Designing Espresso Innovation

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Here are some thoughts on ‘design-driven innovation’ versus ‘design as making things look cool’:

Design-Driven Innovation – Nespresso from Tim Kastelle on Vimeo.

And here are some related points:

  • We often think of design as making stuff look cool, but when we talk about design-driven innovation, we’re actually talking about creating new categories of goods and services based on a deep understanding of what our customers are trying to do.
  • With many design-driven innovations, market testing is very difficult because it is extremely hard for people to envision how the innovation will work. However, this does not mean that mean that customers are unimportant in the innovation process. It simply means that they can’t tell us in advance what they want. So design-driven innovation faces higher levels of uncertainty than innovation processes trying to solve a known problem.
  • The Nespresso case is apparently very popular in Europe, where the system was first launched (a full description of the way the system works can be found here). It is a great example of business model innovation (here is an excellent discussion of this). I talk about the importance of working from the espresso-making process out to the machinery instead of vice-versa – many of the innovations in the business model follow from this choice. By setting up the Nespresso Club to sell the coffee, they essentially built an iPod/iTunes style system – this model was just as innovative in coffee as it was in mp3 players.

  • This is another great example of the difference between invention and innovation. The patent for the espresso capsule was granted in 1976, but the first Nespresso machine was not on the market until 1991. This is not at all unusual.

Nespresso is a pretty interesting case study. It shows some of the benefits of design-driven innovation, and the benefits of business-model innovation as well. It’s pretty good coffee too.

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Student and teacher of innovation - University of Queensland Business School - links to academic papers, twitter, and so on can be found here.

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Categories: business models, design, innovation strategy
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8 thoughts on “Designing Espresso Innovation”

  1. Nice post Tim.

    We’re big fans of the Nespresso ‘business model innovation’ story – to the extent we’ve even got a shiny machine at the Sydney office (http://twitpic.com/p2ah6 )!

    The Nespresso story actually gets even better when one considers the ingeniously differently shaped capsules for commercial and home machines (so people can’t steal the work capsules!), and the persistence shown by Nestle in taking this product to market (as they waited for technology, and coffee tastes/habits to mature over a number of years).

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  4. For another example of innovation at what I consider to be the opposite end of the espresso spectrum, you may be interested in Slayer Espresso. Eric Perkunder (@SlayerEspresso), the founder, is engaging in what I might call recursive craftsmanship: designing and building innovative espresso machines that can be used by innovative baristas to craft unparalleled espresso beverages.

  5. Thanks for that example Joe – that’s really interesting. I’ve done a couple of posts on craft v. scale and this is a perfect example of that. I definitely think that there are significant innovation/business model opportunities at the craft end of things, and I love coming across good examples of that so Slayer Espresso fits perfectly!

  6. Nice post. Nespresso online service is also brilliant, order online – arrives 2 days later, if not the next day.

    It just works – end to end – no hassle. they get customer service. I once tweeted that the site was down and within mins I had a link to another site that I could order from.

    I for one am a raving fan – and have the case!.

  7. Thanks for the comment Nigel. I agree – their system works well from start to finish. The other point about the online ordering is that their control over ordering provides them with an enormous amount of data about about preferences, which I think will also prove useful over time. Another significant business model innovation…

  8. I’ve always tought of design-driven innovation as a radical innovation that change the meaning related to an object. In which way do you think Nespresso has changed the way of having coffee?

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