EN BAD Manual

BAD
Operational Manual
for
Business Aware
Design
BAD
2022© Sefirot Srl
Graphic Design by Studiolabo Srl
Translated by Alizé Latini
Isbn: 979-12-80241-14-6
SUMMARY
What is BAD? . . . . . . . . . . . . . . . . . . 9
How is BAD structured? . . . . . . . . . . . . . . . 13
Let’s go! . . . . . . . . . . . . . . . . . . . . 16
The design process . . . . . . . . . . . . . . . 18
User analysis . . . . . . . . . . . . . . . . . . 26
Competitor analysis . . . . . . . . . . . . . . . . 32
Business model analysis . . . . . . . . . . . . . . 44
A small business model catalog . . . . . . . . . . . . 48
Advanced tools . . . . . . . . . . . . . . . . . 58
Advanced tools: the user journey . . . . . . . . . . . . 60

Advanced tools: the process of evaluating a business model . . . 66
Very advanced tools: enhancement by iteration . . . . . . . 80
Recapitulation and way of use . . . . . . . . . . . . . 92
BAD’s ideal users: 3 case studies . . . . . . . . . . . . 94
Case study #1: the cab app designer . . . . . . . . . . 96
Case study #2: lamp freelance . . . . . . . . . . . . 112
Case study #3: cinema entrepreneurs . . . . . . . . . . 120
All that business is not gold . . . . . . . . . . . . . 140
BAD workshop . . . . . . . . . . . . . . . . . 146
Authors . . . . . . . . . . . . . . . . . . . 150
Glossary . . . . . . . . . . . . . . . . . . . 152
Bibliography . . . . . . . . . . . . . . . . . . 160
WHAT IS BAD?
BAD is an operational tool for Business-Aware Design. It helps to design
with business-related aspects in mind and the dynamics that enable a
project to generate and capture value. Very often a product or service
is designed without considering its economic and practical viability,
resulting in leading the project toward failure and designers toward an
inability to prioritize design choices.
BAD was created to meet this need. It is aimed at designers, entrepreneurs,
and business managers and helps them keep track of all aspects of a
project, from the users it engages to the way it generates value.
Conscious Design
What is the most important aspect in design? Usability? Aesthetics?
Brand? Positioning? Advertisement? Sales strategy?
Let’s try to broaden the perspective: if we invest time and/or money in
making a product, and that product doesn’t give something back (mon-
ey or any other type of value), we will stop investing in that product.
So, the ability of that product to generate and capture value within a sys-
tem is the most important aspect, because it determines its sustainabili-
ty, its reason to exist.
10 BAD CANVAS
• If a chair doesn’t sell, we stop making it.

• If an app is not used and it doesn’t return profit, the startup respon-
sible for it will close.
• If the printer that we designed costs too much, the revenue will not
cover the company’s costs and it will close.
All the aspects mentioned above contribute to the value incapacity

of a project. If users do not find a product useful, they will not use it.
If competitors have a better strategy, they will win in the market. If the
product system is poorly constructed, the project will most likely fail.
This is not a problem that only affects businesses: the designer hired
by a struggling company risks losing his job, a freelance designer who
proposes a product without a clear business perspective will easily face
rejection and entrepreneurs who invest their own money in a project
risk a major loss.
In other words, a lack of overall vision will damage you. If you design sole-
ly considering the user experience, you would advise the designers at a
low-cost airline to increase the space between passenger seating, result-
ing in a reduction in the number of available seats, and the subsequent
increase in prices per passenger may lead to bankruptcy.
BAD helps to gain an overview that considers:

• the users for whom it is designed (the people who will use a product/
service)
• the solutions to the users’ problems and needs
• positioning in the market compared to competitors
• the way all of the above can generate the kind of value that would
give the whole system meaning
It doesn’t mean that every project must generate an economic return: the
purpose of BAD is to make people aware. If we want to develop a product
that sells, we will find the tools to do so. If we want to develop a product
using the so-called “visionary design” (I’ll follow an intuition, to design
what I want and how I want it), we will know how to calculate the risks.
what is bad? 11
Design Thinking helps to think like a designer. BAD will help you think
like a designer who doesn’t want to waste energy over actions that have
no impact. BAD teaches how to become a conscious designer.
HOW IS BAD STRUCTURED?
BAD is a deck of 41 cards, divided into 4 main groups—design process,

user analysis, competitor analysis, and business model analysis.
Each group represents different areas to consider in a project. In addition
to the aforementioned groups, there is a set of cards that helps prioritize
actions towards innovation, the iterations.
Advanced level
User analysis
9 cards Advanced level
Competitor analysis
Very advanced level
5 cards
Business model analysis

9 cards
Design process Enhancement

9 cards 9 cards
14 BAD CANVAS
Basic, Advanced and Very Advanced Usage

To make BAD’s framework scalable, we divided the cards according to
their level of complexity: Basic, Advanced, and Very Advanced Usage.
You will find the advanced level cards in the user analysis and business
model analysis groups. The iterations set is very advanced, and we rec-
ommend using it after you are familiar with the rest of the deck.
The design process is the starting point. It can be described as the right
question to ask at the beginning of every project: who are the users we
are designing for? What are their needs? What solutions can we adopt?
If we are unable to answer any of these questions, there might be a prob-
lem with one of the 3 areas of interest: users, competitors and business
model. An example is if we do not know our business goal or the Unique
Value Proposition (UVP) of the project.
user analysis helps to define and study the different types of users we
want to design for, who they are, and what their needs and habits are. At an
advanced stage, we can also study their User Journey so the steps made in
a decision-making process result in buying a product or adopting a service.
competitor analysis is necessary to get an idea of the market in which

we want to operate. What other products or services solve the same prob-
lem we want to solve? What are their weaknesses and strengths? How do
we want to position ourselves against them? And what kind of strategy
should we adopt?
business model analysis studies how the project captures value. What
are we offering? Who it is offered to? In what way? And why is there a
value capture in this stage? Selling chairs in a physical location is different
from selling them online or offering a subscription to periodically get new
chairs upon an annual payment. At an advanced stage we can calculate the
feasibility of a business model and the list of what we need to implement it.
Warning: design process, user analysis, competitor analysis, and busi-

ness model analysis are interconnected. If we change who the users are,
how is bad structured? 15
then the design, the competitors, and the way we capture value may also
change. The same goes for every other variable in the system. We recom-
mend starting with the design process and then going deeper, when nec-
essary, by delving into the other areas. Later we will see how it is possible to
design starting from any point.
Last, but not least, iterations are a mini framework that helps generate
hypotheses for the improvement of the system studied above, either in
response to a worst-case scenario or for the innovation of a product, pro-
cess, or business model.
O
TO-D
LIST
s
ction
ary a
cess
th e ne hange?
t are the c
Wha oduce
tr
to in
01 DESIGN PROCESS
PROJECT
NAME proje ct
What’s the name of the
you are working on?
s for each project

* Use one line of post-it
LET’S GO!
BAD can be used alone or in groups, in the preliminary stages of a new
project or in more advanced stages to analyze an existing product system.
Find a blank wall, table, or other empty surface. Arm yourself with post-its,
sticky tack, a pen, and start designing!
04
03
BUS
INE
SS
HO MO
TO W OFFERE
BUSIN
DEL
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IS
BUSINESS MODEL ANALYSIS AN

02
gh
D
?
w
hi
ch
The cards help you build a
structure to follow
03 DESIGN PROCESS
02 DESIGN PROCESS
KEY USER
PROBLEMS/
KEY NEEDS
USERS Write down at least three
the users’ problems/need
of
s
Who are the target users
for this project?
USER ANALYSIS
USER ANALYSIS
They want
Writers
support in
and
writing their
screenwriters
story
You fill in the

structure using
post-it notes!
IS
USER ANALYS
01
USER
TYPE me to th
e group
g
Give a na u are analyzin
s yo
of user et grou
for each targ
02 USER ANALYSIS * Use on

e line of
post-its
01 COMPE
03 USER
COM
TITOR A
NALYSIS
04 USER ANALYS
IS
P
COM ETITOR/
USER
USE ANALYSIS DEMOGRAPHICS
USER
NALYSIS PARA PRO R
How old are they? What’s their job?
NAM BLE HABI
What is their level of education?
Writ
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E NEE BLEMS TS How
hob do the
com down
petit th
or/c e name
om of
Wh
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THE DESIGN PROCESS
The design process cards are the white cards in the deck. Arrange the
nine cards on a line, following their numbering.
Project Problems Solutions

Key Users Requirements
Name and Needs and Features
post-it post-it post-it post-it post-it
The design process indicates how you approach a project: a synthesis

of Design Thinking, User-Centered Design, User Experience Design, and
Lean Process. It includes all the answers you need to have when designing
a product or service and all the elements you need to be aware of.
Project Name. What is the name of the project in question on this post-its
line? Each line follows the design process of a particular project. If we are
the design process 19
working on two complementary projects, like a fitness app and a related

gym franchise, on the first post-it line we will analyze the project “Fitness
App” and on the second “Gym Franchise.”
Key Users. Who are the target users of this project? Who is the final recip-
ient of the product/service we are developing? Indicate the target groups:
for a creative writing tool, we could use “writers, teachers, video makers.”
Key User Problems and Needs. To be useful, a product needs to solve a

problem or meet the needs of a user. That way, it will be more likely to be
adopted. According to the Design Thinking approach, that is the starting
point. What problems do we want to solve? What needs do we want to
satisfy? Employees have a hard time going to the gym, so we could build
an app for exercising. Aspiring authors’ manuscripts are often rejected
by publishing houses because they lack structure, so we could develop a
product to help with the structure of a novel. It would be good to indicate
at least three of each problems and needs.
>> Connections: if we can’t accurately answer the questions in the user-re-

lated cards, we must look at the user analysis cards to study the issue in
greater depth.
Solutions and Features. What solutions will we design to address the

problems/needs of key users? If the problems are along the lines of, “I’m
overweight,” “I can’t find motivation to go on a diet,” “I don’t have time to
cook healthy meals,” the solutions we are going to design must have fea-
tures that can solve the problems mentioned above.
Requirements. What are the basic requirements for the realization

of this project? This is usually one of the starting points when design-
ing for someone else, whether it is a client or the company you work for.
A possible brief might be: “We want to sell an outdoor chair that has the
following characteristics: it must be made of wood, snap-in mounting.
It must not weigh more than three kilograms, and when boxed, it must fit
in a space of 100x60x15 cm.” All these elements are requirements to be met.
20 BAD CANVAS
>> Connections: if we don’t know what to write under this section, we must
analyze each area of the project—users, competitors, and business. Going
back to the example above, if we don’t have a clear idea of the requirements
for a chair, we need to ask ourselves how the chair will be produced (the com-
pany prefers wood material), how it will be sold and transported (online, so it
would be better to keep weight and volume down), and to whom (users who
prefer practicality and therefore don’t want to assemble it with a hammer or
screwdriver).
UVP. What is the Unique Value Proposition? How is this different from
similar products? What makes it special? It could be “The fastest ma-
chine,” or “The lightest ladder,” or even “The cheapest table lamp.”
Competitive Strategy. What strategy do we want to employ to compete

within the market? Low cost? Differentiation? Blue Ocean?
>> Connections: if we don’t know what the UVP and the Competitive Strategy
are, it is advisable to study the competitor analysis area in order to discover
how to position ourselves in the market. If you are a Branding enthusiast, be
careful: a UVP that reads “The restaurant that serves my grandfather’s lost
recipes” is not relevant (unless your grandfather is famous), and it’s a slippery
slope that you should avoid.
Business Goals & KPIs. What’s our business goal with this project?
Sales? Brand awareness? New customer acquisition? Do we want to
design a chair and sell as many as possible? Do we want to build a free
learning web platform to collect email contacts? Do we want to create
an event in order to change our market positioning? In short, what do
we want to get (or what does our client want to get) out of what we are
developing?
>> Connections: if we are not clear about what our goals are, we need to ana-
lyze the business model(s) related to the project and understand how the prod-
uct/service we are working on fits into the overall vision.
In-depth Analysis: SMART Goal and KPI

(Key Performance Indicator)
Vague goals lead towards misunderstandings and useless efforts.

The best goals are SMART ones (Specific, Measurable, Actionable,
Realistic, Time-based).
• “To increase brand awareness” is not SMART because it is

very vague. We wouldn’t know how and if brand awareness
has increased.
• “To increase sales by 30% in the next 12 months” is SMART
because it is specific (we know how much sales need to incre-
ase), it is measurable (we can verify that the goal has been
met), it is actionable (we can do something to increase sales),
realistic (if a 30% increase is plausible), and time-based (we
said it needs to be done in 12 months).
KPIs are the key variables that we measure before and after a given
intervention to find out if we have achieved our goals. If the goal
is “To increase downloads of the app by 20% in the next 3 months”
our KPI will be the number of monthly downloads.
User/Business Pain Points. Under this card we need to mark all prob-
lems (critical points) encountered by both users and stakeholders. Have
we done surveys and interviews with potential users to explain the con-
cept? What did they think about it? Or, at a more advanced stage, did we
let them try a prototype? Did they have difficulty using it?
What about the client? What about our senior executives?
Are they happy with the direction the project is taking, or have they en-
countered critical issues?
22 BAD CANVAS
Good designers test their ideas and prototypes with potential users, oth-
er stakeholders, and the people who revolve around a project (managers,
executives, etc.) Negative results of these tests can be noted under this
card, for example: “Users don’t quite understand how to register for the
app” or “The client is afraid it will be too expensive.”
Instructions to Fill Out the Canvas

Every project is different, starting with the way it originates. There’s a
difference between an independent entrepreneurial project and one that
comes from a client’s brief. Our advice is to fill out the design process
with the information you have and focus precisely on the missing pieces,
because that is where the critical issues hide.
03 DESIGN PROCESS
02 DESIGN PROCESS
01 DESIGN PROCESS KEY USER
PROBLEMS/
KEY NEEDS
PROJECT USERS Write down at least three
of
NAME
s
the users’ problems/need
Who are the target users
project for this project?
What’s the name of the USER ANALYSIS
you are working on?
USER ANALYSIS
for each project
* Use one line of post-its
???
YesStream Movie lovers
streaming
platform
If you don’t know how to fill

out a card, it’s best to go and
delve into that section!
Examples
Let’s apply the design process to one of our company Sefirot’s products:
Fabula Deck which is an analog tool for writers and screenwriters to help
structure stories for films and novels. It is a deck of cards that can be
hung on the wall to create a canvas to be filled in using post-its (more
information at fabuladeck.com).
Project Name: Fabula Deck.

NB. This project was born from observing the need for writers to have a
clear vision of their story’ structure, so we will start with the key users and
their needs.
Key Users. Fiction, non-fiction writers and screenwriters.
Key User Problems and Needs.

• To have a clear vision of the story and the character’s arcs.
• To create a solid structure for the stories.
• To quickly find any weak points in the structures.
>> These are our initial assumptions. We will be able to deepen them using the
user analysis cards.
Solutions and Features.

• A modular canvas made of cards that allows users to see the story
displayed in its entirety on a surface.
• The canvas follows the Three-Act Structure and the Hero’s Journey,
two of the most effective narrative structures.
• The canvas gives very specific directions and allows users to see if
something doesn’t add up right away.
Requirements. It must be a portable, small product.
>> For now this is the only requirement we can think of. When digging into
the other areas—users, competitors and business—we’ll find new elements
to keep in mind.
24 BAD CANVAS
UVP. Writing has never been easier!
Competitive Strategy. Differentiation. Instead of buying a manual that

explains narrative structures, with Fabula you can get to work right
away. It is an operational tool.
Business Goals & KPIs. To sell 10,000 units in the first 12 months.
>> The same goes for UVP, Competitive Strategy and Business Goal. We have
a general idea, but we will elaborate on it later.
Users/Business Pain Points.

• Will the stories all look the same?
• A professional writer doesn’t need this stuff.
After getting a general idea of the product’s con-

cept, we conducted a few interviews with am-
ateur and professional writers who expressed
07 DESIGN PROCESS
the same perplexity: “By using the same struc-
ture, won’t all the stories be the same?” This is
COMPETITIVE
our main pain point. In addition, we felt a bit
STRATEGY
of resistance from professionals: they made it How do you plan to compete
in the market?
clear that, according to them, capable writers COMPETITOR ANALYSIS
do not need a support tool. We will have to take

this into account at the design stage.
Differentia-
tion
01 DESIGN PROCESS 02 DESIGN PROCESS 03 DESIGN PROCES
KEY USER
PROJECT KEY PROBLEM
NAME USERS NEEDS
What’s the name of the project Who are the target users Write down at leas
you are working on? for this project? the users’ problem
* Use one line of post-its for each project USER ANALYSIS USER ANALYSIS
Fabula Deck Writers and

screenwriters una
08 DESIGN PROCESS 09 DESIGN PROCESS
USER AND
BUSINESS GOALS BUSINESS
AND KPIs PAIN POINTS
What goals do you want to reach? What pain points did users and
Are the goals measurable? stakeholders identify?
BUSINESS MODEL ANALYSIS
Selling 10,000 Will stories

units be all
the same?
In 12 months
USER ANALYSIS
The user analysis cards are the pink cards in the deck. There are 4 basic
and 5 advanced level ones. Begin by arranging the basic cards on a line,
following their numbering.
User Type User Demo- User Problems

graphics Habits and Needs
1st user post-it post-it post-it post-it

group
2nd user post-it post-it post-it post-it

group
user analysis allows you to gather the minimum information necessary

to implement a design that puts the user at the center (User Centered),
defining who the users are, what their habits are, and their needs and/or
problems. It is the starting point in the Design Thinking process and a
crucial aspect not only from a “good design” point of view (a useful prod-
uct is appreciated by those who use it) but also, and especially, from a
business point of view (a useful product is more likely to sell).
user analysis 27
user analysis cards are used to identify user groups that may be the tar-
get audience for the product/service we are designing. Each line of post-
its under the cards will describe one of these groups.
User Type. What can we name the group that we’re analyzing? If we are
developing a tool that helps people write stories, we might choose “Pro-
fessional Writers” and “Amateur Writers,” or “Writers,” “Screenwriters,”
“Publishing House Editors.” If we are designing a bedside lamp for read-
ing without disturbing the partner sleeping next to us, we might focus on
the “Assiduous Readers” user group.
User Demographics. How old are they? What’s their level of education?
What’s their job? What is their purchasing power? Where do they live?
How can we pigeonhole them to get a clearer idea of who they are? For ex-
ample, in the “Amateur Writers” group we might assume: “Men and wom-
en in the 25-55 age range, medium to high level education and somewhat
dissatisfied with their jobs (they would like to write full time!).”
User Habits. How do they live? What kind of newspaper do they read?
What’s their preferred social media? What do they eat? Clearly, this is a
matter of making rough generalizations, especially in the early stages of
the project. We can imagine that “Assiduous Readers” always keep a few
books on their nightstand, and they always read before falling asleep, of-
ten forgetting to turn off the bedside light. We can assume that “Amateur
Writers” write in the evenings or on weekends, they love to read, and they
follow pages and groups of writers and readers on social networks.
User Problems and Needs. This is the less analytical part, where cre-
ative observation and synthesis come into play. What problems or needs
do the user groups have? Are these needs similar to each other? What
do “Amateur Writers” want? To finish their novel and be published.
Why do they often fail to reach their goal? Because they can’t finish the
book, or the work has serious issues. What do “Professional Writers” want
instead? To work efficiently; to increase quality and productivity. Can the
needs of these two different groups come together?
28 BAD CANVAS
>> Going back to design process

After using the user analysis cards, we need to review and synthesize the
results under the Key Users and Key User Problems and Needs cards. Remem-
ber that BAD is an iterative and never static process: should we realize that we
want to eliminate one group of users in favor of another, we can always go back
and change the variables.
Example
Let’s continue using Fabula Deck as an example.
User Type Demographics Habits Problems and Needs
Amateur 18-55, medium- They write in the – They fail to finish the
writers high education, evenings and on novel they started
low-satisfactory weekends, they – They are rejected by
occupation follow writers’ editors and publishing
groups on houses
Facebook, they read – They struggle when
they have to study
or reevaluate the
structure of their novel
Professional 25-65, medium- They spent most of – They want to be

writers high education, their day writing effective in their work
they work full-time they are avid – They want to have
in writing-related readers control of the revision
positions (often stages of their stories
teaching) – They want to have
a support tool for
teaching
Professional 25-65, medium-high They spend most of – They want to be

screenwriters education, they their day writing, effective in their work
work as full-time they watch many – They want to have
screenwriters movies, they often control of the revision
work on a script stages of their stories
with other people – They have to
collaborate with other
people and they want to
do it effectively
user analysis 29
Publishing 25-65, high They read a lot – They want to analyze

house editors education, they the structure of a story
work full time as to help writers improve
editors their work
NB. These are assumptions. An informed designer will conduct interviews with
target users to validate the points stated above or to find more timely ones.
What more did we learn from using the user analysis cards? First, we
have to remember the issue brought up by professional writers: we un-
derstood that they prefer not to use a tool to help them write. Therefore,
we know that we have a primary target (beginner writers) and a second-
ary target (professionals: screenwriters, writers, editors). Fortunately for
us, the primary target is larger than the secondary (there are more begin-
ner writers than professionals).
We know that our primary target audience wants to be able to finish the
novel they are writing and publish it, so they are in dire need of a tool that
gives them some certainty and concrete help. We know that profession-
als would like to be more effective but, more importantly, we know that
many of them teach or coach other writers (that’s the case of editors) and
they need a method that facilitates their analysis work. Last but not least,
many writers work in writing rooms, or at least with another profession-
al, so it becomes crucial for them to have an easy way to share a general
overview of the story.
Let’s go back to the design process cards and make some changes.
Key Users.
• Primary: beginner writers.
• Secondary: professionals (writers and editors).
• Secondary: screenwriters.
30 bad canvas
Key User Problems and Needs.

