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Validating Your Business Ideas Using Design Thinking, Business Model Innovation, and Customer Development: Summary
- 1. Startup 101: Validate Your Business Ideas 12 October 2016 | Jozihub
- 2. Tools & Methods for Generating, Prototyping, and Testing Business Ideas
- 3. Village offers design thinking & strategic design services to help you transform complexity into unique opportunities for innovation and change. design. innovation. change khaya@villagedesign.co.za
- 4. - Charles Spurgeon The way to do a great deal is to keep on doing a little. The way to do nothing at all is to be continually resolving that you will do everything ”
- 6. 1. Design Thinking 2. Business Model Canvas 3. Customer Development
- 7. 01 The Design Thinking Process Using design to create, innovate and solve problems
- 8. Design Thinking is a way of applying design methods to problem solving and innovation There are many models and versions of “the design process”
- 9. empathise define ideate prototype test iterate Source: Tim Brown, Change By Design
- 10. desirability human viability business feasibility technicalinnovation Source: Tim Brown, Change By Design
- 11. 02 The Business Model Canvas A tool to organise your business model hypothesis
- 12. empathise define ideate prototype test iterate
- 13. 01 Customers 03 Infrastructure 04 Financial Viability 02 Offer Business Model Design Logic Source: Alex Osterwalder & Yves Pigneur, Business Model Generation
- 14. 01 Customers 03 Infrastructure 04 Financial Viability 02 Offer Business Model Design Logic Cost Structure C$ Key Resources KR Key Partnerships KP Key Activities KA Revenue Streams R$ Value Proposition VP Customer Channels CC Customer Relationships CR Customer Segments CS Source: Alex Osterwalder & Yves Pigneur, Business Model Generation
- 15. Hypothesis: a guess about how you will create, deliver, and capture value
- 16. C$ KR KP KA R$ VP CC CR CS Example: Apple iPod seamless music experience hardware design marketing people record companies manufacturers content & agreements apple brand iTunes Software iPod hardware lovemark switching costs retail stores apple stores iTunes store apple.com mass market hardware revenues music revenuesmarketing & sales manufacturing people Source: Alex Osterwalder & Yves Pigneur, Business Model Generation
- 18. desirability customers viability finances feasibility infrastructurevalue proposition Business Model
- 19. Value Proposition VP The Offering / Value Proposition • What value do we deliver to customers • Which of our customers problems do we solve • Which bundles of products/ services are we offering to different customer segments A. Performance of product/service B. Newness C. Customisation and co-creation D. Getting the job done E. Design F. Brand/status G. Better pricing H. Cost reduction I. Risk reduction J. Accessibility (e.g. fractional ownership etc.) K. Convenience/usability
- 20. Key Resources KR Key Partnerships KP Key Activities KA Infrastructure: Feasibility • The network of suppliers and partners that will make the business model work • The most important assets to create value, reach customers, and earn revenue • What must the company do deliver value and operate successfully Source: Alex Osterwalder & Yves Pigneur, Business Model Generation
- 21. Customer Channels CC Customer Relationships CR Customer Segments CS Customers: Desirability • The types of relationships or service that will drive acquisition, retention, and sales A. Personal assistance B. Dedicated personal assistance C. Self-service D. Automated service E. Community of interest F. Co-creation G. Direct sales force H. Direct web sales I. Own stores J. Partner stores K. Wholesaler Relationship Types Channel Types • How you communicate and reach customers with value proposition • For who are you creating value
- 22. Cost Structure C$ Revenue Streams R$ Finances: Viability • What you capture from delivering value to customers • Can be one-time or recurring sources • Fixed pricing or Dynamic pricing • What it costs to operate the business model • Cost driven to minimise costs • Value driven to maximise value Source: Alex Osterwalder & Yves Pigneur, Business Model Generation
- 23. Cost Structure C$ Key Resources KR Key Partnerships KP Key Activities KA Revenue Streams R$ Value Proposition VP Customer Channels CC Customer Relationships CR Customer Segments CS Efficiency Value
- 24. 03 Customer Development Process Going from startup to building a great company
- 26. empathise define ideate prototype test iterate
- 27. - Steve Blank & Bob Dorf A startup is a temporary organisation designed to search for a repeatable and scalable business model ”
