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The genesis of any new company is The Idea. You simply cannot start a company without having an idea that meets the needs of a large group of customers. But it can often be more difficult than you think to identify needs that can lead to successful, innovative companies.
In today’s connected world, coming up with a new idea is difficult.
There are products and services catering to almost everything, and the market seems saturated with companies that offer us whatever our hearts desire. Time and time again a budding entrepreneur comes along and creates a product or service that fulfills a need that perhaps we didn’t know we even had (think iPad!). Such innovations manage to create long-term value rather than just improving on an existing service, sometimes even revolutionising or creating an entire industry.
In a colder country than the UAE, the invisible helmet also doubles up as protection from the cold and the wind, solving another problem at the same time; how to look stylish when riding a bicycle without your scarf blowing off due to the wind generated by speed. The founders of Hövding received nearly $15 million in venture capital funding from ten different investors, and the company is now publicly listed on Sweden’s First North stock market, Nasdaq’s European growth market designed for small and growing companies. The product is now on sale in over 400 stores and online.
So how do big ideas come about, and what does it take not only to identify one, but to make it a reality? Employing something called Design Thinking is a good starting point.
Design thinking is a human-centered process designed to produce more innovative ideas.
Great ideas, according to design thinkers, sit at the intersection of feasibility, viability, and desirability. Feasibility tells us the product or service can be done for an organisation or technology perspective – that it is possible. Viability tells us that we can make money doing it – that it is profitable. And desirability tells us that is satisfies a need in the marketplace – that people want it. These three aspects are important to any business, but the difference with design thinking is where you start.
Many entrepreneurs make the mistake of starting with viability and feasibility, but design thinking encourages to start with desirability. In other words we must first focus on what people need and then create valuable solutions to meet those needs. Too often, and to the demise of many companies, a new product is developed and only then it must go to find a market — a dangerous and risky path.
For example, the need of bicyclists to be safe while riding a bicycle, but not wanting to mess up a hairstyle or carry around a bulky, hard helmet led to the creation of the invisible bicycle helmet. The need came first rather than the product.
So then the question becomes, how do we identify or uncover needs?
A great starting point is to begin collecting data by observing and talking to people, and then drawing insights from the data.
Observation is watching and seeing customers in their environment so you can better understand their lives and how they act on a daily basis. For example, if we observed bicyclists commuting to work we might see them carrying their helmets into the office or awkwardly connecting the helmet to the bike. We may observe that 35 percent of those we watched did not wear a helmet at all and 95 percent of those that did not wear a helmet were women. Then, perhaps, having a conversation with a few women would uncover that the real reason they don’t wear a helmet has to do with style even though safety should be their top priority. When an issue is observed for long enough, patterns emerge, providing greater insights into their true needs. Insights help bridge the gap between the current situation (what is) and the desired situation (what could be).
Observing and listening to potential customers help develop our empathic ability, which allows us to better understand the way people do things and the reasons why; their physical and emotional needs; the way they think and feel; and what is important to them. At the end of the day, it is usually easiest to solve a problem that, while we may not experience it ourselves, we can relate to. Also, it’s a much smarter path to create a product or service people actually need rather than trying to sell something later that people don’t really want!
Overall, the design thinking process is comprised of three overlapping phases: inspiration, ideation and implementation, according to a Harvard Business Review article of Tim Brown. Inspiration is using empathy as we have discussed above to identify needs of potential customers. Once needs are identified, you can begin creating solutions to meet those needs (ideation). As soon as a few ideas start to take shape and you think you may be on to something, it is time to take the idea from the white board to the real world (implementation).
The word “implementation” can seem overwhelming, but it’s actually more about learning than starting and executing.
In the implementation phase you are testing assumption, conducting low cost experiments, and iterating in order to make ideas stronger. It is long before a sophisticated prototype. In the case of the invisible bicycle helmet, the founders could have taken a sketch on a piece of paper. On one side of the paper could have been an airbag in a car. On the other side could have been a drawing of that same concept but for a bike helmet. Taking the drawing to a few bicyclists and saying: “What do you think of this concept?” is a simple test that is likely to yield a lot of valuable information before investing a lot of time and R&D money into the project.
Design thinking encourages you to start in a different place, and it works best when you really don’t know where to start. If instead of starting by asking ourselves whether something can be done, and whether it will make money, we should be asking ourselves How might we? This is a phrase used by Tim Brown, the founder of leading design and innovation firm IDEO.
The how part presumes that the solutions to the problems already exist and they just need to be unearthed; the might part suggests that it is possible to put out ideas that may or may not work; and the we part means that the process will be a fruitful and collaborative one.
Here’s a direct challenge for all aspiring design thinkers:
Once a day, stop and observe the ordinary. Look at those everyday things that you normally take for granted, as if seeing them for the first time. Why are manhole covers round, for instance? Not only will this exercise improve your observation skills, but it will make you a better design thinker; for good design thinkers observe, but great design thinkers observe the ordinary.
Who knows – maybe you’re already on track to identifying and designing the next revolutionary innovation?
About Heidi Neck:
Heidi Neck, Ph.D. is a Babson College Professor and the Jeffry A. Timmons Professor of Entrepreneurial Studies.
She teaches entrepreneurship at the MBA and executive levels Neck has been named President of the United States Association for Small Business and Entrepreneurship (USASBE).