Guide

The Ultimate
Business Design
Guide
Alen Faljic,
Founder of d.MBA
01 Business Design 101
02 How Business
Designers Work
03 Becoming a Business
Designer
01
Business Design 101

1.1. What is business design?

Business design is a relatively new discipline that lives in the intersection
between business and design. It was developed to complement the
growing relevance of design methodologies in the business world.

Design, as practiced in design agencies, is inherently customer-centric

and focuses on the desirability aspect of products and services. The initial
boom (and success) of design methods used in business was fueled by
this unique perspective.

However, companies leveraging design became increasingly aware that

desirability is not enough. If something is desirable it doesn’t necessarily
mean that it is good for business. Yes, we would all want more legroom in an
economy class (while paying the same price as today) but that is not viable
from a business perspective. More legroom means fewer passengers.
Fewer passengers mean that you need to raise the price per passenger.

Soon, companies using design put more pressure on design teams

and design agencies to align their work with a business context. So, the
agencies and teams started hiring business-minded talent who would help
their teams think beyond desirability (and feasibility), adding the viability
component. And boom, the business design was born.

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Since then, the business design has taken on a larger role. It is no longer
just a complementary discipline. It knows how to take the lead too. For
example, if a company is looking for a new business strategy, business
design can use customer-centric design methodologies to create
prototypes of this new strategy and test it.

This rather vague and evolving nature of business design has brought us to
a point where even business designers can’t agree on its definition. There
are many definitions out there but most of them are too narrow, too broad,
or simply wrong. They are not helpful to someone who is just starting out in
the field. And that frustrates me.

All impactful disciplines have started with a clear definition and guidelines.
Business Design is still lacking that. This guide is my attempt to contribute
to this topic and help shape the next iteration of business design practices
and set it on a better trajectory for future growth.

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I remember when I had the first interview for a business design internship at
IDEO. I had no idea what it really was but I was too afraid to ask. I just made
up my own definition. Some months later, I finally had enough courage to
open this debate and figured out that others have a problem defining it too.

If we are not aligned on what it is, how can we expect others to accept it
and start using it?

So, here is my attempt at defining it. After learning from business design
pioneers and practicing it myself for many years, my definition is the
following:

“Business design is an activity that uses design

methodologies, design mindset, and business
tools to solve business challenges.“

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Let’s not gloss over this simplistic definition and let’s break it down.

(a) Design Methodologies

(b) Design Mindset
(c) Business Tools
(d) Business Challenges

(a) Design Methodologies

The business design uses design methodologies, most notably design

thinking. Their power comes from a multidisciplinary approach, highly
iterative nature, use of abductive thinking, and customer-centricity.

The most common mistake business do when first utilizing design

thinking is putting together a homogeneous team. If a project team is full of
marketers, you can expect their lenses to completely dominate the result.
Design thinking works best when we put together a heterogeneous team.
For example, a research designer, an interaction designer, a business
designer, a service designer, etc.

Charles Rainer Härtlein, a fellow business designer, says that a great way
to build heterogeneous teams is including customers in a project team is.
Charles recommends looking beyond the most obvious customers (not
just decision-makers). Look for the extreme and lead customers.

This mixture ensures that we can look at the problem from different
perspectives. Is it desirable? Can we actually make it? Does it make
business sense?
Furthermore, design thinking uses abductive reasoning. Traditional

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education mostly teaches deductive reasoning (from rules to conclusions)
and inductive reasoning (from examples to rules). Deductive and inductive
reasonings work well in well-defined environments. However, business is
far from a well-defined environment. We have incomplete information in
a highly complex system. And abductive thinking is actually most suited
for such situations. Abductive reasoning is a combination of inductive and
deductive. It looks at an incomplete set of observations and helps create
the most likely explanations (hypotheses).

Most business school programs teach deductive and inductive thinking.

They preach business theories and rules, which are applied to the business
world to find the best solution. However, the business world is inherently
ambiguous. Messy. Unpredictable. In many business situations, abductive
thinking is actually a much better tool than the typical deductive.

Finally, design methodologies are customer-centric. The starting point

of any challenge is customers. We start by talking to customers, learning
about their challenges, goals, pains, and their life. This helps us design a
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solution that fits much better in the context of their life. Most companies
behave as if their product is at the center of a customer’s life. Well, my life
doesn’t revolve around my toothbrush. I just want it to do one thing and
I don’t want to spend more than a few seconds (maybe minutes)
choosing one.

I would add that business designers are not just customer-centric but
also stakeholder-centric. We do start with customers but we are equally
concerned about others involved in a business model.

(b) Design Mindset

Business designers use a design mindset. This is often overlooked but

probably the most important ingredient in the whole recipe. As you’ve seen
in the design methodology section, the way we traditionally think about the
problem predetermines the result.

If we use deductive thinking, we will only explore a small subset of

possibilities. It’s like solving a puzzle, which has only one solution. However,
business challenges do not have just one outcome. The solution can be
outside the field (not in the puzzle at all). We need to try out different things
before committing to one version. As business designers, we want to cast a
wide net and look at as many options as possible.

