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Third Party Supplier Marketplace

@ Airspace

Airspace is a time critical logistics company that services a variety of industries. It uses a blend of independent contractors on mobile apps as well as a network of third party courier agencies. The use of third party agencies is critical to meeting customer needs - but also creates a high degree of friction and reduced margin relative to independent contractors. To solve this problem, I guided the company through an innovation process design and validated a new agent focused bidding marketplace, increasing margin and opening new revenue streams.

The Problem

At the outset of this project, Airspace faced the thorny challenge of balancing supply and demand between its customers and courier services. Although Airspace primarily relied on a network of independent contractors to move packages, third party courier agents with their own fleets were needed for many pick up and drop off locations. While these third-party agencies offered reliable coverage in low-density areas, they were costlier per mile and created unique communication challenges in order and tracking management. At the same time, occasional orders from Airspace were often a low priority for the third party suppliers relative to more frequent customers, which increased the friction involved in working with them.

Rejecting orders in remote regions was not an option - for many of Airspace’s customers, if we couldn’t handle their remote we wouldn’t be worth using at all. This dilemma forced Airspace to compromise on margins and operating efficiency to ensure it had the necessary courier coverage in remote areas. To make matters worse, building relationships with third party suppliers took resources away from deepening the Airspace independent contractor network. This led to a vicious cycle that threatened to drag the company away from its core competency and mute the company’s valuation multiples.

To combat this and explore avenues to increase margin and valuation multiples, a cross functional team was tasked to evaluate Airspace’s technical repertoire. I organized and facilitated the effort as we prioritized and tested new strategies. Through a careful evaluation the team identified several areas with high potential for disruption. I guided the team through an iterative design process as we tested innovative solutions, aiming to leverage our technical strengths to create new business opportunities. Ultimately, we honed in on a product aimed at streamlining and monetizing the untapped potential in our third party agent network.

The process for bringing a new product involves iterative exploration and validation phases, culminating in the delivery of a well designed, highly tested product.

Process

The project began with a broad focus: evaluate all existing technical capabilities and resources to identify areas ripe for re-monetization in new ways. To explore this opportunity space, I led the team involved through a three phase process - technical portfolio evaluation, target user interviews, and finally an innovation sprint focused on the most promising opportunity.

Technical Evaluation

The process began with a thorough evaluation of existing technical capabilities within Airspace's extensive portfolio. Over the years, Airspace had built out many internal products for its own operational purposes - the hypothesis was that some of those may provide the seeds for new, high-margin business lines. The evaluation team was composed of developers, researchers, and market strategists, each bringing a unique perspective to the table.

Through a series of interviews with expert team members, we compiled a comprehensive map of previously developed technical capabilities, evaluating the potential of each for new monetization strategies. Ultimately, we arrived at a list of a few dozen clusters of related functionality that were worth more in depth consideration. To do this, we conducted follow up interviews with stakeholders and developers familiar with each functional area.

The goal of these interviews was two fold. First, through interviews with developers we aimed to understand the feasibility of repurposing existing technology for adjacent use cases. Second, we aimed to get an approximate sense of the market potential of each idea. At the same time, I worked with the market strategists to assess the addressable market of the opportunities identified.

Technical capabilities with potential for remonetization were analyzed and mapped according to feasibility and potential value. The top right quadrant highlighted the most promising ideas that were worth exploring further.

From there, we focused on a short list of about 15 different market opportunities. Each of these were ways that core Airspace technology could be repurposed for a new market, without an infeasible amount of new R&D expenditure. From there, the team scored these opportunities on an axis of feasibility and potential value. We then mapped these opportunities into a four-quadrant matrix, with the top right quadrant spotlighting the most promising ideas in terms of feasibility and potential value. With only a few ideas qualifying for the top-tier quadrant, we progressed to user feedback validation to further refine our selection.

Target User Interviews

Following the prioritization of potential ideas, we began the process of gathering preliminary user feedback. Our goal at this step was to get a rapid gut check on the desirability of these ideas from the target users. In collaboration with product designers on the team, I developed low-fidelity mockups and presentations to illustrate the core concepts of our top-ranked opportunities.Then over the course of a few weeks we shared these mockups and concepts with relevant partners.