- 28. Customer Discovery Customer Validation Customer Creation Company Building Source: Steve Blank & Bob Dorf, Startup Owner’s Manual Search Execute
- 29. Customer Discovery • The beginning of a learning process • Founders develop a vision, then find customers for that vision • Get out of the building, talk to customers • Try to learn in depth about their problem • Learn what your customers care about • Create low fi of minimum viable product • Test customer reactions to slowly turn business model hypothesis into fact • Learn how customers make buying decisions • Customer discovery is complete when customers positively confirm the importance of the problem and the solution
- 30. 01 Customers 03 Infrastructure 04 Financial Viability 02 Offer Business Model Design Logic Cost Structure C$ Key Resources KR Key Partnerships KP Key Activities KA Revenue Streams R$ Value Proposition VP Customer Channels CC Customer Relationships CR Customer Segments CS Source: Alex Osterwalder & Yves Pigneur, Business Model Generation
- 31. Founder’s Vision the best coffee shop in town Value Proposition VP image source: https://stocksnap.io/photo/3QX7WQCK52
- 32. Learn about your customers know what they care about Value Proposition VP Customer Segments CS image source: http://www.shutterstock.com/pic-385284079/stock-photo-coffee-tasting-with-baristas-smelling-the-aroma-of-many-cups.html
- 33. Minimum Viable Product: coffee in a cup Key Resources KR Key Activities KA Value Proposition VP Key Partnerships KP image source: http://www.gettyimages.com/photos/cup?sort=mostpopular&excludenudity=true&mediatype=photography&phrase=cup
- 34. Customer Validation • Test ability to repeat and scale with more customers • Create high fidelity minimum viable product • Test sales with paying customers or user engagement • Prove that the market and customers exist with serious intent to purchase • Verify core product features • Test perceived value and demand for product • Identify economic buyer • Establish sales, pricing, and channel strategies • Customer validation is complete when enough customers, with repeatable and scalable sales, make the business model profitable
- 35. High Fidelity MVP: build on the core Key Resources KR Key Activities KA Value Proposition VP Customer Segments CS Key Partnerships KP Cost Structure C$ image source: https://www.pexels.com/photo/restaurant-coffee-cup-cappuccino-2709/
- 36. Verify core features focus on what matters most Key Resources KR Key Activities KA Value Proposition VP Customer Segments CS image source: http://www.eater.com/2016/3/13/11214194/how-to-taste-coffee
- 37. Establish Sales pricing, channels, cycles etc Key Activities KA Value Proposition VP Customer Channels CC Revenue Streams R$ Cost Structure C$ Customer Relationships CR image source: http://www.businessinsider.co.id/starbucks-ex-manager-describes-chaotic-working-conditions-2015-10/#ouZldGPFaP1GwIsy.97
- 38. Customer Creation • The beginning of execution • Build on initial sales success • Step on the gas and drive scale • Get serious about marketing activity: spend • Drive demand into sales channel to scale the business
- 39. Drive Sales spend on marketing to drive demand Customer Channels CC Key Activities KA Value Proposition VP Key Resources KR Revenue Streams R$ Customer Relationships CR Customer Segments CS Cost Structure C$ Key Partnerships KP image source: http://uiconstock.com/30-flyers-designers/free-coffee-shop-a4-flyer-preview-1/
- 40. Company Building • When you know who your customers are • You know what value to deliver to them • The startup has found a predictable, repeatable, scalable business • Begin transition from startup to company • Set up structured departments to execute what has been validated in previous phases • Hire people with clearly defined roles
- 41. Deliver, Scale, Repeat but don’t forget to keep on learning Cost Structure C$ Key Resources KR Key Partnerships KP Key Activities KA Revenue Streams R$ Value Proposition VP Customer Channels CC Customer Relationships CR Customer Segments CS image source: http://capturedmarin.com/
- 42. Become a lifelong student of your customers
- 43. Customer Discovery Customer Validation Customer Creation Company Building Take founder’s vision and turn it into a Business Model hypothesis Test business model for repeatability and scalability Build and drive user demand Scale and repeat the validated model Source: Steve Blank & Bob Dorf, Startup Owner’s Manual
- 44. - Charles Spurgeon The way to do a great deal is to keep on doing a little. The way to do nothing at all is to be continually resolving that you will do everything ”
- 45. Go!
- 46. khaya@villagedesign.co.za +27 82 669 0747 design. innovation. change www.pexels.com