038: Crafting A Valuable Experience Through Design with Aaron Keller
How do you measure the value of an experience? Today’s guest advocates “cutting through the clutter” of traditional advertising and even integrated marketing solutions and get back to creating authentic relationships with brands and people. The key to creating such experiences is a design-centered approach, since true design has no room for transactional thinking.
Our guest goes on to describe design-centered experience as “long-term and relationship-driven” and “being more about the people than the message or the product.” What’s more, design is a team sport. By relinquishing control over your people, you allow their creative geniuses to manifest on their own terms and give them permission to collaborate and build on each other’s strengths. This, of course, results in stellar human-driven experiences and primes the organization for growth. In short: The value of your experience drives the value of your brand.
Aaron Keller and Steve Chaparro discuss Aaron’s experience leading Capsule and the evolution of the company, how thinking like an intrapreneur can help you design your perfect work environment, what it means to work with your client instead of for them, and the commodification of experience.
Here’s a glimpse of what you’ll learn:
- Incorporating design into experience
- Leading young creatives and treating design as a team sport
- Collaborating with your clients to encourage innovation
- Understanding the real value of design
- Stepping away from being ego-driven to being value-driven as a company
- Aaron’s take on the Experience Economy
Resources Mentioned in this episode:
About the Guest:
Aaron Keller is the Co-Founder and Chief Executive Officer at Capsule, which works “to solve complex marketing challenges, identify new revenue opportunities, and refresh lagging brands” by crafting memorable experiences using the principles of design thinking. Aaron is also a columnist for Twin Cities Business, an investor for Rethink Brands, and a Board Member at Read Indeed.
He graduated with a Bachelors in Marketing Management at the University of St. Thomas, and an MBA in Marketing and Brand Development at Carlson School of Management.
Full Transcript: Powered by Otter.ai
Welcome to the Culture Design Show where we feature conversations with leaders and thinkers who are passionate about culture and design. Now, let’s get started with the show.
This podcast is brought to you by Culture Design Studio. This is where I help creative organizations transform their cultures, from being controlling to being collaborative. Now, here are some of the things that I’ve learned. Your creative talent demands a co-creative culture in order to produce their best work. But there’s a problem. So let’s see if we can recognize some of these signs.
There’s no framework to move your culture forward, you have high turnover and low morale. There’s increasing toxicity across all levels. There’s team engagement and satisfaction that are on the decline. There’s a misalignment between the employer brand and the employee experience. And there’s poor communication about expectations, and values. So if you want to learn more about how I provide facilitation and coaching for your creative team, reach out to me at CultureDesignStudio.com.
Our guest today is Aaron Keller, he’s the CEO of Capsule, which is a design agency who helps their clients solve complex marketing challenges. They also help identify new revenue opportunities and refresh lagging brands. Aaron is also the author of three books, two in the series called Design Matters. And he most recently co-authored the Physics of Brand. Aaron, welcome to the Culture Design Show.
Thank you. Thank you. Thank you for having me, Steve.
Yeah, I mean, we were talking just before we push the record that, you know, we’ve been connected on LinkedIn for quite a while. But we haven’t actually connected. And I’m glad that we’ve had this opportunity to just connect here and have a conversation. I’m really interested to hear about your story in the work of capital. So again, thank you.
Yes, yeah, I love having these kinds of conversations. And it’s great that I mean, the more genuine you can have in this kind of environment is digital as shall This is definitely not, you know, in this kind of conversation. Just it’s very rewarding for me as well.
Well, I love to always open our conversations was just asking our guests and so now I ask you, what is your story? What is your professional journey been like, I’d love to hear about that arc. From when not necessarily from when you were a wee boy. But when you first started to think about, you know, your creative career till until now.
I, well, I was first exposed to the Macintosh computer, by my father, who was an engineer. And we lived in South Minneapolis, and he brought us the Apple iMac. And I got exposed to that world of design, didn’t realize I was exposed to the world of design until I went out again to undergraduate went to work at Yamamoto Moss, and found that this was this world that lived underneath the umbrella of integrated marketing, but really wasn’t getting a share of the conversation at all.
It would be hard to find anything. And back then it was before the internet before Al Gore invented the internet, so I didn’t know it existed. And, but as I discovered it, I realized that this was these are the people that designed buildings and products. And even at that time experiences. I just hadn’t seen them, right, I haven’t been exposed to it. And it really wasn’t something you get exposed to in undergraduate. So I fell in love with something that I just didn’t know was there. But it was something that I already loved tremendously in my connection to Apple and my connection to that world.
