Design Thinking for business model generation

At first glance Design Thinking looks like something to design websites with, or something for marketing. However, the use of the word Design belongs in the context of creating something, not in the context of graphic design. It's about creating new products, new processes, new websites, and most of all new business models.

 

I used to work in a large corporate. New products were developed based on lots of assumptions, a business case, sometimes market research, sometimes analyst predictions. The products usually had lots of features, covering as much of the tarket market as possible, so that every customer could find something that was useful for them. Sometimes, a majority of the target market liked the product and this worked really well. Sometimes the products were too complex, sometimes they wer just not quite what the user wanted. We would find that out after spending a lot of time and money on the development of the full product, after launch. Changing the product would again be very expensive.

 

Design Thinking starts with the user. I have to consider carefully what I want to develop for which user in which context. Then I have to go and find a real user that is exactly the type of user I had in mind, and understand the problem I'm trying to solve. Sometimes my user has completely different needs and problems than I assumed. Maybe the user type I imagined doesn't exist, or there are only a few of them. If any of these things happen, I have to start from scratch and find a new need that I want to satisfy. Up to here, I have burnt very little time and almost no money. Fail fast, fail cheap - that's the digital world.

 

Once I have found a real user with real needs that I want to satisfy, development can start. It is critically important to start with a cheap, simple prototype that focuses on the one or very few most important features of the new model. This prototype is then tested with my real user, without too much instruction. If the user doesn't quite know what to do with it, or isn't interested, or doesn't like it, I have to go back a couple of steps and create a new way to satisfy the need, build a new prototype. This will take a little bit of time and effort, but it is still several times faster and cheaper than traditional product development.

Once the user is happy with the rough prototype, I refine it and go back to the user, and this I repeat until I have a minimum viable product - a product that provides the minimum required benefit for my real user to buy it. They have to love some feature or aspect of it so much that they never want to go without it agian. Then they won't mind if there's a bug or two in the product.

 

Now I can start mass production, but I have to constantly improve my product, or my process, or my business model, because my user changes their behaviour, and the market evolves constantly.

 

Design Thinking is a challenge for traditional companies. The idea of a minimum viable product feels outright wrong for companies that take pride in the quality and perfection of their products. In Germany, quality, reliability, and zero bug culture are widespread, and have led to the national and international success of many companies. However, in the digital world, new competition from other countries and from startups is threatening our industry. These companies act differently. Faster, bolder, more audacious, with imperfect products that satisfy one specific user need better than traditional products.

 

If we don't want them to outdistance us, we have to learn from them. Design Thinking means a complete rethinking of organisational culture, and it allows us to become as fast as the new competition. Design Thinking does not necessariyl exclude quality. If we manage to add our stereotypical German focus on quality to Design Thinking, we can use it to remain competitive and move ahead of the competition.

 

Please contact us if you would like to learn more about how Design Thinking can contribute to your success.

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