Design thinking and entrepreneurship

As the global leader of our corporate venture capital program and passionate believer of design thinking, I am often asked how those two disciplines intersect. My answer is short and to the point — they are inseparable. More importantly, what I have found is that successful entrepreneurs start with a human-centered approach to their solution, which establishes an undeniable product-market fit, the cornerstone of the venture capital world. More importantly, often when there is a misalignment of product-market fit, it is because entrepreneurs believe they have a great idea and then back into user research to validate their idea, rather than start with the research in the first place.

There are five key components in the design thinking process:

• Empathizing: Placing a focus on understanding the human needs involved
• Defining: Synthesizing, re-framing and defining the problem in human-centric ways
• Ideating: Creating many ideas to address the unmet needs, opportunities, or challenges
• Prototyping: Adopting a hands-on approach in bringing ideas to life
• Testing: Testing to learn if the prototype/solution addresses the unmet need, opportunity, or challenge

Start with empathy

Empathy is the foundational element of design thinking and is the essence of human-centered design. This first step in design thinking forces an orientation around the people, their goals, objectives and pain points. Using an empathy map can help uncover how people feel, what they say, what they do and what they think. Its intent is to uncover insights about how people make decisions and what’s important to them. I have found that successful entrepreneurs either do this instinctually or they force themselves to continuously have this mindset. They obsess over understanding the user, the problems they are trying to solve or the opportunities to address their unmet needs.

Common themes among successful entrepreneurs:

• They have experienced first-hand the challenges or opportunities facing their customers – either professionally [as the industry insider] or personally.
• They have observed people in use cases that have limitations, challenges or problems that can be solved.
• They understand the physical or emotional connections to the challenges or unmet needs, and what is meaningful to their potential customers.
• They can tell stories [first or second hand] about the challenges or opportunities facing their potential customers in an engaging and meaningful way. 
• They connect with the beliefs and values of their potential customers.

Define the problem or opportunity

This stage is where entrepreneurs synthesize all of the insights learned from the empathy stage. It’s how they identify a point of view and the problem they are solving or the opportunity they are seeking to meet. And while some entrepreneurs may not say they use design thinking, I have found that successful ones do in fact use the key principles intuitively. They will use phrases such as, “We have found that users need a way to perform X simply and efficiently.” That phrase is the very definition of the “point of view” statement used in design thinking. Successful entrepreneurs take insights they have – either from first-hand, insider experiences or from keen observations – to form this point of view statement.

Common themes among successful entrepreneurs:

• They are able to uncover multiple personas along with their respective key challenges, pain points, goals and opportunities. 
• They understand the client journey of what they do today, and can envision a different journey that might be enabled by new solutions
• They clearly understand and define a valuable point of view statement (if solved) for their personas.

Ideation

This stage is where true successful entrepreneurs shine. They come up with novel ideas to address the point of view statement – and more importantly, ideas that their users value. It’s the valued, novel idea that ultimately translates to revenues and market share. 

Common themes among successful entrepreneurs:

• They come up with a novel idea and look at the problem to be solved in a unique and differentiated way.
• They are not married to a single idea, but instead to solving the users’ core challenges or meeting their unmet needs.
• They understand that having many ideas on how best to meet the point of view statement is what will also set them apart.
• They understand that ideation never stops, as new insights are continuously developed and uncovered through meeting with prospects and clients.

Prototype and test

In the academic realm of design thinking, prototyping and testing are separate stages. However, the reality is that once you identify the idea to enact, the next phase is to prototype and test that idea quickly, cheaply and iteratively. This is where successful entrepreneurs recognize the more quickly (and cheaply) they can test the idea, the better alignment they will have with the personas (and segments) they seek to deliver value to. It will de-risk the product-market fit equation, as each iteration ensures tighter alignment to the point of view statement of the personas. This iterative process also helps define and develop the minimum viable product (MVP), a critical step in getting the product to market. 

Common themes among successful entrepreneurs:

• They start simple and build inexpensive prototypes to test their ideas quickly.
• They seek feedback on usability and value, but most importantly if the idea solves the problem or addresses an unmet need.
• They continuously evolve the prototype and obsess on testing and gaining insight, which helps ensure alignment to the personas needs and problem statement.
• They use the process to define and develop the MVP to launch into the market, which maximizes the learning with the least amount of risk and cost.

Pulling it all together

Successful entrepreneurs leverage both design thinking and human-centered design principles in order to drive towards growth and achieve their long-term goals. They combine novel ideas that address an unmet need or challenge and brings value to a large total addressable market. More importantly, they recognize that applying design thinking is not a once-and-done exercise, but a mindset that will arm them for long-term success. Beyond the tools and techniques of design thinking is the mindset of being passionately focused on human-centered design, a mindset that is at the very foundation of successful entrepreneurs.