Extracted Learning Content

Stanford Design Thinking:

From Insights to Viability
Module 1: Introduction and Identify Your Project

Define your Innovation Challenge:

1.1. Design Thinking and Hypothesis-Driven Innovation

The equation, Innovation = Invention + Adoption, explains the rationale behind this course. We
begin with invention. We'll come up with those inventions by first understanding needs and then
imagining new ways to solve them. Inventions that meet a real need are more likely to be adopted
and be viable.

Design is no longer just for designers and creatives, and its purpose has moved beyond creating new
objects. Thinking and working like designers can enable all of us to generate important insights and
take a low-risk path to innovating in the face of uncertainty. Applying design principles to the
workplace itself can offer a competitive advantage for organizations and professionals.

1.2. Value of Design Thinking

Let's take a look at how the design firm IDEO uses the design thinking process to reinvent something
old and familiar: the shopping cart.

YouTube Link: https://youtu.be/M66ZU2PCIcM

Several companies, beyond IDEO, are embracing design thinking. Here are some great examples.

 Google Ventures Design Sprint: http://www.gv.com/sprint/

 Intuit Labs: http://www.intuitlabs.com/ and https://hbr.org/2015/01/intuits-ceo-on-
building-a-design-driven-company
 Citrix In-House Accelerator: https://uxmag.com/articles/3-things-that-will-change-
experience-design-in-2015
 Capital One
Labs: https://www.capitalonelabs.com and http://www.fastcolabs.com/3034618/why-
capital-one-labs-is-banking-on-experimentation

“We do design thinking to help us accelerate and enable innovation, I think. Innovation is a tough
enough job as it is, so we need tools and we need approaches and methods to help us do it more
effectively.

When it comes down to it, business is about people. And it's about what people want and don't want.
And if you take the time to understand what people want, then I think you get a successful business,
and that's the essence of what design thinking is about. It's to get closer to people, so you can
understand what they really, really want, and make that sustainable and viable.

- Gary Etheridge – Director of Design (Nestlé Purina PetCare)

We're seeing projects that are moving very, very quickly, they're punching through where they
couldn't punch through in the past. Innovations making it into customers' hands. Like right now, we
have several that are being tested, and moving through a prototype stage. And some of these
innovations are products, but others are just in-house. We're applying design thinking not just to our
products that we build for customers, but to every part of the business.

- Saul Gurdus – VP of Insights & Enablement (Citrix)

It brings out a different mindset to solving a problem than we would normally take. And that’s super,
super powerful, because you can get pretty, pretty ingrained in a certain way to think.

- Mark Stoddard – Snacks Portfolio Director, Marketing (Nestlé Purina PetCare)

It actually helped us drive to action, because ultimately when we say design thinking what we
ultimately mean is the combination of thinking and doing in tandem. And making sure that there is a
set of concrete actions that come out that we can activate and engage on, that are going to lead to
short, medium, and long term success for the future of the company.

- Stephen Wurth – Design Strategist (Nestlé Purina PetCare)

I think only through experience with design thinking will you actually become aware and be able to
fully appreciate the value that that brings. And it brings value, I think, through forcing people to look
at things through the consumer lens.

And so therefore, the end result is that gaps do get filled that would otherwise be there. That the
appropriate inputs to the project are brought into consideration. And that that iterative process of
going ahead and creating something, and then putting it in front of people, and getting feedback on
that whole consumer experience, and then improving upon that, listening to the feedback, improving
upon that, and continuing down that path ultimately brings the value that, before we incorporated
design thinking that we didn't have at that level in our organization.

- Tim Gleason – Global Director, R&D Packaging & Design (Nestlé Purina PetCare)

So, it's so easy for executives to get very, very separate from who their customers are. So, talk to
them directly, and get a story about how has it been to use our products, to use our services, to
experience what it is to be with Capital One? You're gonna gain so much insight if you just listen to
one customer.

- Evelyn Huang – VP of Design Thinking & Strategy (Capital One)”

1.3. Needs Finding and Determining Your Innovation Challenge

User: You'll see the word "user" a lot in the field of design thinking and in this course. A user is the
person who will ultimately use your product or service, or who will adopt your internal process. Your
user is who you are designing for.

Needs Finding: Needs finding, therefore, is the first step of the design thinking process. In this step,
your goal is to gain empathy with your users and to understand their needs. The video transcript
below gives strategies for uncovering user needs.
“Your first goal is needs finding. You want to engage with your users and identify a deep, unmet
need. Your goal is to gain empathy for your users, learn how to walk in their shoes. Before we
proceed, let us introduce some basic terminology to make sure we are all on the same page.

We are looking for a need. Something not met with current solutions, products, or processes. It can
be a physical, emotional, logistical, or cultural need. It can be an aspirational need, something your
user aspires to. Or a plain operational pain point, or anything in-between. We will engage in a
process of need finding, where you will discover a person's explicit and implicit needs so you can
address them through design.

We will gain empathy, identifying and understanding a user's feelings, thoughts, and attitudes. So,
how do we gain empathy? We become ethnographers. This means that we observe our users, we
immerse ourselves in their environment, we engage with them in deep and meaningful
conversations. There are two basic skills we need to develop to be an effective need finder.

We have to be great at observation, and great at engaging and gaining trust. But fundamentally
behind all this, we need to be patient. Now, if you were to practice your empathy skills, spend some
time at the farmer’s market or the flea market. This is a great place to observe and engage, to
interact with people you never met before.

So now, let us provide some tips on how to engage effectively with your users. We need a beginner's
mindset. Enjoy the newness and freshness of every interaction. There is something new and exciting
for you to discover in every new meeting.

Let us talk a little bit more about the beginner's mindset. What we need to do is rediscover this
unique ability that we had as children, but we lost them as we became adults. We need to be
comfortable questioning everything, not worrying about getting embarrassed, or getting it wrong.

Bring back that curiosity that we all had as children. Do not judge or make any assumptions. Look for
patterns and exercise your listening muscles. And one point is worth emphasizing. Do not go into this
with your own assumptions. Try to get rid of these assumptions. Because remember, you're designing
for your users, you're not designing for yourself.

Take a back seat and leave your notion of what is needed at the door.”

Suggestions for good innovation challenge:

 You find it interesting: You need to be excited about the possibility of spending several
weeks exploring and addressing the challenge.
 You have access to user(s): You need to connect with at least one person who you can
observe and two people who you can interview quickly about this challenge. A part of the
course focuses on interacting with the people who have the challenge in order to
understand their needs/pain points – if it's not feasible to conduct an observation and two
interviews about your topic before the end of week 2 (Module 1), you should pick a different
challenge.
 You shouldn't know too much about the topic already: You may already have some
understanding of, or data about the innovation challenge you select. However, there should
be some degree of ambiguity in order to allow for needs finding and pursuit of a wide range
of possible solutions.
 You should be able to talk about your innovation challenge with others: Your innovation
challenge might align to a project or organizational priority, however, you should avoid
 challenges that involve confidential organizational information. A part of this course involves
discussing your innovation challenge with team members. If an innovation challenge from
within your organization is too sensitive, consider instead something that has come up in
your day-to-day life or the lives of those around you, or one of the innovation challenge
topics listed below.

Sample innovation challenges:

Below are some prompts that can help you craft your own innovation challenges. You can use these
as your starting point and then make them your own. This is a list of innovation challenges tackled by
previous Stanford Executive Education participants. You're welcome to borrow directly from this list
or make your own modifications to one of the listed ideas.

 How might we help employees in our company feel more comfortable in their cubicles?
 How might we help analysis in our company be more productive during the strategic-
planning process?
 How might we reduce the stress of commuters?
 How might we ensure that our elder parents remember to take their medication?
 How might we enable our environmentally conscious neighbours reduce their carbon
footprint?
 How might we help create a more inclusive work environment for executives in our
company?
 How might we help a family reduce food waste?
 How might we help a product manager virtually collaborate with their team?
 How might we reduce the stress from starting a new job?
 How might we help HR leaders recruit more millennials?
 How might we make STEM fields and STEM careers more inclusive for women?
 How might we help professionals who are unfulfilled with their current job redefine
themselves and find jobs or make career changes?
 How might we improve the grocery shopping experience for consumers?
1.4. Describe your innovation challenge by addressing and answering the following bullets/
questions.

Address the following:

1. Describe your innovation challenge.

 Frame your challenge as a question, such as "What if...?", "How can...?", or "How might
we...?"
 Be concise – even complex challenges can be summarized in a short question format.
 Remember the qualities of a good innovation challenge described earlier in the welcome
module (you find it interesting, you have access to user(s), you don't know too much about
the topic already, and you're able to talk about your innovation challenge with others).
 If possible, include an anecdote or story that brings the challenge to life.
 Include an explanation of why you are interested in pursuing this challenge.
2. Who are the users who have this challenge?

 You should be able to clearly describe the user. Think hard of not only intermediate users
but end users. Focusing on end users can uncover more opportunities than just focusing on
intermediate users.

3. How feasible is it to interview a user, with short notice?

 You need access to a user by the end of the next Module. Include a description of who you
plan to interview and/or observe in order to gather more information.

4. How well do you understand the problem?

 There should be some ambiguity in the underlying problem.

5. How much data do you currently have?

 You don't need to have any data yet. If you do, there should be ambiguity in the data that
you have.

6. How would solving the problem help users?

 Describe how solving the problem would help, but do not propose actual types of solutions
at this point.

7. Lastly, make sure you do not include a solution.

1.5. Mapping a User Journey (Video Transcript):

It will be helpful to create a user journey diagram of your focus area (similar to the example below
that depicts movie distribution to viewers); user journey diagrams can include multiple user
journeys. While this is not a required assignment, doing so will help you gain empathy for your user
before you move into observation and interviewing. You may choose to refine your user journey in
Module 2 when focusing on space saturation.

Read the video transcripts below to learn more about the user journey.

“Now, beyond observation, what you really want to do is immerse yourself in your user's shoe. As
you're immersing yourself in your user's environment, make sure to cast a wide net. A mistake, a very
common mistake, made by young entrepreneurs, is to focus on what is convenient, and ignore users
that may be harder to reach, but who may represent the true opportunities for uncovering hidden
needs.

Let me share a few examples of what you can do to cast a wide net. A couple of years ago, we had a
team that wanted to create a product or service for new college students to help them with college
loans. They started by going the convenient route. They talked to newly admitted MBA students to
the GSB, and they soon expanded beyond that to Stanford undergrads. But over time, it became clear
that to get deeper insights, they needed to reach to students at other institutions, but they also
needed to talk to their parents since they play a key role in these decisions.

And they also found out that they could learn a lot by talking to the financial aid offices at university,
but also to banks that offered loans. So, as they started to branch out from their original user, they
were able to get a better sense of what the whole college loan system is and how it worked.

In essence, what you're trying to do, and what this team did, is map the social network of the
interactions between your users and also of the interactions between the users and others who
influence them or interact with them. Oftentimes, great needs surface when you understand the
extent and nature of these broader interactions.

As you're casting a wide net, you're also learning about the value chain that serves your user. An
important tool that can help you to better understand the user is the so-called user journey. This is a
diagram that maps the experience of your key user as she tries to fulfill a particular need.

Consider the college loan example we described earlier. A user journey maps out the experience of a
recently admitted college student as she tries to navigate her college loan options. Let us consider
that journey. The journey begins when our student, we'll call her Panayiota, applies for college. As
part of her application, she and her parents must apply for financial aid.

There are two forms she needs to fill. The financial aid profile needs to be filed first, followed by the
Free Application for Federal Financial Aid, FAFSA. Finally, parent tax returns must also be provided.
The deadlines are different and vary by college and whether Panayiota will apply for early action,
regular decision, or to transfer.

So Panayiota and her parents need to keep track of all the different deadlines, and access different
websites. Once she submits the form, Panayiota waits for the decision. In the background, the
financial aid office at every university where she applied calculates how much her parents are
expected to contribute, and how much she is expected to contribute from any assets she has, or from
any jobs she will be taking while at college.

She learns all this when she receives the acceptance decision and a financial aid award letter. This
letter specifies what awards Panayiota has received. This can be need-based and sometimes merit-
based. The letter also tells her what contributions to her education are expected from herself and her
parents.

Then, both Panayiota and her parents can start considering various loan options to meet her and her
parent’s expected contributions. The financial aid office at the university where she applied can be of
some help, but there are numerous options with different interest rates, limits, eligibility
requirements, and repayment policies.

Their options include: Federal Perkins Loans and Federal Direct Loans that are available to Panayiota,
Federal Direct Plus Loans that are available to her parents, private student loans, and private parent
loans. Depending on her field of study, Panayiota may also be eligible for certain loan forgiveness
programs. So, Panayiota and her parents get inundated with a variety of options.

With little extra help available, they scratch their head, try to get as much information as possible,
and then come up with a combination of Federal Direct Loans, Federal Direct Plus Loans, and a
private loan to finance Panayiota's education. For each loan, they need to follow a different
application process, submit or resubmit different documents, and finally receive an approval.

Then, first year of college begins. Panayiota now needs to complete an online entrance counseling
session for her Federal Direct Loan, and then this process gets repeated every year. In addition, every
year Panayiota and her parents use the loan money to pay for her tuition and other expenses.

And again, every loan has a different way for getting access to the funds and paying colleges. By the
end of her fourth year, Panayiota and her parents have three different loans with three different
balances, repayment policies, and interest rates. For the private loan, Panayiota's parents had to
start repaying while she was in college, but for the other loans, payments can be deferred until she
graduates, and sometimes can be deferred until she gets a job.

Because she has taken federal loans, Panayiota needs to complete an exit counseling session in which
she learns about her various repayment options, loan forgiveness plans, and loan consolidation
options. Her head is hurting, and she's confused. She has yet to find her first job, and she now has to
start repaying her loans, or figure out if she can defer some of her payments, and if that is a good
decision.

And she's confused what all that means. How does she select her repayment plans, and how is she
going to handle all the years of monthly bills and payments? And the journey continues, with monthly
bills and payments, repayments and loans getting in the way of other important financial
considerations.

So, this is a user journey map. Such a user journey map displays the complex web of interactions that
your user faces, the confusing information she gets, and what she needs to navigate. Mapping the
complexity of a user journey can help you identify opportunities for simplifying and streamlining the
journey, appreciating your user's pain points, and understanding the key stakeholders.

In this case, the stakeholders include parents, college aid counselors at the university, administrators
of private and public loans, and even the politicians who set up policies. Looking at the user journey
can also help you figure out what you currently know about the problem, and what assumptions you
have made that will need to be tested when you observe and interview users.

So, try to map your user journey, identify any gaps in the journey, and fill in these gaps as you
conduct observations and interviews later in the course.”

Identify Assumptions

Once you've mapped out the user journey(s), you can begin to identify any assumptions you have
made about your innovation challenge.

To start the process of identifying assumptions, write what you currently know about the problem
(see example below). Use pink post-its to indicate personal stories from yourself, friends, or
acquaintances. Use yellow post-its to indicate any facts related to the innovation challenge. Fill in
the gaps in your understanding with assumptions and post those using blue post-its. Recognize that
these assumptions need to be tested later using observations and interviews.
1.6. Preparing to Observe and Interview

Now that you have Defined Your Innovation Challenge, and possibly mapped a User Journey, it is
time to identify real life users for you to observe and interview. Please note, in Module 2 Professor
Zenios and you will dive deeper into observations and interviews. Below are two videos to help you
prepare for your next assignment. After you have reviewed the content in Module 2, you can
conduct your observations and interviews.

As you identify potential users, check-in with leadership, Human Resources, and workplace policies
to confirm you can proceed with your observations and interviews. Once you have been cleared we
suggest having conversations beforehand with the potential users you will observe and/or interview.
You should let them know that you'll be approaching them soon for help, and share with them your
goals.

Observation (Video Transcript)

“Now, let us recall where we are in the big picture. We are discussing different techniques for gaining
empathy. Let us start with observe. This is what ethnographers do. They are great observers. And a
very effective observational technique is what we call being a fly on the wall. You observe, but do not
interfere.

And let's see how you can be an effective observer. First, let's talk about the observer’s mindset.
What are you looking for when you are observing? You are actually looking for the workarounds, and
the so-called extreme users. Let's start with workarounds. In this picture, there is a paper cup, but
you notice something strange going on with the tea bag. The edge of the tea bag is inserted under
the edge of the cup.

Why do you think? Well, remember of all those annoying times when the tea bag fell into hot water?
So, this picture identifies a need, you do not want the tea bag to fall in hot water. And you have also
found an extreme user, someone who is so annoyed by this problem that she came up with a
homemade solution.

So, in your observation you are looking for the workarounds. These are points of big pain that they
are so big that someone went to the extra trouble to piece together a solution. In B2B environments,
these extreme users are also known as early evangelists. These are the business executives who are
so annoyed by existing processes or systems that they piece together their own makeshift solution to
make progress.

Whenever you find these executives, you have found a big pain point. You can streamline their
makeshift solution, and that's a great new product, and these executives are going to be the
evangelists that are gonna help you recruit more early users.

Now, a challenge facing many teams is finding the extreme users. You're more likely to find these
extreme users at extreme environments. One of our teams was working to create sunscreen solutions
for young men. To find extreme users, this team looked for young men who spend a lot of time,
ideally excessive time, in the sun or in other extreme weather conditions.

When your users are exposed to extreme conditions, they are compelled to come up with their own
makeshift solutions, and these solutions give you the inspiration for the own solutions that you want
to create.
Now, while you're observing, you're also actively formulating some hypotheses. You have mental
questions and you try to make a guess for the answers.

Now remember, you are still the silent observer. You are not asking questions to your users, you are
not telling them your hypothesis, but you are trying to formulate based on what you are seeing what
reasonable hypothesis may be.

So you ask questions to yourself. What are they doing? How are they doing it? And in particular, why
are they doing it? So you are moving from the concrete to the more abstract. On the concrete side,
you can formulate the answers directly from what you're observing. On the abstract side, you are
formulating hypothesis.

