4. Start-Ups: Product vs. Business Design

4. Start-Ups: Product vs. Business Design

 

“Design is creativity mixed with strategy” – Rob Curedale

 

“Design is not what it look like and feels like. Design is how it works.” – Steve Jobs

 

It is time for some story telling. Once upon a time there were 3 guys who single handedly built and designed a computer that was sold as a motherboard with some basic textual-video chips. At the time being one would pay $666.66 for this ‘personal computer’, which today would be adjusted to $2,763 for inflation. After a while, the third person stepped out, sold his shares back to the other two for $800. A multimillionaire provided some business expertise and funding, and on January 3, 1977 Apple was officially incorporated. In the first 3 years sales grew at 533% per year and it didn’t take long for the improved Apple II PC to make its entrance. It managed to differ itself from the competition by using color graphics and open architecture. And this where the theoretical part comes in.

Steve Jobs and Steve Wozniak had a very specific view on how computers should work and in what way their customers would use these hipster devices. If it is a product that you are planning on providing for your customers, ask yourself why you are building it. Why would anyone use your product? And do you yourself even understand the building of your product and in what way it matches the customer want or need?

Apple nowadays faces stronger competition as other producers are starting to catch up on the design aspect of electronic devices. Unless your business idea is completely new to any market, maybe an invisibility cloak, you will face competition from the very start. You may have the most innovative product in your industry, but the thing that will help you is having a strong business model. As soon as you have found your customers and they show interest in your product, you can build your business model and finally, your company. There are 3 well-known methods to establish the beginnings of your business execution.

Customer/Client Development Model

Customer Client Development Model

The Lean Start-Up

The Lean Startup Model

The Business Model Canvas

Business Model Canvas

Having a clear view on how your business will operate and serve your customers is necessary, but not a guarantee for a good product. Seeing the scope of the product though, will lead to a more efficient development of your business’ offering.

“The greatest thing Jobs designed was his business. Apple imagined and executed definite multi-year plans to create new products and distribute them effectively.” – Peter Thiel

Another way to improve your product is to make use of the Value Proposition Canvas. This is an overview of the value you will create for the target segment, and when executed properly, will give a better overview of what the consumers want. This will lead to a more effective product, tailored to the need or want you will satisfy.

Value Proposition Canvas

A good product won’t always lead to a healthy company, and the other way around we won’t even consider. Your life changing idea may be great but prototyping and execution are very important when it comes to success or failure. Having a steady company will provide you with a good basis, but it isn’t the key to success. Apple may enjoy very strong brand loyalty, but still has to fulfill the customers’ wants of introducing radical new technologies. The release of the “iPencil” for instance was not taken well by the big crowd, as this is not what they are Apple evangelists for. The importance in the beginning stages of your product development is that you keep business design development in mind as well. Business and product design are like siblings. They won’t guarantee to keep each other alive, but they also can’t live without each other.

This post is part of the series on “How To Start a Startup”, based on the lectures taught at Reykjavik University. For more information check out their website: Startup Iceland



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