The Three Lenses - Desirability, Feasibility, Viability

If you have a business idea, you should be able to describe three essential elements:
What makes it Desirable to customers, Feasible for you to run, and financially Viable so that you always have cash in the bank.
Desirability, Feasibility and Viability.
Every good business you can think of has managed to get these three things right.
Every failed business usually fell over because they got one or more of these wrong.
Whenever you’re examining new business models, these will be the three “lenses” through which you understand their potential, that’s why IDEO called them “The Three Lenses Of Innovation”.
They are the absolute foundation of entrepreneurship, and each of them is a learnable skill.

Desirability

The first lens we’ll examine is Desirability; offering something that entices and delights customers.

A business serves a customer, and that customer usually has a decent degree of power.
They hold some money, they get to make a choice, and they’re usually in a bit of a hurry.
This customer has needs and wants, aspirations and frustrations, a long to-do list, and a limited amount of time and attention.
They’re going to say “Yes” to the most compelling offer, and we’re always competing against the comfortable option of “doing what I’ve always done”.

If you’re going to win them over, it’s because you’ll be making a desirable offer to them, giving more value that what you’re asking for in return.
And while trickery might win a sale, it only works once.
Unhappy customers can easily take their retribution through ratings sites and social media.

The easiest path is to learn what people want, and create compelling offers that they find desirable.
We’ll need to meet customers where they are, and make it easy for them to choose your brand before competitors and distractions take them away.

Feasibility

The second lens is Feasibility; the systems, assets and partnerships that help you to consistently deliver on your promises.
While a solo founder can serve their first customers on their own, a true business will need a team and a set of well-designed systems, so that new customers have a great experience day-in and day-out.
If the founder needs to be there to serve every customer, they haven’t built a business, they’ve built a job.
And while it’s nice to have a nice job, they won’t be able to grow or to take a proper holiday, carrying way too much responsibility for the brand.

We’ll need to make or buy assets that make the work easier, like equipment, inventory, supplier arrangements, training materials, marketing collateral, etc.
We’ll need good systems for finding/serving/retaining customers, finding/training/retaining good staff, keeping the day-to-day operations running smoothly.
We also want to find ways to keep improving what we sell, before our competitors can outpace our offers.

Viability

The third lens is Viability; understanding how money comes in, money goes out and how money is retained in the business.
Every organisation needs a way of consistently earning more money than you spend, even if you’re a charity, because no business can survive continuous years of losses.
You’ll be designing revenue streams, choosing pricing strategies, measuring your different types of cost and calculating when you will finally break even.

In most cases, the money coming in will be revenue – made from selling products or services, licenses, access to a valuable resource, etc.
Alternatively you might be working with grants or donations, and that’s fine, so long as you have a way of predictably bringing in more funding to cover your ongoing costs and programs.
Grants and donors are great, grant and donor dependency is not.

Money is not evil, money is frozen energy.
You can use this energy to run a great company, or you can consistently have a shortfall that takes a lot of energy to make up.
We’ll need to understand how much our customers are willing and able to spend, and how much it truly costs to serve them well.

We Need All Three

Your business needs to pass all three tests.
If it’s not desirable to your customers, you’ll struggle to make sales, struggle to keep people’s attention, and will struggle to grow.
Trying to sell to indifferent customers is a painful and soul-sucking process.
If it’s not feasible for your team, you’ll burn yourselves out or leave customers short-changed, resulting in high turnover and a bad reputation.
A business that isn’t feasible to run is likely to close within 6 months, even if customers love what you’re doing.
If it’s not viable, you’ll bleed money, and the faster you grow the faster you fold.
There’s a time for doing things that don’t make a profit, but only for a short while.
Without a way of making a surplus, you’ll have to start Googling bankruptcy laws.

Check for yourself – which of those three can you afford to get wrong? 

Three Lenses and The Business Model Canvas

The concepts of Desirability, Feasibility and Viability are the basis of another great tool – the Business Model Canvas.
These three lenses match the nine boxes of the canvas, which each explore the concepts in more detail.
On the right is Desirability, on the left is Feasibility, and the bottom line is the bottom line: Viability.
Canvases are more detailed, but that detail might be helpful if you’re still unsure of how any of the lenses apply to your business.
The process of filling in the canvas doesn’t tell you what to build, but it asks really good questions that draw out your ideas and assumptions, helping you and your team all get on the same page. 

