certain user, geolocation, rapid access to payment services, local data storage, fast and smooth interface.

At first, mobile apps were perceived by business as an instrument for a company to interact with customers. This was the case until people who got used to a good and concise interface in their smartphones began to wonder why their internal corporate systems could not be made as convenient. And even better, if someone can make the work with these systems possible through apps. For the business, this approach was also successful because it gave the possibility to rebuild its business processes. Employees instead of going to the office to sign documents with their contractors could do it right at the meeting. Work in warehouses, trade, manufacturing, and construction could also be built in a new way. As employees got the possibility of mobile work with the systems just at the right time without delaying it further, the business processes were changing accordingly.

Nowadays, when there is so much done on the way of improvement, the internal corporate systems and customer-oriented services are built in a way to make the simultaneous work through several channels possible — through mobile apps, websites, voice interfaces. Users, in turn, can use them in a way that is convenient for them at the moment.

Voice interfaces

The current interest in voice technology was preceded by chatbots’ booming popularity. At some point, it seemed that the text format of communication may supersede traditional graphical interfaces of websites and mobile apps. There were attempts, and I should say rather successful, to implement order processing services in online shops, ticket purchasing and financial systems. This concept emerged as a logical continuation of usual chat rooms with real operators of customer support services. The hypothesis was that if you find a way to replace a human operator with an algorithm or chatbot that can hold a conversation it would be possible to reduce costs and easily scale without expanding the staff.

But the problem is, as always, hiding in details — this time in the ability of chatbots to catch all those important details while communicating with the client. At conferences and in articles there are often nice figures shown, telling about the percentage of users who successfully placed an order through such systems. But you must agree that when ordering, for example, an air ticket, it is critical that all the required travel parameters are taken into account, such as departure and arrival times, airports, fare conditions, etc. If the system can miss some of this, then the cost of the error will be very high for you and you will not care that the other 85% of users got exactly what they wanted and were satisfied.

Anyway, the next evolutionary step was the idea to convert the user voice into a text that is sent to the chat room and make a voice message based on the generated text response. Contemporary technologies have gone very far, and the quality of speech recognition and voice generation is at a very high level. And this only emphasises the problem of filling the communication with a chatbot with meaning. A human when listening to speech intuitively thinks that the one who responds to him has an intellect, which is certainly missing in this case, even an “artificial” one. This results in excessive user expectations which such systems cannot fulfil. Elaborate working out of scenarios making human communication with a voice service useful and meaningful is the hardest part of creating such systems. And this should be paid the most attention to.

With that being said, where can voice interaction with users give advantages unreachable for other technologies? It is worth focusing on two aspects. Firstly, considering there is not a close sign of “intelligence” here, such system should be strictly oriented on some certain applied functions not involving vague discussions and long scenarios of human communication with the service. For example, saying to the system: “Help me arrange a trip”, — means that you will go nowhere but “Order me a taxi for the nearest time, I’ll go to the train station.” will work.

Secondly, voice is not the preferred method of communication in most contexts of use, such as in the office, in transport, on the street among people. But there are other situations when the hands are occupied and there is no way of looking onto the screen, for example when you are driving. And here is a small but important space for such a possibility. Another variant is, when a human interacts with a service via a phone call, thus, in the case of absence of possibility to work via computer devices. This is the way things like mobile operator support can be organized, calls with surveys etc. But there are more applied options, for example when the company has employees who need to communicate something to their colleagues as a part of the business process. A good example is a foreman at a construction site with a push-button cell phone, calling the accountant to tell about missing materials in the last supply.

Along with the scenarios of voice interface usage through “smart” devices such as speakers and phone calls, there are voice assistant apps that already became traditional. Shortly, the concept of their usage is this: by talking to the assistant in the app you launch a certain service implemented in the form of a voice interaction scenario. These services are somewhat similar to apps and are called “skills”. Using “skills” you can, for example, order a taxi, play a game, find out the status of the order, etc. Any company or developer can create their own “skill” so that it is available to all users of one of the voice assistants, such as Yandex Alice or Amazon Alexa. But this approach has one serious flaw — the complexity and non-evidence of the usage method.

