Venture Design, Session I at General Assembly (GA SF)

Alex Cowan
VENTURE
DESIGN I
ACHIEVING CUSTOMER RELEVANCE

copyright 2014 Cowan Publishing
AGENDA
Period
Deliverables
SESSION I: Achieving
Customer Relevance
Personas
Problem Scenarios-Alternatives-Value Propositions
Start Business Model Canvas
Storyboards
Customer Discovery
Venture Design II: Iterating
to Success
Venture Planning- focal hypotheses, experiments, and minimum viable
‘product’
Venture Design III:
Focusing & Validating
Venture Progress
Review of ﬁeld work, reﬁnements of approach, planning next steps.
Venture Design IV:
Engineering Your Business
Model
Detailing your business model and remaining focal assumptions.
Venture Design V:
Designing the Right
Product
Pairing your learnings on personas & hypotheses with high quality,
actionable inputs (stories & wireframes) for product development and
product validation.

ABOUT ME
ENTREPRENEUR (5X)
INTRAPRENEUR (1X)

ABOUT ME

ABOUT ME
www.alexandercowan.com

IT’S A PROCESS
Personas
Some techniques are more effective than others.
But they all require substantial, consistent exertion.

VENTURE DESIGN
Business Model
Canvas
Product & Promotion
User Stories
Test Cases
ExperimentLearn
Hypothesize
Lean Startup-
Style Assumptions
Foundation in
Design Thinking

THE FULL STACK PRODUCT PERSON
ALEX COWAN
AlexanderCowan.com
@cowanSF
Specialties
DESIGN&UX
UNIXSYSADMIN
RUBY
PYTON
JAVA
PHP
...
ENTERPRISESALES
...
SEO
ANALYTICS
...
...
...
Foundation
Skills
LEAN
DESIGN
THINKING
CUSTOMER
DEV.
AGILE
Technical
Literacy
ARCHITECTURE
FUNDAMENTALS
App. & Platform
Integration
ROLES &
SYSTEMS
In a Technical
Team
SOFTWARE
FUNDAMENTALS
Model-View-
Controller

THE ARITHMETIC IS THE SAME
ALEX COWAN
AlexanderCowan.com
@cowanSF
Profit
Drivers
Revenue
Drivers
Tighter Proposition (website, pres., etc.)
Finite Cost
Finite Deliverables
Increased Use of Channels
Ease of Entry
Easy to See What's on MenuUpsell
Intellectual Property Multipliers
Tighter Talent Definition
Simpler Training, Eval.,
Cost of
Cost
Drivers
Less Consultative Selling
Simplified Contracting
Cost of Sales
Standard Project Management
Comparable Post Mortems
Engagement
Management
(example: product-driven consulting)

WHAT DRIVES VALUE HAS CHANGED
Infrastructure-
Driven
UTILITIES TELECOM COMMODITIE
S
Scope-
Driven
RETAIL BANKING CORP. LAW
Product-
Driven
PACKAGED GOODS APP. SOFTWARE MEDIA

OLD SCHOOL VS. NEW SCHOOL
How it
was done
How to
do it
$ !?
? ! ? ? ?

Output vs. Outcome
Scaling vs. Learning

Learn First
Scale Second

BY THE NUMBERS
!
THINK SEE
FEEL DO
PERSONAS
Who?
X
PROBLEM
SCENARIOS &
ALTERNATIVES
What?
VALUE
PROPOSITIONS
& ASSUMPTIONS
What if?
!
USER
STORIES &
PROTOTYPES
How?
Scale?
Pivot?
PRODUCT &
PROMOTION
/
CUSTOMER
DISCOVERY
&
EXPERIMENTS
Tell me…?

BY THE NUMBERS
!
THINK SEE
FEEL DO
PERSONAS
Who?
X
PROBLEM
SCENARIOS &
ALTERNATIVES
What?
VALUE
PROPOSITIONS
What if?
!

