90% of startups fail: here's how we tackle it

On average, a startup founder knocks on Cantiere Creativo's door every two weeks. And what do we tell them?

Maybe not quite that bluntly, but we certainly get there. We want to be realistic and, above all, explain how we have responded to this phenomenon over the years.

First of all, we responded by taking a stand:

In other words, we want to believe in it too and bring our enthusiasm. We don't want to be, and can't be, mere executors.

So over the years we have studied and tested, with hundreds of clients, a methodology called Lean UX, born from the ashes of all the startups that burned out along the way.

I won't go into what Lean UX is and how it works right now (we'll write an article about it soon), but I can mention that it combines three methodologies:

• Lean Startup
• Agile
• Design Thinking

Its primary goal is to reduce your business risk and design a User-Centered product.

It may sound presumptuous, and it certainly wouldn't be right to say we'll lead you to success, because no one can offer guarantees in business. The outcome is decided by the market and many other factors. What we do, however, is apply a method that significantly reduces the risks behind startup failure. Let's see how.

All the work starts with assumptions.

More often than not, we're overconfident about the trends we perceive in the world. This confidence often comes from personal experience and from opinions, sometimes inflated by articles or “trends” that have no truly solid basis, especially within the targets we want to reach with our product.

We often casually say things like “In a few years everything will be mobile and desktop will die” or “People urgently need this” when maybe I'm the only one who strongly felt that need at a given moment in my life, and from then on I let my mind spend days and months imagining how great a certain solution would be, until I convinced myself it would revolutionize an entire industry.

Enthusiasm is fine, essential in fact, but it has to be paired with a method. Here's how we unpack the assumptions:

We put these questions to the team (including the client), either through a brainstorming exercise or by asking each person to answer them privately in an individual focus session and then share their answers one at a time.

Market assumptions:

User assumptions

Note that assumptions aren't meant only as “beliefs”: we treat them that way because we question everything we haven't yet validated through proper research, but assumptions are actually the foundation of all our work and will eventually become our actual product.

Once the assumptions have been discussed and defined, we need to rank them by risk. This is the risk prioritization matrix:

Risk prioritization matrix

In this phase we need to start testing the assumptions, and the best way to do that is to turn them into hypotheses.

Here's the format of a hypothesis:

Hypotheses are very often too big, and therefore too generic, to be tested. Splitting them into sub-hypotheses helps us move toward something practical. In fact, we now name precisely the feature or experience we want to offer the user.

Here's the format of a sub-hypothesis:

The final part of this phase is deciding which performance metrics / results we want to work on.

We suggest creating a list of KPIs and having the team vote on the ones we consider best to work on.

Some examples:

• Average monthly unique visitors
• Referrals from Twitter
• Newsletter sign-ups
• Email open rate
• Payment conversion rate

At the end of this phase we have everything we need to get started: a list of solution hypotheses ranked by priority.

We then take the first one and kick off a second workshop called Design Studio. This time, the text of our hypothesis becomes the theme of the Design Studio.

Simply put, the Design Studio is a session attended by the whole team, with exercises that stimulate creativity and problem solving, aimed at generating solution ideas that will be developed in more detail after the workshop.

A more detailed guide to the Design Studio session is available in this article.

This is just one part of the Lean UX work we do at Cantiere Creativo. In the article linked above you can learn more about the workshop sessions we run together.

Thanks for reading, and feel free to write to us anytime!