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BUS 8303, Entrepreneurship and Innovative Business Development 1

Course Learning Outcomes for Unit IV Upon completion of this unit, students should be able to:

2. Analyze the role of an entrepreneurial mindset in opportunity recognition. 2.1 Integrate entrepreneurial mindset with design thinking.

3. Appraise the use of design thinking toward innovative ideation.

3.1 Discuss the design thinking process. 3.2 Summarize the value of experimentation in the design thinking process.

5. Differentiate innovative business strategies.

5.1 Identify a target customer’s potential problem.

Course/Unit Learning Outcomes

Learning Activity

2.1 Unit Lesson Chapter 4 Unit IV Scholarly Activity

3.1

Unit Lesson Chapter 4 Student Resource: What Is Design Thinking? Unit IV Scholarly Activity

3.2

Unit Lesson Chapter 4 Chapter 7 Unit IV Scholarly Activity

5.1 Unit Lesson Chapter 6 Unit IV Scholarly Activity

Required Unit Resources Chapter 4: Using Design Thinking Chapter 6: Developing Your Customers Chapter 7: Testing and Experimenting With New Ideas In order to access the following resource, click the link below. Navigate to the Video and Multimedia area in Student Resources for Chapter 4 of the eTextbook to view the items listed below.

• What Is Design Thinking?

UNIT IV STUDY GUIDE

Design Thinking and Innovative Ideation

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Design Thinking This unit continues to expand on understanding the meaning of an entrepreneurial opportunity from generating ideas using tools like design thinking to developing customers to experimentation and testing with new ideas. One popular technique that supports innovation is design thinking. Design thinking, popularized by Tim Brown, Chief Executive Officer (CEO) of IDEO, includes a three-phase process in a nonlinear approach: inspiration, ideation, and implementation (Neck et al., 2021). Design thinking begins the process by analyzing problems from the user’s point of view, using the perspective of empathy. How does the user interact with the product, or, conversely, why does a potential user not use the currently existing product? What is the value or benefit that the user desires? What are the challenges that the end user faces around this challenge? Each of these questions encourages a deep understanding of the user or customer’s perspective about the product. Design thinking is used from both a significant innovation viewpoint as well as in making incremental changes that enhance the customer’s experience. One simple example of how design thinking works is Amazon’s change to easy-open packaging. In analyzing the customer’s experience in opening packages, Amazon identified the need to improve the process to make opening the 1.6 million packages delivered per day easier for their customers (Peterson, 2019; Save the Post Office, 2018). See the graphic below (Neck et al., 2021).

Design Thinking and the Customer When identifying the user, be aware that the user can include a chain of users who interact throughout the user experience, and the actual final user of the product or service might not be the purchaser of the product or service. Imagine the example of a parent purchasing a product for a child or someone purchasing a product or service on behalf of someone else or even an organization. Knowing who your customer is as well as what the customer values is essential for the success of the entrepreneurial venture. Integrate the

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information from both learning how to gain knowledge about customers and how the information in this unit ties into design thinking and experimentation. Design thinking works well in learning more about how, from the customer’s perspective, your product or service benefits the customer. That the benefit must come from the user’s perspective can be difficult for some people to grasp. You might think that the benefit of your product relates to the feature of your product, but successful entrepreneurs understand that the benefit comes from the user’s perspective of the value of the product or service. Although a dog grooming business does not technically meet the criteria of an entrepreneurial venture, this example works well to understand the difference between offering a service from the owner’s perspective, versus the user’s perspective. The owner of the dog grooming business probably defines the benefit of the business based on the direct service of grooming. But the dog owner would describe the service from a wider perspective including a clean dog, of course, but also entertainment for the dog, socialization for the dog, and even a place for the dog to stay while the owner is free to run errands or other activities such as visiting a friend who is allergic to dogs. The 2 or 3 hours the dog is at the groomer is a form of dog daycare. The owner of the dog grooming business might not even realize all the benefits that the customer identifies with the dog grooming service. Knowing these benefits opens the possibility for changing a traditional dog grooming business into something new—an entrepreneurial venture that reshapes the dog grooming business by extending services that align with the benefits the customer identifies. Creating a mind map that explores the problem or problems the customer is experiencing works well in preparing for identifying areas for experimentation as well as in design thinking. Expanding on the customer’s experience, the ideas around the potential solutions, and exploring the identified problem through mind mapping fit well with experimentation.