So let's consider this example where we see this little girl picking root vegetables. She's smiling, even
though the batch of vegetables that she's cutting looks much bigger than her. So, it looks like a lot of
fun. Now so you see, based on the what she's doing and how she's doing it, you can answer those
questions directly from what you're observing. But, the why is more challenging.

Why is this fun? Perhaps because it feels like a game. Perhaps because getting messy is fun. So for
the why you make educated guesses, and you're formulating your hypothesis about your user's
deeper emotions, and beliefs, and feelings.

While you're observing, you also want to be recording your observations. If you're alone, and your
user allows you to do that, maybe take some pictures, or take a video recorder with you. If they
don't, create a notebook with a pre-specified format. You can create your own format, or you can use
the example that we have here that we also borrowed from our colleagues at the Extreme course.

Take detailed notes, pictures, collect artifacts from the field. Anything and everything that can help
you remember what you have observed. The key is to gather as many clues as possible to help you
refresh your memory when you go back to your office, when you go back to your brainstorming
space, and try to reconstruct what you have learned.

And you can keep all this in your own journal. It can be a notebook, or you can scan your pieces of
paper and save them online. Whatever works for you. But just remember to keep a record of all those
valuable observations.”

Internal company challenges provide many opportunities for observation. Attend a meeting where
the topic is being discussed, or immerse yourself in and observe the workflow. Then insert yourself
into the workflow to learn by doing.

Observation Techniques for Internal Challenges (Video Transcript)

“Let us now discuss how you can apply the observation techniques you have learned so far to explore
and understand internal company challenges. Possibilities for observations are abundant and readily
available. For internal challenges, you are already part of the organization. So you can learn a lot
about a challenge by observing how things are getting done.

For example, your challenge may involve redesigning how meetings are run. Every time you attend a
meeting, pay attention to how the meeting is run. When you’re at a meeting, remember to be an
observer, and also take time at the end to take notes on what you observed, what worked well, what
caused difficulties.
Second, the holy grail of empathy techniques is learning by doing. If the challenge involves
redesigning a particular internal process that needs to be improved, immerse yourself in the process.
Be the associate who runs parts of the process and experience its different elements. Do the actual
work that the process involves, so you can experience all the steps.

Let me share with you an example. An executive team I worked with wanted to redesign the demand
forecasting method for their organization. The team started by working side by side with the demand
forecasting group to better understand the existing process and the data used by the group. They
then took a specific demand forecasting task and developed and applied their new demand
forecasting process to this specific task.

This was a great way for them to both learn about the underlying challenges, and then demonstrate
their solution by applying it to a real challenge that the organization faced.

So in summary, when gaining empathy for internal challenges, immerse and observe the workflow
and insert yourself in the actual workflow.

And try to complete one or more of the tasks that you want to redesign.”

When developing your observation plan, consider using a format like the template below.

Module 2: Observe and Interview

Observations and interviews are design thinking techniques for gaining empathy with users and for
gathering data. Observations can give you key insights into your user's needs, while interviews give
you data to determine whether or not any assumptions you made were correct.

In this module, you will:

 Prepare for an observation and interviews

 Conduct an observation
 Practice your interview skills
 Gain empathy for your user
 Collect data

2.1. Observation (Video Transcript)

“Now, let us recall where we are in the big picture. We are discussing different techniques for gaining
empathy. Let us start with observe. This is what ethnographers do. They are great observers. And a
very effective observational technique is what we call being a fly on the wall. You observe, but do not
interfere.

And let's see how you can be an effective observer. First, let's talk about the observer’s mindset.
What are you looking for when you are observing? You are actually looking for the workarounds, and
the so-called extreme users. Let's start with workarounds. In this picture, there is a paper cup, but
you notice something strange going on with the tea bag. The edge of the tea bag is inserted under
the edge of the cup.

Why do you think? Well, remember of all those annoying times when the tea bag fell into hot water?
So, this picture identifies a need, you do not want the tea bag to fall in hot water. And you have also
found an extreme user, someone who is so annoyed by this problem that she came up with a
homemade solution.

So, in your observation you are looking for the workarounds. These are points of big pain that they
are so big that someone went to the extra trouble to piece together a solution. In B2B environments,
these extreme users are also known as early evangelists. These are the business executives who are
so annoyed by existing processes or systems that they piece together their own makeshift solution to
make progress.

Whenever you find these executives, you have found a big pain point. You can streamline their
makeshift solution, and that's a great new product, and these executives are going to be the
evangelists that are gonna help you recruit more early users.

Now, a challenge facing many teams is finding the extreme users. You're more likely to find these
extreme users at extreme environments. One of our teams was working to create sunscreen solutions
for young men. To find extreme users, this team looked for young men who spend a lot of time,
ideally excessive time, in the sun or in other extreme weather conditions.

When your users are exposed to extreme conditions, they are compelled to come up with their own
makeshift solutions, and these solutions give you the inspiration for the own solutions that you want
to create.

Now, while you're observing, you're also actively formulating some hypotheses. You have mental
questions and you try to make a guess for the answers.

Now remember, you are still the silent observer. You are not asking questions to your users, you are
not telling them your hypothesis, but you are trying to formulate based on what you are seeing what
reasonable hypothesis may be.

So you ask questions to yourself. What are they doing? How are they doing it? And in particular, why
are they doing it? So you are moving from the concrete to the more abstract. On the concrete side,
you can formulate the answers directly from what you're observing. On the abstract side, you are
formulating hypothesis.

So let's consider this example where we see this little girl picking root vegetables. She's smiling, even
though the batch of vegetables that she's cutting looks much bigger than her. So, it looks like a lot of
fun. Now so you see, based on the what she's doing and how she's doing it, you can answer those
questions directly from what you're observing. But, the why is more challenging.

Why is this fun? Perhaps because it feels like a game. Perhaps because getting messy is fun. So for
the why you make educated guesses, and you're formulating your hypothesis about your user's
deeper emotions, and beliefs, and feelings.

While you're observing, you also want to be recording your observations. If you're alone, and your
user allows you to do that, maybe take some pictures, or take a video recorder with you. If they
don't, create a notebook with a pre-specified format. You can create your own format, or you can use
the example that we have here that we also borrowed from our colleagues at the Extreme course.

Take detailed notes, pictures, collect artifacts from the field. Anything and everything that can help
you remember what you have observed. The key is to gather as many clues as possible to help you
refresh your memory when you go back to your office, when you go back to your brainstorming
space, and try to reconstruct what you have learned.

And you can keep all this in your own journal. It can be a notebook, or you can scan your pieces of
paper and save them online. Whatever works for you. But just remember to keep a record of all those
valuable observations.”

Internal company challenges provide many opportunities for observation. Attend a meeting where
the topic is being discussed, or immerse yourself in and observe the workflow. Then insert yourself
into the workflow to learn by doing.

Observation Techniques for Internal Challenges (Video Transcript)

“Let us now discuss how you can apply the observation techniques you have learned so far to explore
and understand internal company challenges. Possibilities for observations are abundant and readily
available. For internal challenges, you are already part of the organization. So you can learn a lot
about a challenge by observing how things are getting done.

For example, your challenge may involve redesigning how meetings are run. Every time you attend a
meeting, pay attention to how the meeting is run. When you’re at a meeting, remember to be an
observer, and also take time at the end to take notes on what you observed, what worked well, what
caused difficulties.

Second, the holy grail of empathy techniques is learning by doing. If the challenge involves
redesigning a particular internal process that needs to be improved, immerse yourself in the process.
Be the associate who runs parts of the process and experience its different elements. Do the actual
work that the process involves, so you can experience all the steps.

Let me share with you an example. An executive team I worked with wanted to redesign the demand
forecasting method for their organization. The team started by working side by side with the demand
forecasting group to better understand the existing process and the data used by the group. They
then took a specific demand forecasting task and developed and applied their new demand
forecasting process to this specific task.

This was a great way for them to both learn about the underlying challenges, and then demonstrate
their solution by applying it to a real challenge that the organization faced.

So in summary, when gaining empathy for internal challenges, immerse and observe the workflow
and insert yourself in the actual workflow.

And try to complete one or more of the tasks that you want to redesign.”

When developing your observation plan, consider using a format like the template in the shared link.

Link: https://drive.google.com/file/d/11oTRykOdCFPsYVfK-8YJECV5w2Oll9PI/view?usp=sharing

2.2 Design Thinking to go – Observation

Link: https://web.stanford.edu/group/instr_design/cgi-bin/LEAD_TIP/dt_to_go/observation.html

2.3. Interviewing

Interviews help you continue to gain empathy for your user, by helping you discover the emotions
that guide his or her behaviours. Interviews also help you gather additional information from your
user, including confirming or rejecting assumptions you made based on what you observed him or
her do. Go through the video transcripts below to learn more about interview structure and
techniques that will help you in your upcoming interviews.

Interview Techniques and the Rules of the Engage Club (Video Transcript)

“Before you go into your first interview with your user, you will need to prepare. The first step is start
by brainstorming questions. So, for example, let's say you want to learn about their gas station
experience. Some of your questions could be: When do you typically fill up? Is it a pain, and why? And
so on.

Then you can use these brainstorm questions and identify broader themes that you want to explore.
And then you can refine these questions once you understand what are the broader themes. We'll
talk about these last two steps in a second, but first, let's focus on what makes great questions?

The quick answer is open-ended questions and prompts. Do not ask, when did you last fill up your
car? Ask your user to tell you about the last time you filled up your gas. With that question, you are
going to get much more information. Also, you want to avoid questions that are leading.

My colleagues teaching Design for Extreme Affordability at the d.school have perfected some of the
most effective interviewing techniques in the world. And they have come up with eight rules that they
like to call the Rules of the Engage Club. Let me go through these rules for you.

The first rule, you do not say "usually" when asking a question. So you don't say things like: Do you
usually have Cheerios for breakfast? Now, this is so important that we duplicated it and called it the
second rule as well. And the reason it's so important is because the word "usually," it's a leading
question. So, you are careful with the words that you choose in your questions. You don't want to be
leading the subject.

The next rule, if someone says "I think," or states a belief, or seems to prefer one thing over another,
then the conversation is not over. Ask why that's important. So if they tell you: No, I'm not having
Cheerios for breakfast, I'm having Corn Flakes, ask them, why do they prefer Corn Flakes? So you can
understand more about their preferences and their beliefs.

We also want the questions to be short, and a good rule is only 10 words to a question. So you don't
want to say things like this: Wouldn't you agree that in this environment where parents are so busy,
and life is so hectic, and they need to rush out of the home in the morning to get to work and have
their kids prepared for school, convenient breakfast choices like Cheerios would be extremely
worthwhile?

There's so many things that are wrong with that question. It's so long, we don't remember what it is,
it's a leading question. Avoid questions like this. Also, you want to ask one question at a time. So
don't ask things like: What did you have for breakfast, lunch, and dinner yesterday? Ask: Tell me
what you had for breakfast yesterday. Let that evolve, and then turn to the lunch question and the
dinner question.

Also avoid binary questions or leading questions. So don't ask things like, do you agree that healthy
breakfast choices are better than unhealthy breakfast choices? This is both binary and leading at the
same time.

You also want conversations that start from one question to go as long as they have to. Listen
attentively to the answers that you're getting, and build on those answers. Don't pay attention to
your script and what is the next question. Pay attention to what your user is telling you.

And, finally, if you're the only one interviewing, then you have to use a voice recorder to capture
information that you get from the data. You don't want to be distracted from note-taking and
neglect or not pay attention to all these valuable insights that you're getting from your user.

So, use these rules to scrutinize the questions you came up with in your brainstorm, and modify your
questions by following some of these recommendations.

So now, let us revisit the example of coming up with questions about the gas filling experience. You
brainstorm these questions, and then you revisit them to look for themes. By looking at the example
we have here, there are three themes that emerged from the preliminary question.

There is a group of questions that focuses on the step-by-step experience, another one that focuses
on the user's spending habits, and yet a third set that focuses on the user's financial state and
decision-making process. You can then take each group, drill into it, and refine your questions.

For example, to get more details on the step-by-step experience, you can start by asking them to tell
you about the last time they went to the gas station. And then drill into the specific steps: how it felt,
what each step entailed, and so on.

But remember, we need to keep the big picture in mind. We don't just want great questions. What
we want is a great interview, and an interview is like a play, it has acts. An opening act where the
introductions are made, and where the main goal is to build rapport. The main act, where you are
listening to the stories attentively and identifying the key emotions. And a phase where you dig
deeper by questioning some of the statements the user has made. And then, finally, the wrap-up
phase, and the wrap-up phase can be extremely critical. Be prepared for that nugget of wisdom that
will surface the minute you're about to wrap up.

As you're closing your notebook and you are ready to say thank you and goodbye, there is this last
story that your user was dying to tell you, and she knows it's now or never. Be ready to give her that
space, and capture that last word of wisdom.

And remember, the key to effective interviews is listening.

To establish rapport, start with small talk. If like me you're not good at small talk, there are actually
books that can help you gain that skill. And remember that small talk is looking for neutral subjects
of common interest. The weather is always a safe bet. It may be annoying sometimes, but you can try
it.

And from early on in the conversation, try to sense your user's communication style and energy, and
try to consciously match them. Use welcoming facial expressions. Establish eye contact, nod, listen
attentively. Use an empathetic tone. At break points, state back in your own words what you have
heard to make sure you understand what you're hearing.

Watch your body language. Is it matching your user's? And most importantly, resist the temptation
to interrupt. Avoid that temptation, and avoid the temptation to talk about yourself. Remember, this
is about your user. Your user is the expert. It's not about you.”

The Five Whys Technique (Video Transcript)

“When conducting interviews, your goal is to identify deeper meaning behind the answers you get.
You are looking for the deep, hidden beliefs of your users. Their deep unmet needs. The deep causes
of an unmet need. The five whys technique can be very powerful in digging for this deeper meaning.

When using this technique, you keep asking whys iteratively until you feel that you got to a deeper
understanding of your user and of their need. Let us consider a very simple example of how you can
use this method to explore an internal innovation challenge. Meetings at your organization always
start late.

We need to make sure we increase the numbers on app purchases without affecting the users, that's
the most important thing. See you at the next meeting.

Thank you.

Thanks. So, Stefanos, how's everything going lately?

It's good. I just got this new project. I'm trying to put together a team to work on improving our
meetings.

Oh, okay.

So I was hoping I could pick your brains and ask a few questions. Do you have a few minutes?

Yeah, sure, I have a few minutes, before I go to my next meeting, of course.

Yeah, well, we seem to be running from meeting to meeting, right?

We do, we do.

Yeah. So how was this meeting for you?

I think the meeting itself was pretty good, but it did start late, so that was tough.

Well, yeah, they all seem to be starting late. Do you have a sense why, why that's happening? Why
do you think all our meetings seem to start late?

I think the main problem is that the person who's in charge of the meeting usually ends up showing
up late.

Hmm. Okay. Why do you think that's the case? Why do you think the person in charge always tend to
show late?

I think part of it is they don't know how long it will take them to get from a meeting in one area to a
meeting in the other.

But it shouldn't be that hard to figure out that it takes you five minutes to go from one building to the
other.

Yeah.

So why is it happening?

I think part of the reason is that there isn't buffer time factored into their schedule.

Hmm, why don't they put buffer time in there?

I imagine that their assistants either don't think about it when they're helping to create the schedule,
or maybe they're just trying to squeeze in so many meetings, and if they leave buffer time, they can't
fit them all in.

[LAUGH]

Oh, that's a good point. That's helpful, that gives me something to think about. So I don't want to
take more of your time. Do you think it would be okay if I send you an email if I have more questions?

Yeah, definitely.

And get a little bit more of your sense about our meetings, and what we can do to make them
better?

Yeah, definitely, I'd be happy to help.

Okay, that'd be great.

All right, thanks.

Thanks.

Again, this questioning helps you understand that lack of information about travel time between
meetings causes delays. We can also ask whys related to why the assistant did not provide any buffer
time between meetings. And this can provide us with further insights.

You will probably discover that the assistant does not provide a buffer time because that is the only
way to fit all meeting requests in the busy executive schedule.

What is worth observing here is that this approach can help you identify possible intervention points,
where you can make changes, and start solving the underlying problem, meetings always starting
late.

For example, after this questioning, you may want to focus on helping assistants plan for buffer time
and travel time between meetings. Or, perhaps take a higher-level perspective, and focus on
reducing their need for so many meetings that end up being scheduled back-to-back.”

Interview Dos and Don'ts

“I would like to wrap up these videos by highlighting some major dos and don'ts that I would like you
to remember. So let us start with the dos.

By asking your users probing questions, you get to understand them more deeply. Follow up on
interesting statements. Ask clarifying questions to get to the interesting nuggets of insights. "Tell me
more about that..." is always a good technique.

Remember to ask time and situation-bound questions. Ask about the last time someone did
something. Don't ask about hypotheticals. Communicate empathy by matching the user's non-verbal
cues.

If you know about their dress style ahead of time, dress in a similar way. If they're casual, dress
casually. If they're formal, dress formally. Use a similar tone of voice and adapt your energy to match
theirs.

Also, you can use the environment to your advantage. Try to interview at the time and place relevant
to the behaviour being explored. The various clues of the environment can trigger your user's
memory, and will enable you to learn more about what they do in that environment.

And let the interview take its course. Don't set the stage for what you want to hear, but be open-
minded, and follow your user's lead.

Now, about the don'ts. Avoid closed questions or questions that are meant to confirm a statement.
These interviews are exploratory in nature. Not confirmatory.

As we saw in the Engage Club Rules, do not say "usually." It is leading the suspect. And don't stick to
your script. You will miss the biggest opportunities.

Do not ask hypothetical questions. You are looking for concrete examples. And do not be afraid of
silence. Allow your user to think and take their time to answer.
And remember, practice makes perfect. Your first interview may be clunky. By the fifth one, you're
gonna be a real pro at doing this.”

