Service Design as a Development Approach for Early-Stage Startups - Finding the Best “Problem/Solution Fit"
Paakkinen, Miikka (2021)
2021
All rights reserved. This publication is copyrighted. You may download, display and print it for Your own personal use. Commercial use is prohibited.
Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-202105087807
https://urn.fi/URN:NBN:fi:amk-202105087807
Tiivistelmä
Technology-driven startups are significant for the global economy and startup entrepreneurship is likely here to stay. A development framework that is suitable for creating radical innovation in an early-stage startup context does not seemingly exist. The purpose of this thesis is to explore the usefulness of service design as a development approach in this context, when a startup is trying to find “problem/solution fit”.
The theoretical framework of this work 1) explores what high-tech startups are and why they keep on failing with high rates, 2) analyzes what the popular lean startup approach lacks in finding “problem/solution fit” and why service design might be a better approach, and 3) introduces service design as an approach. The focus of the development project, which follows a service design process, is to create practical service concepts that could be commercialized by the author for enabling founders to apply service design to finding “problem/solution fit”. The development work is mainly based on qualitative data collected from eight semi-structured interviews of startup founders and venture capitalists, and nine survey responses from service designers. The service concepts were created in a co-creative ideation workshop.
Theoretical grounds that point to service design’s potential for being a better approach than lean startup for finding “problem/solution fit” were identified. The complementary natures of the two approaches were examined, the lacking aspects of each approach in an early-stage startup context were identified, and a framework for connecting the approaches was theorized. Gaps in academic research regarding the effects of both approaches in this context were also identified. A lack of customer understanding and the inability to find a market for a product were found to be key reasons for startup failure, while team and financing related aspects were also identified as key issues. An overall need for founders to focus more on the problem space and to engage more with customers arose from the data gathered from venture capitalists. Startup founders were identified to have problems in finding the right focus when starting out, which was often seemingly caused by a lack of a structured approach to development, to which service design could be a fitting solution as a development approach.
The theoretical framework of this work 1) explores what high-tech startups are and why they keep on failing with high rates, 2) analyzes what the popular lean startup approach lacks in finding “problem/solution fit” and why service design might be a better approach, and 3) introduces service design as an approach. The focus of the development project, which follows a service design process, is to create practical service concepts that could be commercialized by the author for enabling founders to apply service design to finding “problem/solution fit”. The development work is mainly based on qualitative data collected from eight semi-structured interviews of startup founders and venture capitalists, and nine survey responses from service designers. The service concepts were created in a co-creative ideation workshop.
Theoretical grounds that point to service design’s potential for being a better approach than lean startup for finding “problem/solution fit” were identified. The complementary natures of the two approaches were examined, the lacking aspects of each approach in an early-stage startup context were identified, and a framework for connecting the approaches was theorized. Gaps in academic research regarding the effects of both approaches in this context were also identified. A lack of customer understanding and the inability to find a market for a product were found to be key reasons for startup failure, while team and financing related aspects were also identified as key issues. An overall need for founders to focus more on the problem space and to engage more with customers arose from the data gathered from venture capitalists. Startup founders were identified to have problems in finding the right focus when starting out, which was often seemingly caused by a lack of a structured approach to development, to which service design could be a fitting solution as a development approach.