01 DESIGN PROCESS
• To have a support tool for writing and analyzing
the text. PROJECT
• To find weaknesses in the story structure and im- NAME
prove the text. What’s the name of the project
you are working on?
• To gain an overall view of the story. * Use one line of post-its for each project
01 USER ANALYSIS 02 USER ANALYSIS 03 USER ANALYSIS 04 USER ANALYSIS
USER
USER USER USER PROBLEMS/
TYPE DEMOGRAPHICS HABITS NEEDS
Give a name to the group How old are they? What’s their job? How do they live? What are their What are the target group
of users you are analyzing What is their level of education? hobbies and habits? What kind of members’ problems and needs?
media do they use?
* Use one line of post-its for each target group
Amateur 18-55 Write on 1) They can't

Writers weekends focus
2) Rejected
ure
3)No struct
Professional 25-65 Write and They want

writers and read to be more
editors effective
They want
Professional 25-65 They write to be more
writers and read a effective
lot for work + tool for
teaching
•
02 DESIGN PROCESS 03 DESIGN PROCESS 04 DESIGN PROCESS
KEY USER
KEY PROBLEMS/ SOLUTIONS
USERS NEEDS AND FEATURES
Who are the target users Write down at least three of What problems/needs
for this project? the users’ problems/needs do the solutions/features solv
USER ANALYSIS USER ANALYSIS
First-time Writing
writers Finding
support and
Professional weaknesses
analysis
writers and
editors
Insight
Professional
writers
I integrate what I discovered with the user

analysis cards in the design process
COMPETITOR ANALYSIS
There are 5 competitor analysis cards in the deck. The green cards are
numbered from one to five and are supposed to be set up on the chosen
surface following the numbers.
Competitor Strengths Weaknesses Competition

Opportunities
Name Values
1st competitor
2nd competitor
BAD’s competitor analysis is very simple and fast. It is intended to help

find out what similar products are already in the market as quickly and ef-
fectively as possible, and how a new product or service can be introduced
in the aforementioned market. Once again, we’re going to analyze each
competitor on a dedicated post-it line.
competitor analysis 33
Competitor/Comparable Name. Let’s make a small premise: competitors

are all those products, services, and companies that solve the same prob-
lem as the product/service you are designing. If we are working on an ergo-
nomic chair, our competitors are both the other ergonomic chairs (market
leaders) but also the less comfortable Ikea chairs (an inexpensive alterna-
tive). If we are designing a fitness app, our competitors are both other apps,
such as Freeletics, as well as regular gyms, also solving the “I want to do
sports” problem, and the free and always accessible practice of jogging.
Warning: in order to fill out this part, we must have first filled out the design
process, User Problems/Needs and Solutions/Features cards. If we do not
know what we are designing and what problem it solves, it’s very difficult to
identify competitors.
Strengths. What are the competitors’ superpowers? What is the recipe

for their success? Why do users choose it? In the case of the personal
trainer for example, “You are personally guided. There is a human rela-
tionship so you have more controlled results.” In the case of the gym: “You
have a well-equipped place. You can meet other people. The price is usu-
ally low.” In the case of jogging, “There’s no schedule. It’s completely free.”
If we were working on a new music listening app, it’s clear that we would
put Spotify among the competitors, and one of its strengths would be
“It’s well-known. It has high brand awareness.”
Weaknesses. What are the possible deficits of the competitor? What

might lead a user not to choose their product? For the “Personal trainer”
it might be, “It’s very expensive and you have to comply with their avail-
ability.” For the gym: “For the average gym membership fee you are not
looked after. If you want to take classes, it’s generally quite expensive, and
the schedules are strict.” For jogging: “It takes a lot of willpower because
you do it alone.”
The first three cards suggest doing research: who are the possible com-
petitors, and what are their main characteristics? The other two cards
spur reflection about the collected data.
34 bad canvas
Competing Values. What variables does the competitor use to win over
the competition? If we think about the fitness app example and our con-
sideration of personal trainers, gyms, and joggers, we can work out the
following values: “Price, schedule flexibility, effectiveness, sociability.”
These are the elements that users take into consideration in choosing
one solution over another looking to solve their common problem.
Opportunities. Ask yourself: what are the chances of success of the

product/service we are developing compared to the competitors? If we
are designing a tool to help writers effectively structure their novels,
what are our opportunities compared to writing courses and manuals?
We might think of it this way: courses are expensive, and manuals require
a substantial commitment (reading, learning, and applying theory).
If our product is inexpensive and it requires low learning time, here is
our advantage!
>> Going back to the design process

After using the competitor analysis cards we need to review and summarize
what we marked under the UVP and Competitive Strategy cards. What is the most
important value of our product? And how do we want to compete in the market?
Example
Now that we know what our target audience’s problems are regarding
Fabula Deck, we can analyze the main competitors that solve the same
problems we want to solve.
Competitor Strengths Weaknesses Competing Opportunities

Values
Creative –Known and – It requires – Price Finding a more

writing recognized effort (to – Fame immediate
manual (Save – Dense in read and – Content solution
the Cat, The content understand)
Hero’s Journey, – Very – It is not
etc.) inexpensive immediate
($15-$20)
Creative – Supervised – Costly ($150- – Content Find a cheaper

writing course by a teacher $500) – Alleged solution for the
– Dense with – It requires effectiveness same results
content time and
– Practical logistic effort
exercises
Writing coach – Looked after – Very – Alleged To find a

– The coach expensive effectiveness cheaper
might grant (1500+ $) solution
access to – It requires
editors and enormous
publishers commitment
– There’s no
guarantee of
results
Post-its, used – Inexpensive – There is no – Price To provide a

to analyze the structure to structure to
story and to follow follow
visualize it on
the wall
36 bad canvas
Insight: UVP and Competitive Strategy

Once the problems to be solved are defined (e.g., doing sports + lack of
time), their possible solution (a home fitness app with workouts that can
be followed from anywhere), and after studying the competitors (personal
trainers, gyms, joggers, other fitness apps), we need to find out how to
position our product/service in the market for someone to decide to
adopt our solution and not someone else’s.
UVP
If you search UVP (Unique Value Proposition) or VP (Value Proposition)
on Google, you will find dozens of definitions and examples that, in one
way or another, lead back to the same concept: a simple phrase that
explains why a customer should choose a specific product. For example,
“Cheap flights to Europe” (Ryanair) or “Earn while driving” (Uber), or
even “Get in the shape you’ve always dreamed of” (Freeletics), “Work out
with the same trainers who train Chris Hemsworth” (Centr, the app that
features the actor who plays Thor in the Marvel series movies as a tes-
timonial). Be careful not to misunderstand the importance of UVP and
get caught up in claims that sound nice but have no true meaning: “The
cell phone you’ve always wanted” means nothing; same goes for “The
car of your dreams.” The UVP we identify must make sense, especially
to us as designers, so that we can clearly know the direction we’ll take
within the market.
Examples:
• “The best video courses in the world” is very unspecific. Why are
they the best? What is the real value proposition for the user?
• “Video courses taught by the top experts on a topic” is better and it
has some value. That’s what MasterClass does, offering online cours-
es held by well-known figures such as Neil Gaiman, Ron Howard, etc.
• “The restaurant where you can try my grandfather’s recipes”
means nothing, even if we cover the restaurant’s walls with pic-
tures of him.
• “The restaurant where you can try my grandfather Massimo Bot-
tura’s long lost recipes” explains the kind of value that is offered
to patrons.
The UVP must be useful to us, and it must make sense to the user.
If it sounds like a throwaway line, an overly generic, pompous, boastful
phrase, we’d better go back to our product and review what problem it
solves, how it differs from other competitors, and why it makes sense that
it exists.
Competitive Strategy
It goes hand in hand with UVP. How do we intend to compete in the
market? What strategy do we want to adopt? The choices we have are
not as endless as it might seem. In general, we can take these two paths:
• Cost. We focus on the price of the product/service. If our compet-

itors charge 10, we charge less than 10. It’s a strategy adopted by
many companies. The UVP can be “The affordable alternative to an
iPhone” “The affordable alternative to an MBA,” “Cheap air travel,”
etc. Our product/service will differ from others’ because it is cheap-
er yet solves the problem or need. H&M and Ikea are good exam-
ples: if we want a pair of jeans or a table, we know we can find decent
quality and fairly priced products. Other, far more extreme exam-
ples are Primark, a very inexpensive clothing brand, and Ross, re-
tailers of well-known brands at bargain prices. In the case of Ross,
the UVP has been integrated into the brand: Ross Dress for Less.
• Differentiation. If competitors do one thing, we do it differently.

This is achieved by offering a technologically or creatively innovative
product or by forcing a perception of a product/service through
intense marketing campaigns. Apple is a great example: there are
smartphones and there are iPhones, mp3 players and iPods. Dyson
has done the same with vacuum cleaners. We can also think of
something less gargantuan: if there are universities in the market
that teach UX design with a classic approach, face-to-face lectures,
and a high cost of attendance, we can differentiate ourselves by
creating high-quality online courses (that’s the case of Bloc and
CareerFoundry).
38 bad canvas
Cost and Differentiation find different meanings whether we are talking

about a broad market segment (Broad Market) or a more contained one
(Narrow Market):
• When it comes to Broad Market we talk about Cost Leadership, de-
feating competitors by creating a system that does not allow others
to offer products at such low prices (e.g., Walmart, Ikea, Amazon), and
large-scale Differentiation, offering something so new and advanced
or special that it doesn’t allow others to exceed the perceived value
(e.g., Apple, Starbucks).
• In the Narrow Market we talk about Cost Focus and Differentiation
Focus because you focus on a specific niche (healthy food, luxury ac-
cessories, toys), and then you choose to work on either the selling
price or the distinctiveness of the offering.
For those unfamiliar with these concepts, we can say that the Broad Mar-
ket is the mainstream market (anything that reaches millions of people:
services like Amazon and Netflix, or the products we find on supermarket
shelves) while the Narrow Market is the niche market (a specialized brand
of skis, for example).
Cost Differentiation
Broad Cost
Differentiation
Market Leadership
Narrow Cost Differentiation

Market Focus Focus
If we want to develop our own fitness app, we will work in a Narrow Mar-
ket and we will have to decide whether to position ourselves according to
the selling price of the product (if everyone charges an average of $9.90
per month, we will charge $3.99 and use the UVP “The most affordable fit-
ness app on the market”) or we can find a system of differentiation, such
as using Chris Hemsworth’s team of trainers (Centr) or guaranteeing
maximum intensity and consequent physical results (Freeletics).
If we want to design a reading lamp, we will operate in the Narrow Market

and we’ll have to decide whether to build a product that is ridiculously
cheap compared to others, or a product so smart that it becomes “The
reading lamp for the heavy readers” (UVP).
If we’re working on a supermarket franchise, we will work in a Broad

Market and we can choose to position ourselves by working on the price
point (like Trader Joe’s) versus working on product differentiation (Eataly,
Whole Foods etc.)
One More Competitive Strategy: the Blue Ocean Strategy

Another strategy worth mentioning is the Blue Ocean strategy. It can often
overlap or complement the strategies we already talked about, however it
opens the door to a different creative process.
If we think of the market as an ocean, we know that there is the Red Ocean
where competitors wage war against each other, and we assume there’s a
Blue Ocean that can be discovered, where one can sail peacefully because it’s
where the competitors become irrelevant. The word irrelevant is very im-
portant because their competition values suddenly become meaningless.
Blue Oceans create true revolutions within the market. Their core is the
reduction of elements over which others are competing and the addition
of new elements. Classic examples are Southwest Airlines and Yellow Tail.
Southwest Airlines. Airlines were focused on trying to strike a balance

between the following elements: price, quality of food on board, lounge
decor, speed, flight frequency, etc. Southwest was the first airline to focus
solely on flight frequency and lowering prices. By reducing all possible
amenities—quality seating, in-flight dining, etc.—the cost of flying
became extremely low, attracting a new segment of the market: people
who traveled by car and not by plane, and who previously did not even
40 bad canvas
consider the option of taking a flight. In fact, Southwest Airlines’ main

competitors are cars, which is why their UVP could be “A flight for the
price of a car ride.”
Yellow Tail. It is the most popular wine brand in the United States. Other
brands focused on: wine quality, price, label design, vintages, variety of
choice, vineyard prestige, etc. Yellow Tail, on the other hand, decided to
focus on a new type of costumer: non-wine drinkers, who found it difficult
to choose an alcoholic beverage based on factors they didn’t recognize and
reduced all unnecessary variables: vintage, provenance, etc. It offered only
two types of wine (white and red) with fun labels that evoked the concept
of adventure and they marketed an easy to drink wine that would appeal to
unrefined palates. As a result, Yellow Tail took by storm a new slice of the
market and made the competitors irrelevant.
>> How Can You Create a Blue Ocean?

We look at the competitive values we marked under the competitor
analysis cards and we try to reduce them, reverse them, or add new ones
by asking what target audience they would resonate with.
Let’s make an example. We are planning an independent film festival.
Our users are filmmakers who submit their films to festivals, and they
choose which events to send their films to based on: entry price, festival
prestige, prize money, chance of the film qualifying for the Academy
Awards. Clearly, it will be impossible for us to compete on every aspect.
If, on the other hand, we focus only on the possibility of being qualified for
the Oscars (by becoming an Academy Awards qualifying festival) and on
the price of submission (by raising it to $20, which is very low compared
to other Academy Awards qualifying festivals), we could have an attractive
product for all ambitious filmmakers at a very low price. “Get eligible for
the Oscars at the price of a glass of wine” that could be our UVP!
Let’s Go Back to the Example

With Fabula Deck we’re competing on the following values:
• Price
• Effort
• Alleged effectiveness
• Product’s reputation
• Density of content
It makes no sense for us to work on cost, because we have no interest in

selling Fabula Deck at $5 just to take a slice of the market. That would
be really bad for business. We must choose Differentiation because we
are offering a different product. It is not a course. It’s not a book but an
operational tool.
What we can do is work on reversing the values of our competitors. Look-

ing at the competitor analysis cards we can see a pattern: it seems that
effectiveness and content density go hand in hand with commitment or
price. If you want to get the knowledge and/or results, you have to com-
mit or pay a lot.
Coach
Course
Fabula Deck
Manual
Price Content Effectiveness Commitment

KEY USER
PROBLEMS/ SOLUTIONS
NEEDS AND FEATURES REQUIREMENTS
Write down at least three of What problems/needs What are the main
the users’ problems/needs do the solutions/features solve? requirements of this project?
USER ANALYSIS USER ANALYSIS COMPETITOR ANALYSIS BUSINESS MODEL ANALYSIS
If we decide to compete with a product (Fabula Deck) that, unlike its

competitors, offers a good level of content and effectiveness, but at a
reduced price (slightly more than a manual) and requiring much less
commitment (it is an intuitive product, you start using it right away),
then we are facing a Blue Ocean! A user will not choose whether to buy a
manual, or a course, or Fabula Deck because, the latter, due to its price-
content-effectiveness-commitment ratio, will rank somewhere else,
making the competitors irrelevant.
>> Going back to the design process cards, we’ll have:
UVP. Every writer’s support system!
Competitive Strategy. Differentiation/Blue Ocean. Fabula Deck is a sup-

port tool for writers, both beginners and professionals. The user buys the
manual and Fabula Deck; the course and Fabula Deck. The user doesn’t
have to choose anymore.
UNIQUE VALUE COMPETITIVE BUSINESS GO

PROPOSITION STRATEGY AND KPIs
What is the UVP of the project? How do you plan to compete What goals do you want to r
What makes it special? in the market? Are the goals measurable?
COMPETITOR ANALYSIS COMPETITOR ANALYSIS BUSINESS MODEL ANALYSIS
A support Blue Ocean

Support
for all toll
writers
Book
+ course
+ fabula
I integrate what I discovered

with the competitor analysis
cards in the design process
01 COMPETITOR ANALYSIS 02 COMPETITOR ANALYSIS 03 COMPETITOR ANALYSIS 04 COMPETITOR ANALYSIS 05 COMPETITOR ANALYSIS
COMPETITOR/
COMPARABLE COMPETING
NAME STRENGTHS WEAKNESSES VALUES OPPORTUNITIES
Write down the name of the What are the competitor’s What are the competitor’s Summarize the values on What opportunities does your
competitor/comparable superpowers? Why is it successful? critical points? which this competitor has project have compared to the
based a winning strategy competition?
* Use one line of post-its for each competitor
Famous cheap requires Price Finding

writing famous commitment Reputation a more
manual Content immediate
solution
writing followed expensive Price Find

course Effectiveness a cheaper
practice requires solution
exercise time
The business model analysis cards are the yellow cards in the deck.
There are 5 basic cards and 4 advanced level ones. Begin by arranging the
basic cards on a line, following their numbering.
Business What Is To Whom It How It Is Why You