Writing an interview script or guide will help ensure that you get responses to the specific questions
that you have, and will help build consistency throughout your interview process. Keep in mind,
however, that it's not necessary to stick to the exact script: listen carefully and follow the natural
direction of the conversation.

An interview script should:

 Consist of the following components: 1) an introduction, 2) a series of questions, 3) a

statement of thanks for their participation
 Keep the focus on your user's experience
 Ask open ended questions that begin with "what," "why," and "how"
 Ask "Tell me more..." questions, like "Tell me more about the last time you did..."
 Ask questions that allow you to test assumptions and hypotheses

An interview script should not:

 Include questions with the word "usually"

 Ask questions with more than 10 words
 Ask leading questions
 Ask yes/no or binary questions

Below are links to sample interview scripts:

Link 1: https://drive.google.com/file/d/11oTRykOdCFPsYVfK-8YJECV5w2Oll9PI/view?usp=sharing

Link 2: https://drive.google.com/file/d/1a8NvIJkx0wBBQIkgilTnm4TWol5UPxsg/view?usp=sharing

Points to remember:

Remember that there is a difference between observations and interviews. In your observation, you
should not interact with the person or people you are observing. Be a fly on the wall. In your
interview, you will engage with your user. If your interviewee hasn't revealed any pain points by the
end of your time together, try asking him or her directly, "What pain points are you experiencing?"

Make sure that you are collecting the data from your observation and interviews (capture pictures,
audio, video, and/or personal written observations). You will need these for the Module 3
assignment.

After you've completed your observation and interviews, summarize and reflect on how they went
by answering the questions below.

 Briefly describe your observation: How many people did you observe? Where/when did you
go? What did you see? Did you see any workarounds?
  How many people did you interview? Who did you interview about your innovation
challenge?
 Share three key insights you gathered from your observation and interviews.
 In the interviews, what worked well, and what would you do differently?
 Share two questions from your interview script. Did you end up asking any binary questions?
How might you revise these questions based on your interview experience?
 In the interviews, which Rule(s) of the Engage Club did you violate? (If you think you didn't
violate any, think harder!) What would you change to correct these violations?
 If you were spending more time on this project, what other observations would you
conduct, and who else would you interview and why?

Module 3: Space Saturation and POV

Space saturation and clustering are techniques for making sense of the raw data collected in
observations and interviews. Organizing and analyzing this data will help you define a Point of View
(POV) statement: a problem statement that you can work towards solving with an invention.

3.1. Space Saturation and Clustering

Now that you have gathered data through observations and interviews, you will need to collect all of
that data in a single place so that you can begin finding common threads and similarities.

Space saturation is a term for gathering all of the information that you discovered in the needs
finding portion of the design process, and displaying it all visually in a single space.

Introduction to Space Saturation (Video Transcript)

“In this module, we will learn how to leverage the insights and the collaterals that you've gathered
from your interviews, organize them, and distill them down to a single point of view. This point of
view will give you a clear focus for the design of your solution. We will walk you through three
techniques: space saturation, clustering, and developing a point of view statement.

And let's start with space saturation. In a nutshell, you want a systematic way to gather and
interpret all the data your team has gathered. And space saturation is a technique that does that,
and it serves two basic purposes. It summarizes the data, but more importantly, it establishes a
common information set for the whole team. It gets everyone on the same page. And let's see how
this works.

You begin by capturing the insights from your users' stories. You revisit your notes. You discuss them
with each other. And then you do an exhaustive brain dump of all elements gathered from interviews
and observations. This includes both things that you have observed, but also some implied insights,
some intuition that you may have developed, as part of those interviews.

So, the data that you will gather and collect include what the user says, what he or she thinks and
does, but also what he or she feels. Pictures, objects, artifacts, smells, anything that will enable you
to remember what you have learned from those interviews and interactions. And you're taking all
these insights, and placing them at the shared space for everyone to see and review.
We strongly encourage you to use your whiteboard. Put all the relevant data on a sticky note. Not all
data on a single sticky note, one data point per sticky note. And put them up, unfiltered, on your
whiteboard. Once you do that, you can then start manipulating the data.

This picture shows a very preliminary space saturation. You see tons of stickies that gather all the
observations the team has made. And these are then organized into clusters of similar observations.
We will actually see an example of how this works in practice, later in this module.

Now, the ideal space saturation includes contributions from all group members. You will see different
handwritings, different color of Post-its. It's also visual and manipulable. You want to be able to
move stickies around, and bring them closer together if they represent something similar, or
something that is related.

What you want is simply to create a space that enables you to be immersed, both you and your
whole team, into your observations, into the artifacts that you have gathered, into the stories that
you have learned. And again, this is a way for your group to be on the same page, for everyone to see
collectively all the insights gained, but is also serves as a reminder of all the richness of what you
have learned through your interviews. And remember, at this point, you don't want to filter any
information. Your bias should be towards inclusivity.

In terms of some practical tips, keep one insight, or one distinct observation, per Post-it. And put all
these elements on the board, and then take a step back. What did others see that you did not? Are
you learning some new things about your broader user group that you were not aware of from the
limited interviews that you have done?

So, once you do that, and you reflect and absorb, then you try to organize the information to see
what are the common themes that emerge? At first, you are seeking different ways to organize the
data. Do it once, take a picture, and try again.

So ways of doing that? You can take a high-level survey of the data, and quickly you could come up
as a group with different ways to cluster them, and you cluster them once, take a picture, then try
again, a different way of clustering.

Your goal is to try to make sense out of all these qualitative data.

So, once you start seeing some common threads among the different interviews, the different users,
the different needs, that's a sign of progress.”

Clustering, or grouping data around a common theme, is a useful way to organize data. The video
transcript below offers ways to assemble data into themes.

Different Ways to Organize Data (Clustering) (Video Transcript)

“So, let us review some ways of creating such organizations. One thing that you can you do is staple
yourself to your user and present a typical day in their life. You can think of that as a process map, or
as a timeline. Maybe it's the Facebook timeline of a user over one day.

And then, identify the key pain points in your user's day. Where do these occur during a day, and
what can you learn by identifying these pain points? Then, look for relationships between different
users and different stakeholders. Create a stakeholder map to understand who influenced who. And
look for common needs that span multiple stakeholders.
Another good organizational tool is the empathy map. And you see an example here. At the high
level, you summarize what you learn from your user observations and interviews inside the map. And
then you highlight the key needs identified on the margin.

The map is organized in four quadrants. What the users say, as captured by memorable quotes.
What they do, as captured by their observed actions and behaviors. You could have pictures there.
What their thoughts and beliefs are, and these are things that you have identified and probed
through your interviews. And what their emotions are. And again, you could identify those emotions
through your interviews, but also through the user's expressions.

So, this is another example where you start from the concrete — what they do, what they say —
but you then try to move to the abstract. Key beliefs and emotions. And your key goal here is to see
whether you can identify powerful emotions, because if you can tap these emotions in your design,
you're more likely to develop a successful product or service.

Now, on the margins of the map, you want to identify the needs that emerge from these
observations. These needs can be usability or tactical needs. Usually faster or easier ways of doing
something. But they can also tap into deeper emotions and aspirations. The desire to feel accepted,
or the desire to be perceived as cool or successful.

So, let's make this more concrete by going through this example that focuses on Laura, a teenager
going to summer camp. Now, there are the tactical needs, the usability needs that could focus on
Laura's needs for products that do not require her to go to the camp nurse. That's a tactical need, it is
very usability related in nature. But then, there are deeper needs, like Laura's desire to use products
that save the world, but in a non nerdy, cool way.

And you can see how the two blend together. What you may want to design is a product that would
not require for Laura to go to the camp nurse, and at the same time, would make Laura feel that
she's saving the world in a non nerdy, cool way. This deeper need that you have identified enables
you to design a product that Laura will actually want to use.

And the last thing to remember, the needs that you're identifying and putting at the margins of your
empathy map, should somehow be traced back to all the observations you have inside the map. If
someone asks you: Tell me which observation or observations led you to this need you have
identified, you should be able to point out to the exact observation, or the collection of observations,
that helped you formulate that need.”

The empathy map template described is provided in the link below.

Link: https://drive.google.com/file/d/1AwcS_kzNXKnOnYyPGUuxYb_P99p2PgtG/view?usp=sharing

To learn more about Empathy Maps, review these additional resources:

 Empathy Maps: A Complete Guide to Crawling Inside Your Customer's Head

 d.school Empathy Map Method
 UX for the Masses - empathy map examples
3.2. Advanced Clustering Techniques

Below is a refresher on the video transcript for User Journey and Ecosystem.

User Journey and Ecosystem (Video Transcript)

“Now, beyond observation, what you really want to do is immerse yourself in your user's shoe. As
you're immersing yourself in your user's environment, make sure to cast a wide net. A mistake, a very
common mistake, made by young entrepreneurs, is to focus on what is convenient, and ignore users
that may be harder to reach, but who may represent the true opportunities for uncovering hidden
needs.

Let me share a few examples of what you can do to cast a wide net. A couple of years ago, we had a
team that wanted to create a product or service for new college students to help them with college
loans. They started by going the convenient route. They talked to newly admitted MBA students to
the GSB, and they soon expanded beyond that to Stanford undergrads. But over time, it became clear
that to get deeper insights, they needed to reach to students at other institutions, but they also
needed to talk to their parents since they play a key role in these decisions.

And they also found out that they could learn a lot by talking to the financial aid offices at university,
but also to banks that offered loans. So, as they started to branch out from their original user, they
were able to get a better sense of what the whole college loan system is and how it worked.

In essence, what you're trying to do, and what this team did, is map the social network of the
interactions between your users and also of the interactions between the users and others who
influence them or interact with them. Oftentimes, great needs surface when you understand the
extent and nature of these broader interactions.

As you're casting a wide net, you're also learning about the value chain that serves your user. An
important tool that can help you to better understand the user is the so-called user journey. This is a
diagram that maps the experience of your key user as she tries to fulfill a particular need.

Consider the college loan example we described earlier. A user journey maps out the experience of a
recently admitted college student as she tries to navigate her college loan options. Let us consider
that journey. The journey begins when our student, we'll call her Panayiota, applies for college. As
part of her application, she and her parents must apply for financial aid.

There are two forms she needs to fill. The financial aid profile needs to be filed first, followed by the
Free Application for Federal Financial Aid, FAFSA. Finally, parent tax returns must also be provided.
The deadlines are different and vary by college and whether Panayiota will apply for early action,
regular decision, or to transfer.

So Panayiota and her parents need to keep track of all the different deadlines, and access different
websites. Once she submits the form, Panayiota waits for the decision. In the background, the
financial aid office at every university where she applied calculates how much her parents are
expected to contribute, and how much she is expected to contribute from any assets she has, or from
any jobs she will be taking while at college.

She learns all this when she receives the acceptance decision and a financial aid award letter. This
letter specifies what awards Panayiota has received. This can be need-based and sometimes merit-
based. The letter also tells her what contributions to her education are expected from herself and her
parents.

Then, both Panayiota and her parents can start considering various loan options to meet her and her
parent’s expected contributions. The financial aid office at the university where she applied can be of
some help, but there are numerous options with different interest rates, limits, eligibility
requirements, and repayment policies.

Their options include: Federal Perkins Loans and Federal Direct Loans that are available to Panayiota,
Federal Direct Plus Loans that are available to her parents, private student loans, and private parent
loans. Depending on her field of study, Panayiota may also be eligible for certain loan forgiveness
programs. So, Panayiota and her parents get inundated with a variety of options.

With little extra help available, they scratch their head, try to get as much information as possible,
and then come up with a combination of Federal Direct Loans, Federal Direct Plus Loans, and a
private loan to finance Panayiota's education. For each loan, they need to follow a different
application process, submit or resubmit different documents, and finally receive an approval.

Then, first year of college begins. Panayiota now needs to complete an online entrance counseling
session for her Federal Direct Loan, and then this process gets repeated every year. In addition, every
year Panayiota and her parents use the loan money to pay for her tuition and other expenses.

And again, every loan has a different way for getting access to the funds and paying colleges. By the
end of her fourth year, Panayiota and her parents have three different loans with three different
balances, repayment policies, and interest rates. For the private loan, Panayiota's parents had to
start repaying while she was in college, but for the other loans, payments can be deferred until she
graduates, and sometimes can be deferred until she gets a job.

Because she has taken federal loans, Panayiota needs to complete an exit counseling session in which
she learns about her various repayment options, loan forgiveness plans, and loan consolidation
options. Her head is hurting, and she's confused. She has yet to find her first job, and she now has to
start repaying her loans, or figure out if she can defer some of her payments, and if that is a good
decision.

And she's confused what all that means. How does she select her repayment plans, and how is she
going to handle all the years of monthly bills and payments? And the journey continues, with monthly
bills and payments, repayments and loans getting in the way of other important financial
considerations.

So, this is a user journey map. Such a user journey map displays the complex web of interactions that
your user faces, the confusing information she gets, and what she needs to navigate. Mapping the
complexity of a user journey can help you identify opportunities for simplifying and streamlining the
journey, appreciating your user's pain points, and understanding the key stakeholders.

In this case, the stakeholders include parents, college aid counsellors at the university, administrators
of private and public loans, and even the politicians who set up policies. Looking at the user journey
can also help you figure out what you currently know about the problem, and what assumptions you
have made that will need to be tested when you observe and interview users.

So, try to map your user journey, identify any gaps in the journey, and fill in these gaps as you
conduct observations and interviews later in the course.”
User-needs-insights analysis and defining composite characters are other types of data clustering
techniques that can help move you towards developing a POV statement. Refer to the video
transcript below on how to create and use each of them.

Composite Characters (Video Transcript)

“Let's make sure that we don't forget the big picture. Your goal with all of this is to define a
compelling problem that you want to address, that once you address, you're gonna have a solution
that your users want to use.

Another way to get there is to organize your data into three categories: Data that describe your user,
data that describe the needs you have identified, and data that reveal insights about your user, his or
her values and desires, that essentially justify why these needs are compelling.

Using that organization sets you up for flaring up in the generation of multiple problem statements.
Because you can see problem statements emerging by picking a different sticky note for the user, a
different sticky note for the needs, and then a different sticky note for the insights. It's what one of
the vendors at the farmers' market that I visit always likes to call as mix or match. You pick different
stickies from every bin, and you mix and match, and you come up with different point of view
statements.

But before we talk about how you can actually do that, let's consider one last way for organizing the
data. And this is primarily data on the user.

So it's time to talk about composite characters. You have interviewed multiple users, and some
common themes emerge. A composite character is a clustering of the information you have gathered
on your users and needs into logically consistent categories. And each character is an amalgam of
these user attributes and needs you have identified.

To make this more concrete, consider a team from Northwestern University that was working on the
sleep apnea space. Sleep apnea is a medical condition in which someone stops breathing while
they're asleep. This lasts for 30 to 60 seconds, and then the person is awakened, gasping for air. This
interrupts normal sleep patterns, and patients who suffer from this condition tend to be very tired
during the day.

Existing treatments involve a very clunky breathing device that the patient needs to wear while
they're asleep. This is quite effective, but it's also extremely inconvenient, and most patients hate it
and don't use it. Now, the team, as a result of their interviews, have identified two composite
characters with distinct personalities and needs.

First is Joe the hipster, a young, single professional who is motivated by appearances and social
status. He needs solutions that are discreet, but can be customized and look chic.

On the other hand is John the dude, who is the exact opposite. Unconcerned about appearances,
motivated by convenience, and he's rather unhygienic. He is your college roommate who drinks milk
from the carton. So he needs a rugged solution that is durable, easy to use, and does not require any
cleaning.

So, by creating composite characters, you're able to clearly define, to more clearly define, the
problem that you want to address.”
The user-needs-insights template described in the video transcript is provided in the link below.

Link: https://drive.google.com/file/d/1Yo7X_SC-USeP4uh_cbYQt2wl4c5A-82C/view?usp=sharing

3.3. Design Thinking To Go: Space Saturation

Design Thinking To Go: Space Saturation organizes insights from a greenhouse manager at a
Community Supported Agriculture company into two formats: a user journey and an empathy map.

Link: https://web.stanford.edu/group/instr_design/cgi-
bin/LEAD_TIP/dt_to_go/space_saturation.html

3.4. Point of View Statements

In human-centered design, a problem statement is articulated using a Point of View (POV). A POV
reframes your innovation challenge into an actionable problem statement containing three
elements: the user, his or her needs, and the unique insights that explain why this need is
compelling.

A POV statement is typically structured in the following way: "[User name and description] NEEDS
[Description of need] BECAUSE [Insight that uses adjectives]." Framing your challenge in this format
ensures that it will be sufficiently meaningful and actionable to allow you to ideate in a purposeful
way.

A well-defined POV statement will bring clarity and focus to your work in the ideation process and
will help you evaluate feedback from the prototypes you create. Go through the video transcript
below to learn about this important step.

Introduction to Point of View (Video Transcript)

“In human centered design, the problem statement is articulated using a point of view. A point of
view is your point of differentiation. You want to be some things to some people all the time. You do
not want to try to be all things to all people all the time. That's a recipe for disaster.

So, focus and a clearly differentiated point of view is an ingredient for success. So, what is a point of
view? A point of view has three elements: It describes the user, his or her needs, and the unique
insights that explain why this need is compelling.

Let me highlight this by providing you an example, which is an attempt to come up with a point of
view that represents Dropbox. So, what might the inventors of Dropbox have considered to be their
point of view, their key differentiations, when they went about designing Dropbox? The users are
hard working teams of knowledge workers with average computing skills.

Well they need an easy and seamless way to access and share electronic documents, because
existing approaches make them feel inadequate, since they're becoming increasingly more complex
to accommodate the proliferation of computing platforms. Now, notice how this statement uses
adjectives to describe where the current solutions failed. They are complex, they make the users feel
inadequate.
So this immediately tells you what the good solution will need to achieve. Simplicity, and inspire a
sense of competence among its users. Now, points of view give a great high level sense of direction.
But sometimes they may be at a level that is a little bit too high.

