This research paper aims to present a research study conducted with newly established Hungarian businesses known as startups about their corporate brand management practices, with the first hypothesis being that ICT and Design Industry startups have similar corporate branding practices using the elements of Lean Methodology and/or Design Thinking. Secondly, the application of these methods in their strategic decisions is in positive correlation with branding (like early adopters, communication). Traditional literature focuses largely on big companies, while the number of studies related to startups is small. Thus, this paper aims to fill a niche in this field and serve as supporting material for Hungarian startups during the brand development process.
Do More with Less: Navigating Customer Acquisition Challenges for Today's Ent...
Corporate Brand Management of Hungarian Startups. A Critical Analysis.
1. Eszter Mónos
Corporate Brand Management of Hungarian Startups.
A Critical Analysis
IBS International Business School Budapest
2017
2. 3
Table of contents
Corporate Brand Management of Hungarian Startups.................................................................4
About the researcher and the topic ..................................................................................................5
Introduction .........................................................................................................................................6
The Startup Ecosystem in Hungary .................................................................................................7
Lean Methodology and/or Design Thinking in Corporate Brand Management......................8
Lean Branding ...................................................................................................................................10
Communication and brand .............................................................................................................11
Social media in corporate branding ...............................................................................................13
Conclusions........................................................................................................................................15
Glossary..............................................................................................................................................16
Bibliography ......................................................................................................................................18
3. 4
Corporate Brand Management of Hungarian Startups.
A Critical Analysis
Purpose: This research paper aims to present a research study conducted with newly
established Hungarian businesses known as startups about their corporate brand management
practices, with the first hypothesis being that ICT and Design Industry startups have similar
corporate branding practices using the elements of Lean Methodology and/or Design
Thinking. Secondly, the application of these methods in their strategic decisions is in positive
correlation with branding (like early adopters, communication). Traditional literature
focuses largely on big companies, while the number of studies related to startups is small.
Thus, this paper aims to fill a niche in this field and serve as supporting material for
Hungarian startups during the brand development process.
Structure/methodology/focus: The guiding principles will lead to a focus on the impact of
Lean Methodology and Design Thinking on startup branding. The data-collecting instruments
used included interviews and an online questionnaire with several additional open-ended
questions. As a key component of this research was understanding how entrepreneurs work
with branding in the early stages of their business, the data-treatment technique employed
was content analysis.
Results/Findings: A total of 40 startups participated in the survey, of which 18 also took part
in the interviews. More than half of them agreed or strongly agreed that every interaction
with their consumers is an opportunity for their brand to create value. Half of the respondent
startups reported the conscious use of Lean Methodology and/or Design Thinking methods and
their implementation in strategic decisions. The present study found that practicing these
methods has a positive impact on startups’ brand.
Practical implications: These findings can provide a starting point for future research on
Hungarian startups’ corporate brand management. The present research was conducted with
the desire to make a meaningful contribution, which can be used by scholars and
professionals as well in the field.
Keywords: startups, Hungarian startup ecosystem, corporate branding, corporate identity,
entrepreneurial marketing, lean branding, design thinking
4. 5
About the researcher and the topic
My personal motivation to research this field grew out of experiencing this aspect in a real
life situation with a startup in the early stages of product development. Furthermore, my
enthusiasm grew even stronger after seeing their engagement to solving real-life problems
in a customer-oriented way with a different approach to corporate culture: innovative, open-
minded, communicative, young, friendly and working towards a meaningful goal.
This experience lead to the conviction that it would be worth investigating the extent to
which the corporate branding practices of Hungarian startups differ from or correspond to
each other regarding the ICT and design sectors (creative industry1), with a leading focus on
the impacts of Lean Methodology2 and Design Thinking3 on their branding.
The ICT sector is a leading industry among startups around the world and all the experiences
suggest that it would be interesting to conduct more thorough research into these startups
regarding their branding practices and the application of the above-mentioned methods in
their product development and/or strategic decisions. A research study conducted on the
Design Industry in Hungary (Batta & Szandrocha, 2015) stated that several startups
operating in the Design Industry offer IT, software and computer services. As these
companies gained in significance due to innovative ideas, products and technological
innovations in the Design sector, startups in the creative industry can now be examined in
correlation with the tech or web startups. On the other hand, my choice was influenced by
my personal connections with the design-related startups and their way of thinking, as well
as the world-renowned success of Hungarian tech startups.
