business model, business model canvas, columbia, customer development, lean launchpad, lean startup, steve blank

1. Total customer interviews: 63
• 21 consumers
• 18 restaurants
• 23 coffee shops
• 1 bar
(+ 30 consumers surveyed)

2. OUR JOURNEY
INITIAL PROBLEMS
& THOUGHTS
• People don’t like waiting in line, especially as the world gets more fast-
paced
• Although digital ordering tools exist (Seamless, etc.), adoption is still not
very high, especially for specific use cases
• Starbucks has successfully cracked a new use case for coffee through its
mobile app pre-ordering
• This approach may be applicable to many different venues, such as delis,
fast casual restaurants, delis/bodegas, etc.
MISSION / IDEA
(DAY 0)
• We want to make mobile/web pre-ordering easier and more prevalent to
save people’s time
WHERE WE ENDED
UP
• Coffee shops have the most immediate need and application, as well as a
lack of competition
• SkipTheLine offers a way for independent coffee shops to compete with
the efficiency provided by large chains such as Starbucks and Dunkin’
Donuts
CUSTOMER
DEVELOPMENT
2

3. CUSTOMER DISCOVERY & KEY LEARNINGS
Day # Questions to be Answered Insights
Day 1
• Who are potential customer
segments?
• What are their pain points?
• Fast casual restaurants – Use Seamless/Eat24/etc. but
have pain points in menu updating & technology
integration
• Coffee shops – Deal with long rush hour lines (morning
and post-lunch) in small spaces, no existing pre-order
products
• Bars & clubs – Patrons have a hard time getting through
crowds and getting the bartender’s attention
Day 2
• Which segment is the most viable?
• How big are the market sizes?
• Fast casual restaurants – Less friction due to Seamless,
etc., but harder to compete, only small features
• Coffee shops – Better value prop but more pushback
(implementation & process complexity)
• Bars & clubs – Not feasible due to complexity/timing
Day 3
• Are coffee shops the best segment
despite resistance?
• What about the consumer side?
What segments?
• What’s the revenue model?
• Coffee shops – Talking to managers yields much better
results (more open to change), but needed more data
points
• Consumers – 100% (10/10) acceptance rate amongst
young professionals at a local coffee shop
• Some consumers might also be willing to pay for the
product
• Coffee shops would like to see proof of revenue
increase
Day 4
• How do we finally validate our
customer segments & value props?
• Is there enough demand to proceed?
• Many managers/owners were at least open to a trial
• Identified some very enthusiastic early evangelist shops
• Newer, growing coffee shops may be more open to
adoption, with others following once revenue increases
are validated
• Detailed survey data indicate promising results on
MISSION/IDEA: Want to make mobile/web pre-ordering easier and more
prevalent
3

4. • Reduce congestion
• Execute orders
faster
• Attract new
customers
• Increase retention
• Upsell with add-
ons
• Analyze data
• Simplify payments
• Payment
processor(s)
• Potentially third-
party developers
• Large one-time software development cost
• Smaller recurring software maintenance and improvement
costs
• Advertising revenue from select restaurants
• Revenue as a percentage of orders received
• Revenue as a membership fee
• Data harvesting
• Direct sales of
back-end app that
runs on a tablet or
computer
• Web/mobile
developers
(Objective-C, SQL)
• Sales resources
• Students
• Young
professionals
• Businesses /
groups (catering)
• Coffee shops
• Delis/bodegas
• Chipotle-like
restaurants
• Small local chains
• Columbia startups
Consumer
Restauran
t
Both
• Marketing costs associated with targeting individual
restaurants
• Mobile apps for
app store
• Save time
• Order food with
customizations
• Nutrition facts
• Central hub
• Simplify payments
• Marketing to
consumers
• Software
development
• Sales/marketing
to individual
restaurants
• Strong network
effects
• Word of mouth
BUSINESS MODEL CANVAS (DAY 1)
4

