2. Dr. Takeru Ohe
JBMC Executive Committee
He sits on the boards of Cognex Japan K.K., a machine vision manufacturer, and ConsulFng OASIS K.K., a
consulFng firm specializing in new business development.
He taught Entrepreneurship at Waseda University, Business School and served as managing director of the
Waseda University IncubaFon Center. Currently he serves as an advisor to Research PromoFon Division of
Waseda University and visiFng professor at the InternaFonal University of Japan.
Ph.D. in Experimental Physics from the University of Maryland and MBA from Columbia University
Graduate School of Business.
Dr. Ohe has iniFated various successful projects: “Born ASEAN” project, ConsulFng Based Learning for
ASEAN SMEs program, Teaching IncubaFon Center Project at Waseda University. Waseda Venture Kids
program and etc.
(C) Takeru Ohe 2 17/10/16
5. Uncertainty for New Business
1. There is uncertainty for any business due to being in the uncertain
world.
2. There is addiFonal uncertainty for any new business since there are
many unknown for startups.
! To promote a new business, you must deal with uncertainty and take
advantage of the uncertain environment.
17/10/16 (C) Takeru Ohe 5
6. How to compete: the wave of transient
advantage of uncertainty world
R
e
t
u
r
n
17/10/16 (C) Takeru Ohe 6
The End of CompeFFve Advantage (P13) Rita Gunther
McGrath, HBRP 2012
Launch Ramp up Exploit Reconfigure Disengage
7. How to compete: the wave of transient
advantage of uncertainty world
R
e
t
u
r
n
17/10/16 (C) Takeru Ohe 7
The End of CompeFFve Advantage (P13) Rita Gunther
McGrath, HBRP 2012
Launch Ramp up Exploit Reconfigure Disengage
9. Definition of New Business
Modified Ansoff Matrix
17/10/16 (C) Takeru Ohe 9
Diversifica8on
Market
Development
Product
Development
Market Penetra8on
We know market We do not know market
We do not know Product We know product
10. Types of Assumptions
17/10/16 (C) Dr. Takeru Ohe 10
ー ー
Quantifiable
InternalassumptionExternalassumptions
assumption
CanbecontrolledCannotbecontrolled
Vision
Mission
Business policy
Production
quantity
Sales force
Selling price
Market price
Growth rate
Competitor's
price
Social trend
Trend
Change in
legislation
Cannot be quantified Can be quantified
11. Accuracy of Quantifiable
Assumptions
17/10/16 (C) Takeru Ohe 11
AssumpFons Items Accuracy
Internal
AssumpFons
Development cost
Development period
70%
External
AssumpFons
Market price
New product
introducFon
Market share
30%
12. 17/10/16 (C) Dr. Takeru Ohe 12
Experiment:
Accuracy of Assumptions
• Park vendor: gic items such as poster cards, candles at
Inogashira Park in Tokyo
• The parFcipants of the experiment were asked to make 30
assumpFons mainly markeFng four P: product, place, price,
promoFon
Participants Accuracy
Businessmen Max 30% Average 20%
Students Max 15% Average 10%
14. Experimental Methodology for Business
Management
As experimental physics has
led to the advancement of
physics, "experimental
management” can lead to the
development of Business
management.
"Experimental management"
which was developed for new
business must be applied at
once to the main lines of the
company due to uncertainty in
the ultra-compeFFve world.
17/10/16 (C) Takeru Ohe 14
18. 17/10/16 (C) Dr. Takeru Ohe 18
Assumptions
• One of the greatest difficulFes in
considering new opportuniFes, is managing
what we know versus what we assume to
be true.
• Statements of fact are statements for
which we are able to provide
verificaFon.
• An assumpFon is a statement of fact for
which it is not possible to provide
verificaFon, because the data is not
available.
• A key aspect of opportunity evaluaFon and
selecFon is managing the raFo of
knowledge (factual statements, supported
by data) to assumpFons (statements that
need to be proven true or false).
• It is important to change “qualitaFve
statements” to “quanFtaFve statements” to
check whether they are right or not.
Discovery Driven Growth
Rita Gunther McGrath and Ian C. MacMillan
2009 HBS
19. 17/10/16 (C) Dr. Takeru Ohe 19
• AssumpFons can be checked quanFtaFvely:
• The 50% of Children’s goods sold are less than $5.