1 Clarification of the terms (Design Industry and Creative Industry) and the difficulties concerning the proper usage of this concept is
included in the Glossary.
2 Originates from lean manufacturing and focuses on efficiency by a continuous build/measure/learn feedback loop.
3 The way of thinking and approach emerged from the Design Industry, it is a customer-centered problem solving way.
5. 6
Introduction
Silicon Valley in California, Boston
and Berlin are the most famous startup
ecosystems in the world; however, the
recently flourishing Hungarian startup
ecosystem also boasts a significant startup
community with the most active startups
being Prezi, Ustream, LogMeIn, PikkPack,
Co&Co, MagicMe, Teqball, Offiseven and
others.
Startups operate in a highly
uncertain and constantly changing
environment, compounded by the fact that
they are unable to fit into traditional
branding theories as a result of the
interactive communication that these
organizations have embraced.
The number of research papers
about startups around the world is
constantly growing, although the topic of
brand development in a startup context
must be broadened further.
This research was conducted using
quantitative techniques to define the
preference of the startups and to divide
them into categories; on the other hand,
qualitative techniques helped to give an
insight into how entrepreneurs work with
branding and what
advantages/disadvantages they
experience while using Lean Methodology
and/or Design Thinking during the
product development phase or in making
strategic decisions.
Startups, unlike traditional companies, serve a new customer with a new product,
while traditional companies have already gone through this; they differ in business model,
team, revenue, size, staff (Blank, 2013a) and are committed to sustain innovation at an
existing market, with a known product. Concerning business models, startups search, while
companies execute (Wickham, 2006; Blank, 2013a; Weiblen & Chesbough, 2015). They also
differ deeply in organizing sales and drafting revenue plans. Customer validation is done by
founders of the startups, customer development is founder-driven and there are a lot of
unknown features concerning customer needs, product, business model, which is found by
iteration. Large companies already know their markets, customers, business model. They
produce their own marketing communication materials, are more focused on positioning,
contract PR agencies or marketing specialists, create demand and focus on branding with
considerable resources. In contrast, startups need a more user- and customer-oriented
marketing and branding approach based on listening, testing hypotheses, continuous
discovery and running in circles from an unknown problem to an unknown solution (Blank,
2013a). Lean and Design Thinking have interferences as they are both user-centered (e.g.
designing customer archetypes to find the potential customer). Lean is more appropriate
(“ready-to-go”) as a business strategy, although Design Thinking can also be used in a
business context.
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The Startup Ecosystem in Hungary
By contrasting the empirical evidence that has emerged from the quantitative research
and the interviews representing the most experienced start-ups in Hungary, together with
previous findings and theories specific to new ventures and SMEs, the researcher found that
this type of research is complex but interesting, bringing value and knowledge.
Concerning the research, this paper investigated the product design, graphic design,
fashion design sectors, as well as other design-related sectors. These are collectively referred
to in Hungarian literature as design industry (Batta & Szandrocha, 2015), with some also using
the term creative industry. A study conducted by the Stockholm School of Economics –
European Cluster Observatory 2014 concerning the design industry refers to Budapest and
Central Hungary as the 8th most important design industry center of the European Union,
and also the most intensively improving sub-region regarding the growth of employees
(18%) in the sector (Batta & Szandrocha, 2015). The ICT and Design sectors have a lot in
common by virtue of benefitting from the same trainings and workshops, mentoring and
support activities available for startups in Hungary.
The technological approach has a great impact on the way our society is evolving.
Startups have a significant role in this development by focusing on innovation; they are the
engines that drive this evolution. The success of the startups emerging from the ICT sector
can be explained simply by their ability to attract more funds, the type of product they create,
which is meant to respond to real problems in a customer-centric way and the fact that there
are various opportunities and support available to them that are targeted specifically at this
industry.
