“Rome wasn’t built in a day. Your business won’t be either.” (Gerber, 2009)
Design a business was one of the most interesting, practical and at the same time challenging module during my academic year in Kingston Busines School. It is an elective module, when I had a dilemma what to choose as my optional subjects where I was curious and not really awared of what Design thinking exactly is and gave it a try. My pathway of International Business Management MS’c is Entrepreneurship and I can say without missing a beat that this elective course I found the most useful and efficient for my future entrepreneurial activity than many other obligatory modules. I got a freedom to create something in a safe environment of the university in real, to run a business in practice, learn how to be a team-player, pitch, face obstacles, failures, mistakes which I would face after graduation. Looking back and analyzing the done work throught the year I would like to cover several critical topics reflecting lessons I learned.
What is design thinking?
First of all, searching the definition what is the term “design thinking”? According to Roger Martin a follower of design thinking in modern corporations it is explained as follows “design-thinking company applies to the designer’s most critical tool to the difficulties of the business or enterprise. That tool is abductive reasoning” (Martin, 2009). In the end on 19th century American philosophers John Dewey and Charles Pierce tried to examine the restrictions of formal types of logic: deductive and inductive ones. They claimed that a person can gain understanding only through their own experience, later on appeared a term “abductive logic” which is a new idea of “logical leap of the mind” (Pierce, 1992). This form of reasoning has an objective not to declare a conclusion to be true or false. Integrating abduction as the equivalent of deduction and induction represents an interest for any “business that wants to prosper from design thinking, and every person who wants to be a design thinker” (Martin, 2009). My personal understanding of design thinker is a person who has an open mind, willingness to learn, explore, cross the boundaries of his/her mind cage, full of ideas and able to listen, listen to his/her own team because design thinking mostly take place in groups.
Secondly, the first step of the design process is usually about defining which constraints are important and aiming to to assess them. Constraints can be vizualized in terms of three corresponding principles for a successful idea: feasibility, viability and desirability. Professional designer may resolve this obstacles but a designer thinker will bring them into a harmonious balance in a creative way (Brown and Katz, 2009). It occurs since design thinkers can turn their reasoning from a problem to project.
The project is a train, which brings an idea from theory to reality. Such project experience I had during this module was a chance to create an innovative product and try to run a business from a scratch. After long brainstorming sessions and sharing interests my team came up with an idea to create something for travellers, something what would make their life easie and simpler. First, it was bag, which makes skateboard or longboard more transportable, then socks for feet massage and even special boxes for tissues, but it was not exactly what everyone in the team wanted. Suddenly fli. was born. Now our company calls Detour and we are in the beginning of our business journey. We had several prototyping sessions improving and working on the future product development. It taught me that you have to have willingness to be patient towards achieveng success. Thus, fli. undergone several important changes, especially after the first trade fair, based on the feedback of the customers we realized gaps which inevitably were supposed to be fixed mostly from technical point of view. Though it were things to improve during trade fairs everyone was willing to try and to have their own unique experience of a queer device which many people wore sitting comfortably in the chair.
About product itself. fli. a unique hand-made resting device for any purpose: when you need your private space, noisy neighbours, annoying long flight, trip by train. Why did we choose it? Because we all share one passion — travelling. It combines light proof and sound proof features, wraping head softly with an option plague your own ear phones inside and enjoy your favourite music. When it comes to music when we had our first prototype our gear reminded me of Daft Punk helmet, the same futuristic design would be cool to have them advertising fli. some day.
During the year Detour and fli. had to face many events such as: several trade fairs, rehearsal and real Dragon’s Den with pitching in front of 16 judges, start-up weekends, winning the main prize of 1000 pounds on the Bright Ideas’15 competition, getting an award for the Best Display stand from Young Enterprise and the biggest luck to win an opportunity to go to Manchester and represent Kingston University for YE on 13th of May. Shine of glory is pleasant but running a business in practice made me realize that you devote most of your time to it and meetings lasting for 7 hours do not seem too long anymore! Most of our time we spend on Podio – special tool for small company collaboration between team members, now it is impossible to imagine existence of DEtour without using it.
I believe that success of fli. belongs to our team, smart skilled team is the crucial ingredient for the prosperous future business (Frisch, 2011). Being an introvert, I began my work experience from seeking some job vacancy where I can avoid much communication, team working, something where i could make my own hours. For that moment I didn’t know how limited in the potential to grow personally and in business meaning i will be on my own. Though for results team should be comfortable place to stay in, with honest and respectful communication allowing working independently. Teamwork is actually a key for creative power of the business and there are several favourite qoutes for team inspiration one of them is of Kenneth Blanchard: “None of us is smart as all of us”.
