The Four Stages of Transforming an Idea Into a Business.

This framework is grounded in the belief that all solutions solve human problems and strive to augment human capabilities by introducing a new way of doing things using technology or otherwise (Check the Figure below). The framework is divided into the following four stages. Below are the four stages of transforming an idea into a business.

The four stages of transforming an idea into a business.
The four stages of transforming an idea into a business.

STAGE 1: UNDERSTAND THE PROBLEM to have a clear idea of the four stages of transforming an idea into a business. Desirability by key stakeholder(s).
STAGE 2: DEVISE A SOLUTION to determine the feasibility of the new approach.
STAGE 3: CRAFT BUSINESS to get an insight into viability from a business perspective. As you go through each stage, you’ll be making lots of assumptions. These assumptions are the key driver for the risk in the pursuit and must be validated as the team continues to work on the idea. Which leads to the fourth stage:
STAGE 4: MANAGE RISK to have honest recognition of the inherent uncertainty, a key ingredient of any new pursuit. It is important to note that, although this framework walks you through the above four stages in sequential order, you can start from any of the first three stages of the framework and go in any direction. For example, you may already have an idea of a technological solution in mind. So you’d go to the second stage (Devise Solution). However, as you will see, it will soon be evident to you that you need to go back to the first stage (understand the problem) to have a clear understanding of the stakeholders who have a problem that your solution is trying to solve.

In other cases, you might have an idea of a new business model to apply in an existing context. As you go through the third stage (craft business), you’ll find the need to go to the first and the second stages to understand the value proposition you are trying to articulate for specific stakeholders through a novel solution. And remember, throughout your journey, you will be making lots and lots of assumptions in all aspects of your venture. This will require you to go to stage 4 (manage risk) frequently.

1. Let Your Curiosity Drive Your Endeavor

Endeavours of significance help answer important questions. Through the course of your pursuit, this framework will help you ask the questions that you should ask yourself and try to find an answer for. These answers will help you move your idea forward. Remember that as you’ll find answers to these questions, your idea is likely to morph and evolve so much that it would not look quite like what you had in mind when you started this journey. Do not be alarmed! This is the right way to go about transforming your idea into a business. Here are some of the questions that you’ll be asking yourself as you go forward.

1.1. Questions for the First Stage

In the first stage, the most important questions are as follows:
1. Who is the target stakeholder (or target user) who will benefit from your idea?
2. What problem does your idea solve?
3. What is the current way the user solves this problem?
4. What is the job the user needs to do?
5. What is the goal the user is looking to achieve?
6. Is there a vision that the user is wishing to realize?
7. What is the current end-to-end experience or journey that the user has to go through to complete the job your idea will help with?
8. What are the systems, tools and people that the user relies on to do the job today?
9. What is the emotional state of your target user during his/her current experience?
10. What are the main pain points a user encounters today?
11. Why is the job important for the user to do?
12. What are the user’s contextual elements that need to be taken into consideration?
13. What does the user see in his/her context where your idea will be used?
14. What are the target user’s thinking and feelings in the current situation?
15. Who are the other stakeholders connected with the user?
16. How will the connected stakeholders benefit from your solution?
17. How will the connected stakeholders be impacted by your solution?
18. How will the connected stakeholders impact the usage of your solution?
19. Who are the other stakeholders influenced by or actively influencing the target user?
20. Could the influenced stakeholders play a role in aiding/hindering adoption of your solution?
21. Are there other stakeholders who could beneft from your idea?

1.2 Questions for the Second Stage

In the second stage, the most important questions are as follows:
1. What are the other ways this problem could be solved?
2. How feasible is it to build the solution to address the user’s needs?
3. What would be the new end-to-end experience for the user if your idea is implemented?
4. How can you prototype without investing too much time and money?
5. How can you test your idea with the user today?
6. What system, tool and people will the user need to rely upon in the new experience?
7. Does the solution help the user hit the target (complete the job, achieve the goal or realize the vision) in a better, cheaper, faster or easier way?
8. Why would the user change the current way of doing the job and adopt
the new experience?
9. Are the benefits of the new approach significant enough to entice the user to adopt the new approach?
10. How could you influence the user in adopting the new experience?
11. Are there any personal motivations or behaviours that would help the user see the value in the new approach?
12. Are there any social elements that would help the user adopt the new approach?
13. Are there any structural elements that would help the user adopt the new approach?
14. Are there any implications or reliance on other stakeholders in the new experience?
15. Are there any implications or reliance on existing/other processes in the organization?
16. Are there any implications or reliance on other data sources or systems?

1.3 Questions for the Third Stage

Key questions in the third stage include:
1. What are the short- and long-term industry trends which would help or hinder the adoption of your idea?
2. What are the short- and long-term technology trends which would help or hinder the adoption of your idea?
3. What are the short- and long-term business model trends which would help or hinder the adoption of your idea?
4. What are the short- and long-term macroeconomic trends which would help or hinder the adoption of your idea?
5. What are the short- and long-term demographic trends which would help or hinder the adoption of your idea?
6. Who are the current and future competitors for your business?
Competitors include other players as well as the current way of doing the job.
7. How will the user (and market) know about your business?
8. How will you deliver value to your customers?
9. What kind of relationship will you need to have with your users?
10. What resources (skills and assets) do you need to build your solution?
11. What processes (activities and capabilities) do you need to do to create
the value for your user?
12. Which technologies would you need to use to create your solution?
13. Which partners would you need to rely upon in any aspect of value
creation and delivery for your business?
14. How will you capture the value generated from your venture?
15. What will be your pricing strategy?
16. How will you get paid?
17. When will you get paid for the value delivery?
18. How will you fund the venture?

