DESIGN THINKING; HOW TO TRANSFORM A VALUABLE IDEA INTO A TANGIBLE BUSINESS CONCEPT
DESIGN THINKING; HOW TO TRANSFORM A VALUABLE IDEA INTO A TANGIBLE BUSINESS CONCEPT
Every startup or product department in an organization is in a series of hypothesis about who is a customer, what will move the market, and what makes the product/service attractive to customers. The process of building on an idea starts from a problem, a need and/or gap in the market. Identifying a need or a problem worth solving and up to the point where users are willing to pay for it is quite a task to take on. Many times we have seen startups with brilliant ideas; many have even scaled beyond the startup phase but not yet profitable or tangible. Most startup ideas begin by identifying a need through their own experience. This becomes a valid single case but still lacking evidence for scale. So, if you have already identified the user needs through your own journey or pain points- That is only the beginning and a starting point. But how would you discover the need? The need that is worth funding and customers money. For many businesses, that need is the validation that there is a demand, a need to build an MVP (Minimum Viable Product) but you need some proof. Design Thinking is an innovation process to discover unmet needs and create new products and services. It is well suited as a method to help entrepreneurs build enough evidence and validate needs for their business concept. This is how you can do it with design thinking:
Evidence: Gather evidence on the problem. This should be qualitative in the first instance. Use texts, audio, video, pictures to build a problem grid. Be as visual as possible. Go out and interview people; take pictures of situations, scenarios and people in their natural habitat. Many times, observing people’s behavior is all you need to identify a part of the problem worth giving attention to. Find an unusual audience, I call them ‘extreme users’. For example, if you want to build a money management service for working-class people. Talk to people that don’t use any form of money management. This could be traders, hawkers, unemployed. People that think using it is evil and then also talk to people that use that sort of service heavily. Find younger users and older users. Their story might be an inspiration for an authentic solution to money management. In the same vein, a food company will discover more opportunities by exploring the broader theme of healthy eating and lifestyles than by investigating the more narrow idea of consumption of products such as frozen food. You can use any format you like to store the data. Just make sure, it is visual, readable and handy. Categorize the data, for example, location, age, sex, occupation. This gives you a view of where to focus in the long run. Combine this with quantitative data, and you have an overview of the market size and value of potential customers. You can make your evidence readable and fun by organizing it as a story timeline based on a single customer, customer segment label or theme.
Empathy: Build empathy. Defining the customer problem comes from patient and sustained interaction with the customer over time. You need to be patient to understand customers. For instance, economic and cultural capital are some of the drivers of consumer motivation and they need time and place to manifest. It is important to go beyond interviews and study quantitative data about customers or the market. It is important to stay with customers over time to observe the changes. Empathy takes you closer to your target. If you want to build a money management service, go and observe how traders operate. From selling and collecting their monies to storing them, and ordering for goods. You need to go through the process with them on various occasions. Empathy building can be a part of the evidence and data collection but also important in testing the idea or prototype. For easy recording and analysis, you can use empathy maps to build out the evidence.
Needs analysis: Needs analysis is the analysis of the customer unmet needs to identify opportunities. The first step is to understand the market context as experienced by the customer. Think of markets rather than product/service sector. The context is the activity the customer is engaged in, which could be shopping for a new PC, seeking a bank loan or scheduling a money transfer. Higher-level customer or consumer lifecycles take us further into the customer’s world. By mapping how customers go through this cycle from the beginning to end, you can identify areas of intervention and how well that need is being met by your business concept or other services. Unmet needs form the basis of opportunities and further validates your business concept. For instance, map the customer journey from the moment they discover your brand to the ‘post-purchase’. Observe or ask customers what their experience was as they move along the journey and then record them. Moments of difficulty/stress can easily be a gap for you to build on. Jot them down and move to the next step. You can do this across touchpoints for different channels. For your product/service as well as competitors.
Prototyping: Build to learn, or prove an idea, business solution, business model or revenue model. Your prototype is a minimal version of your product or service. If you are building a product like a digital product, then find a way to create a lean version of it using inexpensive tools like word processors or WordPress. For services, you can easily stage or perform the service with customers and test specific aspects of it. To build your prototype, focus on the evidence from the need. Your prototype needs to be lean to make way for easy assessment and onboarding. For example, your money management service might be an app. Build an easy to use spreadsheet that will allow people to input their monthly/weekly expenses. Forget about notifications and alerts for now. Just focus on inflow/outflow. Find a specific customer segment to demonstrate this better with petty traders or importers.
But, if you have already built out your prototype, focus on testing the unique elements of your prototype especially on how it helps people manage their money. If your value proposition is visibility of transactions, then be sure to test, elements like simplicity, lingo, notification format, etc.
Test your assumptions: To test your assumptions, you need to build an MVP (Minimum Viable Product). The MVP is a proof of concept to test your business model and the entire product/service offering. It is a much larger framework to see that your idea is marketable and valuable to customers. So launch to test.
Iterate and build: Adapting your idea based on customer and market feedback is important. This should be done often even after product rollout. Most of the time, our solutions are competing with values and ideologies and culture. Many of these will remain salient until after launch. Staying at the iteration mode enables you to quickly adapt your business while still in the market. It is hard in many cases to un-launch your product. But you won’t go very far either by pushing it down peoples throat if it is not accepted. So, having this in mind whilst building a strategy is important and gives you the option to adapt in various ways. Before taking your business fully out, it might be worth stating that the product/service is in BETA or soft launch. Monitor the progress for a couple of weeks or months. Digital businesses have a much better opportunity to track customer feedback and improve on them. But iteration is more about how acting on this feedback rather than the feedback itself.
Finally, although we are seeking validation for the business concept, we are not seeking verifiable truth for all customers, but rather, looking for the spark to ignite the idea.
Pay attention to how customers are using your product or service. This may serve as the evidence to pivot from your original idea to something else or change your entire business model or concept. For example, if you are building an evidence for a public toilet business and your revenue model is pay per use. That may need to change if you observe that people are more concerned with finding where to buy a tissue paper to use than paying for the actual service. Your model may need to change from pay per use to selling tissue papers (either as an additional revenue source or bundled with a free use).
Identifying unmet needs is the basis for defining opportunities. To validate a business concept means understanding the customer context through insights from data, evidence, and empathy. With your new business concept powered by insights, you can then develop marketable propositions through a process of prototyping, validation and testing. The process puts emphases on visual thinking and experimentation. It encourages you to stick to evidence and focus on customer needs and behavior and at the same, the creativity to translate the needs and behavior into a valuable proposition that customers are willing to pay for. It is important to be active and proactive based on customer feedback and when necessary pivot your idea to something more valuable based on customer needs.
Charles Ikem, PhD
Charles is a service designer and lead, design and innovation at Design Thinkers Agency, Nigeria