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Umbrella’s for all! How co-creation can stop the rain in your industry.

 Umbrella’s for all! How co-creation can stop the rain in your industry.

We Dutch people love to complain, and the weather is one of our all-time favourite topics. When it’s windy, it’s too chilly. When the sun is shining, it’s too hot. But there is one thing we truly hate.
Rain. And with almost 185 rainy days a year in The Netherlands, we have enough to complain about.

In Denmark, Andreas Søgaard, implemented “rain” in his business model. Actually, he made it a key resource – and no, he’s not a farmer! It all started in Taiwan when he went shopping while it was raining heavily. He noticed that a lot of people would forget their umbrella’s so he would just take one and later put it back. When he got back to Denmark, he was keen on setting up an umbrella service named ‘Abrella’, the Danish word for umbrella.

Rain = Pain?

One of the design criteria of Andreas’ service was that it had to be free of charge for the users. One customer segment not paying for the service is often the case with a multi-sided platform; a business model pattern where you connect supply and demand via an online platform. Think of Google: when you search for something via Google, it’s free. But the advertisers pay, and they pay enough so you can search, mail & document via Google and Gmail for free. Famous examples of other multi-sided platforms are Airbnb, Uber, Foodora, Groupon.

Back to Abrella. Andreas had to find another customer segment who had to pay for his service – the shops felt like a good segment to start. He knocked on some doors and talked to many shop owners to understand their issues regarding to rain. “When it rains, a lot of shops are losing profit” was one of his riskiest assumption, and it was validated: some shops experienced 75% lesser sales on rainy days! Rain was a pain for many shop owners. To not solely depend on the revenue stream of shop owners, he added another customer segment: advertisers. For a small fee, the logo of a company would be printed on the umbrella. People would not only use an item with your logo on it, but also it would be shown throughout the whole city. Andreas also paid attention to making the umbrella stand look good, because it would be placed inside a shop.

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Test Your Assumptions

From that moment on, Andreas pursued his bold ambition: to create the best cities in the world when it rains. And the first step is keeping people dry.

He did a pilot and tested his business model on a small scale. With 8 shops willing to participate and pay for his solution, he produced 1000 umbrellas to get started. Everybody told him that people would steal the umbrella’s, but this assumption turned out to be false. And that wasn’t the only assumption Andreas had to test, there were many more. For example: would umbrellas help to get customers to the shops? Would people use the umbrellas? Does an umbrella take away the pain of the rain? Are people shopping more on rainy days thanks to the umbrellas? Thanks to his first pilot, he found the answers to all these questions.

Umbrella-Love

Abrella soon became a company that people loved. The press and shops couldn’t stop talking about it, and doing sales became easy, because 80% of the advertisers resigned. Also, the shop owner’s level of participation made it a huge success: they are proud to offer this service to their customers and feel responsible for the umbrellas. They provide customers with the story behind the umbrellas and explain how to use the umbrellas properly.

The Road To Success

Abrella shows how you can co-create your success by really understanding the problem of your customer and working towards a solution, together. By starting small and growing rapidly, Abrella shows how companies should be working nowadays. The road to success knows many side paths and there is no silver bullet that will make you successful overnight. But by having a clear ambition, the eagerness to learn and skills to understand your customer, you’ll come a long way.

Want to know more about how to co-create with your customer? Or how to find out what the real problem of your customer is? Drop me a line via martine@businessmodelsinc.com or give us a call via +31 20 505 06 00.

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 Marije Sluis

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