VENTURE DESIGN
Foundation in
Design Thinking
Product &
Promotion
User Stories &
Test Cases
Business Model
Canvas
ExperimentLearn
Hypothesize
Lean Startup-
Style Assumptions

VENTURE DESIGN
Foundation in
Design Thinking

DESIGN THINKING
Design Thinking
Now
Survival
Then

DESIGN THINKING
Empathy Creativity

DESIGN THINKING- APPLICATIONS

DESIGN THINKING- APPLICATIONS
Entry1
Urinate as they go2
Edges preferred3
Speedy4
PB > cheese5
Empathy

Check & Repair 1
UV Validation 2
Relevant Placement 3
A Better Mousetrap 4
Power by Better Bait 5
Creativity

DESIGN THINKING- PERSONAS
Foundation in
Design Thinking
Personas Problem Scenarios
Alternatives
Your Value Propositions

•Women
•Age 28-45
•Have kids
•Socialize with other mom’s
•Online with Facebook
•86% said they’d like to be more
organized
•70% said they’d use an
application that organizes them

Bullet points are
almost never vivid or
detailed
Stock photo- not real
This is a huge
population- not
exact
These responses are ‘fake
actionable’- survey
responses like this are
unreliable
•Women
•Age 28-45
•Have kids
•Socialize with other mom’s
•Online with Facebook
•86% said they’d like to be more
organized
•70% said they’d use an
application that organizes them

DESIGN THINKING - PERSONAS

Mary is a mom by choice. She had a successful career in
accounting, but welcomed the opportunity to be a stay at home
mom. She loves it. But it’s not like having kids purged her
creative, social instincts. She wants to connect, she wants to
learn, she wants to interact. Being a mom is a job and she wants
to do it well. That means corresponding with other mom’s on
child education and keeping track of what works. She posts to
Facebook at least twice a week and responds to other moms’
items more often than that.
She has a few blogs and publications she reads regularly …
Mary the Mom

Mary is a mom by choice. She had a successful career in
accounting, but welcomed the opportunity to be a stay at home
mom. She loves it. But it’s not like having kids purged her
creative, social instincts. She wants to connect, she wants to
learn, she wants to interact. Being a mom is a job and she wants
to do it well. That means corresponding with other mom’s on
child education and keeping track of what works. She posts to
Facebook at least twice a week and responds to other moms’
items more often than that.
She has a few blogs and publications she reads regularly …
Mary the Momthe use of a first name helps
w/ vividness (a little)
these full sentences look like
a good start towards
something vivid and detailed
this is a real photo of a
relevant person taken with
an iPhone in the real world

Copyright 2014 Cowan Publishing
V
A
R
I
E
D
ivid The persona
should make
anyone who
reads it feel like
they’ve actually
met this person.
ALEX COWAN
AlexanderCowan.com
@cowanSF

V
A
R
I
E
D
ivid
ALEX COWAN
AlexanderCowan.com
@cowanSF
If the persona
doesn’t inform
how you sell
stuff and build
stuff, why
bother?
ctionable

V
A
R
I
E
D
ivid
ALEX COWAN
AlexanderCowan.com
@cowanSF
eal Good personas
aren’t created in
cubicles. Go
where the
persona is and
observe.
ctionable

V
A
R
I
E
D
ivid
ALEX COWAN
AlexanderCowan.com
@cowanSF
eal
ctionable
Make sure you
can identify and
target these
personas, or you
won’t be able to
find a use for
them.
dentifiable

V
A
R
I
E
D
ivid
ALEX COWAN
AlexanderCowan.com
@cowanSF
eal
ctionable
dentifiable
‘Everyone’ is not
your customer.
Make sure the
personas are
distinct so you
can apply
relevant focus.
xact

V
A
R
I
E
D
ivid
eal
ctionable
dentifiable
xact
etailed
People are
complicated and
so good
personas are
usually pretty
substantial.

EXERCISE- PERSONA CREATION
List at least 3 personas
Mary the Working Mom
Susan the Stay-at-Home Mom
Douglas the Dad
Nathan the Nanny
Ivan the Infant
…
(4 min)
use 1 index
card/persona

A LITTLE GAME FOR BETTER PERSONA DISCOVERY
(4 min)
Day in the Life
we look at a few photos for a given persona
you make some guesses about them
there are no right answers BUT
there is a right process: observe and infer
OBJECTIVE: get a feel for what’s real; start to create something
vivid
(not a full picture, just snippets)

OUR CAST
Sally the
Single Mom
Luke the Late
Millenial
Miguel the
Mid-Mellenial
Trent the Techie
Umberto the
Undergrad
Bob the Baby
Boomer

WAKE UP!