Leveraging our strong relationships with partners, we conducted quick, informal feedback sessions, gaining valuable insights into the desirability of the ideas. In particular, we were looking for signals of excitement - was the user interested in actually signing up or getting on a waitlist for those concepts. This provided an early indicator of which ideas were worth pursuing further, and which we could safely deprioritize.

The user feedback revealed that while several concepts intrigued our customers, one particular idea stood out due to its high level of excitement and potential. This concept revolved around creating a portal for customers to place and track orders through Airspace with all of their logistics providers. This would streamline a core workflow for our users - and held strong monetization potential and strategic value.

Positioning Airspace as an intermediary for more orders could enable us to earn finder's fees and increase order volume, thereby enhancing our courier network and opening new revenue streams. In theory, this would allow Airspace to add value with our technology on a larger set of orders, while minimizing the direct operational involvement in low margin orders. Similar products existed for other logistics modes (train, plane, ship), but there were not yet any strong winners for the NFO courier business that Airspace operated in. Integrating third party courier agencies this way aligned with the company experience vision, and also had the potential to increase margin and valuation through a new line of business.

The remaining question, however, was how we could make this business model attractive to third-party vendors and engage the supply side effectively?

Innovation Sprint

To identify a concept that would be desirable for third party agents and flesh out more specific interface designs, I led the team through what I call an “innovation sprint”. Innovation sprints, a multi-phase process combining research and design, are designed to drive teams toward rapid, impactful outcomes. They take a cross functional team through a rapid schedule of UX research, design sprints, hypothesis testing and technical roadmapping to deliver a validated and well-rounded product proposal.

Innovation sprints solve problems in traditional design processes and are excellent for quickly making sense of complex problem areas. This rapid and iterative approach enables quick testing of assumptions and fosters the development of comprehensive solutions. The collaborative process employed also helps to generate strong confidence and alignment across stakeholders, paving the way for implementation.

The team involved had previously conducted extensive discovery research on our third party agents, so we began with a quick research phase of familiarizing ourselves with that past research. From there I led the team through a “questions & assumptions” exercise to ground our research process and identify the areas we needed to focus on. During the workshop, I encourage team members to articulate their assumptions about the problem area and the questions they sought to answer. This process both encourages the team to be more aware of potential sources of bias they have and also identifies the areas that need to be tested to ensure design success.

Often if an assumption that informs a design goes untested it can limit the effectiveness of the solution, so I find that it is critical to map and validate key assumptions as early as possible. I find that question and assumption workshops also help teams create a shared understanding of each other's point of view. In turn, the team can more quickly identify when they have learned something that challenges their assumptions - potentially unlocking a new area ripe for innovation.

The agenda for a "Question and Assumption's Workshop". Question and assumptions workshops help get teams on the same page and risky assumptions that need to be tested first.

In this workshop we identified a number of key assumptions that we aimed to test. Based on our prior research (and direct experience), we suspected that our third party suppliers struggled with quoting orders effectively. Therefore, we expected that our automated quoting technology would appeal to them. We also thought that repurposing our easy to use order placement form so that agents could share it with customers would be appealing for our suppliers. Finally, we identified the assumptions that our internal fleet management and fulfillment tools would be readily repurposable and appealing to our target customers. These assumptions provided a guide to focus the design phase of the innovation sprint.

Each week concepts were generated, tested and refined - with user feedback informing the next iteration.

To test our assumptions and design a desirable product, we conducted four iterative design sprints of one week each. In each design sprint, I led the team in ideating and sketching a set of ideas on Monday to start the week. These sessions were key opportunities for non-designer stakeholders to get their ideas into the mix. The executive stakeholder, in this case the CFO, played a crucial role as the 'decision maker,' selecting the most promising ideas from the pool. Then on Tuesday and Wednesday of each sprint, I worked with two other designers to create hi-fidelity interactive prototypes of the prioritized sketches. At the same time, I worked with the other user researcher on the team to create the necessary research script and recruit target users for testing.

This prep work set the stage for the big event. Each Thursday, we conducted prototype tests with 5-6 target users, collecting their feedback for analysis. We paired these prototype tests up with brief interviews to contextualize what we learned from the testing. Typically developers and stakeholders would join a subset of these user sessions. Finally, on Friday we reconvened with the full group to analyze the results, update our assumptions, and pick a direction for the next week.