Model Offered Is Offered To Offered Capture Value
1st BM
2nd BM
Business models are the models that describe how something generates
and captures value. Selling items online through a website is a business
model called E-commerce (e.g., Amazon). Selling access to a movie
streaming service with a monthly payment is a business model called
business model analysis 45
Subscription (e.g., Netflix). Selling very low-priced flights and actually

making the real money on the sale of additional services (seats, luggage,
etc.) is a business model called Add-on (e.g., Ryanair). Choosing the right
business model is one of the main reasons why a company or project
succeeds or not. If Netflix had chosen to give access to its services with
a Freemium model (like Spotify) the result and longevity of the company
would have been different.
>> The choice of a specific business model affects the entire system. Let’s
make an example: our company sells furniture to people who come to the
store, buy them disassembled and packaged and build the furniture at
home (like Ikea); part of our Cost Leadership strategy is precisely based
on lowering costs because of the reduced packaging and because the as-
sembly is borne by the buyer. We will have to take this into account in the
design process Requirements, because we will necessarily have to design
furniture that is easy to assemble.
The basic business model analysis cards are an easy way to understand,
study, and come up with any kind of business model, which always follow
these characteristics: something (what) is offered to someone (to whom)
through a channel (how) and for a specific reason (why) whoever owns the
business in question gets value, whether it is monetary or something else.
Business Model. Is the name indicating the way a project gains value.
We can refer to the list you find below (Subscription, Add-on, etc.) or we
can give it a name we think is more descriptive.
WHAT Is Offered. There is always something that is offered to someone. It

can be a product (as in the case of Amazon), access to a digital service (as in
the case of Spotify), or an advertising space (as Facebook does with adver-
tisers), or even a professional service, like what an attorney offers a client.
To WHOM It Is Offered. This something is offered to someone. An editor

offers books to readers. A TV station gives programs to the audience.
A coffee shop gives coffee to patrons.
46 BAD CANVAS
HOW It Is Offered. It’s the way the what gets to the who. Amazon sells
products (what) to the website’s visitors (who) through an e-commerce
platform (how). Ikea sells to customers through physical stores. The law-
yer gives advice to customers face-to-face. Universities give training and
certifications to students through a physical facility.
WHY You Capture Value. How does the business make money? Some-
thing is given to someone through a channel. So what? Why does the op-
erator of the business, whoever owns the business or project, get a return?
Amazon sells to customers products it does not own through e-com-
merce and makes money because it retains a percentage of the sale of
the product. Ikea sells products to customers through physical stores and
makes money because customers pay at checkout.
Warning: the why is not always immediate. Facebook, for example, offers a
free service to thousands of people through a proprietary social platform
and makes money because, at the same time, it offers advertising spaces
to brands and advertising agencies, and these entities pay for the ads
spaces. The same happens with Uber: it offers cab rides to customers
through an app and at the same time it offers jobs to those who need
flexible employment through the same app, earning a percentage of what
the riders pay.
Warning: value doesn’t always mean money. In the Lead Generation

business model, a UX design online course platform may offer a UX design
manual (what) for free to download upon entering an email address (how)
to people interested in the topic of UX design; and it captures value
because it gains email addresses of potential customers (also called leads)
to whom it will later try to sell a course. At that secondary stage it will
implement a new business model: sell a UX design course (what) to people
who want to become UX designers (who) via a web platform (how) and
capture value in the form of money because students will pay the price
of the course.
business model analysis 47
Warning: it is possible to employ more than one business model at a time.

Within the same project we can have different business models working
together. For example, we can use the E-commerce model together with
the Add-on model. Or, as in the example above, we can have a Lead Gener-
ation model paired with an E-commerce model.
A SMALL BUSINESS MODEL
CATALOG
The easiest way to understand business models is to study some of the ex-
isting ones and understand how they work using business model analysis
cards. Below you will find a list of the most popular ones, from which you can
draw inspiration, either to analyze the businesses you’re working in/for to
use them in your own projects, or to design completely new ones.
Add-on. I offer a relatively low-cost product (what) to customers (who)

through a channel (how) and I make money because I offer several ad-
ditional products to buy along with the basic product, and in the end,
the customer pays more than they would have without the add-on(s).
Low-cost airlines use this model.
Affiliation. I offer someone else’s products (what) to customers (who)

through my channels, like blogs, newsletters or otherwise (how) and I
make money because I get paid a percentage of each sale.
a small business model catalog 49
Auction. I offer products (what) to those who want them (who) through
an auction system (how) and I make money because I take a percentage of
the sale. It is particularly profitable because the auction system tends to
raise the price of the product. eBay is the most famous example.
Cash Machine. I offer a product or service (what) to an end customer

(who) who pays me before I have paid suppliers (how), and I make mon-
ey because I raise a large amount of money that I can use as an invest-
ment. This is a model adopted by most businesses that also adopt the
E-commerce model, and it is especially valid for those that have very low
production costs. If I collect $100 for a product that cost me $5 in produc-
tion and only at the end of the month I pay for shipping, online ads and
salaries, I will have a large amount of money left from the amounts paid
in advance that I can use to make investments ($95 times the number of
units sold).
Crowdfunding. I offer a product that does not exist yet (what) to customers
(who) through a crowdfunding platform (how) and I make money because the
customers pay for the production before I even have to make any investment.
This model is useful when you don’t have the funds to develop a product or
when you decide to reduce your business risk.
Direct Sale. I offer a product (what) to customers (who) through a pro-

prietary channel (how) and I make money because customers pay for the
product. Unlike Distribution-based models, the percentage of profit is
higher because there are no middlemen.
Distribution-based. I offer a product (what) to customers (who) through

distribution channels that I don’t own (how) and I make money because
the customers pay for the product. I pay a percentage to the distribu-
tor but I get great dissemination of my product in return. All publishing
houses use this model to sell their books in bookstores as well as all com-
panies that outsource their products to distributors who place them in
supermarkets.
50 BAD CANVAS
E-commerce. I offer a product (what) to customers (who) through an

online channel (how), and I make money because customers pay for
the product.
Franchising. I offer a product (what) to customers (who) through a series

of outlets operated by third-party entrepreneurs (how) and I make money
because they pay me a percentage of sales. All chains (e.g., McDonald’s)
adopt this model.
Freemium. I offer a service (what) to users (who) through an app or platform

(how) in two ways: the first way is for free, but reducing the service or
interspersing it with ads; the second way reckons paid subscriptions that
guarantee a full service free of advertisements. In the first case, I make
money because the advertisers pay me. In the second, I make money because
the user pays me. This type of model is used by Spotify and YouTube.
Hidden Revenue. I offer a service (what) to users (who) through a channel

(how) completely free of charge and I make money because I have another
hidden model from which I capture value. Facebook for example does not
charge for the use of the platform but charges money to advertisers who
place ads on the platform.
Lock-in. I offer a product (what) to users (who) in a way that creates in-
terdependence (how) and I make money in the long run because it’s very
costly or inconvenient for users to replace the product or service with
someone else’s.
Long Tail. Instead of offering a single best-selling product or service

(what), I decide to offer products that sell less, but together they generate
a similar or greater margin. This model is very strategic because if a sin-
gle product does not sell, there are others to bear the risk.
Open Source. I offer a product or service (what) to users (who) complete-

ly free of charge (how) and make money because I offer premium ser-
vices, such as consulting, about that product or service. Companies that
have developed open source products and follow this model are Linux
RedHat and Ubuntu.
Peer-to-peer. I offer a platform (what) to connect individuals (who)

through a digital or physical medium (how) and I make money because I
retain a percentage of what they exchange. This is the model adopted by
Uber, AirBnb, all those services that connect those who have something
to give and those who want it.
Razor and Blade. I offer a product below cost (what) to customers (who)
and make a profit because my margin on “refills” of that product is very
high. A famous example is that of the razor with razor blades refills;
the same applies to selling printers at bargain prices but involving a re-
curring purchase of ink.
Rent Instead of Buy. I offer a product (what) to customers (who) through a

rental agreement (how) and make money because I rent the same product
to multiple customers.
Self-service. I offer a product or service (what) to customers (who) who

serve themselves (how) and I make money because I do not have to pay
those who serve my customers. This model allows me to lower costs and
implement a Cost Leadership strategy. For example, a customer will be
more enticed to buy a water bottle at a vending machine rather than at
the store because it costs less.
Subscription. I offer a service (what) to users (who) through an app or plat-

form (how) and I make money because users pay a certain amount month-
ly or annually. That’s what streaming platforms and most of the digital
services do. It is very cost-effective, in fact a large number of businesses
have moved onto this type of model: think of Adobe, which switched from
selling a direct version of its professional suite to a monthly membership.
Whitelabel. I offer a product that I have developed (what) to other compa-

nies (who) who sell it under their brand as if they developed it themselves
52 BAD CANVAS
(how) and I make money because these companies pay me for produc-
tion. This model is adopted by many Chinese manufacturers who develop
hardware products that are then branded by companies that sell them as
their own.
After reading examples of models that are frequently used, you might
have guessed that the definition of business models can be very flexible.
It is not a science; it is more of a point of view. The most important thing
is to have an idea of how they work and the ability to think, keeping in
mind that a business needs to capture value in order to exist.
Once you understand how business models work, you will have an edge
as an entrepreneur and also you’ll be able to anticipate the demands and
needs of clients (who are often entrepreneurs themselves) for whom
you’re developing a project. If the business model changes, the whole
project changes.
An Illuminating Example. Let’s imagine we move from a Distribu-

tion-based model, which foresees the product we are working on ending
on big retailers’ shelves, to a Direct Sale model, perhaps E-commerce,
where the same product will be shipped directly to the end consumer,
how will our Design Process change?
In the first hypothesis we will have to give a lot of importance and space
to packaging (packaging is crucial in distribution, not only the look of the
box but also the size and weight). In the second case, we will have to work
in the opposite direction, reducing the weight and volume of the packag-
ing in order to save money with shipping.
Insight: Business Model Integration and Innovation
Once we have identified or hypothesized a business model, we can decide

to integrate it, change it, innovate it so that our project can capture as
much value as possible. The more you change it, the more impact you can
generate: if we are selling online through E-commerce and we decide to
integrate an Add-on model to increase the average cart, we will have less
impact than if we completely revolutionize the model used.
According to The Business Model Navigator, in order to have a true innova-

tion of the adopted business model, it is necessary to change at least two
of the four variables that help describe a business model.
If we are starting from a Distribution-based model:
Model What Is To Whom It Is How It Is Why You

Offered Offered Offered Capture Value
Distribution- Products End consumers Through non- The distributor

based proprietary gives us a
channels (e.g., percentage
supermarkets) of the selling
price
Distribution Products Retailers Through non- The distributor

B2B proprietary gives us a
channels percentage
(wholesalers) of the selling
price
The change from Distribution-based to Distribution B2B (business-to-busi-

ness) is NOT an innovation because we are only changing one variable.
54 bad canvas
Model What Is To Whom It Is How It Is Why You Capture

Offered Offered Offered Value
Distribution- Products End consumers Through non- The distributor gives

based proprietary us a percentage of
channels (e.g., the selling price
supermarkets)
Proprietary Products End consumers Through a The customer pays

E-commerce proprietary us directly and we
platform earn 100% of the
selling price
On the other hand, the switch from Distribution-based to proprietary

E-commerce is a real innovation because we are introducing a completely
different way of capturing value. The impact will certainly be greater.
Model What Is To Whom It Is How It Is Why You Capture

Offered Offered Offered Value
Proprietary Products End consumers Through a The customer pays

E-commerce proprietary us directly and we
platform earn 100% of the
selling price
Direct Products End consumers Direct mails The customer pays

Mailing to customers us directly and we
already in earn 100% of the
database selling price
By starting with the proprietary E-commerce and adding Direct mailing,

which involves sending sales emails to customers already acquired using
the E-commerce model, we are looking at a simple integration of the model.
Example
With Fabula Deck, the business model analysis helps us define who we
are: authors or entrepreneurs? The question “How do we expect to capture
value from the project?” will completely change our approach to the project.
Model What Is To Whom It Is How It Is Why You

Offered Offered Offered Capture Value
Authorial Fabula Deck End consumers Distribution The publishing

through a house pays us
publishing a percentage of
house sales
E-commerce Fabula Deck End consumers Amazon The customer

pays us via
Amazon
Counseling Help on Writers Through Clients pay us for

writing novels in-person the mentoring
using Fabula mentoring service
Deck
These are several ways in which it would be possible to capture value

through the Fabula Deck project:
• be the author of the deck, sell it to a publishing house that will take
care of distributing it, and pay us back through a percentage of sales;
• sell it independently through platforms such as Amazon;
• worry little about the sale itself; focus mainly on selling advice to
beginners writers.
Of course, the path we’ll choose will change the entire system we are
considering.
• If we choose to sell to a publishing house, we will take into account the
fact that the product will have to be displayed on shelves, and we will
give a lot of attention to the packaging in the design phase. We will also
review the list of competitors because, within the bookstore, Fabula
Deck will compete not only with writing manuals but also with other
gift ideas that the prospective buyer will have in front of his or her eyes.
56 BAD CANVAS
• If we choose to sell independently online, we will instead have to

consider reducing packaging to the bare minimum, both to keep
costs and entrepreneurial risk down and because the pack will no
longer be a sales vehicle.
• If we choose to focus on consulting, we might consider not even
producing Fabula Deck but offering it for free in its digital version
only to ensure maximum circulation. Then we would completely
revise our Competitive Strategy because we might adopt a Cost Focus
approach on the product itself and focus primarily on positioning
ourselves against other writing coach services.
01 BUSINESS MODEL ANALYSIS 02 BUSINESS MODEL ANALYSIS 03 BUSINESS MODEL ANALYSIS 04 BUSINESS MODEL ANALYSIS 05 BUSINESS MODEL ANALYSIS
BUSINESS WHAT TO WHOM HOW WHY

MODEL IS OFFERED IT IS OFFERED IT IS OFFERED YOU CAPTURE VALUE
Name the way your business It’s an exchange: Who is receiving it? How and through which Why does the entity who runs
captures value what is being given? channels? the business capture value?
* Use one line of post-its for each business model
Authorial Fabula Deck To end Distribution We take a

consumers Fee from
the publishing
house
E-commerce Fabula Deck To end- Website We get paid

consumers
Writers Consulting To writers Mentoring We get paid

consulting with Fabula for mentoring
Deck
Depending on the
08 DESIGN PROCESS
chosen business
model, project
BUSINESS GOALS
variables will change
AND KPIs
What goals do you want to reach?
Are the goals measurable?
Make it Sell Do 50
publishable 10,000 consultancies
copies a year
Conclusion: What Is the Advantage of This Approach?
Some might think: “If one wants to be an entrepreneur, it makes

sense to take into account competitors and the business model.
But what if I simply want to sell this product to others? Why should
I worry so much?”
The answer is that we are selling it to entrepreneurs, and they will
wonder how they can capture value from the product. If we know
how to anticipate their concerns and even incorporate plausible
solutions at the presentation stage, it’ll be a win-win.
If we present the Fabula Deck product along with its possible
positioning in the marketplace and we can support our design
choices in an informed way, it will be easier to succeed in selling
it to a publisher.
ADVANCED TOOLS
In the first part of the manual we saw how to use BAD on a basic level that
allows us to have an overview of a project, taking into account the main
aspects regarding users, competitors and business model.
In this part we will see how to delve further into two specific aspects:
• The User Journey, which helps us study the different steps taken by a
user in interacting with a product or service.
• The evaluation of a business model, which allows us to predict
whether and how much a model can really generate value.
I S I T I O N /CED - USER JOURNEY
ACQU 2 ADVAN
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roduct/
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eo
The use ecomes awar NEY
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SONDVANCED - USER
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User Journey
ADV
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D
Business Model
Evaluation cards
04
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ADVANCED TOOLS:
THE USER JOURNEY
Among the user analysis cards, you will find 5 dark pink cards that focus
on the User Journey.
User Type UsDre emo - User Problems Acquisition

graphics Habits and Needs Awareness
1st user itpos- itpos- itpos- itpos- post-it

group
2nd user itpos- itpos- itpos- itpos- post-it

group
The User Journey is the set of actions, thoughts, and feelings that a user
experiences during different stages of interaction with a product or
service. It is a very useful tool when we need to study the behaviors of
advanced tools: the user journey 61
our target groups in detail. It is a sort of role play game: we empathize

with the user, imagine how they behave, feel and think, and based on our
research, we try to improve their experience.
The User Journey is a scalable tool: it can study a macro, very extended
time frame (in the case of an airline ticket purchase, from the moment
the customers feels the need for a vacation to the moment they get off
the plane on the return trip) or micro, very short (in the case of an online
purchase, from the moment a product is placed in the shopping cart to
the final step of payment).
In the User Journey cards you will find the analysis of the 5 most common
steps. If necessary, we encourage you to create additional steps and insert
them between the cards, as if they were new columns of a chart.
Acquisition/Awareness. It is the moment when the user becomes aware

of a need and starts looking for a solution to a problem, the moment when
communication (acquisition) catches their eye. For example: “The user
wants to exercise at home and searches for an app on Google.” Or, “The
user clicks on a sponsored Facebook post that leads to a landing page.”
Or, “The users are shopping for groceries when they see our product.”
Purchase
Comparison Retention Advocacy
Experience Advanced User
Journey cards are
post-it post-it post-it post-it arranged as an
extension of the
post-it post-it post-it post-it
basic cards
Comparison. This is when the users evaluate the product/service by com-

paring it with competitors of which they are aware. Examples: “The user
compares the pasta with other brands available on the shelves evaluating
62 BAD CANVAS
price and origin of the grain”; “The user browses the fitness app website, then
compares the price with the monthly cost of the gym closest to the office.”
Purchase/Experience. It is the first real contact. “The user buys the app
and starts exercising.” “The user purchases the pasta.” A purchase does
not necessarily take place. “The user sits in the restaurant and eats.”
“The user downloads the app and starts browsing it.”
Retention. After using it a couple of times, how do the users feel?

Do they continue to buy/use the product/service? “After the first month
of using the fitness app, the user is satisfied and continues to exercise.”
“After cooking pasta, the user becomes attached to the brand and buys
it again.” A negative retention phase—where the user is dissatisfied—is
the first step to disaster. A dissatisfied user does not buy a second time,
stops using a service, never returns to the restaurant, and does not rec-
ommend the product.
Advocacy. How do the users talk about the product/service? “The users
have been using the app for a month, they are very satisfied and recom-
mend it to all their friends.” “The user ate well in the restaurant, made a
review on TripAdvisor, and talked about it with colleagues.” Or, the oppo-
site can happen: “The user makes a bad review on social media.”
The User Journey is critical in understanding how to intervene in the user ex-
perience to achieve the impact we desire. If we assume that users get upset
about the shipping time of our products, we can prepare an email sequence
that reassures them. If we know that the user will compare our packaging with
that of other competitors, we will have to put a lot of emphasis on that aspect.
If we want to maximize the Advocacy phase, we can build a referral program
through which we reward users who get other users to sign up with discount
codes or gifts.
Examples
For Fabula Deck we eventually decided to adopt a more entrepreneurial
model and sell the product on our own website, after conveying custom-
ers through Facebook advertising campaigns.
Acquisition/ Comparison Purchase/ Retention Advocacy

Awareness Experience
Customers They read the Finally they Fabula is They talk

see Fabula landing page and are are convinced. delivered and about
Deck’s ad on intrigued. They have The price is it is a really it with
Facebook and no other products to low so they good product. friends in
click on it compare it with. They make the They often use writing
search for Fabula on purchase it to write their class;
Amazon but can’t find novels they’re
it; it’s only on our site excited
about it!
The User Journey tool pushes us to think. We have hypothesized the User
Journey of a user making an impulse purchase. As we said in the compet-
itor analysis phase, there really is no alternative to the product we are
offering (as a complementary item to manuals and courses), so we believe
the customer will not compare it with anything else. But what if we are
faced with a skeptical customer?

