Stakeholders

We’re using a few individuals to form a lens on problems, needs, and solutions that belong under the heading of health literacy.

Right now Humaginarium is listing, vetting, and scheduling stakeholder interviews in the ramp-up to our I-Corps Summer Cohort. At least 100 interviews that we’ll conduct and analyze from mid July until late August. Who are the people we’re going to meet, and why do they deserve all that bandwidth?

First the why. Stakeholders are a clue train. Some are interested in the causes and consequences of health illiteracy, and want to see it reduced. Some are interested in the social impact of digital art, and want to make it pervasive. Some are interested in emergent learning technology, and want to make it engaging and far-reaching. Thus our stakeholders cut across big industries: life science, health care, entertainment, education. Each is a sparkling light on a dark horizon, guiding us to safe harbor for our market.

Now the who. We’re listing scientists, clinicians and other health care workers, health organizations, participants in the health care supply chain, patient advocates and patients themselves (like the young woman who inspires this startup). We’re listing consumers of video games, software engineers and tool vendors, digital artists, storytellers, media producers, cloud vendors, and professional associations in the entertainment industry. Plus we’re listing a variety of marketers, educators, and regular folks who consume online information. Together these stakeholders make up a vast popular culture that surrounds, involves, and strongly influences our customers.

This who is a big chunk of the adult population. In one sense that’s encouraging, because it suggests we have a lot of stakeholders and a huge market opportunity. In another it’s discouraging and distracting because our who is way too large. It makes us look like Atlas holding up the world: an image that’s impossible to fathom commercially.

To escape this conundrum, we’re following the example of favorite artists by putting on blinders. After all, Rembrandt didn’t paint every burgher in the Netherlands to get at his truth; he painted just a few. Shakespeare didn’t tell the story of every British monarch to get at his truth; he dramatized just a few.

We will likewise get at our truth by interviewing around 100 stakeholders. They will become our lens on problems, needs, and solutions that define a new market for health literacy. This lens will help us decide where to begin building Humaginarium, precisely what to build first, how to deploy and scale, and ultimately why ours is a mission that must not fail. For the benefit of investors of course; and also for the benefit of millions of consumers across the United States and maybe beyond.

SBIR Phase 0

We’ll join the I-Corps Summer Cohort in New York in July 2018.

2018 is becoming our Year of I-Corps. Made possible by the National Science Foundation and a program innovation known as SBIR Phase 0.

  • SBIR stands for Small Business Innovation Research
  • Phase 0 prepares qualified startups for a Phase 1 SBIR grant

Our Phase 0 boot camp in January was a Customer Discovery course run by the Midwest I-Corps Node at the University of Michigan. Great experience! We discovered much about our business ecosystem and even more about our capacity to deliver.

After boot camp the Midwest Node facilitated our application to SBIR Phase 0. We’ll join the I-Corps Summer Cohort in New York City starting in July. Phase 0 includes seven weeks of intensive customer discovery and related business formation supported by the new I-Corps Go Entrepreneur Assistance program.

Boot camp convinced us that it’ll be best to start Phase 0 before it formally begins. We actually began preparing in February and will continue right up until the kickoff meeting in July. By that time we’ll have enumerated many of our critical success factors; written our business, technical, scientific, and clinical assumptions to test with stakeholders; and made a balanced, vetted list of over 100 scheduled interviews around the United States. Rather than leave New York at the end of the kickoff meeting, we’ll stay to conduct stakeholder interviews in the metropolitan area.

Two members of our team along with our industry mentor will attend Phase 0 meetings in New York and weekly online. All four founders are helping to prepare and analyze our results. One will manage the project and the process that leads Humaginarium to a December submission of a Phase 1 SBIR grant from the National Science Foundation.

Boucher

Scientific entertainment. Variation on Ruhendes Madchen, by François Boucher

Democratization

The tools of Humaginarium are collectively known as health literacy.

Our recent pivot from video game developer to market maker has lots of ramifications. Remember our motive was to match the speed and scale of operations with the opportunity that lies before us. Yet the more we think about it, the more we realize that the pivot changes everything. It re-frames us as a My Space of wellness.

Chris Anderson has a word for this: democratization. “Transformative change happens when industries democratize, when they’re ripped from the sole domain of companies, governments, and other institutions and handed over to regular folks.”

What industry are we aiming to democratize? What’s being handed over, and to whom?

The industries that matter to us are entertainment, education, and health. Thanks to thousands of companies like YouTube and Wikipedia, the first two of those industries have already been democratized. Not health though.