And so as I was there for a number of years and looked around, my father was an entrepreneur, my business partner, his father was also an entrepreneur, and we started exploring the possibility of starting our own thing. And we did that seven years in there and decided to go out and start what is now Capsule in 1999. I was a fresh young, 29 year old, I’d finished graduate school and MBA and I’d seen design start to bubble up with IDEO. And what they were doing and I thought this is this has got to be the future and also fell in love with a particular book at that time, called The Experience Economy by Joe Pyne.
Glad I brought that up. I’m glad you brought that up because that’s been a key inspiration for me as well.
Yes, it was a big turning point. It was designed some great research methodologies around that idea around how do you measure the value of an experience. And it became very clear to me that that was the future that we could not rely on advertising or even integrated marketing. To get through the clutter. It had to go farther. It had to be offensive just to get through the clutter. We had to design experiences, we had to get back to authentic connections and relationships with brands and people.
And that had to come from design, it had to have a design component because design is not a transactional kind of way of thinking, right? It’s a very long term, very relationship-driven, right, it’s more about the people than it is about the message, or the product, or the connection with a person. So that book was a big inspiration for me and for starting the firm that we started and where we went from there.
So I love to hear I mean, as entrepreneurs, like I love to hear the story of what was it? What began the itch to start your own thing, because that entrepreneurial journey, not everybody has sort of that itch to scratch in terms of striking out on their own. What was there any collection or single bits of inspiration or motivation that you had to start your own agency at that age?
We had, well, I came out of undergraduate. My father, like I said, was an entrepreneur, he was an engineer and ran an engineering firm that was rather large in scale. And when I came out of undergraduate, he said you should go start your own business. And I kind of looked at him as a dad, I don’t know anything yet. I just got an undergraduate. I gotta go find something. And so then, seven years later, I brought it up to him again, I said, well, we’re thinking about going out and starting your own thing. And he said, you know, son, you know, one-third of all new businesses fail, another third don’t look like what they look like, right? Like, Dad, I’m looking for the supportive message now.
You’re telling me to do this, now you’re giving me all this doom and gloom.
Right, right. And so there was that there was also you know, so it kind of it was kind of built-in like it was going to happen at some point time, in some form. It’s just a matter of when, but there was a call that I had with my partner, that we had joked around about the idea of doing it at some point, and then I chatted with him, and I’m complaining about how the business is being run by the leaders. Look back on that now. And I realized that I couldn’t see why they were making their decisions. And now I look at it, I’m like, I can see why they made those decisions. And I can respect that even more.
It’s like, as you become an adult, and you respect your parents more, because you realize what they were doing, right? By doing what they were doing. You didn’t you can’t do that until you become an entrepreneur. So they get to the other side, you can complain about it as much as you want. But to actually go out there and do it yourself. put your money where your mouth is, which is extremely cliche, but it’s definitely true, right? You have to make those decisions now.
And you have to be honest with yourself, you cannot just do you can’t lie yourself, you can’t complain about it, because it’s your problem to fix. Right? What’s actually complain about, right? You can complain about COVID if you want to, which is a problem I can’t fix. But it doesn’t help anything, right.
So you get away from that and you start to you start to build and you focus on the positive and yeah, and then I learned the things that make it work, which is resilience, and grit, I think is a large portion of entrepreneurship is not giving up, you know, and making it to that 10 year to the 20 year to that, that stage where if you want to hit a curve, you have a growth curve, but you don’t have to you can have a lifestyle business and do very well. Right?
And be there for others in the community, right employ people give them things to do that they can enjoy and earn off of. So yeah, it is. I don’t know, there’s one moment other than that call partner, which was me complaining to him saying, we want to go out and do this. Cause now we should.
Yeah. And I think that’s that that definitely is a something that is common with a lot of entrepreneurs, that there’s a certain restlessness about the current situation. And either one, you feel that there’s something that you are called to do, or that you want to do, or that there is something wrong with where you’re at. And you might have the opportunity to create something better.
How has he serve you as you’re recalling that story of yourself where you were questioning what your leaders were doing? Now, years later, you understand that? How does that sort of reflection help you lead the younger leaders who may have those same types of questions that you had, however, many years ago, you know, you know that you were in the same place? You’ve grown older, you now mature and you understand the reasons for those things. How does it help you lead young creatives?