Customers They read the landing They think it When they They will
see Fabula page and are intrigued is a scam or see the ad not talk
Deck’s ad on but want reassurance. otherwise a on Facebook about the
Facebook and They search Fabula poorly sold they will leave product
click on it on Amazon to read and unreliable a negative with
reviews, but can’t find product. comment anyone
it. Then they Google They close under the ad or
“Fabula deck review” the browser, flag the ad to
and find nothing annoyed Facebook
64 BAD CANVAS
This skeptical User Journey is entirely plausible. The User Journey helps
us understand how we might intervene to solve the problem. For exam-
ple, asking happy users to write reviews on their blogs or by building ad
hoc mock reviews so that skeptical users can find more information on
Google. Among other things, this might more effectively convince users,
even those who are not skeptical but just slightly undecided.
01 ADVANCED - USER JOURNEY 02 ADVANCED - USER JOURNEY 03 ADVANCED - USER JOURNEY 04 ADVANCED - USER JOURNEY 05 ADVANCED - USER JOURNEY
ACQUISITION/ PURCHASE/
AWARENESS COMPARISON EXPERIENCE RETENTION ADVOCACY
The user discovers the product/ The user compares the product The user makes the purchase/ Will the user use the Does the user talk about
eeds? The user becomes aware of a need with other known competitors The user experiences the product product again? the product? Would the user
recommend it?
Sees Fabula Checks Is convinced The deck Recommends

Deck ad website It's cheap arrives and it to writer
uses it- is friends
satisfied
Sees Fabula Checks Thinks it's When ad Does not re-

Deck ad review, is SCAM shows up again, commend it
skeptical gets angry -
bad review
We use the User

Journey cards to
delve into previously
studied users
Another Example
The example we listed above shows us how the User Journey is a powerful
tool for discovering a weakness and acting on it. It proves equally power-
ful for the opposite.
Let’s look at this instance: we are selling high-end earbuds with a well-de-
fined positioning in the market (high performance and relatively lower
price than better-known brands), and we are targeting knowledgeable
users who know they are making a great purchase from a hardware
perspective. What is their journey?
Acquisition/ Comparison Purchase/ Post- Retention Advocacy

Awareness Experience purchase
Customer After The user The user When the The user
sees the comparing our buys the complains earbuds will tell
earbuds’ ad earbuds and product in the arrive, the friends
on Facebook others. Ours because is following user is and family,
and clicks win strategically 2-3 weeks overjoyed! “Shipping is
on it well because we The a little slow
positioned are using product is but the
low-cost really good product is
shipping the bomb!”
NB. An extra step (Post-purchase) was needed for this journey, which we added
by inserting a post-it between the Purchase/Experience and Retention cards.
In this case, it is clear that to make the user happier, it would be smart
to introduce a better shipping service. However, if we study the journey
carefully, is it really necessary from a business perspective? If faster (and
therefore more expensive) shipping took away 5% of revenue, would it still
be worth it?
ADVANCED TOOLS:
THE PROCESS OF EVALUATING
A BUSINESS MODEL
Among the business model analysis cards there are 4 dark yellow
advanced level cards that help assess the feasibility and impact of a
business model.
Business What Is To Whom It How It Is Why You Need

Model Offered Is Offered Offered Capture Value List
1st BM
post-it post-it post-it post-it post-it post-it
2nd BM
post-it post-it post-it post-it post-it post-it
advanced tools: the process of evaluating a business model 67
The basic cards help us study what a business model is all about. The
advanced ones will help us understand what we need to get the business
up and running and whether and how much value this model actually has.
Need List. What do we actually need in order to adopt the model?

If we are talking about an E-commerce model, we will certainly need:
an online sales platform, a way to package and ship products (e.g., a ware-
house with shipping service), someone to take care of customer care,
someone to take care of advertising.
Costs. Which of the things we need are costs? If someone within our team
has the skills needed to assemble the sales platform, we can avoid consid-
ering that as a cost. If we are influencers with millions of followers and
we only want to sell products with our brand, we can assume that we have
no advertising costs.
Key Metrics. These are the main metrics. It is a similar concept to KPIs,
but it is less goal-oriented. Metrics are important values to monitor the
variables. If we are talking about an E-commerce model, these will be:
number of purchases per month, number of accesses on the platform,
cost per acquisition (how much we pay in advertising for each person who
makes a purchase), shipping cost, and production cost. It is like organiz-
ing a party for a fee; the party will be more or less profitable depending
on the number of paying people, the cost of the ticket, the cost of renting
the hall, the DJ, etc.
Key Valuability
Costs
Metrics Check
Advanced Business Model
post-it post-it post-it Assessments cards are laid out
as an extension of the basic
cards
post-it post-it post-it
68 bad canvas
Valuability Check. The moment of truth. If we want to know whether

or not it is worthwhile for us to host a party with an entrance fee, we
will realize that, taking costs into account, we will need at least 500 par-
ticipants willing to pay $10 per ticket. Or, for an e-commerce to make
sense, we need to make at least 200 sales a month with an average $50
cart. Or that the restaurant we want to open in downtown Turin must
serve at least 80 tables a day to support the cost of rent, that the stream-
ing platform we are working on must have 20,000 paying users, and so
on. It is a matter of opening an Excel file and putting down numbers.
You don’t have to overdo it. We recommend creating a business plan
sketch or a “napkin” business plan. Crunch some numbers on a piece of
paper to see if the idea makes sense. This technique has been codified by
Harvard scholars in a methodology called Discovery-Driven Planning.
Insight: Discovery-Driven Planning

It’s a razzle-dazzle business plan. It does not take into account every sin-
gle detail but instead tries to calculate as quickly as possible whether a
business can work or not and under what conditions. It is a great tool
because it costs very little in terms of time and money, and it can show us
immediately if we are building a boat that is destined to sink. It answers
the simple question: “Is this thing we want to do worth doing?”
Example 1: E-commerce
Let’s pretend that we want to open an e-commerce store to sell hand-
crafted ceramic mugs and that we want to devote ourselves to that full-
time. First we need to know how much we want to earn in order to com-
mit to this full-time project. Let’s say we need a minimum of $4,000 net/
month to be able to live comfortably (it’s even a bit more than what we are
earning now at work and it seems fair to want a “raise” because quitting
will be a risk).
Perfect! Let’s start by defining our Key metrics:
• production cost;
• production time;
• shipping cost;
• cost of customer acquisition;
• number of sales per month;
• selling price.
NB. Let’s pretend we don’t have any rent cost and we can create an online
selling platform for free. We’ll have:
Raw material cost per unit $2

Production time per unit 1 hour
Cost of acquiring a customer We don’t know yet (let’s assume it’s $15)
Shipping cost $5
Selling price $40 (shipping included)
70 bad canvas
Please note: the cost of acquiring a customer (the price we pay in advertising
for each individual customer) is a number we must necessarily assume.
How do we do that? By doing Google research and finding average market
values. We identified a general value at $15.
Now we need to create an Excel file to figure out how much we need to
sell in order to earn $4,000/month net (about $4,500/month gross if we’re
looking at a 10% taxation).
Hard data per unit Monthly variable data

Material cost $2 Units sold 20
Hours of work 1 Cost of acquisition per $15
customer
Shipping cost $5
Sales price $40
Achievements per month

Total working hours 20
Costs $440
Revenues $800
Income $360
Results per month follow the following formulas:

• Total working hours = Working hours * Units sold
• Costs = (Material cost + Shipping cost + Acquisition cost per customer)
* Units sold
• Revenues = Selling price * Units sold
• Income = Revenues - Costs
In the Excel file, increase the number of units sold until the income is at
least $4500:
Fixed data/units Monthly variable data

Material cost $2 Units sold 250
Worked hours 1 Acquisition cost per $15
customer
Shipping cost $5
Sales price $40
Results/month
Total working hours 250
Costs $5 500
Revenue $10 000
Income $4 500
We will realize that we need to sell at least 250 mugs each month in order
to earn the necessary amount of money. This is true only if the acquisi-
tion cost stays at $15. Let’s remember that this cost is just an assumption;
we might end up spending more or less (and, if we were to spend more
than $15, we would be in trouble!). We will also find out that in order to
earn the desired amount, we’ll have to work at least 250 hours per month
just for the production of the mugs so, unless we get someone to help
us, we are already close to our production limit (250 hours per month is
roughly 60 hours per week).
Example 2: Kickstarter Campaign

We want to produce a next-generation smart facemask and would like to
use the Crowdfunding business model. This type of model involves rais-
ing funds from the crowd, that is, from a number of individuals who de-
cide to support the project in exchange for a reward, which is usually one
or more units of the product in question.
We are working on setting up the fundraising campaign on Kickstarter
(the number one platform in the industry) and we are wondering what is
the minimum goal we need to reach for the project to be sustainable.
Again, we start by defining what our key metrics are and we know that:
72 bad canvas
1. This will be an industrial production to produce 2,000 masks the

cost will be $30,000 at the very least.
2. We plan for 2 main donation-level rewards: a 1-mask package and a
2-mask package at a cheaper price.
3. Kickstarter takes 10% of the total revenue.
Production cost $30,000

Number of backers TBD
Percentage of backers that chooses the 1 70%
mask package
Percentage of backers that chooses the 2 30% (percentages derived from the study
mask package of similar projects)
Sales price $60 (shipping included)
Please note: we are not taking design costs into account (designing the
mask, branding, packaging etc.) and communication costs (creating a
presentation video, photo shoot, writing the text for the Kickstarter page,
etc.) because we assume we can do everything in-house. We also assumed
that 70% of the backers will order the single-mask package while the
remaining 30% will order the double-mask package because we analyzed
other similar projects on Kickstarter and realized that the single/double
package percentages are on average 70/30.
Now we create an Excel sheet to calculate the minimum number of

backers we need in order to get to the famous “break-even point”, where
costs and revenues go to zero.
Fixed data Variable data

Minimum production cost $30,000 Number of backers 524
Numbers of mask 2,000 Backers reward #1 366
produced
Shipping costs $10 Backers reward #2 157
Reward #1 price $60
(1 mask)
Reward #2 price $110
(2 masks)
Results
Total revenue $39,230
Kickstarter fee $3,923
Costs $35,240
Profit $67
In this chart we used the following formulas:

• Total revenue = (Price reward #1 * Backers reward #1) + (Price reward
#2 * Backers reward #2)
• Kickstarter fee = Total revenue * 10%
• Costs = Production costs + (Number of backers * Shipping cost)
• Profit = Total revenue - Kickstarter fee - Costs
We will realize that we need at least 524 backers to make the project
viable. Even if we were to be successful, this is the worst case scenario,
the one in which we manage to start production but costs and revenues
get to zero: the revenue will be at $39,230 and expenses at $39,163, with a
profit of $67. So what can really be our profit? The remaining masks that
we have in stock, which we can sell later!
We also have to ask ourselves: are we sure we can get 524 backers without
any advertising investment and using only our social channels? What if
we were to assume a $10 investment for each acquired backer?
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Minimum production cost $30,000 Number of backers 635
Numbers of masks 2,000 Backers reward #1 366
produced
Shipping costs $10 Backers reward #2 157
Reward #1 price $60 Acquisition cost per $10
(1 mask) customer
Reward #2 price $110
(2 masks)
Results
Total revenue $47,540
Kickstarter fee $4,754
Costs $42,700
Profit $86
In this scenario we’ll need to reach a higher goal of about $50.000 and at
least 635 backers.
Final Considerations
Discovery-Driven Planning helps us to evaluate the model we want to
adopt and to understand whether it might make sense to implement
(perhaps in the case of ceramics it’s not the way to go) and it also sheds a
light on possible adjustments (in the case of masks we might even decide
to increase sales prices). In general, it helps us not to get hurt when we
are choosing which business direction and business model to choose.
Example
For Fabula Deck, if we want to adopt the proprietary E-commerce busi-
ness model, we are going to fill out the Business Model Evaluation cards
in the following way:
Need List Costs Key Metrics Valuability Check
– E-commerce – Warehouse with – Fabula Deck units

platform shipping service sold per month
– Warehouse with – Facebook ads – Acquisition cost
shipping service per customer
– Customer care
– Facebook ads
We did not consider e-commerce platform development and customer

care as costs because we know we can do it internally at no cost. We also
left the Valuability box blank because we still have to evaluate it.
We know that:
• we want to sell the product for $29 including shipping costs;
• the cost of the product is $1/unit;
• shipping is about $8 per order.

Fabula Deck price $29 Number of orders per 2,000
month
Acquisition cost $15
Shipping cost $8
Production/unit cost $1
Result/month
Revenues $58,000
Costs $48,000
Final profit $10,000
76 BAD CANVAS
Assuming that we sell 2000 units a month we know there will be profit.
It’s not the best option but it works so it is certainly a viable path.
Let’s take it further: what would happen if we offer one Fabula Deck
for $29 and two decks for $49, convincing customers to buy two and
save money and assuming that 30% of people will choose to buy the
two-deck bundle?

Fabula Deck price 1 unit $29 Number of orders per 2,000
month
Fabula Deck price 2 units $49 Orders of 1 Fabula 1,400
Acquisition cost $15 Orders of 2 Fabula 600
Shipping cost $8
Production / unit cost $1
Result/month
Revenues $70,000
Costs $48,600
Now it is very clear that the E-commerce business model is viable, especial-
ly if we use bidding logic, bundling multiple products to amortize shipping
and acquisition costs.
Need List Costs Key Metrics Valuability check
– E-commerce – Warehouse with – Fabula Deck units Viable if we bundle

platform shipping service sold per month products
– Warehouse with – Facebook ads – Acquisition cost
shipping service per customer
– Customer care
– Facebook ads
We set the Business Model

Evaluation cards as an extension of
the basic cards
05 BUSINESS MODEL ANALYSIS 01 ADVANCED - BM EVALUATION 02 ADVANCED - BM EVALUATION 03 ADVANCED - BM EVALUATION 04 ADVANCED - BM EVALUATION
WHY NEED KEY VALUABILITY

YOU CAPTURE VALUE LIST COSTS METRICS CHECK
Why does the entity who runs What do you need to get the What are the estimated What variables and data do you Is the business model realistic
the business capture value? business up and running? expenses? need to monitor? and viable?
publisher Distribution Distribution Sales Ok..

fe Press
release
they pay platform warehouse Sales It works!

us for the warehouse ads CPA
product customer care
ads
we get Mentoring Ads Sales Hmmm

paid for Ads CPA
consultig
08 DESIGN PROCESS Only by crunching

numbers can we
BUSINESS GOALS decide which business
AND KPIs model to apply
What goals do you want to reach?
Are the goals measurable?
Sell
Make it 10,000 50 consulting
publishable copies clients
a year
VERY ADVANCED TOOLS
In the first part of the manual, we learned how to visually represent a
project in all its key areas (users, competitors, and business) and to think
and act in a holistic and informed manner. In the second part, with the
help of advanced level cards, we understood how to delve into the user
interaction experience and to evaluate business models.
In this third section, we’ll see how to handle the ideal and operational
evolution of a project. Specifically, we will see how to:
• hypothesize product/service innovation;
• hypothesize process innovation;
• hypothesize business model innovation and enhancement;
• prioritize possible strategic choices.
04 VERY ADVANCED - ITERATIONS
01 BUSINESS
VERY ADVANCED - ITERATIONS
03 VERY ADVANCED - ITERATIO
NS
05 VERY ADVANCED - ITEMRATIOONSDEL
T
WORST CASE BUSINESSENHANCEMEN e the existing PROCESS 02 VERY ADVANCED - ITERATIONS
SCENARIO
Can you enhanc
MODEL the
business model
?
INNOVATION
n that prevents
INNOVATION
Find the solutio
worst possible sce
nario
PRODUCT
Can you optim
ize the costs
and/or the pro
Can you dr cesses?
astically ch
INNOVATION
current bu an
siness mod ge the
el?
ovate the
How can you inn
?
product/service
To use when we want ITERATION

to prioritize actions HYPOTHESIS
or when we need to How can we innovate? New products,
radically change the 02 VEnew processes, new business models?
RY ADVA NCED - ITERATIO
NS
project
VALUE
INDEX
What is
the
Benefits
/Costs ra
tio?
04 VERY AD TO-DO
VANCED
- ITERATIO
LIST
NS
y actio ns
What are the necessar
ge?
to introduce the chan
MANA
GEME
Who
is
the n going to
eede
d act supervis
NT
ions? e all
VERY ADVANCED TOOLS:
ENHANCEMENT BY ITERATION
Projects are constantly evolving. How does our business look one year
after we have produced our next-generation masks through a successful
crowdfunding campaign? Should we expand with the introduction of a
new product, or should we optimize our internal processes? Should we
innovate our business model?
Actions that can generate a positive impact, from least impactful to most
impactful, include:
• product innovation;
• process innovation;
• business model innovation.
According to statistical studies, business model innovation brings more

benefits than process optimization, which in turn brings more benefits
than product innovation.
very advanced tools: enhancement by iteration 81
It means that statistically it is wiser to invest resources in innovating the

way you generate value from the sale of masks than in creating a new
product. But are statistics always true? It’s good to have a tool that can
help you calculate the impact of each available path, because not knowing
where to direct your efforts means losing control of the project.
The iterations cards help to precisely hypothesize iterations, improve-

ments, and enhancements to the product system previously studied with
the basic and advanced level cards. They guide us through a mini-work-
shop that allows us to consciously consider which path to take.
The iterations cards are the black cards in the deck. There are 9 of them.
The vertical ones should be aligned on the y-axis, and the horizontal ones
on the x-axis, building a small grid.
Iteration Value To-do

Management
Hypothesis Index List
Worst
Case post-it post-it post-it post-it
Scen.
Product
Inno- post-it post-it post-it post-it
vation
On the left vertical side, we can find 5 cues to start finding new solutions,
while on the upper side, the horizontal one, we’ll have the 4 recommended
steps to analyze possible solutions.
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The steps are:

• Iteration Hypothesis. What can we introduce into the previous
system? The creation of a new feature, a renewal of the product,
a change in the production system to reduce costs? Once the change
hypothesis is defined, we can work on the system to integrate it. For
example, if we are hypothesizing to launch a new product that tar-
gets the same users as the existing one, we will build a new line un-
der the design process cards and evaluate the impact within the
previous system.
• Value Index. This is an intuitive index evaluation that is defined by
dividing Benefits by Costs with Benefits and Costs being numbers
from 0 to 5. How much benefit can we derive from this change from
0 to 5? And how much does it cost us in terms of time or money from
0 to 5? If we are imagining a re-styling of a product, an operation
that costs us 3 and would give back 1, then we are looking at a Value
Index of 1/3=0.33. If, on the other hand, we had encountered a design
problem (it doesn’t work well and 30% of customers send it back or
complain) then re-styling would still cost 3 but the benefit would be
maximum, so a 5. The Value Index would be 5/3=1.66.
• To-do List. If we really wanted to implement the changes that we’re
considering, what should we do? Should we work on design sessions,
request new quotes, launch a new production?
• Management. Who is going to oversee what needs to be done? Very
often we assume we are going to do something and then no one takes
care of it. It’s very important to decide who will take responsibility
for each aspect.
To effectively find impactful change hypotheses, we have prepared 5

insights (vertical cards):
• Worst Case Scenario. What is the worst case scenario we can imag-
ine? A new competitor entering the market with a cheaper product?
That the raw material runs out? That the market becomes saturat-
ed? What is the thing that could happen that would be a disaster?
And what solutions can we picture to prevent this from happening?
This is our modification hypothesis. For example, if our business
model is E-commerce, we know that it relies entirely on advertising

through Facebook, our worst case scenario could be Facebook’s hy-
pothetical shutdown. If that scenario were to occur, how else would
we advertise our products? We could sell them in stores and move
to a Distribution-based model. How would this impact our current
situation? What would be the costs and benefits?
• Product Innovation. What if we innovated the product? What could
we come up with? Does it make sense in our scenario? Would sales
improve? How much would it cost?
• Process Innovation. How can we optimize costs and process-
es? Is it by changing production locations? By reducing staff?
By automating some of the roles? How will our system change?
• Business Model Enhancement. What can we do to enhance the
business model? If we have an E-commerce business we could
imagine adding the Add-on model to increase the average shopping
cart, or introducing a mail marketing model to sell new products to
existing customers through email sequences. How much would
such a change cost? How much would it increase our revenue?
• Business Model Innovation. What if we completely changed the
business model? What if instead of selling the products we start-
ed charging a monthly subscription to provide the products on an
unlimited basis? Would that make sense?
As we mentioned before, working on these elements is vitally important

to know which direction to invest your efforts and to not make the
mistake of investing without analysis.
Here’s a Practical Example:

Let’s look at a company like Oura, which produces a ring that tracks your
body’s data (heartbeat, sleep pattern, etc.) Oura could wonder whether to
focus on each of the following:
1. A better version of their product (a ring 2.0);
2. Optimizing internal processes;
3. A radical change in the way they deliver the product.
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What Is the Most Convenient Option?