While we do use traditional business tools, we are creative in how we do

so. For example, before ever drawing a business model we would talk to
customers and all relevant stakeholders in our potential business model.
We wouldn’t just look at a spreadsheet to create the best scenario.

We also wouldn’t use the Business Model Canvas to find the solution

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(as there isn’t just one). We would create many extreme business model
scenarios and use them as prototypes to learn from customers, suppliers,
and other stakeholders.

(c) Business Tools

Even though business designers use design methodologies, they still use
business tools.

There is a very long list of tools and I can’t list them all. Here is a list of some
of the most common and popular among business designers:

Porter’s Five Forces

PESTEL Analysis

Financial projections

Reverse income statement (Discovery Driven Planning)

Top-down and bottom-up business opportunity estimations

Growth-Share Matrix

Business Model Canvas

Sales funnels

Blue Ocean Canvas

Playing to Win

Organizational charts

Etc.

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 Porter’s Five Forces is a tool that helps analyze an industry and
identify opportunity areas for design challenges.

However, business designers use these tools differently than business

analysts and most entrepreneurs. As mentioned in the previous section, we
would use these tools not just to shape the solution but also as prototypes.

(d) Business Challenges

And now to the final component of our definition. For something to be

called a business design, a combination of design methodologies, business
tools, and a design mindset needs to be applied to a business challenge.

I categorize business challenges into the following main groups:

growth (increasing revenue, getting more customers (sales),

increasing market share, pricing strategy, go-to-market, etc.),

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 strategy (finding a defensible position in the market, defining our
trade-off decisions),

business models (finding and improving how we create, deliver, and

capture value),

cost optimization (optimizing our cost structure to improve

profitability),

organization (optimizing business processes, attracting talent,

defining incentives, designing organizational structure, etc.),

brand and UX (brand and UX are still 90% in the hands of brand/
service designers but the business design should have a say in it with
regards to positioning and implications to other business topics)

and product (defining a value proposition and product strategy).

Now that we defined business design, let’s also cast away some
misconceptions.

1.2. What business design is not?

Business design is not management consulting.

Management consultants work on business challenges and use business

tools too but their methodologies and mindset are typically on the other
side of the spectrum. They are business-centric (i.e. profit-centric), they
avoid ambiguity (and hence thinking in extremes), stay very short in the
discovery phase (business designers enjoy it), and invest a lot of resources
in finding the single best answer. They use business tools and deductive
thinking.

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Business design is much more comfortable with big hairy challenges (e.g.
what are most likely modes of transportation in 2030 and what will their
business model be). It is customer-centric, embraces ambiguity, works in
multidisciplinary teams with other designers, creates tangible prototypes,
and runs tests in the field to validate business and value proposition
hypotheses.

Typically, business designers are more involved in the implementation of

the solution. Through prototyping, they don’t launch just experiments but
also products and whole ventures. Business designers go beyond just
creating beautiful slides.

Management consultants usually get better results with well-defined

problems in well-established industries and with stable business models.
Especially on projects that deal with a bottom line optimization (improving
profitability) while business design deals much better with a top of the line
improvement (increasing revenue and finding new opportunities).

Business design is not business development.

As per Wikipedia, “business development entails tasks and processes

to develop and implement growth opportunities within and between
organizations.”

The business development function is typically more involved with the

sales perspective. Its purpose is to work on the challenge of growth and
product while the business design is much broader (business models,
strategies, processes, etc.).

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The most fundamental difference is that business developers usually don’t
use design methodologies and design mindset.

Business design is not product management.

Yes, business design skills translate nicely to a product management role.

But that doesn’t mean that they are the same. The product manager’s
mandate is to create and execute a strategy around a specific product.
Moreover, they typically also manage a team that builds a product.

Product managers are in charge of the whole lifecycle of a product

(range) - also including minor adaptations towards the end of the life cycle
- whereas business designers focus on new products or more radical
changes.

Business design is a much broader role. It does not look only at the product
strategy, but at business models, company-level strategy, processes,
organizational structures, etc. Typically, business designers would not be
managing a product team beyond the first or second-level prototype.

I would argue that most business designers don’t have the depth and
knowledge of all methodologies and processes (e.g. scrum) to manage a
product well. On the other hand, most product managers are semi-fluent
but not masters in the design methodologies.

Business design is not service design.

Service design and business design start with customer-centricity,

however, business design goes beyond that. After business designers

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figure out what customers want they also do research with all other
relevant stakeholders in the business model. I would say that business
design is stakeholder-centric and that the main stakeholder is a customer.

Moreover, the business design differs from service design also in focusing
on viability and business aspects of service.

Business design is not just designing business

models.

It is so much broader than that. Business design can tackle a wide variety
of business challenges. Reducing business design simply to business
models would be like saying that cooking is just the cleanup. What about
preparing ingredients, mixing them in the right ratios, cooking them, etc.?