A layer further down, you can define what we call the design requirements, more concrete and
specific articulation of what the solution to this point of view statement will need to address. So for
example, for Dropbox, this can be: It should work in multiple platforms, it should adopt a unified file
naming protocol, it should be as easy to use as native applications in every platform, does not require
any new training for saving, naming, opening, and editing applications. Since mobile is becoming
abundant, it should work well in mobile platforms. It should support 24/7 access, and it should be
secure.

And because time is limited, most teams cannot start by focusing on every single attribute in the
design requirement list. Most teams are better off by focusing, prioritizing this list, and putting at the
top the one thing that they want to get right first. Come hell or high water, we want our solution to
achieve this one thing really well. So for Dropbox, this could be as easy to use as native applications
in every platform.

Now, do not be fooled. Coming up with a strong POV it is not easy. And this is another example
where practice makes perfect. Your first one is gonna be clunky. By the fifth one, or the tenth one,
you're going to become experts.

The following is actually a great example from another startup garage team. BipSync.

BipSync interviewed more than 20 investor analysts, and they actually came up with ten different
points of view. The following is what they settled with by the end of their fifth week in the course.
David, the disorganized analyst who is good at what he does, but is really bad about staying
organized and following workflow productivity best practices, needs to save the time he wastes in
gathering, finding, and recreating knowledge that already exists.

Because he spends too much of his day on activities that frustrate him, and prevent him from making
money by looking at more ideas. Notice how BipSync provided concrete information about the user.
They gave him a name. They wanted to design for a specific person. David. And in this case, David is a
composite character that motivates this team to take action.

Now, I want to take a moment and say something that is more advanced. For some of you, this may
be completely irrelevant, for some of you, it may not make much sense at first, but we expect that for
several teams, what I'm gonna say next is gonna be important to their success.

BipSync team actually work with two points of view at the same time, that represented two different
characters that they were critical in driving adoption for their product. They created the second point
of view for the Chief Information Officer. Why? Because the Chief Information Officer, along with the
analyst, was critical in making the final decision to adopt an IT solution in the environment that
BipSync was talking about.

And, CIOs care a lot about security. So, BipSync solution ended up focusing at the same time on the
usability and convenience needs identified for David, but also on the security needs identified for the
purchasing manager, the CIO. And many of you will have to grapple with these issues, and
understand that your final product will need to address the point of view of multiple stakeholders.”
Module 4: Ideate

Ideation is a process of generating ideas quickly through unrestricted thinking. Though ideation is a
highly creative activity, it is best conducted within a semi-structured approach that we'll explore in
this module.

In this module, you will:

 Generate ideas
 Meet with your team to perform and document brainstorms
 Inject insights from a broader group
 Select ideas to pursue

4.1. Brainstorming

Introduction to Brainstorming (Video Transcript)

“Now that you have selected your POV, you are ready to start generating solutions. In this module,
we will introduce brainstorming. This is a special form of collaboration, with specific rules of behavior
designed to maximize idea generation and separate idea generation from idea selections. There are
some things that you must keep in mind.

First, brainstorming is a team sport. It is a powerful tool, but it is often misunderstood. Great
brainstorms follow a process and certain rules, and you need to be mindful of the process to be good
at it. Let's talk about the process.

Every brainstorm has a facilitator. The facilitator, in particular, concentrates on the process and
enforcing the rules, so that others can focus on idea generation. Facilitators aim to manage three
things: Positive momentum, high energy, and the level of abstraction in the ideas generated. We
want these ideas to be concrete, but not too concrete or too detailed.

Let us now talk about the basic rules of brainstorming. The first one, defer judgment. This aims to
separate idea creation from idea selection, and create a nonjudgmental environment that
encourages creativity. You will have plenty of time to evaluate, and judge, and test later. When you
brainstorm, you don't judge.

The second one, go for quantity. Thomas Edison once said, "To have a great idea, have a lot of
them." Or, to put it differently, you need to kiss a lot of frogs to find the prince.

The third rule, encourage wild ideas. It is easier to tame a wild, absurd idea than to make a plain
vanilla idea exciting. Build on the ideas of others. Great new ideas are two old ideas meeting
together for the first time. The act of brainstorming enables this serendipitous meeting of ideas.

Listen to the flow of ideas. Bring in your own perspective. Add to the ideas that others throw on the
table.

Also remember to stick to one conversation at a time. Many people admire the high energy of
brainstorms. They are momentum, they are speed. However, brainstorms do not need to erupt into
uncontrollable chaos. Keep the focus on one conversation at a time, and save side conversations for
later.
Be visual. Summarize your ideas quickly with a brief sketch. Put it on a sticky note, and place on a
wall or a whiteboard. And finally, headline. Describe your idea quickly. Capture its essence, and leave
the details for later.”

The Role of the Facilitator (Video Transcript)

“So let us now review the role of the facilitator. The facilitator is critical to the success of the
brainstorm. She begins by preparing questions for the brainstorm, and tests these questions.
Facilitators ask themselves, can these questions generate many ideas? She assembles a group of
participants and prepares the logistics.

Makes sure that M&M's and other energy fueling snacks are readily available. She comes up with her
own crazy ideas that she can use to replenish the creative energy of the group if she finds it dropping.
And she starts by doing a brief warm-up. Reviewing the rules of the brainstorm, and introducing the
brainstorming questions.

During the ideation part of the brainstorm, she enforces the rules playfully. A favorite technique is
where the facilitator penalizes violation of the rules by gently throwing M&M's at the violators. In
addition, the facilitator pays special attention to the mood of the brainstorm, and is ready to take
concrete actions when things get off track.

At the end of the brainstorm, she makes sure that all the data are captured, and that no idea is lost.
Let me conclude now with some specific tips for facilitators. As mentioned earlier, one of the
facilitator's most critical tasks is coming up with the questions for the brainstorm.

The facilitator should consider the question from different perspectives, and be ready to reframe the
question on the fly based on where the brainstorm is going. Consider a team that wishes to help
young adults develop financial literacy.

One possible question for a brainstorm can be, "How might we help young adults plan their
finances?" But this can be too broad. Maybe a better question is, "How might we help young adults
live within their means?" Or, "How might we help them set realistic savings goals?" So now we are
focusing on savings. Or maybe, "How might we help them set realist savings goals, but also stick to
these goals?"

So you see how the facilitator can scope down these questions and make them more focused. And
each of these are a possible starting question, but then, as the brainstorm evolves, the facilitator may
need to modify the questions. She should be ready to manage the group's energy level.

A good principle is to adopt a demeanor that is opposite of the group. If the group has too much
energy, be calm and measured. If the group is too subdued, be more energetic.

One of the most important things that the facilitator can do is modifying questions on the fly. She can
reframe and rescope. In the example we described earlier, she can reframe the question by asking,
"What are the different ways in which young adults can learn valuable financial skills?" Or, "What
are the different ways in which parents can teach their children valuable financial skills?"

If, during the brainstorm, the team ends up identifying job seeking as an important financial skill,
then the facilitator may want to rescope the question to focus on how might young adults develop
effective job-seeking skills? And then, move on to other important skills. What are the skills that we
want young adults to have, and how do we help them get them?
Finally, the facilitator should be ready to throw in crazy ideas. This can reenergize the group and
provide much-needed momentum when things become stale.

So, now that you have the basic principles, you're going to watch our fellows conduct a brief
brainstorm. There are two goals with this small demonstration. First, we want to model good
brainstorming techniques so you can learn from them and adapt them in your own team. Second, we
also want to demonstrate that a quick brainstorm is a great test for a POV. Let me talk a little bit
more about that.

So, good POVs are generative. Even a brief 5-minute brainstorm should generate a lot of interesting
ideas. So, if you start your brainstorm, and after 5 minutes you are not getting anywhere, this may
mean that you need to rethink your POV. You need to reframe the problem.

It's either that your original POV is too abstract, so the team doesn't get motivated to address it, or
it's too narrow and specific that the team feels tied in their effort to come up with new and creative
ideas.”

The following video transcripts explore advanced brainstorming techniques. Go through the
Brainstorming in Action video transcript to go through a traditional brainstorm first, then learn how
to apply advanced brainstorming techniques to the same POV statement.

The POV addressed by brainstorms in these three videos is:

Scott, an avid hiker and camper from Montana, NEEDS a way to share secret camping and fishing
spots that do not have an address with fellow adventurers BECAUSE they will in turn share their
secret spots with him.

Brainstorming in Action (Video Transcript)

“Now you're going to watch the Startup Garage fellows perform a classic brainstorm.

All right, guys, let's do this. Okay, facilitator, you've done it a couple of times.

Hey, it's your turn, you're the facilitator.

It's my turn? [LAUGH] All right, perfect. All right, let me read our POV.

So, Scott, an avid hiker and camper from Montana, needs a way to share favorite camping and
fishing spots, that do not have an address, with fellow adventurers, because they will in turn share
their secret spots with him.

All right. So let's do our "How might we..”

So the crux of it is about sharing locations.

Some kind of swap.

But they're not just any locations, right?

Yeah.
Secret locations.

Yeah, secret, that's right.

Only the people that he's willing to share it with.

So only his circle.

Yeah.

Okay, so how might we help Scott

Share secret..

Share, yeah, secret..

And hidden locations..

Yeah, hidden because they're off the beaten track. They're not just in a street, they're camping spots.

[CROSSTALK]

How about just secret, off the beaten track..

Yeah, yeah.

..locations with friends?

Yeah, or..

..or just share secret, off the beaten track locations.

I think that’s..

Because we don't wanna limit..

No, we don't.

Okay, perfect.

Perfect, that's great. Okay.

So how might we help Scott share secret, off the beaten track locations.

Perfect.

Well, the first one I was thinking about was leaving goldfish trails.

Like little goldfish crackers.

Yeah, that's great, kind of like Hansel and Gretel.

Love it.

The campers will be there at night so they should be glow in the dark.

Oh, right.

Glow in the dark trail.

That would be hilarious. What about some kind of like text-based secret, I don't know, secret code,
like someone texts in, and if you respond yes, then you get to see, or if you respond with the right
password.

Right.

So like a password-based text.

Type in a code to unlock the location, I like that, that's great.

[CROSSTALK]

Yeah, I like the idea of secret languages, because if someone did happen to see the phone once it was
unlocked, they could see the location, but if it was in code word, like a code language, no one would
know.

What if it was something connected to your GPS. Either on your phone or in your car, whatever. But
then, that would disappear or go away if you wanted it to or when you wanted it to.

Oh, yeah, it's like a Snapchat for location.

Awesome, I've got it.

Snapchat.

I like that. Or even like James Bond, honing in on the enemy like--

Yeah.

If you can see them, if you can get the signal, and then they can turn it off as well.

Awesome.

That's great.

I'm gonna say Bond style.

Yeah, I like that.

I wonder how you can use the natural environment, like…

Yeah.

Oh, like trees.

Yeah!

Birds, birds.

Yeah, birds, I was thinking.

Oh! Birds.

Or monkeys?

A messenger bird you can train.

Like a pigeon.

Messenger pigeon.

Messenger pigeon.

That's a good idea.

That's my messenger pigeon!

Oh, yeah, tagging trees. so like, this kind of happens already, but people don't know what the tag
means, like if you tagged it certain colors, or symbols.

So building on that, if people lived around that area who were local, maybe you can buy them in to
this secret trail to the great fishing spot.

Yeah! Yeah right. You can use local knowledge somehow. Local knowledge of landmarks and stuff?

[CROSSTALK]

Yeah, maybe if you buy this certain candy bar at the little neighborhood store..

Yeah, I love that.

..the little village store that has the code.

Like "Willy Wonka and the Chocolate Factory."

Yeah, when you open it, it has the code.

Oh, I love that.

Yeah, candy bar company.

Oh my god, I love it.

Then it becomes so much more exciting, like a game.

And even if it was like a swap. So if it was some sort of platform where you could swap your locations
with people, and the better your location is, the better location you get in return.

Right, because you wanna swap locations that are equally good. Because you don't wanna swap an
awesome location with someone that has a really obvious location, so, yeah.

Maybe you can assign a point system to that.

Yeah, I love that..point system.

Ooh.

So you can like..

Ooh, I really like that.

You can win unlocking them, well, that's great because it helps every..

Then it encourages everyone to discover new locations.

That's true. Yeah.

Yeah.

And to make them good.

Some kind of, what about some kind of like gambling game or like when you play solitaire with your
[INAUDIBLE], solitaire with friends, like some kind of, I don't know.

[CROSSTALK]

Like a card game? With cards?

Yeah, like if you win, then you get a location.

Mm-hmm.

Oh!

Make it a game.

So it’s a reward-based system.

Yeah, I like that.

Okay.
That could work.

What else can we do?

What else is there?

Well, maybe we should go off of one of these and like..

Yeah.

So if we think about some kind of secret language, swap of knowledge. So you had the candy bar
idea. What are other ways that we could swap knowledge, only within a secret group, specifically?

If it was location based, like campers in that area, for example, you could do that thing where you
blast an SMS only to a certain geolocation.

Oh! Geo-based.

So anyone within a 500 meter radius, or whatever, gets access to that message, and everyone else
doesn't.

I like it, so some sort of geo-based blast.

Yeah.

Or, it's like with raves. They send a blast message right before. So the timing is everything. So you
have to be at the right place at the right time.

That's really interesting. It's like disappearing text. Oh, that gets back to your Snapchat idea.

Yeah, right place, right time.

Oh, yeah.

But if you like have the Snapchat with the geo-based, if you like slowly sent people, so you'd say like,
be at this location, and then if you're in the geo-based area, then you'll get the next text message,
and blah-blah-blah-blah-blah.

And then you could like cut it off if you get too many people, 'cause you don't want too many people.

Oh, so that's great because that gets you more involved over time.

Totally. Sequencing.

I see, okay. It's making a lot of sense now.

This is awesome. I think this gives us some good ideas. Let's go, next step, right?

Yeah. Let's go prototype.

Great.”
Advanced Brainstorming Techniques Crazy Sabotage and Constrained (Video Transcript)

“So now that you have witnessed an actual brainstorm in practice, take a few minutes to reflect and
come up with your own lessons of what makes an effective brainstorm. What worked, in your
opinion? What was the most difficult aspect of this brainstorm? And how did the fellows work around
this?

Were there any crazy ideas? And what enabled the fellows to come up with these ideas? From my
perspective as an observer of brainstorms, my favorite exercise is to notice the tipping point, where
the ideas stop being predictable, and start to become crazy, unpredictable, and novel. When did this
happen in this video? Have you noticed?

Now, let us build a bit more on brainstorming. Brainstorming can be used to generate ideas for your
POV, but also to solve problems that your testing uncovers later on. Brainstorming does not occur
once in the process, rather, it recurs at every step of the process, because it's a problem solving
technique.

Now I want to share with you four advanced brainstorming techniques. I will explain what they are,
how they work, and more importantly, why you may want to use these techniques. The four
techniques are: crazy, sabotage, constrained, and analogous. I will start by demonstrating the first
three first, crazy, sabotage, and constrained. And then, in a separate module, we are going to talk
about the analogous brainstorm, and I will present all four approaches in the context of Scott's
problem.

Remember his POV? Scott, an avid hiker and camper from Montana, needs a way to share favorite
camping and fishing spots that do not have an address with fellow adventurers, because they will in
turn share their secret spots with him. And his “How might we..” statement was: How might we help
him share off the beaten track, secret locations?

So, let's begin with a crazy brainstorm. Here, the participants are tasked to come up with wild, crazy,
out of this world ideas. I asked our fellows to brainstorm under this constraint, and they came up
with many crazy ideas, such as: You could create a cloud that would share the secret location with
people. Or, add invisible dye on trees and have special glasses that can see the dye. Or create a secret
language.

Now, when you conduct a crazy brainstorm, you come up with ideas, but you don't worry about
practicality. But then at the end, you take these ideas and ask, how do we make them viable and
realistic? For example, adding invisible dye on trees and wearing special classes that can see the dye.
Hmm, am I hearing a Google Glass application?

And then create the secret language. Do I hear an encryption system added into Google glasses? So
the idea is, you use a crazy brainstorm to make sure you increase your creativity, and you come up
with unfiltered, crazy ideas, but then you take these crazy ideas and you come back to the real world,
and you see what elements of these crazy ideas can you present, modify, and make them practical.

The next concept is sabotage brainstorm. The idea here is to discover all the things that can be
wrong, and start creating solutions that are foolproof. You ask: What are all the different ways that
the solution to Scott's problem may go wrong? Again, I asked the fellows to do a sabotage
brainstorm, and they came up with, you share diamonds and they share crap. Excuse my language.
People follow you to the secret location, and then tweet it to the whole universe. So now the
sabotage brainstorm is a perfect technique that can ensure that your solution does not have
unintended consequences. It's a great way to stress test your ideas, especially later on in the process
when you have actual prototypes. Use this brainstorm to find out how your solution may burst in
flames, or become an epic failure, and try to avoid that from happening.

The next technique is called constrained brainstorm. Oftentimes, teams make assumptions about
their users, and these result into solutions that may be unnecessarily complex. Added constraints can
force you to develop solutions that are simple and user-friendly. For example, going back to Scott.
How might we share locations with him if he were blind? This constraint forces you to think about
and develop solutions that promote ease of use. So, you may come up with solutions that utilize
sound instead of vision. For example, musical directions, or solutions that utilize a guide, and so on.

Two years ago, we had a team that was developing a system to help patients at the local hospital
complete the registration process. Because the hospital treated a lot of recent immigrants, the team
was concerned about language barriers. To help them develop a solution that would work with
patients with limited or no English language skills, I asked them to develop a system where the
instructions could be communicated by signs, not by words. That was a constraint that I gave them.
And then they started thinking of traffic signs as symbols, so I told them, do not utilize words. Try to
come up with something similar to traffic signs, where nobody needs to read English in order to
understand what traffic signs say.

