Service Design Thinking for Startups

The Service Startup from brazilian designer Tennyson Pinheiro

As designer and entrepreneur, this book is very welcome. Why?

Because add “design thinking and service design” to all this Business Model Canvas and Lean Startup models and dinamics. This models are  great but when talking design they are not really useful, since they have been created by a “business approach”.

Read the interview from Core77:

Let’s start with some background and how did you arrive at your calling in Service Design?

I’m a designer and serial entrepreneur. I started my first business when I was 13 years old— lady punctured my soccer ball and I decided to get back on her by entering the same market she was in and take it over. She was an ice cream maker, so my friend and I started to do experiments on how to make an ice cream that was twice as delicious and that we could sell at half her pricepoint. My grandma unknowingly played the role of a seed investor, as we were secretly using her account at the grocery store to buy ingredients for our endless prototypes. Eventually we developed a delicious and cheap formula and completely stole the lady’s market. Not long after, the lady played an unfair move and went to my grandma to ask her to force me out of business claiming she needed it more than me. Without our investor, we were obliged to shut down the business.

I learned some lessons with this fast-to-success and even faster-to-closure business and moved on to pursuit other ventures over the next years (for better reasons). As a designer, I started with interaction design, a journey that led me also to learn how to code. Later I moved from the digital world to the design of entire service ecosystems a decade ago, while I was doing projects in Africa, where I lived and worked during two years.

Currently I’m the founder and CEO of the Brazilian office of Livework, the pioneer global service design agency. And in 2013, I foundedEISE, the School for Service Innovation, an entrepreneurship acceleration program through service design. I’m also a columnist here at Core77, where I pen the Design @ Your Service column, and the author of two books on the subject, most recently The Service Startup: Design Gets Lean.

Why did you write this new book on startups?

The book was designed to help small teams running on tight budgets implement service design into their development routines. Anyone in this position will find it a good read. Startups have the advantage of being conceived without the legacy toxins brought by the industrial revolution. As such, I believe they are in the ideal position to take service design to a whole new level. The inspiration to the book came two years ago, after I founded EISE, a program that is a mix of a school and startup accelerator through service design. Since then, I have been mentoring startups in implementing service design into their very foundation.

Why unite service design and lean startup practices?

The real question here should always be how and not why. When we look back at the Industrial Revolution, we can track the origins of the production systems that evolved to become lean manufacturing practices and ultimately served as inspiration for the Lean Startup approach. But what many people don’t know is that design was born at that very same age, out of the same influences, struggles and technological advances brought by the mechanization of humankind. As siblings sharing the same mother, they of course have their differences. One is scientific, extremely rational, while the other is humanistic, empathetic and has a soft heart for emotions. Both attitudes are needed on the making. There should be no science without empathy and innovations are only good if they leave the sketchpad.

What can service design bring to the lean startup practice?

Lean startup is a clever and Agile approach, but it has a scientific and product-oriented core, which was inherited from TPS, the Toyota Production System, a production methodology that gave birth to lean manufacturing. This means it is oriented by the old “make and sell” logic, where the emphasis of the business strategy lies in the pre-transaction tier. What I mean by that is, it is clever to use Lean Startup, but you will need service design’s humanistic and service-oriented perspectives in order to come up with relevant business models in the actual de-objectified and relational economy. One where value is co-generated with users not delivered to them in branded packages anymore.

Can they work together smoothly?

That is a great question, and in fact it is the one that drove me to write the book in the first place. The thing is, I saw many people trying to do simple, tool-level mash-ups between the two approaches and that can be dangerous. Lean Startup is a derivative of production methodologies, and it has a scientific and product-oriented core, one that focuses on transactions and states that value is always generated and delivered to users. Service design, on the other hand, has a humanistic core with a strong emphasis in co-design practices and works on the premise that the value is always co-produced with the user. So this cannot be just about simple mash-up of fields in canvases.

In the second part of the book, I introduce a framework called MVS—Minimum Valuable Service, an adapted version of the service design approach. This is an optimized and balanced model designed to help small teams integrate service design into lean startup and other Agile approaches.

But why only service design?

Well, here is the thing. When I say service design, I mean the design oriented to the construction of service ecosystems. I’m not referring to a profession or an academic discipline. My belief is that design cannot be contained in silos. That was not the idea behind Bauhaus, design’s mother school in 1919. The Bauhaus movement was trying to fight the specialization urge brought by the Industrial Revolution and promote the generation of a new breed of transdiciplinary professionals. The word for design in German is gestaltung. To have design separated in different silos is actually an outdated idea that remounts to the industrial legacy (the division of labor) we still carry today.