Business design is a holistic view of a business with a design mindset.

Business design is not about aesthetics.

Business design is not designing logos, business cards or websites.

Design in the business design term does not mean drawing a graphic, an
image or the visual design of an app. It means that we use methodologies
traditionally used by product designers to come up with better products.
So, the business design uses these same methodologies but applies them
to a wide array of business challenges.

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 Business design is not entrepreneurship.

While business design can definitely (and probably should) be used when
creating a startup, these two terms are not synonyms. Entrepreneurs
can use a completely different approach to building their business. For
example, they could be product-centric and start from a technology or
a product idea. Again, business design is a (business) problem-solving
approach.

1.3. Six mindsets that make a business

designer, business designer
To truly explain what it takes to become a business designer, we have to
cover six really important mindsets that business designers have:

(1) Start with Customers and Stakeholders

Business designers start their work with customers in mind. Instead
of doing competitor research and looking at other limiting constraints,
we start by talking to customers and relevant stakeholders. We are
fluent in conducting customer/stakeholder interviews and using
various prototypes to uncover insights that will lead us to solution
prototypes.

(2) Think in Extremes

A traditional way to business problem solving is quickly identifying
the most likely scenarios and excluding unviable solutions. Business
designers embrace extremes. We create extreme prototypes to
uncover new ideas and provoke reactions in testing. For example,
when designing a new business model, a business designer would

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 try to combine elements that on paper do not make sense just to see
what else it could lead to.

(3) Prototype to Learn

Business designers create prototypes not just to prove their validity
but also to learn. We launch products and services to test business
model designs. We create a fake-door test to test the willingness to
pay. We create financial projections and business cases to validate
the financial viability of a product. We sketch product ideas that
represent strategic trade-offs to inform our strategic decisions. We
design new processes and test them with small teams for a limited
timeframe. The variations of these prototypes are endless.

(4) Combine Qualitative and Quantitative Data

Anyone who has gone through a traditional business school has
noticed that most problem solving happens through secondary
research. Annual reports, business cases, trend reports, etc.
Business designers are comfortable with messy qualitative data,
which is mostly statistically insignificant. However, when qualitative
data is combined with some macro-level data (e.g. industry size,
target market, etc.), we can create very sound hypotheses using
abductive reasoning.

(5) Embrace Small Data Sets

After conducting ten interviews, you don’t get a statistically significant
result. Business designers are comfortable with small amounts of
data that will lead the first round of hypotheses, prototypes, and tests.

(6) Think Visually

Business designers do not live and die by their spreadsheets. We
love to turn business data into visual tools that help us find patterns,
communicate learnings, create experiments, and prototype our ideas.
For example, when doing competitor research, a business analyst

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 would typically note all data points in a neatly organized spreadsheet.
However, business designers might look for seemingly disconnected
data, draw charts, graphs, business models of other companies,
and visualize their strategy. In the end, they would collect them on a
whiteboard and look for unusual patterns.

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02
How Business
Designers Work

2.1. The business design process

This is what most of you have been waiting for. The process. But if you
carefully read the previous section, you know that the process is not the
main thing. I would even argue that there is no ultimate business design
process.

Each business designer can design their own process and adapt it,
depending on the challenge. But I know that this is not a helpful answer so
here is a business design process in its typical five stages.

Empathize (and Explore)

Define

Ideate

Prototype

Test

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Here is what business designers do in each of these stages.

Empathize (and Explore)

We begin with customer-centricity and stakeholder-centricity. We want
to understand what customers and stakeholders are going through. What
challenges do they face? How big are these challenges? What alternatives
are they using today? What is their willingness to pay?
I added explore to this stage because business designers should not only
rely on qualitative data from customers but conduct desk research on
competitors and industry.

Define
After conducting research, we synthesize our learnings and define the
challenge. Remember that business design is well suited for ambiguous
challenges? They are so complex that you don’t know what the real
challenge is until you start the first phase of research. So, after the empathy
stage, we finally have enough insight to frame better questions that will lead
the rest of our process.

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Ideate
After defining what we’ve learned, we start coming up with the first ideas
for our solution. We would typically have numerous HMW questions for
brainstorming sessions. After we’ve collected enough ideas, we would
cluster those into opportunity areas and prioritize them. At the end of this
stage, a project team would select the most promising opportunity area as
the focal point for the next stage.

Prototype
In the prototype phase, we start designing the solution to our challenge.
Depending on the challenge, a business design prototype could be
anything from a new business process to a completely new venture.
Most common business design prototypes are new business models,
business strategy articulation, financial projections, business processes,
organizational charts, proposed metrics framework, and pricing strategies.

Test
In the final stage, business designers (and a whole project team) launch
experiments to learn. We set hypotheses and use prototypes to get
answers. A business designer is usually also involved in finding the right
metrics for each experiment and for finding benchmarks (to know if our
hypothesis is accepted or rejected).

