Power of design to support achieving “Zero to One” in startups and new businesses. In continuation of the previous studies on the questions: “What is a Startup?” and “What is Design?”, we will talk about these chapter theories and practical knowledge that we gained through our joint research based on fundamental ways of thinking about startups.
We hope this series of our messages can help you discover and better understand design, filling up a gap between startups and design as much as possible. We will be delighted if such a situation can bring more positive investments toward design and there by increasing the number of startups that continuously scale while achieving “home run” success.
(Written by Shusuke Eshita, Sony Design Consulting and Yasuhide Yokoi, Final Aim)
> Previous Article: “History of Design andMain Points of Design Today”
Sony Design Consulting and Final Aim have been engaged through design in creating numerous cases of zero-to-one of startups and new businesses. We now reflect on our activities and analyze the successful startups and the cases of business that has developed continuously from zero by producing products and services that have received favorable response from users. We have found from such analysis and propose here a basic framework, in a broader perspective, of utilization of design for evolving startups.
We consider that the three elements shown in the above diagram can summarize important points for a startup to be remarkably successful by producing “products and services that can receive favorable response” through utilization of design.
The three elements are “Aesthetics”, “Business”, and “Technology”.
Engaging in these three elements from the early stage of the entrepreneurial process and trying to maximize the overlapped part of the three elements are the necessary thoughts and practice to produce products and services that can receive favorable response. These elements are likely to be divided into specialties and may be dealt individually in the process of business developments. However, we think it is important to creatively adjust and optimize the relationship between these elements through utilization of “creative relationship optimization power” of design so as to enlarge the overlapped part.
Let us now explain each of the elements in order: “Business”, “Technology”, and “Aesthetics”.
“Business” means continuous activities of planning, producing, and selling products or services using management resources in purpose of making money. It is itself a purpose of a corporation, such as corporate planning based on a corporate philosophy, business planning, or sales & marketing for making profits through strategies, which can be represented basically by numerical or index values. In addition, although being considered less connected with design, legal affairs, which carry out social relations and responsibilities, and financial affairs, which are responsible for profit distribution among shareholders, are also important marketing issues and are subjects to be approached for producing good design. As will be introduced in the following article, the influence of “Business” on design in startups is remarkable in particular, and designers are required to have deep knowledge and good practices in this field.
IoT, AI, blockchain, 3D printing, and deep tech can be named as recent advanced technologies. In addition to those advanced fields, “Technology” also includes fields directly connected with “techniques” that are literary done by human hands, such as hardware planning, hardware producing technologies, and software developments. Startups, in particular, often focus on technologies having prospects of future large scale, and there are many technology-oriented startups that are completely specialized in development of such elemental technologies in some cases. However, to pursue profits by raising corporate values as a startup and to build long-term continuous relationships with society and clients, the other two elements, as well as design, cannot be ignored.
“Aesthetics” may be harder to grasp compared to the above two elements. Also, the word “Aesthetics” may bring only limited associations of concrete images of art works or fine arts, such as oil paintings or sculptures. You may think that “Aesthetics” is irrelevant to your daily life, and even its priority is low in management of startups. However, we do seek, purchase, and experience “Aesthetics” in a broad sense everyday, for example, by listening to music in a concert hall with deep emotion, seeing cool super cars and feeling uplifted, performing online payment smoothly on a smartphone, or eating at a restaurant to enjoy special atmosphere and good food.
“Aesthetics” may be a vague element that is completely opposite to logic, and is harder to grasp systematically and to be represented by numerical values. However, it will be easier to subjectively evaluate or restructure “Aesthetics” if we disintegrate it into two following perspectives: “Aesthetics in Forms” and “Aesthetics in Ideas”.
First, “Aesthetics in Forms” refers to an expression itself, represented by a concrete object or a tangible body, for example. It can be further disintegrated into elements such as color, contours, form, light, sound, taste, and fragrance. Harmonizing and balancing these elements with technical skills using contrast, symmetry, rhythm, etc. can express an integrated beauty. (For example, the platinum ratio and the golden ratio are universally acknowledged formats in the field of vision.)
“Aesthetics in Ideas” does not exist in concrete forms in reality but exist as ideas or concepts that can be recalled in our brains and can be shared with many people. Examples are: heritages in which space and time of natural features and history are accumulated; ethics and morals such as chivalry, bushido, and sportsmanship; and thoughts and philosophy such as wabi-sabi and zen; and examples in corporate activities are: founding stories and mission/vision/values statements; a purpose verbalizing an importance of existence of a corporation; and brand images of products. Although these are all abstract ideas, we do always value these aesthetics in ideas that can be shared with others.
In order to provide products or services that can receive favorable response as well as to gain approval for the importance of existence of the corporation, we consider “Aesthetics” as an extremely important element for success of a startup.