Service design is a transdiciplinary design practice, one that is pointed to the actual de-objectified service economy. This is not to say that it does not have specific approaches, tools and practices. In the same way that a product designer performs better if he or she understands materials and structures, service designers should make use of time-honored practices as part of their design routines.

When I say it is a practice, not a field, I mean that a graphic designer, for example, is doing service design whether he or she knows or does not know about it. Everything in this economy fits in a broader interconnected service ecosystem, and the sooner you realize that, the quicker a better designer you will become.

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In the book, you talk about the Business Model Canvas, what do you dislike about it?

It is not that I do not like the BMC, as the BMC is a business plan. And I have nothing against business plans. But you know how business plans work: a lot of extrapolation, followed by a chain of suppositions that sometimes proves to be useful, but, most of the time, it does not.

The real issue I have with it is that people is often using the BMC as a tool for generating new businesses, which it really isn’t. A business plan was never meant to be the tool for designing new businesses. Great services are born out of vision and sensibility towards other people’s challenges. I think the BMC canvas is a useful tool to help the project team document a business proposal and exercise the possible infrastructure around it–but definitely it should not be used as a service creation platform. It is not good or evil; it is just a tool, like many others.

So you are really not into the design-tools fever?

The thing with tools is that designers should have less respect for them and be ready to build their own. I like to compare a tool to a pair of lens. Some of them help you see clearer, some don’t. And the funny thing is, it is always your call to check if they are being useful or not. This way, too much respect for a tool can be misleading.

I don’t like to discuss design tools. It feels like discussing a screwdriver, which is meaningless unless you are actually using it for some purpose. Tools are there to serve the designer, not the other way around.

So designers should always be ready to get rid of some tools and be confident enough to build others in order to move their design propositions forward. I’m not against tools; I’m against the tail wagging the dog, or, turning tools into a doctrine that ends up driving the design practice.

You also talk about the “make and sell” economy versus the service economy. Can you elaborate on that?

In the book, I propose a business shift from transactions to what I call “learn, use and remember” user journeys. The actual economy was created based on an industrial mindset that is geared towards production capacity and sales distribution. In other words, all of the modern organizations were structured to work based on introducing things into the market and finding people to buy those things. This explains the last 100 years of organizational budget spending.

In this “make and sell” orientation, it does not matter how customer-centric you say you are, it eats into profits to invest in relationships. Most organizations make their money from transactions and lose money by carrying on relationships. The less a user connects with the organization after the sales transaction, the better. This model puts a lot of pressure on the planet and it has also been proven not to be the most profitable one.

But is this a bad thing? I mean, a business needs its transactions.

Let’s say you are a company that sells water purifiers operating in “make and sell” mode. If you sell a product that will last three years, your customers will have to come back and buy again from you. However, if you sell a product that will last for 60 years, they will disappear from your charts and you will soon be out of business.

Now, what if you remain the owner of the purifier and sells to people the right to use it? Then you better design a purifier that can last for 60 years, otherwise you will have to endure the loss of giving customers a new one from time to time. In this case, it eats into profits if you do not provide a better and more consistent user experience.

By the way, this is a real example—it’s a model that Whirlpool successfully created to commercialize water purifiers in Brazil. When I propose a shift from transactions, I do not mean to skip “the collection of money.” What I mean is that we need to find new models that allow us to dodge the intentional disconnect that needs to take place after the transaction in a “make and sell” economy.

So encouraging lean startups to build service thinking into their business is just the beginning of a much greater shift?

This is, in my view, one of the most important things we should be doing right now. It is nonsense to grow the new generation of entrepreneurs over a collapsed industrial logic. And this is exactly what we are doing by blindly promoting the sole use of the scientific approach to fuel the pursuit of innovation in early stage businesses. We will not be able rethink our current collapsed systems by using the same product-based and transactional mindset that we used to create them in the first place.

I believe the ability to see the final user as a co-producer, and not only as a scientific test subject, when combined with the understanding that a product is, in fact, an avatar in a broad service ecosystem, can be key to help us shift from a transactional to a truly relational economy.

This starts with the adoption of a service-oriented mindset; it certainly does not help to have service institutions, like banks, calling their offerings products. One could be deceived to think that this is just about naming, but it is really not. As I discuss further in the first part of the book, the “make and sell” mentality is based on a flawed operational model that is not fit for the current de-objectified economy.

This is not to say that the scientific approach is not important; it is—it still plays a role and designers need to understand it. The book is not about one or another, but about how to harmonize both in the making.

We definitely need more than scientific troubleshooting techniques in order to unveil breakthrough sustainable models. Startups need to recognize the user as a co-producer of value and integrate them in the making. This is where service design can really help.

(EXTRACTED FROM CORE77)

FIND TENNY PINHEIRO AT http://tennypinheiro.com/

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