The health industry is not a democracy, but a syndicate of institutions (clinics, providers, payers, manufacturers, universities, agencies). The customers of this syndicate are not consumers or patients, but fellow institutions. This partly explains why consumers feel that health care is costly and dysfunctional while institutions keep increasing the costs and chaos.

A “market for health literacy” is what we’ve always said about Humaginarium, only greater. It’s where communities of interest get the health education they want, in the ways they want and can use it, from as many “teachers” as there are points of view. By teacher we mean experts with scientific and medical proficiency, and communicators with artistic talent; and we also mean peers who have learned from the greatest teacher of all: personal experience. The market we make is where “regular folks” enjoy and learn from others; and co-create insights with others; and endow others including experts with the gift of their own knowledge and perspective.

Chris Anderson goes on to observe that “We all have our own needs, our own expertise, our own ideas. If we are all empowered to use tools to meet those needs, or modify them with our own ideas, we will collectively find the full range of what a tool can do.”

The tools of Humaginarium are collectively known as health literacy. There’s no central store or world market for these tools that speaks in the vernacular of regular folks rather than the jargon of institutions. At least, there hasn’t been until now. Stand back, we hear the rumble of Shadowfax approaching!

Value Proposition

Our pivot gives credence to our value propositions. It lets us promise meaningful results.

Our recent pivot from producer to market maker is a paradigm shift. Though it preserves and even strengthens vision, it also re-frames everything we call execution: what we do and how we do it. CSFs like speed and scale can now emerge from the mist and glisten in the light of certainty.

Another outcome of the pivot is a good value proposition. This is the central pillar of a Business Model Canvas, the holy grail of tech startups, the secret sauce of innovation, and maybe the hardest thing to get just right. In our case it’s taken years of ideation that resembled a blind search under the Lonely Mountain.

So then, returning to early drafts of our Business Model Canvas, the pivot prompted us to replace one rickety post holding up a low roof with five flying buttresses reaching for the stars. One new value proposition for each class of stakeholders in our venture:

Customer Value Proposition
Making health literacy easy, fun, useful, and rewarding; and making wellness a reasonable choice for everybody.
Customers are buyers and users in our market.

Partner Value Proposition
Increasing access to targeted customers, developing new revenue streams, and enhancing brand equity.
Partners are producers, sponsors, and advertisers in our market.

Investor Value Proposition
Achieving superior return on investment while improving population health.
Investors are shareholders, foundations, and companies with stakes in our market.

Provider Value Proposition
Increasing patient engagement and compliance with medical protocols; and improving outcomes that rely on patient agency.
Providers are caregivers who send patients to our market to increase insight.

Payer Value Proposition
Lowering the lifetime cost of subscribers who deliberately choose wellness.
Payers are insurers who send customers to our market to lower risks.

Our pivot gives credence to each of these value propositions. It lets us promise meaningful results to each stakeholder: promises we can reasonably expect to keep. That’s why we quoted Merry Brandybuck on our website, when speaking about those we serve:

You can trust us to stick to you through thick and thin — to the bitter end. And you can trust us to keep any secret of yours — closer than you keep it yourself. But you cannot trust us to let you face trouble alone, and go off without a word. We are your friends.

 

CSF

A Market for Health Literacy quickly achieves social and economic impact.

Reductionism is how we promote science to non scientists. And also how we present opportunity to investors. After all a pitch deck, a commercialization plan, a valuation, a business model: all are simplifications that make innovation easier to understand and risk easier to accept.

A handy tool of reductionism is the CSF: critical success factor. Rather than feeling overwhelmed by the many ways our venture could fail, we focus instead on a few that increase the probability of success. Do we know what our CSFs are?

Reductionism itself is certainly one. By virtue of integrated modeling, simulation, game mechanics, and visualization, we think we’ve come up with powerful technology to handle reductionism efficiently. Consumers become health literate with Humaginarium because we make it fun and easy for them.

Two other CSFs are speed and scale. They mean we must:

  • Make things really fast
  • Offer many different things to a very diverse audience

Pondering these CSFs changes the role of Humaginarium. We’ve been seeing ourselves as product developers; we are pivoting into market makers.

Why? Because product developers can’t make things fast enough, with enough variety, and for enough people, to satisfy customer demand. They are relatively slow and specialized, like a tool maker that comes out with one new tool every so often; relying on it to fire up customers. This is cottage industry. A bad idea.

On the other hand, a market maker is fast and comprehensive. By making a Market for Health Literacy we (along with many other organizations and individuals) can offer a wide range of products and services, all with the common denominator of nudging consumers to wellness.