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 The business activities and tools
Description Business design activities Tools

Empathize (and Explore)

Customer research Analogous Discussion guide
Empathizing with customers and
Experiences Industry and Trend Business Empathy
stakeholders to understand their
Analysis Competitor Analysis Porter’s Five Forces
wants and needs. Conducting
Strategic analysis Business Model Competitor Empathy
desk research on competitors and
Analysis Checklist Blue Ocean
industry
Strategy Canvas
Ecosystem Map

Define
Anthropological (design) research Notes Marker
Identifying the project’s most
Identifying Patterns in the Data Whiteboard
important problem and related
Synthesizing Research Shaping
challenges
Insights and Related HMW Questions
*not business design activities per se but
rather design activities

Ideate
Prioritising Opportunities Drafting Post-its sharpies
Brainstorming and co-creating
Early Strategic Recommendations Blue Ocean Strategy
around HMW questions to create
Co-creating with users and Canvas Business Model
opportunity areas for our solution
stakeholders Modeling Business Navigator Back of the
Models Sizing Opportunities. envelope Business
In this phase, all these activities are Calculations
done on a very high-level (just a rough
outline)

Prototype
Shaping Strategic Documents Blue Ocean Strategy
Creating business design
Defining Business Models Proposing Canvas Playing to
prototypes to learn and (in)validate
Organizational Chart and Flows Win Business Model
our ideas
Modeling Sales Funnels Creating Canvas Business Model
Top-down and Bottom-up Business Navigator Organigrams
Cases Sales Funnels Financial
Projection Spreadsheet

Test
Road-mapping, Shaping Experiments Design Metrics Canvas
Launching experiments to test our
Defining Metrics Launching Project Roadmap
hypotheses using prototypes
Experiments Experiment Sheets
Sales Funnel
Assumptions Document
With experience, every designer creates his/her own version of this
process. It still follows the same principles but some details might get
shifted around. For example, ideation for me happens throughout the
project, not just in phase three. I love to start drafting business ideas from
the beginning. It helps me do better research.

I sometimes dive straight into prototyping if I know an industry or a problem

well. I found that running just one experiment helps me frame a better
research question for the empathy stage.

2.2. Do business designers work

alone or in a team?
Business designers work as an integrated part of a design or a product
team. There is no specific “handover” per se. As described in the previous
section, business designers bring their lense throughout the project by
asking business questions, translating the work of a team and designing
the business side of a project.

2.3. What is the role of a business

designer on a project?
Tsukasa Tanimoto, a business designer based in Tokyo, wrote a really good
piece on this topic.

He concludes that the role of a business designer is to:

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(1) “frame, direct and/or inform the design process through a business
lens to ensure design solves business problems effectively.

(2) translate design solutions into value and impact through a language
that business stakeholders are familiar with to prove design provides
solutions to business problems.

(3) apply human-centered methodologies to strengthen business and

financial components of design work to create services and products
that are viable.”

I agree with Tsukasa’s outline. Here is my interpretation of these three

points and translated into the language of this guide.

Firstly, business designers must bring a business perspective to design

projects. While other designers work on user flows, user experience,
aesthetics, and features, business designers are on a project to frame the
whole project strategically.

For example, if a design team is working on product improvement for a

client, a business designer needs to understand the client’s business
strategy, state of the industry, biggest cost-drivers, and competitors’
strategy. So, if you work with an affordable hotel chain you can talk to your
team about cost-drivers (location, staff, room size, amenities, etc.). In the
research, you might find that your potential customers do not care about
the room size but they really care about the mattress quality. This is huge
news because you know that room size is more expensive than investing in
better mattresses.

Secondly, business designers act as a bridge between traditional design

work (wireframes, product sketches, brand design, etc.) and business
stakeholders or clients.

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To build this bridge, I have usually backed up our design decision with a
business rationale. For example, when we tried to argue for investing in a
certain product feature, I showed competitor research and explained why
others will struggle to keep up with us (i.e. copy us), giving us a sustainable
competitive advantage.

Finally, business designers also produce business design deliverables.

This may be a new business strategy, a new business model, process,
pricing, go-to-market plan, etc. This is the most tangible part of designers
work and the thing you would put in your portfolio.

2.4. How do business design co-

creation workshops look like?
As an integrated part of a team, business designers also organize co-
creation workshops. Typically, the purpose is either acquiring certain data,
widening a perspective, or making business decisions.

These workshops can take many shapes but they usually revolve around a
certain business tool. My most common tools/workshops were:

(a) Business Empathy

(b) Blue Ocean Canvas
(c) Financial Planning

Let’s go quickly through each of them.

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(a) Business Empathy

In the early stages of a project, we want our team to not exercise only
customer empathy but also business empathy. We want to find the best
balance between customer and business goals. Only then can we expect a
successful product.

Business Empathy is my term for bringing the business lens to the research
phase. It covers two activities. First, asking business-minded questions in
customer interviews. Second, interviewing business stakeholders to better
understand their goals.