5. • Marketing costs to build up customer base
• Reduce congestion
• Fulfill orders faster
• Attract new
customers
• Increase retention
• Upsell with add-
ons
• Analyze data
• Simplify payments
• Integrate with
POS/ERP
• Easily customize
menus
• Payment
processor(s)
• Potentially third-
party developers
• Large one-time software development cost
• Smaller recurring software maintenance and improvement
costs
• Advertising revenue from select restaurants
• Revenue as a percentage of orders received
• Revenue as a membership fee
• Data harvesting
• Direct sales
• Payment
processors
• Web/mobile
developers
(Objective-C, SQL)
• Sales resources
• Students
• Young
professionals
• Businesses /
groups (catering)
• Fast casual
restaurants
• Delis/bodegas
• Chipotle-like
restaurants
• Small local chains
• Columbia startups
• Coffee shops
• Bars
Consumer
Restauran
t
Both
• Marketing costs associated with targeting individual
restaurants
• Mobile apps for
app store
• Save time
• Order food with
customizations
• Pictures
• Nutrition facts
• Central hub
• Simplify payments
• Marketing to
consumers
• Software
development
• Sales/marketing
to individual
restaurants
• Continuous
support
• Consulting on how
to improve usage
• Strong network
effects
• Word of mouth
BUSINESS MODEL CANVAS (DAY 2)
5

6. • Marketing costs to build up customer base
• Reduce congestion
• Fulfill orders faster
• Attract new
customers
• Increase retention
• Upsell with add-
ons
• Analyze data
• Simplify payments
• Integrate with
POS/ERP
• Easily customize
menus
• Payment
processor(s)
• Potentially third-
party developers
• Large one-time software development cost
• Smaller recurring software maintenance and improvement
costs
• Advertising revenue from select restaurants
• Revenue as a percentage of orders received
• Revenue as a membership fee
• Data harvesting
• Direct sales
• Payment
processors (e.g.,
app on Square
Platform)
• Web/mobile
developers
(Objective-C, SQL)
• Sales resources
• Students
• Young
professionals
• Businesses /
groups (catering)
• Fast casual
restaurants
• Coffee shops
• Bars
Consumer
Restauran
t
Both
• Marketing costs associated with targeting individual
restaurants
• Mobile apps for
app store
• Save time
• Order food with
customizations
• Pictures
• Nutrition facts
• Central hub
• Simplify payments
• Marketing to
consumers
• Software
development
• Sales/marketing
to individual
restaurants
• Continuous
support
• Consulting on how
to improve usage
• Strong network
effects
• Word of mouth
BUSINESS MODEL CANVAS (DAY 3)
6

7. • Marketing costs to build up customer base
• Reduce congestion
• Fulfill orders faster
• Attract new
customers
• Increase retention
• Upsell with add-
ons
• Analyze data
• Simplify payments
• Integrate with
POS/ERP
• Easily customize
menus
• Payment
processor(s)
• Potentially third-
party developers
• Large one-time software development cost
• Smaller recurring software maintenance and improvement
costs
• Advertising revenue from select restaurants
• Revenue as a percentage of orders received
• Revenue as a membership fee
• Data harvesting
• Direct sales
• Payment
processors (e.g.,
app on Square
Platform)
• Web/mobile
developers
(Objective-C, SQL)
• Sales resources
• Students
• Young
professionals
• Businesses /
groups (catering)
• Fast Casual
Restaurants
• Coffee shops
• Bars
Consumer
Restauran
t
Both
• Marketing costs associated with targeting individual
restaurants
• Mobile apps for
app store
• Save time
• Order food with
customizations
• Pictures
• Nutrition facts
• Central hub
• Simplify payments
• Marketing to
consumers
• Software
development
• Sales/marketing to
individual
restaurants coffee
shops
• Continuous
support
• Consulting on how
to improve usage
• Strong network
effects
• Word of mouth
BUSINESS MODEL CANVAS (DAY 4)
7

8. BUSINESS MODEL CANVAS (DAY 5)
• Marketing costs to build up customer base
• Reduce congestion
• Fulfill orders faster
• Attract new
customers
• Increase retention
• Upsell with add-
ons
• Analyze data
• Simplify payments
• Integrate with
POS/ERP
• Easily customize
menus
• Payment
processor(s) and
POS systems
• Square
• PayPal
• ShopKeep
• Shopify
• LevelUp
• Potentially third-
party developers
• Large one-time software development cost
• Smaller recurring software maintenance and improvement
costs
• Revenue as a percentage of orders received
• Advertising revenue from select coffee shops
• Data harvesting
• Direct sales
• Payment
processors (e.g.,
app on Square
Platform)
• Web/mobile
developers
(Objective-C, SQL)
• Sales resources
• Students
• Young
professionals
• Businesses /
groups (catering)
Coffee shops
• Independent/local
• Located in
competitive areas
• New and growing
Consumer
Restauran
t
Both
• Marketing costs associated with targeting individual
restaurants
• Mobile apps for
app store
• Save time
• Order food with
customizations
• Pictures
• Nutrition facts
• Central hub
• Simplify payments
• Marketing to
consumers
• Software
development
• Sales/marketing
to individual
coffee shops
• Continuous
support
• Consulting on how
to improve usage
• Strong network
effects
• Word of mouth
• Revenue as a percentage of order price
9

