Design Thinking: Your ultimate tool to overcome and win any downturn.
Case study: Solving a business problem during a downturn
Design thinking 101
Let’s begin by getting ourselves clear on the question: What is design thinking?
Many people have an impression that design thinking has something to do with being artistic, having a sense of aesthetics, style or is reserved for those who create beauty or have an inherent sense of creativity.
Turns out design thinking has nothing to do with these things. What design thinking really is, is a process for problem solving.
You can think of design thinking as a powerful tool in your toolbox for problem solving. Many people see creative folks such as UX designers, product managers or creative employees use design thinking.
But actually, design thinking can be used by anyone who seeks to infuse creative problem solving into every level of an organization, product or service in order to drive new innovation for business and society.
Let’s break down the process for problem solving:
- Understand the problem.
- Define the size and impact of the problem.
- Generate ideas.
- Building a solution.
- Test and measure the success metrics.
In a diagram it looks something like this:
It turns out, the design thinking process from Stanford’s Design School looks very similar to the process for problem solving.
The difference being that in design thinking we start with empathy, which is about understanding the problem from the perspective of the user.
Now that we’ve established that design thinking is essentially the process for how we go about solving problems, what are the strengths of this design thinking process? Here are a few points:
- Design thinking provides a common language for bringing together diverse teams in the organization.
- It enables the team to solve complex problems by breaking down the problem into concrete steps and making sure everyone in the room can understand and relate.
- This helps generate novel and creative solutions by enabling everyone to participate and bringing out the best ideas onto the table.
The next question is what are the types of problems we can solve with design thinking? Turns out there are a lot. Here are a few examples:
- Designing your career
- Re-inventing business models
- Starting a company
- Shifting markets and customer behaviours
- Problems that data cannot solve (answering why people behave the way they behave)
- Helping your business navigate during a downturn
Case study: Solving a business problem during a downturn
We’re going to take a dive into the last point — helping your business navigate during a downturn. To do this, let’s do a case study from the work we’ve been doing at Neuron Mobility, an e-scooter sharing company in the micro-mobility space.
As you can imagine, if people are in lockdown, they are unable to go out and ride a scooter or an e-bike and this could deeply impact the business.
While defensive strategies are crucial for saving a business during a downturn situation, we wanted our business to not only survive, but to thrive.
So the question we also wanted to ask was “How do we make a business actually thrive during a downturn?” I was inspired by Gokul Rajaram’s writeup of Playing offense during a downturn, and so we decided that we would apply design thinking to several key points Gokul mentions for taking your business on the offensive. The questions we wanted to tackle were:
- How do we discover new customer segments? We knew that tourists were not going to sustain us over the next few months due to restrictions on air travel, so where are our new customer segments going to come from?
- How do we increase loyal customers? Loyal customers in a business are generally the more valuable customers in terms of revenue. So how are we going to drive more valuable customers to get us through the tough times?
- How do we find new distribution channels? Even after lockdown eases up there may be a risk of people not traveling as much, so how are we going to encourage more people to go out and explore their city?
- How do we discover new business models? E-scooters were largely based on a pay per ride model, but what about models that could give the company a more sustainable and resilient revenue stream?
Let’s take a dive into the first question — how do we discover new customer segments, and use this as a case study in how we can apply design thinking.
Step 1: Empathize
The first thing we do in our empathaize step to discover new customer segments is to create a registration form that we send out to our users.
Our goal here is to segment our audience and so we ask questions such as gender, what location in the city they live in, what industry they work in, what they use scooters for, etc.
This will help set us up nicely in the next phase when we get to ask more targeted questions. We discovered a few interesting clues about our sample audience:
- Essential workers need to get to work during lockdown.
- Very few women are represented.
- Users are using scooters for commuting to work.
Now that we can identify users in each segment, it’s now time to interview our users and start asking our questions.
Because the Covid-19 lockdown meant it was not possible to meet users in person to observe them, we called them up and interviewed them.
We want to avoid hypothetical situations, so our first question was “What was your choice of transportation on your last trip?” This gets them to focus on a specific event to walk you through their thought process on how they made a decision in that moment.
Next we start asking “Why”. The general rule is asking “Why” up to three times will get you to the root of their problem. Here’s a few things we learned about essential workers on their choices for transportation:
- Public transportation posed challenges for maintaining safety including social distancing and sanitization.
