Montreal Ventures

Venture Capital Glossary

Design Thinking

User-centered problem-solving methodological approach, organized into divergence and convergence phases.

Design Thinking is a methodological approach focused on solving complex problems by centering on the user. Unlike purely linear processes, this practice is organized into phases of divergence (generating multiple ideas) and convergence (selecting and refining). The process is composed of five technical stages. The first is Empathy, which uses direct observation and interviews to collect data on the public's difficulties. This is followed by Definition, where the data is filtered to isolate the core problem. In Ideation, The team proposes various solutions without immediate feasibility assessment. Prototyping consists of building low-cost models to materialize the solution. Finally, the Test Submit the prototype to real-world use to collect performance data. The goal is to reduce the risk of developing solutions that lack demand or have usability flaws before significant engineering investments.

Practical Example: A fintech identifies that elderly users have difficulty making transfers via app. Instead of assuming the cause, the team observes these users and notices that the font size and the number of confirmation steps generate insecurity. Applying Design Thinking, the company prototypes an interface with voice command and enlarged fonts. After positive tests with this specific group, the solution is implemented in the main system, increasing the transaction volume for this demographic.

Book: Design Thinking: A Powerful Methodology to Decree the End of Old Ideas, by Tim Brown (CEO of IDEO).

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