1.4 Questions for the Fourth Stage

The two key questions here are:
1. Throughout each step in all the stages in this framework, what are you assuming to hold true to make your idea work?
2. How could you test and validate your assumptions?

2. Falling Early, and Failing Fast

One of the main concepts underpinning this approach is for you to recognize that having an emotional attachment to your idea might lead to a myopic view of the world. That way of looking at the world is highlighted by the age-old maxim, “To the one with a hammer in hand, every problem looks like a nail.” Although entrepreneurship is inherently about risk-taking, successful entrepreneurs are pragmatic risk managers. Throughout the journey, you and your team must have honest recognition of the uncertainty inherent in your venture. You must evaluate whether your idea is viable from a business perspective and feasible to implement. Instead of continuing to beat a dead horse, this framework will also help you have that honest insight to fail early and fail fast. You only fail when you try your ideas with relevant stakeholders and test your assumptions.

So regardless of which stage you are focusing on, you must be testing your assumptions with key stakeholders. You’ll learn about how to prototype and test your ideas in the second stage of this framework. However, you may use the same tools and mindset to prototype and test not just your solution ideas but also your understanding of the user problem or any aspect of the business model as well.

3. The Problem Statement

Before you start working on the first stage, write down a problem statement that describes the problem you are trying to solve or the question you are trying to find an answer for.

The problem statement clearly describes two aspects:

What problem are you solving, and for whom?
The problem statement acts a guiding light for you and your team.

“Template 1 The Challenge or Problem Statement” below shows you how to write a problem statement.

3.1. Template

Describe your problem statement on the following statement:

How might we _____________________________________?
How do we ________________ to _____________________?

3.2. Examples

Here are some examples of problem-solving statements:

The challenge or problem statement examples.

3.3. Guidance

3.3.1 Session Lead

Write “How might we” on a flip chart or whiteboard and ask participants to
complete the phrase to convey the problem definition.
Convey that the problem statement should:
◾ Not be too broad as to “boil the ocean,” or, for example, “How might we solve world hunger?”
◾ Not be too narrow as to “direct to a potential solution,” or, for example, “How might we deliver hot lunches to homeless people via motorcycle in front of the city centre by collecting extra food from restaurants?”
◾ Have a right level somewhere in the middle. For example, “How might we fulfil daily nutritional needs for hungry people in the downtown area?”
◾ Highlight the problem and the key stakeholder who has the problem.
◾ Not hint toward any potential solution, for example, “How might we build a mobile app to link nonprofit organizations to donors?”

3.3.2 Three-minute Self-brainstorming

All participants think of a different version of the problem statement without talking with each other and each writes one problem statement per sticky note.

3.3.3 Team Brainstorm

Session lead asks each participant to come to the flip chart/whiteboard, place the statements and explain their statement to the team.

Once all the statements are placed on the wall, the team should discuss and agree on one problem statement. This statement should build on the various versions and may also combine several statements into one. Expect several iterations before a consensus is reached.

3.3.4 Document Assumptions

After agreeing on the problem statement, the session lead should ask the team to write down all the assumptions that you are making and record those assumptions in the assumptions template.

4. Overview of the Transform 3+1 Framework

Before we delve into the details of each of the stages, let’s walk through the framework, which I call “Transform3+1,” on a high level (check the figure below)

Transform 3+1 Framework to transform ideas into business with designthinking.
Transform 3+1 Framework to transform ideas into business with design

In stage 1, you’ll develop a deep understanding of the stakeholders relevant to your idea and do user research to develop personas and capture their current journey. This will allow you to develop an insightful point of view
for the key stakeholder or stakeholders who have a problem that your idea intends to solve.

Stage 2 will walk you through the ideation techniques, building future experience vision, prototypes and testing of your prototypes with key stakeholders. You’ll be able to recognize the importance of not being emotionally tied to the first idea you had for a solution and of listening to the
customer and testing your ideas without investing too much of your time
and resources in finalizing the solution offering. This will also help you understand the use cases for which the solution will be beneficial for the stakeholders as well as recognize dependencies of the future experience on
existing processes, in case the solution is geared toward enterprises.

In stage 3, you’ll convert your use cases into a value proposition and have a better understanding of the complexities involved in converting an idea into a business model in a complex world full of competitors and other trends that have an impact on how you go to market with your solution. These complexities include financial implications, resources, activities and partnerships needed and channel to reach customers.

Finally, throughout the above three stages, you and your team must be documenting all the assumptions you are making, which will help you have an honest insight into the uncertainty inherent in your venture. In this stage,
you’ll be able to manage risk as you pursue your endeavour. It is important to highlight at this stage, as indicated in the circular Venn diagrammatic depiction of the framework, that as you work through this framework, you will be going back and forth between the various steps of the framework. When you are focusing on one stage, you may follow the steps therein sequentially. However, you should feel open to jumping to a different stage and step to brainstorm and come back to the step you were working on afterwards. The sequence of the framework is provided to guide your thinking primarily and should not be considered as a step-by-step process that has to be followed strictly.