Learnable Skillsets

Most new business owners have a favourite out of these three, and they usually have a least favourite too.
Luckily, each of these three lenses is made up of a series of learnable skills.

Desirability covers areas like marketing, branding, distribution and logistics, social media, Value Proposition Design, graphic design and customer interviews.
No babies are born who are good at those, they all come from deliberate practice.

Feasibility covers areas like hiring, production management, partnership brokering, time management, training, content creation and diplomacy.
These are transferrable skills that develop over time, and you might have some expertise already from previous roles.

Viability covers areas like pricing, brand positioning, bookkeeping, personal finance, unit economics and the ability to read financial statements.

If there are some areas you haven’t developed or would like to improve, working with a coach or a group of mentors will be helpful.
Look for people who have those particular skills and find out where/how they learned them.
This works especially well with people who didn’t have a natural aptitude and decided to build them into strengths later in their careers. 

Iterating Until You Land In The Middle

These three lenses form a Venn diagram, and it’s vital that our new business lands in the middle.
It’s unlikely to start in the middle, you’re more likely to get one lens going well, then deliberately make changes to your business to address the other two.

One of the best ways to get started is to frame your “How Might We…?” question.
These don’t presuppose a particular answer, but they help us think through specific angles and aspects of the model we’d like to improve.
These might include: 

·      How might we reach 3x more customers?

·      How might we double our prices and still be great value?

·      How might we partner with specialists who can take over our weakest points?

·      How might we find or create talented new team members?

·      How might we reduce our cost of goods without customers noticing a difference?

·      How might we keep our customers coming back for second or third purchases?

A problem well framed is a problem half solved, and the design of these questions gives you some natural starting points to bring up with a mentor or through Google.

These questions work well when paired with an appropriate “Gate”, a fair criteria for an idea to progress on to the next stage of development.
This is a form of “how will we know?” checkpoint for a new idea, an objective sign that there is real traction. 

For example, a gate might be “We’ll invest more into our operations and marketing once we’ve done over $10,000 in sales”.
The gate here is the $10k milestone, so you’re only spending money once you’ve seen some promising signs.

Another example might be “We’ll start mass production and recruitment one we have agreements in place with three suppliers and three wholesalers”.
This doesn’t specify who any of those people will be, but it’s a milestone that’s only possible once your idea is strong enough and persuasive enough to gather further support.

A gate helps you say “We can if…” to hypothetical scenarios.
This helps your brain think creatively and positively, trying to devise scenarios where something different might work, rather than finding reasons to rule it out, such as;

·      We can if our marketing consistently generates an ROI of over 2.5x

·      We can if we find two new trainees in the next three months

·      We can if we persuade three stockists to sign an MOU

·      We can if we find a content marketing specialist who can double our web traffic

Again, this doesn’t magically solve any problems, but it identifies and breaks those problems down into much more manageable pieces.
This helps you comprehend what it might take to make the business more desirable, more feasible or more viable, and you can make whatever call you want with that information.

Three Lenses And Your Impact Model

There’s a parallel between Desirability, Feasibility, Viability and your impact model – how your company does something good for the world:

Desirability – How might we sell something that is good for the world?
Maybe you’re making ethical/responsible/healthy products and services more appealing, or reframing them to entice a new audience

Feasibility – How might we do good through our operations?
This might be through the people you employ, the partners you work with, the materials you use or the processes that go into your work.
It might be that the customer never sees the true power of your work, which comes from your payroll and methodologies to change people’s lives.

Viability – How might we use our funds and assets for good?
This might be profit donation, or giving ownership of your assets to a particular group, with the intent of supporting their work and providing an income stream.

These aren’t mutually exclusive, and a lot of social enterprises or impactful businesses try to do two or all three approaches in their work.
Which one best matches your philosophy and model?

More Lenses

If you look online, you’ll find expanded versions of this concept with more and more lenses.
They might help you think about the environmental and social effects of your work, the beneficiaries you serve, the reason why you started in the first place, etc.
These are all good things to think about, and you might choose to let them influence your business model.

The reason why we stick to IDEO’s Three Lenses (Desirability, Feasibility and Viability) as a starting point is that they are the most interconnected and the most foundational.
You HAVE to think about them, you HAVE to get them right.
The ethical and personal lenses don’t always influence and reshape the other parts of your business, at least not today, and often not across an entire company. 

If you like the revised frameworks, great!
If you find them overwhelming, start with these three:
What makes us desirable, what makes our work feasible, how can we stay viable?