So, you now have the basics to conduct a crazy, sabotage, and constrained brainstorm.”

Advanced Brainstorming Techniques Analogous (Video Transcript)

“The last brainstorming technique we will explore is the analogous brainstorm. In a nutshell, this
technique reframes the problem you're trying to solve, to a problem that has already been solved
somewhere else, the analogous problem. And then we draw inspiration from the existing analogous
solution. This essentially tries to imitate a skill that great innovators have. Making connections
between seemingly unrelated problems and drawing inspirations from seemingly unrelated solutions.

The analogous brainstorm has four steps. First, you identify a specific attribute of your POV that you
want to focus on. Second, you create a list of potential analogies and metaphors to the specific
attribute of your problem. Third, you pick one analogy, list how this analogy has been solved
previously, and then finally, fourth, you draw inspiration from these solutions back to your problem.

So, let's see how this worked for Scott, the character that we have been studying for the last few
modules. If we focus on Scott's POV, we find that there are two attributes that the solution to his POV
needs to have: Share hard to find off-road secret spots, or desire to swap exclusive information.

Let's pick one of these attributes for our brainstorm. Share hard to find spots. So then, you ask
yourself, where else does this challenge exist?

And here, we came up with multiple examples. Gold miners, sharing locations with rich gold deposits.
CIA agents, meeting for undercover operations. Wildlife explorers, sharing locations for finding wild
animals. Partygoers, sharing information on underground parties, and so on, and so on.

So for the sake of the example, let's assume you selected to focus on sharing information on
underground parties. What are the different ways people currently do this? They can drop a pin on
Google Maps. They can give code names that are attached to specific locations. They can send text
messages with a new application that destroys the text message after a finite amount of time. And
so on, and so on, and so on.

So, once you list all the different ways people solved this problem, then you can ask, how can we
draw inspiration from all these solutions that worked in the analogous problem?

You could conceive an application in which secret locations have a code name. To then unlock the
code name and reveal the location of the party, you would have to be willing to share an equally
valuable hidden party location, with the owner of the location you want. So, that's where the
analogous brainstorm led to the inspiration of a new solution for your original POV.

Now of course, there are details that need to be worked out, but you see how this process creates the
seeds of new ideas. Locations have secret code name. To unlock it, you must be willing to unlock your
secret location for the person owning the secret code you are interested in.

So for Scott, developing an app with these principles could be an interesting solution to his original
POV and user need. And this brings us to the end of our module on brainstorming. Before we wrap
up, I wanted to leave you with a few final thoughts. Oftentimes, our teams are disappointed at the
end of their first brainstorm, because they expected a breakthrough.

So, first and foremost, do not become disappointed if you do not stumble upon one. It takes time and
iterations. Also the breakthroughs are in the eyes of the beholder. You may not consider an idea that
comes from a brainstorm as innovative, but when you test it, your users may love it.

In the end, a breakthrough is a solution that delights your user. It may not be as radical as you would
expect, but if it delights your user, it is a breakthrough. Second, remember to create some crazy
ideas. You can figure out how to design within constraints later. Third, brainstorms are useful
throughout the innovation process.

Early on, you create your first solutions. After your test, you use the data gathered from this test and
perform additional brainstorms to improve and refine your solutions. You can even use brainstorms
to refine your POV after your first round of user testing. Brainstorms can and should even used to be
generate your business model and address specific components and challenges of your business
model.

Finally, the analogous brainstorm is a very powerful technique. In business, we often draw inspiration
from the ways other businesses have successfully solved the problem similar to the one we are
facing. The analogous brainstorm provides you with a road map of how to take a business problem
you will face, as part of your startup journey, redefine this problem using an analogy, identify
solutions that have worked previously, and translate them to your problem.

As you learn to be agile with different brainstorming techniques, you will see that your ability to solve
problems will grow exponentially, and the startup creation journey you're following is nothing more
than an iterative process of problem definition and problem solution.”

Conducting Your Team Brainstorms

As a team, you should determine two separate times you can meet during this module to conduct
your brainstorms. Conduct brainstorms for two team members in the first meeting and for the
remaining team members in the second meeting. The below table provides a timeline to conduct
each brainstorming session (start and end time are in minutes). You will facilitate the brainstorms for
 your challenge. To prepare, come up with 3-5 HMW ("how might we") questions and share them
with your team ahead of time.

Start End Task

Time Time

0 3 Introduce POV, background on challenge, and HMW questions. Remind

everyone of the rules of brainstorming

3 13 Run a regular brainstorm

13 15 Select top 2 ideas from regular brainstorm (each team member picks top 2
ideas)

15 17 Introduce crazy brainstorm

17 27 Run crazy brainstorm

27 30 Select top 2 ideas from crazy brainstorm (each team member picks top 2 ideas)

Selecting Ideas from a Brainstorm

Once you've brainstormed a lot of ideas, you'll need to select a few of those ideas to pursue further.

In order to determine the five best ideas, you may want to use some form of voting among your
team members. The brainstorm facilitator can start a voting session and specify a number of votes
each team member is allowed. Team members may choose to spend more than one of their votes
on a single idea if they really like it. When selecting ideas, it is good to go for a mix of practical and
bold. After the facilitator has ended the voting session, you will be able to see which ideas are the
most popular.

As a team, discuss which ideas you believe have the most potential as a solution to your innovation
challenge. You should prototype the ideas with the greatest potential as a solution. It is best to
create prototypes for more than one idea, so that you can see which solution satisfies the needs of
your users.

The template shared in the link below can be used to conduct a brainstorm and vote on ideas
remotely.

Link: https://drive.google.com/file/d/1pxrzHZbUBw-ol8HlLeSKtMm9Q47GpWU1/view?usp=sharing
4.2. Design Thinking To Go: Brainstorming

Take a look at Design Thinking To Go: Brainstorming, which shows a brainstorming and voting
session addressing the question: "How might we help patients take their medication on time and in
the right dosage?"

Link: https://web.stanford.edu/group/instr_design/cgi-bin/LEAD_TIP/dt_to_go/ideate.html

Module 5: Prototype

Prototyping involves producing a rough, inexpensive representation of your product, service, or

process, in order to bring your idea to life and test the practicability of the design. Prototypes are
built quickly and cheaply, so that solutions can be made tangible without investing a lot of time or
money at their early stages.

In this module, you will:

 Explain the different prototyping methods

 Identify the best prototyping method for your innovation solution
 Develop prototypes, including an interactive prototype

5.1. Prototyping

You've now generated ideas for your product, service, or process, but do not yet know whether
those ideas will in fact meet your user's need or evoke the intended responses. It's time to create a
prototype.

Prototypes are visual and physical representations of a product, service, or process. They allow you
to take a concept and present it to users so that you can get detailed feedback and continue to
improve the product or service. Prototypes, by definition, should not aim for perfection. Instead,
they serve as a crude representation of your solution idea that will spark conversation with users.

Introduction to Prototyping (Video Transcript)

“You have now completed your first round of brainstorming. You have generated some great ideas,
and you will now start on a journey of turning these ideas into concrete new products or services. You
will do this in small, incremental steps and every step is a prototype, an early representation of your
new idea that aims to demonstrate how it works and get feedback from your users.

In this short lecture, we will explain what a prototype is, how prototypes fit in the Startup Garage
process, and provide a high level overview of some common prototyping techniques. In subsequent
modules, we will provide more detail on these different prototyping methods.

So, what is a prototype and why do we do it?

Prototypes are conversation starters. They make the hypothetical real. They are a visual or physical
representation of a product or a service. They do not need to be functional, and by their nature they
are preliminary and crude. Prototypes are not perfect. Here are some things you need to keep in mind
when developing prototypes.
You will need multiple prototypes to communicate your ideas. Your first prototypes will be a disaster.
Your users will not know what to do with them. But you will learn to iterate quickly and learn from
each version of your prototype. Each prototype may represent different aspects or features of your
solution.

Some of them may not even be functional. But prototypes help you engage in a conversation with
your user. Rather than telling them about your idea, you show it to them. Or even better, you give
them something they can interact with. Prototypes help you get a stack. Now actually, one of the
best pieces of advice given to our teams from one of our alumni of the course is: Do not debate, test.

When you're stuck in your team and you don't know where to go, do a quick prototype and test it
with your users. And prototypes allow you to test, to test whether an idea will work. Prototypes allow
you to visualize your ideas and involve others. And more generally, prototyping is an attitude.

You view everything as a prototype. And a prototype is simply an opportunity to learn. So, a
prototyping attitude does not let your ideas become too precious. You know that your prototypes will
evolve, and will change as you get feedback from your users. Prototypes are by their nature, low
resolution. And each prototype aims to focus on one dimension of the user experience you want to
test, or one dimension of the functionality you want to implement.

Teams often ask us why is it important to prototype, and in particular to prototype early. Prototyping
early is critical, because early failures are inexpensive and less painful. And because early on, you
have not put too much effort into your prototype, you're open to the painful feedback. It doesn't hurt
as much. Once you invest months or years, and potentially millions in a prototype, failures are
extremely painful, and expensive. Also, your willingness to change directions based on the feedback
you have received diminishes over time.

So the principle is simple. Prototype early and often. Fail early and often. Learn and adapt. Briefly,
there are multiple prototyping techniques you can choose from. The simplest one is a sketch. Simple
sketches are a great way to demonstrate a new concept or idea. For digital products, you can sketch
a couple of interfaces.

For physical products, you can sketch a possible realization of the product. You can make these
sketches more elaborate and turn them into fully blown mockups. And if you are creative with the
material you use for the mockups, you can also make these mockups interactive. Use stickies, use
flexible material. Allow the items to move and be interactive.

To demonstrate how someone will interact with your new product or service, you can create a
storyboard that lays out a series of interactions between the user and the product, and the outcomes
from these interactions. Sketches and storyboards are a great way to illustrate a new product or
service, but they are not interactive.

Interactive prototypes that enable the user to actually experience the new product or service can be
extremely valuable. For example, you can role-play a particular interaction between the user and the
product. For physical product, you can use inexpensive material, such as styrofoam, to create a
physical representation and let your user play with them.

Now, going back to the storyboard idea, you can elevate that to the next level, and create digital
storyboards or even a movie. The possibilities are endless. What you need is a sense of what is it that
you really want to communicate, and a willingness to experiment, and push for a prototype that is
interactive.
It doesn't have to be perfect. Actually, imperfect and crude prototypes is what we are after at this
point. Just being willing to experiment, and try different things. And in the next portion of this
module, we will present a few examples of great storyboarding, and paper mockup techniques.”

There are multiple ways to create a prototype. The approach you use should depend in part on your
purpose – to explain what your solution is to your user, to test how your user interacts with your
solution, or to gauge whether your prototype delivers value to your user.

This video transcript describes and provides examples of prototyping techniques. These techniques
are organized by purpose in the table below.

Prototyping Techniques

“Prototypes can serve three distinct purposes. Early on, they explain and communicate the solution
concept visually. Then they enable the user to interact with the prototype and get a sense of how it
works. Finally, they provide the simplest possible way of delivering value. In this video, I will share
different prototyping techniques you can use for products and for services.

And let us demonstrate these with examples, starting with prototypes that explain. The simplest
prototypes that explain are mockups. Mockups are scaled or full-sized models of your product or
service. Physical mockups can be created using inexpensive material, such as Styrofoam, Play-Doh, or
Legos. Or if you want to get really fancy, you could use 3D printers.

Another type of prototype for explaining is a storyboard. Think of this as a cartoon with five to ten
panels, showing the key elements of the solution. This can be created on paper, digitally, or using
video. Another type of prototype that explains is the user journey. This is a visual description of a day
in the life of a user with your solution.

For services, processes, or systems, you can use visual process or flow diagrams. A great technique
for services is to use a swim lane diagram in which you specify the roles and responsibilities for
everyone involved in the delivery of the service, the tasks to be performed by whom, and the order in
which they are to be performed.

Swim lane diagrams are a great way to both visualize an existing process and to prototype a new
one. Moving on, let's talk about prototypes that allow users to interact with them. Wizard of Oz
prototypes are used for testing functionality and interface ideas within software applications. You
create a paper or digital mockup of the application interface and behavior.

A user interacts with the prototype as he or she would with the actual software. Meanwhile, without
speaking, you manipulate the prototype to simulate the reactions of the application in response to
the user's action. All of this allows you to observe the user to see what his or her interactions with the
prototype would look like.

Role plays are another prototyping technique that allow user interaction with your product, service,
or experience. Plan and try a role play that demonstrates how your invention might work in real life.
You can go wild, and even set up a stage for the role play that simulates the environment.

Using things like props can really bring your role play to life for your user. Imagine for a second how
you would role play a new, more personalized way of welcoming passengers to a plane. A way in
which the attendant would know ahead of time your name, your seat, and your preferred meals.
You could role play that by having a member of your team pretend to be a flight attendant and give
him a script of how he would welcome the first passenger. Use cardboard to create a fake fuselage,
and an artifact for a welcome kit you would give to the passenger, and a mockup for a seat.

When your passenger appears, welcome her, share the welcoming gift and direct her to her seat and
confirm her meal preferences. Meanwhile, observe her response. Role play is especially helpful if
you're operating or designing a complex service environment. One of my favorite examples is from
the movie The Founder, in which the founders of McDonald's sketch the layout of their kitchen on a
basketball court and role play the kitchen activities with their employees over a period of six hours.

After experimenting and iterating on their prototype, they figure out the best layout, task allocation
and steps, and invented the McDonald's system. Now, let's talk about prototypes that deliver value.
One of my favorite example is a technique called the Mechanical Turk. This technique is similar to
Wizard of Oz, but is on steroids, and is best illustrated through an example.

In the 1960s, IBM wanted to test the hypothesis that speech recognition would replace typing, in
order to determine whether they should invest in R&D in speech recognition technology. Their
experiment was brilliant. They assembled 60 typists in a room, gave them a microphone and a
computer monitor, and asked them to dictate to the mic.

Now remember, IBM hadn't even developed speech recognition software yet. They just wanted to
find out whether they should try to develop it and whether it would be of interest to people like these
60 typists. So, behind the scenes, each mic the typist were speaking to was also connected with wires
to a person listening in a hidden back room.

That person is our Mechanical Turk. The hidden listener would hear what the users were speaking
into the mic and simply transcribe that into a keyboard, connected to the speaker's monitor. The
typist thereby experienced speech recognition (even though it wasn't a computer doing the
recognition part). So, what happened with the experiment?

In the first ten minutes, everyone was impressed. But within an hour, everyone started to get tired.
By the end of the day, the 60 typists wanted out. IBM learned that the speech recognition technology
had value, but only for short bursts of dictation. They decided to invest, but less intensely than
originally.

And now we see this technology all around us. Another technique called the Imposter prototype
involves dressing up existing products or services to make them look like your product or service. This
is how Elon Musk got pre-orders for Tesla. Since the 80s, there were books explaining how you could
turn any car into a battery-powered electric vehicle.

I actually found such a book when I was browsing in my hometown public library recently. The
problem was not making an electric car, it was for how long you could drive it before the batteries
ran out. So, Elon Musk bought a Lotus that provided the first frame for Tesla, replaced its engine with
a battery-powered electric engine and started driving it around and taking very quiet trips in Palo
Alto.

And he started getting orders. He presold multiple cars before he even designed or built them. And he
used the Imposter technique to deliver value. Other prototyping techniques for delivering value
include Pinocchio, in which you are using a mockup, but pretending it is the real thing. This was used
by the inventor of the Palm Pilot, a personal assistant device that was popular in the late 90s, and in
many ways laid the foundation for the iPhone.
 Another technique is a smokescreen where you direct customers to a website. Where they see a video
of your product. Alongside the video, you ask them to sign up for a beta test or even a preorder. And
this was a technique used by Dropbox. The One Night Stand Technique is great for services.

Here, you offer the services in a pared-down, minimal fashion, on a very limited time basis, to see if
there is any interest. That is how AirBnB was launched by its founders: renting out air mattresses
over night at their apartment in San Francisco. An air mattress bed and breakfast, AirBnB.

And of course, the most classical example of a prototype, especially for services, is the pop-up store,
which is exemplified by the lemonade stands popping up in neighborhoods across the US throughout
the summer months. So, these are a couple of great prototyping techniques you can use to visualize
and test your product or service.

Now, try these.”

Prototyping Techniques, by Purpose

Explain Interact Deliver Value

Mockup* Wizard of Oz* Mechanical Turk*

Storyboard* Role Play Imposter

User Journey* Mockup Pinocchio

Process or Flow Diagram* Smoke Screen*

One-Night Stand*

Pop-Up Store*

*Prototyping techniques well-suited for services and processes (these techniques can also can be used for
products and processes).

Prototypes are developed quickly and are usually very rough, but even rough prototypes can be
extremely effective. The following optional excerpt from Tom and David Kelley's book, Creative
Confidence, describes the rapid prototyping process and explains how a good prototype can be
made in less than an hour: Why Designers Should Never Go to a Meeting Without a Prototype.
Below are some additional prototyping resources and tools:

 Additional prototyping techniques and examples:

 Quick Review of Pretotyping Techniques
 Service Design Tools: Testing and Prototyping
 Demonstration of how foam core and everyday objects can be used to create mechanical
prototypes
 Tools for creating virtual 'physical' prototypes:
 SculptGL

5.2. Design Thinking To Go: Prototyping

Design Thinking To Go: Prototyping shows how both process diagram and role play techniques can
be used to visualize a company's internal process for handling its social media.

Link: https://web.stanford.edu/group/instr_design/cgi-bin/LEAD_TIP/dt_to_go/prototyping.html

Module 6: Test

Hypothesis-Driven Innovation ("Lean Startup")

In modules 5-7 of this course, we'll employ strategies from hypothesis-driven innovation ("lean
startup"), a methodology for turning the solutions we've imagined and proposed thus far into valid
enterprises. The phases derived from hypothesis-driven innovation involve articulating and testing
assumptions around customer segments, distribution channels, and revenue models.