ABOUT SALLY THE SINGLE MOM…
What’s her favorite kind of music?
Band/composer?
Where did she buy her last pair of shoes?
What movie did she last see?
What did she drink with dinner last night?
If she had a dog, what kind?
What’s her favorite magazine?

OUR CAST
Miguel the
Mid-Mellenial

BREAKFAST & HEAD TO WORK

AT WORK

AFTER WORK

PRE-BED

GEAR

IF I HAD 3 EXTRA HOURS

ABOUT MIGUEL THE MID-MILLENIAL…
What’s his favorite kind of music?
Band/composer?
Where did he buy his last pair of shoes?
What movie did he last see?
What did he drink with dinner last night?
If he had a dog, what kind?
What’s his favorite magazine?

OUR CAST
Umberto the
Undergrad

HEAD TO SCHOOL

AT SCHOOL

AFTER SCHOOL

IF I HAD 3 EXTRA HOURS…

ABOUT UMBERTO THE UNDERGRAD…
Band/composer?

OUR CAST
Luke the Late
Millenial

BREAKFAST AND HEAD TO SCHOOL

ABOUT LUKE THE LATE-MILLENIAL…
Band/composer?

ABOUT TRENT THE TECHIE
Band/composer?

TO THE OFFICE

WORK/PLAY

FITNESS

LEISURE

DINNER AT HOME

ABOUT BOB THE BABY BOOMER
Band/composer?

Which are buyers? Users? Both?
Note with a ‘B’ and/or ‘U’ on the Post-It
(1 min.)
Mary the Working Mom (B, U)
Susan the Stay-at-Home Mom (B, U)
Douglas the Dad (U)
Nathan the Nanny (U)
Ivan the Infant (U)
…

Can you think of 5 real examples for each?
(2 min.)

Which have the most compelling need, desire? Sort top to
bottom
(1 min.)

For your top person, complete Think-See-Feel-Do (6 min.)
Thinks: Helen thinks the hiring process should be so much better- more systematic, fewer bad hires.
Professional development is something they’ve identiﬁed that they want to do better, but the
functional managers aren’t engaged enough to get the whole thing started.
Sees: Helen is at the tail end of every bad hire and sees the damage it does to the employee and
company, alike. Helen sees that online learning has rocketed forward in the last few years. If someone
wants to learn a speciﬁc skill, there’s a number of high quality options online, many of them free.
They just need a way to help employees organize select into these courses.
Feels: Helen feels like crap whenever they have to let someone go. She hates it. The employee hates it.
The manager hates it. It’s incredibly destructive and de-motivating for everyone involved. Helen would
love to be more involved, more included in functional skills evaluation and improvement. She’s love to
have a success story to talk about. Most HR departments don’t do a whole lot in this area.
Does: Helen’s relatively responsive to new ideas, particularly if someone knowledgeable is willing to
come in and talk about it. If she likes it, she’ll bring it to the functional managers, who are usually the
ultimate decision makers since without their support she can’t get the system online and working.
Post-sale, Helen will help keep the program organized, moving, and otherwise on the functional
managers radar. All this is predicated on Helen being equipped with the right messages, facts, and
best practices to make the purchase and use of Enable Quiz effective.
EXAMPLE: HELEN THE HR MANAGER

PROBLEM SCENARIO
X

PROBLEM SCENARIO
X
What job(s) are you doing for the
customer?
What existing need or
behavior are you fulﬁlling?

ALTERNATIVE(S)
?
PROBLEM SCENARIO
X

ALTERNATIVE(S)
?
PROBLEM SCENARIO
X
If they currently use spreadsheets,
watch them use it and get a copy of it.
If they currently put notes on the family
fridge, ask about it, photograph it.

EXERCISE- PROBLEM SCENARIOS & ALTERNATIVES
Brainstorm Problem
Scenario-Alternative Pairs.
(7 min.)
ALTERNATIVE(S)
?
PROBLEM SCENARIO
X
Problem: Mary would like to be more
structured and consistent in her use of
allowances to teach the link between work
and ﬁnancial rewards.
Alternative: Track the completion of
chores, homework, etc. manually using
paper, boards, notes on her phone.