9. CUSTOMER SEGMENTS & VALUE
PROPS
10
Consumers Coffee Shops
We offer an
online/mobile ordering
app that allows you to
acquire new customers
who prioritize time and
convenience. By
speeding up your
ordering process, you
can turn over more
orders and get revenue
from customers who are
turned off by long waits.
We offer an
online/mobile ordering
app to save time by
ordering and picking up
from your favorite
coffee shop. Now, you
can support your local
stores while avoiding
long lines and
miscommunicated
orders.
Fast Casual
Restaurants
We offer an
online/mobile ordering
app to speed up your
pre-order/pickup
process. Unlike
Seamless, you can
customize menus
yourself, provide more
information, and better
integrate with your
POS/ERP systems.
Bars & Clubs
We offer an
online/mobile ordering
app that allows you to
reduce congestion at
the bar. By putting less
strain on the bartenders,
you can turn over more
orders and keep
customers at your
venue longer.

10. Consumer – Young
Professionals
• Want to save time
• Very busy schedule
• Have a daily routine
• Prefer an app over ordering
by phone or in person
• Tech-savvy
• Male and female
• Aged 21-40
Consumer –
Students
Vendor – Coffee
Shop
• Independent, local,
specialized coffee shops
• New/growing customer
base
• Prioritize customer
experience and satisfaction
• Treat coffee shop as home,
employees as family
• Uses Square for POS (initial)
• Get frustrated when barista
gets order incorrect
• Rushing to get to class
• Speed up ordering
• Enjoy relaxing, socializing,
or studying at coffee shop
• Male and female
• Aged 18-28
(Resegmented Markets)
11
MARKET TYPE & CUSTOMER ARCHETYPES

11. GET STRATEGY
12
GET KEEP GROW
Consumers
• Ad flyers at shops
• Social media
campaigns
• Discounts for early
adopters
• Stand in long lines
and promote app
• Adjust process for
obstacles discovered
• Facilitate social media
sharing
• Partner with Yelp for
streamlined reviews
• Incorporate customer
feedback
• Transition more costs to
the coffee shop
• Referral discounts
• Add requested features
• Scale to other customer
segments
Coffee Shops
• Direct sales
• Partner with POS
vendors
• Trial period with no
charges
• Provide reports on
usage
• Share customer
feedback
• Incorporate shop
suggestions
• Statistics on revenue
growth
• Small
business/restaurant
conferences
• Ads in trade
publications

12. CHANNEL & REVENUE MODEL
App Store Direct SalesPOS Vendors
Coffee ShopsConsumers
1. Consumer finds
coffee shop nearby
and places order in
the SkipTheLine
SkipTheLine
2. POS vendors
process
payment, order
is sent to coffee
shop
Coffee shops
acquired via direct
sales & POS vendor
partnerships
Consumers
download app after
activating
+ 0%-5% per trans. + 0%-5% per trans.
3. Consumer picks up order from coffee
shop. Coffee shop staff ensure a
personalized experience to maintain
interaction.
- 2.9% + $0.30 per
trans.
13

13. Find Coffee Shop
Zip Code
SkipTheLine
Joe
23 W 116th St
Gregory’s Coffee
123 W 96th St
The Bean
1323 Broadway
Joe
SkipTheLine… …
Cappuccino
Checkout
SkipTheLine …
2
Cameron
Use Card xxx543
Change/Add
Card
SUBMIT
MVP (ORDER FLOW)
Guatemala
single-
origin,
floral, etc.
8:00
AM
Pickup Time
Running Late
14

