Design and Innovation: Ideation, Prototyping, Validation and Lean Startup
Domain 4 tests how business models are invented and, above all, tested. Expect questions on ideation techniques, the difference between a prototype and a pilot, and the lean startup cycle with its metrics and pivot decisions.
Ideation
- Sources: customer insight, observation of workarounds, analogies from other industries, "what if" questions, SCAMPER.
- Blue Ocean tools: strategy canvas (competing factors and offering levels) and the ERRC grid - Eliminate, Reduce, Raise, Create.
Prototyping
- Progression: sketch → concept → business case → landing page → minimum viable product.
- A prototype exists to learn, not to sell. Fidelity should match the question being asked.
Validation
- Method: hypothesis → test → evidence → decision, recorded on test cards and learning cards.
- Three risks: desirability (do they want it?), feasibility (can we build it?), viability (does it make money?).
- Evidence hierarchy: observed behaviour (pre-orders, payments, usage) beats stated opinion.
Lean startup
- Build–Measure–Learn, with validated learning rather than vanity metrics.
- The MVP is the smallest artefact that generates learning about the key hypothesis.
- Pivot or persevere; pivot types: zoom-in, zoom-out, customer segment, platform, business architecture, value capture, engine of growth, channel, technology.
Worked example
An app for booking small-boat moorings in Menorca. Hypothesis: owners will pay to reserve a mooring online a week ahead. Test: a landing page showing real availability at three marinas with a €5 deposit; metric: pre-orders per 1,000 visitors; threshold fixed in advance at 3%. Result: 1.2%. Reasoning: the threshold was set before the data, so this is learning, not rationalisation. Interviews show price is acceptable and the deposit is the blocker, so the next test removes the deposit and measures take-up of a paid cancellation option. That is a value-capture pivot, not a failure.
Traps
- Calling an unfinished product an MVP.
- Validating with friends and family.
- Moving the success threshold after seeing the results.
- Treating any pivot as proof the idea was wrong.