So, in the business empathy workshop, business designers work with

their team to add business-minded questions to the discussion guide. This
would typically cover areas such as:

How big is the pain of the interviewee’s problem? How much time/
money are they spending on solving it right now?

Who is the decision-maker? Who will pay for the solution (and who
will use it)?

What trade-offs are customers willing to make for their solution?

(think about strategic trade-offs discusses later in the business
design prototypes section)

How and when would they ideally want to pay for the solution? How
are they paying for other similar solutions in their life?

etc.

Secondly, together with a team, you would define the most important
project’s stakeholders. Who is investing in it? Who will be affected? Who
could block a project? Who would benefit from it? Create a shortlist and

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interview them too. In these interviews, you want to learn four things:

Goals - what are their quarterly, yearly and long term goals

Their Challenges - what is blocking them in achieving those goals

KPIs - how are they measuring goals

Organization - how are they organized

If you do this well, you don’t only learn about business expectations.
You will also identify the vocabulary that you need to use in your project
deliverables in order to convince decision-makers.

(b) Blue Ocean Workshop

Whenever you need to design a new business strategy, I would suggest

conducting a Blue Ocean Workshop. It will help you get valuable input from
your team and business leaders.

In essence, the Blue Ocean Strategy facilitates making strategic trade-off

decisions. We need to decide where we want to compete, who we want to
target, and what we will invest in.

Before trying this workshop, you should familiarize yourself with the Blue
Ocean Strategy. The best way to do that is by reading the book.

The basic tool we will use in this workshop is the Blue Ocean Canvas. The
workshops can be structured as follows:

define competing factors (what companies in an industry invest in),

draw the dominants strategic groups lines (what other strategic

groups in the industry invest in),

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 and draw your blue ocean offer (by answering what competing
factors you will eliminate, reduce, raise, and introduce).

(c) Financial Planning Workshop

Towards the end of the project, business designers sometimes prepare a

detailed financial plan. This covers projects’ estimated revenue and costs,
which helps us understand the size (and viability) of a business opportunity.
This exercise usually involves making many educated assumptions so
there is a high degree of uncertainty, which can be reduced by bringing
others into the process.

Prior to the “financial planning workshop”, a business designer already

prepares the first version of a financial plan. In the session, she presents
a prototype to get feedback from her team. Even if the rest of the team
is not business-minded they still have a really good feeling for certain
assumptions.

If a client/investor is involved in this workshop, they can provide certain

data that helps us hone the financial model. For example, when I created a
financial model for a new product that would need a team of 10 developers
I could only guess how much they are paid. But my client knew exactly the
average cost of a developer so I after talking to him I could plug in the exact
number and decrease uncertainty in my model.

A quick tip: For financial planning, I would suggest using Discovery-

Driven Planning instead of a regular business planning approach.

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2.5. How do business design
prototypes look like?
Let’s get concrete. How does business designers’ work look like? Let’s
begin by looking at some business design prototypes.

For example, if we would be testing a product price, we could launch various

experiments to find an optimum point. We could rent a pop-up store in a
supermarket and offer price X today and price Y tomorrow. If we have a digital
product, we could simply launch an A/B test with two different price points.

When I am testing strategy (business trade-off decisions), I create a series of

extreme trade-off decisions that I can test in user research. Let’s go back to
our hotel chain example. When testing the best strategy, I would come up with
a list of customer trade-off decisions:
Room size - Bed quality (would customers want a larger room or a
better bed?)
Hotel Location - Room size (do customers prefer larger rooms or
better location?)
Concierge service - Gym (do customers value concierge service
more than a gym?)
Etc.

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I would present these extremes to interviewees and ask them to choose
between these options. This will tell me what I need to invest in and what I
can divest from (i.e. strategic choices).

A third prototype I love using is financial projections. Using the Discovery

Driven Planning, I can test the viability of our business concept. I wrote
more about it here. Below is a quick illustration of the DDP in action.

Let’s say we would like to start a food truck. Following the DDP principles,
we would start with our goal for profitability. If our yearly profit goal is
$100.000, what needs to happen? Well, if our average dish is priced at $5
and costs us $4 (including salary, rent, ingredients, etc.) we need to sell
100.000 dishes in a year ($500.000 revenue minus $400.000 costs). If
we break this down even further, we would need to sell 274 dishes per day
(100.000/365 days). Assuming 10-hour workdays, that would mean 27,4
dishes per hour. That sounds like a lot for one food truck, right? But that is
exactly why we use DDP. To find out these early red flags.

This approach leads nicely to experiments. We don’t need to invest in a

business to find out if we can prepare 27,4 dishes per hour. We can do that
in our own kitchen.

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2.6. How do business design
deliverables look like?
There are too many deliverables for me to cover in this guide so here is a
short overview of the most common ones:

Competitor research Who are we competing against?

Industry analysis What role should we play in the industry

and why?

Ecosystem Map How would the business model look like?

Revenue potential How much can we expect from this project?

Business Strategy How we compete against others?