Experimentation in Design Thinking There are many types of experiments that entrepreneurs have access to. To reiterate, design thinking is a three-phase process: inspiration, ideation, and implementation. Experimentation in the implementation phase develops an entrepreneurial mindset of acting on and being open to new ideas and information. Some approaches to experimentation include trying out new experiences; analyzing products, processes, and ideas; and testing ideas through pilots and prototypes. In using the dog grooming example, the recommendation is to work in the dog care industry to gather new experiences. What is currently offered in this industry? What works well? What needs to be improved? What is the dog grooming industry like in other regions or countries? What locations work well, and what products and services are offered? What does the location look like, and what names are used for the business? As you are trying out new experiences, write down or record the information you are learning. Tracking this information is an important part of building your knowledge about your business idea. Essential information might be missed or forgotten if you are not documenting your findings and experiences. What can you learn about your business idea by analyzing or deconstructing the established product or system? Let’s look at Airbnb. Airbnb deconstructed the hotel industry by taking apart the product and process. In taking apart the product and recognizing that the value proposition of a place to stay, Brian Chesky, Nathan Blecharczyk, and Joe Gebbia, the founders of Airbnb, recognized that every homeowner could potentially offer rental space within their home (Airbnb, n.d.). These resources could be matched with people who need a place to stay; the missing piece was offering a platform to match the homeowners’ resources. The supply is the guest, and the demand resulted in the creation of Airbnb.

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The example in the eTextbook discusses Rent the Runway, which is a company that uses a similar approach. That company recognized unused resources, designer dresses—which is a specific target market. They recognized there were people who were interested in the dresses, and there was a need to create a business that matched the supply, dresses, and the demand. Women who were price-conscious in deciding on committing to buying a dress but interested in renting a dress were the target market. Not only is there a similarity in identifying unused resources in creating an entrepreneurial venture, but analyzing the current industry is key in discovering new entrepreneurial ventures. This action also reinforces the previous information on entrepreneurial mindsets—the ability to see commonly accepted methods and processes from a new perspective. What other commonly accepted systems and processes do we encounter regularly but never see from the perspective of how to deconstruct the industry into something new that provides an improved value between the supply and demand? One type of testing is the use of prototypes and pilot studies. Prototypes are the creation of the actual product. Pilot studies include the processes of testing the validity of the product for potential success. In both the creation of the prototype and pilot testing, the goal is to gain feedback by asking what works well and what needs improvement. In both creating prototypes and pilot studies, the information gathered in the new experiences area is vital to refer to for tracking improvements and value creation for the end user. In companies like Airbnb, the pilot study was about the processes for connecting the supplier and the buyer with adjustments made based on the feedback about the process. Not only are processes tested in pilot studies, but company names are also tested.

Interactive Activity

In order to check your understanding of concepts from this unit, complete the Unit IV Knowledge Check activity. Unit IV Knowledge Check PDF version of the Unit IV Knowledge Check Note: Be sure to maximize your internet browser so that you can view each individual lesson on a full screen, ensuring that all content is made visible. Remember, this is a nongraded activity.

Conclusion

In the experimentation process, be alert to the possibility of moving your idea into a new and more innovative idea based on the results of your research. Asking questions, collecting results, and making changes and adjustments are key actions for success. This is also true for identifying your target market. You might find

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that what you thought would be the ideal target market is not the correct target market. For example, a business might be created to sell to the end users of the product, when the better choice is to target businesses in a business-to-business (B2B) model, a nonprofit organization, or perhaps a target market in a different country. Once again, we see the connection to an entrepreneurial mindset, the openness to adjust your venture based on new information, and your research.

References Airbnb. (n.d.) About us. https://news.airbnb.com/about-us/ Neck, H. M., Neck, C. P., & Murray, E. L. (2021). Entrepreneurship: The practice and mindset. SAGE. Peterson, H. (2019, December 19). Amazon’s delivery business reveals staggering growth as it’s on track to

deliver 3.5 billion packages globally this year. Business Insider. https://www.businessinsider.com/amazon-package-delivery-business-growth-2019-12

Save the Post Office. (2018, July 29). An Amazon puzzle: How many parcels does it ship, how much it cost,

and who delivers what share? https://www.savethepostoffice.com/an-amazon-puzzle-how-many-parcels- does-it-ship-how-much-does-it-cost-and-who-delivers-what-share/

Suggested Unit Resources In order to access the following resources, click the links below. The articles below showcase examples of opportunities for innovation with design thinking. Berglund, H., Bousfiha, M., & Mansoori, Y. (2020). Opportunities as artifacts and entrepreneurship as design.

Academy of Management Review, 45(4), 825–846. https://doi- org.libraryresources.columbiasouthern.edu/10.5465/amr.2018.0285

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Garbuio, M., Dong, A., Lin, N., Tschang, T., & Lovallo, D. (2018). Demystifying the genius of entrepeneurship: How design cognition can help create the next generation of entrepeneurs. Academy of Management Learning & Education, 17(1), 41–61. https://doi- org.libraryresources.columbiasouthern.edu/10.5465/amle.2016.0040

The article below provides insight about differentiating innovative business strategies. Tracey, P., Dalpiaz, E., & Phillips, N. (2018). Fish out of water: Translation, legitimation, and new venture

Creation. Academy of Management Journal, 61(5), 1627–1666. https://doi- org.libraryresources.columbiasouthern.edu/10.5465/amj.2015.0264=site

Learning Activities (Nongraded) Nongraded Learning Activities are provided to aid students in their course of study. You do not have to submit them. If you have questions, contact your instructor for further guidance and information. In order to access the following resources, click the links below. Utilize the following Chapter 4 Flashcards, Chapter 6 Flashcards, and Chapter 7 Flashcards to review terminology from the eTextbook.