The Design and Technological Innovation: How to Understand the Growth of Startups Companies in Competitive Business Environment

This paper analyzes how the strategy focusing on design-driven innovation can help startups in creating design concepts or business innovators to promote the growth of such companies so sustainable in its market, where competition is fierce and full.

2351-9789 © 2015 Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of AHFE Conference
doi: 10.1016/j.promfg.2015.07.361
Procedia Manufacturing 3 ( 2015 ) 2199 – 2204
Available online at www.sciencedirect.com
ScienceDirect
6th International Conference on Applied Human Factors and Ergonomics (AHFE 2015) and the
Affiliated Conferences, AHFE 2015
The design and technological innovation: how to understand the
growth of startups companies in competitive business environment
Isabela Moroni*, Amilton Arruda, Kátia Araujo
Federal University of Pernambuco, Av. Acadêmico Hélio Ramos, s/no, Recife, 50670-420, Brazil
Abstract
This paper analyzes how the strategy focusing on design-driven innovation can help startups in creating design concepts or
business innovators to promote the growth of such companies so sustainable in its market, where competition is fierce and full .
As much as there is an understanding and recognition of the importance of design as a management tool, Brazilian startups have
difficulties in linking the design driven innovation with the strategies of their small organizations devoted to innovate. Thus,
through a literature review using the recent lines of research that address the design-driven innovation, design management and
innovation, it was possible to develop a strategic management model targeted to the profile of startups based on design driven
innovation to contribute to the building and strengthening of values related to the design and innovation in the organizational
environment of these young companies, in which the correct and effective use of these methods / tools always lead to growth and
greater interaction of the brand / product to the end user
© 2015 The Authors. Published by Elsevier B.V.
Peer-review under responsibility of AHFE Conference.
Keywords: Innovation; Startups; Design-driven innovation; Strategy design
1. Introduction
Many companies in the XXI century are going beyond the traditional calcu lations and analyzes. This is the case
of small and young firms known startups. These organizations have realized that many of these procedures are
identical, and want something different, they can discover extremely profitable niche markets to innovate without
* Corresponding author.
E-mail address: [e-mail]
© 2015 Published by Elsevier B.V. This is an open access article under the CC BY-NC-ND license
(http://creativecommons.org/licenses/by-nc-nd/4.0/).
Peer-review under responsibility of AHFE Conference