Yeah, it’s interesting, because you look back on that there’s some things that I’ve adopted and some things I’ve resisted. And now about how much freedom you give how much control you take, how much you do it yourself versus letting other people do it. Right. My father was really good about handing things to people. Just by not doing them right? By him not picking something up and taking it on and doing it. Other people would. And when they did, they got rewarded for that.
Sometimes it’s hard to not pick something up and do it right. It’s like right there in front of you, I got this. Right? I compared to Michael Jordan in his early years. And when he was trying to do everything and lift the entire team, and he made the transition to now it’s a team sport. Design is a team sport. You cannot, there are hero designers out there. But behind the scenes, we all know that that’s a team back that is not getting credit for it. Right?
This is a team sport, when we give credit we have to not just our team, but the clients we’re working with, right? So that that becomes more of a mentorship, it becomes more of a conversation and rewarding for taking things on. We love it when people come to us with Hey, I’ve got a solution for this. I think I as an individual should develop this particular area of practice. And we’d say yes, you should, and you wouldn’t support that in every way. And we’d love to see that happen.
Because, you know, and to a certain degree, we look back on that and affirm that we came from they created a number of entrepreneurs by doing that, by living that way and managing that way. Because people know when Oh, wait a minute, there was an awakening like I’m gonna do this. Right. And yeah, you can but there’s hardship on the other side. Let’s not forget, it’s not roses and green grass the whole way. But that’s their legacy. They created a tremendous number of entrepreneurs coming out of that firm, I think more for, you know, number of employees and many other firms. And that’s how they manage, which is a good thing, right?
Yeah, I’m in there, it reminds me of a saying that says you are either structured for control, or you’re structured for growth, but you can’t be both. And so that growth, that growth, as you’re saying, a lot of times that comes by letting go of control, by giving them opportunity, and there’s a little bit of psycho psychological safety, there’s the ability to take on risk, and even to use the word, the ability to fail or a safe place to fail.
But part of that failing is not so much failing, but you’re learning lessons through that experience. And if there’s that, that ability, and I hear both sides, like you’re, you’re citing some wonderful examples where that was the case, but you also hear examples at other agencies where you do have this charismatic founder, who is probably a sole genius, and everything is based around that person, but then no one grows because of it. It’s based on control. And there’s a limitation to the growth of that firm, let alone the individuals.
Yeah, yeah, no, it is true. And each have their merits as a business model, right. And they should not be discounted for what their merits are for sure. But it is a challenge, you’ll get to a limitation for sure, if you’re trying to rely on the sole genius, right, because people aren’t gonna stick around for that they’re not gonna, right, they’re not getting their own personal growth, they’re gonna move on to something else.
Because, you know, I think my generation, the Gen X generation, we probably just put up with that stuff. Now, this is the way it’s going to be, I’m just going to put up with it. I’m not going to speak up. I like either, I just have to suck it up. But I think the younger generation is more prone to like say, hey, if this isn’t for me, I’m out of here. Is that you’re experiencing anything like that? Maybe not necessarily at your firm? But in general? What are some of your observations about that?
And I feel like I have the impression that the younger generations that come in the younger generation that come has is working right now entering the workforce, whether it’s zero to five years of experience, they’re looking for growth. And it seems to me that if they are not getting that growth, they’re either going to speak up verbally, or they’re going to speak up with their feet by just leaving to another place that will.
Yeah, I think that generation has grown up in a world of abundance, and their that abundance has allowed them to develop behaviors that are well, but don’t like there’s always things to go do. Right? Yeah. So they can move on fairly quickly. And it’s a more natural-born behavior than it is. But we got pressed into us by our parents was not necessarily rule of abundance, right, that you need to protect, but we also moved around more than our parents did. You know, I think it continues, there might be this pendulum might swing back, perhaps back to the not that they’ll endure more, but they’ll realize that they can have an influence and change the environment, they’re in versus just bouncing to another one. Right?
Which is, I think, the more advanced way to look at it, right? Why bounce around trying to find the perfect environment, because there isn’t one. Perfect environment is the one you design for yourself. You say, this is the place I want to work in and I’m going to work towards that. You know, and I’m going to have situations that doesn’t, you know, it’s the idea of an intrapreneur you know, and it’s somebody else’s organization can think like entrepreneur, and make those kinds of behavior changes within a group, right and lead a group to be more successful.
