And why they shouldn’t.
This article explores why the role of research shift as start-ups growth and mature and what they might be missing out on in the process. I argue why having research at the forefront of product development is always key when creating customer-centric products.
At the initial stages of any start-up, a couple of people come together because they believe they can solve a customer problem in an innovative way. This founding team often consists of two founders: one focussed developing the product and one focussed on selling the product.
As a team, the founders are iterating their way towards success by developing and testing hypotheses with their target customers. These customer insights are at the core of everything they do — most importantly product development. Their customers help founders make sure that the problem they’re looking to solve is real and that their to-be-developed solutions actually solves it.
Naturally, this customer-centric process isn’t easy. Persisting with it — will at the very least — help the founders make sure that they tried everything. Even if it things don’t work out, but this is not our focus here.
What is interesting, however, is that Research is are at the core of the product development strategy as start-up founders are trying to achieve product-market fit so they can secure the required investment.
Now that the founders know exactly what they should be building, they employ Designers and Engineer to help them create the product to the previously identified specifications. In the ideal case, their company continues to grow and they add more capabilities — analytics and data-driven — to remain focussed on insight driven decision making. Aside from these analytics functions, they’ll also continue to build out their marketing and brand teams.
All is well.
Well mostly. The recently added talent typically starts to think about how the product can be made better and better. And this means continuing to experiment to find better ways of doing things.
Whilst the team’s initial hypotheses are more straight forward and more frequently result in positive results, later hypotheses need to be more outlandish and consequently hold up less frequently.
At this point, someone needs to re-start reaching out to customer — something that hasn’t happened in a while as things were going great — to get a better understanding of why the more recent experiments didn’t work. Reaching out to customers and getting their feedback and perspective is again important. And it’s most important for Design: The insights are typically needed and used by the designers to make the current product execution better and better. And as a result, it’s often a designer that reached out.
Evidently, customer insights are now used to find the best execution of the product. As such, it’s not surprising that Research teams are often slotted within the Design function as designers first experienced the need to do more customer-facing research and the organization eventually hires the specialists.
However, as companies mature within these given guide rails, having Research be a part of Design can result in missing out of great future opportunities, that could enable the company to reach new heights. In a previous article, I go into more detail on how to find these new solutions as part of conceptual optimization.
So why is important to not miss out of such opportunity as a mature company?
Let’s start by talking about what makes a mature company mature. The company has identified a target market that it’s serving well. The financial pressure that it used to feel is much less. And while it’s now less likely to lose the current solution to an incumbent or start-up, doing nothing and staying stagnant could just result in that.
As a result, the company is looking to find the next thing: a new product feature, a new product or new customers to increase its market penetration and to avoid decline. At the core, this requires research to identify that new thing!
At this stage, research work is exploratory and again more on the product development side — similar to what it was when the company was first founded. Research should now no longer be part of Design but report into the person that owns the P&L to help the company reach its full potential and achieve its objectives.
As the company has grown, Research has gone full cycle: research was at the core of product development in the founding phase, resurfaced within the Design team during the growth phase to find better executions of the current product and was again of strategic importance to help the company expand its market penetration as a mature company.
As a result, I often argue that
- Start-ups should focus on building a stand alone Research team to recognize its key function in the product development, and that
- Growing companies should think about separating the previously combined Design and Research function to meet their new needs.
Similarly, it’d be very interesting to have a research-driven Design function in start-up and growing company. I’d expect that a research led design, copy and research team would build great products, build customer centric product as part of the team’s fabric and find interesting solutions to help the organization achieve its objectives.