2200 Isabela Moroni et al. / Procedia Manufacturing 3 ( 2015 ) 2199 – 2204
the need huge investments. Introduced into their product or service innovations that your users fall in love
immediately.
This thinking has led many of these companies to the world of design, although this area is traditionally known
for the aest hetic appearance of products, however the primary objective it is to promote maximum well-being in
people's li ves. It allows even a number of methods, tools and techniques that can be used in different stages of the
innovation process to increase the amount of new products and services. The design proposes a process in which
companies can look the same context with a new perspective, so that a startup is not only driven by the marketing of
new technologies, but driven by new meanings to promote products and services, since the consumers do not buy
more exclusively by the impulse of the aesthetic quality of products, but their decisions include criteria emotional,
social, cultural and psychological and usability.
The design-driven innovation is a strategy focused on delivering distinct offerings that provide new meanings
through radical proposals which are not limited only to analyze user universe, but get a larger context of how the
environment in which people live is evolving and which could change for the better. Includes in its process called
interpreters of meaning to detect, attract and interact different concepts to products. In addition to supporting the
development of new products with extraordinary meanings for users, it also provides a high degree of innovation of
the product or service in the market.
In Brazil, startups are considered startups and ma ny of them are embedded in the context of an incubation process
in order to receive funding for projects supported by external sources of financing, but also a way to optimize a
small capital. The incubators are responsible for assisting these companies to develop a strategic plan and develop
your business plan in the short and medium term. However, this article contributes to the strengthening of design
concepts for startups in Brazil in order to provide an understanding of how the design area may help these small
businesses to create and implement successful strategies, which make them suppliers radical innovations in an
extremely competitive market. In this sense, a strategic model geared to these companies, which includes innovation
driven design approach to innovation, it is extremely relevant for the purpose that these companies become
differentiated and scalable, they can get a prominent position in an increasingly dynamic consumer market.
2. Literature review
2.1. Startups and the competitive market
[4] defines a startup as "a company or a human institution that is built on different branches and that
spontaneously arises the condition of extreme uncertainty, has at its core innovation to create products and services
which they wish revolutionize the market." Complementing this definition, [1] states that a startup, connected to any
type of business, which is not in focus to product innovation or services and therefore waived for the risks of
uncertainty, it is not a startup.
In a highly competitive environment, startups have an i mportant role. Young entrepreneurs willing to take risks
with disruptive ideas and creativity, create completely new business that help invigorate the economy of a country.
However, as much as a startup has a revolutionary idea, is no guarantee of sustainable success. Such companies
often seek financing for their projects become scalable and profitable.
As the market for startups is characterized by u ncertainty and also because they are completely new businesses,
there is a long and stable operating history, since it does not have statistics or experience, which makes them
companies with high risk of mortality in the first years of activity . The great challenge of these companies is to
remain essentially creative not only in innovation in products or services, but also in the company's management
mechanisms.
It is with this thought that other business functions also make it up as important as the development of new
products or technologies. A startup should not be focused on the product only, but in your market, competitors,
users, suppliers to be identified real opportunities for innovation. For this, a strategic long-term vision is important,
with objectives and goals outlined for the young entrepreneurs have a guiding instrument of their actions.

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2.2. The economic and social importance of startups
In developed countries like the United States, startups have an important role in the economy. The region of
Silicon Valley, known for harboring renowned high-tech companies such as Google, Cisco, Facebook and Apple, is
considered the most promising startups in the world environment. About 86% of Valley startups receive high
investment values. It is estimated that there are 298,800 angel investors, critical to the development and success of
these companies and also for the movement of financial resources in the country.
In developing countries, the scenario of start ups is quite different. In Brazil, 50% of them die in the first four
years of operation. About 25% receive investments of approximately 6,450 angel investors. It is estimated that there
are in the country about 10,000 startups, which moved in 2012 about US $ 2 billion, representing 0.4% of Brazil's
GDP. From the point of financial volume movement of view, the impact of these companies in the economy is still
small, however these companies stand out by providing solutions which are not based on high technology, but social
impact. As an example the company Easy Taxi, which developed an innovative mobile app for the population to
receive taxi services in a secure and extremely fast, with quality of care, minimizing the negative impacts of a
network of extremely problematic country transport.
2.3. Management of startups
[4] states that the traditional methods of administration do n ot appl y startups, since these methods are based on
estimates that work best in environments static, rather than dynamic environments to which these companies are
inserted, with frequent changes and greater risks. The author proposes a simplified model to help young
entrepreneurs in the conduct of startups, as shown in Figure 1. For the most base of the triangle, vision, small
entrepreneur defines where it wants to go, a North, in order to have a clear idea of a goal greater to be achieved. On
the following basis, strategy, includes the company's business model, as entrepreneurs will lead an organization to
which it was assigned. The definition of the strategy includes the methods, techniques and tools standards adopted
by startups to reach the last stage of the model, the products, which will be launched in the market and also adjusted
according to their performance.
The strategy of a startup is an important driver of their actio ns. The idea is to avoid designing complex, intangible
plans without considering the uncertainties and difficulties of startups management, but include in your business
model a product plan that is faithfully fulfilled and that every setback is not seen as a failure, but as an opportunity
to learn how to get on the established view. It is a hard road in search of success, but in the current conjutura
marketing, failures are extremely important for greatness, so innovation covers not only the final product, but also in
how to achieve these goals [4].
In this context, the design management area encourages an inclusive approach, ie, involves people of the
company towards the creation of an offer of really considerable value, as it helps the company to structure and
design your environment to make it understandable. When it comes to a completely surrounded by uncertainty
environment as in the case of a startup, this view that the design allows these small companies to shape their
environment, contributing to building a reality and helping in strategic management, results in a collaboration for a
better understanding of their complex environment [3].
3. Strategic management of innovation and design
Essentially remain innovative to compete is a strateg ic attitude a nd innovation should be seen by young
entrepreneurs not like any activity, but as an ongoing process in the long run. [3] states that the design relates to key
issues for successful innovation as the understanding of user needs, competitive advantage and synergy between the
company's strengths. The strategic approach to design management involves understanding of design as a new
paradigm for reaching ideas and methods that can be used to increase management efficiency as a whole.
[3] points out that the design creates value in a company innovation m anagement, as part of improving the quality
of new product development process, defining the product strategy and the skills of a project team, is a large
company, but also a little.

