The Soul of Design
Business Value Creation in the Age of Apple
Robert D. Austin, University of New Brunswick
Vipp
• Designer Trash Bins
– Other upscale home and
bath products
• Annual growth
rate: 30 - 50%
• Sample Price
Points
– 4 liter bin: $200-$250
– 30 liter bin: $500
How does Vipp get people to pay $500 for a trash can?
Trash Can as Art Object
• “Danish trash bin at Louvre”
• “The famous Danish VIPP
trash bin will be seen from
April 24 at the Paris Louvre”
• “…the only trash bin invited
to be an art object [at the
Louvre]”
• “Special music composed
for the installation”
Some (business) things to notice
about the Vipp example…
 Vipp is about as far as you can get from
trying to compete on cost
 This is not: “Buy mine, it’s just as good but
cheaper”
 Rather, it’s: “Buy mine, it costs more but its better”
 But better is not a matter of mere function
 Items normally valued primarily (exclusively?) for
their functionality (trash bins, toilet brushes)
valued instead for their meaningfulness
The B&O MX Series Television
 Introduced in 1984, retired in
2003, the MX lasted a
remarkable 19 years in an
industry in which most
product models last only a
few months
 “The most beautiful TV in the
world”
 A David Lewis design
 Price on the market
increased when the product
was discontinued
Apple’s market cap in 2012
Selling more than function…
Arne Jacobsen
Series 7 chair, by
Fritz Hansen
Price of wood
exported in this form:
$955 per metric ton
Copyright R. D. Austin,
Price of wood
exported in this
form: $137,500 per
metric ton
Question: What makes products
“special”?
 Our answer (with a major debt to Aristotle’s Poetics):
Coherent form that is accessible and perceived by
audience/customers
Patterns
combine to suggest
Trajectories
which lead people to
anticipate direction and
bring to mind
Expectations
These together create
FORM
coherent in greater or
lesser degree
which may or may not be
met in
Closure
Patterns, Trajectories, Expectations, and Closure Combine to Create Form
“Coherence” of a product or service
 A quality exhibited by a well-plotted product (or service).
The interdependent parts achieve coherence on the basis
of plotting. A coherent arrangement produces resonance
among its interactive parts.
 In a coherent plot, beginnings flow into middles, and
middles flow into ends
 Patterns juxtaposed create trajectories which are resolved in
closure
 An “incoherent” plot is one that has many “loose ends”
 Patterns without trajectories that flow from them
 Trajectories never resolved
 Closure that does not follow from established trajectories
Some Implications (ones especially
relevant to IEOM…)
1. “Nobody knows anything”
 When it comes to predicting whether a new made thing
will be perceived as special based past experience,
“nobody knows anything” (Williom Goldman, talking
about predicting the success of movies)
 Specialness derives from how the parts of a thing fit
together with its other parts
 Therefore, each special thing is special for its own reasons
 Not because it shares a characteristic with something else or
is a certain category
 Statistically speaking, each special thing is a draw from a
different population
Broadening De Vany’s conclusions to
special things “in general”
 Hollywood Economics (Arthur De Vany):
 “movie revenues follow a non-linear dynamics that bifurcates
into two separate paths, one leading to long lives and high
revenues and the other leading to brief lives and low grosses”
 Paretian model, non-Gausian distributions, with undefined
expectations and standard deviations
 “In a Gaussian world there would be no films like Titanic, Gone
with the Wind, or Star Wars…[In a Paretian world], an average
differs from an expectation. Averages of key variables are
unstable over time. Expectation may not even exist. And the
variance is infinite. There is room for extraordinary movies like
Titanic and even higher grossing movies in the “heavy” upper
tail of the stable Paretian probability distribution”
2. Variation is a Source of Innovation
A challenge to the reflexive
tendency to reduce process variation
 "Invention is by its very nature a disorderly process," says [3M]
CEO George Buckley…"You can't put a Six Sigma process
into that area and say, well, I'm getting behind on invention,
so I'm going to schedule myself for three good ideas on
Wednesday and two on Friday. That's not how creativity
works.”– “3M’s Innovation Crisis” by Anthony Bianco, BusinessWeek
 “There is no doubt that the application of…programs …
such as ISO 9000 and Total Quality Management, has been
one of the most important business trends of past decades.
But … [eventially], the onus shifts to growth and innovation,
especially in today's idea-based, design-obsessed
economy. While process excellence demands precision,
consistency, and repetition, innovation calls for variation,
failure, and serendipity.” Bianco in BusinessWeek
3. Marketing is (Partly) Educating
 The problem: A coherent form might not be perceived as
coherent, thus will not be considered special, if audience
or customers can not perceive the form well enough to
see its coherence
 People might not be familiar with patterns in the made
thing
 The Rite of Spring at its opening
 Original forms are, by definition, unfamiliar
raustin@unb.ca