In the equation, Innovation = Invention + Adoption, we're now examining adoption and iterating
towards market fit (or internal organizational fit for innovations that are internally focussed).

Testing is a major component of hypothesis-driven innovation, which argues that designers should
develop products iteratively in order to reduce risks, prevent overbuilding, and avoid overspending.
In order to develop products (or services, or processes) iteratively, you need to build and test
Minimum Viable Products (MVPs). Testing your product, service, or process in a structured way will
accelerate learning and reduce waste.

In this module, you will:

 Learn about the purpose and types of Minimum Viable Products (MVPs)
 Discuss the difference between prototypes and MVPs
 Gather feedback from users

Minimum Viable Product (MVP)

A Minimum Viable Product (MVP) is more advanced than an initial prototype, but it is not a final
product. It needs to contain features or serve purposes that deliver some value to users.
The purpose of early MVPs is to test your user Point of View (POV). Specifically, the goal is to test
whether or not your MVP meets the need stated in your POV statement, formatted as: [User name
and description] needs [description of need] because [insight that uses adjectives].

There are two common types of MVPs: mockups and concierge MVPs. Mockup MVPs are developed
for products. A Mockup MVP is a version of the product with minimal features that can be built with
very limited resources. It is the lowest version of the product that can deliver customer value and
(ideally) capture some value. Concierge MVPs are developed for processes or services. For concierge
MVPs, designers play the role that machines or service agents will be responsible for in the final
process or service.

Minimally Viable Product (MVP) (Video Transcript)

“So far, we have discussed how you can use prototypes to start a conversation with your users.
Understand their needs and requirements more deeply. In other words, we viewed prototype as an
extension of gaining deep empathy. As your prototypes become fully developed though, you will need
to start asking the following question.

Can I actually build a commercially viable product around this prototype? You will answer this
question by developing and testing what we call a minimally viable product or MVP. An MVP has just
those features that allow the product to be tested and generate data that can provide insights about
the user.

But also about the fit between the user and the product, and about the business model for the
product. in this class, we call early MVP as napkin MVPs. They take the form of an early prototype.
They are shared with users for the purpose of testing a specific use case.

And gaining feedback about the between used case and the user need. This feedback is then used to
iterate and improve the MVP. As minimally viable products evolve, they become more elaborate. The
use case becomes more extensive and detailed. And the MVP may start accommodating multiple use
cases.

In addition, the MVP can be used to start testing key hypotheses related to the business model. Such
as pricing, customer acquisition costs, customer retention and many more. So, early MVPs test the
hypotheses that the use case specified by the designer of the system achieves a goal that is
meaningful for the user.

In this sense, earlier MVP tests test your POV. Let's connect the dots. So in the POV you have
identified the problem and what your user need. Ideally, the use case enables you to deliver to your
user what they need. And the MVP testing demonstrates that either you have achieved that with
your MVP or you have failed to achieve that.

And the goal that you are defining in your MVP is typically related to the need in the POV. Now, early
MVP testing can have four possible outcomes. First, it can confirm that the MVP meets the use case
you have defined, and that the final outcome is desirable for the user.

Second, it can reveal additional requirements for what is truly a good outcome. Third, it may reveal a
new use case that is more compelling than the previous one. And third, it may reveal that the existing
use case is absolutely irrelevant for the user, but provide insights about the why.
Now, early stage teams usually rely on three distinct MVP strategies. Using surveys and emails, using
mockups or using what is called a Concierge MVP. In the remainder of this vol, video we will define
the three strategies and provide several examples. Basic surveys and emails can test very simple
hypotheses for user behavior.

Will they be willing to perform very simple tasks? Will they be willing to share a link and create
virality? Will they be willing to provide us with some useful information? Because of their simplicity,
they are easy to implement. However, the underlying user engagement they promote does not
translate to repeated behavior.

A survey is a one-time interaction. mpowere, a former startup garage team, used surveys very
effectively. They wanted to redesign the experience of shopping for biking clothes. They found that
women in their 40s and 50s were particularly unhappy with the selection they found in their local
bike shops. The team discover that there was a wide variety of good options online, but these options
were dispersed among a multitude of sites.

So the hypothesis was that examples of biking clothing would provide these women with the choices
they needed. So the team started by creating a database of 200 Polish elites. People with an active
interest in biking clothes. The team first sent an email blast to the list in an effort to introduce the
concept.

And then they follow that with an email and a Google doc order form to ask for specific orders. The
mpower team did something extremely well with their MVP. The MVP have, has the hypothesis that
their users would be willing to place online orders for buying clothes. From their testing and follow up
one-on-one interviews that they did.

They learned that free shipping and the ability to try on and test clothes, were critical to customer
adoption. They also gathered data that customer acquisition founded and used this data to
formulate their key unit economic assumptions. So they gather valuable information about the
viability of their MVP. The team also learned some valuable lessons from this MVP.

They created too many barriers for their users. They would have streamlined the process by giving
people the option to order immediately. Give us your number and we'll give you a call back, for
example. In their MVP, the order form was not a real order form, but an expression of early interest.

Well the team followed up, a couple of weeks later, to get a real order. Most of their customers
became very confused. They thought they have already placed the order. So, the team learned that
it's also extremely valuable to reach outside their own social circle. Outside friends and family and
the GSP.

But think so was proven to be more difficult than they thought. Which meant that this step would
require additional customer development costs.”

Mockup MVP (Video Transcript)

“Let us now talk about mockups as MVPs. Typical mockups are video demos or wireframes. One of
the most celebrated examples is the online video demo for Dropbox. The demo was created by Drew
Houston, the founder of Dropbox. It describes what Dropbox does and how it works. However, the
video was released before the final product was even ready.
Drew and his team simply used screenshots and motion to simulate how the product would
eventually work. It was posted on Dropbox's early website, and with some targeted email blasts, they
saw interest grow from 5,000 to 75,000 people overnight. This validated that strong interest for their
product existed, before they invested further in developing a robust interface. I will strongly
encourage you to watch this video online. You can find the link in the Additional Resources space.

Now, at the early stages of your startup, we're advocating an approach where you sit down with
your users, let them watch this video mockup, and ask them to think out loud and give you their
feedback. This early stage, one-on-one, personal feedback can be extremely valuable and insightful.
And we will insist that you do that, and you do that often and well.

Our teams at Startup Garage use early stage mockups to get early user feedback. BipSync, one of the
teams that took the course in 2012 to 2013, was developing a software as a service to help investor
analysts perform and manage their investment research. Early-stage wireframes, such as the one
showed here, helped the founders hone in on the functionality that truly resonated with its future
users.

Mockups also work well for physical products. One Startup Garage team wanted to create a product
that would increase the use of sunscreen among teenagers. Through extensive interviewing, the
team learned that teenagers considered sunscreen uncool, but deodorant as cool. There was their
entryway to that group.

So the team came up with the idea to embed sunscreen in a deodorant. Their first mockup was based
on the container for a standard deodorant, but with the added fixture of SPF 35+ protection. The
team also spoke to a local drugstore, who allowed them to mockup how their new product would
look on the shelf.

By sharing their product mockup with teenagers, the team then learned that teenagers found this
concept to be creepy. In the memorable words of one teenage boy: You want me to spread
deodorant all over my body? They also learned from the drugstore manager what they would need to
do in order to run a pilot of their product with a local store.

So, in a nutshell, creative early-stage mockups provide insights into the fit between the product and
the user need. They also provide valuable information that can help you build your business model
later on.”

Concierge MVP (Video Transcript)

“The last type of MVP strategy that I want to describe is a concierge MVP. This works really well
when the new offering takes the form of a service. It can be a digital service enabled by software, or
a real, physical world service. With concierge MVPs, the designers play the role of the machine, or the
service agent, and aim to offer their early customers the best possible service.

Let me share a few examples. One of our rockstar teams from 2012 to 2013, Doorstep, identified a
need among smaller restaurant owners. Many owners recognized that offering delivery would boost
business. However, they do not have the infrastructure to hire their own drivers. Doorstep wanted to
see if they could deliver this service in an Uber-like fashion.

To understand all of the logistics involved from A to Z, they started by fulfilling deliveries for a local
cupcake store in town on their own. The team became the delivery drivers. This gave the owner of
the cupcake store an idea of how many orders were in demand, but also gave the team an
understanding of just how complicated fulfilling orders was. They delivered on campus, to local
businesses, and residences.

Doorstep used the lessons learned from that initial and napkin concierge MVP to expand and develop
a proof of concept test. They eventually ended up processing hundreds of orders, being in very high in
demand from both small businesses and individuals who wanted delivery as an option, and after our
course, they used Y Combinator to expand their business further.

Good Eatz is another great example of a concierge prototype that came from the class. The team
wanted to test the logistics behind making and delivering healthy school lunches. But, more
importantly, if parents were willing to have someone else make a lunch for their child.

The first round was very simple. They recruited parents on Craigslist, and from their user interviews,
provided a simple list of options to parents, took orders from four families, prepared and delivered
lunches. In a second round of concierge prototyping, the team tested the concept of having parents
share the burden of making lunches.

They delivered the ingredients to one parent of the four. That one parent made lunches for all four
children, and the team delivered the lunches. All parents loved the service the first day. The next day,
however, the team ran into a glitch. The second group of parents who were supposed to prepare the
lunches were confused. They thought they only had to make lunch for their child and one more child.
So the team had to scramble to prepare lunch and fill the gap.

From this experiment, the team discovered that sharing the burden concept was logistically very
complex, because every parent in the group needed to be reliable. If a parent failed to deliver the
service, the whole concept would unravel. They also learned from their first MVP that they faced
some competition. The parents participating in the experiment kept telling them about the
competing offering.

So, through these two MVPs, the team not only developed a deeper understanding of the logistics
involving their offering, but also a deeper understanding of the whole need and competition space.
It's a magnificently practical way of doing your market research, on the ground with real users using
early prototypes of your product.

So, I would like to complete this module with some key takeaways, and some frequently asked
questions.

First, the most successful prototypes and napkin MVPs include the following components: They are
interactive, they are simple, they are self-explanatory, and they test a single or very small set of
hypotheses related to the fit between the product and the user need, or, later on, related to the
business model.

Now, we often hear from our teams several concerns about MVPs and the prototyping approach. For
example, students ask: Will a low-quality MVP affect my brand? First, at the early stages of the
process, you don't have a brand. So you don't worry about that. But then you can also take eBay's
early MVP. This obviously did not affect their brand.

Another question we get is: Will exposing my MVP on the web give my competitors a chance to copy,
or hurt us competitively? Amazon did not suffer that fate with their early MVP. And, in general, your
MVP will be noticed by your competitor only after you have gathered sufficient traction. By that
point, you will have enough resources to protect your product from competition. Even in the best-
case scenario, you have at least one year, if not more, in which you can experiment and you remain
under the radar screen of your competitors.

People also ask: Will an MVP turn off potential customers? Well, your early customers that will use
your MVP will be the early adopters. These are the people who will tolerate crude prototypes, who
understand that an MVP, it's really an early version of your product, that it's gonna be buggy. And
they are ready to actually work with you and help you address a problem that defies them and is
really painful to them.

Finally, I always get the question: I have a vision of a rich product, why should I start with a bare
minimum MVP? Because, your first product will not be even half of what your final product will look
like. You need the early input from your customers, so you can change and adapt your product.

What you really want is the final product to delight your customer, and the best way to do that is to
engage your customer in the development of your product early and often. Use prototypes and MVPs
to do that. Iterate and learn.”

Concierge MVPs for Internal Processes and Services (Video Transcript)

“Concierge MVPs also work for internal processes or services. I will share with you a few examples to
describe how that works. One of our teams wanted to develop an improved internal demand
forecasting system. This would eventually be integrated with IT systems. But at the pilot phase, they
focused on a concierge implementation.

They manually created the database with all the data that they needed, and then, they manually
programmed, developed, and tested the algorithm. Their ultimate goal was to develop an end-to-end
internal, fully integrated system. But at the beginning, the focus was on completing all the steps in
the system manually.

In many ways, the development of this course followed the concierge MVP model. In-class courses
are the concierge MVP for the online experience you are now having. By testing different content,
approaches, and activities physically in the classroom, we learn what works, we receive immediate
feedback, we learn what doesn't work, and we can then translate the best experiences into an online
experience.

Another example involved the HR department of a Fortune 500 company. To help develop mid-level
managers, the head of HR and her team wanted to develop and implement an online coaching tool.
In this tool, employees would be matched with coaches and work with them online, for both short-
term and long-term engagement.

The concierge MVP was a pilot, with a small number of employees. It involved manual recruitment of
coaches, manual identification of interested employees, and manual matching of coaches to
employees. This required an HR person who would take the responsibility for identifying the coaches
and the employees, matching them to each other, initiating the connection, and then completing and
facilitating any necessary follow-up.

In general, concierge MVPs are labor intensive and involve manual implementation of a new process
or service. But they can be completed and implemented over a very short period of time, and provide
invaluable data on whether the underlying concept is workable or not. In the cases of two of our
previous examples, the forecasting concierge MVP generated superior forecasts.
So that led the company to take the next step to explore a more full implementation. On the other
hand, the coaching MVP demonstrated that identifying employees and coaches willing to participate
in the pilot was extremely time consuming. And this led the company to abandon that concept.

In either case, the innovation teams learned, with very limited resources, whether the proposed
solution held the promise to be valuable or not.”

In this clip from a "Lean Startup Meets Design Thinking" Google Hangout, Eric Ries explains the
importance of testing an early MVP. Remember that it is better to get a product out there with
fewer features but be able to learn earlier.

Link: https://youtu.be/bvFnHzU4_W8

Optional: To read more about the DropBox MVP and watch the demo video, go to this TechCrunch
article from 2011: How DropBox Started As A Minimal Viable Product by Eric Ries

6.2. Design Thinking To Go: MVPs

Take a look at Design Thinking To Go: MVPs, which features a dog-walking application MVP and
provides tools for creating a software MVP using only Google Slides.

Link: https://web.stanford.edu/group/instr_design/cgi-bin/LEAD_TIP/dt_to_go/MVP.html

Enabling Templates:

 Follow the user testing procedure outlined in this document developed by the d.school
(Hasso Plattner Institute of Design at Stanford).

Link: https://drive.google.com/file/d/1EIvR9zn5-l-DpTBPCCUXAQK0bxq_Mn9v/view?usp=sharing

 Capture the user feedback on your prototype in a feedback grid. The document below (also
developed by the d.school) describes the feedback grid. A template is also provided.

Link: https://drive.google.com/file/d/1-cWcZzgd40TtAng5sS9b0pt14sizJ0JG/view?usp=sharing

 Feedback capture Grid template is available below

Link: https://drive.google.com/file/d/1zZJoQ_30WTJ1zYrtVCg6iOtTJ17lhsP1/view?usp=sharing

Module 7: Business Model Canvas / Business Case Canvas

A business model is a design for the successful operation of a business that takes into account the
following elements: key partnerships, resources needed, details about how you will sell and
distribute, and a plan to earn more than your costs. The Business Model Canvas (BMC) is a tool for
planning, describing, and revising this business model.

Whereas the BMC is used for external, customer-facing products and services, the Business Case
Canvas (BCC) — a modified version of the BMC — is used to plan, describe, and revise the business
case for internal processes and services.
In this module, you will:

 Learn the purpose of a business model and business case

 Explore the components of a BMC and BCC
 Create a BMC or BCC
 Meet with your team to share and refine your BMC or BCC

7.1. Business Model Canvas (BMC)

For an invention to deliver value, be adopted, and be viable, it needs a business model. And business
models, like solution ideas, need to be designed and tested.
One method of designing your business model is to use the Business Model Canvas (BMC). The
Business Model Canvas was introduced by Alexander Osterwalder in the book Business Model
Generation. Osterwalder defines a business model as "the rationale of how an organization creates,
delivers, and captures value."
The BMC is a visual representation of your business model and is therefore a good way to
brainstorm, design, communicate, and track the development of your business model. The BMC
should be a living document that is updated as needed.
The BMC includes the following sections:

 Key Partners
 Key Activities
 Key Resources
 Value Proposition
 Customer Relationships
 Channels
 Customer Segments
 Cost Structure
 Revenue Stream

Template for BMC is available in the link below

Link: https://drive.google.com/file/d/14znfatccWUquXQm8NSiAnH8oaDjkgiLf/view?usp=sharing

Template with guiding information is also available below

Link: https://canvanizer.com/downloads/business_model_canvas_poster.pdf

The first two video transcripts on this page will introduce you to the purpose and use of the Business
Model Canvas. These videos are presented by Russell Siegelman, Lecturer in Management at
Stanford Graduate School of Business, who is one of the other instructors for the MBA Startup
Garage course.

Basics of BMC (Video Transcript)

“In this session, we are introducing another thread to the course, the Business Model Canvas. So far,
our venture development process has been anchored in human-centered design. We are big believers
that startups have to focus first on a customer problem. As Steve Blank says, more startups fail not
because they can't build a product, because they can't sell what they build.
We believe that human-centered design is a great way to get startups to focus on deeply
understanding a customer problem. And from that comes the idea for a solution in the form of a
product or service. But understanding a customer need, or even having a great solution to that
problem, is not enough to build a successful venture.

You also need to be able to sell and distribute the product, and charge more than your costs. You also
need to develop and to retain key resources, skills, assets, and partnerships that give the venture a
lasting competitive advantage. Together, all these elements are known as your business model.

You should think of your venture's business model not as something you fall into, but something you
design. You wanna make explicit choices about your business model as you develop your venture.
One way to design your business model is to use the Business Model Canvas, introduced by Alex
Osterwalder in the book "Business Model Generation."

Osterwalder defines a business model as the rationale of how an organization creates, delivers, and
captures value. That is all the technology, people, and processes you use to develop and deliver a
product or service that customers value and, in return, your venture derives value from.