When we hear the word “design” or “designer”, we often imagine graphic design, such as logos and illustrations, or fashion design of clothes etc., and we also tend to pay attention to concrete and artistic skills or talents. Where “Design” in principle should be an integration of the above three elements - “Business”, “Technology”, and “Aesthetics”, why do we come up with “Aesthetics” only?
We are guessing that the situation of the labor market in Japan is a big background of this phenomenon. We classified, according to the three elements we have proposed above, statistics data of “The number of graduates according to related subjects and situations” provided in Basic Research on School 2020 by Ministry of Education, Culture, Sports, Science and Technology of Japan (MEXT) as follows.
You can see from the diagram that there are relatively too few human resources who will take on roles in the field of arts. If we define design as an act of creatively integrating and balancing each of the elements, those who can take on “Aesthetics” have scarcity value in the labor market, and therefore too much emphasis is put on the artistic aspect. As a result, a narrow and stereotypical impression that “design ≒ art”, which is so distant from the original meaning, has been stuck with us. As mentioned above, “Aesthetics” is, of course, essential for design. However, the pursuit of just “Aesthetics” does not always achieve good design, or a person who masters “Aesthetics” is not always a good designer.
With understanding of the three elements of design required for “products and services that can receive favorable response”, let us consider and sort out, with a help of schematic diagrams, how the evolution of a startup should be.
First of all, every element starts from zero at the early stage of the entrepreneurial process. Creatively adjusting and optimizing the elements harmoniously, while sowing seeds in each field and expanding performances and assets thereby enlarging the overlapped part of the elements, will lead to an evolution of a startup.
The overlapped part formed during such evolution has power of “originality” and “identity”, and it grows into products and services, or even into the startup company itself, that are strong and sustainable and can be easily leveraged. On the other hand, such creative approach requires accumulation of time, and thus it is very important to pay attention from the early stage of the business to translate ideas into actions. This will build up into a huge and strong asset over time.
However, it is also true that forming the integrated overlapping part of the elements while raising each of the elements at the same time is quite difficult. As shown in the diagram below, we often see startups with elements that are separated from each other, or startups that lack some elements. The products, services, or outward communications produced by such the startups often lack consistency. This makes it difficult for the startups to gain trust from users and investors, and throws them into a situation where big home runs are not likely to be produced.
Among these types of startups, most of the startups that are “weak in design” or struggling to grow can be classified into one of the following types.
This is a pattern often seen especially in an early stage of an entrepreneurial phase mainly among technology-oriented startups starting from a research lab or an engineer-focused founder. For a short time after founding the company, there is no problem in putting priority on speed and pushing ahead with developments of its own original technology. However, even if it is a special technology, other competitors may catch up soon (no matter how new the technology is, commoditization proceeds in a short term these days in particular), and if that happens, the company will fail to gain markets or clients and to achieve the growth based on future prospects or sustainability.
This is a pattern of companies whose capability and achievement in business, such as building of business model or sales force for customer acquisition, are quite satisfactory, yet who are weak in original technology and lacking in branding power and loyal clients. When a company, as a startup in particular, aims for a growing market with scalability, lacking in technology and views of user experience that embodies the technology may make it difficult for the company to grow with leverage and gain valuation for equity finance.
This is a pattern where design that gives weight to expression precedes. Even if it looks like “strong in design” on the surface, deep down, “design” is becoming a goal of expression in some cases. For example, we see cases lacking inattention or strategies toward intellectual property rights, having vulnerability in business models or logics, lacking in sustainable growth power, or lacking in technological perspectives that are ahead of time and markets. These situations are incomplete as design when viewed in a comprehensive way.
(Though not all of them, but these patterns can be seen in cases having a catchphrase “Designer’s xxx”, so be aware!)
In this last pattern, business and technology are connected firmly in the right balance, but the element of “Aesthetics”, such as creativity, is extremely weak. We frequently see companies having numerical achievements, such as sales and profit values, and steady technological achievements, yet they lack branding power and loyal clients, and having issues such as a stagnated culture where innovations are unlikely to happen. We think that not only startups that had scaled to a certain extent but also big companies may fall into such situations.
We have proposed here the basic framework, which may lead to the root of design, found through the joint research between Sony Design Consulting and Final Aim.
As explained above, in order to form good design of a product or service, design must be fully utilized, and we think creatively adjusting and optimizing the relationship between the elements of“Aesthetics”, “Business”, and “Technology” so as to enlarge the overlapped part can lead to evolution of a startup.
You might find it difficult to grasp an image of “Aesthetics” in particular since people generally have less opportunities to be exposed to this field. Nevertheless, we would be delighted if we were able to change the narrow and biased image of design, even just a little.
Following this schematic explanation, we will show you next time how design can contribute to the growth of startups by giving concrete examples in practices.
Written by Shusuke Eshita, Sony Design Consulting and Yasuhide Yokoi, Final Aim
July 26th, 2022