Startups are widely known to have a strong vision and belief that their product/idea
is valuable and useful for the market, but they often feel that they are not well-known or
understood by customers. Some of the traditional marketing strategies (advertising
campaigns involving newsletters, billboards, flyers and newspaper ads, television or radio
spots and commercials) may not be as successful for them as they are for big companies,
which is why they need a more user/customer-centered marketing and branding strategy.
As a result, Hungarian startups might greatly benefit from the application of Lean
methodology and/or Design thinking in their brand building strategies or in any of their
internal/external processes as these may lead to a more focused attention of the customer.
The startup ecosystem has contributed to the success of the surveyed startups in the
ICT and design sectors alike. Startups could benefit in various ways from the growing
number of available programs and conferences, not only in finding resources for their daily
activities, but also by gaining knowledge applied by the first entrepreneurs. Some of the
programs and conferences are organized based on the experiences of the first such
7. 8
entrepreneurs in Hungary since 2008; these players continue to share their knowledge and
offer support in applying Lean Methodology and Design Thinking to strategic decisions
and/or all levels of the organization as well. It cannot be neglected that the startups
participating in this research who apply these methods were influenced by the changes in
the Hungarian startup ecosystem, shifting from a poor environment to a flourishing one.
In Hungary, the first trainings for startups were launched in 2009. Resulting from the
demographic data of the startups participating in the research that almost all of them were
established after 2009, with three notable exceptions that three were established before 2009:
one in 2007, one in 2008 and the earliest one in 2001. Two-thirds of the startups from the
research were established before 2014-2015 when programs have shaped their focus –
growing together with the development of the Hungarian startup ecosystem (Startup
Underground, Colabs Startup Cneter, European Entrepreneurship Foundation, Jeremie,
Design Terminal, Startup Campus).
Lean Methodology and/or Design Thinking in Corporate Brand
Management
Entrepreneurs face several challenges during the initial phases of startup branding,
which is a complex and holistic process influenced by corporate culture, behavior, design
and communication.
Almost all of the interviewed and surveyed
startups stated that they were familiar with the
concepts of Lean Methodology and/or Design
Thinking and remarked that these methods had an
impact on their product development phase and
strategic decisions (early adopters, first users
and/or other communication). See Figure 1 for a
division by industries. The interviews with these
startups showed that some of them from the ICT
industry used these methods due to the influence
of Western startups (examples from the United
States) in reducing risks and in forming a better
product with more focus on customer needs.
ICT
sector
37%
Design
36%
Other
27%
Impact of Lean Methodology and
Design thinking on product
development phrase
Figure 1 Impact of LM and DT on product dev.
8. 9
From the findings of the survey, it can be stated that one half of the participating
companies are more inclined to investing in testing in order to avoid failures with real users,
while others are more interested in developing the product based on feedback from the first
users, which is also an opportunity for the user to interact with the brand and to better
understand what the product stands for. By this approach, having limited resources makes
it easier to face challenges of a new market (Volkmann & Berg, 2011; Rode & Vallaster, 2005;
Gardner & Cooper, 2014; Timmons, 1999). This is further supported by the fact that half of
the respondents strongly agreed that, any kind of interaction with their customers is a
potential opportunity to create value with the brand (Urde, 1999). Therefore, in the process
of MVP, product development or customer feedback/interview, whether or not they use
Lean Methodology or Design Thinking, these interactions have a positive impact on the
brand. However, a significant number of startups disagreed with the statement that any kind
of interaction with the customer is an opportunity to create value with the brand, which can
be explained with the fact that some of these companies have already been on the market for
several years and have already built more sophisticated strategies for branding.
Half of the participants strongly agreed that it is important for them to create value for their
customers – further strengthening this statement under the communication section in the
survey –, to have customers in the focus of their innovation strategy and to solve a real
problem with their product (Brown, 2009; Zupan & Nabergoj, 2012; Mueller & Thoring,
2012). This idea is complemented by a strong argument originating from the interviews
regarding the advantages of applying Design Thinking:
One of its advantages is that product development was preceded by a long-term research,
and thus a problem was outlined before designing the product, and the product was created
in response to the problem. Actually, that is the point of Design Thinking; you don’t have to
create a marketing plan for a product in order to increase sales, but the product sells itself as
it provides a solution to a real problem. (A startup from the Design Industry)
More than half of the startups in the actual research are inclined to proceed with the
product development and the exploration of the target audience at the same time to develop
a product to a segment that exists and that actually needs the product, shaping it according
to the market needs with high emphasis on making all employees clear and passionate about
the company values and mission.