Over four iterations, we refined our approach, discarding less effective ideas and focusing on those that resonated with excitement and interest. At the same time, we were also developing personas to segment our target users to organize which features addressed the needs of different segments.

Initially, the design concepts were basic - such a simple offer bidding board, rate management system and driver management system. These provided a starting point from which to grow.

Design Iteration

The iterative design process allowed us to swiftly challenge and reassess our initial assumptions. For instance, features like auto quoting and order placement, contrary to our expectations, were met more with skepticism than enthusiasm by agents. In these iterative design sprints, we learned that the desire for a personal connection with customers was paramount for many of our target users. Users were willing to sacrifice operational efficiency to maintain that connection. We also discovered that users were looking for tactical control over quoting - and the combination of these two discoveries unlocked new potential design ideas we hadn’t considered before.

After a few iterations, we identified the features that excited users the most - such as in depth fleet management features and a refined bidding board that filled gaps in their current process.

Leveraging these insights, the team pivoted, developing updated designs that more closely aligned with user preferences and concerns. In subsequent design iterations, we incorporated features emphasizing personal connections, such as direct messaging with quotes, and balanced automation with user empowerment through suggested quoting. Additionally, we also dug deeper into the logistics provider workflow based on the user feedback, designing fleet management experiences with rich driver profiles and dispatching tools that were well received.

These iterations led to the identification of concepts, such as a bidding board and fleet management tools, that generated strong positive responses from most users. These became the focal point for further design iteration, which guided us to create and test a portfolio of design ideas that maximized excitement from our target users.

In collaboration with lead developers, we created a detailed roadmap to get a realistic assessment of the likely implementation timeline.

In the final week of the innovation sprint, I collaborated with developers and product managers to outline a potential implementation roadmap, breaking down the product ideas into manageable milestones. In this roadmap, we divided the product ideas into smaller milestones and checkpoints to create more digestible planning phases for rolling out the new product.

Additionally, I collaborated with business analysts to evaluate the market potential of this idea. We modeled the potential value for Airspace across two dimensions: revenue potential from various monetization strategies and margin gains from increased operational efficiency. The intersection of these factors - the development cost and potential payoff - allowed us to identify the likely return on investment, risks and implementation timeline to help inform a subsequent go/no-go decision.

The research team identified four key personas along with useful dimensions that allowed us to discuss and prioritize features.

Impact

By the end of the innovation sprint, we had identified two overarching product feature areas that were broadly appealing to our target users - order bid boards with suggested prices, and fleet management capabilities. We identified four specific user personas to help guide the understanding of the user base targeted by our new product and help the larger organization make sense of a complex user base. These personas were also critical to identifying features that would appeal to key target user sets, ensuring that the designs were well positioned to be understood and implemented effectively.

Over the course of our design sprints, we successfully fine tuned our interface with smaller details that worked to excite our users. Whereas in the first week of the innovation sprint, our designs were met with lackluster enthusiasm - and even skepticism - from users by the end of the sprint users were asking how to sign up. Many followed up with us in subsequent weeks to inquire as to the status of the project and whether they could help test it, or be the first users. This response - achieved in just a few quick weeks of design work- showcases the power of the iterative learning process harnessed by the innovation sprint.

We developed a detailed roadmap mapping out key milestones to reach as the product was brought to market.

The specificity of our designs created a roadmap that turned the larger project into a series of smaller value delivering milestones. This approach set the stage for the product to be built out using an agile process while reaping the benefits of a thoroughly researched design and planning process. With a solid but flexible roadmap, development squads were empowered to see the overall roadmap and understand how their work connected to it, but also given the freedom to make smart tactical decisions during implementation.

After presenting our results to the executive team at the quarterly company leadership offsite, we received enthusiastic support for the endeavor. After discussion, key pieces of the product (the bid board) were prioritized for implementation with a focus on streamlining the order placement process for the strategic heavy-weight logistics vertical. This feature was subsequently implemented according to the roadmap and now facilitates hundreds of orders worth millions of dollars a month. The new agent driven bidding process significantly decreases the overhead for these orders and has allowed Airspace to be a strong competitor in a high growth market.

By decreasing the friction involved in working with third party couriers, setting the stage for more competitively priced shipments, the Airspace third party courier bidding platform provides a key foundation for Airspace’s continued growth.

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