Consumers have a problem.

You know that you can solve it.

You and your startup team are confident that your product or service will be THE answer, and you will have customers beating a path to your door.

Sounds good in theory, but the marketplace is crowded with technologies, physical products, and expert services that all offer ways to simplify consumers' lives. The iOS App Store, for example, boasts 2.2 million apps available for download. So, whether you’re building software or offering consulting services, there is significant competition.

In such a crowded marketplace, what will make your product or service stand out? Focus on serving the "Experience Economy."

What is the Experience Economy?

The term "Experience Economy" was first used in a 1998 article by B. Joseph Pine II and James H. Gilmore, in which they noted the experience economy as the next economy following the agrarian, the industrial, and most recently, the service economy. It is defined as "an economy in which many goods or services are sold by emphasizing their effect on people's lives." Experiences are their own category, just like "goods" and "services."

According to an Eventbrite study, Millennials, America's largest generation by population, are entering their earning prime. With this generation now in the workforce, they currently command an estimated $1.3 trillion in annual consumer spending. The study shared that 3 in 4 millennials (78%) would choose to spend money on a desirable experience or event over buying something desirable, and 55% of millennials say they're spending more on events than ever before.

What does this mean for your startup or small business? Millennials and their younger cohorts, Generation Z, have higher "experience expectations" for all their buying interactions than previous generations. By creating an exceptional experience while solving their challenges, you will dramatically improve the chance of your success.

Providing a Successful Customer Experience

Developing products and services that offer desirable experiences begins with the right design. According to Alastair Simpson, Head of Design at Tech giant Atlassian, shared that excellent design has been the key reason that the firm has been able to scale 14 products that are used by 89,000 organizations every day. Simpson noted that "...simplicity and consistency for key interactions is important because you don't want your customer to have to re-learn new things."

Great and (Not So Great) Design Examples

Author, writer, and usability expert Jared Spool, shared his thoughts on what constituted good design. "Good design, when it's done well, becomes invisible. It's only when it's done poorly that we notice it."

Great - UberEATS

In an article he wrote for Medium, Paul Clayton Smith shared how the UberEATS team tackled the core human experience of hunger by utilizing "empathy, innovation, and an appetite for complex logistical challenges." The developers immersed themselves in all aspects of the food delivery process across the globe. The result was an application that offered customers a familiar interface (Uber) and a simple order tracking feature. He added, "After learning that customers wanted more info about their delivery, we designed the second iteration to provide a richer, more detailed experience."

Not So Great - Windows 8

The Windows 8 journey is a perfect example of how poor design can occur when a team loses sight of the consumers' needs and goals. Microsoft 8 was created with a dual overlaid operating system interface. It had one environment for keyboard/mouse AND one for touch screen operation. Each version used different browsers, control panels, and email programs. The two systems created confusion for customers who had to learn both interfaces and regularly switch between them. Not surprisingly, users hated Windows 8. Its low adoption forced Microsoft to scrap it and accelerate the release of Windows 10.

This example also emphasizes the importance of utilizing design thinking, a process implemented by industry leaders such as Apple, Google, Samsung, and GE, that will provide your startup a framework for creating a customer-focused design for your product or service.

What Is Design Thinking?

Design thinking was introduced in 2008 by Tim Brown, CEO and president of design company IDEO. The Interaction Design Foundation shares that design thinking is a process that focuses on consumers’ challenges and assumptions; redefines problems in an attempt to identify alternative strategies and solutions that might not be instantly apparent with our initial level of understanding. At the same time, design thinking provides a solution-based approach to solving problems. It is a way of thinking and working, as well as a collection of hands-on methods.

Design thinking is a process that focuses on consumers’ challenges and assumptions; redefines problems in an attempt to identify alternative strategies and solutions that might not be instantly apparent with our initial level of understanding.

While the process places the consumer at the center of all design decision making, all ideas are also reviewed for feasibility (can it be done?) and profitability (will it make money?). The ultimate goal is to fill a need, provide great experiences, and drive innovation.

The Hasso Plattner Institute of Design at Stanford describes design thinking as a human-centric approach to evolving existing products and generating new ideas. It is a five-stage, iterative process. Outlined below are the five stages. It should be noted; however, the stages are not always sequential and can occur concurrently.

• Empathize
• Define
• Ideate
• Prototype
• Test

Advantages Of Design Thinking

HackerNoon explains that design thinking is all about breaking conventions. When you follow the steps mentioned, you brainstorm and stumble upon ideas, perspectives, and angles to resolving issues you never knew existed. While the entire market gets busy studying competitors and their approaches, design thinking allows you to carve a path of your own into winning your target audience.

Putting People First - Importance of User Stories

A key aspect of design thinking is to put people first. Creating user stories will help your startup team focus on what your customers need and the context in which they expect their problems to be solved. A user story is an informal, non-technical description of a product or service’s features. Its purpose is to articulate how your solution will provide value to the customer.

A user story template is as follows:

• As a (user persona)
• I want to (do a task)
• So that I can (achieve an outcome)

A GSA Tech guide outlines a user story for an HR Manager who will use a virtual job board.

• As an HR Manager
• I want to be able to Log in to the virtual job openings board system
• So that I can view job status and manage company personnel needs.

User stories can be captured on index cards, sticky notes, or with project management software, and depending on the project, they can be written by different stakeholders, including customers, users, or managers.

How to Create User Stories

While user stories are typically just a few sentences long, essential factors should be considered when creating them, including:

• User personas - Define the unique needs of each persona (there may be many) for which you are creating the stories.
• Feedback - Capture the needs and goals in the persona’s own words.
• Tasks - Outline the specific steps that need to be completed and assign responsibility to your team.
• Ordered Steps - For more complex processes, write a story for each step (see time below).
• Time - Stories should be able to be completed in manageable time blocks. Those that might take weeks or even months need to be broken up into smaller stories.

Design thinking provides a framework to take your startup or small business from product or service idea to release. The insights gained through this process help your startup team focus on the aspects of your solution that are critical to its success. Utilizing design thinking ensures that you provide the most value to your target market and reduce potential future costly and time-consuming redesigns/upgrades.