We have already mentioned that, on a statistical level, among product,
process, and business model innovation, the greatest positive impact is
found in business model innovation. This means that it would make more
sense for Oura to invest in changing the business model rather than in
improving the product (in fact, it is no coincidence that the company re-
cently switched from a direct sales model to a model that involves paying
a subscription to its monitoring service).
However, it would be smart to investigate each of the possibilities and
then decide after calculating the impact of the different scenarios with
Discovery-Driven Planning.
Example
Let’s imagine that Fabula Deck is now a real and launched project.
We sell products online through a proprietary E-commerce model, with
no middlemen, and we advertise only through Facebook.
Here’s how we might use iterations cards:
Iteration Value Index To-do List Management

Hypothesis
Worst Case If Facebook 1/5 – Call – We need

Scenario were to fail It costs a lot to bookstores to have a
(worst case do (5) and we are and stores salesperson
scenario), we not sure of the to convince who is
could create benefits (1) them to responsible
a physical order Fabula for making
distribution Deck on phone calls
consignment and reporting
– Contact
them again to
keep monthly
statements

Hypothesis
Product We could 1/3 – Redesigning

Innovation improve Since customers the product
Fabula Deck are satisfied, it for a possible
would be a fair improvement
investment for
us (cost = 3) and
we don’t think we
would sell more
(benefits = 1)
Process Since we 5/2 – Finding a It can be

Innovations spend a lot We would raise warehouse in handled by
of money the profit if the US the same
to ship our we opened a – Negotiate person who
products warehouse in the shipping costs manages
from Italy to US and shipped – Ship supply the Italian
customers everything from to US warehouse
in the U.S. there (benefit =
(40% of our 5). Also it doesn’t
sales are in require too much
America), we effort, just a
could open a couple of phone
warehouse in calls (cost = 2)
the U.S.
Business Model We could 3/3 – Designing – The lead

Enhancement design There would new products designer can
products definitely be a – Finding coordinate
related to profit (benefits = manufacturers the design
Fabula Deck 3) and it requires for new process
(leather deck a good amount of products and request
holders, effort on our part – Implement quotes
post-its, etc.) (costs = 3) add-on – The UX
to implement features on the designer can
an Add-on site take care of
model updating the
web part
86 BAD CANVAS

Hypothesis
Business Model Same as in 1/5

Innovation the worst (Same as above)
case scenario.
We could
move from a
direct-sales
model to a
Distribution-
based one
Let’s look at this into detail:
• Worst Case Scenario: since Fabula Deck is only sold online

through Facebook ads, we think that Facebook closing down
would be a disaster for our project. What could we do in that case?
One plausible solution is to stop selling online and only sell in
stores through a distribution. How much would it cost to rev-
olutionize our system? The answer is: a lot! We would have to
change every aspect of the project, so the cost on a scale from 1
to 5 is 5, the maximum. And how much would we get out of it?
We don’t know. Physical distribution is a wild card (you give tens
of thousands of products to a distributor and wait months to
find out whether they have sold or not), so we decide to value the
eventual benefit as 1. In this case the index is 1/5=0.20; quite low!
• Product Innovation: we can decide to improve the product we sell.

We can rework how it operates, or work on its appearance, etc.
But is it worth it? We know that our customers are satisfied, so
the current product is fine and has no real need to be changed.
It is plausible to think that a product innovation will not bring any
increase in sales, so we estimate the benefit at 1. What about costs?
We would have our in-house designers working on it, perhaps while
also doing something else, and we would have to pay for prototypes
and early production; let’s say the cost is average, so 3. We are look-
ing at an index of 1/3=0.33. Again, this is a lukewarm prospect.
• Process Innovation: we know that 40% of orders come from the

US, and we spend a lot to ship from Italy to America. We realize
that a great way to optimize would be to open a warehouse in the
US from where to ship with a local service and not an interna-
tional one. How much does it cost us to open a warehouse there?
Very little. There are hundreds of companies that offer a good
service, it’s just a matter of finding them, calling them and work-
ing out a deal (the cost is low, let’s say 2). And the benefit? Huge.
We could save as much as $4 per shipment! Then let’s say the benefit
is 5. In this case we would have an index of 5/2=2.5. Now we’re talking!
• Business Model Enhancement: we could design something similar

to Fabula Deck, like a premium leather case, and sell it with an Add-
on model at the end of the purchase process. How much work does
it take to set this up? Quite a bit. You have to find suitable leather
cases, brand them, produce them etc., and create the digital system
to develop the add-on function (so cost is = 3). What about benefits?
There will be a few extra dollars of profit per order. Nothing crazy, but
not bad either, so let’s say it’s a 3. We’re looking at an index of 3/3=1.
• Business Model Innovation: moving to a Distribution-based

model, as we hypothesized in the Worst Case Scenario. The same
argument as above applies.
88 BAD CANVAS
Summary
For the time being, we could only think of one possible business model
innovation which doesn’t seem fruitful. We also realized that product in-
novation is not for us (or at least it’s not at the top of the list), and there
are in fact only two promising avenues: optimizing shipping and adding
products to sell in add-ons. The statistic discussed earlier suggests that
add-on implementation should be the most impactful action, but we now
know about the Discovery-Driven Planning technique, so let’s crunch
some numbers and try to predict what the impact of each of the two
paths might be.
Let’s go back to the scenario we analyzed in the previous chapter. We are

selling an average of 2,000 Fabula Decks per month, 70% of buyers buy
only 1 product while 30% buy 2.

month
Shipping cost $8
Production / unit cost $1
Result/month
Revenues $70,000
Costs $48,600
Let’s see what would happen approximately, if we introduced an add-on

in the form of a leather case priced at $15 with a margin of $8, assuming
that 15% of buyers decide to choose the add-on.

month
Leather case price $15 Orders of 2 Fabula 600
Acquisition cost $15 Orders of leather case 300
Shipping cost $8
Leather case cost $7
Result/month
Revenues $74,500
Costs $50,700
In doing the math it turns out that this operation would be worth an extra
$2,400 per month. Not bad, but perhaps less than we would have expected.
Instead, let’s see if we were to find a way to optimize shipping by intro-

ducing a US warehouse for the sales we make in America. We know that
we will spend an average of $4 per domestic shipment in the US and, as of
today, 40% of shipments go to the US.

Fabula Deck price x1 $29 Number of orders per 2,000
month
Shipping cost $8 Orders of 1 Fabula US 560
Shipping cost US $4 Orders of 2 Fabula US 240
90 bad canvas
Result/month
Revenues $70,000
Costs $45,400
Alright, this is much more intriguing. We would see a monthly revenue

increase of $3,200. Which is a lot if we consider that the effort to achieve
shipment optimization could be much lower than the effort to design a new
product to offer as an add-on.
Conclusion: out of all the assumed directions we could take, the one with
the greatest impact is process optimization in the form of opening a US
warehouse to reduce the cost of shipping. Another viable way, even if low-
er in the list of priorities, is to create an add-on to increase the average
shopping cart. Finally, if we really want to invest in product innovation,
we can do so, but as a last option.
02 DESIGN PR
OCESS
KEY
USER
How do goals change? Who S ar
for th e the ta
is proj rget
How about users? ect? users

USER ANA
LYSIS
Requirements? 08 DESIGN PROCES

S
05 DESIGN PR
OCESS
How about the GOALS

BUSINESS
other elements? AND KPIs REQU
ls do you
want to
reach?
IREME
What goa ls measurable?
Are the
goa
Wha
t
requ are the m
irem
ents ain
NTS
of th
L ANALYSIS is proj
BUSINESS MODE USER ANA
LYSIS
ect?
COMPET
ITOR ANA
LYSIS
BUSINESS
MODEL ANALYS
IS
01 VERY ADVANCED - ITERATIONS 02 VERY ADVANCED - ITERATIONS 03 VERY ADVANCED - ITERATIONS 04 VERY ADVANCED - ITERATIONS
ITERATION VALUE TO-DO

HYPOTHESIS INDEX LIST MANAGEMENT
How can we innovate? New products, What is the What are the necessary actions Who is going to supervise all
new processes, new business models? Benefits/Costs ratio? to introduce the change? the needed actions?
IF
WORST CASE Facebook
SCENARIO
collapses Make phone
Find the solution that prevents the
worst possible scenario 1/5 = 0,2 calls to Have a
Create libraries distribution
physical Make person
distribution statements
PRODUCT
INNOVATION
How can you innovate the
product/service?
Make new 1/3 = 0,3 Redesign Designer
Fabula Deck deck
PROCESS
INNOVATION - Find
Open 5/2 = 2,5 Same person
warehouse
Can you optimize the costs
in charge of
and/or the processes?
warehouse
in US - Negotiate logistics
contract
BUSINESS
MODEL
ENHANCEMENT - Find
Can you enhance the existing
Add-on 3/3 = 1 Lead
products
business model?
designer +
- Place add-ons UX designer
on site
BUSINESS
MODEL
INNOVATION
Can you drastically change the Distribution 1/5 = 0, 2 See worst See worst
case scenario case scenario
current business model?
Choose which actions to implement

and modify the basic system
accordingly
RECAPITULATION AND
WAY OF USE
The basic and advanced level cards allow us to visualize the entire eco-
system of a project by connecting the users, competitors and business
areas to the design process, as if it were the backbone of the system.
The very advanced level cards, at a later time, help us by pushing us to
hypothesize changes to the system.
Depending on the project and goals, we may decide to:

• Start from the design process, and try to put together all the
pieces and then explore the other areas as if they were insights.
For example, if a client asks us to develop a product that solves
a problem for certain users and has specific characteristics
we will start from the Key User Problems and Needs cards.
Or, if our boss tells us that the product has a problem, we go to the
User or Business Pain Points cards.
recapitulation and way of use 93
• Start with one of the external areas, and then trace our thinking
back to the design process. If we want to design a product that
works with the Subscription business model, we might start in the
business area to derive the Product Requirements as a first step, and
only later we’ll think about the actual design. If we already have a sol-
id community, we may want to develop a product for a specific target
audience. In that case we will start working from the users area.
BAD’s main goal is to provide mental elasticity and a broad view of the
project. The important thing is not how to navigate the canvas but to
acquire the ability to navigate it smoothly.
BAD’S IDEAL USERS:
3 CASE STUDIES
BAD is designed to broaden the vision of a project, taking into account
aspects that are often underestimated or whose interdependence is over-
looked. We have outlined three ideal users who, in our opinion, represent
the profiles who would benefit the most from this tool:
In-house Designers in a Company. They may be part of a company’s

internal team, such as Ikea or Spotify, or they may work for an agency or
consulting firm that external clients rely on.
Benefits of using BAD: adopting choices with the business aspect in mind
makes proposals more effective and they can achieve the goals set by
their bosses and clients more consciously.
Freelance Designers. Professionals who are contacted by a client on a

one-off basis to solve problems or individuals who decide to contact a
company independently proposing an idea to develop. For example, an
BAD’S IDEAL USERS 95
object designer who contacts a lighting company to sell a concept for a

new product.
Benefits of using BAD: to take into account business and Competitive
Strategy aspects which will help them speak the same language as
companies, build more convincing presentations, and increase their
chances of getting work.
Designers-entrepreneurs. These are independent professionals who de-

cide to develop a product or service independently. Designers who decide
to produce and sell their own product fall into this category, as do entre-
preneurs who want to open a startup and have good business knowledge
but need design skills. Business managers are also part of this profile as
are the people with whom the first two targets described above often
need to relate.
Benefits in using BAD: for people who fall into this category this tool is ex-
tremely advantageous if not necessary, because it helps them have a com-
plete view of the project so that they can be sure not to invest resources
in the wrong direction.
In the case studies we have examined different scenarios for differ-

ent user types and they are all plausible. We will see step by step how
the temptation to engage in an incomplete approach is always lurking
around the corner and it risks leading to failure and loss of resources,
where a more informed choice can be made using BAD. Enjoy!
CASE STUDY #1:
THE CAB APP DESIGNER
Maria works as a UX designer for a cab company called iTaxi, a 50-employee
startup that allows customers to hail cabs by sharing their location and allow-
ing them to preview the cost of the ride. It’s like Uber meets the classic cab.
The Brief. One day Amelia, the company’s CEO, comes out of a meeting
very nervous and calls Maria telling her the brief: “Marketing is working
very well. We continue to acquire new users. However, we have a problem:
a lot of people use the app once and then they quit. Either they don’t use
it anymore or they delete it. We believe it’s a user experience problem.
We definitely need to increase our retention rate.”
For those unfamiliar with the terms used above: User Experience, or UX,
refers to the user experience of the product (an area in which Maria is an
expert). Retention rate, on the other hand, is the percentage of users who
download the app and then keep it and use it.
case study #1: the cab app designer 97
Having received the brief, Maria might choose to do textbook work:

conduct user tests to check the app’s usage flows and understand if there
are any pain points that make key actions (hailing a cab, waiting for it,
riding in it, and then paying) difficult or frustrating. As a result, it would
certainly identify areas for improvement related to the functioning of the
app and its interface and propose viable solutions.
But are we sure that this is the best way to benefit the project?
Let’s see how Maria would operate if she decided to use BAD to get a
broader view: Maria starts with the design process cards, specifically
from what she knows to be the problem stated in the brief.
User/Business Pain Point. High rate of dropout after installation or after

the first use of the app.
Now Maria fills out the rest:
Project Name. iTaxi app.
Key Users. Cab users.
Key User Problems and Needs. To hail a cab swiftly and easily.
Solutions and Features. An app that allows you to click and get a cab and
to know ahead of time how much the ride will be, giving you the possibil-
ity to pay by credit card.
Requirements. Fast and easy to use.
UVP. Take control of your ride.
Competitive Strategy. Differentiation, it is the same service as a classic

cab however there is more control (you know how much it costs, you pay
with your card, you are billed immediately, etc.)
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Business Goals & KPIs. Increase the rate of users who continue to use the app.
Maria immediately finds a shortcoming in the brief: the objectives are not
specific, they did not provide her with either KPIs or precise data about
the problem. So she immediately goes to Amelia and tries to get more
information discovering that, of all new users:
• 60% use the app at least once;
• only 5% continue to use it (the retention rate).
Also, management set a goal to:

• increase the percentage of those who use the app at least once
to 80%;
• increase the number of users who continue to use it to 50%.
Meanwhile, Maria tries to evaluate the following KPIs: what is an av-

erage rate of users leaving travel/lifestyle apps? After doing some re-
search she found that for the targeted market the average retention
rate 90 days after download is 18%. This means that iTaxi’s current re-
tention rate (5%) is far below average. It is unrealistic to think of raising
that rate to 50%. It would be more realistic to set a goal of 20-25%. She
discusses this with Amelia, who agrees and confirms that she is working
on keeping that as a goal.
So Maria focuses mainly on users using the user analysis cards and
particularly looking at their User Journey:
Regular cab 25-65, live in a big Good internet They want to improve
users city, high income or knowledge, high their cab experience,
work for company living standard specifically:
that pays cab fares – not having to be
on the phone to give
directions to the pickup
location
– pay quickly
For now, Maria decides not to study another user group but to focus on
the one already at hand.

A friend Carlo weighs the The app asks for He doesn’t

shows Carlo pros of using information. He use it and
the iTaxi iTaxi: he thinks thinks the process mentally links
app. Carlo of all the times is a bit too long, it to a negative
looks at the he was on the so he postpones experience
app’s website phone and had signing up. Next
and finds it to interrupt time he needs a
intriguing a call to hail a cab and wants to
cab! He finds it use the app. He is
intriguing and annoyed because he
downloads it still has to enter all
his info
Julia She weighs the She fills out She was very She tells
discovers pros and cons of the required satisfied with her collea-
the iTaxi app using iTaxi and information right the service and gues about
through a deems it fair so away using a 5 continues to it recom-
Facebook ad she downloads it minute break at use it! mends it
work. When she
leaves the office still
on a work call, she
opens the app and
books a cab
Maria realizes that the first problem might be with the registration and
specifically entering the information needed to use the app (credit card,
etc.) She asks for a user abandonment rate at the registration stage, look-
ing for how many people, like Carlo, found the process frustrating and
chose to give up. To her surprise, she finds that the percentage is 40, less
than the average of 50% that she found online. She also runs brief tests
with users and discovers the sign-up process is extremely fast and that
the app works well and has no bugs.
After that, she decides to test the process of booking a cab: that evening,
she hands the phone to her mother and tells her to call a cab to go to a
restaurant where they’re having dinner. She watches her Mom entering
100 BAD CANVAS
the arrival address and clicking on the “Call Taxi” button. Mom hesitates
for a moment to ask for the restaurant address, which she does not know
by heart (but she would have had to research it anyway to let the cab
driver know). Otherwise everything went very well; she had no difficulty.
Maria considers that the address entry system could be improved, but
she does not think it is a crucial problem.
Thoughts. Maria doesn’t think that she is facing a user experience prob-
lem: the user experience already seems to be good and she is absolutely
convinced that no matter how much it is improved, this will bring the
benchmark KPI (retention rate) from 5% to 25%.
Warning! If Maria hadn’t followed these steps, she would have worked on UX
improvements, with developers busy on implementing it only to get an earful
from Amelia because the retention rate would not have increased.
Maria realizes that something doesn’t add up: why do users download
the app, use it in large numbers, and then stop? She decides to talk to
the marketing department and ask what type of communication strat-
egies they are adopting. She discovers that, to entice first use, they are
offering $5 coupons to new users, a strategy that is quite popular.
Maria goes back to the user analysis cards:


Fred sees Fred has to go to He called the cab He keeps the He tells all
an ad on a dinner party. with the app and app as a last his friends,
Facebook He usually uses was very satisfied. resort. Without “Download
offering a cab a car sharing The ride cost him the $5 discount, that app,
ride with a $5 service, which exactly $10, as the he doesn’t like the first
discount. would cost him app said! to use it. He ride is $5
He thinks: $7-8. A cab ride prefers car off!”
wow! And would be $15, a sharing
downloads bit too much.
the app However with
the $5 discount
it becomes
acceptable
Maria learns two things:

1. Retention rate is low because acquired users find it advantageous to
take the cab ride at the discounted rate but not at the full rate.
2. The type of user that Fred is part of is not the primary target audi-
ence she had identified.
Maria creates a new user group:
Habitual cab 25-65, live in a big Good internet They want to improve
users city, high income or knowledge, high their cab experience.
works for company living standard Specifically:
that pays cab fares – not having to be
on the phone to give
directions to the pickup
location
– pay quickly
102 BAD CANVAS
Alternative 20-45, live in a They are well versed They want to

systems (not big city, medium in new technologies conveniently move in
cabs) users income and careful about the city. They generally
how they spend avoid cabs because they
their money. They are too expensive. The
generally get issue with car sharing
around the city is that cars, at times,
by car sharing, are too far and they
scooters, electric don’t like using electric
scooters, or bicycles scooters when it is cold
It is crystal clear to Maria that the Marketing department is acquiring

new users from the second group, because those from the first group
(with high income or working for a company that pays for their cab
fares) care little about a $5 discount. Is iTaxi a good solution for this
type of user?
Maria goes back to the design process cards.
Key Users. Cab users + alternative services users.
Key User Problems and Needs. To book a cab quickly and easily + getting
around town conveniently.
Solutions and Features. An app that allows you to get a cab with a click.
It also allows you to know in advance what the fare will be and be able to
pay with a credit card.
>> This is a critical point: for the second group of users, the only interesting
feature may be the preview of the fare. However, it is not a real solution to the
problem. The cab is still too expensive.
Requirements. Fast and easy.
UVP. Take control of your ride.

