I’m not a tech guy. I’m looking at the technology with the eyes of my customers, normal people’s eyes. – Jack Ma
What are the questions you should ask yourself when thinking about a new startup?
The reason I ask this is because there is an increasing consensus that the way to help cities and areas is to encourage startups that will create jobs and economic growth.
There’s a lot of money out there waiting for a good idea – but how do you know when you have a good idea?
The same questions can be asked if you want to improve how an existing process works.
So, is there a model that can help – a model that may help question an idea and figure out whether it’s worth doing or better abandoning?
The model above is a start, adapted from systems thinking ideas that have made their way into a number of methods – including the lean startup approach which talks about customer development.
Let’s see how this might work with a thought experiment.
Type in “startup idea” into Google and you find a website with thousands of ideas.
Let’s pick one for a graphical restaurant reservation system and see if the questions help.
The system, in the model, is not the system we are building.
Before we build a system to do something we first need to understand the system we are serving.
So, the system that we should look at first is the restaurant itself.
What is the purpose of a restaurant?
It is, presumably, to fill its tables with customers for the sittings it has available.
Or, in transformation terms, change customers wishing to have a meal together to satisfied customers.
Which then leads you to ask what does customer demand look like?
Is this a top end restaurant that is booked up months in advance?
Or is it the kind of place people tend to wander into?
If you want to develop this app you need to understand the nature of the customer demand.
Which probably means spending some time talking to restaurants, maybe even working there for a while to see how it works.
Now, what sort of data will help you understand this restaurant better?
Is it how long it takes to get a customer a booking from when they call?
That’s probably not useful – once you get through on the phone it’s probably fairly quick.
And you don’t know what you don’t know – like how many calls were dropped because they couldn’t get through.
Maybe the measure is how much time staff spend on the phone instead of serving customers?
Let’s say you could record something like that, then you’d be able to suggest than a website where you could book a table would be a good idea – that would improve the process.
And finally, you could figure out if it’s worth doing.
At a large pizza chain, for example, it is worth doing – which is why they do it now.
You can go online and book a table for a time you want and that’s great.
For a single owner-managed restaurant, not so much.
Now, this idea is back from 2012 – so there are applications that do just this.
What’s weird is that this suggestion is one of the top results…
But, the point is that if you came along with a startup idea for this kind of app you’d do well to think hard about points 2 and 3.
It’s your study of customer demand and the associated process required to serve that demand that will help you understand if there is something you can do.
And this suggests that your customer development activity should perhaps be reframed as action research rather than market research.
In market research you try and find out stuff – using tools like surveys, interviews and so on.
With action research you get into the details – immerse yourself in the actual work in order to understand what’s going on and come up with a theory.
When you see customer development as an opportunity to carry out research at an organisation – research that will help the organisation understand what’s going on in more detail – you may get a chance to get a much deeper insight into what’s going on.
Perhaps the first bit of any investment into a startup should be seen as an investment in research – an investment from which possible improvement ideas are generated and which then make their way into startups that create scale and growth.
In regions and cities and innovation hubs around the world, formalising such an approach may help unlock both productivity improvements and innovation.
But even in your own startup using a systems thinking approach is probably worth doing.