• More than 50% visitors accept used children’s merchandise.
• A shop is larger than 300 m₂, and it is enough to carry more than 1000
items.
• A large shop specialized in children’s goods is very akracFve.
• Main goods are brand-name children’s clothes (and baby goods).
• The purchase amount per customer is around $ 50.
• Turnout per month is 5,000 people.
• An area within a 30-minute ride is a trading zone.
“Statements which you can check
quantitatively” are useful as assumptions
20. 17/10/16 (C) Dr. Takeru Ohe 20
• It 's hard to verify vague statements:
• If the customers purchase low-priced children’s goods, they are interested
in used goods.
• A clean and spacious sales floor and lot of variety of merchandise are
important.
• A large shop specialized in children’s goods can akract customers.
• AkracFve products are brand-name children’s clothes and baby goods
• Purchase amount per customer is large.
• Turnout per month is large.
• Even train ride area can be the commercial area.
“Statements which you can not check”
are not useful as assumptions
21. Assumption Test Card
ITEMS Remarks
1 Test No.
2 AssumpFon
3 Metric
4 Test
5 Data
6 ValidaFon
7 Period
8 Expense
17/10/16 (C) Dr. Takeru Ohe 21
(Reference) Value ProposiFon Design Alex Osterwalder, etc. 2014
22. 17/10/16 (C) Dr. Takeru Ohe 22
Ratio of Knowledge to
Assumptions
In the development of your offering to
capitalize on a recognized opportunity, the
raFo of knowledge to assumpFons is very low
in the early stages (concept development).
As the project progresses, we learn more and
more, and the raFo of knowledge to
assumpFons increases.
23. 17/10/16 (C) Dr. Takeru Ohe 23
Turning Assumptions to Knowledge
To be an existing business (10:90)
New business (90:10)
Turning assumptions
to knowledge
Amountofknowledge90%
Amount of assumptions 90%
24. Six Stages of New Business Development
1
Intui8ve
Idea
2 Business
Idea
3
Business
Concept
4
Business
Model
5 Business
Plan
6
Scale Up
Search
R&D
Theme
Documente
d Theme
R&D
Ini8al
Experiment
al Model
Minimal
Func8onal
Model
Commerci
aliza8on
Model
Produc8on
Model
Uncertainty level
Development
level Stage
25. Where are you in new business development stages?
Milestones
Status
(〇 for
Yes)
1 Did you have a written business concept (who has the problem,
what is the problem, what is your solution, and what is value
proposition)
2 Did you meet with people who have the problems?
3 Did you identify key problem which people have?
4 Did you have a solution to the problem?
5 Did you meet experts in this field?
6 Did you build a minimum viable product?
7 Did you identify competitive products/services?
8 Did you have a written business model on canvas?
9 Did you pivot already your initial business model?
17/10/16 (C) Dr. Takeru Ohe 25
26. Key Failure Factor
• These are assumpFons which influence the failure of the business. If
these assumpFons were wrong, you need to stop the project or to
pivot the project.
• They affect many elements of the project.
• They have the greatest effect on outcomes.
• They make or break basic feasibility: If they are wrong, you can’t
delivery the business.
• Key Failure Factors are different for different business models.
Examples are:
• CompeFtors‘s acquisiFon of strong Intellectual properFes
• Lack of key raw materials such as rare metals
• The market price
17/10/16 (C) Dr. Takeru Ohe 26
27. 17/10/16(C) Dr. Takeru Ohe 27
Importance of Key
Failure Factor
• The concept of Key Failure Factor is suited for the
experimental management, or the lean startup
method.
• Key Failure Factor is more important than Key
Successful Factor in new business development.
28. Relationship: Business Concept and BMC
17/10/16 (C) Dr. Takeru Ohe 28
Key
Partners
Key
AcFviFes
Value
Pro-
posi8ons
Customer
RelaFonships
Customer
Segments
Key
Resources
Solu8ons
Channels
Cost
Structure
Revenue
Streams
Business Concept
29. “Business Concept” is
a group of the most important assumptions
The most important assumpFons of your new business are “customer
segment,” “value proposiFon,” and your “soluFon” to the “problems”
which the customer segment has. These assumpFons are grouped
together to form a “business concept”.
