The April issue of Fast Company has a thought-provoking blurb about an acquisitional approach to R&D. As the Lean Startup method gains traction and permeates into corporate culture, big companies are passing up long-term investment in R&D strategies and acquiring startups instead. Startups, with low overhead, are nimble enough to experiment and iterate through the initial product development process. Large companies are therefore able to bypass this risky development stage and invest in a tried and true product.
This makes me wonder what design research will look like in the new model. In the R&D model, design research uses quantitative and qualitative methods to identify societal trends, behavior patterns and consumer expectations, be they latent or explicit. These insights influence marketing strategy and product development. In the acquisition model, startups take over the iterative and refinement processes, translating research insights into product form. Does design research switch from the corporate setting to the startup setting? What will be new needs on both the corporate and startup sides?
Where can design research lend value in this shifting context?
User Insight & Opportunity Definition
Opportunity definition remains in-house for large companies and user insight can provide valuable direction. Which markets to target and how do they differ? How to evolve product line concepts to respond to new trends, changing expectations, and steeper competition? Design research keeps an ear to the ground, scanning the consumer landscape to find frustrations, successes and behavior patterns that have yet to be designed to. In an acquisition model, this landscape also includes identifying startups with compatible products and mindsets.
User Research & Usability Testing
The lean startup method means that startups prototype and iterate over extensively researching in advance. Startups therefore generally consist of three tracks: product/software development, sales and marketing. Marketing and customer relations come the closest to user research. But this leaves room for understanding those who are not yet customers. Why aren’t they customers? What would persuade them to be? Additionally, design research can lend value in the usability testing process. Though testing needs to be rapid with clear, actionable design implications in the startup context, there is room for a thorough attention to detail. As Charles Eames said, “The details are not the details. They make the design.” Regulatory standards such as the FDA for medical devices and evaluation requirements for governmental programs will increasingly demand that startups are held accountable for their output.
In the acquisition model, a new product development step emerges: integrating startup products into corporate brand identity. This creates possible opportunities for design research. What are the purposes behind products and how can they be coordinated to make up a cohesive product line? And taking an anthropology angle especially, there is significant cultural integration to be facilitated along with product integration. Where is the common ground amongst various perceptions of market opportunity and ideas for how to respond?
An acquisition-based approach to research and development introduces new approaches for design research. Large companies can yield design research to identify opportunity both in user and startup landscapes. Startups can yield design research to understand untapped markets and apply more rigor to the testing process. And in the hybrid companies that emerge when a startup is brought into a large company, design research can aid in product line and culture integration. It remains to be seen how common this tactic will become, but the possibilities are intriguing.