The entrepreneurial designer

Sander van Berlo & Sietse Dols

When people think of an industrial designer, they often think the focus merely lays on aesthetics. However, today’s designer has a much wider set of skills. We think a designer can be a successful entrepreneur, and have an essential role in several aspects of a starting company. In this article we will discuss the qualities and traits of an industrial designer, and the potential value of a designer in a start-up company. A framework that could guide us to a successful start-up is proposed. We will illustrate where and how we, a designers, would apply principles of Effectuation to successfully start our own company.

  1. Characteristics of an Entrepreneur
  2. Company position
  3. Effectuation
  4. Dissecting the Effectuation model
  5. Case study
  6. Conclusion
  7. References

Characteristics of an Entrepreneur

Expert entrepreneurs are not usually in the ball counting business or the gaming business. Instead they are actually in the business of creating the future, which entails having to work together with a wide variety of people over long periods of time.”

– Saras Sarasvathy [1]

Entrepreneurs come in a lot of different stripes and colours. While there are vast differences in their individual personalities, successful entrepreneurs tend to share certain characteristics and work habits that we shortly want to discuss here.

  1. A commitment to purpose with passion
  2. Courage/willingness to take risks
  3. Positive attitude, opportunistic
  4. Strength of character/fortitude
  5. Integrity/authenticity
  6. Ability to engender trust/confidence/respect, to develop credibility
  7. Vision/ability to see things as they might be and to anticipate change
  8. Self-confident, assured
  9. Dedication/commitment
  10. Self-starter/proactive

– List assembled by William Zinke, chairman of the “Spotlight on Entrepreneurship Summit” event, Forbes.

The traditional training for entrepreneurship is grounded in business education. Main characteristics of an entrepreneur do not necessarily correlate to a designer. In this position we do not want to state that the designers approach is better than one of business administrators, we merely want to state how it is different and why this might be valuable to a start-up.

Company position 

“Effectual logic is particularly useful and effective in domains such as the introduction of new products in new markets, an area often referred to as the suicide quadrant, exactly the area where traditional marketing techniques are ineffective.”

– Saras Sarasvathy [1]

The Ansoff Product-Market Growth Matrix

The Product-Market Growth Matrix is a marketing tool created by Igor Ansoff [2].The matrix allows marketers to consider ways to develop their business via existing and or new products, in existing and or new markets.

This matrix identifies corporate growth strategies and assesses the risk of market opportunities based on whether a company plans to market new or existing products in new or existing markets.

  • Market penetration occurs when a company enters/penetrates a market with current products.
  • Product Development means a firm with a market for its current products embarks on a strategy of developing new products catering to the same market.
  • Market Development: an established product in the marketplace can be tweaked or targeted to a different customer segment.
  • Diversification: companies can branch out into new markets to provide a new line of products that differ from their existing stock. This results in a company entering new markets where it had no presence before.

Diversification is also known as the “Suicide Quadrant” and generally carries the greatest risk of all. It usually requires new skills, new techniques, and new facilities. Since start-ups are new to the market and have a new product, they are always found in the Suicide Quadrant.It is not always a recipe for success, but the businesses that survive often end up doing very well. [3]

 Effectuation

The Five Principles and the Effectual Cycle (2009) – Effectuation.org

The Five Principles and the Effectual Cycle (2009) – Effectuation.org [4]

The effectuation model is a proven method with which entrepreneurs have started successful companies over and over again. The term Effectuation has been founded by Saras Sarasvathy and is the result of scientific research guided by Nobel prise winner Herbert Simon. The visual model has been created in a workshop with 27 expert entrepreneurs with highly successful businesses.

By going through the separate topics discussed in this model, we will describe where we think the added value of a designer lies in a start-up company. We are not trying to prove that a designer could fill certain parts better than others, we merely suggest in what way a designer is different and how that can add to the strategic position of the company.

Dissecting the Effectuation model

In this section we discuss the effectuation model principles and how and why we could use them, to reduce the uncertainties that we as a start-up company have to deal with.

Bird in Hand

“When expert entrepreneurs set out to build a new venture, they start with their means: who I am, what I know, and whom I know. Then, the entrepreneurs imagine possibilities that originate from their means.”


Who we are

As ID students we have learned to articulate our vision on design, and identity as designer. Being aware of our own characteristics and skills gives us clear goals and directions for our start-up.

Vision
In its core for us design is not about products but about people. The development of a project relies on the user insights gathered from stakeholder communication, leading to design opportunities. This underlines our preference for a user driven process. The way people are affected by products and services drives us.

It is the designers task to push the boundary of what users see, feel, hear and thus experience. We perceive our role as a designer to confront users with interesting concepts that fulfil their unknown and known needs, so that products and services are meaningful and valuable for them.

To successfully create meaningful products and services, it is essential that stakeholders also understand these insights. Therefore it is important to be familiar with our stakeholders, their attitude and wishes, and pay a lot of attention to clear and effective communication. It can be valuable to have an iterative co-creation process to involve the stakeholders and users.