The open-ended questions of the survey show that startups apply Design Thinking in
branding, internal process development, brainstorming and all levels of the organization in
many cases in the design industry (but not limited to it), which further confirms the increase
in efficiency in almost all levels of the organization (Wlash, 1995; Borja de Mozota, 2003a;
Borja de Mozota, 2003b). Moreover, some startups emphasized the following aspect: ‘We
place considerable emphasis on our corporate image, and focus on user experience design
9. 10
and easy-to-understand user interface design. Attractive convenience and the effective
utilization of working time are our main concerns.’ (A startup from the ICT sector)
The interviews also showed that in some ways, design is a tool for making a strategy
visible and supporting branding, but it is not limited to that, as it can also influence all levels
of the organization. In some cases, startups are so committed to these methods that they hold
courses on it: ‘Holding courses on Lean Methodology. And, with regard to Lean
Methodology, we use the method of discovery phase as Design Thinking.’ (A startup from
the ICT sector)
Lean Branding
Since we shifted from old practices to a new trend, businesses are focused on
outsource production, fast to market, creating brands and most importantly, they pay more
attention to the customer. Activities done according to our old principles were slow and
certain, production focused, driven by capability and involved fewer risks. I am inclined to
believe that in this old economy, traditional marketing communication tools achieved the
best results but they are no longer on the top of the list today for startups.
We have become endowed with the knowledge to think differently and to focus more
on learning and developing new, interesting and fun things. Startups are not traditional
companies and they may thus be more focused on applying these new practices in branding,
and creating values, engagement, and emotional connections then other traditional
companies. Startups also differ from traditional companies in goals, measurement
techniques, employees, culture, skills, processes and structure, which is why they need
different management principles (Blank, 2013a).
Almost two thirds of the surveyed startups share the value created by the brand with
the target audience, and value having a relationship with the target audience, which is one
of the fundamentals of Lean Branding (Gardner & Cooper, 2014). It is less emphasized that
they create opportunity for interaction with their customers on different platforms. They are
also inclined to believe that the product represents the brand, which has a lot more behind
it. A considerable number of startups disagreed with these statements, the ratio being
roughly the same in the ICT and design sectors, with some stating that they did not apply
Lean Methodology or only by intuition, while others apply it consciously to product
development or internal procedures and decision-making. Almost all of those who disagreed
did not apply Design Thinking either.
More than half of the surveyed startups consider that their brand represents the
emotional elements, while the product represents the functional elements combined with
10. 11
their belief in creating a long-standing relationship with their consumers based on an
authentic, consistent and believable brand. Concerning brand association with consumer
focus, innovation and value creation, most of the surveyed startups ranked value creation
first. Overall, more than half of them ranked innovation and consumer focus first to be
associated with their brand. However, many also strongly disagreed with these statements,
which can be explained with their priority on selling the product. A higher percentage of
these startups came from the ICT sector, but not exclusively. More than half of the companies
are inclined to believe that the success of a corporate brand depends on the quantity and
quality of consumer relations (a deeper relationship leads to more accurate value creation).
In conclusion, it can be stated that more than a half of the surveyed companies practice Lean
Branding strategies in their corporate brand management.
Communication and brand
More than half of the surveyed participants consider networking important with a
strong emphasis on communication in brand building (de Chernatony, 2001; Rode &
Vallaster, 2005; Wiedmann, 1992 In Rode & Vallaster, 2005). Starting from the viewpoint that
startups are new companies under the personal influence of the founder (Rode & Vallaster,
2005), we can see that the importance of communication and brand is manifested in the
priorities of the startups from the research: creating value, importance of brand and product
sales. More than half of them consider it important to initiate and maintain communication
with early adopters in order to create value, while they also tend to have direct contact with
early customers in order to tailor the product to their needs. Those who strongly disagree
with these statements do not apply these methods at all. However, there may be some
contradiction in the results: under a different question, these startups mentioned Branding as
an example of applying Design Thinking, thus it is not possible for them to truly disagree
with the importance of communication when building a brand.