Competitive Strategy. Differentiation, it is the same service as a classic

cab but there is more control. You know how much it costs, you pay with
your card, you are billed immediately.
>> Maria starts having some doubts. Even on the UVP and Competitive Strat-
egy, users are acquired with a UVP that is saying, “$5 off your first cab ride”
which really means “For once, a cab ride will be affordable,” and it works!
But the cab is no longer affordable after the first ride so the product stops being
competitive and that’s when the retention rate plummets.
One might object that it’s not Maria’s job to worry about these issues.
Wrong! We just proved how the opposite is true: if Maria had not con-
sidered all of these factors, she would have wasted time and resources.
Designers need to look at the project in a holistic way to be sure to
make informed decisions.
Maria is now asking herself a crucial question: if we are acquiring the
wrong users, our product will not meet any need and will be perceived
as useless. How do we make it useful? And most importantly, useful
for whom?
Maria decides to use the competitor analysis cards to gain a clear overview:

Name Values
Yellowcab – It is reliable. – Expensive. – Convenience To create a

– Someone – The price of the – Respectability cheaper cab
else is driving ride is unknown service, or a
– One is till the end more automa-
protected – One must call to ted system for
from rain/ get a cab administra-
snow/heat – An invoice must tion
be specifically
requested
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Name Values
Car sharing – Fairly cheap – The price of the – Independence To create

– One is ride is unknown – Price a cheaper
protected from till the end car sharing
rain/snow/heat – One must drive service
– Automatic
invoice
Scooters – Fairly cheap – The customer – Independence

and electric – Fun is not protected – Price
scooters for – Automatic from rain/snow/ – Experience
sharing invoice heat
– The price of the
ride is unknown
till the end
– The customer
must drive
Maria is trying to go deeper in studying the needs of the two different

types of targets:
• for those who use cabs regularly, the high price is not a big problem,
so even the ride cost preview function is not a real added value.
• for those who prefer alternative solutions because of the price, the
only real solution would be a cheaper cab service (which is why the
discount on the first ride works).
Maria now feels the need to expand her vision even more, so she asks
Amelia for some information and also analyzes iTaxi from a business
perspective using the business model analysis cards:
Business What Is To Whom It Is How It Is Why You Capture

Model Offered Offered Offered Value
Fee Cab ride Passengers Through an app The radio cab

company pays me
5% of each ride that
comes through the
app
Maria asks for two pieces of information specifically: acquisition cost

per new user ($10 spent in ad) and the average number of rides booked
by the remaining users (10 per month, so 120 per year). She proceeds to
create a chart:
Fixed data
Fee 5%
Average ride cost $15
Ads acquisition cost $10
Additional cost for first ride $5
Number of users acquired/year 10,000
Retention rate 5%
Number of users who stay/year 500
Number of rides per user/year 120
Results
Loss on the first ride $4.25
First ride loss/year $42,500
Acquisition cost via ads/year $100,000
Total acquisition cost/year $142,500
Number of rides/year 60,000
Sales $45,000
Profit $-97,500
Maria arbitrarily sets the number of users acquired per year (10,000)
to start making an assessment. She calculated the loss on the first ride
($5—the gain on the relative ride), the number of rides per year, and the
total revenue, so revenue minus expenses. She realizes that this cannot
work: there’s going to be a significant loss.
106 BAD CANVAS
Fixed data
Fee 5%
Additional cost for first ride $5
Retention rate 20%
Number of users who stay/year 6,000
Results
Loss on the first ride $2
First ride loss/year $60,000
Acquisition cost via ads/year $300,000
Total acquisition cost/year $360,000
Number of rides/year 720,000
Sales $540,000
Profit $180,000
By acquiring 30,000 users and raising the retention rate to 20% things
could be much better (not counting structure costs like salaries and rent,
etc.) Unfortunately the problem stays: how can the retention rate percent-
age increase when the newly acquired users are the wrong ones?
Maria goes back to the design process cards and she focuses on users’
needs and solutions:
Key Users. Cab users + alternative services users.
Key User Problems and Needs. To book a cab quickly and easily + getting
around town conveniently.
Solutions and Features. An app that allows you to get a cab with a click.
Unfortunately, the price preview function makes little sense for cab
users who are not concerned about the expense, and it may even be
a deterrent to other possible users who might be scared off by the
excessive cost.
Maria makes a list of possible solutions/features to discuss with Amelia:

• for cab users (especially those who use it for work and the rides
are paid by the company): a feature to simplify the administrative
aspects related to billing and reporting?
• for users of alternative systems: it’s not possible to lower the cab
fare because it would mean going at a loss. Perhaps it is possible to
create a service to pair multiple users who want to take a cab and
charge them half as much.
The problem here is that the solutions provided to users at the mo-
ment are not sufficient so the product has been poorly designed. It is the
designer’s job to recognize it and develop a product that not only looks
good and has a satisfactory user experience but also has a reason to exist
and it is actually used by paying users.
Another thing that Maria can do is to use the Very Advanced level cards
and remember that statistically the greatest positive impact comes from
a business model innovation. Hence the question: how would it be possi-
ble to integrate or transform the current model?
Maria tries to apply the subscription model:
Business What Is To Whom It How It Is Offered Why You

Model Offered Is Offered Capture Value
Subscription 10 discounted Passengers Through a fixed My profit comes

rides a month monthly fee from the unused
rides during the
month
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Assuming a monthly subscription of $135 giving access to 10 cab rides

(with a capped distance, of course). Then assume that 20% of the monthly
rides are not used for multiple reasons (illness, change of schedule, etc.)
Fixed data
Fee 5%
Retention rate 25%
Number of users who stay/year 2,500
Percentage of rides not used 20%
Monthly Subscription $135
Results
Acquisition cost $100,000
Yearly subscription revenue $4,050,000
Money to be given to yellowcab $3,600,000
Fee we take from yellowcab $180,000
Revenue $530,000
By doing this brief discovery-driven plan, Maria finds that this model might
be valuable: if 20% of the rides were not used (a metric that needs to be
studied) the revenue for the company would be very high.
This type of model would go a long way towards completely repositioning
the product, especially for the first target audience. With the design pro-
cess cards, we would see:
Key Users. Regular cab users.

Key User Problems and Needs. Calling a cab in an optimized way + keep-
ing travel expenses within the city limits under control.
Solutions and Features. A service that allows you to pay a monthly fee
giving access to a set number of cab rides.
UVP. Keep track of your movement.
Competitive Strategy. Differentiation. The service becomes like a

voucher booklet so that companies can effectively keep track of employee
expenses and it is an easy tax deduction.
Obviously, in this case, the project would take a completely different course,
shifting to a business service, and the marketing department would also
have to change its strategy.
Another possible model that Maria could explore is Add-on or Hidden

revenue:

Add-on Discounted Passengers Through an app Because I make

cab rides money from
selling other
related services
(e.g., water
bottles, etc.)
Hidden Discounted Passengers Through an app Because I sell

revenue cab rides advertising space
on cabs, or find
a secondary
market for
passenger data
Since we can’t lower the price of rides because otherwise the company
would go broke, how else can value be captured?
110 bad canvas
If a cab ride cost $5 but the user was asked to answer surveys of paying
companies during the ride, we would have a new scenario:
Key Users. Alternative methods users.
Key User Problems and Needs. They want to move in the city but won’t or
can’t spend too much money.
Solutions and Features. A low-cost cab service that asks customers to

answer industry surveys in exchange for lower fares.
UVP. Your opinion for a ride.
Competitive Strategy. Blue Ocean. Here you’ll gain a whole slice of the
market that would have never used a cab, but will now because it is cheap-
er than car sharing!
Final Conclusions
It’s uncertain if this process will lead toward a successful solution, nor
that Amelia, faced with Maria’s proposal, will agree and decide to accept
a radical change in the service she has designed. However, it is important
to understand the difference between a less conscious approach (Maria
deciding to improve the UX of the product) and a broader approach that
can show her how the design problem is deeper than it might have seemed.
CASE STUDY #2:
LAMP FREELANCE
John and Mark are two product designers who specialize in furniture.
They are often approached by companies that commission objects for
their catalogs, but they are also working on a new business venture:
they work on concepts and present them to specific companies and in the
hope that those companies will want to buy them.
In this new business, they encounter big problems: they spend time and
energy on designing sensible, harmonious objects in line with the cata-
logs of companies they contact, and even more time preparing eye-catch-
ing presentations that manage to convey the poetics of the product. Un-
fortunately, most of the time they come out of the meetings after hearing
a “Great job but…”, which leaves them extremely frustrated. The same
thing happened yesterday: they presented three floor lamps to a company
in Milan that showed no enthusiasm.
case study #2: lamp freelance 113
Let’s look at how we can use BAD to understand what is happening to

John and Mark and how they can change their approach.
John and Mark start from the design process cards, specifically the
Business Goal:
Business Goals & KPIs. To sell a lamp to a company.
They fill out the canvas:
Project Name. Floor lamp.
Key Users. 35-55, high-spending customers with elegant taste.
Key User Problems and Needs. Lighting a room with a beautiful object.
Solutions and Features. A bright and beautiful floor lamp.
Requirements. Bright and beautiful.
UVP. Cooler than other lamps.
Competitive Strategy. Differentiation. The lampshade is made of stone

that produces a beautiful effect.
John and Mark realize that there is something very weak in their
approach. They try to get in the shoes of the company that should buy
one of their lamps and they ask themselves: “Would we invest in this
product?” A shiver runs down their spine: it is a very expensive lamp
from a production point of view, so it will have to be sold at a high
price, and… it has no real UVP! “Cooler than other lamps” doesn’t mean
anything.
John and Mark begin to better understand what they’re facing: when
company’s managers see their presentations, they are afraid to invest
in a product that might be bought only for emotional reasons. If they
were well-known designers, everything would be easier: the UVP in
114 BAD CANVAS
that case would be “A lamp by John and Mark!” However, they are not
there yet, so they consider changing their strategy.
Meanwhile, they try to get a general idea of the market using the com-
petitor analysis cards. If a user is looking for a lamp, these are the
available options:

Name Values
Designer – They’re – Expensive – Beauty Make

lamps beautiful – Sometimes – Designer something less
– Built with impractical name expensive and
sophisticated more practical
materials
– They are often
made by famous
designers
Affordable – Accessible to – Often not – Price To make

lamps for everyone particularly – Convenience something
common use – They perform pleasing to the nice to look at
a simple and eye and unique
precise function – Made with
(e.g., a table lamp) cheap materials
– They’re not
very unique
Feature- – They solve a – Cold, not very – Utility To make

specific specific problem impressive something
lamps (ex. Reading impressive
lamp)
John and Mark understand that it’s easier to sell a lamp that has a specific
function than one that is bought only for its aesthetic or emotional ap-
peal (which is very subjective), and they see a good opportunity in noting
that many of the lamps that respond to a problem (e.g., reading without
annoying other people) are functional but cheesy.
In addition, analyzing the business model of the company to which they

proposed the other floor lamps, they realize that more and more sales
have shifted from the Showroom, where there was a chance to be lured in
by the beauty of the object, to E-commerce, where variables such as the
feel of the materials become completely irrelevant.
John and Mark review their project so they can develop a functional
“designer” lamp:
Project Name. Reading lamp.
Key Users. 25-55, avid readers, in a relationship, mindful of aesthetics.
Key User Problems and Needs. To read in bed without bothering their
companion.
Solution and Feature. A bedside lamp with dimmer switch.
Requirements. Elegant, functional, not too expensive.
UVP. A dream-like reading experience.
Competitive Strategy. Differentiation. The product is designed with the

same care as those who emotionally move customers, but in this case it
is also functional.
Business Goals & KPIs. Sell the lamp to a company.
When it comes to requirements, John and Mark decide to use inexpensive

workmanship and material, so that the investment for the initial produc-
tion does not scare the company away from an overly challenging project.
While designing they also take into account the fact that the company
they have in mind has shifted to an E-commerce model so they work on
two lamp proposals that can be packaged intelligently, saving both stor-
age space and shipping costs.
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To pinpoint the exact needs of frequent readers, John and Mark interview
some of their friends using the user analysis cards:
Frequent 25-65, highly They have one or – If their partner falls

readers educated more books on asleep before them, they
their bedside table. have to adjust the light
They always read turning it down
before sleeping at – If they fall asleep while
least 15-30 min reading, the lamp stays
on and they wake up
annoyed a few hours
later
Based on the problems identified, John and Mark decide to design lamps that:
• have dimmers so as not to annoy the other person in the bed;
• have a timer that turns off the lamp at a set time.
Presentation
When they present the new lamps to the company they had approached
in the past, they do so with a reasoned presentation: first, they explain the
market opportunity, then they identify the problem of wanting to read in
bed with an adjustable light as a fairly widespread need (frequent readers
are over 10% of the population, a not insignificant niche), and then they
reveal possible solutions to the problem as a product feature that was
taken into account in the design phase.
John and Mark explain the User Journey of Carla, an avid reader:

Carla is frustrated She finds several The price is She reads every She talks
because her options. Many are acceptable for night and is about it
boyfriend cheesy or require a high-end very happy. with all
complains about hanging on the product so she She links the her reader
the light coming wall, which Carla buys it! purchase to friends!
from her bedside doesn’t want a positive
lamp when she to do. She finds experience
reads in bed. She John and Mark’s
googles “reading lamp which looks
lamps” functional and
pretty!
They close the presentation by showing the three concepts they de-
signed and explaining that they are designed for optimized storage and
shipping costs.
The Result
The company managers are very impressed with John and Mark’s work.
They compliment them on their approach, which has convinced them.
They are not interested in the topic of bedside reading lamps at the mo-
ment, but they decide to commission an armchair reading lamp. The new
business paid off!
Final Considerations
John and Mark’s goal was to find new clients. They realized that devel-
oping a unique product solely taking into account the aesthetic and
using expensive materials is a risky investment for the company (and
therefore also for them as freelance designers). Designing function-
al items and keeping a business approach in mind, has a much better
chance of success.
This does not mean that John and Mark have to completely change their
values as designers by “selling out”. John and Mark decide to differentiate:
118 bad canvas
50% of their new business actions will be high-risk. They will propose ob-
jects born of pure gut feelings and lacking a true UVP. The remaining 50%
will be low-risk, strategically justifiable objects, and will guarantee new
collaborations with companies.
CASE STUDY #3:
CINEMA ENTREPRENEURS
Alice and Claudia are two young female entrepreneurs who have been run-
ning the Dot Film Fest, an international independent film festival that takes
place in a small town we will call Dotland (imaginary name), in Italy, for three
years. They realize that the current situation is not sustainable: the festival
does not make enough money from either ticket sales, private sponsors, or
even public subsidies (governments allocating public funds to support arts
initiatives is a very common practice in Europe). They know they have to do
something to keep the event running, but they feel paralyzed, afraid of mak-
ing the wrong decisions and being forced to close. They use BAD, beginning
from the design process, specifically looking at pain points.
User/Business Pain Points. The festival is not sustainable. It’s not at a

loss but just barely breaking even and they can’t pay their own salaries.
Alice and Claudia fill the rest of the canvas:

case study #3: cinema entrepreneurs 121
Project Name. Dot Film Fest.
Key Users. Indie filmmakers, movie industry professionals, cinema lovers.
Key User Problems and Needs. For filmmakers to show their films. For in-
dustry insiders to network. For film enthusiasts to have a diversified offer.
Solutions and Features. A festival, a meeting place where filmmakers can

get visibility and visitors can get exposed to a different kind of cinema.
Requirements. (They leave it empty)
UVP. (They leave it empty)
Competitive Strategy. (They leave it empty)
Business Goals & KPIs. To survive…
Alice and Claudia immediately realize that the situation is pretty bad.
They are unable to fill out half of the design process cards!
They patiently lay out the other cards and start working on the area they
think they know best, users:
Independent 20-40, Filmmakers who want – They want to make

filmmakers young and to work in film and start themselves known in the
ambitious, independently. They film world
they have a often have other jobs – They want to show
great film to support themselves their films to as many
culture and devote the rest of people as possible
their time to making – They want to find
films. They are very distribution for their
well versed in new films
technologies – They want to win
festivals to increase the
visibility of their films
122 BAD CANVAS
Insiders 20-60, they If they are already – They want to know

work or want working in the field, people they can work
to work in they are immersed in with
film and have the film world. If they
a background are not yet working,
in the field they are looking for
opportunities
Cinema lovers 20+, they are They pay attention to – They want to see
cultured and the film world, visit something new
well-educated independent film
websites and festivals
in search of non-
mainstream films
Dotland 18-65 They live in the town, – They want to

citizens some run businesses experience something
such as hotels, bars and new
restaurants – Those who run a
business want new
clients
Aside from the first three target audiences, Alice and Claudia identified a
fourth group in the citizens: those who find Dot Film Fest a different form
of entertainment and the business owners to which Dot Film Fest brings
new customers each year.
They move on to an analysis of other film festivals in Italy (competitors):