These assumpFons must be checked in the first phase of the business
development to be successful. Once one of the assumpFons of this
concept was found to be incorrect, then the concept itself is required
to be modified or pivoted or given up enFrely.
17/10/16 (C) Dr. Takeru Ohe 29
30. 17/10/16 (C) Dr. Takeru Ohe 30
A business concept has clear
answers to the following questions
Who has problems?
What kind of problems do they have?
What is your soluFon to the problems?
Why do they buy your soluFon (value proposiFon) ?
31. 3. International Business Model
Competition
IBMC:
http://
www.businessmodelcompetition.com/
general-information.html
32. IBMC Founders, Host Schools,
Judges
The IBMC is currently co-hosted by Brigham Young University, Harvard University,
and Stanford University.
2013 Host - Harvard University
2014 Host - Brigham Young University
2015 Host - Brigham Young University
2016 Host – Microsoc
2017 Host – Computer History Museum
The Founders:
Nathan Furr (Ph.D., Stanford; Entrepreneurship Professor, BYU)
Steve Blank (Entrepreneurship Professor, UC Berkley; Lecturer, Stanford)
John Richards (Entrepreneurship Professor, BYU)
Scok Petersen (Director, Center for Entrepreneurship & Technology, BYU)
The judges of the 2017 IBMC
hkp://www.businessmodelcompeFFon.com/2017-
ibmc-judges.html
17/10/16
(C) Takeru Ohe 32
34. Business Model Competition evaluates the
process of checking of assumptions
Business Model Compe88on
(BMC)
• The objecFve is to help
start the business
• Most of Fme spent
meeFng potenFal
customers or searching
markets
• Customer segmentaFon
• Value proposiFons
• The most important thing is
revenues
• The simple profit
statement is good enough
Business Plan Contest
(BPC)
• The objecFve is to write an
elaborate and logical plan
• Most of hours are spent in
front of the PC to get
secondary data
• A lot of Fme is spent to
prepare financial
statements
(C) Takeru Ohe 34 17/10/16
38. The Japan Business Model Competition
(JBMC)
• JBMC was founded in 2013 by
• Prof. Takeru Ohe (Waseda University adviser, IUJ ),
• Dr. Makoto Sarata (ASTEM)
• Mr. Satoshi Okuda (Primestyle) in 2013.
• JBMC is one of feeder compeFFons for IBMC, and the winner of JBMC automaFcally will be sent to the
IBMC.
• The 5th Japan Business Model CompeFFon will be held on March 3 (Sat) and 4 (Sun), 2018
hkps://mail.google.com/mail/ca/u/0/?
ui=2&ik=22db79abd1&view=ak&th=15ea8f36e8a39967&add=0.1&disp=safe&realadd=f_j7voywck1&z
w
hkp://japan-bmc.com/index.html
hkps://www.facebook.com/japan.bmc
info@japan-bmc.com
17/10/16 (C) Takeru Ohe 38
39. 2015 JBMC Finalists
17/10/16 (C) Takeru Ohe 39
Business Model University
"Dream Pharos" Cloud notebook between
parents and nursery
Japan Advanced InsFtute of Science and Technology
"Next .I " DecoraFon kit for lunch Keio University
Tailored health analysis system Tokyo University
"Dream Come True" new SNS Keio University
Japanese Language and culture lessons
through Youtube
Waseda University
● Log System for low back pain Kyoto University
Customer service system for beauty salons Tokyo University
Total hair care system based on gene
analysis
Tokyo University
Assist device system with dispensable
actuator
Waseda University
Social "fidng room" pla•orm InternaFonal University of Japan
40. 2016 JBMC Finalists
17/10/16 (C) Takeru Ohe 40
Business Model University
New Found Experience Nagoya Commerce College
Homemade Food Delivery- Kokushikann University
FLEETANGLE -An Automated & Intelligent
Fleet Management System
Nagaoka Science & Technology
University
1tap diet Kyushu University
GOFITURE (Medical Tourism Pla•orm) Osaka University
Challenged to Challengers Kyoto University
●
Establishing New Food Cycle System by
UFlizing Insect Feed
Waseda University
Maternity Beacon Nagoya Commerce College
Super-Cooling Vegetable delivery
revoluFon by super-cooling preservaFon
Osaka Prefecture University
Electric Money Balance Display System
Advanced InsFtute of Industrial
Technology
41. 2017 JBMC Finalists
17/10/16 (C) Takeru Ohe 41
Business Model University
Doctors Crowd Waseda University MBA
Tranet Miyazaki University
Social Security System Osaka University
Histream Kyushu University
Campus Life Assistant Gakushuin University
Hanoi Recycle Factory (or Hanoi
ZStore)
InternaFonal University of Japan
Efficacy and toxicity evaluaFon service Tsukuba University
eYoga Hong Kong Chinese University
42. 5. How to prepare
for the competition
17/10/16 (C) Takeru Ohe 42
43. The JBMC rewards students for:
1. IdenFfying and tracking key business model hypotheses (use the
Business Model Canvas)
2. TesFng and validaFng those hypotheses with customers (get outside the
building)
3. PivoFng and iteraFng their business model based on customer
interacFons
• Submissions for the compeFFon focus on the process and learning a team
goes through as they test their unexamined hypotheses in the field and
develop validated business models. The goal is validated learning about the
business model assumpFons and failing early is a success compared to
failing late.
