What is Venture Design?

 By Ada Ryland

Venture design is the main job of the startup founder. Granted, there are other things founders also have to do, like sell things (for example, products, services, or parts of their company) and make decisions (usually without enough information) but venture design is the work of "founding" a company. 

Venture design is about designing the company itself. I say this to distinguish it from product design or service design. The company is the thing that makes money from the product or service. It is the thing that holds the value for investors. What is the big deal? Designing a company sounds fairly straightforward because people do it all of the time, so how hard can it be?  

The answer to that is: Harder than you think. 

Starting a company with known customer segmentation and a known business model is much easier than starting a company that has some critical parts of it that are new. The new thing requires searching for a way that works. When you are doing something that has never been done before you are working with guesses and trying to predict the future. The real reason startups fail because predicting the future is hard, no matter who you are.

Eric Ries, author of The Lean Startup, defines a startup as: "a structure designed to create a new product or service under conditions of extreme uncertainty."

The situation of extreme uncertainty is no joke. One thing that hit me recently is the biggest difference between venture design and other kinds of design is the extreme uncertainty that founders face. Even if you have chosen a fairly stable business model, the customer segmentation is probably new which means the market definition is new, and, along with that, the market that you are attempting to target is probably changing. The trajectory of innovation in most markets these days is crazy steep, making it is very hard to position your company successfully. To add to that, if you don't have an unfair advantage, you can do all of the work to get to growth and then watch an incumbent copy what you did and take it from you. 

My point is that venture design is inherently risky. One might say we already knew that. Fair enough. It is in the name with the word “venture” 

The definition of venture: 

noun - an undertaking involving chance, risk, or danger

verb - to proceed especially in the face of danger

I am highlighting the uncertainty and risk to make the point that if you are a startup founder you are doing something very hard and very risky — and you need all of the help you can get. Bringing together "all of the help you can get" is what venture design is all about. 

 Let me explain: 

Since venture design it is a design effort, we need design thinking, of course. This brings in the iterative learning process that the lean startup movement popularized as “Build, measure, learn." Design thinking takes this much further and gives you more tools.

But we need more. We need systems thinking because the business you are designing is a system and it inside another system of an ecosystem. We also need game thinking and complexity theory. We need behavioral science, emotional intelligence, ontology, and precise language. We need new perspectives for unexpected insights.

We need all of this for insights.  Insights are the key.  I say this because one insight can save you 6 months -- or it might just save your entire project.

Over the past 10 years working with  startup founders in their early stages and applying all of the tools and schools of thought I could find along the way, I have developed a fundamental framework for venture design. This framework acts like a foundation or scaffolding to begin to organize all of the information that shapes a company. This helps founders with the sheer volume of information they are dealing with and provides a context to see it all more clearly. Not only does this help with prioritization and decision-making, it is a game-changer for getting people on the same page. But best of all, it is a framework to generate insights.

The main thing I wanted to do with this article is to let you know that there is a thing called  "venture design" and it can help you be a better founder. 

This is my first article introducing my thoughts about venture design, so I want to leave you with the KeyChange definitions: 

A venture design is...

a proposed model and story for a future possible company built with the intent to take advantage of a theory about a market opportunity

 a design discipline for startup company development

 You can learn more about venture design in our free class “Venture Design 101.”