Organizational charts What needs to change on the organizational

and implications layer to execute on the vision?

Proposed metrics How will we know if we are on the right track?

Timeline How will we go about making it happen?

Go-to-Market- How we plan to enter the market?

Strategy

Suggested Pricing How and much would we charge

Plans for a product?

Now, let’s have a look at three concrete examples.

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Let’s begin with my favorite business model tool. An ecosystem map that
shows how our product or venture will actually work. It consists of four
building blocks:

Actors: Who is involved in creating, delivering, and capturing value

(individuals, companies, partners, etc.)?

Flow of information: How is information flowing among actors? What

type of information?

Flow of goods: How is a product or service flowing from a provider to

a customer?

Flow of money: Who pays whom? How does money travel?

Below is the business model visualization for Netflix’s business model.

Ecosystem maps are not just great for presenting the result of our work but
also for our design process. By making it highly visual, we get better ideas
for new iterations and solutions.

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Secondly, in most design projects we need to estimate business impact.
One way to do that is by doing top-down and bottom-up revenue
estimates. Here is an example, showing the bottom-up revenue estimation
for a bike shop based in Berlin.

Slide 1: Framing the challenge/deliverable

Slide 2: Showing the breakdown of our bottom-up calculation.

The Ultimate Business Design Guide 32

 Slide 3: The final result of our estimation.

Slide 4: Further breakdown of our revenue estimation

through a sales funnel.

The Ultimate Business Design Guide 33

Finally, certain projects require thorough competitor research that leads
to interesting insights, which guide our design work. I wrote more about
conducting competitor research here. In essence, we look for direct and
indirect competitors and analyze them from a business, a product, and a
customer perspective.

This is typically done in a spreadsheet. Here you can find my analysis

of the music streaming services (early 2018). This leads me to the
following insight.

The insight was later turned into a 2x2 matrix, which furthermore
confirmed my hunch that profitability could be achieved through backward
integration. There was a gap in the market.

Bigger companies (Spotify, Apple Music) work closely with record labels.
That makes sense because streaming services need to collaborate with
record labels in order to use music in apps. If, for example, Spotify would
try to create its own label that could irritate music labels so that they would
increase their royalties and hurt their profitability even more.

The Ultimate Business Design Guide 34

This hypothesis was later tested
as Spotify tried this exact strategy (source).

The Ultimate Business Design Guide 35

03
Becoming a
Business Designer

3.1. How do I become a business

designer if I have a design
background?
As a designer, you are already fluent in the language and methods of design.
You have been part of qualitative research before, you’ve done rapid prototyping
with sketches or legos, and have synthesized learnings from your experiments.

To become a business designer, you need to become fluent in the language of

business. You need to understand what drives business value, how executives
think, how they make decisions, and master business tools and frameworks.

The first struggle for designers is entering the world of endless buzzwords.
The business community is great at giving everything a sophisticated name.
Diminishing returns, negative cash flow cycle, opportunity costs, etc. It is easy
to get lost and feel incompetent. Especially because most business books are
written for business people so some basic knowledge of business vocabulary
is expected.

That’s why I have structured my open-source curriculum in three stages,

helping you ease your way into the world of business. This curriculum covers the
most important business books that introduce fundamental business concepts.

The Ultimate Business Design Guide 36

Start here

Blue Ocean Strategy, Expanded Edition: How to

Create Uncontested Market Space and Make the
Competition Irrelevant
by W. Chan Kim and Renee A. Mauborgne

BUY BOOK

The Personal MBA: Master the Art of Business

by Josh Kaufman

BUY BOOK

The Business Model Navigator: 55 Models That Will

Revolutionise Your Business
by Oliver Gassmann, Karolin Frankenberger, Michaela Csik

BUY BOOK

Lean Analytics: Use Data to Build a Better Startup

Faster (Lean Series)
by Alistair Croll, Benjamin Yoskovitz

BUY BOOK

The Ultimate Business Design Guide 37

Then read these

Hacking Growth: How Today’s Fastest-Growing

Companies Drive Breakout Success
by Morgan Brown, Sean Ellis

BUY BOOK

Business Model Generation: A Handbook for

Visionaries, Game Changers, and Challengers
by Alexander Osterwalder and Yves Pigneur

BUY BOOK

Good Strategy Bad Strategy: The difference and why

it matters
by Richard Rumelt

BUY BOOK

Play Bigger: How Rebels and Innovators Create New

Categories and Dominate Markets
by Al Ramadan, Dave Peterson, Christopher Lochhead, and Kevin Maney

BUY BOOK

The Ultimate Business Design Guide 38

Finish with these

Playing to Win: How Strategy Really Works

by A. G. Lafley

BUY BOOK

Competitive Strategy: Techniques for Analyzing

Industries and Competitors
by Michael Porter

BUY BOOK

Discovery-Driven Growth: A Breakthrough Process

to Reduce Risk and Seize Opportunity
by Rita Gunther McGrath, Ian C. Macmillan

BUY BOOK

Numbers Guide: Essentials of Business Numeracy

by The Economist

BUY BOOK

The Ultimate Business Design Guide 39

This plan should bring you to 80% fluency in business understanding. Now,
we get to a bigger problem. Most managers hiring business designers
prefer to hire talent with deep business knowledge and teach them design
than the other way around.

