In today’s technologically advanced world, businesses have a huge scope for innovation and growth. However, most start-ups (over 90%) fail in spite of developing and offering a great product. There can be various reasons for this but overlooking the customer point of view can be sited 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 feedbacks 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.”
There are increasing challenges for start-ups to adapt their services and products with the rapidly changing economy and evolving market. The costumers 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 behavior has brought in a new set of challenges. While there are multiple reasons why start-ups fail, not giving enough time on customer development tops the list.
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.
Businesses have begun to recognize the need for innovation as the key strategy that can help them gain and sustain a competitive advantage over their competitors. Due to the knowledge and opportunities that customers and users can provide, businesses have begun to show great interest in user-centered 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.
How can businesses inculcate the Design Thinking mindset?
Start-ups 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, start-ups can inculcate the design thinking mindset in their business processes or can also align their start-ups culture with design thinking.
These are a few things that businesses should inculcate in order to adapt the design thinking mindset:
1. Walk in your customer’s shoes
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 behaviors, desires and needs. By narrowing down their potential users, they can focus on a specific segment of 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 start-up is offering them. Once the founders identify key insights through research, they can focus on turning them into meaningful solutions.
2. Develop real solutions
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
It is rare for any start-up 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.
Founders need to keep in mind that customers don’t use their product merely for the sake of using it, but 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 start-up. Focusing on the value will enable the business to create something that customers want to pay for, share, and come back for.
By keeping this in mind, we can better set the right constraints, tap into the right values with solutions that fit in seamlessly and make an effort not to create new problems, when solving the current.