Producing Profitable Products
The MPD2 Business Model Design course gives students a toolkit to create and manage the things consumers want – and are willing to pay for.
To understand the importance of the Business Model Design course taught in Northwestern Engineering's Master of Product Design and Development Management (MPD2) program, just ask Alexa.
What once was a popular name for girls is now synonymous with the Amazon Echo smart speakers that were introduced to consumers in 2015. That year, Alexa was the 32nd most popular baby name; by 2021, it fell to No. 442.
By 2018, more than 100 million Alexa-enabled devices were sold. There’s just one problem: The businessmodel behind Alexa is not succeeding. The Alexa division of Amazon is projected to lose $10 billion this year alone, according to Business Insider.
Mike Edmonds and John Renaldi are hoping to empower MPD2 students to create and manage products that meet consumer needs while also achieving financial success. The two co-teach Business Model Design, which is offered in the spring quarter for second-year students.
“Technology-enabled products are all around us," Edmonds said. "The business models behind our favorite products drive the experiences we consume. The course enables product managers to master all aspects of a business model and the business model design process.”
Both instructors know more than a little about what they are teaching.
Renaldi is the co-founder and former chief executive officer of trackable device company Jiobit and now works for Google as product and design lead of its wearable software platform. Edmonds co-founded an innovation studio called Moonshot Horizon and now is a senior director of strategy for Microsoft’s worldwide retail and consumer goods team.
“Being an adjunct professor is all about sharing lessons and learnings from the field,” Edmonds said. “Students appreciate the real-world application of the frameworks and tools that we practice in class.”
For example, a student should see in the Amazon Alexa case that demand alone isn’t enough.
The love for Alexa is undeniable. Amazon announced in June that more than 300 million smart home devices, ranging from lights to robotic vacuums, have been linked to Alexa. But customers haven’t widely adopted Alexa’s paid offerings. Thus, the product’s revenue stream comes almost exclusively from its purchase price, with little ongoing money flowing in for Amazon.
Cases like this show the importance of a class like Business Model Design. When it was last offered in April, it was expanded for the first time from five weeks to 10 because of the significance of the topic — and the expertise of the instructors.
“What's great about John and Mike is both of them bring a robust understanding of contemporary business models and how to evaluate them in the context of your product offering,” MPD2 director Jim Wicks said. “Their course allows students to better understand how to iterate and test different business models.”
The goal is for students to understand industry-relevant examples and come away with a complete toolset to create and continuously refine business models. The course’s lessons also will be linked with students’ capstone work, allowing them to put what they are learning into use quickly and practically.
“Business models grow and evolve just like products,” Edmonds said. “John and I strive to create a learning environment where we share scenarios we see in our careers, using those contexts to create space for learning and engagement.”