The importance of creating value with the product were highly rated, with almost two
thirds of the surveyed startups more inclined towards this aspect, which is also manifested
in their priority to understand what specific needs their product covers, correlating with the
application of Lean Methodology and/or Design Thinking in their strategic decisions.
Furthermore, building company value awareness from the first customer onwards is also
important to them.
The second component of these priorities is manifested in the importance of brand.
Although very few disagreed, many of them from the ICT sector were neutral to this
statement. Overall, more than half of them indicated brand awareness as their first priority.
General findings based on the interviews are that these startups from the research may be
11. 12
more passionate about their products and customers, and their story reflects strong company
culture and a vision going way beyond the product.
The third aspect is selling the product, which more than half of them ranked highly,
and almost all of the startups who agreed with this statement do apply Lean Methodology
and/or Design Thinking consciously or by intuition in product development, MVP,
validation, marketing, relationship with customers, branding and brainstorming.
More than half of the interviewed startups agreed or strongly agreed that it is
important that the company’s values are in line with their own values, which links to the
conclusion that entrepreneurs play a key role in developing the corporate brand; they must
have a clearly defined business concept, values and philosophy, they must live accordingly,
communicate these concepts both internally and externally and develop the right team to be
able to transfer the startups’ identity (Rode & Vallaster, 2005; Aaker, 1996; Centeno, 2013;
Renton et al., 2015). A considerable number of the survey participants were neutral about this
statement, while some strongly disagreed. An eventual contradiction of the results is also
possible. Startups from the ICT and design sectors as well as mature companies applying
Lean Methodology to their product development strongly disagreed in approximately equal
measure. They tend to apply Design Thinking less, or some of them may perform it by
intuition, but those that do apply it, mentioned branding and customer feedback. This is
connected to the fact that a brand with stable values can achieve greater success on the
market (Sami, 2013, analogy to Roper and Fill, 2012), with which more than half of the survey
participants agreed or strongly agreed. Some of those who disagreed from the Design
Industry, however, emphasized the principle of competitive differentiation, building a
designer community, which buyers and designers perceive as value creation causing again
some contradiction in the answers.
Half of surveyed participants reported making conscious efforts to initiate
communication with the consumers about the brand, while a considerable number of them
gave neutral opinions about this statement. An interesting result of the survey emerged from
a particular case: one of the survey participants noted that they have developed their own
methods, namely they apply Design communication, claiming that ‘contrary to thinking and
communication that are not characteristic of single-celled organisms, communication is more
universal than thinking.’ (A startup from the Design Industry)
Many of the startups strongly agree that if the consumers get to know the product of
the company, they will be more committed. Those who strongly agree are mainly small-sized
young companies applying Lean methodology to their strategic decisions consciously in the
product development, MVP, early adopters, while they use Design Thinking in branding and
customer feedback. Therefore, this is connected to the importance of discovering their
specific audience during their communication. Based on the interviews, startups applying
Lean are more inclined to the following approach:
12. 13
A premise for such thinking is to test and iterate as many elements as you can, keep what
works and drop what doesn’t work. It’s very easy to measure these aspects in online
marketing. You can see what conversion rates you have for a Facebook campaign, and if the
rates of a content, appearance, target or target group are not what you’ve expected, then you
should drop it and move on to the next iteration stage; you modify some elements and try to
ensure your rates will be in line with your expectations. The same applies to e-mail marketing
and PPC marketing. I believe this approach works relatively well in case of content marketing,
SEO and SEM as well. But, in case of the latter ones, expected rates only show up in the longer
term. (A startup from the ICT sector)
Social media in corporate branding
Marketing can be one of the greatest problems faced by Hungarian startups, but
simultaneously one of the most important activities to their growth and survival. Based on
the study done with these startups in Hunagry, marketing can be informal and reactive to
the market opportunities in some cases, and the founder has an influence on the decision-
making process.
The interviews indicate that specific to the Design industry but not limited to it, the
access of the key professional and business players is facilitated by the participation in
national and international trade shows and fairs, design exhibitions and market/fashion
weeks. Furthermore, business pitches are also important, not to mention relationship-
building with specialized agencies and buyers. Therefore, the establishment of a professional
network is critical for achieving success in the design industry (linked to Batta and
Szandroch, 2015), but this is also true for startups in general. It can be highlighted that startup
meet-ups, conferences, hackatons (startup weekends) and gatherings provide perfect
environment for networking.