With our work we want to focus on societal problems that affect many people. One specific problem we are aware of is the increasing need of health care in our society. Reasons are the existing shortage of professional caretakers, and the aging society that will put our healthcare system under increasing pressure.

Ambition
Our goal after graduating is to start our own design company. This way we will be able to express our vision and approach on design into our products and services. The idea of being independent designers is appealing to us because we like to be in control of all aspects of the process from idea to product. We believe that attempting to start our own company will also be a great lesson and learning experience in defining strategic business policies. The opportunity to develop this skill is higher in a start-up: when joining an existing company these policies are determined so the opportunity for a junior employee with our profile to influence the strategic decision is likely to be limited.

What do we know

The competency centered education model of the TU/e allows for multidisciplinary development which results in knowledge of a wide variety of subjects. The self-directed learning model has taught us to be pro active and to direct our own learning progress.

Skills
As designers we are able to think outside the box and find creative solutions to problems of all sizes and origins. Understanding all perspectives of a situation is essential: by questioning why, how and what problems arise, we get unique insights and imagine a better future. Our ability to not only imagine but also visualize this future also gives us the ability to make strategic decisions that are thought through until application level. As designers we are able to guide and work in all phases of the creation process. Our knowledge of a wide range of methodologies allows us to interact with different stakeholders in appropriate ways, to get valuable information that can later define the product or service.

Approach
We try to focus our work on meaningful subjects that are relevant to individuals as well as our society. Often our projects are medically orientated and concern societal problems, that we envision to improve with our products.

Start – At the start of a project we pause to question ourselves what the exact problem is and why it occurs. We ask not only what the project entails, but also why it is relevant and to who.

Refining – In some situations the origin of a problem or question might seem clear but needs better understanding or a new perspective. It can be necessary to refine the design brief once the problem is fully understood. This then leads to new project descriptions or problem statements.

Inspiring – We believe that inspiration does not have to come from within. In fact, we think that communicating with others with various expertise leads to more valuable inspiration. By analyzing earlier research, gathering information from various sources, observing examples of similar situations, and reading about concluded studies, we create a big mixed pool of information that we then take to the next step of ideation.

Interpreting – The way we interpret information is defined by our identity and vision as designer. The raw information is automatically filtered through our personal opinion and therefore this step is partially done automatically. Interpretation is the automatic result of gathered information through the eyes of the individual.

Prototyping – The inspiration and interpretation of data lead to initial ideas. These ideas exist in our minds and now need a first representation. This is done visually with basic sketches or descriptions. Before this stage it was nothing more than a thought, and is not defined in shape or functionality yet. Now our ideas are further developed in the physical world.

Developing – In development the functional specialties of a designer are important. The proposal is shaped by user-centered processes. In an iterative design process, it is developed and evaluated. We highly value an interwoven research (testing, literature, expert etc) &design approach, meaning that the two occur simultaneously rather than one after the other. Ideas and concepts are evaluated in context by testing prototypes of different fidelity.

Whom we know

Our capability to communicate on a professional level will be of great value when networking and finding interesting contacts for our company. Our experience with presenting adds to our capability to engender trust from potential stakeholders.Our network at this moment consists of academics, both fellow students and professors.

Goals
Designers are able to envision the future because of their knowledge of a wide variety of innovations and societal changes. On top of that, we are able to create visual representations of our future expectations and goals.

Affordable Loss:

“Expert entrepreneurs limit risk by understanding what they can afford to lose at each step, instead of seeking large all-or- nothing opportunities. They choose goals and actions where there is upside even if the downside ends up happening.”

As designer we can limit the risk per step by making small/ short iterations where the prototype/ growth is not an all or nothing opportunity, but an exploration of one important aspect of the idea. Because of our understanding of the process, we can understand the risk per iteration, and the risks in the total picture.

Lemonade:

“Expert entrepreneurs invite the surprise factor. Instead of making “what-if” scenarios to deal with worst-case scenarios, experts interpret “bad” news and surprises as potential clues to create new markets.”

Designers are creative thinkers and problem solvers, therefore we can easily deal with unexpected issues and use them to gain new insights. We have learned to use an iterative process which is a good way to deal with these unexpected issues or challenges, we find quick solutions and are able to apply them quickly and effectively.

Interactions& Commitments:

“Expert entrepreneurs build partnerships with self-selecting stakeholders. By obtaining pre-commitments from these key partners early on in the venture, experts reduce uncertainty and co-create the new market with its interested participants.”

We are able to visualize scenarios to communicate ideas and future predictions. This storytelling skill enables us to explain complicated models or theories to an inexperienced audience. These visual skills will help in communication with stakeholders. Co-creation is a highly valued method that we learn as designers. Rather than trying to compete with the existing market, we try to cooperate with interesting stakeholders and create new products and services together. Because of our ability to communicate with different expertises, this cooperation can lead to highly innovative results. In this co-creation, we can also facilitate visual language and tangible objects to stimulate the outcome.

Pilot-in-the-plane:

“By focusing on activities within their control, expert entrepreneurs know their actions will result in the desired outcomes. An effectual worldview is rooted in the belief that the future is neither found nor predicted, but rather made.”