So, if you really want to be a good candidate you should get some
experience working in business roles. That could be a business role in a
startup or working as a business analyst of a sort.

However, to get those roles, you need to start practicing your business
knowledge. Applying it to case studies and on projects. So, one thing you
can do in your current role is to put yourself in situations and projects
where you can bring a business (design) lens on projects and try out
different tools.

Here is a great tip by Jonas Kronlund on how to put yourself in situations

to bring your business design lense to projects: “Volunteer to do the
Powerpoints, which is the most despised and hated task within an
organization... Do the decks and do it well, which hopefully will put an
aspiring business designer in the midst of also strategy processes, where
there is surprisingly much room to leave a footprint. Become the go-to
point of crystallizing ideas!”

If you are looking for a sandbox to practice business knowledge, you can
also join us in the d.MBA to work on real-world examples. You will learn
how to speak the language of business in order to be more effective at any
organization. We achieve that by breaking down complicated business
concepts into digestible material, so you can deeply internalize the
principles and leverage them to your advantage.

The Ultimate Business Design Guide 40

3.2. How do I become a business
designer if I have a business
background?
With your business background, you are already fluent in the language of
business. You know what separates a winning business strategy from the
losing one, you have created a few financial projections in your career, you
have an overview of the most important business metrics, and know-how
to redesign a business model.

So, for you, it is not about learning new tools or new business frameworks.
You have to make a mindset shift or change the way you approach
problems.

This is harder than it sounds. It is not just about learning new skills, it is
about changing the way you think. Don’t shrug it off as an easy task. It took
me at least a year to grasp a design mindset.

My best recommendation would be to find a job (or project) where you

will work with very experienced designers. Look for a team that has a very
strong design process, some designers with 5+ years of experience, and
that work in multidisciplinary teams. Be ready to be taken on a journey of
the unknown, feeling stupid, and incompetent for a year.

But it’s worth it. You will come out different on the other end.

The best place to start looking for such opportunities is design agencies
that look for candidates with the following roles: business design, strategy
designers, and venture architect/designer. Alternatively, look for product

The Ultimate Business Design Guide 41

companies that have a very strong design culture. This usually means that
one of the founders or senior executives will be a designer.

I just want to underline again that attending a 5-day design thinking

workshop is not enough. I speak from experience. I’ve taken a course
on design thinking and I felt I knew the process. And I was right. I knew
the process but I did not have the mindset yet. It just takes more time to
immerse yourself in the topic, change your thinking models, and create
new habits.

Here is how I would put together a curriculum to turn you into

a business designer.

To tip your toe into the world of design, go through the following
books and courses:

Sprint: How to Solve Big Problems and Test New Ideas in Just Five
Days by Jake Knapp, John Zeratsky, and Braden Kowitz

The Design Thinking Playbook: Mindful Digital Transformation of

Teams, Products, Services, Businesses, and Ecosystems by Michael
Lewrick, Patrick Link, Larry Leifer

Change by Design, Revised and Updated: How Design Thinking

Transforms Organizations and Inspires Innovation by Tim Brown

IDEO U course: Hello Design Thinking

The Design of Business: Why Design Thinking is the Next Competitive

Advantage by Roger L. Martin

Immerse yourself fully:

Find a 3-6 month project or internship at a design agency

or design team

The Ultimate Business Design Guide 42

 Take IDEO U course: Insights for Innovation

Read all Medium articles on IDEO’s Design Research Methods

Value Proposition Design: How to Create Products and Services

Customers Want by Alexander Osterwalder, Yves Pigneur, Gregory
Bernarda, Alan Smith, and Trish Papadakos

Discovery-Driven Growth: A Breakthrough Process to Reduce Risk

and Seize Opportunity by Rita Gunther McGrath, Ian C. Macmillan

Take IDEO U course: Designing a Business (a venture design course

that is based on business design mindset)

Polish your skills with these:

Designing with Data: Improving The User Experience With A/B

Testing by King, Rochelle

Articulating Design Decisions: Communicate with Stakeholders,

Keep Your Sanity, and Deliver the Best User Experience
by Tom Greever

On the web version of this guide, you can also find a list of schools that offer
business design programs.

3.3. Do I have to be a consultant to be

a business designer?
Not necessarily. For example, you can be a business designer and act as
an entrepreneur or intrapreneur. Business design is a problem-solving
approach, not a role.

The Ultimate Business Design Guide 43

However, it is easiest to start as a consultant because you can hone your
skills by applying them to different industries and challenges. Currently, the
best structure to learn business design is in design agencies. But that may
change in the future.

