In 2013, Forbes reported that a startling 80% of young companies fail within 18 months. Why? There’s no shortage of information online to advise on growing market penetration rates, brand loyalty and so forth. Nor is there a lack of able agencies and specialists to consult with.
One thing the Internet can’t give, and money can’t buy, is learned personal experience. A consultant I admire always says: “You’re not paying for my successful experiences, but my failures.”
Humans learn by doing, and by the transitive property, companies do, too. The Los Angeles Cleantech Incubator (LACI), a non-profit brainchild of the city’s government, industry and academic leaders, recognized this and set out to fuel Los Angeles cleantech startups with knowledge that is either very expensive or learned the hard way.
LACI cultivates traditional business acumen through providing CEO mentoring, access to investor and customer networks, and collaborative working space, but recently, LACI saw the increasing value in adding user-centered design and creative thinking to the mix.
Would tech start-ups succeed if they adopted this holistic approach from square one?
(Check back in a few months and we’ll let you know).
Partnering with local specialists, Pull Experience Inc., Motivo Engineering and Echo-Factory, LACI started an ongoing Design Thinking Workshop Series to equip its portfolio companies with this methodology.
Erik Steeb, VP of Programs at LACI, 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.”
The series started with participants collectively selecting a problem to solve that affects their community: “create a solution that combats the negative health affects of smog in populations near the freeway.”
Through five pillars of design thinking, shared below, theory was put into practice in a “safe and fast fail” environment.
1. Uncover insights that drive innovation
Considering the user through the lens of empathy is crucial. Start with definingwho your users are. Create personas. Speculate about the pain points of their daily lives, their behaviors, desires and needs. As a startup, narrow down your potential users to one beachhead market that you can service and win quickly.
Next, deepen your understanding by walking in their shoes (literally, if you can) with meticulous research to verify and refine your speculations. Skipping or skimming this step could jeopardize success; these insights let you know whether your target users would want and value your offering.
Make sense of your findings. Do opportunities rise to the surface that you hadn’t seen before? Be nimble. Identify key insights and focus on turning them into meaningful solutions.
2. Identify enabling technology
User driven, tech enabled.
Letting users drive solutions instead of technology might seem counter-intuitive for a cleantech startup, but it pays off. Insights from users should dictate the key requirements for a product or service. Ideas that aren’t harnessed in the right context risk missing their mark…and potential.
Develop concepts, prototypes and their use-cases. Test, fail, refine and debug. As you hone in on the best technology for your concept, evaluate whether it is a product or a platform. Be careful not to pigeonhole yourself into one product if your concept is actually a platform.
Nail the logistics.
In 2012, 84% of Kickstarter’s top projects shipped significantly later than promised. As a new company, understanding realistic timelines and costs for product development, packaging and delivery is important, impacting your ability to compete and retain customers. Consult with seasoned experts and take advantage of multi-functional teams.
3. Turn solutions into viable ventures
Make it real.
As your prototypes increase in fidelity, refine your value proposition. Pivot as necessary, but never lose sight of the user. What needs are you satisfying? Who are your competitors and why should a customer choose you?
Refine the details of your business model.
Identify your partners, channels, revenue streams and cost structure. If infrastructure necessary for the ideal user experience is missing, address that. For example, offering a life-simplifying technology with a complicated purchasing experience creates dissonance. Find or create alternatives.
4. Design and tell stories
Bring your value proposition to life by telling the story of your solution. Get people excited, create memories and make complex ideas digestible. Do this at every touch-point of the user experience, and for different audiences. Know what to say to both the venture capitalist and the social media blogger.
Ensure that the core of your story is both harmonized and reinforced across each touch-point – from the design of the artifact, the experience of using it, purchasing it, maintaining it, to social media messaging and customer service.
Be concise. In 2013, the average attention span was only eight seconds. Brief and repeatable messages are your friend. Visuals and imagery are too.
5. Fail efficiently
Companies rarely get the solution right the first time. Understanding and expecting that teaches us how to test early, often, and adjust accordingly. It’s OK to fail…but learn how to do it quickly, cheaply and learn from the experience.
In the design world, “thinking outside the box” is a cliché buzzword that might earn you a groan. Design thinking isn’t just about thinking outside of the box. It’s about empathizing with it. Knowing when it’s a sphere helps too.
Understanding the needs of your audience through design thinking is the first step, and critical foundation to creating solutions that solve real problems, create great experiences and improve life.
Cole Hershkowitz, CEO of LACI portfolio company Chai Energy, attended the series and remarked: “The workshop showed us that executing great design is far less about being some sort of Steve Jobs reincarnate and far more about approaching problems with the right processes.”
After the series, Hershkowitz recognized the adjustments his company needed, “We have already turned our product development process on its head. We now take our mockups, feature ideas, and prototypes directly to customers to get their feedback.”