In systems with a graphical interface, the user immediately sees the available functions, but in the case of a voice interface, there is no way of quickly and explicitly explaining how to use it. Of course, a “skill” can start its welcome phrase with a short explanation of how it can be used, but in real use, it becomes a serious limitation. Recently my colleague Dmitry Chechetkin from the Just AI company proposed a new concept for using voice systems. Instead of having a common entry point as a separate voice assistant app, it makes sense to add voice functions directly to the apps we already use. In this case, away goes the necessity to give access to all service functions through complex voice scenarios — we just need to find places in the app which are easier to pass by voice, for example, to dictate delivery address when ordering from an online store instead of manually filling it in. Several scenarios in this approach can be also greatly simplified when instead of a sequence of screens which the user goes through, he can respond to some questions with his voice and immediately land at the final point. Also, the existing app knows the user and can gain access to the previous interaction history, for example, the contents of previous orders, thus simplifying the interaction even more.

Probably in the future, a more appropriate way of usage will be found for the voice technologies in every life area. What we can say is that this will be not the only and far from the only way to communicate with computer systems. People when communicating with each other use speech only as one means of information exchange, supplying it with books, schemes, paintings, music, physical objects and, of course, emotion expressions in the form of mimics and gestures. On the other hand, as far as the thing called “artificial intelligence” gains more and more intelligence, the way of problem setting and solving will also begin to change.

Industry concepts

Regardless of the product or technology that you are planning to use in your business, it always makes sense to ask yourself how exactly this tool will change the way you work, what opportunities it will create, and how financial or organizational parameters will change. If nothing would change then using the product is just an emotional choice, like changing clothes, buying a new car when there is another one working, etc. This often makes sense, but you need to understand what it is — for example, creating a new working atmosphere or changing the image in the eyes of consumers.

I have already described above the idea of constant exploring possible ways of business improvement with the usage of digital technologies. Looking at this task from the point of entrepreneurs, there is a point in concentrating attention more on the adjacent industries than your industry. This way unobvious decisions can be found.

On the other hand, if you professionally do projects and develop digital products, your value is more related to the knowledge of technologies and the breadth of ways to use them. If you imagine a two-dimensional table with industries on one axis and digital technologies on the other, then at their intersection are the areas of solution search. In the fourth chapter about the product designer’s code of conduct, I talk about the approach which is about creating industry concepts as a format for conducting your own research. Looking ahead I would say than in the Eleven digital artel every producer is working on product concepts for different industries — it is useful to keep an eye on that and you will probably be able to find something interesting to solve your tasks.

The dilemma of businesses and IT professionals

There lies a dilemma because business requirements do not negate the fact that working on a project should be interesting to specialists who create a product. For high-class professionals who are passionate about their work (and otherwise they would not become of high class), money is not the only motivation. They need an interesting task. They may do a lot for this, including making a useful product. Therefore, successful projects are always a story of mutual interest when both sides give each other what they need. It is the rule that helps to create complex digital products that deliver results for businesses and end-users.

In the next chapter, I will explain in detail how the digital product creation industry works. By understanding the types of projects and companies working on them, each side has a better chance of getting the desired result.

Dear reader!

The book was intended to be the method research which I and colleagues use in project practice and which helped us solve traditional problems of this field, connected with quality, timeframes and, most importantly, with the understanding of real goals of digital product creation projects. I wanted to find out what the heart of our “producer’s approach” really is and where the border between my personal work style and common principles to be used by businesses and professionals lies.

The approach described in the book at a certain moment got its name of “The Paranoid Method” due to certain reasons. I’m convinced that truly high-quality results in projects can be gained only by maximizing focus on the main purpose and the goals by holding the general picture in mind, from one side, and, from the other side, by not missing a single important detail.

While working on the book I left the boundaries of researching the method itself and set myself a goal to form a common vision for the business and for professionals on what digital products are and what possible approaches of their creation exist so that all project participants could communicate the same language. It became clear due to this reason, that the book should be divided into two parts in such a way that the first one would be oriented on business and would describe common principles of the method while the second one would serve as a practical guide for professionals who manage the projects, their design and development. The first book is called the Red one, the second is the Black one, with an addendum containing project documentation examples — the White one (White Paper).

The first chapter of the Red Book was published in the autumn of the year 2019. At the moment, the work on the last chapters is going on. The book is initially written in Russian while the English variant of each chapter is published as soon as it is translated, and you can follow the progress at Medium.

Producer and designer of digital products. Founder and managing partner in the Digital Artel “Eleven”. Author of the book “The Paranoid Method”.

Producer and designer of digital products. Founder and managing partner in the Digital Artel “Eleven”. Author of the book “The Paranoid Method”.