Building successful startups using Design Thinking

The Need for Design Thinking

Businesses, mostly startups, have begun to recognize that innovation can provide a competitive advantage over their competitors. Due to the knowledge and opportunities that customers and users can provide, startups have begun to show great interest in user-centred approaches to innovation. This approach has led to an increasing interest in the design thinking methodology. Design thinking is a mindset that is not restricted to designers. The principles of Design Thinking can be extended across multiple disciplines within a business.

Why Design Thinking is Essential for Startups?

In today’s technologically advanced world, businesses have a huge scope for innovation and growth. However, most startups (over 90%) fail despite developing and offering a great product. There can be various reasons for this but overlooking the customer point of view can be cited as one of the crucial ones. Unlike a few years ago when businesses focused on developing their internal process to drive growth, today most businesses are also considering customer needs and feedback to develop innovative products.

Erik Steeb of the Los Angeles Cleantech Incubator explains, “Design is a critical element of any business but it’s especially important for startups who have the unique challenge of discovering the right business model for their innovation. Too often, companies spend all their time on the innovation itself and miss one or two key elements that would really connect with a particular market. By identifying and really understanding their customers early on, companies can save a lot of time and money in discovering that successful business model.”

Challenges faced by startups

There are increasing challenges for startups to adapt their services and products to the rapidly changing economy and evolving market. The customers are changing from passive consumers to active influencers and trendsetters. Consumers are emerging as makers and innovators themselves. Although the advancement in technology has enabled the founders to start new ventures with ease, the increasing global competition and changing customer behaviour has brought in a new set of challenges. Inadequate time for customer development is the number one reasons why startups fail.

For any business, customer understanding should be of prime importance. It is critical to the success of startups as it helps in creating improved and more compelling services and products that lead to competitive advantages as well as increased innovation capability.

How can startups inculcate a design thinking mindset?

Startups should not only focus on solving problems but develop solutions for problems that the users didn’t even know existed. Apart from improvising their product, startups can inculcate the design thinking mindset in their business processes or can also align their startup’s culture with design thinking.

Ways to adapt Design Thinking

Following are the ways how startups can inculcate design thinking:

1. Walk in your customer’s shoes

Identifying the customers' needs is the first step in design thinking.

First and foremost, the founders should look at the users through the lens of empathy. Founders should start with defining who their users are, speculate their behaviours, desires and needs. By narrowing down their potential users, they can focus on a specific segment of the market, service them and win quickly.

Next, founders must deepen the understanding of their customer base. This can be achieved by doing meticulous research and refine the speculations. Skipping or skimming this step could jeopardize success; these insights let you know whether the target users would want and value the product that the startup is offering them. Once the founders identify key insights through research, they can focus on turning them into meaningful solutions.

2. Develop real solutions

Design thinking offers solutions that solve users' problems.

Developing real solutions based on user insights instead of focusing only on technology is crucial. Although this approach might seem counter-intuitive for a cleantech startup, it will eventually pay off.

Even if founders have an idea that solves a core problem of users, they need to harness it in the right context or risk missing the mark.

As the business grows, startups can refine their model and strategies as necessary, but should never lose sight of the user. They should always be able to answer questions like What needs are they satisfying? Who are the competitors and why should a customer choose them instead?

3. Evolve continuously

Design thinking helps in cultivating a culture of innovation.

It is rare for any startup to get the solutions right the first time. It takes multiple failures and trials to hit the spot and develop the right solutions that will work. Therefore, founders should know that it is OK to fail but learning from it and trying again is what counts.

Iterating and evolving the product continuously based on customer feedback and suggestions will help in scaling the business better.

Conclusion

Founders need to keep in mind that customers use their product for the value it provides.

Thus, focusing on the ‘why’ will allow the founders to make better and more relevant decisions around the things they design for their startup. It will also enable the business to create something that customers want to pay for, share, and come back for.

By keeping this in mind, we shall be better able to solve customers’ problems and achieve total customer satisfaction.


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