Define/Destroy a Business Services Marketplace

This is an illustration in doing the first iteration in an innovation project. It is a note on a case study on how Define/Destroy was applied in matching experts to business problems.

It is frequent, in companies of any size, to have problems/opportunities that require expertise not available internally. If, in addition, it looks like that expertise is needed only temporarily, management will look for consultants.

In May 2017 two friends and I (we were business partners as well at the time) were introduced to three founders of a new business in Tel Aviv. They described it as a service that helps match business to consultants. We had a reputation for being able to design marketplaces for complex services, where it was necessary to work out the motives of the participants, identify and design the information to ask parties for and to show them, processes through which they provide that information, design incentives that fit their assumed motives, and so on. A critical part of the problem was how to design an economic mechanism that stimulates sharing of specific information and leads to behaviors that, ultimately, result in an economic exchange between the contracting parties.

They had a rough business model, ideas for how to drive adoption, and expertise, having themselves been on both sides of the market, as those who hired consultants while in executive positions, and as specialist consultants themselves.

While all of our past clients wanted results quickly, this team was particularly demanding. They wanted to go with us through an open brainstorming of their business model, the complete lifecycle of their service, and prototypes that demonstrate and allow some early testing of how the service would look like to the market participants. The timeline was in weeks, not months.

The three argued that it takes too long to go from acknowledging that a consultant is needed, to having them start working. Some of the time is spent to understand and verify expertise, build confidence and trust, agreeing on ways of working and deliverables, fees, among other things. The three entrepreneurs wanted to make that unstructured process shorter. In exchange for a fee, companies would get recommendations of consultants to hire, these consultants would be vetted, and they would have simple tools to define their own and the consultant’s rights and responsibilities, sign the agreement, kick off collaboration, and track its progress until completion.

The first brainstorming meeting focused on identifying the benefits that the new approach would have for buyers and providers of services. Many questions came up; what follows is a sample.

How do we move a complex process, in which key discussions and decisions are made through live communication, to asynchronous communication, where much now needs to happen through writing?
If this can be done, then how do we help service buyers identify the most relevant service providers, for the goals they want to have solved?
How do we recommend buyers to providers, and vice versa?
How do we help both sides reach an understanding on goals to achieve, tasks to do, timeline to do them, price and payment?
How do we collect feedback from each party about the other, and use it to improve future recommendations?
How do we help these parties raise and resolve disputes? How do we distribute responsibilities for issues between them, and the future business which will offer this service to providers and buyers?
How do we grow the marketplace from a small set of pilot buyers and providers?

We spent the next weeks proposing, testing, changing, refining, replacing different answers to these questions. The entire time we invested in this was an innovation process, in that we converged to an agreement on the economic mechanism, service design, and ultimately a software specification, although only towards the very end of that period.

We produced various artefacts while working. Drawings, diagrams, algorithm specifications, working prototypes of potential pieces of the future software, interview guides to use with pilot buyers and providers are some of them.

A list of definitions of new terms was the sole artefact which was made literally the evening after the first meeting, and remained relevant throughout the innovation process, and for all outputs of that process. It was used and challenged by everyone involved. It was also a notoriously unstable artefact, changing frequently to reflect key design decisions, open questions and shifting positions on how to resolve dilemmas.

Joseph Kosuth, One and Three Chairs, 1965 [Source].

Where did we begin? What were the first definitions we had, and why did we start from them?

The start is simple, and it always looked roughly speaking the same in all cases I was involved in: we take time to discuss the motivation and expectations from the invention that the innovation process should produce. In practice, this looks like a few hours in live meetings, trying to find a starting point that everyone sees as important for the success of the invention.

The starting point has three parts to it:

What is new? There has to be an idea about how the invention will differ from what the team is aware of; evidently, we usually go back and destroy this idea rather quickly, but that’s not an issue, it is a feature of innovation; it is constructive destruction, applied.
Who makes up the market? Who do we want to expose to this novelty, so that they decide if they will use it? It has to be new, but not in an absolute sense; it may be new to a specific audience, even if it isn’t to another one, or its use in another context may be the novelty, and we expect it to be useful to an audience concerned by that specific context.
Why would the invention also be useful for this audience? What do we think would make the target audience interested in trying the invention out, so that they can decide whether it is useful or not?

This really was simply a starting point: it was never indicative of the scope, depth, or complexity of what followed, it was not stable, and so couldn’t be an anchor or a reference point to which we might come back later.

Hours to get to the starting point never turned into days, however. One day of four to six hours of meetings is usually more than enough to have the input needed for the very first iteration of Define/Destroy. It always led to a few terms that keep coming back, or ideas which need naming. Following the method, this initiated the Define step: to document discussions, identify terms, give a default definition to each, and ask others to make changes, or assume acceptance.

First Iteration: Define

The following paragraph is an excerpt from the summary of the first few hours of discussions, at the very start of the collaboration. Although there was much more content, this is already sufficient to illustrate how Define/Destroy works.

