Business design is a new way of thinking about companies as interconnected systems worthy of innovation, creativity and the application of design to the systems themselves. Business design applies the mindsets of a designer to the task of creating the overall strategy and business model.
Business design is a useful way of looking creatively at a company in the context of its customers, suppliers and competitors. Every company needs to combine the disciplines of technology, design and business together to deliver value for a customer. But too often, only the crafts of technology and design are seen as real sources of new innovation (with the business function itself just doing the marketing or arranging the finances). In reality, the business-side of innovation can be incredibly important.
Equity crowdfunding is a new way of raising capital for startups. Kickstarter has proven a successful model for crowdfunding an idea (by pre-selling the product). Equity crowdfunding takes this further by allowing the crowd to buy shares in the company itself. The volume of alternative finance for startups, entrepreneurship and innovation is growing rapidly.
Crowdfunding is a delicate balance of describing the product, the team, the business and the investment opportunity. Each of these need to be communicated in a clear, compelling and persuasive way. Often the teams with the best technical skill are not the best communicators.
If you were the CEO of a large company, who would you turn to for help to recapture your lost mojo? How would you create, test and build new products? Big companies have been steadily getting worse at innovation, whereas startups have begun to eat the world. Small companies can move fast, take risks and attract talent.
The brightest minds of the next generation are spending their weekends building software in hackathons, quitting their jobs to build interesting startups and being investing in by incubators and accelerators. It’s a brave new world, but large companies are still looking for ways to become more agile.
A new trend is emerging where hot studios (that combine design, business and technology skills) are building startups from scratch for large companies. This new approach is reviving the patronage model from Renaissance Florence.
Lance Wiggs is raising a fund to invest in high-growth tech startups. He’s ex McKinsey and has been working on the Better By Design programme for a few years so he’s a super smart guy. I’m excited about his journey but he’s made some mistakes along the way that we can all learn from. There are lessons in this story for all of us who are involved in capital raising for early stage companies.
It’s useful to compare a few of the new ways that early stage investing is happening around the world. Angel syndicates, follow funds and accelerator funds are some of the most interesting ways of investing in startups today. They all put a layer between you and the startup that you’re investing in. But for lots of investors that’s a good thing.