5. MARKET CREATION
= BEST CHANCE FOR A STARTUP
Act of making something that is
more useful, affordable or better
for someone - than existing
alternatives
12. STARTUP SCORECARD - RECORD OF PROGRESS
WHY?
Grand Vision
HOW?
Resources,
culture and
skills
OPERATIVE CAPABILITY
WHAT?
Scalable
business model
& Product-
MARKET EVOLUTION market fit
13. PRODUCT WITH A MARKET - DEFINITION
PRODUCT THAT SOLVES A
PROBLEM FOR CUSTOMERS THAT
ARE WILLING TO PAY FOR IT
44. STARTUP EVOLUTION:
MARKET CREATION PERSPECTIVE
PROBLEM /
PRODUCT /
SOLUTION SCALE
MARKET FIT
FIT
VALIDATED LEARNING GROWTH via OPTIMIZE
via PIVOTS
Experiment-driven
47. STARTUP SCORECARD: RECORD OF PROOF
PROBLEM /
PRODUCT /
SOLUTION SCALE
OPERATIVE CAPABILITY
MARKET FIT
FIT
VALIDATED LEARNING GROWTH via OPTIMIZE
via PIVOTS
MARKET EVOLUTION
49. #1: LEAN CANVAS by ASH MAURYA
“FROM BUSINESS PLAN TO BUSINESS MODEL”
50. #3: LEAN CANVAS
PROBLEMS: SOLUTION: UNIQUE VALUE UNFAIR ADVANTAGE: CUSTOMER
PROPOSITION: SEGMENTS:
CURRENT
SOLUTIONS:
METRICS: CHANNELS:
EARLY ADOPTERS
COSTS: REVENUE:
51. #3: LEAN CANVAS
PROBLEMS: SOLUTION: UNIQUE VALUE UNFAIR ADVANTAGE: CUSTOMER
PROPOSITION: SEGMENTS:
Top 3 Problems Top 3 Solutions Can’t be easily bought
Single, clear, compelling or copied Target customers
message that states way
you are different and
worth buying
CURRENT SOLUTIONS:
Competitive solutions for
solving the problem METRICS: CHANNELS: EARLY ADOPTERS:
Key activities you Path to customers Who’s the first to adapt to
your solution?
measure
COSTS: REVENUE:
Customer acquisition costs Revenue model
Distribution costs Life time value
Hosting Revenue
People, etc. Gross margin
52. #3: LEAN CANVAS (EXAMPLE: FACEBOOK)
PROBLEMS: SOLUTION: UNIQUE VALUE UNFAIR ADVANTAGE: CUSTOMER
PROPOSITION: SEGMENTS:
Hard to reach specific Targeted ads
people with specific Targeted advertising 1 Billion users Marketers
demographics Share, Like, Newsfeed, Knows everything
1. Hard to stay in friends and profiles Connect to friends and Consumers at large
touch with all friends family
at once
2. How do I share my
METRICS: CHANNELS:
baby pictures?
EARLY ADOPTERS
CPC/CPM avg. bid Media agencies
CURRENT
pricing Facebook merchant
SOLUTIONS: High schools
# Served ads advertising program
Online ads e.g.
# of conversions
Google
Friend invitations (c2c,
Postcards, Calls, ..
DAU virality)
Facebook like-partners
COSTS: REVENUE:
Development Highly targeted - CPC/CPM advertising (“e.g. pay to display
Hosting an ad to 25 yo old men, that like World of Warcraft in Oulu”)
Lobbying
Free for consumers
55. 4 KINDS OF RISK IN MARKET EVOLUTION
(NOT SOLVED LINEARLY, BUT KIND OF APPEAR CHRONOLOGICALLY)
PRODUCT MARKET GROWTH / COMPETITIVENESS
RISK RISK SCALE RISK AND PROFIT RISK
56. (applied from Mark
Suster)
COMPETITIVENESS
AND PROFIT RISK
GROWTH /
Valuation
SCALE RISK
MARKET
RISK
PRODUCT
RISK
Time
57. PRODUCT RISK
How important is the problem for the customer?
Will your solution solve the problem? Can you
build it?
Does your solution deliver a unique value
proposition?
58. MARKET RISK
Who has the pain?
How do they solve problems today?
Will they pay for the problem? If not, who will?
59. GROWTH AND SCALE RISK
How will you find customers?
How will customers find you (at scale)?
How will your growth engine operate (viral, paid,
sticky, ..?)
How will you scale to demand?
60. COMPETITIVENESS AND PROFIT RISK
Are you getting paid?
Do you have a viable business (LTV!)?
Do you have a way to build unfair advantage?
63. PROGRESSIVE LEARNING BOARD
Before each experiment: Define Choose the fastest
your hypothesis and ways you way to test as an
validate learning experiment
Lean Canvas Experiment 1: Experiment 2: Experiment 3: Experiment 5: e.g.
Experiment 4: e.g. MVP
Module e.g. “Problem Interviews” e.g. Interviews e.g. Prototype v1.0
Problem/Solution Fit - Product Risk
There is a customer segment with the problem CUSTOMER
Problem is important to the customer PROBLEM
segment
Product delivers UVP (is unique and relevant to UVP
customer)
Product/Market Fit - Market Risk
There is a way to build the product to solve the SOLUTION
problem
There is a way to connect with early-adopters CUSTOMER
Customers are willing to pay for the solution to REVENUE
the problem
Growth / Scale Risk
We are able find customers CHANNEL
Customers are able to find us CHANNEL
Engine of growth is operative (viral, sticky or CHANNEL / REVENUE
paid)
We are able to scale on demand SOLUTION / COST /
METRIC
Market / Monetization Risk
We are getting paid REVENUE
We are able to generate revenue from each REVENUE / COST
customer
We have an unfair advantage UNFAIR ADVANTAGE
70. CURRENT HYPOTHESIS PLAN TO EXPERIMENT
BUSINESS MODEL AREA PRIORITY CURRENT HYPOTHESIS PLANNED EXPERIMENT
71. PROGRESSIVE LEARNING BOARD
Before each experiment: Define Choose the fastest
your hypothesis and ways you way to test as an
validate learning experiment
Lean Canvas Experiment 1: Experiment 2: Experiment 3: Experiment 5: e.g.
Experiment 4: e.g. MVP
Module e.g. “Problem Interviews” e.g. Interviews e.g. Prototype v1.0
Problem/Solution Fit - Product Risk
There is a customer segment with the problem CUSTOMER
Problem is important to the customer PROBLEM
segment
Product delivers UVP (is unique and relevant to UVP
customer)
Product/Market Fit - Market Risk
There is a way to build the product to solve the SOLUTION
problem
There is a way to connect with early-adopters CUSTOMER
Customers are willing to pay for the solution to REVENUE
the problem
Growth / Scale Risk
We are able find customers CHANNEL
Customers are able to find us CHANNEL
Engine of growth is operative (viral, sticky or CHANNEL / REVENUE
paid)
We are able to scale on demand SOLUTION / COST /
METRIC
Market / Monetization Risk
We are getting paid REVENUE
We are able to generate revenue from each REVENUE / COST
customer
We have an unfair advantage UNFAIR ADVANTAGE
72. MISTAKES ARE PROOF THAT YOU’RE TRYING.
THANKS!
kristian.luoma@gmail.com
@kluoma