17/10/16 (C) Takeru Ohe 43
45. Assumption Test Card
Items Note
1 Hypothesis
2 Metric
3 Test Method
4 Data
5 Validate
results
6 Period and
cost
7 Next AcFon
(pivoFng)
17/10/16 (C) Takeru Ohe 45
Resource: Value ProposiFon Design, Osterwalder, A. & etc., Wiley (2014)
46. 2013 Best Business Model “Owlet”
http://www.businessmodelcompetition.com/past-winner-videos.html
Resource: Value Proposition Design, Osterwalder, A. & etc., Wiley
(2014)
The owlet is a wireless monitor measuring
your baby's heart rate and oxygen. The
data is sent to your smartphone and will
alert you if there's an emergency.
17/10/16 (C) Takeru Ohe 46
47. Example: Owlet
• IniFal Idea
• Opportunity
• Monitoring pulse oximetry could be easier without the cord
between the device and the monitor display
• Our Smart Sock is designed to noFfy you if your baby’s oxygen
levels or heart rate fall out of a preset range.
hkp://www.businessmodelcompeFFon.com/past-
winner-videos.html
17/10/16 (C) Dr. Takeru Ohe 47
48. Owlet: constant progress with systematic
design and testing
• Wireless monitoring of babies' blood oxygen, heart rate and sleep data.
• The owlet is a smartphone compaFble baby monitor. But for added safety
and security, Owlet is designed to funcFon independently of your Apple
device. The Smart Sock and the Base StaFon connects through low power
Bluetooth. If your iOS device dies, or home internet goes out, your Base
StaFon will sFll alert you if your baby stops breathing. For convenience, the
Base StaFon will upload your infant’s heart rate and oxygen levels to the
cloud. You, and anyone with permission, can view your baby’s levels from
anywhere in your home, Grandma’s house, or even the office.
17/10/16 (C) Takeru Ohe 48
Resource: Value ProposiFon Design, Osterwalder, A. & etc., Wiley (2014)
49. 49
Resource: Value Proposition Design, Osterwalder, A. & etc, Wiley (2014)
4.
Customer Relationships
3. Channels
2.
Value Propositions
7.
Key AcFviFes
6. Key Resources
(Intellectual property,
Assets)
8.
Key Partners
5. Revenue Stream 9. Cost structure
Owlet Business Model: version 0
1. Initial Idea: an opportunity (Monitoring pulse oximetry could be
easier without the cord between the device and the monitor display)
17/10/16 (C) Takeru Ohe
1.
Customer Segments
Pulse
oximetry
monitor
Nurses
Hospitals Hospitals
Salesmen
50. Test 1A
Nurse Interviews
Items
1 Hypothesis Wireless pulse oximetry is more convenient
2 Metric Percentage of posiFve feedback
3 Test Interview nurses
4 Data Of 58 interviews, 93 percent prefer the wireless
monitoring
5 Validate results Validated
6 Period and cost 1 week, $0
7 Next acFon Interview with hospital manager
17/10/16 (C) Takeru Ohe 50
Resource: Value ProposiFon Design, Osterwalder, A. & etc., Wiley (2014)
51. Test 1B
Hospital Administrator Interviews
Items
1 Hypothesis Wireless pulse oximetry is more convenient
2 Metric Percentage of posiFve feedback
3 Test Interview hospital feedback
4 Data 0 percent ready to pay more for wireless. Ease of use is
not a pain, it not cost effecFve.