14. LESSONS LEARNED
15
• Call potential restaurants/coffee shops first to secure meetings with
managers (not all customers are the same)
• Map out route in advance before “leaving the building”
• It’s difficult not to try to “sell” something even before it exists
• Listen to the customer’s needs – entrepreneurs are problem solvers
• Be open to changing your mind – 1x, 2x, 3x, … 50x
• It’s OK to hear 99 “no’s” and 1 “yes” … now you just found your
Earlyvangelist
• When in a new/re-segmented market, start small and work your way up
• Call back Kobrick Coffee and set up a meeting with the owner and investors
• Speak to other “start-up” and local coffee shops without a business model
etched in stone who want to build a strong customer base and drive their
sales
• Determine whether target market has been reduced too much
• Do more research on customer acquisition channels – especially how to
partner with POS providers such as Square
• Begin looking for software developers and move beyond an MVP
• Code the app, and start 4 month “demo/trial” during the spring semester
NEXT STEPS

15. APPENDIX
16

16. MARKET SEGMENT SIZES
17
3-Yr
Opp.
$3.9M
Total Market Size
(All US Restaurants)
$14B
Market Segment
$780M
3-Yr
Opp.
$4.9M
Total Market Size
(All US Restaurants)
$14B
Market Segment
$487M
3-Yr
Opp.
$5.2M
Total Market Size
(All US Restaurants)
$14B
Market Segment
$520M
Fast Casual Restaurants Coffee Shops Bars & Clubs

17. MARKET SEGMENT SIZES CALCS & METRICS
18
(all figures in $MM) Fast Casual Coffee Shops Bars
Total dining revenue (US) $709,240 $709,240 $709,240
% of revenue charged 10% 10% 10%
Target online ordering share 20% 20% 20%
Total market size $14,185 $14,185 $14,185
Total segment revenue $39,000 $32,460 $26,000
Non-espresso sales 75%
Target segment market size $780 $487 $520
Number of establishments 65,000 55,246 69,974
3-yr target market share 0.5% 1.0% 1.0%
3-yr target customers 325 552 700
Target market size $3.9 $4.9 $5.2
Revenue/store $600,000 $587,554 $371,567
Annual contribution margin $12,000 $8,813 $7,431
Retention rate 75% 75% 75%
Discount rate 10% 10% 10%
Estimated LTV $25,714 $18,886 $15,924
Estimated CAC $5,000 $5,000 $5,000
LTV/CAC Ratio 5.1 3.8 3.2
Sources
https://www.restaurant.org/Downloads/PDFs/News-Research/research/ForecastExecSummary2015-
FINAL.pdf
https://blogs.technomic.com/forecasting-the-future-of-fast-casual/
http://www.statista.com/statistics/196570/revenue-of-the-us-coffee-and-snack-shops-industry-since-
2002/
http://www.statista.com/statistics/196590/total-number-of-snack-and-coffee-shops-in-the-us-since-
2002/
http://www.ibisworld.com/industry/default.aspx?indid=1685

18. PETAL DIAGRAM
19

19. HYPOTHESIS TESTING
20
Segment Test Pass Rate Conclusion
Coffee Shops (Managers &
Owners)
“We believe that this app can help you
better serve customers and increase your
store’s sales. Would you be willing to
test the app for free and subscribe as a
customer if it works?”
9/12 Pass
Consumers
(Young Professionals)
“Would you use this app on a regular
basis?”
10/10 Pass
Consumers
(Young Professionals)
“Would you be willing to pay a 5% fee for
this app?”
6/10 Continued to test via
survey to get more data
points
Consumers
(Students)
“Would you use this app on a regular
basis?”
4/5 Continued to test via
survey to get more data
points
Consumers
(Students)
“Would you be willing to pay a 5% fee for
this app?”
3/5 Continued to test via
survey to get more data
points
Additional Survey Findings
• Surveyed 31 students and young professionals to get a diverse and more comprehensive set of quantitative
data not available through in-person interviews
• 11/12 (92%) of consumers surveyed who prefer large chains over independent shops would choose an
independent shop if it had mobile/web pre-ordering features
• The average wait for these consumers is 10 minutes
• The average WTP of all consumers surveyed was 3% of the total order size
• All else being equal (location, quality, etc.), 14/14 (100%) would choose an independent shop with
mobile/web pre-ordering over one without it

20. RISKS & MITIGATIONS
Risk Mitigations
Coffee sitting on
counter
• Customer specifies time of pickup
• Add a “running late” button
• Start with drip/iced coffee and food
Operational
implementation
& execution
• Dedicated training and best practices
• Constant employee & customer
feedback and iteration
Unwillingness to
pay
• Trial period to demonstrate
effectiveness & increased sales before
introducing payment
Not enough staff
to handle orders
• Increased sales will allow for more staff
21