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Market dynamics requires constant change, the competitive advantage of a startup is determined by the strategy
adopted to design your success in the future, as well as the principles and practices that will build and strengthen a
design-based innovation culture [2]. In this context, it is important to th e understanding of a startup management
singularades and establish a method focusing on the business model of these companies, so they can develop
strategies that allow them to generate a continuous cycle of innovation.
3.1. Innovation driven by design (Design driven innovation)
For companies already are born essentially innovative and techn ology, startups should not miss this essence. It's a
real challenge to break the barriers of inertia imposed by the routine when you have a product established on the
market. Managing innovation for customers fall in love, clarify how a company can create and implement
innovation strategies that create products and services with completely new meanings, anticipating competition, and
become leaders in their market, meet the challenges that design driven innovation is proposed in order to reduce
uncertainty about the future of organizations.
Innovation driven by design supports the idea that companies abandon oriented view to the user and seek a
broader perspective, the so-called interpreters. Are agents that are close to the companies that share the same
interests as, for example, researchers, artists, media, companies in other lines of business, suppliers and others.
Companies must value the contact with the performers to exchange information and discuss their views. [5] states
that this relationship company / interpreter is essential to providing an understanding of how people give meaning
things, since this interaction favors an anticipation of trends, behaviors and contexts of consumers.
The author believes that every product has a meaning and that many companies do not bother to Inova it, but seek
to understand the actual meaning people give things. This fact, even differentiates driven innovation design strategy
with the conventional strategies, since these provide methods, tools and processes detailed, so they can be purchased
and reproduced immediately, but that competitors copying with ease. Already the design driven innovation is
connected to a network of interpreters who work together to promote new meanings and attract people's perception,
is not a model that can be standardized and followed to the letter, as traditional, but its unique feature is how their
interpreters understand, interpret and disseminate the way people give meaning to things. It is a unique way of
driving of a strategy to support new products that provide important meanings to consumers and has a high degree
of innovation to the market, based on a cooperative network that is attentive to technological, social and cultural
world of users [5].
3.2. Driven design process as innovation
The innovation process guided by the design consists of a set of th ree actions. The first is to listen, which is the
company's iteration with their interpreters, in order to have access to knowledge of new meanings. The greatest
chances of getting new information and consequently greater competitive advantage when there is a careful choice
of his interpreters in several areas where co mpetition is not yet working. These choices can not be random, because
leads to impaired quality of the information.
The second action is to interpret. From the moment that the information of the performers are acquired, it is
necessary to group them with the company's own ideas, their technologies and resources in order to generate its own
proposal, with the company's objective to create a single proposal, or is the development of an innovative
significance to a particular product.
The third action is to spread. Because th ey are unexpected and unknown, radical innovations of meanings need to
be arranged to be launched on the market. Because of its high degree of innovation and novelty, the market may not
be ready to receive this innovation. Thus, it is necessary to use proactive actions to facilitate understanding,
assimilation and adoption of these new meanings. Actions can be inserted into an advertisement, marketing, even
through their interpreters, who were part of the first action of the process.