And I’ve seen that showup. And I think there’s definitely a higher level to be achieved there. But you’re right that there’s there is a bit of the Millennial I’m gonna want the next thing, right. Yeah. And we are in that, you know, 15 minutes of fame, kind of culture, right, you can see shows up everywhere. Nobody’s seeking it. Right. And again, to get that.
So share with us a little bit more about the story of Capsule and the work that you folks do. I mean, we could go over sort of how Capsule has evolved over the years. But let’s take a snapshot of today Capsule of today. I know you folks went through a recent rebranding, I don’t know if that was just a visual rebranding, but it’s beautiful. But maybe tell us about what Capsule looks like today?
Yeah. So when we first started, we, you know, the category of design was fairly established. But you were you had constructs that were attached to that, right all your design firm, it was kind of like, Oh, that’s nice. You know, you’re a design firm. That’s nice. And then IDEO broke some barriers, which is nice. But it was still product design. And we, you know, we talked about brand design. And that’s what we did most of our own work.
Now with this rebrand, where we talk about is where Special Projects team. So we’re not an agency, we’re not retained, we come in on specific special projects to solve really interesting, complex problems. So what that means is we have researchers, writers, designers and strategists that and we custom build a team with external partners and internal team members, to either invent things to rebrand, refresh, things that are lagging, we work on a lot of interesting types of custom projects, we just did our first unboxing experience on it.
And so we’re doing we’re doing an internal branding project, essentially, culture branding for an organization. So those types of things, we have seven different types of these custom special projects that we do that solve specific problems. And that has been the new form of us. And it actually came out of our work with Patagonia, the way they described us, they said, wait, you’re in a category design thinking but the way you’re doing it is really different in the sense that you’re looking at, you know, each of the things, we have a problem to solve.
And so now, in their minds, they see us as the people when they’ve got something really painful that they can’t solve, either by capacity, or by just, you know, a perspective on an outside perspective on it, they send it, you know, look at our way and say, how would you address this specific thing, versus having a this is what we, this is the solution we’re looking for. Now, we just need some to execute on that. Which for us, you know, we look at that work, we see that work, that’s generally not as rewarding. We want to work where we can be a part of solving it with the client, right in collaboration. You know?
I love that you say that, because I’m starting to hear that more and more in terms of folks saying, you know, in the past clients have asked us to do the work for them. But now they’re asking us to do the work with them. How far back? Did you see that trend start to happen? And what does that look like today?
It was I might attach it with due to the decline of advertising or the decline of you know, you control your ideas, and you have your things and, and you don’t show it to the client until it’s perfect or to live in the right place? You know, it was probably 10 years ago that we started to see inklings of this, like, no clients will want to ask, well, I want to see this stuff or like, right, I want to be involved in the process.
One of it was it was the best part of their day, in many cases like this is in progress and creative, right? It also probably paralleled the movement towards the in house right where they could, or they could see things earlier because it’s under the domain of in house. So I think that parallel that as well. But for us, we looked at it we did like one of our early clients Barley’s, the rebrand of Barley’s we did it. We brought them into the process so they can see all the decisions we’re making. Because it what we’re doing for clients is you’re making 1000 decisions, right?
Put this letter here designed to look like this use this color, whatever it happens you’re working on, you’re making 1000 decisions, and you put in front of a client to make five decisions, right? Or the big, really meaty decisions. So if we bring them into the early decisions, they just become better but we have to make sure we direct together not you know, we’re just bowing down to say you don’t like that concept. It’s never going to survive. No, let’s see if we can have that stay in the air as long as possible, right because you might not be able to see what the concept is.
So they have to come in with a creative mindset. We can come in with a control and command and editing mindset, right? It has to be more for or add to when they enter into that frame. And many love it and absolutely, you know, want to be a part of that process. We’ve almost had to bring ourselves along and our clients along have that right? To make sure it’s comfortable? Yes, let’s let people see it earlier, and show them work in progress, and they’re not going to destroy it. It’s a trusting kind of thing. But when you do it much better work and much better work gets through, right. It’s not only the better work, but it’s the better work actually makes it out into the world. Right. Because everybody’s onboard and making this happen, so.
There’s ownership, there’s engagement. And I think I think the innovation is much higher, when you’re more co-creative with the client, for sure. Yeah, so that that’s very interesting. And I would imagine that creatives in the past that have that relied on being sort of the creative driving force in a project, as they’re now bringing in clients into the process, there’s probably some new skills or at least skills that they had to either unveil or to develop in themselves, like facilitation and coaching, even for their clients was something that they needed to develop in the repertoire, it was that something that you folks focus on is specifically as a skill set into your projects.