When a company needs services of an expert, for a short time, on a specific project or to help close a deal, it can be very hard to identify actual competence, to trust available evidence of reputation, and then, to get to a formal agreement on what to deliver, when, and what to do in case of dispute. Word-of-mouth is still the best tool, but it lacks transparency, structure, and availability. On the other hand, experts need to make themselves available to companies, in a way in which they can provide trustworthy evidence of relevant competence. Both sides need to be able to find each other, and follow a clear process to get to an agreement, having a third party that will mediate the contracting and disputes which may take place. That third party would need to run the marketplace which would match the demand and supply of experts’ time to work on projects and deals.

The Define step involves identifying terms to define. They are italicized below; otherwise, the paragraph is the same.

When a company needs services of an expert, for a short time, on a specific project or to help close a deal, it can be very hard to identify actual competence, to trust available evidence of reputation, and then, to get to a formal agreement on what to deliver, when, and what to do in case of dispute. Word-of-mouth is still the best tool, but it lacks transparency, structure, and availability. On the other hand, experts need to make themselves available to companies, in a way in which they can provide trustworthy evidence of relevant competence. Both sides need to be able to find each other, and follow a clear process to get to an agreement, having a third party that will mediate the contracting and disputes which may take place. That third party would need to run the marketplace which would match the demand and supply of experts’ time to work on projects and deals.

These are the common-sense definitions of each italicized word in the paragraph above. Definitions are picked from WordNet [1]. There are no neologisms.

Company: an institution created to conduct business.
Service: work done by one person or group that benefits another.
Expert: a person with special knowledge or ability who performs skillfully.
Short time: None.
Project: any piece of work that is undertaken or attempted.
Deal: a particular instance of buying or selling.
Actual: presently existing in fact and not merely potential or possible.
Competence: the quality of being adequately or well qualified physically and intellectually.
Evidence: your basis for belief or disbelief; knowledge on which to base belief.
Reputation: the state of being held in high esteem and honor.
Formal: being in accord with established forms and conventions and requirements.
Agreement: the statement (oral or written) of an exchange of promises.
Dispute: a disagreement or argument about something important.
Word-of-mouth: gossip spread by spoken communication.
Transparency: the quality of being clear and transparent.
Structure: a thing constructed; a complex entity constructed of many parts.
Availability: the quality of being at hand when needed.
Trustworthy: worthy of trust or belief.
Relevant: having a bearing on or connection with the subject at issue.
Find: discover or determine the existence, presence, or fact of.
Process: a particular course of action intended to achieve a result.
Mediate: act between parties with a view to reconciling differences.
Contracting: enter into a contractual arrangement.
Marketplace: the world of commercial activity where goods and services are bought and sold.
Demand: the ability and desire to purchase goods and services.
Supply: the activity of looking thoroughly in order to find something or someone.

These definitions cannot be used. In the language of Define/Destroy, they are old concepts; there are no neologisms, and therefore, nothing new is captured. Definitions need to be redefined, new concepts need to be made.

First Iteration: Destroy

Below, terms that are new concepts are surrounded by curly brackets. For example, {Marketplace} is the term for a new concept, while marketplace or Marketplace is the term for the old concept., which has the common-sense definition from a dictionary.

Each term is followed by the new concept it led to, when that occurred.

Company: an institution created to conduct business.
{Company}: Legal entity whose Company Users request Services on the Product and receive expertise from {Experts} through these Services.
Service: work done by one person or group that benefits another.
{Service}: Designates the collaboration of one specific {Expert} and one specific {Company} using the Product, in order for the {Expert} to satisfy a {Key Expectation} of the {Company}, and the {Company} to satisfy the Key Expectation of the {Expert}.
Expert: a person with special knowledge or ability who performs skillfully.
{Expert User} (equivalently, {Expert}): User who provides expertise of any kind (including sales expertise, business development expertise, etc.) via {Services} to {Companies}.
Short time: There is no dictionary definition. It is a vague term, with “short” being a gradable adjective.
Project: any piece of work that is undertaken or attempted.
{Project}: Service in which (i) {Company}’s Key Expectation is is to have access to {Expert}’s knowledge; (ii) {Expert}’s Key Expectation is to be remunerated for the time during which the {Expert} provides access to the {Company} to {Expert}’s own knowledge.
Deal: a particular instance of buying or selling.
{Deal}: Service in which (i) {Company}’s Key Expectation is to sign a business deal promised by the {Expert}; (ii) {Expert}’s Key Expectation is to receive a Deal Commission for enabling the {Company} to sign a Deal.
Actual: presently existing in fact and not merely potential or possible.
Competence: the quality of being adequately or well qualified physically and intellectually.
Evidence: your basis for belief or disbelief; knowledge on which to base belief.
Reputation: the state of being held in high esteem and honor.
Formal: being in accord with established forms and conventions and requirements.
Agreement: the statement (oral or written) of an exchange of promises.
{Service Agreement}: Norms governing the relationships between {Expert}, {Company}, and Platform during the Service. Types: (i) Project Agreement: {Agreement} regulating a {Project}; (ii) Deal Agreement: {Agreement} regulating a Deal.
Dispute: a disagreement or argument about something important.
{Dispute}: To be defined.
Word-of-mouth: gossip spread by spoken communication.
Transparency: the quality of being clear and transparent.
Structure: a thing constructed; a complex entity constructed of many parts.
Availability: the quality of being at hand when needed.
Trustworthy: worthy of trust or belief.
Relevant: having a bearing on or connection with the subject at issue.
Find: discover or determine the existence, presence, or fact of.
Process: a particular course of action intended to achieve a result.
Mediate: act between parties with a view to reconciling differences.
Contracting: enter into a contractual arrangement.
Marketplace: the world of commercial activity where goods and services are bought and sold.
{Marketplace}: Online software which mid-size information technology {Companies} would use to find and contract with business development experts, who can help these {Companies} expand into other territories.
Demand: the ability and desire to purchase goods and services.
Supply: the activity of looking thoroughly in order to find something or someone.

