How to Be an Innovative Startup?

innovative startup by Droplr

There’s a common belief that the larger your company is, the more difficult it becomes to innovate. That’s true: “innovation isn’t easy when you have procedures to follow, strategies in place, and multiple decision makers – all with their own cherished ideas and a degree of resistance to change – in the boardroom” – Iminno. These are real speed bumps that slow companies down and prevent them from innovating.

Innovation lag has lead to the downfall of once promising and prospering giants like Kodak, Blackberry, or General Motors. And, it’s going to continue taking its toll in the nearest future. Corporations have already realized that big isn’t better in times of rapid technological development and there’s a lot they can learn from startups.

Startups, as opposed to corporations, are unburdened by the ballast limiting the giants. They have fewer decision makers. They’re young and don’t have established procedures to follow, nor a fixed way of thinking about their product offerings. They are agile.

Yet, the ability to pivot quickly doesn’t necessarily shield them from failure. In fact, the list of startups that have dropped out of the game is long.

robot humanoid

Why do startups fail?

The most frequent reasons for startup failure are:

    • poor product – market fit
    • cash flow problems
    • having the wrong people on board
    • getting outcompeted
    • pricing mistakes
  • bad UX

If you take a closer look at the list, you’ll see a common denominator. A lack of understanding of who the product is serving underlies almost all of them, aside from cash problems and poorly-built teams, which are rather management issues.

If your startup doesn’t meet the market’s needs, it means you don’t understand your audience. If you make poor pricing decisions, you clearly don’t fully understand the financial capacity of your target group and how much (little!) they value your offer.

The reason your product creates a bad experience for users can be twofold: either you’ve been negligent or you failed to understand the context, habits, and the way your audience does things.

This may not be a great consolation, but you’re not alone. All startups learn by making mistakes along the way. Mistakes come with the territory. This doesn’t mean, however, that you can’t mitigate them.

Take the time to get your ducks in a row

Startups often get carried away by overconfidence that their idea will take off. Their founders tend to be passionate, highly driven individuals who love to do rather than talk and who don’t like being sidetracked. They buy wholeheartedly into the Lean Startup methodology.

The core component of this methodology is the build-measure-learn feedback loop. However, the first step, before developing the minimum viable product, should be figuring out what problem the product (or service) will be addressing. Nailing down the nature of the problem is crucial as it’ll be your lighthouse guiding you while you steer the ship through the stormy seas of business reality.

As a startup, you may feel reluctant to spend time doing research. Comprehensive research is time-consuming, and therefore costly. You can’t afford to spend months, or even weeks, on it. But you can’t afford not to do it either.

Let me illustrate why with an anecdote:

A few years back, I spent a year in London. One day, while I was still new to this massive metropolis, I had an appointment in a part of the city I had never visited before. Feeling (over-)confident in my ability to navigate, I checked the bus connection but didn’t bother with Google maps, street views, etc. When I stepped off the bus, I faced a choice. Which way to go – left or right? I took a quick glance at the street map by the road and decided “left”.

Short of time, I started walking really fast. After half an hour of marching full speed ahead, I realized I should have already reached my destination. It was only then that it dawned on me I had spent the last 30 minutes striding along in the opposite direction.

The Whittington hospital on google map

Soaked with rain and shivering with cold, I somehow managed to laugh at the stupidity of the situation. Realizing you’re taking your business in the wrong direction, however, would hardly be a laughing matter.

A/B testing, experimenting, asking your five why-s and learning along the way how to develop your MVP are undoubtedly the right things to do, provided you’ve chosen the right course.  

According to CBInsights, 42% of startups that don’t make it attribute their failure to no market need. Either they got too carried away with their idea and visions of success that they failed to see there was really no need for what they had to offer, or that they had misunderstood the nature of the need.

If you base a project on wrong assumptions, efforts at improving it will be a futile waste of time and money.  So, if you keep testing and, despite pivoting, your product still doesn’t take off, you may want to consider going back to square one. This means taking the time to do proper quantitative and qualitative research. The sooner you confront the situation, the better off you’ll be.

Put design thinking into your startup toolkit

One way of becoming an innovative startup is putting design thinking, the human-centered approach to innovation, into your toolkit. Even if, as Steve Glaveski, the founder of Coll Campus and Lemonade Stand CC observes, design thinking is not “a silver bullet solution for your innovation woes,” it offers you tools to understand the problems you set out to solve. It lets you generate unique solutions that address your target audience’s real needs, and test them. It’s a method that aligns perfectly with the Lean Startup and Agile methodologies.

design thinking, agile and lean startup cycle

Image source: Granter

By applying this methodology to your startup’s workflow, you make sure you’ve understood the user’s needs and keep them at the center of your product development. It’s a great mindset to adopt regardless of your company’s size and resources.

Danny Sanchez, a UX/UI designer at DVmobile Inc and Enterprise Cloud Solutions developer with experience using the methodology, points out that design thinking is “flexible and can be applied to any kind of problem at any stage of organizational development. The level of effort can vary, though. Depending on the size, budget, and other constraints of the organization, design thinking can scale to the needs of the project.”

The methodology puts user needs back at the center of attention. On top of shaping your startup’s culture (by developing empathy and promoting collaboration), it also translates into higher ROI. As Sanchez says, “By putting the spotlight on people, we have won many project bids and accomplished tasks of greater magnitude.” For your startup, it could mean happier users whose actual needs are addressed in a unique way.

a asian girl is shaking hand with robot

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I'm a service designer and a digital marketer, passionate about human-centered design and storytelling. To my own surprise, I frequently find myself writing about motivation and organizational culture. Why? This could be the human factor at play...

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