Yeah, and asked to be a balance of both, right? We can’t have somebody that’s just a creative, often a corner, and then pumping out really good stuff that nobody sees the last possible minute. It’s literally baked into how we do it. We practice it internally first, with everybody, not just what we’re labeled as creatives, everybody gets to review the concepts ahead of time and give their feedback and perspective. And the creator of that thing, gets to defend it and talk about it, but also has to coach that person.
It’s not just right, you don’t get it, you cannot use like you, you’re not a designer, you don’t get it, that language does not apply, right? You’re not a writer, you don’t get it, right. No, you have to help somebody get it. That’s your responsibility as the person putting that creative content out there. Because if they don’t get it, and somebody else doesn’t get it, right, if somebody else doesn’t get it, more than likely, we’re gonna run into a lot of people that don’t get it we can’t have that.
are those skills that we often overlook is just communication skills? It’s not that your idea is bad, or is not that your audience doesn’t get it? It’s just that maybe it hasn’t probably been communicated. And I think even giving, getting that feedback of I don’t understand, can you help me understand is really helpful to say, Okay, let me articulate in a different way. And that be like a muscle, it just, you’re able to be better at explaining your ideas to folks so that they can understand I think that’s, that’s part of the battle or part of the task, I should say.
Right, right. Yeah, it’s a different role for sure. For the team. And they have to add on to what they’re doing.
Yeah, well, I know that a lot of you know, as a design firm, I think you’ve seen how design has been adopted or even maybe not adopted by organizations. And I know that one of the things that we talked about was, you know, design having a place in cultures of companies in that could be whether it’s entering the boardroom, of large corporations, or maybe even on the other end of the spectrum, design entering startup communities, I’d love to get some of your thoughts about that.
I’d love to see it when it starts from the beginning. Right? When it’s there, there’s a design philosophy in the startup itself. And you can see it almost in the early days of the development of whatever it is, they’ve actually considered little details that other people wouldn’t consider, that are good signals of that. We’ve worked with the Honest Company, and Christopher Gavigan is he will pronounce his design affection as he gets into typography and the type that we’re using, even in a naming presentation, which has nothing to do with typography, but yet, he still loves to talk about type.
And so it’s, it’s nice to see early on, and at that level of the organization that there’s an understanding of that this is important, then by this, we connect with people, right design is for people innovation is for corporations. Well, let’s design for an audience. But let’s consider them in a real humanistic kind of way.
And so I love that, and you can definitely see the indications early on. And I think it contributes to the success potential for that venture, right. In a lot of ways from investor’s perspective, as well as from, from their actual consumers, because investors have more and more affection for design, which is a really fascinating thing to say out loud, right? Investors, affection for design. And I hear it popping up again and again. Because they’ve seen the results of it. Yeah, they’ve seen what really good design does.
And you’d say Apple broke this right as they’re broke this through and the fact that you need the largest corporation in the world at one point time was Apple, and they did it with design. So everyone had to look at it go. Is that an aesthetic thing and some people use the aesthetic, they just don’t, right, they went down that path, and all of a sudden you see a lot of, you know, white and you know and all that kind of aesthetic. That was Appleaest right, they look like Apple. Well, that’s not what we’re talking about when talking about design, it’s not an aesthetic in particular, you know, it’s a way of thinking about the object or the experience or whatever it is.
And that can people get there, it’s it is hard at first right to think in that way. And then it because not everybody has good taste, right. So they don’t have good taste if they haven’t consumed really good design or become addicted to design. It’s hard for them to get there for a while, right. So then the other piece on the board level, what I love to see and where it’s, it’s a risk as well. But it’s a fascinating one, as I see, in design, getting a role or a test seat, really designing a seat in the boardroom. Right, and an important seat in the boardroom, as you see Chief Design Officers and you as you see more of that role of thinking about design as a strategic tool within our organization.
And PNG did a lot to break that through, and that they use design as a way of thinking and lafley. And everything he did around that. And others their tremendous amount of admiration for how they thought about that. And they connected it pretty closely with innovation as kind of the peanut butter and jelly of an organization, which is good to see as well. And 3M doing that. And it was always fascinating to me as 3M, I went out to own the concept of innovation and the practice of innovation, but they never had design. It’s just, it’s like, well, it’s peanut butter, and you can have a peanut butter sandwich. But when you add jelly, it’s just that much better. So why wouldn’t you add the jelly of design into the organization?