Since I came from a business background I took responsibility of finance part of our start-up. It was very useful experience for me taking into account that when you build cash flow or a break-even point yourself and when you read a theory about it its totally different things as well as exploring Young enterprise software and opening a new business bank account. Apart from finance we had a requirement to produce a business report reflecting all parts of the business such as: marketing, financial performance, sales, findings and future plans. I have a feeling that for startup business writing a business plan is the same as to write a game plan in sports to create a winning strategy for the game. A business plan for the young enterprise lays all the cards on the table revealing strong and weak spots. It demonstrates the ways to capitalize on the strengths and minimize the weaknesses. It is important to realize the financial position and consider all operational and other matters as follows: business objectives, strategy, ways to attract funds, market analysis, what is the order winner of our product, marketing plan, break-even analysis and advertisement. There is a saying «There is no second chance to make a good first impression»(H.Hogan) which is highly relevant for the business plans for startups.
The main sources of cash in our team were prizes we won during the year and our capital investments with a fixed amount agreed by team. The main difficulty was that the product was produced and manufactured in the UK, producing abroad for instance in Asian region would decrease our costs dramatically but even now with the selling price of flI. at £24 where profit margin is calculated to be £8.7 equal to 36.2% whereas costs including manufacturing service are 11.3. Taking into consideration that fli. is mass-market oriented product such profit margin is pretty high.
There are two main things investors pay attention before signing a cheque: right team and potential profitability of the business to make sure they will have a high return on investments and smart team in case of failure to carry on with something new (Osnabrugge and Robinson, 2004).
One more important issue from financial point of view was decision to start a crowdfunding campaign and Kickstarter was singled out for this purpose. After modest calculation to start a mass production based on the current costs producing in the UK we need 25 000 pounds excluding our salaries. Nonetheless, it is necessary to build a base of followers using a strong marketing campaign to get enough followers/ fans on Kickstarter.
Once we had a lecture dedicated to storytelling. And key message of our guest lecturer Rob Grundel was: it is all about emotions. You are able to build an emotional connection with a customer only if you yourself passionate about it, telling them your unique story through your brand.
Furthermore, I really enjoy reading quotes of Richard Branson, founder of Virgin Atlantic, who is a great entrepreneur himself and provided dozens of remarkable inspiring statements. He said: “Complexity is your enemy. Any fool can make something complicated. It is hard to keep things simple.” The worst thing you can do launching the product is to confuse people, customers, investors, followers. We also try to keep it simple, be transparent and honest, be ourselves and look forward to build a modern company based on our passion, talents and friendship.
Brown, T. and Katz, B. (2009). Change by design. New York: Harper Business.
Fitzpatrick, R. (2013). The Mom test: How to talk to customers and learn if your business is a good idea when everyone is lying to you.
Gerber, S. (2009). 6 Steps to the Perfect Pitch. [online] Entrepreneur. Available at: http://www.entrepreneur.com/article/201826 [Accessed 25 Apr. 2015].
Goodreads, (2015). a quote by Kenneth H. Blanchard. [online] Available at: http://www.goodreads.com/quotes/56863-none-of-us-is-as-smart-as-all-of-us [Accessed 26 Apr. 2015].
Martin, R. (2009). The design of business. Why design thinking is the next competitive advantage?. Harvard.
Newlands, M. (2014). 5 Things Investors Want to Know Before Signing a Check. [online] Entrepreneur. Available at: http://www.entrepreneur.com/article/234536 [Accessed 26 Apr. 2015].
Pierce, C. (1992). Reasoning and the logic of things. Harvard.
Preston, J. (2015). 10 inspirational Richard Branson quotes — Virgin.com. [online] Virgin.com. Available at: http://www.virgin.com/entrepreneur/10-inspirational-richard-branson-quotes [Accessed 26 Apr. 2015].
Frisch, B. (2011). Harvard business review on building teams.
Osnabrugge, M. and Robinson, R. (2004). Angel investing: Matching start up funds with start up companies : The guide for entrepreneurs.
Fli. advertisment https://www.youtube.com/watch?v=ggmr_gDJZms
Rob Fitzpatrick https://www.youtube.com/watch?v=O_xjb7LB7VY
10 inspirational Richard Branson quotes http://www.virgin.com/entrepreneur/10-inspirational-richard-branson-quotes