Many of the participants of the survey consider social media less important, although
a considerable number proved neutral opinion about it. Almost half of respondents agreed
that their social media communication is not particularly active due to a lack of resources;
however, they can operate social media sites themselves, if they wish to do so. Out of those
who cannot operate it but consider important, less than half dedicate an employee or sub-
contractor to maintain their social media presence. The interviews showed that startups are
well familiar with the use of social media for promoting events, but particularly, for
participation at trade shows, which is even more a question of status. Moreover, participation
at trade shows is considered a great way to build image and presence in the social media
(such as Facebook, LinkedIn); it serves as confirmation for the customers that their business
is still ongoing.
13. 14
Overall, more than half of the surveyed participants agreed that they can create a
positive brand image through social media, provide detailed knowledge about the product
and build a community for their brand. Many of them also mentioned that they can easily
obtain feedback from the first users about the product in the product development phase
through social media. It also came out during the interviews that startups may use Facebook
for getting feedback, disseminating questionnaires and for testing, but no more than once or
twice.
Opinions differed greatly concerning the communication of corporate values and
mission through social media. A large number proved neutral about this issue, while some
were inclined to disagree in a way, although many would use it for this purpose as it
contributes to a stronger brand at a limited budget. Startups revealed during the interviews
that they set a minimum marketing budget and focus on SEO, Google, Facebook, PR and
their website. The interviews indicate that startups are comfortable with using social media
for brand-building and recruitment.
Overall, half of the startups consider it crucial to communicate with consumers on
different platforms (Facebook, website, e-mail, etc.) not only for sales purposes but also for
relationship building and value creation, which is in correlation with the fact that regular
and meaningful communication with consumers and users is only possible with a brand that
has stable values. Some of the interviewed startups confirmed that they have a customer-
focused marketing approach, as their most valuable assets are relationships with customers
and other key stakeholders. Many of them also confirmed that they acquire new customers
based on customer recommendations or recommendations from partners and key players in
the field. This is more characteristic of but not exclusive to the design industry.
14. 15
Conclusions
Startups are not traditional companies and their unique nature makes it impossible to
consider their activities in traditional marketing concepts; it is rather innovative and creative
solutions that appropriately reflect on their corporate branding practices. In order to analyze
these startups in Hungary, where in-depth study in this topic had not been conducted – or
not in a volume comparable to foreign studies – the aim of this research was to examine the
corporate branding practices of Hungarian startups operating in the ICT and design
industries with emphasis on the application of Lean Methodology and Design Thinking and
its effect on their brand.
As a conclusion, it can be stated that more than half of the startups participating in the
research use Lean Methodology and/or Design Thinking in their strategic decisions. It is also
well known that Lean Methodology is applied more by the high-tech related startups4 and the
Design approach is more familiar among startups from the Design Industry, which was
confirmed also in case of Hungarian startups.
The findings have shown that the startups questioned do use Lean Methodology in the
product development phase more often, while Design Thinking is mostly applied in other
processes and decision-making, for example branding and marketing. Some startups
demonstrated the use of both methods in all levels of the organization, which proved to have
a positive impact on their brand.
As a best practice for startups, it is worth mentioning that applying Lean Methodology
calls forth continuous whirlwind and communication, which have very positive effects on
any team. It is recommended to use the elements of each method that bring the highest
benefit.
To sum up, the advantages of Lean Methodology are manifested in the constant need
for adaptation and positive effects on products and work ethic. For young startups, nothing
can be more valuable than user feedback, as the very success of the product (i.e. whether or
not one can sell it), relies heavily in developing it specifically for the customer. The methods
of Lean and Design Thinking provide valuable support in achieving this target.
4
Eric Ries: The Lean Startup;; Brigitte Borja de Mozota: Design Management
15. 16
Glossary
Corporate branding: Corporate branding refers to a set of unique characteristics of the
organization (de Chernatony, 2001) formed by core values, behavior of the employees, its
symbolic representation and corporate communication (Rode & Vallaster, 2005).