- They preferred scooters and e-bikes because it helped address safety concerns.
- They found scooters too expensive to use on daily commutes.
Step 2: Define the Problem
We use the interview process to speak to 15–20 people in each of our customer segments. Then what we do is to crystallise our findings into a problem statement that identifies the root of the problem while also being easily relatable by anyone on our team.
Here is some of the findings from our sample:
- Essential workers need to get to work during lockdown. — Public health workers want better access and more affordable pricing for commutes.
- Very few women are represented — Women need to feel more safe and secure when riding a scooter.
- Users are using scooters for commuting to work — Convenience matters more than price for frequent commuters.
Step 3: Ideation
The next step is where things start getting more fun. Identify stakeholders in your team for the problem you’re solving and get them into a room (or on a Zoom call).
Focus the team on the clear problem statement to solve, which in our case is to help public health workers gain better access and affordable pricing for commutes. Start the process having each person spend 10 to 15 minutes on their own writing as many ideas as they can think of on post-its. If you’re doing this online, a great tool to use is Murals which you can find here.
The goal here is to generate as many ideas as possible. Once you notice people are slowing down in generating post-its, it’s time to get them to post their post-its on the whiteboard.
This is where the collaboration begins. You’ll start noticing patterns of these post-its and you can group them together on the wall.
This is the time to discuss the post-its, get people to build on top of ideas to refine them further. Sift through the ideas and start bubbling up the ones that seem to keep popping up again and again in conversation.
Prioritizing them will also be helpful to decide which one to starting building first — to do this take a vote, but keep in mind how passionate people are about the ideas is also a factor here.
Here is a small sample of the 30 ideas that came up in just 40 minutes on what essential workers need from scooters:
- Free monthly pass
- Icons to identify which scooters are sanitized
- Educational video on safety around scooters
- Cross-promotion with local public transportation
- Deployment of scooters near bus and train stops for better physical access
Step 4: Prototype
Let’s take a look at a mockup of a free monthly pass we put together for public health workers.
Notice that this prototype doesn’t look too intimidating — it took us less than 20 minutes to mock up. The goal is to get this prototype of a free monthly pass out to our users as quickly as possible and observe how users respond.
That’s the idea here — we want to learn quickly and fail lower down in the value chain where it is cheaper and faster to change our product.
Step 5: Test and Measure
We defined several metrics to measure — no. of subscriptions and no. of trips. It took us just 48 hours to launch our free monthly pass feature for public health workers and immediately we started seeing results. We got over 500 subscriptions and a thousand trips within a week.
We even received several articles in the press which helped increase awareness about scooters being a safer option in helping commuters maintain social distancing.
But another unexpected metric that would help us achieve our business objectives also came into focus: user retention.
We wondered if the free monthly pass helped introduce this essential worker segment to our scooters, then would this segment turn into a loyal customer and ride our scooters even after the Covid-19 lockdown lifted? In other words, did we just discover a new market for our scooters? All these interesting learnings and questions happened because we were able to quickly put a prototype together, launch it to our users and start observing the effects.
Another important source of feedback often overlooked is from your own Braintrust. What is a Braintrust? Here are the three factors that make up the process for a Braintrust:
- Gather people you trust who are willing to provide candid feedback.
- Present your solution in a show and tell.
- Listen to the feedback.
Ed Catmull from Pixar speaks about the Braintrust in his book Creativity, Inc as one of the most important factors for allow Pixar to churn out hit movie after hit.
In his words a successful Braintrust should enable “Frank talk, spirited debate, laughter and love.” Don’t underestimate the power of candid feedback to help generate amazing products.
So, now that we’ve completed our 5 steps in our design thinking process, where does this leave us? Well, circling back to the original goals we had for helping our company thrive during a lockdown situation, we applied the same design thinking process to each of the other topics, and here are the final results:
- How do we discover new customer segments? We discovered how to make scooters more friendly and accessible for women, commuters and essential workers.
- How do we increase loyal customers? We launched Parking Incentives and a Free Monthly Pass for public health workers who could convert into new loyal customers.
- How do we find new distribution channels? We launched Group Rides to leverage our existing riders to get their friends to ride on our scooters.
- How do we discover new business models? We launched a 3-day, Weekly and Monthly Passes pricing option to provide more affordable options for tourists, students and commuters.