Name Values
Venice Film – Prestigious and – Pricey – Prestige Creating an

Festival well-known – Extremely – High level accessible
– All the big exclusive networking and inclusive
names go there – Inaccessible – Exclusivity festival
– Great networking for – Academy
networking at the newcomers Awards
highest level qualifying
– Academy – International
Awards qualifying
– Historical
Alice nella – Prestigious – Logistically – Prestige Be

città – Young fragmented – Various recognized
– Set in Rome, – Difficult networking worldwide
movie capital of network for levels
Italy newcomers
– Various – Poorly
networking levels recognized
internationally
Lago Film – Accessible and – Not very – Price To build an

Fest inexpensive prestigious – Inclusivity event with
– Inclusive – Unspectacular good and
– Ineffective efficient
networking networking+
– Little known spectacular
internationally look
Torino Film – Prestigious – Pricey – Prestige To create a

Festival – Internationally – Lack of – Great well-com-
recognized communication networking for municated
– Great about the event indie cinema festival
networking for – No wow effect – International
indie cinema – Logistically
fragmented
124 BAD CANVAS
From an initial analysis, which does not yet take into account international
festivals, Alice and Claudia understand that there are certain values that
hold sway, particularly the prestige of the festival and the effectiveness
of networking. This is a blow for them since they know that, in order to
become prestigious, a festival needs years and years of activity (and they
don’t have that kind of time!).
They also realize that their research was a bit unfocused: if competitors
usually meet the same needs as Dot Film Fest, what are those needs?
They try to be more specific regarding the two main targets:
• Filmmakers want visibility and exposure because they want to have

a career in the movie industry;
• Insiders want new job opportunities so they want to meet new people.
And that’s where the values they listed above come back: the more pres-
tigious a festival is, the more it promises visibility. The more effective the
networking, the more industry insiders attend.
There is a third noteworthy value: exclusivity. This generates a rift be-

tween perception and reality. Prestigious festivals give visibility to those
who can access it, and high-level networking gives job opportunities to
those who are already well-placed. This means that all exclusive festivals
are competitors only as far as already known filmmakers and insiders are
concerned, not for up and coming professionals.
Also, prestige is not the only value that can address the need for visibility.
Access to effective distribution can also be a solution. A real opportunity
is beginning to emerge: to create an inclusive festival that also targets
yet-unknown filmmaker and insiders and one that focuses primarily on
real distribution possibilities for the films in competition!
Alice and Claudia go back to the drawing board working on the design
process section:
Project Name. Dot Film Fest.
Key Users. Filmmakers, insiders, cinema lovers.
Key User Problems and Needs. For filmmakers to show their films;
for industry insiders to network; for film enthusiasts to have a diversi-
fied offer.
Solutions and Features. For filmmakers access to a distribution channel;

for industry insiders an inclusive and democratic networking event; for
film enthusiasts to have a diversified offer.
Requirements. Inclusivity + distribution.
UVP. Red carpet for those who work for it.
Competitive Strategy. Blue Ocean. A real opportunity is created for those

who otherwise would not have it, and the focus is on effectiveness and
inclusiveness instead of prestige.
Business Goals & KPIs. To survive…
Alice and Claudia can now approach the biggest pain point: lack of funds.
They analyze the business models adopted so far:

Submission The chance Indie By paying a fee Filmmakers pay

to be in filmmakers on FilmFreeway us to have the
competition (dedicated chance to be in
platform) the program
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Public funds Cultural General Through a cultural Because the city,

offering public event film commission,
and region all
give us grants
Private Brand Private Through on-site Because

sponsors visibility companies advertising during companies
the event pay us for
advertisement
Bar Drinks Visitors Through a bar in Because visitors

the lounge pay for their
drinks
They don’t need to make projections because they have data from pre-
vious years.
• The in-house bar is a model that is closely tied to audience turnout.

The Dot Film Fest has already had very good numbers, so they realize
that they will not see great revenue from this business model. It is an
extra but nothing more.
• Alice and Claudia know that they are at a standstill when it comes
to public and private funding: public funds increase over the years
(they would have to wait ten years to see substantial growth), private
money follow prestige (which needs time to be achieved).
• The only business model they have real leverage on, is the one that
involves charging a submission fee to filmmakers who send their
films. Last year they raised about $9,000 from 300 filmmakers (the
average entry fee is $30) from around the world that they contacted
by email through the FilmFreeway platform, and they are confident
that there is room for improvement.
How much is the margin though? More importantly, what do they need
to enhance this model?
Need List Costs Key Metrics Valuability Check
– One or more people – One or more – Number of

to contact filmmakers people to contact submissions
– People to see the filmmakers
films and give a – People to see the
preliminary rating films and give a
(Programmers) preliminary rating
(Programmers)
Alice and Claudia talk to their co-workers and learn that they can pay
people 10% on the entries they bring in and they can give the programmers
$5 per film viewed.

Average submission fee $30 Submissions 2,000
Commission 10%
Programmer fee $5
Result/month
Revenues $60,000
Costs $16,000
This is a great perspective! Especially since, by paying according to the

number of submitted films, the system is completely scalable. Nothing
stops them from having more people contacting filmmakers and thus
increasing earnings:
128 BAD CANVAS

Average submission fee $30 Submissions 4,000
Commission 10%
Programmer fee $5
Result/month
Revenues $120,000
Costs $32,000
However, it’s not that easy to convince 4,000 filmmakers to submit their
film unless the festival offers them something they really care about.
Alice and Claudia go back to the competitor analysis focusing primarily
on filmmakers’ needs to have visibility and exposure. Since they cannot
offer prestige, the only possible alternative, as they had already assumed,
is to give access to distribution opportunities.
Please note: giving distribution to filmmakers is not an assumption at

this point but a necessary condition. In Design Thinking, any product/
service must address a need effectively in order to be useful, and in
this case, if we cannot offer prestige, we must give a viable alternative.
Alice and Claudia could partner with Netflix, Amazon, or HBO, and offer
the winning films a chance to get in these companies’ catalogs.
The UVP will become “The festival that takes you straight to the most
popular streaming platforms.”
If Alice and Claudia can strike a deal with these players, one of their
business models could become extremely fruitful. What other aspects can
they focus on?
Let’s go back to the design process cards, focusing on insiders, the
secondary target audience and their need to make new connections that
could lead to new job opportunities. They decide to broaden their user
analysis by dividing the target audience into two parts: up and comers
and established professionals.
Up and Coming 20-35, they are They look for – They want to find job
filmmakers knowledgeable networking events, opportunities to start
in film studies join Facebook groups their career in cinema
and want to start on the topic, and – They want to meet
working actively seek job and talk to established
proposals professionals
Established 30-65, they work They are part of – They want to find new
professionals in film and TV the industry and job opportunities
are looking for new – They want
career opportunities opportunities to
strengthen relationships
with their contacts
– They want a up and
coming filmmakers-free
space
Alice and Claudia see an obvious problem: up and coming filmmakers

want to talk to established professionals who, on the contrary, desire
exclusive networking venues where they can be with other introduced
insiders. This is also a challenging block because to create a top-notch
networking event you have to have a prestigious festival (back to square
one) while organizing a up and coming filmmakers-only event is not
helpful to up and coming filmmakers at all.
Alice and Claudia know that they need to find a Key Problem (perhaps
not obviously visible) of their users that they can satisfy through a non-
exclusive event.
They make some assumptions:

• Both up and coming filmmakers and established professionals
want to attend courses on cross-cutting topics (business in film,
communication techniques and strategy applied to film, etc.)
• Established insiders want to find promising young people to mentor.
130 BAD CANVAS
These are just guesses, so Alice and Claudia call some of their friends who
fall into the target groups and interview them discovering that:
• Everyone would love to attend an event where experts in business,
branding, strategy explain how to make more money from the movie
business. There is nothing like that in Italy!
• Half of the established professionals interviewed confirm interest in
meeting promising young people.
Alice and Claudia rejoice: they found hidden needs and can work to find
solutions. Creating an education and networking event is a complemen-
tary project to the festival, so it should be placed in a new row under the
design process cards:
KEY USER
PROJECT KEY PROBLEMS/
NAME USERS NEEDS
What’s the name of the project Who are the target users Write down at least three of
you are working on? for this project? the users’ problems/needs
* Use one line of post-its for each project USER ANALYSIS USER ANALYSIS
Dot Filmmakers Find

1st project Film Fest distribution
Dot Insiders Find

2nd project Biz Fest work
We can manage multiple projects at

once and evaluate where and how
they interact at the user, competitor,
and business levels
Project Name Dot Film Fest Dot Biz Fest
Key User Filmmaker Insiders
Key User Problems and Find distribution – Train in business

Needs – Find new quality work
opportunities
Solutions and Features To create a distribution – Expert business lectures

ecosystem with big – Quality networking events
players
Requirements Distribution Educational and inclusive
UVP Get your film on Netflix! Cinema renaissance
Competitive Strategy Blue Ocean/ Blue Ocean/

Differentiation Differentiation
Business Goal & KPI $100,000 in revenue 500 professionals involved
The picture is clearer now! Alice and Claudia know what to do to save
their festival: focus on creating partnerships with non-traditional distrib-
utors and a cross-skill cultural event.
The very last piece concerns the target groups they left out (film lovers
+ Dotlandia citizens). Over the past 3 years, Alice and Claudia know they
have built an elegant, spectacular, and entertaining festival, so they are
confident they can amply meet their needs.
Next Step: One Year Later

Alice and Claudia were able to implement the choices discussed above.
The festival is making money and growing. Filmmakers are happy to
submit and participate in the competition because Dot Film Fest already
has a track record of 6 films that found distribution (buyers for their films).
Industry insiders attend Dot Biz Fest and talk about it enthusiastically
132 BAD CANVAS
with other industry professionals. Film enthusiasts and Dotlandia

residents are looking forward to next year’s edition of the festival. As a
consequence to the large turnout of insiders, prestige has also increased
and it has been relatively easy to find private sponsors. In short, there is
money to invest, and Alice and Claudia are wondering what to do next!
They’ve already put up their BAD Canvas on the wall and started filling it.
They place the iterations cards and look at the possibilities:

Hypothesis
Worst Case If there was a 2/5 – To create – We need

Scenario pandemic and It’s costly (5) an online an online
offline events we’re not sure platform platform
were impossible, about the – Upload films manager
we could move benefits (2) – Advertise
everything to the platform
online with
a streaming
platform
(DotStream?)
Product Nothing comes to

Innovation mind
Process They could avoid 3/5 – Create a The person

Innovation using FilmFreeway There’s an proprietary in charge
for submissions advertisement registration of festival
so as to save the cost because and payment submissions
service fee we need to system on can take care
convince film- the festival of that
makers to sign website
up on Dot Film – Clearly
Fest’s website communicate
(5) the financial the new
benefit will be registration
good (3) method

Hypothesis
Business Model One could invest 3/5 – Contact the Alice or

Enhancement in bringing an It would star’s agent Claudia
international star, increase profit need to take
who would attract via ticket sales care of that
thousands of and bar orders personally
visitors (benefits =
3) it requires
a big initial
investment
(costs = 5)
Business Model – Moving to a Like in the

Innovation subscription model worst case
on DotStream, an scenario: 2/5
online platform
(as per worst case
scenario)
– Create a 5/5 – Create a A manager

production Costs will be new company solely in
company: Dot high (5) but – Find scripts charge of the
Production also benefits – Create production
(5) because we teams company
already have – Find
contacts with investors
distributions,
industry pro-
fessionals, etc.
In summary, apart from simply excluding FilmFreeway (totally doable),

Alice and Claudia see three possibilities:
• invite a super star to increase the number of visitors and the newswor-
thiness of the festival;
• create DotStream, an online platform that can introduce a new sub-
scription business model;
• create Dot Production to start producing and distributing films.
134 BAD CANVAS
They add these concepts to the business areas:

Super star The chance to General Via having the star Because visitors
meet a star public in Dotlandia consume at the
bar + journalists
talk about the
event
DotStream Year-round Cinema Via proprietary Because users

access to lovers streaming pay a monthly
indie films platform or annual
subscription
Dot Film Cinema Via distribution Because I take

Production lovers public funds to
make films
Using the advanced cards they know that:
Need List Costs Key Metrics Valuability

Check
– Contact the agent – Super star fee – Number of

– Paying the super star – Travel visitors
– Arrange the super – Hotel – Numbers of
star’s travel and stay newspaper related
articles
– Platform creation – Programmers – Number of users

– Uploading films for creating the – Acquisition cost?
– Platform platform
communication – Time to upload
– Adv for platform? the films
Need List Costs Key Metrics Valuability

Check
– Creation of the – Time to do all of – Amount granted

production company that by public subsidies
– Building a team
– Scripts research
– Public funds research
– Creation of the film’s
Business plan
– Public funds request
Alice and Claudia quickly try to assess the potential of each business model:
Superstar
They start for the Superstar option, assuming that it will cost them $20,000
divided in fee, travel and stay. They hypothesize that 5,000 visitors will come
to the festival attracted by the star and that one in two spends at least $5 at
the bar. In addition they budget at least 10 articles in national newspapers.

Superstar cost $20,000 Number of visitors 5,000
Visitors who also spend at 50%
the bar
Average cart at the bar $5
Result/month
Revenue $12,500
Costs $20,000
Final profit $-7,500
Even if the bar were to serve 2,500 people (half of the 5,000), the costs
wouldn’t be met. They would have newspaper articles that would end up
having cost $7,500.
This is not a real business model because it doesn’t catch value. They can
look at it as a brand awareness strategy that compensates with bar revenue.
136 BAD CANVAS
DotStream
Here there is more work to be done. They ask a team of programmer
friends how much it might cost to build a Netflix-like platform ($5,000),
then set a monthly price ($4.99, super competitive) for the subscription.
At a strategic level they know they don’t have to work too hard to search
for indie films because they already contact over 20,000 filmmakers each
year for the festival. When it comes to acquisition they can avoid using
paid advertising at the beginning, planning to offer filmmakers and their
friends a free month and estimating a 5% retention rate.
Fixed data
Monthly price $4.99
Platform cost $5,000
Variable data
Filmmaker contacted / 20,000
year
Retention rate 5%
Results First year Second year Third year

Number of users 0 1,000 2,000
Revenue $0 $54,890 $114,770
Costs $ 5,000 $ 1,000 $1,000
Total $-5,000 $48,890 $162,660
Wow! Of course, one has to be sure that 20,000 filmmakers are contacted
and invited each year and that really 5% of users stay on the platform.
To this model they will add paid advertisement and hire someone to do
full-time management as a cost. The important thing is that Alice and
Claudia know that it is an extremely promising scenario!
Dot Production
Alice and Claudia envision making full use of their contacts in the industry
to find the right scripts and teams to create a film, and to access public
funds to make them. Their goal may be to put up one film a year and, for
the first 3 years, to get $600,000 in public funding. They estimate that
they will be able to use two-thirds to pay for outside workers and living
costs, and allocate one-third for their income.
Fixed data
Public funds $300,000
Dot Production gain 33%
Result / year
Revenue $99,000
Costs ?
Final income ?
Something is not adding up. Alice and Claudia must provide salaries for
those who will work full-time at Dot Production (2 people at $30,000
gross/year at least, average income in Italy), and already the whole op-
eration does not look promising. If they want to make it profitable, they
definitely need to find another business model to integrate. Since they
already have partnerships with alternative distributions, how much could
they earn from direct sales of the films they will produce?
138 bad canvas
Final Conclusion
Alice and Claudia cannot predict the future, however, they can now make
informed choices. They now know that:
• investing in a world-class star is only a brand awareness strategy,
not an action to increase revenue;
• creating an online streaming platform, no matter how complex, can
bring tremendous and tangible results;
• setting up a distribution with a classical business model may not
be the most effective path. They need to think about that one a
little more!
ALL THAT BUSINESS
IS NOT GOLD
Until now, you may have felt that we are advising you to always look at
profit, as if the ultimate goal of any project is only to monetize.
That is not so. A project can be very valid and worthwhile even if it fails
from a financial point of view. It can be very successful, even if every part
of your study, from users, to competitors, to the discovery-driven plan,
made you think otherwise. We will never tire of saying this: it is not about
business; it’s about business awareness. BAD’s goal is to make you as aware
as possible of the path you have decided to take. There is nothing wrong
with deciding to invest in a project based on a hunch and not on data, or on
pure passion for an idea. The important thing is to know the risks.
Let’s look at the ultimate failed project: writing a literary novel. We all
know that writing a literary novel requires a huge amount of energy and
time, and not only is there no guarantee of publication, but the scenario
of seeing a financial return is very unrealistic. How so?
all that business is not gold 141
Let’s look at it with the design process cards:
Project Name. Literary novel.
Key Users. Potentially all readers.
Key User Problems and Needs. Being entertained?
Solutions and Features. A novel to read.
Requirements. At least 200 page.
UVP. No idea… I wrote it? Is it “nice”?
Competitive Strategy. Zero clue…
Business Goals & KPIs. To be published.
It’s immediately clear why the novel we want to write is a failure. It has
no specific target audience, the problem it sets out to solve (entertain) is
much more efficiently solved by a TV series, the UVP is irrelevant because
we are not celebrities. Let’s face it—it’s a leap into the unknown, a total
risk. Would you guys spend $2,000 to print it and sell it door to door?
A beginner writer is right to want to be published by a real publishing
house because, when you are unknown to the public, the only value a
novel can acquire is to be selected by a quality brand. So:
Project Name. Literary novel.
Key Users. Potentially all readers.
Key User Problems and Needs. Being entertained?
Solutions and Features. A novel to read.

142 BAD CANVAS
Requirements. At least 200 pages.
UVP. Published by Penguin.
Competitive Strategy. Differentiation. It is a good novel since Penguin is

known to publish good books.
Business Goals & KPIs. To sell at least 5,000 copies.
Since no novel can really address the needs and problems of key
users, publishing houses also play on UVP enhancement by adding
bands that say things like “Winner of the Pulitzer Prize”, “So and so
loved this book.”
Let’s take a step back. Since the only value our novel might have is to
be chosen by a major publishing house (and even then, it may not sell!)
our chances at success are very limited. How can we increase them?
What if we write a genre novel (e.g., a thriller)?
Project Name. Thriller novel.
Key Users. Readers who love thrillers.
Key User Problems and Needs. To be entertained by a thriller.
Solutions and Features. A thriller.
UVP. The book that will keep you on the edge of your seat—8 hours of
reading!
Competitive Strategy. TBD.
Business Goals & KPIs. To get published.

all that business is not gold 143
We could be cheeky, figure out what the current trends are and choose to
write a thriller novel on a certain topic, so that we also have a Competitive
Strategy.
Seeing the pattern before, we quickly realize that a thriller has a better
chance of working than a literary novel, both in the marketplace and
when being evaluated by a publishing house. What about non-fiction?
Project Name. UX design manual.
Key Users. People interested in UX design.
Key User Problems and Needs. I want to learn about UX.
Solutions and Features. An easy and efficient manual.
Requirements. Clear and captivating.
UVP. Written by a major expert in UX design (assuming we are).
Competitive Strategy. TBD.
Business Goals & KPIs. To be published.
You can see that this is even easier, especially if we were writing a manual
with a specific positioning compared to other available manuals.
We’ve figured it out by now. Since we are great at writing, why don’t we
talk to an influencer with 500k followers—perhaps a mom followed by
other moms (we’ll call her SuperMom)—and convince her to hire us as
ghost writers to write a book perfect for her target audience?
Project Name. A manual on how to be super moms.
Key Users. Moms who follow SuperMom.

