How To Build a Start Up With Design Thinking
For the past year, I have been working in a venture capital incubator trying to help people turn their ideas into companies. As an entrepreneur myself I find this role extremely gratifying. When I joined the team, I was bright-eyed and optimistic. The stories I had heard about places like Silicon Valley were amazing. People taking their dorm room ideas and ten years later IPO’ing. I had (and still have) moonshot ambitions of incubating another unicorn company.
In the startup world, founders regularly pitch me amazing ideas about revolutionary technologies that could change the world. Unfortunately, what I learned is that great ideas do not always equal good companies. The reality of working with startups is that we invest money, time and energy in the art of the possible. I have first hand seen many startups fail because they don’t actually understand how to build a company. This stunts their ability to create the right product, which ultimately leads to failure. Seeing this as a commonality, I asked myself, how can we prevent this?
A few years back I learned about design thinking. This framework’s roots are in building a deep understanding of your users. By putting your user first, it allows you to make decisions faster and with more certainty. The core of decision making when it comes to a startup’s products or services should be insights from your customer base. If you do not understand your customers then you will not understand how to adapt to the market. Design thinking can be the fast lane to these types of breakthroughs.
When someone pitches me on an idea, I ask three very simple questions. It is surprising how many people cannot provide clear answers.
1. Who are the early adopters?
2. What value are you providing the early adopters?
3. What does near term success look like?
If you are starting or growing a company and want guidance, below I go through each question and provide design thinking activities that will help with articulation. Grab a marker and some post-its and follow along.
Question One. Who are the early adopters?
Often times in design thinking we will ask the question of “who are your users?” This is a reflective question for people who might already have a product or service in the market. If you’re trying to get a company off the ground a way to re-frame this is, “who are your early adopters?” Early adopters are the people who once you start off will need to be the first users. An activity I use to help founders understand their users early on is the Persona Sketch. This tool allows you to align on the basic demographics of an early adopter. Below you can see the basic template of a persona sketch.
Let’s see what one looks like for a company we see regularly. In the case of a company like AirBnB, these were the people who needed a place to stay during the busy San Francisco conference season.
What about something not in the tech industry? For a company like Shake Shack, these were the people in Madison Square Park who were ordering when they were a food cart.
When you are starting off think near term. Who are the people that you would want to learn from in the next 4–8 weeks?
Once you have a picture of your early adopters, it’s good to ask yourself, how might you find those people? Are they old clients, people at the supermarket, members of an online forum or a meetup? The goal here is to build relationships with your early adopters so that you can validate your ideas and test changes.
Question Two. What value are you providing your early adopters?
One of the best parts of living in this modern age is our ability to have options. Walk into a store and go look at the honey aisle.
At first glance, it looks like there are so many choices of virtually the same product but each one serves a different need. Do you want raw honey? Do you want only mountain flower, honey? Are you sugar-free? Do you want organic? The companies above understand their target users and their needs out of a product. As a consumer, options are a great thing to have. As an entrepreneur, it means there is ample competition.
When thinking about your product or service, ask yourself what value am I going to give my users immediately?
Prior I talked about early adopters a.k.a your first customers. How are you going to make sure that you are solving one of their problems? Start by understanding what they actually need. In design thinking, we use the activity of needs statements to build empathy for our users. The framework is simple but I find value in going through this activity a few times.
Let’s do one for the AirBnB early adopter we identified above.
These needs statements help you get to the core of what your user’s problems are and the value you bring. When used properly this will provide momentum and guidance for future decisions.
Question Three. What does near term success look like?
In entrepreneurship, there is an exhaustive focus on vision and scaling. While long term planning can be helpful, it’s more important for startups to think near term. It is a lack of articulation of what a company is going to do in the next 4–12 weeks that will stunt a team’s ability to deliver. We focus so much on what could happen one, two, five years out that we forget that tomorrow we need to do something!
This answer will look different for every company but I take this time to reflect and plan. I am a big fan of writing out milestones per week, month and year.
Ex. For a food truck restaurant concept, “By the end of week 2, I want to interview five potential customers about where they spend time during the summer”
Ex. For a tech startup “By the end of week five, I want to have a clickable prototype to take to my users to see how they react to our user experience.”
The goal here is to break down your big ideas into actionable steps so that you know you are making progress toward the larger vision. From this process, you can also break down your milestones into sub-tasks if you think it would be beneficial.
Often times you see founders going off track because they don’t have a plan. This is step one in that process of trying to make your ideas a reality. By taking a user-centered approach you are finding the problems that are actually worth solving and holding yourself accountable to the outcomes.
So how did you do?
Early stage companies generally need very little which is why I find these three questions so important. I have found that many founders early on receive a lot of bad advice.
Too often we glamorize the process of scaling, getting seed money or hiring a bunch of people. Unfortunately, we focus on these things instead of understanding and validating our ideas with a real customer base. Remove those points of stress and refocus on your users. In this article, we quickly covered how to gain insights into how your customers think, feel and react. This process will allow you as an entrepreneur to be more productive, save time, save money and actually build a great product or service. When you’re toying around with an idea for a startup, ask yourself the three questions above. Do the activities and see how far you can get. Document your findings and where you got stuck. I promise, having these artifacts will save you headaches down the road.
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Paper Mentorship is a collection of stories, advice, and guides which focus on entrepreneurship through the lens of design thinking. All views, opinions and, guidance expressed are that of the author and not a representation of any companies or other interests.
