In the past decade, there has been a revolution in how we think about bringing new products and services to market. Driving that revolution have been two major movements: the Lean StartUp methodology first set out by Eric Ries, and design thinking, popularised by leading design consultancies such as IDEO.
So as a fan of both, it was with great interest that I watched this week’s Virgin Unite Google Hangout with three industry titans: Eric Ries in conversation with Tim Brown, the CEO of IDEO, and Jake Knapp, a Design Partner at Google Ventures.
It was a stimulating and fun conversation, which ranged across a wide number of topics. Both Lean StartUp and design thinking have a great deal in common, but they evolved separately and are only now starting to converge, with fascinating results.
Lean StartUp’s principles are as simple as they are profound: don’t wait for perfection when creating something new, just get a ‘minimum viable product’ (the most basic workable version) in front of a customer as quickly as you can. Get customer feedback based on actual observed market behaviour (‘customer validation’) then continually iterate your product and market strategy (‘persist, pivot or kill’) based on that feedback until you hone in on exactly what customers want.
To generations of start-up entrepreneurs reared on the classic approach of traditional business schools (which might be caricatured as: ‘guess what your customers want. Write a five-year business plan which you commit to unswervingly. Raise a bucket load of cash. Spend the money, and pray that your strategy comes right first time’), Ries’ approach came as an epiphany. You mean you’re supposed to adapt the business plan continuously? That the customer is actually the most important person to speak to? This was intoxicating, radical stuff.
Design thinking is no less revolutionary. Similar to Lean StartUp, there is a relentless focus on the customer. In the case of design thinking, the emphasis is on truly understanding the customer’s real needs, of ‘taking a walk in the user’s shoes’. In other words, a really deep application of empathy, as the critical quality needed for success. If you understand the real needs of your customer, you have the true north for which to aim. The design process is then about how to creatively generate as many ideas as possible, refine them through customer feedback, and evolve towards a best-fit solution.
So the discussion had me thinking – what can social entrepreneurs, or those running non-profits, learn from Lean StartUp and design thinking? The answer is: a great deal.
For non-profits, substitute ‘beneficiary’ for ‘customer’ if you need to, but the principles are the same. Walking in the shoes of the person that you are trying to serve, prototyping a solution and iterating it continuously based on observed real world behaviour, not assuming a solution but testing it in the field – these are as true for the social start-up in Sudan as they are for the latest tech launch in Silicon Valley.
At Ashoka, we meet many founders of social ventures, and we resonate wholly with what Ries, Brown and Knapp are saying. In particular, the emphasis on starting with empathy for the people that you serve is a huge observation for us.
I’ve met many bright founders bringing a fantastic product to market that could transform the lives of millions of people living at the base-of-the-pyramid. Solar lanterns, water purifiers, clean cook-stoves, water-free toilets, drip irrigation systems – the list is long and impressive.
But how many actually met their customers before they built a product and went off to sell them? Depressingly few.
I remember one enterprise that distributed affordable eye-glasses to impoverished rural kids in India. It would have made a huge difference to their education. Yet a surprising number of the glasses were broken or ‘lost’ very quickly. Why? Because the (early versions) of the glasses were just plain ugly. It turns out children at the base-of-the-pyramid are the same as kids all over the world – they care how they look in front of their peers. Design thinking would have found that out quickly.
Another venture had developed a rainwater capture device for use in Bangladesh. By capturing rainwater on their roofs, the local women could save hundreds of hours a month queueing up for water at the local pump, which was often unreliable and dirty. Who wouldn’t want to save all that time? Yet it turned out that gathering around the local village pump was actually a key social event where women of the village met and talked. Displacing that with one solution (reduced time carrying water) would actually have failed to meet another key need of the village (social gathering). It transpired that the women didn’t really place high value on the time saved, or on getting cleaner water than what they could obtain from the pump. Hence no demand for the product, no matter how useful it would have been.
Ashoka entrepreneur Al Hammond later turned this insight on its head when designing a project called ‘E-Health Points’ in rural India. If the customer’s real need is not just for affordable clean water but also for social gathering, why not set up centres offering low cost clean water, where people could gather? And once gathered, other health services that they would not otherwise go out of their way to pay for, such as health check-ups and vaccinations, could then be provided. They tried it, it worked. Prototype, persist or pivot, then scale – classic lean thinking in action.
Lean Startup and design thinking have revolutionised how start-ups work today. The world’s best social entrepreneurs and non-profits are taking note. It’s time for lean and design to meet social.