Welcome to week two. This week Rael Futerman of the Hasso Plattner Institute for Design Thinking here at the University of Cape Town introduces approaches he uses with early-stage startups. He reminds us that the number one reason startups fail relates to the challenge of developing a product or service that fits the needs of the market. Finding this product market fit is essential in the early stages of a startup as Kungela observed earlier. This is where design thinking comes in. Helping to move away from being product-centric to being more customer-centric. Design thinking refers to processes, methods, and tools for creating human-centered products, services, solutions, and experiences. This approach is used in understanding and solving complex problems. Rael speaks about how design thinking unlocks the insights and creative collaboration needed to generate innovation. In applying design thinking, you'll need to visualize a product or service that fits the needs of the market. There's nowhere else in the world where there are so many pressing social and individual needs as in developing markets, where the challenges around services and development are looking for urgent and practical solutions. Here, creating products and services for financial inclusion has skyrocketed over the last few years because these fit the needs of many markets. People are no longer waiting for the big banks to solve and address these issues around financial inclusion. One often cited example is M-PESA, a mobile phone app that has become the de facto means of money transfer for the unbanked populations of Kenya who did not have access to formal banking services. Launched in Kenya in 2007, M-PESA has since revolutionized the banking sector in East Africa. By 2010, M-PESA had 10 million active users and made the decision to expand into South Africa. If it was successful in Kenya, why wouldn't it work in another African country? Yet by 2016, there were only 76,000 active users in South Africa and M-PESA made the decision to exit the country. So we have to remember that not all emerging markets are equal, as M-PESA discovered. So why did M-PESA fail in South Africa? In East Africa a large proportion of the population did not have access to any form of financial services. There was an absolute need for a product like M-PESA. South Africa on the other hand has a better developed banking sector, so it wasn't meeting such an immediate and widespread need. Customers would have needed to switch from using another only slightly less capable service to M-PESA. It's not to say that there wasn't a need for a mobile money product in South Africa. There has been a proliferation of mobile money services and products since then. But the key takeaway is that we must not incorrectly assume that a successful product in one market will automatically work in another. While it is possible to learn from other contexts, the business models are by no means transferable. While we talk about emerging markets, these all have very specific challenges. To avoid ending up in a situation like this, we have to do market research. We have to know what our customers want. Following the design thinking process and also repeating this process for different markets will result in good product market fit. Design thinking puts our users or customers at the center of everything we do. You may have a great idea, but do you know what your customers want? There's nothing more important than gaining a deep understanding about your customers lives and their pressing needs. Immersion in the world of the customer produces invaluable data necessary to build meaningful products and services. Design thinking provides the magic ingredient to deliver products and services that fulfill the customer's needs. Once we've introduced design thinking, we'll move onto business planning. Rael takes us through the methodology of discovery driven planning and also introduces business planning. Sarah-Anne Alman provides details on how to use the business planning tool Business Model Canvas. Doing a business plan allows you to launch a process to systematically uncover, test, and if necessary, revise the assumptions behind a business plan. In this course, you will be introduced to the Business Model Canvas tool, which is one of many business planning tools available. You'll hear from several entrepreneurs who describe how they undertook business planning. I invite you to listen carefully to their stories as you'll be asked to interview a startup business to understand their business planning process during the final assignment given in week four. It can be a messy process but planning is really critical. As someone famously said, "If you don't have a plan, then you are planning to fail." With this in mind, enjoy the week.