So it’s really good to see that they’ve done that at a large corporate scale. And what I find fascinating is when people say, well, that’s good for the consumer products for like the post-it notes and the grill out of ingredients and a lot of other things. Why? How do you apply design? Well, you’re thinking about design more as an aesthetic conversation, not as a way of thinking. And if you have that, that that constraint in your head, well, yeah, you’re never going to be able to apply that to industrial, but doesn’t industrial have a customer doesn’t industrial have a person that interacts with that.
Maybe that the user of that industrial product is more important than the end customer as a consumer, but they’re still a person. So human being that you can design for. And if you do that, they’ll have loyalty, no other bond with you that can be really, really impenetrable even know beyond legal bonds, right? If you have a human dominance, that goes beyond trademark or patent law and everything else, right, it’s just it’s stuck in your head, you can’t use anything else, because it’s not the level of quality. I love margin, or the line that people go with 3M on, which is margin and more margin, they probably would want me to see that.
3M stands for margin because they are really good at getting really good margin for their inventions for their designs. It is trademark law and law definitely apply. But there’s other things that they use, and it’s the human bond between, you know, a product a thing that you use every day, and you don’t want to change that out, because it’s that thing, someone designed it for them. So I love seeing it on both levels, both the startup community, and on the big corporate side, it’s become more and more relevant, it still has a long road to go, it still is a small club. And sometimes the club members like to keep it a small club and they don’t want anybody else to know about this, I’d rather have more people get it know about it. And I’ve got a lot of other people that get that and so like more opportunities, a big fan of them making this a bigger deal. And he keeps pushing it to wherever he can and it should be. Right. So anyway, that’s my deal.
Yeah, I think that’s so important. I think too many times though, people that are not historically in you know, designers or familiar with the design, industry, or methodology, way of thinking, they do think of it as superficial, you know, aesthetic thing, or you’re designing a product you’re designing a, you know, even to think about designing a service is a stretch for many people designing an experience, I come from the world of architecture, which in my view, I just feel like it’s you’re designing the largest products ever in you know, it’s literally a human scale, type of product, but it is something that you experience that you go through.
But when I hear it even myself when I try to explain how design is applicable in all areas of business, it could be accounting, it could be policy, it could be HR, and I think, I think sometimes distilling it down to its most basic principle on one hand design thinking, you know, one of the definitions that I love to share is just it’s just a systematic approach to solving complex problems. And if you could almost design and use the word intention to describe design at its most basic route, and I think you start to see, just be intentional about what you’re doing and you’re already starting to get into some elements of design.
Even though the pentagram designers of the world might say, you know, design thinking is, you know, some expletive, in terms of right, because I know that there is the traditional designers, there is a craft to it that not everybody has. And I appreciate that for sure. But I think the design thinking part of it, people can think like a designer, even if they don’t have the handle designer. So what are some other thoughts you have about how to describe design in a way that sort of the masses can understand its value.
You can sense things that have not been designed for you as an individual, and you may not be the audience for that, and that’s okay. And so you can kind of separate yourself from it. But as a and I agree with everything, you’ve said that it isn’t, you don’t have to have a background in being an architectural designer, a product designer, a graphic designer, to take on these principles, and to think in this way, and design experiences. And we’ve proven that Walt Disney’s design experience is right, he was an illustrator.
And it shows up in a lot of places in different forms. We just have to see past the do this thing temporary, you do this thing in a commodity kind of way, do this thing and not care about it. If you care about something, you deliberately design it right. If you care about the audience, you’re doing this for you deliberately designed, and you designed it with intention with thoughtfulness, right, you slow it down a little bit to make sure it’s designed for someone. If it’s designed to make money, that’s not someone, if it’s designed for the corporation, that’s not someone that is an organization, it’s not a person. And it’s important design per person.
And there’s just there’s a lot of things out there that are not, you just have to pause and go, Wow, this really wasn’t designed for people. This was designed for the corporation, right? It’s designed for efficiency, or right, it’s designed for a distribution system. And that may be okay for its time. But someone’s gonna look at it at some point in time and say, I could design this for people and do better with this because people will adopt it will love it. And it’ll crush the system is the cab system, like the cab system was designed for the cabbies. And it was designed for the government, right, because the government got taxes, right. And there were small owners of cabs and cab systems, right. And it was designed for the cabbies are not necessarily designed for the passengers, right. And over time, you could kind of sense that.
