Various developing countries on a continuous basis, undergo assorted economic crises. To overcome these crises and garner economic development, entrepreneurship is the key path for adoption. Therefore, several countries are taking effective steps in this direction by providing the infrastructure needed for entrepreneurship. This includes initiatives on setting up incubators, building institutions that educate on entrepreneurship, setting up of incubators, accelerators besides setting up ecosystem etc. The CEOs and incumbent start-up founders have something common in practice and that is design thinking. Do you have this in you?
Design thinking and Accelerator
As per statistics, the start-up culture is accelerating but very few among all survive. The failure rate of start-ups has led to waste of resources and the crunched capital. These failures have been witnessed in the early stage of start-ups. At this stage, Accelerators play an important role in supporting these start-ups. Design thinking uniquely helps start-ups in tackling assorted problems with by ideating on solutions encountered at early stage or life cycle of start-up. Design thinking uses five stages that include empathizing, designing, ideating, developing a prototype and testing, thus, helping the entrepreneur for developing a useful product based on customer’s need.
The accelerator is beneficial for a start-up, assisting them meticulously in their risky investments at an early stage. Thereby with a probabilistic reasoning, leading to higher chances of success. Design thinking intervenes in a dynamic way, developing and launching innovative ideas that attempts to develop new ways of thinking. This additionally leads towards improvisation of product services and processes.
This design thinking is a process of redefining problems by understanding the challenges faced by users and emerging with innovative solutions that help the entrepreneurs. It first breaks down the business problem into smaller aspects and then facilitate thinking at the base level. Finally, the solutions are compared with each other as in scenarios and depending on the situation the most suitable solution is selected. Design thinking provides long term strategy planning, allowing divergent thinking by incorporating a process model, which makes an entrepreneur curious. Design thinking process allows the entrepreneur to see their business through the eyes of the customer for fulfilling their needs.
Should CEOs challenge assumptions?
The CEO must ask significant questions while challenging assumptions. Accelerators with limited resources must carefully choose amongst the potential start-ups, as to who require a curated design thinking approach. Accelerators in leading countries have criteria for selecting start-ups in the acceleration phase. What is yours? We mean the CEOs leading the Accelerators?
- What has been done in building a deep understanding about the customer?
- Do we understand their fundamental, goals, behaviors and motivations? How?
- Is the goal well defined of a particular startup?
- Is the strategy adopted by an entrepreneur is right or not?
- How to execute the strategy to fulfill the need of the customers?
These are few questions posited to the CEOs for visual thinking, left over to immerse and learn from interaction with the customers.
What start-up accelerators are engaged into?
Start-up accelerators support early stage, growth driven companies through education, mentorship and financing for pre-defined period. They provide the start-ups with requisite resources needed for their growth and success. The start-up accelerator is a business model that is catching up worldwide acceptance and is expanding rapidly. The Y-combinator business model has emerged in early 15 years with a good success rate. These Accelerators play a significant role towards the development of the entrepreneurial ecosystem by providing various services such as networking, mentorship, training, initial capital, investor introduction and more as stated earlier.
At the same time business incubators provide support to start-ups and early-stage business by providing resources, working space, networking opportunities, potential investors and workshops to young companies as they find difficult to access. Business incubator is used by any start-up prior to the acceleration. Incubators and Accelerator are parallel organizations but with different goals and scopes. Incubators incubate a selected start-up at an early stage, helping them to convert their ideas into businesses, whereas Accelerator accelerates the ones in next stage of business scaling, especially to those reflecting some potential. Incubator help start-ups for a slightly longer period, but accelerators help the start-ups to grow in a compressed period. Both organizations engage the start-ups by providing mentorship and training and methods to commercialize their idea. Incubators have fewer challenges in fundraising in start-ups while accelerators, provide financial assistance to start-ups as a seed capital.
Design thinking and future approach
Design thinking creates understanding and continuous engagement of people for practice of determining what problems to solve, what model derives success and what business shall emerge while solving the problem. Opinions of experts and managers are crucial in developing a framework. Using Fuzzy Delphi method and aggregation of opinions of experts and managers in the acceleration field, criteria for evaluation can be constructed. Hence, design thinking focusses the way for quality long term strategy to give user centric product and services.
Written by Prof. (Dr.) Manoj Joshi.
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