The Role of Service Design in Startups: Exploring Potential Benefits and Challenges from Service Designers’ Perspectives

Abstract: The rapid and constant changes taking place in the modern business world together with an increased global competition is making it more urgent for companies to introduce innovative offerings at a faster pace. Purchasing decisions by customers are not solely based on function anymore, there is an increasing demand for intuitive and seamless experiences from the products and services that they interact with. The need to think and act differently has significantly increased the relevance of service design as a contributor to innovation. However, unlike corporates and public institutions, entrepreneurial startups rarely employ during their early stages the full potential of design in their business development and innovation processes. This thesis was conducted to explore how service design could potentially contribute to the practice of entrepreneurial startups to identify the right business model in a more effective way, while avoiding the common pitfalls faced by most startups. First, the contemporary literature was reviewed to examine the startup and service science literature to identify potential service design implications for an early stage startup and the connection between practice and theory. Furthermore, the thesis explores the methodologies of lean startup and service design. This is followed with an empirical study that was conducted by applying a qualitative methodology, which involved in-depth interviews with service design practitioners. The existing literature showed that there is a lack of research regarding the potential integration of service design practices within the Lean Startup Method. Furthermore, a pre-study and informal interviews with business incubators and startup accelerators showed that the service design approach is still not common amongst startup entrepreneurs and managers. For this reason, this qualitative study was limited to the perceptions of service design practitioners with sufficient knowledge and experience of the startup context. The aim of this thesis is to explore the potential benefits and challenges associated with applying service design in an entrepreneurial startup context. The findings and managerial implications of this research may serve as a foundation for future research, for further validation of the concept. The study presents significant potential implications, benefits and challenges from implementing service design in a startup context, as well as practical suggestions on how to achieve that. The outcome is, that from the service designer’s point of view, service design application in a startup context is possible and may be performed in two levels (separately or in combination), one in terms of practical tools and the other in terms of organisational culture, by building a design-led customer cantered mindset within the organisation. It identifies the potential of service design to facilitate the application of Service-dominant Logic in managerial contexts and provides recommendations about service design tools that may be optimal for its application in a startup context. It concludes with suggestions for further research.