The Business Model Canvas, or BMC, is a visual tool for developing, designing, and communicating
your business model. Like other design tools we have used, the BMC can be used to design and
brainstorm in an interactive, team setting. It can also be used to iterate and track your thinking as it
evolves. It is a visual representation of your business model, and as such, it is a good tool for
communicating your assumptions about your business model.

Here is the BMC template. It has each of the key nine elements, called Building Blocks by
Osterwalder, of a business model. Customer segments, customer relationships, value propositions,
channels, key activities, key partners, key resources, revenue streams, and cost structure. For each of
the nine building blocks, the template has questions that help you identify and describe that element
of your venture's business model. By answering these questions and filling out the template, you
design your business model.

Here are the building blocks of the BMC. For the early stages of venture development, the building
blocks that teams most often focus on are: the customer segments, which are which customers will
you serve, value propositions that your product or service provides to customers, the channels by
which you'll distribute your product or service, and the revenue streams, how you'll generate revenue
from your customers.

Many of the other building blocks come in focus after you have some data from experiments. Once
you feel that the customer, value proposition, channel, and revenue stream hypotheses are validated,
then you move on to validate other building blocks. It's okay to have a guess for all the building
blocks when you initially design your BMC, but don't expect to validate all of them right away.

Let's focus on the value proposition building block. The value proposition is the statement that
captures the unique benefit or value that your customer will derive from your product or service. It is
what you need to get right to achieve product market fit, which is when your product's value
proposition is strong enough that you can sell it profitably to a set of customers.

You've been talking to customers about discovering their pain points, and developing a point of view
statement that captures that need, and an insight to address it. The goal of that process is to help
you develop a product with a value proposition that addresses the need expressed in the point of
view statement. The value proposition statement says, for a target customer who has this need, our
product provides this benefit to the customer.

You really want to be precise and clear about this statement. A crisply articulated value proposition
will make it easier for you to build a minimum viable product that addresses it, and design
experiments to validate it. Validating the value proposition with MVP testing is the beginning of
developing a successful venture. Having a strong, clear, unique value proposition statement is key to
developing an effective business model.

Here's an example of a value proposition statement for Google, say, in the early days of the
company. For World Wide Web users who need to find information, Google.com is our website that
provides a fast and easy way to accurately search the entire World Wide Web. You will see
similarities between the value proposition statement, and the point of view statements that you have
been developing as part of the human-centered design process.

The statements both include a customer or user, and the need that the user has. The point of view
statement outlines the need, and your insight how you might solve that need. The value proposition
statement describes how you will solve the need with your product, and the benefit that you will
provide to your customer.

So in a sense, the value proposition and the point of view statements are mirrors of each other. They
should be consistent, and the point of view statement and the value proposition statement should
complement each other.

In summary, the Business Model Canvas is a way to design, communicate, and track the evolution of
your thinking about your business model. In the next session, we'll show you how to use it.”

How to Use BMC (Video Transcript)

“The Business Model Canvas is a way to design and communicate your business model, and track the
evolution as you experiment to prove or disprove the hypotheses embedded in your proposed model.
In this session, we'll show you how to use it with your team to design a business model for your
venture.

Here are a couple examples of a BMC in use. You can see the use of stickies, similarly to the way we
have used them previously in the design process, to record your ideas as you brainstorm and design
your business model. We recommend that teams have a most recent copy of their BMC available at
all times as a reference point.

Feel free to have your team revisit the BMC as you get new data from your experiments and
research. It is a living document that will change and track your thinking over time. Some teams keep
two or more versions in parallel, to track how their thinking is evolving and where it came from.

You and your team will use the BMC to visually design your business model, brainstorm options and
enhancements, assess its consistency, and track changes over time. We prefer paper versions of the
BMC in Startup Garage, especially for the initial brainstorming and design phase. But there are also
online versions of the BMC as well. They and other BMC tools can be found at the Business Model
Generation website.
The lean startup process involves a set of hypotheses that you test to learn about your business
model. Think of those hypotheses as critical questions about each building block in your business
model that you'll want to validate to prove that your venture is viable.

As you develop and write out your BMC, you should think of your statement for each building block
as a hypothesis that you need to validate through tests or experiments. We will cover experiments in
another session. For now, just fill out each building block with your best guess for that element of
your business model. Write it out on a yellow sticky, and populate your BMC with those stickies.

Let's use Google as an example. For customer segments, we put in World Wide Web user, and World
Wide Web advertiser. In the beginning, as Google got started, these would have been hypotheses.
For example, Google needed to prove that, in fact, advertisers wanted to advertise on search results
pages.

For revenue streams, the hypotheses are that the service would be free to World Wide Web users,
and that advertisers would pay for keyword options. Again, this latter assertion was initially a
hypothesis that needed to be validated through experiments and execution.

Note that in the value proposition building block, you put in the value proposition statement
discussed in the last video session. Note the use of color-coding to show the hypotheses that are
consistent across building blocks. In this example, yellow stickies have been used for the user
segment, and the blue stickies for the advertiser's segment. Pink stickies are used for activities, costs,
and resources that are shared across both segments.

Feel free to code the BMC any way that makes sense to you and your team. For example, some teams
put a couple of business models they are considering on the same BMC using color-coding, and track
them over time.

In summary, use the Business Model Canvas to design, brainstorm, and track the evolution of your
business model. It should be the document that records your current best thinking about how your
venture's business model will work, your hypotheses about the building blocks of your venture's
business model, and any conclusions from experiments that you have run to validate those
hypotheses.”

View these additional resources as you create your BMC:

 Create a new Business Model Canvas

 The Business Model Theater
 Using the customer relationships building block of the BMC

7.2. Business Case Canvas (BCC)

The Business Case Canvas (BCC) is a version of the BMC that is modified for internal processes and
services. When you are developing an internal process or service, you are designing a business case
instead of a business model. Business cases focus on employees, not customers.

The Business Case Canvas includes the following sections:

 Key Partners
 Key Activities
 Key Resources
  Value Proposition (focused on value to employees)
 Employee Relationships
 Employee Segments
 Cost Structure
 Quantifiable Benefits

Link: https://drive.google.com/file/d/1PTf5Y0V6_NQAqUSXhwhbLXpCG_4-dCjO/view?usp=sharing

BCC and Benefit Calculation for Internal Processes and Services (Video Transcript)

“The Business Model Canvas is an excellent tool for developing and testing the commercial viability of
an external, customer-focusing innovation, such as a new product, or a new customer-focused
service. What if your innovation is internally focused? A new process, a new internal system, or a new
internal organizational design.

In this case, you will need to develop the so-called business case, the business rationale supporting
your innovation. Drawing parallels from the Business Model Canvas, we'll now introduce the Business
Case Canvas. Here are the key elements you need and how they match to the Business Model Canvas.

The customer segment in the BMC becomes the employee segment. This is where you describe the
different groups of employees targeted by the innovation. You will describe them based on position,
based on geography, based on function, or whatever else is relevant. Value proposition remains
value proposition. But it now focuses on value to employees, their managers, the different functions
in the organization, or the organization more broadly.

Revenue is replaced by quantifiable, tangible benefits. Benefits that you can measure. This may
include potential growth in revenue, but more often it will be cost savings or productivity
improvements. Cost structure remains the same, and it captures all the relevant costs for
implementing and deploying the new innovation.

Customer relationships become employee relationships. What types of relationships are needed with
the key employees, and how these relationships will be nurtured to make the innovation succeed.
Channels are no longer relevant, but key activities, key resources, and key partners remain relevant.

So, you can use the modified Canvas tool to develop your Business Model Case, and then you can also
attempt to put some numbers to quantify the benefits. Use a top-down approach for the
quantification of benefits, based on one of the following two formulas.

If the benefit can be measured by employee, then use number of employees multiplied by benefit by
employee. Or if the benefit can be measured by customer served by employees, then number of
employees multiplied by the number of customers per employee, multiplied by the benefit by
customer. There could be other formulas that you may need to use, but use those two as a starting
point.

Once you complete the Business Case Canvas and the top-down calculation of the benefits, you can
also use a tool called the Business Case Test to identify the key tests or experiments that you will
need to conduct.

As with the business model, the key tests in this tool focus on five key steps. The value proposition,
execution at small scale, scaling up, defending the innovation from potential detractors, and securing
funds to implement the innovation. Use this tool to help you determine and prioritize your key tests,
and to keep track of your evidence as you gather data.”

7.3. Design Thinking To Go: BMC and BCC

Design Thinking To Go: Business Model Canvas, first shows a BMC for a product: a smart toothbrush.
It then considers the same product from the perspective of a school district, and shares a BCC for a
smart toothbrush program.
Link: https://web.stanford.edu/group/instr_design/cgi-bin/LEAD_TIP/dt_to_go/BMC.html

Check points to remember

 You generated at least four alternatives in the following boxes: Value Proposition, Customer
Segment/Employee Segment, Channels, Revenue/Quantifiable Benefits.
 Frame the value proposition for at least one of the four alternatives using the Geoff Moore
template introduced in the videos for this module.
 In the value proposition box, you crafted a value proposition that directly addresses the
POV.
 You used color coding across your BMC/BCC if each of the segments you identified offer a
different value proposition. (Use colors to associate a segment with its value proposition).
 You've clearly described the relationships you will establish with your customers/employees
and how you will manage and maintain those relationships.
 You haven't overlooked any important cost components.
 You've made sure the sharing settings are configured correctly for any Google Drive file you
submit. (The file should be viewable to those who click on the link. Configure this in the file
under Share > Advanced Settings > Anyone with the link can view).
 Common Mistakes to Avoid: a) The value proposition is not a description of the solution or
its features. It is a description of the benefit that the customers gain from the solution. b)
Color coding should be used to distinguish between different segments. Do not use different
colors for the same segment. Rather use the same color for all elements of the BMC/BCC
that are relevant for the same segment.

Module 8: Experiment

Underlying every early stage innovation is a set of hypotheses – about who's a user, what makes the
product or service attractive to those users, and so on. Prove or disproving as many of these
hypotheses as possible will move you towards a viable business model or business case.

In this module, you will:

 Describe the hypothesis-driven approach to innovation

 Define key components and terminology related to experiments
 Design an experiment
 Define the term pivot as it is used in the innovation process
 Articulate reasons to pivot or persevere that are supported by data

8.1. Experimentation

Experimentation is an important way to get user feedback and test the assumptions in your business
model or business case. Every assumption in your business model or business case can be
considered a hypothesis that will need to be tested. Here are some types of assumptions that can be
tested through experiments:

 X type of customer needs our product/service.

 Customers value this particular feature.
 Customers will pay X for this product/service.
 Customers will be able to use the product without help.
 We can deliver this service with X resources.

Early stage innovations have unique challenges that are not faced by established products, services,
or processes. Most of these challenges revolve around the issue of unknown information.
Five Key Challenges of Early Stage Innovations:

1. High uncertainty, especially about demand.

2. No prior track record to inform decision-making.
3. Key variables are often unknown or only partially known.
4. Limited resources.
5. Assumptions are likely to be wrong.

These challenges mean that innovators need to adapt quickly to user feedback and run inexpensive
experiments to test critical hypotheses. There is no downside to performing experiments and you
should not worry about failure. You will either validate your hypothesis or you will learn important
new information

Go through the video transcript below to learn about the hypothesis-driven innovation approach.

Hypothesis-Driven Innovation (Video Transcript)

“You have just completed a phase of deep exploration. Your early prototypes, which we refer to as
minimum viable products, were not meant to be final products, or even your final concepts. They
were conversation starters aimed to help you explore the need in more depth. Now, armed with this
knowledge, you're moving to the next phase, in which you will refine and develop your solution, and
business model or business case.

You will also confirm that there is market fit for the new product or service you are developing. And if
you are developing an internal processes system, that there is fit between that system and the
employees that you are targeting. You do this by running a series of experiments, learning from the
data you're generating, updating your solutions, and iterate.

You start by identifying the most critical leap-of-faith assumptions that are embedded in your
business model or business case, and in your new product or service. You then design an experiment
to test each of these leap-of-faith assumptions.

Each experiment involves an attempt to get the user to engage with a part of your solution, and
you're looking for engagement that is meaningful. Engagement in which the user offers you
something of value, a so-called currency. Currency does not mean dollars, but means something of
value, like their time.

Your task now is to perform several experiments to test key hypotheses about your solution, your
business model, or your business case. You will gather the data, synthesize them, and at the end,
prepare a pitch that you will use to get resources for the further development of your product,
process, or service.

Now, we're obviously advocating an experimental approach to developing your innovation, but why?
Because early stage innovations face some unusual challenges that make them ripe to
experimentation and testing. There are five key challenges.

First, there is high uncertainty, especially about demand. Customers' or users' revealed preferences
are different from their stated preferences. Asking users what they want is not the same as users
demonstrating with their actions — with their actual actions — what they really want. You all
know the story about Ford asking: "If I would ask my customers to tell me what they wanted, they
would say they needed a faster horse." So you don't ask your customer. They reveal their preferences
through what they do.

Second, there is no track record on which to base decisions. No maps, no prior history. You're an
explorer entering a jungle for the first time. Third, you're facing a rapidly changing environment,
where the key variables are often unknown or only partially known, and they change over time.
Fourth, you have limited resources. You cannot waste time or dollars. And finally, fifth, your
assumptions are highly likely to be wrong.

Innovators also suffer from two forms of bias. Optimist bias and confirmation bias. Let's begin with
optimist bias. All innovators wear rose-colored glasses, and they also tend to be charismatic. They
can convince anyone that the need they're addressing is critical, and their solution is the one. Steve
Jobs is a typical example for that, and he gave rise to the term the Steve Jobs Distortion Field.

Innovators also suffer from confirmation bias. They want to be right, and they only pay attention to
the evidence that supports and confirms their beliefs, and they disregard the evidence that
contradicts them.

So, what is an entrepreneur to do in this environment? The first approach that they can take is the
so-called Field of Dreams approach. In other words, build it and they will come. In the 1989 movie
Field of Dreams, an Iowa farmer has a dream to build a baseball diamond in his cornfield. He does
that, and it attracts the Chicago Black Sox.

Oftentimes, innovators, especially engineers, want to build it. And they expect that people will come.
But they don’t. And this is a very risky approach. A second approach is the waterfall approach.
This approach refers to software development models. It is linear, and it is not iterative.

It starts with capturing all the requirements and freezing them, then designing a blueprint and
freezing it, and then implementing it. This approach is very expensive. It assumes that all
requirements can be captured at the beginning of the process, and it does not allow for any learning.

So, this brings us to the third approach we're advocating here, based on the premise that an
innovation is simply a set of hypotheses. So, what you want to do is run the least expensive
experiments you can run, to test the most critical hypothesis very early on. Use the learning from
these experiments to either validate your hypothesis, or learn something new.

In hypothesis-driven innovations, there are three key ideas. Experiments test hypotheses. Results
provide opportunities for learning. And the data are analyzed to determine either possible
refinements on the product or service and the business model or business case, or determine whether
there is a need for a pivot, that is a radical change in your direction, or completely abandoning the
path that you are on.

The object of the experiment is neither to prove or to disprove a hypothesis, but rather to help you
learn something new about an unknown aspect of the innovation. It's all about learning. According to
Eric Ries, one of the early advocates of this approach, the goal is to generate a validated learning, an
empirical demonstration of valuable truths about the innovation's present and future business
prospects.

It is more concrete, more accurate, and faster than making forecast or classical business planning. As
Eric Ries says: "It is a principal antidote to the lethal problem of achieving failure..successfully
executing a plan that leads to nowhere." We're trying to avoid the famous bridge to nowhere.

Now, why is this approach valid? Because most attempts to bring an innovation to the market, or to
get it implemented within your organization, fail. Not because you cannot build the product or the
service, but because they cannot sell what they build. They cannot get people to use it the way they
would desire to use it.

Most of your initial assumptions are going to be wrong, and speed and cost matter. By running quick
and inexpensive experiments, you limit the early deployment, you control costs, you reduce waste,
and you get early customer traction. This in turn will help you persuade key stakeholders to provide
you more resources downstream with less resistance, by demonstrating important value creation
milestones.

The reason you test and run experiments, is because your best guesses about what your customers or
users will do, even if informed by your best strategic sense, are often going to be wrong. Now, the
process, like everything else in this journey, is iterative. It begins by articulating the key product and
business assumptions.

You devise a series of tests, your experiments, then you prioritize and stage the tests. You prioritize
tests that can eliminate considerable risks, and involve low cost. For example, if a key assumption in
your business model is that you can patent your technology and exclude competitors from using it, a
patent search is a low-cost way to test this assumption. Once you can then gather the data, and
synthesize them, you can then determine the next step with confidence. Iterate, pivot, or abandon.

So, going back to the patent example, you find there are strong patents in the space, then you ask
the question: How do I work around those patents? Can I work around those patents? That's a pivot.
Or, is it impossible to operate in this space? And in that case, you abandon, and you go somewhere
else.

This completes our high-level overview of hypothesis-driven innovations, and why this approach is a
powerful antidote to the key risks facing early stage innovations. Innovations that may involve new
products or services, or innovations that involve internal changes in your organization.”

One of the most critical assumptions behind your business model will be that the target user will use
the product and pay for it. But will they? Asking them is not helpful because people often say one
thing, but do something else.
Another critical assumption that appears once you start having some traction is that the demand will
grow. Airbnb provides a great example. When the company first started, their revenue was lower
than expected. They hypothesized that the low quality photos of the rentals on the website had a
negative effect on user desire to book rooms. To test this out, they did an experiment where they
took high quality photos of rentals and put them on the website to see if revenues increased. To find
out what they learned, read this optional article: How Design Thinking Transformed Airbnb From a
Failing Startup to a Billion Dollar Business
The following video clip shows how Best Buy designed and ran a great experiment to help secure
buy-in for a new service concept: the Xbox trade-in program.

