ENTR6081 – Entrepreneurship

Topic 2
Understanding Your Customers
 LEARNING OUTCOMES
• LO1: Construct creative mindset in developing a new business
• LO2: Identify value propositions in business ideas and market
opportunities
 OUTLINE
• Design Thinking
• Empathy Map
• Market Research
Design Thinking
 Design Thinking
• Design Thinking is a design methodology that provides a solution-
based approach to solving problems.
• It’s extremely useful in tackling complex problems that are ill-defined
or unknown, by understanding the human needs involved, by re-
framing the problem in human-centric ways, by creating many ideas
in brainstorming sessions, and by adopting a hands-on approach in
prototyping and testing.
 Design Thinking Application
• Design thinking can help your team or organization:
• Better understand the unmet needs of the people you’re creating for
(customers, clients, students, users, etc...).
• Reduce the risk associated with launching new ideas, products, and services.
• Generate solutions that are revolutionary, not just incremental.
• Learn and iterate faster.
• Design thinking is applicable no matter your role or industry. Whether
you work in business, government, education, or nonprofit, design
thinking can help you develop innovative solutions based on the
needs of your customers.
 Design Thinking Stages

Empathize Define Ideate Prototype Test

 Design Thinking Stages
1. Empathizing: Understanding the human needs involved
2. Defining: Re-framing and defining the problem in human-centric
ways
3. Ideating: Creating many ideas in ideation sessions
4. Prototyping: Adopting a hands-on approach in prototyping
5. Testing: Developing a prototype/solution to the problem
 Empathize
• This involves consulting experts to find out more about the area of
concern through observing, engaging and empathizing with people to
understand their experiences and motivations, as well as immersing
yourself in the physical environment so you can gain a deeper
personal understanding of the issues involved.
• Depending on time constraints, a substantial amount of information is
gathered at this stage to use during the next stage and to develop the
best possible understanding of the users, their needs, and the
problems that underlie the development of that product.
 Define
• During the Define stage, you put together the information you have created
and gathered during the Empathize stage.
• This is where you will analyze your observations and synthesize them in
order to define the core problems that you and your team have identified up
to this point.
• You should seek to define the problem as a problem statement in a human-
centered manner.
• The Define stage will help the designers in your team gather great ideas to
establish features, functions, and any other elements that will allow them to
solve the problems or, at the very least, allow users to resolve issues
themselves with the minimum of difficulty.
 Ideate
• During the third stage of the Design Thinking process, designers are
ready to start generating ideas.
• You and your team members can start to "think outside the box" to
identify new solutions to the problem statement you’ve created, and
you can start to look for alternative ways of viewing the problem.
• There are hundreds of Ideation techniques such as Brainstorm, Brain
write, Worst Possible Idea, and SCAMPER.
• It is important to get as many ideas or problem solutions as possible
at the beginning of the Ideation phase.
 Prototype
• The design team will now produce several inexpensive, scaled down versions of the
product or specific features found within the product, so they can investigate the problem
solutions generated in the previous stage.
• Prototypes may be shared and tested within the team itself, in other departments, or on a
small group of people outside the design team.
• This is an experimental phase, and the aim is to identify the best possible solution for each
of the problems identified during the first three stages.
• The solutions are implemented within the prototypes, and, one by one, they are
investigated and either accepted, improved and re-examined, or rejected based on the
users’ experiences.
• By the end of this stage, the design team will have a better idea of the constraints inherent
to the product and the problems that are present and have a clearer view of how real users
would behave, think, and feel when interacting with the product.
 Test
• Designers or evaluators rigorously test the complete product using
the best solutions identified during the prototyping phase.
• This is the final stage of the 5 stage-model, but in an iterative process,
the results generated during the testing phase are often used to
redefine one or more problems and inform the understanding of the
users, the conditions of use, how people think, behave, and feel, and
to empathize.
• Even during this phase, alterations and refinements are made in
order to rule out problem solutions and derive as deep an
understanding of the product and its users as possible.
Empathy Map
 Empathy Map
• The Empathy Map helps you go beyond a customer’s demographic
characteristics and develop a better understanding of environment,
behavior, concerns, and aspirations.
• Doing so allows you to devise a stronger business model, because a
customer profile guides the design of better Value Propositions, more
convenient ways to reach customers, and more appropriate Customer
Relationships.
• Ultimately it allows you to better understand what a customer is truly
willing to pay for.
Empathy Map Worksheet
 Empathy Map Questions
• Who are we empathizing with?
• What do we want them to do?
• What do they see?
• What are they saying?
• What do they do?
• What do they hear?
• What do they think & feel?
Market Research
 Market Research
• Market research helps you find customers for your business.
• Market research blends consumer behavior and economic trends to
confirm and improve your business idea.
• It’s crucial to understand your consumer base from the outset.
Market research lets you reduce risks even while your business is still
just a gleam in your eye.
• Gather demographic information to better understand opportunities
and limitations for gaining customers. This could include population
data on age, wealth, family, interests, or anything else that’s relevant
for your business.
 Get a Good Sense of Your Market
• Demand: Is there a desire for your product or service?
• Market size: How many people would be interested in your offering?
• Economic indicators: What is the income range and employment
rate?
• Location: Where do your customers live and where can your business
reach?
• Market saturation: How many similar options are already available to
consumers?
• Pricing: What do potential customers pay for these alternatives?
 Use market research to find
customers
• You’ll also want to keep up with the latest small business trends. It’s
important to gain a sense of the specific market share that will impact
your profits.
• You can do market research using existing sources, or you can do the
research yourself and go direct to consumers.
• Existing sources can save you a lot of time and energy, but the
information might not be as specific to your audience as you’d like.
Use it to answer questions that are both general and quantifiable, like
industry trends, demographics, and household income.
 Use market research to find
customers
• Asking consumers yourself can give you a nuanced understanding of
your specific target audience. But direct research can be time
consuming and expensive. Use it to answer questions about your
specific business or customers, like reactions to your logo,
improvements you could make to buying experience, and where
customers might go instead of your business.
 Direct Research
• Here are a few methods you can use to do direct research:
• Questionnaires
• Focus groups
• In-depth interviews
 REFERENCES
• https://www.interaction-design.org/literature/article/5-stages-in-the-
design-thinking-process
• https://www.ideou.com/blogs/inspiration/what-is-design-thinking
• Osterwalder, A., & Pigneur, Y. (2010). Business model generation: a
handbook for visionaries, game changers, and challengers. John Wiley
& Sons.
• https://www.sba.gov/business-guide/plan-your-business/market-
research-competitive-analysis
• https://xplane.com/worksheets/empathy-map-worksheet/