Choosenick. Notes and observations on service design, as well as other interesting things/thinking. By Nick Marsh.

Archive of August 2011

Startup as a process for solving hard business problems

Startup startup startup. That's all I hear in the London tech and design scene at the moment. Well, the tiny bit I get to hang out with now I'm a parent.

There's a bubble going on right now, which is ace, as bubbles mean irrational exuberance (anyone ever figured out why this is always considered a BAD thing!? Irrational exuberance sounds amazing!).

Anyway, amid all the chat and so on about startups, I've come to a realisation - Startup is a process, not a thing. And to me, it seems like the closest to a new process for value creation and solving hard problems since everyone figured out how to formalise innovation. Essentially, Startup is the process of properly, genuinely figuring out the answer to the question, what is actually valuable? What product or service will people actually pay for?

This is a question that is often asked of lots of different types of business consultants in vary levels of detail and lots of different forms - from market researchers to innovation consultants to design agencies to straight up business advisory services. And all of them deliver half baked answers in powerpoint decks - the only way to really find out if they are right is to try it. By which time you've wasted lots of money and time (same thing) on fees and powerpoint decks.

The thing is, is that the process of Startup answers the question very quickly, at very low cost, away from your brand and existing customers in a 'safe space' - Startup is all about figuring out what will people use and pay for - Right now?!

Right now, it is still the case the process of startup is being tamed to make investing in traditional, entrepreneur led web/tech startups more efficient. Effectively, this is just an investment strategy - people like 500 Startups, Y Combinator, Techstars etc are getting good at investing in lots and lots of little bets.

Surrounding this is an emerging set of practices for how to make it more likely that your bet will pay off - Lean startup, the pivot, customer discovery, sales learning curve to name a few - that taken together have the smell of a new type of process for creating value.

Apart from startups just being the most totally exciting place to be a designer of the New Product (which is why at Sidekick we're doing about seven at once), the thing that I think is about to happen is the emergence of Startup as an agency offer - its something we're thinking about at Sidekick, and to me, its super interesting as a solution for established businesses looking for ways out of the cul-de-sacs that their legacy businesses, legacy customers and general inability to do stuff that compromises existing profit centres gets them stuck in.

This is not lean agency, which as far as I can see is just very iterative product development. Instead its about offering a service that helps companies take risks and explore new routes to growth outside of their existing product portfolios and development processes.

The cost of doing a web startup has now fallen well below the cost of doing a reasonable campaign. In addition, doing a startup has the potential to return a lot more to the business than just ROI from the new company - it can help them understand the future customer, the future market and the routes their competition will be taking.

The trick to selling startup as a business process is to be good at the process. That's my next post.
August 2nd, 2011 / Tags: design, innovation, sartups / Trackback / Comments