Design Thinking and Lean Startup have become a part of any innovation enthusiast’s jargon. These relatively new methodologies are being used by corporates as well as startups to structure and de-risk their innovation activities. Inspired by success stories such as Uber, Airbnb, Facebook, Google, companies are increasingly looking to Design Thinking and Lean Startup for answers.
In order to find the answers that they are looking for, it is essential for companies to ask themselves the question when to apply either Design Thinking or Lean Startup.
In this article, we briefly summarize both methodologies and elaborate on the added value they provide in different stages of the innovation pipeline. We offer our perspective on when each methodology should be used and why, as well as a checklist for corporate teams to know when to move from one methodology to the other.
IN CASE YOU MISSED IT: A RECAP ABOUT LEAN STARTUP
The Lean Startup, first coined by Steve Blank, is best defined as a blueprint for how to run a startup. In essence, the goal is to find a product-market fit by moving a Minimum Viable Product (MVP) through the Build-Measure-Learn feedback loop.
When building a new product/service and applying the lean methodology, teams start by building a minimum set of features that satisfy early users (MVP). Teams then test the assumptions they made about key features early-on with users and measure the data they acquire from experiments. In that way, evidence-based decisions can be made about the direction the product/service should be moving into for the next iteration. This process is repeated in continuous loops until product-market fit is reached. The goal being to reach a state where the data proves the team has built a product/service that accurately addresses the needs/demands of the market.
IN CASE YOU MISSED IT: A RECAP ABOUT DESIGN THINKING
Design Thinking is an approach to problem-solving that results in solutions that people love. The conviction here is that you should always start by building empathy with the people you are building a product/service for. A plethora of techniques from ethnography, sociology and psychology are used to gain insights into human behavior, to enable the team to come to a clear understanding of who the user is and what his/her needs are.
After empathizing with the user, Design Thinkers define and prioritize users’ most pressing problems and consequently come up with relevant ideas to solve them. Ideas are then translated into rudimentary prototypes and presented to users. A prototype contains a minimum set of features (like the MVP in Lean Startup) that are tested in a continuous feedback loop (like the Build-measure-learn loop in Lean Startup).
THE Excellence OF LEAN STARTUP
As we addressed earlier, both methods drive a prototype (in Design Thinking) or MVP (in Lean Startup) through a test-and-learn cycle and assume that using such a process is the best way to yield knowledge about the user. In this stage, the Lean Startup provides added value over Design Thinking by providing practitioners with a framework and actionable metrics (metrics that tie specific and repeatable actions to observed results). A good example of a step-by-step guide to building a B2B startup is found in Etienne Garbugli’s book, “Lean B2B“.
THE VALUE OF DESIGN THINKING
Design Thinking, on the other hand, starts by empathizing with customers, defining their most pressing issues and based on this input, coming up with a variety of relevant ideas. All of these steps are taken before considering the development of a prototype. This approach reduces the risks involved with bringing new innovations to market; by probing peoples’ interest before actually investing in development. In that respect, Design Thinking is most valuable in the earliest stages of an innovation project.
The above diagram gives a clear picture of where the majority of the value of both methodologies lie. Although the majority of their value is manifested in different stages of the innovation pipeline, Lean Startup and Design Thinking are inherently intertwined.
There is a division between ‘problem space’ & ‘solution space’ as defined by Dan Olsen in the Lean Product Playbook. This dichotomy offers us an alternative way of thinking about the Lean Startup and Design Thinking, as parts of a larger product/service innovation strategy.
The Problem space is where the users and their needs live. Needs are defined either as gaps in usability or as an absence of meaning. Successful innovations fill these gaps in usability or provide meaning for users where it was previously absent (through a powerful brand experience). Design Thinking primarily adds value in the problem space.
The Solution space is where products, services, and experiences that fulfill users’ needs live. Lean Startup lives entirely in the Solution space along with other value-capturing methodologies such as Total Quality Management, Six Sigma & Agile.
WHEN DO YOU MOVE FROM DESIGN THINKING (PROBLEM SPACE) TO LEAN STARTUP (SOLUTION SPACE)?
The challenge for innovation managers, product owners and intrapreneurs lies in deciding when to move from Design Thinking (problem space) to Lean Startup (solution space). As a general rule, you want to have a certain amount of validation about the problem you are solving, the solution you are providing, and the business model you plan to use before commencing with Lean Startup. Exactly when each element can be considered ‘validated’ is highly dependent upon the case at hand.
For corporate startup teams, problem/solution/business model validation is only one part of the story. Those moving from Design Thinking into Lean Startup should also carefully consider the following items:
- Strategic fit: the company’s vision reveals that the company places importance towards solving the users’ problems/needs, uncovered via Design Thinking.
- Portfolio fit: the solutions that were generated through Design Thinking fit into the company’s wider innovation portfolio across incremental, adjacent and radical innovation projects.
- Internal Buy-in: resources have been freed by internal managers in order to pursue your solution. These resources include budgets, people, workspaces and time.
- Isolation from the rest of the company: When intrapreneurs don’t have to adhere to standard performance metrics anymore (monthly sales quote etc) but to a set of innovation accounting metrics.
Moving from a design thinking approach to a Lean Startup approach should be considered a Go/No-Go decision for internal startup teams.
LEAN STARTUP AND DESIGN THINKING: THE BEST OF BOTH WORLDS
Design thinking and Lean Startup are two parts of a holistic innovation process. They are highly complementary and provide how-to approaches for on-the-ground, day-to-day innovation management across industries for both new products and services in B2B as well as B2C.
The core benefit of Design Thinking lies in the discovery of user needs, contexts, problems and the openness to a wide variety of ideas. These Design Thinking elements optimally serve as inputs for a structured assumption testing and a validation set of cycles offered by Lean Startup (Build-Measure-Learn) to achieve product-market fit as soon as possible. The launching point for Lean Startup should be heavily de-risked through the validation that was carried out during the Design Thinking phase.
For internal startup teams, the move from a Design Thinking approach to a Lean Startup approach is dependent upon the amount of validation, the fit with the company, and the support that they are getting from internal managers.
- Keep the problem space/solution space framework in mind. This helps to determine the state of your innovation project and to determine which methodology is most suitable.
- Avoid jumping into a Lean Startup approach to quickly. Move into a Lean Startup approach when you have gathered sufficient validation about the problem you are trying to solve and the solution you are proposing.
- To Go or Not To Go? Moving from a Design Thinking approach into a Lean Startup approach should be a Go?No Go?decision for your innovation project.
- Consider strategic fit and portfolio fit early on. If you are an intrapreneur, avoid spending time and energy on a project that will eventually be killed off.
(1) Ash Maurya, 2012, Running Lean. O’Reilly Media.
(2) Etienne Garbugli, 2014, Lean B2B.
(3) Dan Olson, 2015, The Lean Product Playbook. John Wiley & Sons Inc.