I’ve recently come back from a two-day workshop on Lean StartUp, hosted by The Pollenizer in Sydney, where I got a crash course in how entrepreneurs take a sketchy idea and develop it into something worth investing in.
This got me thinking about one of the trickiest parts of the type of design that we do—namely, how do you prototype a new business?From a design point of view, I think of organisations as a great big set of interactions. All of these interactions can be designed, and if they are designed well, an efficient, profitable business can emerge. I’ve learned that entrepreneurs do this kind of work all the time, starting with the smallest viable set of interactions possible, and setting them loose in the world to see what will happen.
Saras D. Sarasvathy from the University of Washington School of Business published a paper on how entrepreneurs think. What struck me was the finding that entrepreneurs think more like experimenting scientists (or perhaps like playful children) than they do like strategists, by which I mean those typically responsible for launching new businesses within mature organisations. According to Prof. Saravathy, the entrepreneurial mindset takes what’s at hand, surveying the available resources, and plays with them in an attempt to come up with something that could possibly deliver some form of value—they essentially design experiments to see if this configuration of services or that articulation of value will attract attention in the market. The effect itself isn’t necessarily a strategic goal; it’s just an indicator that the interaction was effective. A strategist, on the other hand, typically sets a target or vision, and then spends his or her time designing a way to achieve that specific goal, usually by building big plans with associated metrics. The strategist then puts lots of wheels into motion, monitoring for specific success criteria to see if the idea works the way she or he hoped it would.
What’s becoming clear to me is the fact that the former approach has far more in common with prototyping than the latter. The entrepreneurial approach, as I saw it playing out at The Pollenizer, is primarily about learning. It is explorative and interested in making discoveries and changes. ‘What will happen if I do this? What kind of response will I get if I try that?’ It does this in an extremely intuitive and lightweight kind of way, and it uses each new finding to change the way it operates, informing the next experiment.
While the strategic approach is undeniably about learning as well, it is far more concerned about the efficacy of the design—‘Is it doing what I intended it to be doing? Am I getting the results I need to be getting? Is it running to plan?’ The strategist typically wants the plan to be ‘right’, and wants the outcome to be what he or she has intended. However, since the strategist isn’t approaching things as an experiment but rather as a plan, she or he is often only looking at the strict metrics and goals pre-determined to be worth measuring. Since attention is only being paid to what is being measuring, the strategist often ignores or accidentally misses wider lesson or trends. When unexpected things do occur and are noticed, the strategist will often have a great deal of difficulty making changes and adapting.
A colleague recently told me about a conversation she had with a consultant from a traditional strategy and operations firm. The consultant said after launching a new business, they typically look for confirming data and ignore the rest. It’s not that he and his fellow strategist are inflexible or can’t adjust, it’s just that they only pay attention to what they are measuring and therefore miss unexpected learnings.
I know that the traditional intent of prototyping is to identify where a design will break and spot how the design can be improved. But perhaps this is too constrictive, particularly when it comes to prototyping new businesses. What about using prototyping to find brand new opportunities? That’s what Lean StartUp and Sarasvathy’s entrepreneurial mindset seem to be all about.
Of course, this would be a new way for many businesses to operate—experimenting with resources, approaching innovation as play. It may require that new methods be developed, new KPIs put into place, new boundaries of responsibility and domes of discretion articulated so that the traditional immune systems of the organisation don’t kill this new function of experimentation.
But imagine if large, mature organisations set their intent to find new ways to organise their existing resources to deliver new value and took an entrepreneurial approach. They would prototype. They would put little things out into the world to see if value was clear. They would see if people get it. See if they could get a nibble. Then they would bring it back in and re-jig it. Try something else. They would be nimble, agile, but most of all, they would be experimental—or even, dare I say it, playful.