INNOVATE

Design Thinking vs. Lean Start-up: Which Innovation Method Is Best For Southeast Asia?

The answer lies in where you are in the innovation process

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BY Tanya Mariano - 21 Mar 2017

PHOTO CREDIT: Getty Images

At the very heart of it, we can look at start-ups as a problem-solution pair. The founders find a problem, and proceed to build a start-up around solving it. And while some founders may take on a more gung-ho, just-do-it approach, many are finding that systematic inquiry can yield better results.

When it comes to product generation, problem-solving, and innovation, two popular methods often come to mind: design thinking, and the lean start-up approach.

 

Design Thinking – putting users at the center of your business

The former is a more qualitative, human-centered approach. The goal is to understand users better in order to come up with solutions that actually resonate with them. This entails a lot of user research – talking to customers – and iterating and refining the product or service based on insights gleaned from these conversations.

This method is said to have turned Airbnb from a struggling start-up in 2009 into the billion-dollar success that it is today, according to seed-stage venture firm First Round. The key was to get out of the mindset that only scalable, technical solutions are valid. By simply visiting the properties and taking better photos of these, the company raised weekly revenues from $200 to $400 in just one week, the first financial improvement they had seen in about eight months.

In Southeast Asia, some of the companies that apply design thinking include Thai NGO LearnEd and social enterprise Proximity Design in Myanmar, says Courtney Lawrence, co-founder of DSIL Global, a Bangkok-based company that offers trainings and professional development courses on social innovation and human-centered design.

Says Lawrence, “Design thinking is one the most powerful ways for entrepreneurs to ensure that they are on track with their product, service or idea in general – primarily because it breaks down the gargantuan task of trying to generate connection and loyalty with their target market by leaning on small iterative research and development cycles, with feedback loops, in an agile and efficient way.”

She adds, “Part of what makes it so powerful is that it is anchored by the principals of design mindsets – deeply understanding your target customer's context, desires, hopes, frustrations and needs – and creating a product, service, and user experience that is a result of prototyping and iteration.”

 

The Lean Start-up – fail fast, cheap, and often

Whereas creativity and empathy underlie design thinking, it's efficiency that is central to the lean start-up method. It “gives entrepreneurs [a] framework to validate their propositions in an efficient, quick way,” says Golden Gate Ventures principal Justin Hall.

Developed by American entrepreneur Eric Ries, this approach is more quantitative, and aims to shorten the time it takes to take a product to market, as well as minimize the amount of resources wasted in the process. The concept of failing fast is integral to this approach. It requires building a barebones version of your product – your MVP, or minimum viable product, taking this to market, and collecting user feedback. The product may undergo incremental fine-tuning based on feedback, or the founders may also decide that the solution isn't working, and that a pivot is in order.

Dropbox is one of the companies that have found success implementing Ries’ method, growing their user base from 100,000 to over 4,000,000 in just 15 months, according to Ries’ website.

 

Which is better?

As a design advocate, Lawrence thinks design thinking has an edge over other approaches. “[It] is no silver bullet, yet it is by far one of the most dynamic innovation methods in that it can create the necessary space to bring diverse minds together into a problem solving process that runs a full cycle. In contrast, other methods out there often zoom into one aspect of a challenge or opportunity, not always considering the grand context or creating space to ensure that, by default, a target customer or beneficiary's perspective is integrated into the ideation or solution making.”

But Hall thinks the two aren't mutually exclusive. “[I]ndeed, entrepreneurs can rely on lean start-up methodology to better understand the early seeds of their business, and design thinking to create a better product or service within the framework of said methodology.”

Nathan Furr and Jeff Dyer, in this Harvard Business Review article, say innovation methods may go by many different names – lean start-up, agile software, design thinking, etc. – but they actually have a lot in common. “Where they differ is primarily with regard to the steps of the innovation process they emphasize. For example, design thinking emphasizes understanding customer problems, whereas lean emphasizes solution experiments.”

In their research, Furr and Dyer found that these strategies lends themselves to different stages of innovation. Design thinking, for instance, is best when trying to gather insight into a solution or potential need – step one of the innovation process. Lean start-up, on the other hand, is good for testing solutions, a step that comes after collecting insight and defining the problem, and before finding a viable business model.

So, which is better? The answer, it turns out, depends on which innovation stage your start-up is in.