I hope that in the near future, more product companies will start employing
business designers to complement their teams. We might see a stronger
specialization of business design roles: business model designers,
strategy designers, pricing designers, process designers, growth
designers, etc. Actually, it is already happening in some pockets of the
industry.

3.4. Are there any specializations

within the business design?
As the business design is still a young discipline we don’t have clear
specializations yet. But that might change in the future.

I recently spoke to John Oswald, a business design pioneer, who has hired
and lead around 100 business designers in his career. He told me that he
spotted five bigger patterns of talent in the business design profession. He
noticed that business designers can be categorized into five larger groups:

Entrepreneurs / Product Owners - they know what needs to happen

to launch a great product, good at managing investors and teams to
implement things

Strategists - these designers know what strategic tools to use in what

context and how to talk business value

Storytellers - they are great at thinking through how a story will

The Ultimate Business Design Guide 44

 engage an audience (using imagery, anecdotes, vulnerability) to land
significant points about the business change that needs to happen

Account managers - they have good empathy and understanding of

an organization, identify different people’s agendas, how to tell a story
to different people

Culture Changers - good at inspiring and leading people to change

company culture

Some business designers are good at everything and some are more
focused.

These are not specializations per se but could develop into ones over time.
John also stressed that this list is probably not exhaustive. There might be
more patterns and profiles already (or there will be in the future).

What companies hire business

designers?
As mentioned before, most companies hiring business designers today are
design agencies. Companies use different names for the role of a business
designer, which again shows how ill-defined this term has been since its
inception.

You can find the latest shortlist of companies hiring business designers
on the guide’s original link under the same question “What companies hire
business designers?”

The Ultimate Business Design Guide 45

How does a business portfolio
look like?
Most companies that hire business designers do not look for a portfolio.
However, you will significantly improve your chances of getting hired if you
have one because you can showcase your work and experience.

When I first got the interview for a business design internship, I was asked
to send in my portfolio. Of course, I had no idea what that was supposed to
look like. But I also didn’t dare to ask.

It is very uncommon for business graduates or business professionals to

have a portfolio. It’s just not something that is taught at a business school or
expected from applicants. However, in the design industry, your portfolio is
everything. That’s where you show your work.

So, I had a week to come up with my business design portfolio. Needless

to say, it wasn’t great but I got lucky. The business design team was looking
for someone with an entrepreneurial point of view and interest in venture
design.

Here, you can download my business design portfolio from 2013. I know, it’s
not great. Now, let’s talk about how it is supposed to look like.

I would suggest focusing on two to three projects and showing a specific

part of the process along with your deliverable. I would argue that you
don’t have to present the whole process. I would suggest zooming in the
most interesting challenge and present your solution. You can follow this
framework:

The Ultimate Business Design Guide 46

 Challenge - explain why you were hired or tasked with this project;
mentioned a business goal and customer goals

Overall Approach - explain your process on one page (e.g. describe

stages, who was part of the team, how long it took, etc.)

The Main Insight(s) - what did you learn in customer interviews and
desk research that drove your solution

Deliverable - show your business design deliverable

Look under the question “How do business design deliverables look like?”
to see a few examples of deliverables that you could have in your portfolio.

Another piece of advice. If you haven’t worked on business design

projects yet, just work on two or three spec projects. Think about business
challenges that you like and turn them into speculative design. Your
portfolio is supposed to show your thinking process so even if projects are
not real client work, that is ok.

How do you sell business design

services?
I believe that business design should not be sold as an independent
service. The business design creates the most value when it is an
integrated part of a larger multidisciplinary design team.

If you are a business designer lone wolf, you will quickly be eaten by other
animals in the business kingdom. Most companies are so heavily business-
focused that just one designer (especially a business designer) does not
have the power for impact.

The Ultimate Business Design Guide 47

As a business designer, you usually work as a bridge between more
tangible design (product, UI, service) and a strategic level. If you work
alone, you will miss that tangibility which will lead to lower quality of
prototypes, insights, and eventually a final result.

So, what can you do?

If you are running a design agency, don’t sell business design work
independently. Add business designers to project teams. For example,
if you are running a design sprint, you don’t need to create a new format
or a product. Just add a business designer on the next sprint and charge
accordingly.

I’ve been involved in many projects that were sold without any
consideration of business design. Even though it sounds like no big deal
(“we will just add you on a project”), it makes a big difference. If business
designers are involved in the pitch process, they can help shape the
project so that a client has the right expectations and that a project team
has enough time to cover the viability aspect.

If you are a freelancer, make sure to look for projects where you can
collaborate with a client’s design team. They will understand your ideas,
help you build prototypes, visualize your deliverables, and you will help
them add a strategic perspective and translate their work into a language
that executives understand.

The Ultimate Business Design Guide 48

If you are serious about learning business, you can
also join us in the d.MBA program. It is a 6-week online
part-time business course that teaches business
fundamentals to designers. Our approach is focused
on rapid skill acquisition and deliberate practice on real-
world case studies, so you can start using business skills
in days, not months.

Visit our website to find out more about the exact dates
of the following courses.