144 bad canvas
Key User Problems and Needs. Be better moms.
Solutions and Features. A book written by someone they trust.
UVP. A book by SuperMom for super moms.
Competitive Strategy. Differentiation. It only sells to this niche.
Business Goals & KPIs. To get published.
Anyone would publish this book. You would too if you had a publishing
house, right? With a pool of 500k followers, we are sure that 10,000 copies
of the book will sell in the first week. Maybe even 30 or 40,000. But why
publish with a publishing house?
30,000 copies at $20 each makes $600,000 where 10% author royalties
equals $60,000. I know it feels cool to tell everyone you were published by
Penguin, however if we convince the influencer to self-publish, maybe she
sells the same number of copies keeping 100% of the profit, so $600,000
(from which we have to subtract printing and Amazon costs, which will be
more or less 50%. We’re still talking about $300,000: five times compared
to the other scenario).
Moral of the story. We wanted to write our big novel. Instead, we ended
up considering ghostwriting for a supermom influencer and convincing
her to self-publish to monetize more. Sickening, isn’t it? That’s called
awareness. You can decide to follow your dreams, even if it’s a bad busi-
ness move, but at least you’re aware of what you’re up against. Or you can
choose to reassess your dream because you want to make a revenue out
of it. You are the compass.
BAD WORKSHOP
You can use BAD to hold workshops for your company or your team, and
if you’re a teacher you can use it as an educational tool.
Workshops in the Company

To effectively conduct an in-house session, we recommend that you
always start with preparing the canvas:
1. Ask your team to fill in what they can of the design process
cards (10 min).
2. Have them identify the points of the design process that are
unclear (10 min).
3. Have them fill in and comment on the three main areas—users,
competitors, and business—with special attention to what was
not clear at the beginning (1-2 hours).
If the goal of the workshop is to identify possible new directions, you can
proceed with an exploratory session:
1. Set up the iterations cards and ask the team to come up with a
hypothesis for each cue (30 min).
bad workshop 147
2. Have them hypothesize costs and benefits of each change hypoth-

esis (30 min).
3. Ask for an evaluation with Discovery-Driven Planning of each of
the hypotheses (1-2 hrs).
4. Integrate the canvas with the most promising hypotheses (15 min).
5. Ask the team to define what it takes to implement the most prom-
ising hypotheses and the chain of management (30 min).
6. Work together on an operational takeaway (30 min).
[Alternative: Validation Workshop]

If the team already has some ideas for strategic directions, you can fill
in the first column of the iterations cards with the hypotheses already
being discussed and then resume from step 2.
In Class Workshop
You can use BAD to create fun and challenging teaching units for stu-
dents in design, marketing, business management.
Analysis of an Existing Project:

1. Choose an existing product (e.g., an ergonomic chair like the Varier,
a pair of earbuds like Status Audio’s, an innovative hair dryer like
Dyson’s).
2. Ask the class to fill in what they can of the design process cards
(10 min).
3. Have the students focus on users and their needs with user analysis
cards, then ask them to create profiles of at least 3 ideal users (1 hour).
4. Have them focus on competitors with competitor analysis cards.
Ask them to identify at least 3 competitors and figure out what the
competition values are (1 hour).
5. Ask what they think the product’s competition strategy and its
UVP are (15 min).
6. Check the communication on the product’s website. Does it match
the one you identified together? (15 min).
7. Briefly analyze the business models (30 min).
148 BAD CANVAS
Creating a New Product Starting from Users:

1. Ask the class to identify a problem common to a group of people
(15 min). Alternatively, you can suggest it.
2. Ask them to start from the user analysis cards to identify target
groups and delve into their needs and problems (30 min).
3. Have them hypothesize a solution for the problem and mark it on
the design process cards line (15 min).
4. Ask to identify at least 3 competitors and quickly analyze them
with competitor analysis cards (30 min).
5. How can you position yourself in the market? Come up with a UVP
and competitor strategy together (30 min).
6. How can you capture value from this product? By selling it to a
company? By crowdfunding? Have people hypothesize business
models with business model analysis papers (30 min).
7. Bonus: Guide them in evaluating models and have them choose
what they deem worthy to pursue (1 hour).
8. How do product requirements change depending on the model
chosen? (15 min).
Creating a New Product Starting from the Competitors:

1. Give the class a target market (e.g., earphones, cell phones, pasta,
etc.) and ask them to analyze at least 5 competitors (1 hour).
2. Are there opportunities for a new product? Which ones? (30 min).
3. What is the Competitive Strategy of this product? What about its
UVP? (30 min).
4. What problems does it solve and to what type of users? (15 min)
5. Have the rest of the canvas filled with the new product created to be
positioned in the marketplace.
Creating a New Product Starting from the Business Model:

1. Give the class a business model to start from. For example, the sub-
scription model, or crowdfunding, or selling online without interme-
diaries. Ask them to look for examples of projects that use this model
(or suggest them yourself). Discuss together how it works (30 min).
2. What are the requirements for this model to work? (15 min).
bad workshop 149
3. What product can they build to make that model work? Ask them
where they would like to start on the canvas (30 min). In this case it
is valid to either start with users or competitors.
4. Have them fill in the rest of the canvas, trying to go as deep into each
part as possible (1 hour).
AUTHORS
Matteo di Pascale and Andrea Binasco are Sefirot Independent Publish-
er’s founders and directors. They are responsible for the creativity tools:
intùiti, Fabula, Fabula for Kids and Cicero, which have sold more than
100,000 copies worldwide.
BAD was developed in collaboration with Studiolabo as a creative partner

and was responsible for the graphic design of the product.
GLOSSARY
Design, planning and business lingo is full of technical and foreign terms.
In BAD we have chosen to use the language that is as similar as possible
to what you might hear in a design studio, or in an advertising agency.
We did not take into account the origin of the words, or the accuracy
of the expressions, in favor of the actual use of the words in work en-
vironments.
In this glossary you will find the meaning of expressions that recur
throughout the book and that have not yet settled into common usage,
or that may not be clear to some readers. The definition covers only
the usage in a design context and leaves out any different meanings in
other languages.
Acquisition. It occurs when a user makes a purchase, provides data, or

interacts with the product or service after being reached by an ad or con-
tacted by the service provider.
Advocacy. The act by a user of talking, usually in a positive way, about a

product or service they have tried.
glossary 153
App. Computer application, especially referring to programs used on mo-

bile devices. The term derives from the word ‘application’.
Backer. In crowdfunding language, a backer is a person who purchases a

good or service in advance, or makes a donation so that a good or service
can be produced. From the English word meaning ‘supporter’.
Blue Ocean. Is a strategy that provides the simultaneous pursuit of

differentiation and low cost to open up a new market space and create
new demand achieved by acting on nontraditional competition values.
It is about creating and capturing uncontested market space, thereby
making the competition irrelevant. It is based on the view that market
boundaries and industry structure are not a given and can be recon-
structed by the actions and beliefs of industry players.
Brand. The set of elements that identify a business, person, or public en-
tity. The brand consists of tangible elements, such as logo, name, and ad-
vertisement, but also intangible elements such as the reputation, values,
and history of the product/business. As a whole, a brand is made of the
consumers’ perceptions of a company, product or service.
Brand Awareness. Degree of knowledge consumers have about a brand

and what is the target audience’s perceived image of the brand.
Branding. A companys’ set of activities and strategies aimed at creating

and communicating with customers, leading to the company being asso-
ciated with certain values and creating a set perceived image.
Break Even. The moment when a company’s costs and revenues are equal.
Brief. Set of directions for the realization of a product, content or

work. Originally, the brief was a summary document in which the ob-
jectives of an advertising campaign and all useful information for its
realization were stated. It later took on a broader meaning of ‘opera-
tional directions’.
154 BAD CANVAS
Broad Market. The wide-ranging market, involving a very large number

of people, such as groceries, video and music streaming services, etc.
Business Goal. Goal that a company sets for itself; it can be short-, medi-
um-, or long-term and can relate to both turnover and processes, brand
awareness, and generally all elements of the company itself.
Business Model. The strategy a company adopts to generate value.

It usually involves giving something, to someone, through a channel and
receiving something in return. For a list of some business models, see
page 48 of this manual.
Claim. In advertising it refers to the characteristics of a product describ-

ing to the target audience its superiority over others and convenience.
Comparable. Companies, products, or services that, while not meeting exact-

ly the same needs, they act in the same market or with comparable strategies.
Competitive Strategy. The strategy that is adopted to compete in the

market. The two main ones are differentiating the product or service or
reducing the cost for the user. It is also possible to find new elements of
competition and create a Blue Ocean.
Competitor. People or companies that offer the same product or service,

or meet the same needs or solve the same problems, and for this reason
compete. A distinction is made between direct competitors, which offer
completely overlapping products and services, and indirect competitors,
which offer solutions to the same problem in different ways. For example,
a direct competitor of Netflix is Disney+, since it offers the same service.
An indirect competitor might be movie theaters, or a literary publishing
company, because they address the same need for entertainment.
Concept. When it comes to design it is the idea of a product or service

with its characteristics, and also the written or graphic document that
illustrates it.
glossary 155
Customer Care. It is the set of all interactions that a company has with
the customer before, during and after the purchase or use of the service,
to provide information, support, problem solving, etc.
Genius Design. Design approach that enhances the creativity, vision and
intuition of designers, who design based on their own inspiration, without
necessarily starting from a user requirement or user testing and feedback.
Design Thinking. The approach to design that aims to solve one or more
problems and is iterative and nonlinear. The expression is widely used
and has come to be applied to many approaches and methods that are
also somewhat different. It usually indicates design steps, for example:
the moment in which we empathize with the user to find a problem,
a problem definition phase, a solution ideation phase, a solution proto-
typing phase, and a testing phase. This process is repeated until the ideal
solution is found.
Discovery-Driven Planning. Design technique that involves not defining

everything in detail but implementing planned actions while remaining
open to necessary changes that are discovered in the process. It also indi-
cates the practice of creating a business plan very quickly to see if it works.
Feedback. Response, answer. Usually designers analyze those provided

by a user following a test aimed at finding possible issues and improving
the product.
Feature. It can be a design feature (a glow-in-the-dark watch, a light-

weight vacuum cleaner), or a usage feature (an easy-to-use application),
and is usually defined at the design stage.
Fee. Amount of money paid in exchange for a product or service, usually

calculated as a percentage of the revenue.
Framework. Set of structured and coordinated elements that support a

process or method.
156 BAD CANVAS
Freelance. Professional who is not bound by any exclusive contract

with clients. From the expression ‘free lance’ that historically indicated
mercenaries.
Key Metric. Data essential for finding out whether the business is
working.
Key User. A user that the service/product primarily targets. For this rea-
son, key users are usually involved in testing.
KPI. Set of data used to understand whether a business is sustainable and

profitable. KPIs are mainly used in strategy evaluation; for the evaluation
to be accurate, it is important that the KPIs are well defined and measur-
able. From the expression Key Performance Indicators.
Landing page. Web page built for a very specific goal, to which the user is
directed usually after clicking on an advertising link.
Lead. Contact (email, phone number, etc.) of a potential client. From the
expression meaning ‘guide’ or ‘leash’.
Lean Process. Approach to design that seeks simplification and optimi-

zation of every aspect of the process also reducing waste of resources and
time and aiming for constant improvement.
Low-cost. It is said of a product or service offered at a lower price com-

pared to the rest of the market.
It is usually attained by sacrificing a non-essential part of the product or
service. The most frequent use, refers to airlines which were also among
the first to use this strategy.
Napkin Business Plan. A business plan drafted quickly, without going

into detail but identifying only the essential elements and making calcu-
lations based on assumptions.
glossary 157
Narrow Market. A niche market involving a small number of specific us-

ers, for example the sport equipment market or the reading lamps for
assiduous readers market.
Pain Point. Critical point or defect in the product or service found by us-
ers or stakeholders, either during testing or regarding an existing prod-
uct or service.
Positioning. How a company, product or service stands out in the market.

Positioning also includes how the company, product or service is commu-
nicated, and also how it is perceived by customers. Positioning can thus
relate, for example, to target audiences (The vacuum cleaner for singles),
communication (Jeans since 1829), a product feature (Paraben-free sham-
poo), price range (Luxury chocolate).
Referral. Recommendation of a product or service by a user who already

knows and uses said product/service for a user who does not yet know it.
Requirement. The set of characteristics that a product or service must

have because required by users, the market, the customer, or the chosen
business model.
Retention Rate. Percentage of users who, after using a product or service

for the first time, continue to use it.
Reward. In the language of crowdfunding, the good or service that a

backer (supporter) is promised in exchange for their support.
Scalability. Ownership of a product or service that can be modified as

needed, for example by increasing the number of users without the need
for major changes.
SMART Goal. A business goal that has the following characteristics: spe-
cific, i.e., well-defined; measurable; actionable, i.e., can be put into practice;
realistic, i.e., can be reasonably achieved; with a deadline or time reference.
158 BAD CANVAS
The expression is composed of the acronym SMART (Specific, Measurable,

Actionable, Realistic, Time based) and the word goal meaning ‘objective.’
Smart in English is an adjective meaning ‘cunning, intelligent’.
Sustainability. Referring to a business it is the ability to generate sufficient

value to meet all operating costs, taking into account the ratio between
employed resources and generated resources.
Stakeholder. Any individual, group, or company involved in an economic

initiative, and who holds an interest in or is affected by that initiative.
Stakeholders include, for example, customers, suppliers, investors, em-
ployees, contractors, and also external parties such as the inhabitants of
an area adjoining a company, etc.
Startup. Emerging or newly formed enterprise that is characterized by

the scalability of employed resources and costs. Startups are usually cre-
ated to launch or validate a new activity or business model. From the En-
glish expression meaning ‘to begin’.
Target. The audience for which a product or service is intended. A dis-

tinction is often made between primary target (the audience for whom
the product or service was intended) and secondary target (the groups for
whom it was not primarily intended but who might still adopt it).
Usability. Characteristic of a product or service that helps generate an

effective, efficient, safe, and enjoyable experience for the user. Usability is
a key condition for products because products that are difficult or tiring
to use fail more easily.
User Experience Design. Design method that primarily aims to improve the
user’s experience in using the product or service, making it pleasant and easy.
User Journey. All the stages users go through in using a product or ser-
vice, starting from the moment they learn about it, to using/experiencing
it to recommending it or giving it up.
glossary 159
User-Centered Design. Also known as UCD, it puts the user at the cen-
ter of design. This method revolves around involving the user in the
design from the early stages, taking into account the user’s requests,
incorporating the user’s feedback into the design process, and iterating
the design based on this feedback.
User. Individual who uses a product or service. In design, the user is

the final recipient of the good or service being designed, innovated,
or advertised.
UVP. A project’s Unique Value Proposition. This statement identifies the

unique value of the product or service distinguishing it from the compe-
tition and enunciating what the benefits are for the customers and how
it solves the users’ problem. The UVP can be summarized in a simple and
direct sentence.
Value. In a business context, value is understood as both the cost of an

asset (its price) and its ability to satisfy a need. The expression ‘capturing
value’ therefore can be understood as both the ability to generate profit
and the ability to generate resources or processes useful to the business.
This is the reason why some business models, such as lead generation,
capture value while not involving money transactions, but facilitating
future transactions. The value generated can also be non-economic, for
example social or artistic.
Worst Case Scenario. In a business context, this refers to the worst-case

event or set of circumstances for a company’s performance. Imagining
what the worst possible scenario for a business might be, allows one to
understand what difficulties one might face in the future.
BIBLIOGRAPHY
W. Chan Kim, Renée Mauborgne, Blue Ocean Strategy: How to Create
Uncontested Market Space and Make the Competition Irrelevant, Expanded
edition, Boston : Harvard Business Review Press, 2015.
Matteo di Pascale, Manuale di sopravvivenza per UX designer, Milano :

Hoepli, 2023.
Oliver Gassmann, Karolin Frankenberger, Michaela Csik, The Business

Model Navigator: 55 Models That Will Revolutionise Your Business,
Harlow : Pearson, 2014.
Rita Gunther McGrath, Ian C. Macmillan, Discovery-Driven Growth:

A Breakthrough Process to Reduce Risk and Seize Opportunity, Boston :
Harvard Business Review Press, 2014.
A. G. Lafley, Roger L. Martin, Playing to Win: How Strategy Really Works,

Boston : Harvard Business Review Press, 2013.
bibliography 161
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Handbook for Visionaries Game Changers and Challengers, Hoboken NJ :
Wiley, 2013.
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and Competitors, 2nd edition, Riverside : Free Press; 2008.
Richard P. Rumelt, Good Strategy Bad Strategy: The Difference and Why It
Matters, London : Profile Books, 2017.
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BAD

How is BAD structured? . . . . . . . . . . . . . . . 13

The design process . . . . . . . . . . . . . . . 18

Business model analysis . . . . . . . . . . . . . . 44

A small business model catalog . . . . . . . . . . . . 48

Advanced tools: the user journey . . . . . . . . . . . . 60

Very advanced tools: enhancement by iteration . . . . . . . 80

Recapitulation and way of use . . . . . . . . . . . . . 92

BAD’s ideal users: 3 case studies . . . . . . . . . . . . 94

Case study #1: the cab app designer . . . . . . . . . . 96

Case study #2: lamp freelance . . . . . . . . . . . . 112

Case study #3: cinema entrepreneurs . . . . . . . . . . 120

All that business is not gold . . . . . . . . . . . . . 140

BAD workshop . . . . . . . . . . . . . . . . . 146

• If a chair doesn’t sell, we stop making it.

All the aspects mentioned above contribute to the value incapacity

BAD helps to gain an overview that considers:

BAD is a deck of 41 cards, divided into 4 main groups—design process,

Business model analysis

Design process Enhancement

Basic, Advanced and Very Advanced Usage

competitor analysis is necessary to get an idea of the market in which

Warning: design process, user analysis, competitor analysis, and busi-

s for each project

BUSINESS MODEL ANALYSIS AN

You fill in the

02 USER ANALYSIS * Use on

Project Problems Solutions

post-it post-it post-it post-it post-it

The design process indicates how you approach a project: a synthesis

working on two complementary projects, like a fitness app and a related

Key User Problems and Needs. To be useful, a product needs to solve a

>> Connections: if we can’t accurately answer the questions in the user-re-

Solutions and Features. What solutions will we design to address the

Requirements. What are the basic requirements for the realization

Competitive Strategy. What strategy do we want to employ to compete

In-depth Analysis: SMART Goal and KPI

Vague goals lead towards misunderstandings and useless efforts.

• “To increase brand awareness” is not SMART because it is

Instructions to Fill Out the Canvas

If you don’t know how to fill

Project Name: Fabula Deck.

Key Users. Fiction, non-fiction writers and screenwriters.

Key User Problems and Needs.

Solutions and Features.

Requirements. It must be a portable, small product.

UVP. Writing has never been easier!

Competitive Strategy. Differentiation. Instead of buying a manual that

Users/Business Pain Points.

After getting a general idea of the product’s con-

do not need a support tool. We will have to take

Fabula Deck Writers and

08 DESIGN PROCESS 09 DESIGN PROCESS

BUSINESS MODEL ANALYSIS

Selling 10,000 Will stories

User Type User Demo- User Problems

1st user post-it post-it post-it post-it

2nd user post-it post-it post-it post-it

user analysis allows you to gather the minimum information necessary

>> Going back to design process

User Type Demographics Habits Problems and Needs

Professional 25-65, medium- They spent most of – They want to be

Professional 25-65, medium-high They spend most of – They want to be