Concepturealize\u2122: a new contribution to generate real-needs-focussed, user-centred, lean business models

Graeme Joseph Allen

doi:10.1186/s13731-022-00198-4

Abstract

It is widely accepted that somewhere in the region of 90–95% of startups fail. It is often suggested that the majority of unsuccessful startups either failed to identify a viable idea, or they failed to execute the idea effectively enough to get to market before running out of cash. Two approaches stand out as being particularly well-suited to addressing these problems: Design Thinking and Lean Startup, respectively. This paper presents the Concepturealize™ methodology that cross-applies Design Thinking and Lean Startup as a single iterative process and that enables the entrepreneur to generate real-needs-focussed, user-centred, lean business models. Existing literature reveals a need for further exploration of cross-application of Design Thinking and Lean Startup (and other related methodologies) in the areas of business model development and innovation. This work answers the research question by review of prior attempts to combine Design Thinking and Lean Startup and presenting the Concepturealize™ model that cross-applies Design Thinking and Lean Startup in a single iterative methodology and that enables the practitioner to generate real-needs-focussed, user-centred, lean business models. By following this new process model correctly, a practitioner will be guided to uncover a viable way to create value, develop a deep understanding of the value proposition, the target customers and how to reach and serve them, together with the expected revenue and costs, all needed to properly formulate the business model. Finally, the practitioner may use the Concepturealize™ model to retest the problem–solution fit and understand how the customers perception of value has altered, each time a new product or new features are launched, looking to continually add value at each cycle. Whilst prior research has explored how organisations may make use of both DT and LS, it has failed to demonstrate how they may be used in parallel, throughout the entire business model development process, instead it demonstrates examples of insight into where to transition from one model to the other. This work progresses the state of the art by following Design Science guidelines to present how the true, in-parallel, cross-application of DT and LS, in the context of business model development, is possible.

Highlights

Innovation is essential for achieving and maintaining a sustainable competitive advantage, both for startups and established businesses, alike (Crossan & Apaydin, 2010; Foss & Saebi, 2018; Prajogo, 2016).According to CB Insights (2019), a lack of market need is the leading reason for failure of startups, noted in 42% of cases from a post-mortem of 101 failed startups
To present a novel methodology for Business Model Design (BMD) that improves on the independent use of both Design Thinking (DT) and Lean Startup (LS), whilst retaining the lean nature of LS and the user-centredness of DT
Design Thinking vs. Lean Startup DT is an approach that starts with real user-needs and takes a designer’s approach to find solutions that are technically feasible and viable (Lewrick et al, 2018; Liedtka, 2014), whereas the LS model is built upon Customer Development, which at its very foundation, makes the assumption that most startups are technology-driven—they are founded and funded by visionaries that already have a product or service idea and need to find customers and markets (Blank, 2005, 2012)

Summary

Introduction

Innovation is essential for achieving and maintaining a sustainable competitive advantage, both for startups and established businesses, alike (Crossan & Apaydin, 2010; Foss & Saebi, 2018; Prajogo, 2016).According to CB Insights (2019), a lack of market need is the leading reason for failure of startups, noted in 42% of cases from a post-mortem of 101 failed startups. Cantamessa et al, (2018) conducted an analysis of a database of 214 startup failure reports They identified the most common reasons for failure are a missing or incorrect business model (35%), lack of business development (28%), running out of cash (21%), and no product–market fit (18%). The principles of lean are to identify value, map the value stream, create flow, establish pull, and create perfection (Womack & Jones, 2003) It makes use of techniques such as drawing on the knowledge and creativity of individuals, the shrinking of batch sizes, just-in-time inventory control and production and a reduction of cycle times (Womack et al, 1990). “It is the translation of strategic issues, such as strategic positioning and strategic goals into a conceptual model that explicitly states how the business functions.” (Osterwalder et al, 2005, p. 4)

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