This is a MUST READ if you’re considering starting a new business or adding a new product or service to your existing business. Why? Because many companies fail simply because they didn’t consider the steps outlined in this post.
At TPM Focus, we assist startups and small businesses utilizing the Lean Startup Methodology and Design Thinking strategies. Both concepts are intertwined in the realities of starting or building a business and provide the basis for how you should proceed.
Before creating anything new, you should ask yourself: “Does my creation solve a problem? Would solving this problem this way be viewed as valuable by my ideal customers? Can I sell this solution to ideal customers for more than it costs me to make it?”
Design Thinking 101
Without getting too technical, we’re going to cover the basics of design thinking in regards to creating anything new for the market–a new business, new product, or new service.
Step 1: Empathize
Typically, one decides to create a solution to a problem they’ve witnessed themselves, experienced themselves, or something that has been requested by customers. That’s a good start to embarking on your new venture. If you’ve experienced something yourself, you can empathize with the experience of your customers and create a solution in line with an understanding of the problem. However, the data points provided by your own experience are insufficient to create a new business/product/service upon. It’s a HUGE risk to create a solution based upon one person’s limited experience, even if it is yours. Therefore, you’ll need to spend time researching and interviewing a significant number of prospective customers to develop a deep understanding of their challenges and experiences. This is called ethnographic research and it enables you to truly empathize with your customers and create a user-centered solution that they’ll find valuable and useful. In addition to ethnographic research, finding relevant data that’s already out there, like interviewing experts, can also be an excellent source of insights.
Step 2: Define
After conducting your research, you’ll then be able to define the actual problem. Many times the problem you set out to solve is not really the main problem, but a symptom of a problem. During this step, you should gather all data collected during your ethnographic research and analyze it to conclude where your customer’s problem actually exists.
Step 3: Ideate
This is where the fun comes in. During this step you’ll come up with creative, innovative ways to solve the problem identified in Step 2. The ideation phase is often put to the forefront when one comes up with a new business idea they want to implement. However, while tempting, you should avoid determining how you will solve the problem until you’ve spent time understanding and empathizing with your customer and defining their actual problem. Many times the true problem is not always apparent in the initial stages.
In this step you want to focus on the possibilities. Ask: “What if anything were possible, what can be done to solve this problem?”
This is the step where many believe they have to come up with an “out-of-this world” idea in order to be considered innovative. So, let’s make something clear: Innovation is not primarily around novelty. It’s about value creation. The most valuable kinds of innovation often involve borrowing something from somewhere else. Another industry, your own past, or else recombining things that already exist.
Step 4: Prototype
This is where you’ll create a scaled-down version of your solution to the identified problem. In tech startups, it’s common to call the prototype an MVP–minimum viable product. This is the most basic representation and mock-up of your product or service that can be created to allow customers to test drive or experience your new solution. Remember to leave out all the bells and whistles at this stage. You need only to provide a simple tactile version of your creative solution.
Step 5: Test
Now it’s time to put your prototype out there and let customers test drive your new solution. Since the solution was derived from studying their needs, they’ll be receptive to providing feedback from their experience with it. This feedback is extremely valuable for iterating on your solution so that it materializes into something customers find valuable enough that they are willing to pay for it.
Keep in mind that Steps 4 and 5 may be repeated over and over again. Once you receive feedback from your customers, you’ll find that changes to your prototype are necessary. This process of testing, receiving customer feedback, making adjustments, then repeating the process over and over again is called iteration. Iteration is the repetition of a process or procedure as a means to obtaining successively closer approximations to the solution of a problem. So, don’t get impatient with the process of repeating the steps, it’s part of the journey to creating a valuable product. Innovation comes from tests.
Step 6: Implement
This is where it’s time to go full speed. In this step, you’ll use all of the data and feedback collected to go full speed ahead implementing the vision.
This process–the design thinking process, ensures you stay focused on why you’re building a product–a user-centered approach versus focusing on what you think customers want. After all, the users–your customers, are the reason why you’re in business. You’ll want to make sure you’re providing value that serves their needs.
This process is extremely difficult to follow when you are the founder or owner of a business because you have confirmation bias. This means that you’ll do just about anything to look for data that confirms your idea and desire to move forward. Confirmation bias is a huge risk to the success of a business, mostly because it’s done subconsciously.
The purpose of the design thinking steps outlined above are to help you find disconfirming facts (yes, you want to know where you are wrong). You need to find the holes in your hypothesis and understand where you are wrong so that you can put your energy and resources into searching for and implementing what is right.