As the market maker we define standards and protocols for the marketplace. We set the bar high for things like quality and security. And we unleash the creativity and prowess of the market to fulfill our mission.

Market making somewhat follows the examples of Ebay and Amazon, Facebook and Reddit, Wikipedia and the App Store; it doesn’t follow analogs like WebMD or Lumocity. A Market for Health Literacy achieves social and economic impact of great magnitude, far greater than any product development model is likely to attain, in a relatively short time.

This paradigm shift suggests another CSF: reliability (so important in anything to do with health and science). That one’s for another discussion.

Flandrin_Jeune_homme_nu_assis

Scientific entertainment. Variation on Jeune Homme nu assis au bord de la mer, by Jean-Hippolyte Flandrin,

Revenue

Each thing we make will be purchased by as many customers as possible.

The right side of the Business Model Canvas concerns customers: those who want, use, liaise with, or pay for Humaginarium. The cornerstone of the right side is Revenue Streams. Accordingly, everything we believe about customers must boil down to income.

That isn’t how we think about customers when designing for them. We think instead about their practical needs, the experience they’ll have with our products, what they’ll learn, and how that may nudge them to wellness and a better way of life.

It’s tempting just to think that way about design and not mind the cornerstone. “If you build it, they will come.” Maybe that works in a field of dreams, not so much in a marketplace.

So, separate from what we’re doing for customers, we’re deciding what customers must to do for us. We’re sorting out a web of branching revenue streams so that we design more carefully to sustain them.

The branches so far look something like this:

  1. Customers who pay to play. These are consumers of entertainment who pay nothing to start, but then buy subscriptions or features or feeds that enhance their satisfaction.
  2. Customers who pay to learn. These are patients or students who pay nothing to start, but then buy subscriptions or features or feeds that reinforce their therapy or study.
  3. Customers who pay to connect. These are medical product or service providers. They buy ads, product placements, or patient referrals in order to build their businesses.
  4. Customers who pay to collect. These are researchers. They pay for data analytics generated by users of our games, to track consumer choice and behavior.
  5. Customers who pay for content. These are manufacturers and institutions like medical centers. They pay for branded content that introduces products and services to patients.
  6. Customers who pay to advocate. These are organizations that make program-related investments. They pay to sponsor themes, stories, or competitions in order to further their societal agendas.

We’re subdividing these six different revenue streams to reflect skinny customer segments; so that each individual and small group of customers can be optimally served with tailored benefits. At the same time we’re aggregating all six streams in one production path, so that each thing we make is purchased by as many different customers as possible.

Free

People say they’ll pay nothing, but in reality they pay, almost always with cash.

As Humaginarium develops a pitch to investors, a pre-money valuation, a robust business model, a commercialization plan, even our first working prototype, we’re struggling to answer the thorniest question: What should we charge?

It’s about more than dollars & cents price. It’s also about intrinsic worth, comparable value, fit with lifestyle, emotional appeal, unique affordances, and practical utility. These facets turn price into kaleidoscopic chimeras: none is fixed, each part depends on the others for reckoning, and all lead to the frightening concept of “free.”

Free of charge is frightening because we can’t make Humaginarium for free. If we give it away, we’ll need other ways to pay for it. The obvious way in the digital “freeconomy” is advertising. That’s of little use to a startup because advertisers require a mass audience that takes years to grow; and because advertising tends to undermine the credibility of mission.

Let’s not forget that our products develop insight and skills related to health. Can they do that honestly if we’re hawking snake oil in the margins? That’s what I asked when I learned the business model of Outcome Health, Chicago’s first unicorn. Don’t get me started.

Ask anybody what they would pay for Humaginarium and the answer will likely be “nothing.” Even if they like it, appreciate its benefits, recommend it to others, want to play it endlessly, they’ll still say they want it for free. Accordingly we should charge customers nothing and make money in other ways, like selling user data or product placements.

Yet there’s another view of economic reality. Consider:

  • Humaginarium makes entertainment. Consumers pay for entertainment. Try streaming from Netflix for free and see what happens.
  • Humaginarium makes education. Consumers pay for learning. Try enrolling in the School of the Art Institute of Chicago for free and see what happens.
  • Humaginarium makes therapy. Consumers pay for counseling. Try joining LA Fitness or Weight Watchers for free and see what happens.

Here lies the conundrum. People say they’ll pay nothing for things they need and enjoy, but in reality they pay, almost always with cash. When they don’t pay they wind up with sketchy customer experience. Facebook shows how that business model works.

Humaginarium is not sure how our thorny question will be answered. We’re working on it. The final answer may lie less in what we charge, and more in how we deliver.