5 Validate results Un-validated
6 Period and cost 1 week, $0
7 Next acFon New market segment with this technology idea
17/10/16 (C) Takeru Ohe 51
Resource: Value ProposiFon Design, Osterwalder, A. & etc., Wiley (2014)
52. 52
Resource: Value Proposition Design, Osterwalder, A. & etc., Wiley (2014)
4.
Customer Relationships
3. Channels
2.
Value Propositions 7.
Key AcFviFes
6. Key Resources
(Intellectual property,
Assets)
8.
Key Partners
5. Revenue Stream 9. Cost structure
Owlet Business Model: version 2
Pivot: Change the customer segment from nurses and
hospitals to worried parents
17/10/16 (C) Takeru Ohe
1.
Customer Segments
7.
Key AcFviFes
8.
Key Partners
Baby alarm Parents
Baby
store
< $200 price
53. Test 2
Parent Interviews
Items
1 Hypothesis Parents are ready to adopt and buy a wireless baby alarm
2 Metric Percentage of adopFng parents
3 Test Interview months
4 Data Of 105 interviews, 96 percent adopt the wireless
monitoring “Awesome. I want to buy now!”
5 Validate results Validated
6 Period and cost 1 week, $100
7 Next acFon Develop MVP and landing page
17/10/16 (C) Takeru Ohe 53
Resource: Value ProposiFon Design, Osterwalder, A. & etc., Wiley (2014)
54. Test 3
MVP Landing page
(minimum viable product)
Items
1 Hypothesis A smart sock is convenient and easy to use for monitoring
2 Metric Number of posiFve comments
3 Test An MVP, with a video an a website
4 Data 17,000 views, 5500 shares of facebook, 500 posiFve
comments by parents, distributors, and research
organizaFons
5 Validate results Validated
6 Period and cost 2 week, $320
17/10/16 (C) Takeru Ohe 54
Resource: Value ProposiFon Design, Osterwalder, A. & etc., Wiley (2014)
55. Test 4
A/B Price test
Items
1 Hypothesis Rental versus sale at $200+ sale price
2 Metric Percentage for a sale price
3 Test A/B tesFng, 3 rounds on the website
4 Data 1170 people tested, $299 the best price
5 Validate results Validated
6 Period and cost 8 weeks, $30
17/10/16 (C) Takeru Ohe 55
Resource: Value ProposiFon Design, Osterwalder, A. & etc., Wiley (2014)
56. 56
Resource: Value Proposition Design, Osterwalder, A. & etc, Wiley (2014)
4.
Customer Relationships
3. Channels
2.
Value Propositions 7.
Key AcFviFes
6. Key Resources
(Intellectual property,
Assets)
8.
Key Partners
5. Revenue Stream 9. Cost structure
Owlet Business Model: version 3
With a more minimal, less risky product, and infant health tracker (heart rate,
oxygen levels, and sleep patterns), but without alarm, for another customer
segment; the less worried parents
17/10/16 (C) Takeru Ohe
1.
Customer Segments
7.
Key AcFviFes
8.
Key Partners
Baby alarm
FDA
clearance
<$200 price
Infant
health
tracker
Baby stores
Worried
parents
Less
worried
parents
Baby stores
57. Test 5
Interview/Proposition: Owlet Challenge
Items
1 Hypothesis Less worried parents are ready to adopt and buy a
wireless baby health tracker, without alarm
2 Metric Percentage of parents adopFng the no-alarm tracker
3 Test Interview at retail locaFons, having to choose between
Owlet tracker and other similar systems (video, sound, and
movement)
4 Data Of 81 people interviewed, 20%adopted the Owlet tracker
5 Validate results Validated
6 Period and cost 3 weeks, $0
7 Next acFon
17/10/16 (C) Takeru Ohe 57
Resource: Value ProposiFon Design, Osterwalder, A. & etc., Wiley (2014)