Essays/linkedin/26-01-27 double diamond

<p>Is it possible to adapt the double diamond used in design to the early stages of deep tech company development? </p> <p>Most companies start with a technological development either based on new science, or manufacturing options. That edge is what makes deep tech companies unique in their development process compared to those that start by focusing on problems worth solving. </p> <p>Initially, that technological edge needs to find a market. The exploration is a divergent process, different paths must be evaluated, at the same time that prototypes are built. The business model is not clear, the ideal customer is not known, and sales funnels can't be established. </p> <p>However, this exploration should eventually lead to a converging phase. Prototypes change into early products, and different markets transform into a concrete focus. </p> <p>These two phases of a company also coincide with the funding steps that go from seed to series A. Most startups can pull this off with a minimal team, outsourcing smartly, and getting the best bang for the buck. Grants and partnerships, including pilot customers, are crucial tools to extend runway and hone in the offer. </p> <p>The double diamond offers another interesting visual coincidence: the valley of death. </p> <p>Going from early products to industrialized systems and a repeatable business model is a stage that requires appropriate strategy and, in many cases, extra financial support. Evidence is mounting but it may be insufficient for a traditional VC. </p> <p>Once this valley is traversed, it's the time companies will stress test their hypothesis and processes. Challenges will be of a different nature, such as dealing with supply chain issues that were easier to bypass at smaller sizes. Team scaling requires adapting behaviors, leadership styles, and finding talent to cover the skill gaps of the early team. </p> <p>It is again a diverging phase, but this time it's much harder to navigate than the first one. </p> <p>Getting fixated in the past, on how things were done before, instead of focusing on what's ahead can hinder the chances of success. </p> <p>If we align the process to funding rounds, the end of this phase coincides with a series B. Sales channels are established, the business model has been validated, and it's time of propelling forward. "Operational Excellence" is related to optimizing margins, using the power of scale to lower costs, as well as strengthening teams. </p> <p>The final step of the double diamond is again a converging phase. This is the moment where profitability will become apparent in the balance sheet, when the effort and investment will finally pay off. At this stage the company should have gathered enough market information to have predictable revenue streams, accurate projections, and healthy unit economics to keep moving forward. </p> <p>What I personally appreciate of the double diamond is that it clearly identifies moments of creativity and exploration from moments of decision making. At the same time it clearly distinguishes moments of uncertainty from moments of clarity, both internally and externally. </p> <p>After all, the process of moving a company forward is not just a tale for investors. The team also goes through these phases with more or less understanding of what is the context, and the reasoning behind. </p> <p>I got to know the double diamond by working with industrial designers, and I truly appreciated its power, especially when it comes to aligning stakeholders with very different interests. </p> <p>I am curious to know: do you see the pattern I've described in different companies? Do you think it's useful to have models to understand what is happening, and align the team towards a common cause?</p>