How can Product Design workshops help you to raise capital for your startup?

When I first joined Merixstudio, and that was over a year ago, I didn’t really understand the excitement of everyone onboard about the idea of Product Design Workshops. When I reflect on that moment, I imagine this might be exactly how a beginning entrepreneur might feel like in the face of making a step into the unknown. But now, from the perspective of the person who moderated a number of workshops, I’m able to name a dozen of reasons why running them could be beneficial for a startup. Especially when they need a coherent, persuasive presentation of the project to gain the attention of venture capital funds or the private investors on the crowdfunding platform. Preparing even a short piece like video or a pitch deck requires wide and in-depth knowledge about the product, its business environment, and users. All of these can be provided by Product Design Workshops, and now I will show you how exactly it happens.

Meet the real needs of your users

Why do startups should start from the users?

It’s not a secret that a majority of startups fail - according to some sources, even 70% of them collapse. Maria has already delved into the subject and highlighted the very first reason for that is no market need.

As we can see, almost half of the startups didn’t get to know the target group inside out, their real problems, and desires. And that’s something I can, unfortunately, confirm with my own experience. On countless occasions, I’ve heard a statement: “We don’t have to worry about the users now. Once they learn how good our product is, they will eagerly learn how to use it”. Why is this approach so damaging for startups? Let’s take a closer look at some statistics about the apps. Currently, there are around 2 460 000 apps available on Google Market, 1 960 000 on Apple App Store, 669 000 on Windows Store, and 479 000 on the Amazon App Store. An average user has 60-90 apps installed. Having an almost infinite competition, there is really something to be gained by reflecting on the users and their needs first.

How do Product Design Workshops help to explore target groups?

Identifying so-called “personas” - representatives of the main target groups, is one of the most crucial and beneficial parts of Product Design Workshops. They help to approach an idea from the standpoint of the end-user and deliver answers for a couple of vital business questions, such as:

• Why would this group be likely to use my product?
• What would I offer that no one else does?
• What pains do the users encounter right now?
• What gains would they benefit from if I launched my product?

And also some deepening questions that would reveal the details about users’ behaviors and habits, like:

• What do they do in their free time?
• What other services do they use?
• What values do they cherish?

Equipped in such detailed knowledge you will be more susceptible to notice the facts that what end-users want is to be heard.

Simply thinking about the users is a great approach. However, what really gives great value is performing UX research. It can be done literally on all levels of product design process: from the very first moment of coming up with an idea (through e.g. IDIs with potential users); on the prototype level, through e.g. so-called usability testing (giving users a prototype of the product and conducting a series of tasks and gathering feedback); and finally on a fully developed product (through e.g. gathering quantitative data).

Research on the early stages gives a lot of valuable insights from people regarding their habits, impressions, preferences, etc. and sometimes can change the initial approach of the originator (and, as a result, turn the initial idea upside down). Research on the existing product can also bring a lot of benefits, such as measuring the KPIs as well as diagnosing the main pain points and defining the opportunities.

A common reply to the research offer is “I don’t have money for this”. Interestingly, it turns out that research saves money (and quite a lot of it!). There is a magic 1:100:1000 rule of research: if you spend 1$ on research, you won’t have to spend 10$ on changing the designs or 100$ for modifications in the development stage. The advice is, if you have a limited sum, spend it wisely and develop something that makes the most sense and gives the greatest value to your user.

Get to know your product and business better

Validate your idea and be prepared for all the questions

Although Product Design puts the users' needs at the heart of the designer’s concerns,  we believe that another issue needs to be considered as equally important - business goals. This is why workshops should equip the company not only with deep insides of the target audience, but also the product environment, current competitors, etc. That usually happens within creating a business model canva. It is the first step in capturing the business complexity of the product. The canva is a pretext in a broader discussion about the validity of the idea.

Business model canva covers everything from the unique value proposition offered by the product, through sources of revenue and expenses, target user groups and main activities, etc. This is usually a part of the workshops that evokes the most questions. With UX, PM, and developers on board, there is a vivid discussion about the necessity of some elements and the lack of other ones. The opportunity to consult particular ideas with a wide range of experts is invaluable before a startup will face the investors’ meetings.

The immensity of the questions during that part of the workshops might be perceived as oppressive at times. But the bottom line is:

If you aren’t able to convince a group of relatively friendly people that the idea behind your product is a real game-changer, you certainly won’t be able to convince the investors to support your cause.

This might be a necessary practice to be able to provide swift answers and have an inkling that you have covered everything.

Shape your idea - design the MVP and make a prototype

Having the business model covered now is the time to focus on the functionalities. Defining MVP and creating a prototype based on it are the advantages of Product Design Workshops that probably appeal to the clients the most. The possibility to visualize the idea, give it a specific shape, and more physical dimension enables us to literally show (and not only describe) the investors what your business is about. During the workshops, we attempt to find a perfect balance between the functionalities and budget/time limitations.

This doesn’t mean we criticize ambitious ideas. On the contrary, the vision and charisma are highly appreciated. Our role in the process can be perceived as a ’bad cop’ at times. We are painfully aware that, unfortunately, not everything can be a part of the MVP scope. This is very similar to an everyday decision-making process. The plans we make are an attempt of the best compromise possible taking the time, budget, external limitations, etc. into account.

The same applies to decide on MVP. There is a core idea or functionality that you can’t live without, which doesn’t mean that the additional features are not important. Giving the time/money limitations, it might be wise to simply deprioritize them.

What startups think about Product Design Workshops?

The strong focus on the user perspective was very helpful. Workshops provided us with a better understanding of the complexity of the undertaking and required processes.

DR. Tim Rosengart, Selfmade Energy

Our goal was to design all the necessary features and verify if all the concepts we worked out are possible to fulfill. During the workshops, we found out much more about our project and not only from the tech side. Consulting our ideas with attendees from Merixstudio helped us to discover a few bottlenecks and eliminate them on the design stage, which, of course, saved us a lot of money and time. The exact estimation of the project that we were provided after workshops empowered us to prepare the round of investment and anticipate the cash flow more efficiently.

Dawid Paczka, CEO Emiteo

Get ready to raise capital for your startup!

I hope I managed to convince you that Product Design Workshops provide real business value by giving a great chance to confront the ideas, consult them with experts, and make them more coherent. You will learn more about the users and their needs and also the business site, which will help you to create the timeframe and tasks required to fulfill the project. In short, after the workshops, the idea becomes more touchable, maturates from an abstract concept to a tangible plan with a roadmap, expenses, and priorities. Such a mature approach is a quality that an investor would highly appreciate.

Want to know more about Product Design Workshops deliverables? See our detailed presentation and check how to change your idea into a fully-fledged business concept!