And once that technology was available, that it could be redesigned and designed for you and I to basically hail something to come right to us. So we can jump in, and then just sit in that car until I got you somewhere and then jump right back out again. And that is a system designed elegantly for us that we can enjoy. Right? That’s rideshare. Now, that’s not what the cab system and even now the cab system goes through redesign itself. for human beings, right? It can’t figure out how to design for people. Right?
But it’s hard to see those things, right? Sometimes you look through a look through the construct or this is a business opportunity. Yes, it may be. But can you design that thing for people? And would it in that redesign actually create moments in their lives that they would be more, have more affection before would come back to again and again. And there are plenty of opportunities out there. There’s always entrepreneurial opportunities out there to redesign systems because over time, old systems that are designed for something get broken, right, they can survive the test of time, like the calves, right?
New technologies enter new behaviors, we’re coming out of a time period in which there are a ton of new behaviors that are happening, right. So what are the new systems are going to be designed and how they’re going to design for people? Right, right now we’re designing for safety and security. We’re designing for keeping people from getting ill. That isn’t it? There’s definitely new possibilities. Right. So yeah, I think it’s a fascinating time and exciting time, because of these new behaviors. And seeing companies and startups in organizations figuring out how to redesign for this new culture is gonna be really, really interesting.
Well, we’re nearing the end of our time, but I can’t end our time together without asking a follow-up question because you mentioned earlier that Capsule was founded was inspired its founding was inspired by the book about The Experience Economy. So I love for you to when we talk about sort of this combination of brand and experience. And you mentioned, you know, Walt Disney with Disneyland as the ultimate experience type of, you know, economy elements, share with our audience, sort of the underlying premise of what The Experience Economy looks like. And I have a follow-up question once you when we talk about that.
Yeah, okay. Yeah, that book gave me a new perspective at the time it was integrated marketing. And I thought, you know, that was the thing. And that was going to be the thing. And that was the debate. Was it agencies that were integrated? Or was it corporations with integrated, basically experience economies and none of that matters? That is not what we’re talking about here. We’re talking about experiences designed for people.
So how do we design experiences that can people will be more loyal to that he will want to come back to the people actually pay to go to right, what is it when Joe Pyne talks about the fact that can you charge for having your experience? If it’s a retail experience? Can you charge an entrance fee? Right? How comfortable is that feel? Not very, for a lot of experiences, right? Because it’s very transactional.
I love the way he thinks about, you know, services, as the design of a service is about time well spent. More time well saved, versus the design of experiences is about time well spent. Right? So thinking about the value of people’s time in that experience? And how are you doing that? And how are you creating something that they want to spend their time in, which is really more valuable than their dollars.
So that was a very, it was a very big piece of our start, though, when we first started talking about earlier, this is 1999. And the book was just out. People looked at us like we were crazy, they just look good, what are you talking about? So we started in brand design and worked our way in and kept bringing back the principles into the conversation around the design of experiences because it had to come to life at some point time. And it’s also been it struggled up against well is that is his experiences I really digital design. No, the broader experience has to be in in the book, The Physics of Brand book that we wrote, we tied value brands to value their experience.
That was the math we did to figure out but the value of your experience is what drives the value of your brand. It’s not about the advertising spend, right advertising spend can often be used just to prop up brands are not in a good place. So yeah, that was very big. And Joe would love to hear that. It’s a big inspiration for us for starting this firm. And what we have, so
Well I know, in the book itself, they actually point to a future era, even after The Experience Economy, they talk about The Transformation Economy. And that is where people actually want to be transformed by this experience, they will pay to be transformed in and I think, you know, some of the things like the you know, the rise and whether you want to call it the rise and fall. But you know, like say that the CrossFit community, the SoulCycles of the world, and all of these other brands that have really brought around this sense of community, around transformation, around creativity, and all the all of these different things.
I know there was a study that was actually put out by the Harvard Divinity School. And it was trying to understand why the church the American church was losing its millennial members, and I and identified that these folks were leaving the church because there were six things that they aspire to experience in their life, you know, social transformation, self-transformation, creativity, community, all these different things are six things. And they were saying that they weren’t finding it in their places of worship, but they were finding it in the CrossFit and the SoulCycles, they were actually experiencing community and transformation.
