What is “Harvest Loop”?

There is a famous story that Jeff Bezos drew a loop diagram before founding Amazon. This was a ``win-win loop'' in which the more products you purchased, the more you could sell them at lower prices, and the more you could sell products at lower prices, the more customers you had and the more products you could purchase. 

The Harvest Loop we propose is a framework for increasing competitive advantage. This can be said to be a very important way of thinking when thinking about the purpose that many companies have been working on in recent years, that is, the fundamental meaning of their existence. 

The composition of a harvest loop can be explained using the diagram below. 

Let's look at each of the four boxes in turn. First of all, "function" here refers to AI technology, and in other words, what kind of predictions it makes. Next, "approach" refers to the method of how to provide AI. When we talk about AI, we tend to think of it as automation, but in reality, it is based on the coexistence of humans and AI. 

The "end value" that follows is broken down into five main categories: increased sales, improved operational efficiency, reduced risk, improved UX, and R&D. These values create ``UX (customer experience),'' and through this flow, AI accumulates data. 

Accumulated data will lead to further enhancement of AI functions, and by repeating this process, end value and customer experience will increase steadily. This is the harvest loop. 

Let's apply this to self-driving car technology. In this case, the first "function" that AI performs is accident prediction. And "approach" will sound an alert to the driver. The ``end value'' that is created is the reduction of accident risk, and the ``UX (customer experience)'' of safety and security is provided to drivers. 

With this loop completed, the more the car is driven, the more unique data the AI will collect. For example, by accumulating data such as the conditions of intersections a driver frequently passes and their driving habits, AI will be able to make more personalized accident predictions, and accuracy will continue to improve. It is. 

The first thing you should set is "UX (user experience, customer experience)"

So, when it comes to completing the Harvest Loop based on this framework, which box should companies fill in first? I think it should be "UX (customer experience)." 

The customer experience that companies aim for is connected to Purpose. If you investigate the reason for a company's existence, you will naturally have to consider its Unique Value Proposition (UVP). A value proposition is the reason why a customer buys a product, and a unique value proposition is a unique reason for a customer to purchase a product that is not found elsewhere. In other words, the value proposition should be turned into a KPI, and what maximizes it should be called "UX (customer experience)." 

When talking about KPIs, people generally tend to focus on financial figures such as sales and profits, but it is KPIs from the customer's perspective that create unique value propositions. 

For example, when considering the business model of a food delivery service like Uber Eats, the ``UX (customer experience)'' is the experience of having the food delivered to your home without the hassle of preparing the meal. If we were to set the KPI here as ``the time from ordering to the time the food arrives,'' the current situation would be around 30 to 40 minutes. If we think about maximizing this KPI, we can ultimately imagine a world where food is delivered within one minute from the time of ordering. In other words, the "end value" is "improved UX." 

So, how can we actually achieve this KPI? The ``approach'' is to deliver food within one minute from the time of ordering, and to do so, it is first necessary to narrow down the area and time period and accurately predict needs. At lunchtime in the Marunouchi area, if we can accurately predict how many servings of okonomiyaki, how many ramen, and how many tempura bowls will be ordered, we can send delivery staff around with pre-stored dishes based on that prediction. You can leave it there. 

The more orders are received and the more the delivery person moves around, the more data will be accumulated, and eventually it will be possible to make predictions based on minute details such as subtle changes in needs on an hourly basis and changes in needs due to weather and temperature. . 

The important thing here is not to think about how to use the data you have. To complete the ideal harvest loop, you should first consider the purpose that starts from the UX (customer experience), and what data is needed to achieve it. I feel that many companies aiming to utilize AI misunderstand this point. 

Our philosophy is that if you don't have the data you need to achieve your goals, just make the effort to acquire it. In other words, the framework's "features" box should be filled in last. 

Purpose formulation and harvest loop based on customer experience. Please think about it in accordance with your own business model. 

Serial entrepreneur. Completed graduate school at the University of Tokyo. Engaged in research on recommendation engines, complex networks, clustering, etc. It was twice selected for the IPA Unexplored Software Creation Project in 2005 and 2006. Founded Naked Technology while still in school. We develop and operate middleware that allows you to develop applications on IOS/ANDROID/flip phones. In 2011, the company was sold to Mixi. Received various domestic and international awards such as ST.GALLEN SYMPOSIUM LEADERS OF TOMORROW, FORBES JAPAN “Entrepreneur Ranking 2020” BEST10, Woman of the Year 2019 Innovative Entrepreneur Award, VEUVE CLICQUOT BUSINESS WOMAN AWARD 2019 NEW GENERATION AWARD . He has also given a keynote speech at AWS SUMMIT 2019, Milken Institute Japan Symposium, 45th Japan-ASEAN Management Conference, Bloomberg THE YEAR AHEAD Summit 2019, etc. Since 2020, he has been appointed as a member of the Cabinet Secretariat IT Strategy Office and a special member of the Cabinet Office Tax Investigation Committee. From 2021, he will serve as an expert member of the Cabinet Office's Economic and Fiscal Policy Council. In her private life, she is a mother of two children.

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