The Pretotyping Manifesto

Link: https://youtu.be/t4AqxNekecY

8.2. Experimental Design

Before designing an experiment, consider these questions:

 Which variable will you manipulate?

 What will your intervention be?
 How will you control to mitigate biases?
 How will you observe and measure?

Your experiment should include the following six components:

1. Hypothesis
2. Subjects
3. Intervention (what you will ask the subjects to do)
4. Data that will be collected
5. Data collection method
6. Method for calculating the result

There are also a variety of types of experiments. There is a trade-off between the types: the
experiments that give you valid results are more difficult and time consuming to run, while the
experiments that are easy to run will not give you valid results. Watch this video to learn about the
components and qualities of effective experiments.

Introduction to Experiments (Video Transcript)

“Now we are ready to get deep into the woods. Let us first talk about hypothesis.

What is a hypothesis for our purposes? A hypothesis is an assumption or a guess about your business.
A building block of your Business Model Canvas that is testable.

For example, it can be your value hypothesis. Your assumption about the key value that your product
will offer its customers. Or it can be your go-to-market hypothesis. How will you get your first
customers? Or your growth hypothesis. How will you grow your business?
In a nutshell, an early-stage startup needs to deliver value to its customers, and have a scalable
model of reaching its customers and growing its customer base. You can make assumptions for all
these elements of the startup and run experiments to learn something about what is viable and what
is not. What is doable and what is not going to work.

How about experiments? What is an experiment for our purposes? We use a loose interpretation for
experiments, and define them as any method to collect data that can prove or disprove a hypotheses.

Now, there are three things that you need to keep in mind. The best experiments are falsifiable. If you
cannot fail, you cannot learn. Negative results are as important, if not more important, than positive
ones. And at your stage, they are much easier to get. But just make sure that as you design your
experiments, you have a plan to learn from those negative results.

Experiments should be practical. Statistical validity is good, but do not let perfection be the enemy of
the good. Randomized experiments are great, but remember, you're not developing a drug to cure
cancer, so sometimes it's okay to sacrifice recall for speed. And there will still be a fair amount of gut
and hunch in your conclusions, because the data will be limited, and oftentimes ambiguous.

Now, some tests are more statistically valid than others, meaning that they're subject to less bias and
interpretation errors. Some involve more qualitative than quantitative data. Some involve more
customer commitment than others. The more commitment, or exchange of value in terms of dollars,
time, or other commitment from your customer, the better.

And remember, the goal of a test is to see what customers do, not what they say. So, any experiment
that gets your customer to do something, is much more valid and informative than an experiment
that just gets your customer to say something.

As an entrepreneur, you have a variety of choices for the kind of experiments you can run. The gold
standard is a so-called A to B experiment. This is similar to randomized control trials in medicine. Live
customers are randomized between your MVP and any current offering that is meant to address the
same need, and you expect higher engagement from your MVP than what is currently available.

Now, most startups will never do that. It's too expensive and it's a very high standard. But you can do
simple live customer testing. Customers interacting with your MVP, you record their experience, and
ask them structured and open-ended questions at the end of the test. You can even use web services,
such as usertesting.com, to facilitate some of the data collection.

The next experiment that you can try is users spending time watching a video MVP, and then provide
you with their input. This is not a direct interaction with your MVP, it's just watching a passive video.
Or, you can get users to interact with landing pages. Or, users responding to a so-called smoke test.
This is where a user visits a website with a specific call to action. For example, download our product.
And you are measuring user's response to the call to action.

Or you can reach out to multiple potential business customers. And you're seeking to get them to
agree to a pilot and sign a letter of intent. Or customers engaging in a one-on-one sales meeting. Or
users responding to online surveys. Or user interviews like what you were doing so far.

Now, if everything else fails, you may rely on secondary data that you collect from comparable
situations. And the tests are limited only by your creativity.
Here, I have just shared with you some examples. Now, the best experiments are biased towards
action. You're looking for experiments in which customers trade some scarce resource – a currency.
This can be money, time, or attention. Examples include the amount of time a user spends on a
landing page, or in viewing a demo. Or, time spent at an in-person meeting. Perhaps their willingness
to participate in a user test, or commitment to do a pilot, or sign a letter of intent.

For physical products, you are also looking for ways to measure users' engagement. Look for currency
such as time spent discussing the product, assembling your product, using the prototype, and so on.

It is helpful now to see an example to better understand experimental design. One of our rockstar
Startup Garage teams, Homemade, was trying to develop a sustainable weight-loss solution for their
target user group, overweight individuals.

Through insights gained from user testing and interviewing, they learned that their users lacked a
community. They wanted to somehow have fun with their weight-loss endeavor, and they wanted to
feel a sense of control over their health.

The team had this idea that facilitating weekly cooking meet-ups would be a potential solution for
their users. However, they needed to validate both the insight and the feasibility of the solution.

To test whether or not people were willing to pay to get together and learn how to cook a healthy
meal, they advertised a class on Craigslist. They decided that their goal would be to have 30 people
inquire, and have 4 people sign up for the class at $80 per week. They were blown away. They
received 80 responses to their initial Craigslist ad, and had 8 people sign up at $80 per week. Over a
7-week period, they generated $850 in revenue, and saw a 75% retention rate.

Did they validate their hypothesis that people would pay for cooking meet-ups? They absolutely did.

Another experiment this team ran was to test if dietitians are willing to refer their patients to the
Homemade service. If you think about this, this is essentially testing a hypothesis about a channel of
how they would acquire customers. The team decided to test this by telling 10 dietitians about their
service, and asking them to refer patients.

Their currency, or measurement, could be to have 2 dietitians agree to refer at least 4 patients.
Again, the experiment exceeded their expectations. Within only a few weeks, they had 6 medical
clinics and the Palo Alto Veteran's Association as referral partners. They were inundated with
referrals from these clinics, and started having to turn people away with a promise of an invite after
the pilot.

By strategically designing their experiment to test specific components of their business model, the
Homemade team was able to validate product market fit, and actually gain an idea of their unit
economics. By running the classes with real customers, they gained a better understanding of their
unit economics, and the intricacies and subtleties of running a hands-on cooking and nutrition course
for their clients.

Let me now introduce some key terms that will help you in your experiment design. Every experiment
has six elements. I will introduce the elements, and use the Homemade example to demonstrate
them. The first element is the hypothesis. This is the assumption you want to test. The question you
want to ask with your experiment. For Homemade, it was easy. Will enough people be interested in
our service?
Next is the subjects. Who will be the people providing the data? In their case, the subjects would be
users recruited through a Craigslist ad. Next is the experimental intervention. What do we expect the
users to do? In this case, view the ad and respond. Fourth is the data we will cover. In this case,
number of inquiries and number of sign-ups. Fifth, the method we will use to capture the data. In
Homemade's case, a simple spreadsheet would be sufficient.

And, finally, our decision rule. What kind of response do you expect to see to be convinced that your
assumption is valid? That your question is answered positively? The team decided 30 inquiries and 4
sign-ups. But why 30 and why 4? These targets that you put in your decision rule are typically
informed from some basic economic analysis.

There is a financial model behind this, developed by the team, that informs them that these
thresholds, such as liability of the venture. And the key here is not to obsess too much about those
targets, but also not to be wishy-washy. Establish thresholds that are credible, it can help you learn
about your business and one or more of its key aspects.

Now, in this case, Homemade learned that their value proposition, as articulated in their ad,
resonated well with their users. They have also established a baseline that they use later on in their
unit economic analysis.

Now, I need to digress for a second and, for those of you not familiar with the term unit economics,
explain what it is. This is basic analysis of the profitability of your business. The revenue generated by
a customer, minus the cost of acquiring and servicing the customer. You want this basic unit
economic analysis to inform you what are credible thresholds that you want to use as decision rules
in your experiments.”

8.3. Design Thinking To Go: Experiments

Take a look at Design Thinking To Go: Experiments, which shares experiments for testing the channel
and value proposition of a healthy soft drink product. Notice how this experiment modifies the Value
Proposition and Channel variables of the business model.

Link: https://web.stanford.edu/group/instr_design/cgi-bin/LEAD_TIP/dt_to_go/experiments.html

8.4. Pivot or Persevere

After gathering data and feedback, you will typically need to make a decision about whether to pivot
or persevere. Both of these decisions are types of iteration.

It is important to understand that a pivot is not a radical change where you start from scratch.
Instead, pivoting involves changing one of the assumptions that you made in your BMC or BCC.
Pivots should be made as the result of data that has been collected. Persevering means that you still
plan to iterate on your current idea, but without making a fundamental change to any of the
assumptions made in your BMC or BCC.

Iteration and continual improvement are necessary parts of the innovation process. Although we do
not have time in this course to have you practice iterating, in the real world you would make
changes after each step of the process, based on feedback you have received and new information
you have learned. In fact, it is common to go through multiple iterations for one step before moving
on to the next.
You should approach iteration in a structured way so that it becomes a habit to do it after every step
of this process, and so that you allow yourself the time needed for iteration. Go through the video
transcript to learn more about when and how to pivot.

Pivoting After Experimentation (Video Transcript)

In this video, we will discuss a critical innovation skill, determining when it is time to pivot. But first,
let me explain what is a pivot. The word "pivot" is widely misused in the innovation and
intrapreneurship arena. A pivot is not a radical change in direction where you start from scratch.

For example, looking for an opportunity in the real estate space in one week and then jumping to
sports next week, it's not a pivot. It is a beheaded chicken gasping for air. So, what is a pivot? It's a
change in one of the critical assumptions you're making in your Business Model, or Business Case
Canvas, that is done as a result of data obtained, and at the same time, persevering and preserving
some other elements of a canvas.

Another way to think about the pivot is the following. Visualise a three-dimensional chart, where the
x and y axis represent the different choices you have for the venture. And the vertical axis is an
indication of profitability. You're searching in this space for the combination of choices that generate
the greatest profitability. Each idea, each concept, each opportunity you are exploring generates an
outcome. And you iterate, hoping to get to a good place.

If at some point you're stuck, and you're not seeing an improvement, that's where you may want to
jump into a new idea. But you do so in a systematic and structured way. You don't throw the chart
away. You just do a pivot within the chart. So, we will provide concrete examples later in this video.
But, let us first outline the general approach. It is evidence-based, and it involves a cycle of learning
and testing.

You began with a set of hypotheses, you have your MVP, and your Business Model, or Business Case
Canvas, and you design experiments to test the hypotheses. You collect data, in short, to meet
specific goals. You have learned, and you are iterating on your hypotheses. Small iterations is
persevering, large iterations is pivoting.

Pivoting is hard because of the inherent optimist of the intrapreneur, and because noise can get in
the way. Irrelevant data, oftentimes called vanity metrics, can get in the way. Metrics that are
supposed to represent progress but do not have a clear and unambiguous link to profitability and
commercial success can derail you.

Unclear hypotheses can cause difficulties. If you're not clear about exactly what it is you're testing,
then you can start making up stories and convincing yourself. That's why it's important to be rigorous
when you design your experiments. And, emotionally, acknowledging that something you worked on
is not working is hard.

So the question is, when to pivot? When you are not making sufficient progress but can retain some
key elements of your Business Model, or Business Case Canvas. A pivot does not equal starting from
scratch. Like a pivot in basketball, one foot is firmly on the ground, and the other foot is used to
change direction.

A key assumption of your Business Model Canvas, or Business Case Canvas, is preserved during the
pivot. I will now share with you several examples of pivots. These are drawn from a book I highly
recommend, "The Lean Startup" by Eric Ries, and from several teams I worked with over the years.
The first type of pivot is called zoom in. In this type, a single feature on the MVP becomes the whole
product. BipSync, which I introduced in an earlier video, provides a great example. The team
originally thought that their product should have features that appeal to analysts and features that
appeal to the needs of their managers.

Their early tests confirmed the analyst hypothesis. But they were not as promising for the manager
hypothesis. So the team decided to zoom in on the analyst feature. Zoom out is the opposite. You've
discovered that your MVP is narrow and cannot support a business, and then the MVP becomes a
single feature of a much larger product.

An example for this is provided by Joya, a company started by two Startup Garage alums. The initial
concept for the company was an app that would enable parents to better organize the videos of their
children. Once they started sharing their first prototypes, they started hearing that parents also
wanted to share these videos, so they added that functionality. Early feedback was enthusiastic. But
the founders knew that this would not be sufficient to support the business.

But they did recognize that what they were doing, they were tapping on a broader need of enhanced
video sharing and video communication. By iteratively adding and testing features, the team
converged on an app that enabled sharing of personalized videos that could be modified using filters
and could be shared through Facebook Messenger, visually presented as zoom out pivot at the
beginning, and later on, a combination of zoom out pivot, customer segment pivot, and need pivot.

While the team preserved key features of the product all along, their pivots consisted of a
combination of adding features, introducing new customer segments, and focusing on different and
enhanced customer needs. Let me now share more details of the customer segment and customer
need pivot. I already described those two pivots in the Joya example, but let me dig more deeply now.

Suppose people want the MVP, and they want to buy it. But it is not the people who you thought they
would have liked it. It is a different group of customers. This is the customer segment pivot. One of
our teams developed an algorithm that enabled them to scrape hard to get information on
companies from the Internet. Their original hypothesis was that hedge funds and private equity firms
would want access to that data.

Early experiments were just mildly encouraging and not to the satisfaction of the founder. The
enthusiasm was simply not strong enough. Through a series of additional interviews and detailed
work, the founder soon realized that the same technology would be of potential interest to
salespeople who wanted to identify company and customer leads.

Tests of that hypothesis were very successful and the company, EverString, decided to focus on that
segment instead of the original investor segment.

The other type of pivot is the customer need pivot. Here, you discover that the problem is not
important, or people are not willing to pay, and you have to find another need for the same product.
This is hard to do, but sometimes it works amazingly.

A great example is provided by celebrated drug Viagra. The molecule was originally tested as a
potential treatment for hypertension, but the data were not promising enough. It was simply not
effective. However, as part of the preliminary clinical testing, the scientists noticed a surprising side
effect, which led them to conclude that Viagra would not be a good treatment for hypertension, but
it could potentially be an effective treatment for erectile dysfunction.
Let me now share with you some practical tips on pivots. Every innovation team would benefit from
scheduling a pivot meeting every one to three months. Schedule meetings often but with enough
time in between to gather data and run experiments. The purpose of this meeting is to discuss
whether it is time to pivot.

Prior to the meeting, prepare two cases, a case to pivot and a case to persevere. In the pivot case,
present the top five evidence from your experiments supporting a pivot, and propose a concrete and
actionable pivot. Do the same for the persevere case. And present concrete, iterative changes in your
Business Model, or Business Case Canvas, and in your MVP.

During the meeting, discuss both options, and aim to make a decision by the end of it. From our
experience, such meetings provide an excellent opportunity for the innovation team to review their
progress and determine whether it is time to change directions.

And before I wrap up this video, I would like to leave you with some food for thought.

A misguided decision to persevere, despite evidence to the contrary, is a huge waste of human
potential. Take a hard-nosed look at your progress at regular intervals, and assess whether you're
making good enough progress. If not, is it time to pivot?”

If you would like to learn more about types of pivots and pivots of well-known brands, read the
Forbes articles, Top 10 Ways Entrepreneurs Pivot a Lean Startup and 14 Famous Business Pivots, and
Eric Ries' book, The Lean Startup.

Additional Resources

All DT to Go Artefacts: https://drive.google.com/file/d/1BDl9cU4l9Cb-

iSKfKb1uFpwpsMk4STpu/view?usp=sharing

Recommended by the Teaching Team:

 Designing for Growth, Jeanne Liedtka and Tim Ogilvie

 Change by Design by Tim Brown
 The Laws of Simplicity by John Maeda
 Jon Stewart NPR Interview (talks about how structure helps creativity)
 ABC Timeline Documentary on IDEO Shopping
Cart https://www.youtube.com/watch?v=M66ZU2PCIcM
 Design & Thinking http://designthinkingmovie.com/#home
 Great documentary with various perspectives on design, design thinking, and its intersection
with business and society.
 Extreme by Design http://www.extremebydesignmovie.com/
 Another documentary on student teams at Stanford using design thinking to address
challenges in extreme poverty.
 d.school web site http://dschool.stanford.edu/use-our-methods/
Articles:

 Design Thinking, Tim Brown, Harvard Business Review, June 2008 Issue
 Intuit's CEO on Building a Design-Driven Company, Brad Smith, Harvard Business Review, Jan
– Feb 2015
 How Indra Nooyi Turned Design Thinking Into Strategy: An Interview with PepsiCo's CEO, Adi
Ignatius, Harvard Business Review, Sept 2015 Issue
 Design for Action, Tim Brown and Roger Martin, Harvard Business Review, Sept 2015 Issue
 How Samsung Became a Design Powerhouse, Youngjin Yoo and Kyungmook Kim, Harvard
Business Review, Sept 2015 Issue
 How IBM, Intuit, and Rich Products Became More Customer-Centric, Brad Power, Steve
Stanton, Harvard Business Review, JUNE 17, 2015

Books:

 The Art of Innovation: Lessons in Creativity from IDEO, America's Leading Design by Tom
Kelley (Author), Jonathan Littman (Author), Tom Peters (Foreword)
 Creative Confidence: Unleashing the Creative Potential Within Us All by Tom Kelley (Author),
David Kelley (Author)
 Change by Design: How Design Thinking Transforms Organizations and Inspires Innovation,
by Tim Brown (Author)
 Designing for Growth: A Design Thinking Tool Kit for Managers (Columbia Business School
Publishing) by Jeanne Liedtka (Author), Tim Ogilvie (Author)
 The Laws of Simplicity (Simplicity: Design, Technology, Business, Life) by John Maeda

Recommended by Previous and Current Participants:

 Design Thinking at Stanford: Extreme by Design documentary (available on iTunes)

 d.school Crash Course
 IDEO Design Kit
 d.school mixtapes
 How to Run a User Interview video