And so I started to really think like, you know, that transformation economy that they wrote about, I believe it’s here. And I wonder if there are brands that are making that shift, to say, hey, we’re not just going to provide you with because I think in some cases, even experience can be commoditized.
And I think people are starting to say, I know, yes, it’s memorable experience was memorable. It was even meaningful in the moment, but once I’m no longer there, it’s gone. The impacts are gone. But if I actually experienced something that changes me, the way I think the way I dress the way I use products, whatever. I’m willing to pay a premium for that. What are your thoughts just about that relationship? And maybe shift?
Yeah, yeah. Yeah, definitely. experiences can be commoditized, the trigger word for commoditization of experiences is convenience. Right? If it’s incredibly convenient, then it’s not really that valuable, right? It’s it pushes down the value of another question, of course, convenience stores, but there are really valuable experiences and convenience stores as well. I’ve critiqued them before then someone from a convenience or was at a speech that I was at, and so I had to correct that.
But yes, the transformative experiences, the highest value of experience where it becomes as we look at lifetime value of customers. And think of that as a mathematical approach, which is often what we do in a business, right, you think about, well, the lifetime value of a customer is based on how many times they come back to us, and what do we have to pay to make them come back to us. And loyalty programs essentially worked with that math to say, if we give them incentives, they’ll keep coming back to us because these incentives are there.
But we don’t realize that if you actually transform people’s lives, and do things that they actually love to experience as it relates to the category, you can build that lifetime value without having to spend on them without having to put those debts which are, you know, points on your books, right. If you talk to an airline now, right, they’ve got loyalty programs, and they get these massive liabilities on their books because they paid for loyalty, versus designing a transformative experience. Right, which I think there’s some airlines that are doing more than I think Delta is moving in that direction, in a big way. They’ve done more than most other airlines to say we’re going to think about this experience, we’re going to have it be now they’ve all run into the significant headwind of COVID right now, but they were making more progress, and many were.
But to move to that more transformative experience, where if I go through that, that, that you’ve changed, you’ve changed the sense of airline travel right for me, which makes it hard to go back. It’s kind of like we talked about Uber versus cab, it’s hard to do an Uber 10 times and then go back to a cab, go back to a cab, you’re like aww this is not fun, I hate sitting in the back of the car waiting to pay with my credit card.
You know that they’ve changed you, right? They’ve changed your experience of riding the car with someone. If airlines thinking that way, and they advance and they put their innovation dollars into that kind of thinking, they’ll have a better chance of essentially breaking the consumer from their traditional habits of this is what it’s like to travel. It’s miserable. I don’t want to do it. Now, and it doesn’t have to be joy. I have I’ve often said this to people say like, there was a thing that went through culture where you had to deliver joy, or you had to deliver as a high level of experience. It doesn’t have to be it just has to be a little bit better. Right?
In the case of airlines, just a couple of niche little notches better and you will, you will transform people’s experience, right, you’ll break them going back to another airline, I’ve had it happen to me between Northwest Airlines United, United is a painful experience. I’ll say that publicly. And if there’s someone who watches this from United, I’m sorry, but it is the case everything about your kiosks, your planes, everything is a horrible experience. Compared to Delta, right? You may only be a couple of notches worse, but it’s enough for me and I will do everything I can to not fly with United.
So yeah, there, it’s definitely showing up. It’s transformative and thinking about essentially breaking those traditional habits that the consumer has, or that the shopper has, or the human being has, and make them just a little bit better, not profoundly better, doesn’t have to be profoundly better, because that’s almost impossible to achieve. And then people just say forget it, I’m not going to try that inside of organization, right? Want to go that far, just do little things, better little things, you know, little things a little bit better. And we would go a long way. And a lot of the experiences are out there.
I love this one quote that says he says one-degree improvement over a long period of time is massive change. And I think sometimes we can think of just one or two degrees doesn’t have to be a massive, disruptive like changing the world with one single product in one single year. I think it’s it’s, you know, I think innovation, yes, we love those disruptive types of innovations. And I think those are good. But those are, you know, few and far between what those will be but I think if we can make things just a little bit better each and every time I think over a long period of time. That will be definitely transformative. Well Aaron, I appreciate our time together. I wish we had more time. Right. I appreciate you coming on if folks want to learn more about you and or Capsule or can they go?
They can go to Capsule.us and you can find me you can find other things we’ve done and you could sign up for our speaker series and, and enjoy the conversations that we have.
Thank you, Aaron. I appreciate you being on.
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