Having redefined specific terms above, the remaining work in the first iteration of Define/Destroy is to identify terms to define in the next iteration. These terms are underlined below, and are those that appear in definitions, but not among the terms we had as input in the Define/Destroy iteration. In other words, we had one set of terms when we started the iteration, we gave these terms definitions, we revised some of the definitions, and ended up with many more terms now. The new terms are underlined below; they do not necessarily point to new concepts, but they need to be defined.

Company: an institution created to conduct business.
{Company}: Legal entity whose Company Users request Services on the Product and receive expertise from {Experts} through these Services.
Service: work done by one person or group that benefits another.
{Service}: Designates the collaboration of one specific {Expert} and one specific {Company} using the Product, in order for the {Expert} to satisfy a {Key Expectation} of the {Company}, and the {Company} to satisfy the Key Expectation of the {Expert}.
Expert: a person with special knowledge or ability who performs skillfully.
{Expert User} (equivalently, {Expert}): User who provides expertise of any kind (including sales expertise, business development expertise, etc.) via {Services} to {Companies}.
Short time: There is no dictionary definition. It is a vague term, with “short” being a gradable adjective.
Project: any piece of work that is undertaken or attempted.
{Project}: Service in which (i) {Company}’s Key Expectation is is to have access to {Expert}’s knowledge; (ii) {Expert}’s Key Expectation is to be remunerated for the time during which the {Expert} provides access to the {Company} to {Expert}’s own knowledge.
Deal: a particular instance of buying or selling.
{Deal}: Service in which (i) {Company}’s Key Expectation is to sign a business deal promised by the {Expert}; (ii) {Expert}’s Key Expectation is to receive a Deal Commission for enabling the {Company} to sign a Deal.
Actual: presently existing in fact and not merely potential or possible.
Competence: the quality of being adequately or well qualified physically and intellectually.
Evidence: your basis for belief or disbelief; knowledge on which to base belief.
Reputation: the state of being held in high esteem and honor.
Formal: being in accord with established forms and conventions and requirements.
Agreement: the statement (oral or written) of an exchange of promises.
{Service Agreement}: Norms governing the relationships between {Expert}, {Company}, and Platform during the Service. Types: (i) Project Agreement: {Agreement} regulating a {Project}; (ii) Deal Agreement: {Agreement} regulating a Deal.
Dispute: a disagreement or argument about something important.
{Dispute}: To be defined.
Word-of-mouth: gossip spread by spoken communication.
Transparency: the quality of being clear and transparent.
Structure: a thing constructed; a complex entity constructed of many parts.
Availability: the quality of being at hand when needed.
Trustworthy: worthy of trust or belief.
Relevant: having a bearing on or connection with the subject at issue.
Find: discover or determine the existence, presence, or fact of.
Process: a particular course of action intended to achieve a result.
Mediate: act between parties with a view to reconciling differences.
Contracting: enter into a contractual arrangement.
Marketplace: the world of commercial activity where goods and services are bought and sold.
{Marketplace}: Online software which mid-size information technology {Companies} would use to find and contract with business development experts, who can help these {Companies} expand into other territories.
Demand: the ability and desire to purchase goods and services.
Supply: the activity of looking thoroughly in order to find something or someone.

Notice how the first iteration created and expanded the glossary. This happens because new terms enter the glossary with each new definition, so the question becomes which of these can have their default dictionary definition, and which are new concepts.

Something else to notice is that there are still no neologisms in the glossary above. They are easy to introduce, but may be difficult to learn and use, even if they help depart from another term that looks the same but isn’t defined the same way; for example, if there is good reason to avoid calling {Marketplace} that way, because the definition is clearly different from that of marketplace, then maybe we should commit to that departure by not calling the new concept {Marketplace}, but something else, such as {Dealspace} (where “dealspace” is a neologism).