Money and Magic - Fahrenheit 212 and Strategic Planning

Few business consultant firms integrate business strategy so perfectly with design in New York City like Fahrenheit 212 (http://www.fahrenheit-212.com/#) does. On May 21, 2012, I have the opportunity to visit the company with a group organized by Taiwan Design Center. (Note: 212 is the area code of Manhattan only)

The office is near New York University and at the border of Greenwich Village and So Ho. The presentation started with the slogan or motto of the firm “Money + Magic”. Pete Maulik, the chief strategy officer, gave the presentation by saying that there are plenty of ideas out there, but only a few can become vial business ventures. His company focus on innovation and find the new business model for customers, creating FPV (future potential value). It combines profitable business planning with creativity to help customers maximize returns for their stakeholders.

The company is made of three main groups of people – business planning, idea development and idea creation. Fahrenheit 212’s business model is they provide business innovation planning for customers and own a stake in a customer’s success. It only take 1/3 of its fee upfront and will collect the other portion of its fee based on the performance of the new venture it plans for a customer. The fee collection is divided into four tiers and when the milestone for each tier is achieved, it receives the fee. The four tiers can be the target market, and so on. Namely, Fahrenheit 212 wants to own a stake in a customer’s success or failure in the new venture it helps plan.

During the presentation, Pete gave 3 examples of works his company has done for customers. The first one is a project designing personal finance products for a Dubai bank, targeting the middle class with the goal to encourage the bank customers to concentrate their financial assets in the bank by creating discounts products customers buys, such as lower interest rate on mortgage as well as loyalty program.

Fahrenheit 212 also did a stackable LCD panel module for Samsung which can be assembled to form a TV wall with programmable on-screen multimedia contents. In addition, Fahrenheit 212 also designed a new vending machine system for Samsung in which the main focus is on inventing a new internet-connected vending machine with LCD panel. The panel will tell the drink customers what drinks and how many of them are in stock in the machine. The connection to the beverage company’s distribution system can alert the company when inventory of certain items are low, and thus the company knows when to restock the items. All 3 examples were presented to their customers in so called video prototyping – the video format of multimedia presentations that explain the business models and narrate the story of the business process/user experience.

My overall experience with Fahrenheit is its willingness to take a stake and participate in a customer’s venture to co-develop a new business model. Its co-creation effort reflects in its fee schedule for its customers. Another impressive feature of Fahrenheit 212’s business model is that it focuses, as Pete said, on innovation alone. It has to count on its customers to gain the insider knowledge and information in order to innovate. And that is exactly what Fahrenheit’s core competence. Though it is a business planning consultant firm, it strategically integrates the creative and design functions with its business planning capability. That is sort of like Mckinsey & Co. the largest business consultant firm in the U.S. extends its strategic planning to the design and development phase to vindicate the idea for new business models are viable and competent. This approach sets Fahrenheit 212 apart from many branding and marketing strategy companies in New York. The way it extends from business planning into design works reversely to the core strategy IDEO adopts in which IDEO expands its core competence in design and engineering into experience design and corporate-level business planning. This approach alone makes Fahrenheit 212 stand out crowded business consulting field for consumer products in the U.S.