Customer journey: defined by Tim Brown (2009) charts the stages through which an
imagined customer passes from the beginning of a service experience to the end – story of
the customer’s experience, to be used in the process between empathize and define (the
process of design thinking: empathize, define, ideate, prototype and test).
Design Industry: The Government of the United Kingdom issued a communication in which
they listed the following as belonging to the creative industry: advertising, architecture, the
arts and antiques market, crafts, design, designer fashion, film and video, interactive leisure
software, music, the performing arts, publishing, software and computer services, television
and radio (UK Government: Department for Digital, Culture, Media & Sport, 2001). In this
document, they name it creative Industry and define it as ‘those industries which have their
origin in individual creativity, skill and talent and which have a potential for wealth and job
creation through the generation and exploitation of intellectual property’ (UK Government:
Department for Digital, Culture, Media & Sport, 2001, p.5).
Design Thinking: As taught by Stanford University and practiced by Tim Brown, CEO of
IDEO (Brown, 2009), Design Thinking Method meant finding out what people do, feel or think
about a certain issue/problem and how they would feel, think and act after the provided
solution. It is more about building things up: it is ambiguous, iterative, breaks the rules, it is
more open to embracing risks and trusting intuition. In comparison with some critical
thinking, design thinking focuses on stories instead of numbers and involves a shift from
consumption to participation (Brown, 2009).
ICT: Information and Communications Technology, often referred to as ICT, is an extended
term for IT – information technology –, which emphasizes the role of combined
communications and the integration of telecommunications, computers, software, storage
and audio-visual systems (Riley, 2015).
Lean Branding: Lean branding is linked to the name of Jeremiah Gardner and Brant Cooper,
who define it as ‘a brand wherein an organization and audience have achieved a symbiotic
relationship around common value without any extraneous activities’ (Gardner & Cooper,
2014, p.16). Lean branding is not about the standard branding deliverables, but more about
understanding and learning from the audience and measuring reactions like passion,
frustration, excitement; it is starting the conversation and building the relationship with them
at a low risk (Altman, 2013) (Gardner & Cooper, 2014).
16. 17
Lean Brand Framework is based on Lean Startup Methodology; it is a tool for brand
innovation (Gardner & Cooper, 2014) and has three main elements: Hypothesis Gap
(Assumptions), Validation Gap (MVB - P/M/B Fit) and Growth Gap.
Lean startup: Lean startup is based on Blank’s (2013a) customer development process:
customer discovery, customer validation, customer creation and company building. This
approach involves asking potential users, purchasers and partners for feedback on all
elements of the business model: features, pricing, distribution channels, and affordable
customer acquisition strategies (Blank, 2013b). This is more like a circle, where assumptions
are revised based on customers’ input and retested (Blank, 2013b).
Lean Thinking: on the other hand, according to Eric Ries (2011) is more focused on designing
new products and services. However, both methods have innovation, learning, the user and
cheap prototyping as their focus. The main differences between design thinking and lean
thinking are manifested at the founder level. While Design Thinking means observation and
discovery, is intuitive and human-centered, Lean Thinking starts with the vision of the
founder, is more analytical and customer-oriented.
Minimum viable product: or MVP “is that version of a product that enables the full turn of
the build-measure-learn loop with minimum amount of effort” (Ries, 2011, p.77). In these
early stages, the goal is to find product validation, to see if the product fits the market and
explore customer needs.
Startup: Steve Blank in his book The Startup Owner's Manual defines startups in the
following way: ‘Startups are not smaller versions of large companies. A startup is a
temporary organization in search of a scalable, repeatable, profitable business model’ (Blank
& Dorf, 2012, p. xvii).
Startup ecosystem: Entrepreneurial ecosystem is a group of interconnected entrepreneurial
players, corporations (e.g. venture capitalists, business angels), institutions (universities,
governments, etc.) and entrepreneurial procedures, which officially and unofficially unite to
link, intercede and lead the performance inside the local entrepreneurial environment
(Mason & Brown, 2013). These ecosystems could be industry-specific and they are
geographically bound, but not connected to any specific geographical dimensions (Mason &
Brown, 2013).
17. 18
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