As designers we have basic knowledge of all the phases of the creation process. During our studies, internships and other projects we have worked on all phases first hand and have also managed time and progress. With proven methods we try to maintain a high amount of control. We believe to be able to steer the project into the right direction in the event of unexpected changes and guide it towards a successful result.

Overall
The five principles of effectuation have a lot of resemblance with the design process that we have been taught and apply to our work. This is a result of the nature of our education in which independent and multidisciplinary development, creative and iterative processes, and professional conduct are central. Therefore the effectuation model provides a good framework for the design entrepreneur who wants to strategically position himself in a new market.

Case Study: Dyson

 In this chapter we take a look at Dyson and how it was founded. We use this case study to highlight key points that are important for entrepreneurs and point out were we believe designers can excel as entrepreneurs. The Dyson story is one of persistence and dedication.

The Dyson DC01 – first vacuum cleaner launched under the Dyson brand

The Dyson company released its first product in 1993; the Dyson Dual Cyclone DC01 vacuum cleaner.   James Dyson who studied at the Royal College of Art is nowadays seen as one of the most iconic industrial designer of the UK.  But before successfully launching his own company in 1993, he already had a long road behind him.

The BallBarrow

The BallBarrow

Dyson believes that physics are applicable in every situation and that the scientific approach is key in design. [5]  Earlier work form Dyson includes the Ballbarrow. Which is a redesign of the wheelbarrow with a rotational moulded ball as the wheel. For the principles of the design he was inspired by his work he done for working an engineering company called Rotork. At this company he learned about balloon tires for amphibious vehicles which he applied to the design of the Ballbarrow. It is a clear transfer of an idea and technology from one application to another. [6]

For his work Dyson very much seems to rely on the person he is. He is aware of his multitude of skills, and applies them extensively. His knowledge, and daily frustrations determine his goals very much similar to the bird in hand principle of the effectuation model.

Similar the cyclone principle he used in his vacuum cleaner design was inspired by the usage of this technique in a different field. After production problems at the Ballbarrow factory due to resin powder clogging up the filtration system, he was advised to install an industrial cyclone.

The setback in production for the Ballbarrow production he used as leverage surprise. It altered the means of James Dyson and with the potential of the cyclone principle he set out to develop a vacuum cleaner. Over a period of five years he created 5127 prototypes living off the salary of his wife who was an art teacher. This allowed Dyson to developed his goals based on the affordable loss principle; even if his product would fail, losses were minimal and they could still live off his wife her salary.

However for the distribution of the vacuum cleaner, Dyson had more trouble to find more stakeholder commitments. For nearly three years Dyson went from manufacturer to manufacturer but there was zero interest. [7] It was good for cleaning but bad for business.

Eventually he licensed the cyclone technique to Apex a Japanese manufacturer. However, Dyson realized that if he wanted to launch the machine in the UK he would have to do it himself. The commitment of the Apex allowed Dyson to spread his financial risk. Using the earnings from the licensing he launched the Dyson DC01 vacuum cleaner in the UK, and within 18 months it was the number one selling vacuum cleaner.

Over the past twenty years Dyson as a company continues to release successful innovative household applications. The iterative approach, passion and persistence of Dyson are inspirational to designers who want to be entrepreneurs. He demonstrates that you should not be afraid to fail, but rather should learn from your failures. The effectuation framework can help with this.

Conclusion

When attempting to start your own company, it is important to have knowledge of business strategies to be able to position yourself on the market, and be aware the risks that this position entails. Dr. Sarasvathy suggests that entrepreneurs can be successful in what is called the suicide quadrant, where the market and product are new to the company. Her framework of Effectuation describes several principles that can help in building a successful company.

We conclude that designers with their creative process and capabilities can be good entrepreneurs, and can have an essential role in several aspects of a company. In this article we discussed our capabilities in combination with the effectuation framework. We could relate to the effectuation framework since we found it close to our own approach of design. The heuristics of the framework can give guidance to design entrepreneurs.

Furthermore we have looked at Dyson, an example of what we find great entrepreneurship from a designer. We relate to James Dyson’s approach in design, and were able to recognize his strategic decision with help of the effectuation model.

References

[1] Saras Sarasvathy -2001 – What makes entrepreneurs entrepreneurial

[2] Ansoff I. (1957) Strategies for Diversification – Harvard Business Review

[3] Openview Lab – http://labs.openviewpartners.com/how-to-be-successful-in-the-%E2%80%9Csuicide-cell%E2%80%9D/ – Last visited 28-2-2013

[4] Effectuation.org – The Five Principles and the Effectual Cycle (2009)

[5] Dyson J., Uhlig R. (2001). James Dyson’s history of great inventions – editorial note

[6] Roy, Robin (1993). Case studies of creativity in innovative product development. Design Studies

[7] Dyson J. (2011). My Favorite Mistake: James Dyson: James Dyson on his 5,000 missteps while inventing his famous vacuum cleaner. Newsweek June Edition

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