from innovation hampered by production to a sustainable business model
Scaling Innovation
Business Model Design | Oikonos | 5 months
Background
Oikonos pioneered an innovative solution to seabird conservation: ceramic nests. But, design and production relied on a single overburdened artist and didn’t pencil out financially.
Challenge
Reduce production cost so that more bird species continue to exist. Turn a grant-dependent project operating at a into a new profit center for the organization.
Result
New business model based on values-aligned production partners and leveraging existing design assets to meet demand while reducing costs by 75%.
Team
Kirsten Collins, Strategist
Sofia Ochoa, Operations
Vivi Kreisel, Design Lead
NSS Akhil, Supply Chain
Skills
market research
business model design facilitation
financial modeling
revenue strategy
stakeholder management
Product Innovation Stymied by Process
Our client, Oikonos, a global environmental conservation NGO, collaborated with ceramicist Nathan Lynch to invent a brilliant solution to protect seabirds as climate change and invasive predators destroyed natural nesting sites.
Biologists worldwide were eager to use these ceramic nests (instead of building their own from Home Depot supplies). But production was complex and expensive. Oikonos couldn’t meet the existing demand and seriously considered shutting down the program.
Hand-built site-specific ceramic seabird nests loved by birds, biologists, and the environment but expensive to produce at scale
Parachute in to the Current Landscape
Our work began with zooming out to analyze the marketplace and Oikonos’s positioning. I built a systems map to visualize the funding complexities, which uncovered opportunities for consortium funding.
System map illustrating funding dynamics. Examining this diagram with the client led to a new grant funding strategy.
Through stakeholder interviews, we mapped the current business model and value proposition. We co-created design criteria for future innovation by leading clients through a card-sorting exercise.
Design criteria co-created with client
Talk to Customers
We checked the client’s reality and assumptions against their customers’s actual needs and experiences. From 5 interviews with biologists and land managers we learned:
Clients are beholden to their own funding streams
Ceramic nests are indeed regarded as innovative, with no existing substitutes
Synthesize
Based on our research, we developed a challenge statement to guide the design process:
How might we produce nests at scale that delight scientists, funders, and the production team?
Ideate, Cluster, Narrow
Generated 163 concepts through rapid ideation
Presented 9 concepts to client for feedback on feasibility
Built out 4 new business model canvases and value propositions
Selected the 2 most promising to test for desirability with customers and feasibility with potential production partners
clustering 163 new business model concepts into themes
Test Riskiest Assumptions
our recommended business model: find a small-scale manufacturer to produce the 2 most popular designs for off-the-shelf availability
We tested the two most promising concepts:
Off-the-Shelf: Select the 3 most popular and versatile designs to manufacture at a larger scale.
Community Facilities: Replicate a successful pilot partnership with a community college ceramics studio, leveraging student labor and nearby ceramics facilities to build custom nests.
Testing with market interviews quickly showed the Off-the-Shelf option as the right direction. With the benefit of international teammates, we connected with small manufacturers in Mexican and Indian villages that specialize in ceramics to confirm feasibility.
Decide and Build
Our design process resulted in three key recommendations:
Match the 2 most versatile existing nest designs with 4-5 sites.
Pursue manufacturing in Guadalajara, Mexico for nimble scale with high craftsmanship, and to reduce production costs by 75%.
Shift fundraising strategy to a story-driven campaign model, raising funds for many sites up front rather than one at a time.
Our final deliverable was an actionable 3-year and 90-day roadmap with lanes for program management, manufacturing, and fundraising. We handed-off contacts with potential production partners in Mexico and provided artifacts to use to gauge funder desirability.
Applying my nonprofit funding strategy background, I designed a financial model to show viability and outlined a funding strategy.
Financial model leading to profitability in year 2
3-year implementation plan for program management, manufacturing and fundraising
Result
“We had all but given up on this project. It just didn’t seem possible. This opens up new possibilities and enthusiasm to get more nests into the world.”
The new proposed way of working allows total nests installed each year to increase from 60 to 200, and the project is projected to generate a profit starting in year 2. Outsourcing manufacturing for the most popular designs also frees up the design team to do what they are best at: developing new designs for specific species and habitats.
Oikonos biologists installing ceramic nests to preserve endangered seabirds