Figure 1: Midas, Atlas and Hermes
In their book on developing creative approaches for solving problems Barry Nalebuff and Ian Ayers describe the “What Would Croesus Do?” approach . The gist of the approach is to consider how a consumer would solve a problem when she has unlimited resources. Need tech support, have the tech sit outside your office and enter when called. Bored, become a cosmonaut. This approach can help to identify products and services for the high-end where the consumer is not price-sensitive and is interested in many different features (see Figure 1). We have renamed Croesus to Midas products because it is easier to remember and because it imparts a very colorful and explicit image of high-end features. Midas products and service are designed for consumers that are not price-sensitive and demand high-end features. Products that are designed with high-end features for individual’s that are affluent or for individuals that are simply interested in high-end products are designed using extravagant engineering. Extravagant engineering is less concerned with costs and more concerned with using new technology and concepts to develop innovative and perhaps even radical products and services. In general, products and services that are extravagantly engineered contain advanced features and attributes.
There is another part of the demand curve where the consumers are price-sensitive. This could include students, seniors, and in general individuals with low levels of discretionary income or individuals that are value conscious . In designing products and services for this group you can use the “What would Hermes Do?” approach. Hermes was the god of the traveler, the shepherd, the athlete, the merchants, the cunning, and was linked to invention and commerce. We are now designating Hermes as the patron for the part of the demand curve that does not have a patron. Hermes products and service are designed for consumers that are price-sensitive and demand features that are functional for the task at hand. Hermes products and services are still functional, but they have reduced and scaled-back features. There are a variety of very interesting products and services that have been developed for Hermes customers occupying the price-sensitive end of the demand curve. An important reason for offering Hermes products and services is to acquire customers that might eventually become Midas consumers. For example, students become less-price sensitive as they enter the work force and generate more discretionary income. Consumer’s tastes can also change as they become more familiar with a product line or because they get caught up in the hype around fashionable product. Designing Hermes products requires skills in frugal engineering.
Midas and Hermes product have an important role in developing new ideas for product and services for the middle of the demand curve. Midas gives product developers the license to create ideas that are unique and perhaps superfluous. Hermes products and services establish a minimal baseline for a product or service with the additional prompting of being inexpensive to produce. Hermes products should be less expensive to produce because they are used to attract price-sensitive customers.
From the producer’s perspective, the idea is to get the creative juices flowing and use the top and bottom of the demand curve to generate new ideas for products and services by drawing on both extravagant and frugal engineering approaches to develop Atlas products. The mass appeal or mainstream products in the middle are called Atlas products. Atlas was a Greek mythological figure that supported the weight of the heavens on his shoulders. Atlas products support the broad-based customer segment in the middle that requires products that have standard features and also have slightly differentiated features to meet the demand of monopolistic competition.The result of this dynamic tension between frugal and extravagant engineering is the development of Atlas products and services. Atlas products and services have attractive features and an attractive contribution margin. The result of this dynamic tension is a robust process for continually inventing and reinventing products and services to stave off the competition and establish a strong foundation for survival.
Here are some interesting “What Would Hermes Do” ideas:
- There is an adjustable lens that costs $19 that is being developed for the one billion that need glasses.
- Popular science is a great place for inexpensive creative ideas
- Both Midas and Hermes approaches are found in the idea marketplace.
- Make is one of the most interesting do-it-yourself prototyping magazines you can buy.
- Power for the proletariat.
Barry Nalebuff and Ian Ayers, Why Not?: How to Use Everyday Ingenuity to Solve Problems Big And Small, Harvard Business Press; 1 edition (December 1, 2006), http://www.whynot.net/main/about_book.php. Also visit Wikipedia for a discussion of Croesus http://en.wikipedia.org/wiki/Croesus
I realize that there are many patrons for this large segment of humanity. The goal is to have a question for the bottom of the pyramid. Please see C.K. Prahalad, Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, Wharton School Publishing, 2005 and many others that have been committed to this group.
 Dynamic tension was an exercise approach developed by Charles Atlas, but it also works here.