2203Isabela Moroni et al. / Procedia Manufacturing 3 ( 2015 ) 2199 – 2204
Table 1. Strategy design driven innovation for startups.
Design steps driven
innovation
Goals
Strategy formulation Listen 1. Collate the social context of the
project refers to understand the
potential for success of the product /
service.
2. Identify the interpreters
(technology providers, artists, media
people, designers, researchers,
universities ...)
3. Integration of interpreters
(formation of a network of
relationships, synthesis of
interpreters)
4. Organize meetings, meetings,
workshops to gather interpreters and
information about the established
context.
Ideation Strategy Interpret 1. Collate the information found their
interpreters and stored as ideas;
2. Integration of the ideas of the
performers with the company itself;
3. Analysis of the needs of the
intended users;
4. Development of new concepts and
meanings.
5. Development of the innovation
strategy.
Strategy Implementation Broadcast 1. Prototype Assembly;
2. Product development;
3. Communication plan for new
concepts and meanings that include
the spread of new product / service
through the social network of
interpreters.

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3.3. Strategic management for innovation of startups through design driven innovation
[3] sets the model for strategic management of design through three stages: strategy formulation, strategy
ideation and implementation strategy. These steps in the innovation driven vision of design is proposed in Table 1.
The use of driven innovation design process for building and implementing a product strategy or service is to the
purpose of the pursuit of innovation must not be restricted to the context of a startup. The proposed goals can be
considered steps to be met so that they can capture new meanings that people give to products and services, which is
only possible if the company manager can identify the performers and use your information in the construction of an
idea innovative.
4. Conclusions
Table 1 that emerges in this present article h ighlights the strategic management for innovation of startups driven
by innovation design is at an early stage of evolution, scarcely supported by actual facts and concrete when it comes
to its effectiveness. Studies on the design driven innovation as innovation strategy in the business world, specifically
in startups evolve slowly. Thus, this article contributed to approach this design method in startups in the sense that
they introduce into their strategies of innovation through meanings. Added to this, the article provides a review of
recent literature on the phenomenon, essential to the researc h that is beginning to investigate the occurrence.
Thus, it is necessary to go beyond practices exposed in the article, find new ways through which extend the
phenomenon of conceptualization of the universe, beyond the practical application of the proposed model. A first
step on this path is on how to target small business owners better understand your organization's external
environment for possible interpreters of meaning, so that the market, suppliers, users, universities, researchers,
among others, can contribute to research and design a new product or new service. Another important aspect is the
transformation of the information of the interpreters really important ideas that can generate innovations and
consequently enduring competitive advantage in your market. And last but not least, it is the research to consolidate
a strategic management based on design driven innovation intrinsically these organizations.
The practical application of this model is a real opportunity for the maturing of the method for innovation in
startups in B razil, since there is an understanding of the importance of design as a strategic management tool, is not
only given the importance of design in the final aesthetic products. From this perspective, it is important to obtain
qualitative data, as the next stage of the research, so you can find out how the model can be generalized to startups
so that the correct and effective use of these methods / tools always lead to growth and greater interaction of the
brand / product to the end user.
References
[1] Steve Blank, Bob Dorf, The Startup Owner's Manual: The Step-by-step Guide for Building a Great Company, K&S Ranch, 2012.
[2] Heather Fraser. Design Works: How to Tackle Your Toughest Innovation Challenges Through, University Toronto Press, Canada, 2012.
[3] Brigitte Borja Mozota, Design Management: Using Design to Build Brand Value and Corporate Innovation Allworth Press, Canada, 2011.
[4] Eric Ries. The Lean Startup: How Today's The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to create radically
successful Businesses, Crown Bussiness, United States, 2011.
[5] Verganti, Roberto. Design - Driven Innovation: Changing the rules of Competition by Radically Innovating What Things Mean. Boston,
Harvard Business School, 2009.