YOUR VALUE PROPOSITIONS
!
ALTERNATIVE(S)
?
PROBLEM SCENARIO
X

YOUR VALUE PROPOSITIONS
!
ALTERNATIVE(S)
?
PROBLEM SCENARIO
X
Are they better enough than the
alternative(s)?

YOUR PRODUCT HYPOTHESIS
A certain PERSONA exists…
X… and they have a certain
PROBLEMS(S) …
?
… where they’re currently
using certain
ALTERNATIVE(S) …
!
… and I have a VALUE
PROPOSITION that’s better
enough than the alternatives
to cause the persona to act
(purchase, use, etc.).

EXERCISE- VALUE PROPOSITIONS
Add Value Propositions to
your top Problem Scenario
+ Alternative Pairs
(3 min.)
YOUR VALUE
PROPOSITIONS!
ALTERNATIVE(S)
?
PROBLEM SCENARIO
X
Problem: Mary would like to be more
structured and consistent in her use of
allowances to teach the link between work
and ﬁnancial rewards.
Alternative: Track the completion of
chores, homework, etc. manually using
paper, boards, notes on her phone.
Value Proposition: Use our app to easily
and consistently implement best practices
tailored to your situation.

Prioritize your value propositions- if you could only pitch
one, which? After that? Etc.
2 min.

YOUR PRODUCT HYPOTHESIS (4 MIN)
A certain PERSONA exists…
… and they have a certain
PROBLEMS(S) …
… where they’re currently
using certain
ALTERNATIVE(S) …
… and I have a VALUE
PROPOSITION that’s better
enough than the alternatives
to cause the persona to act
(purchase, use, etc.).
‘HR and functional managers are in
charge of technical hires
and they struggle to effectively screen
for technical skill sets, making the hiring
process slower and more labor intensive
and producing worse outcomes than they
should reasonably expect.
Currently they implement a patchwork of
calling references and asking a few
probing questions.
By offering an easy, affordable,
lightweight technical quizzing solution,
Enable Quiz can acquire and retain these
customer personas, delivering material
Enable Quiz example:

THE BUSINESS MODEL CANVAS
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit http://
creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.The templates here are made available on the same CC license terms as the original canvas.
(Cost Structure)
(Key
Partners)
(Key
Activities)
(Key
Resources)
(Revenue Streams)
(Customer
Relationships)
(Channels)
(Value
Propositions)
(Customer
Segments)

THE BUSINESS MODEL CANVAS

SEGMENT TO VALPROP MAPPING
Cost_1
Cost_2
Cost_3
Partner_1
Partner_2
Partner_3
Activity_1
Activity_2
Activity_3
Resource_1
Resource_2
Resource_3
Revenue_1
Revenue_2
Revenue_3
Relationship_1
Relationship_2
Relationship_3
Channel_1
Channel_2
Channel_3
Proposition_1
Proposition_2
Proposition_3
Segment_1
Segment_2
Segment_3

THE INDEPENDENT VARIABLE
Value
Propositions
Customer
Segments
(Cost Structure)
(Key
Partners)
(Key
Activities)
(Key
Resources)
(Revenue Streams)
(Customer
Relationships)
(Channels)
(Value
Propositions)
(Customer
Segments)

CUSTOMER SEGMENTS VS. PERSONAS
≈
Customer
Segments
Customer
Segments Personas

EXERCISE: MAPPING CUSTOMER SEGMENTS TO VP’S
1. Print out the Canvas
2. List your prioritized personas (Customer
Segments) and Value Propositions
3. Map your personas to your Value
Propositions
(4 min)
Cost_1
Cost_2
Cost_3
Partner_1
Partner_2
Partner_3
Activity_1
Activity_2
Activity_3
Resource_1
Resource_2
Resource_3
Revenue_1
Revenue_2
Revenue_3
Relationship_1
Relationship_2
Relationship_3
Channel_1
Channel_2
Channel_3
Proposition_1
Proposition_2
Proposition_3
Segment_1
Segment_2
Segment_3

PEER PRESENTATION PREP!
For [target customer] who [statement of the need or
opportunity], the [product name] is a [product category] that
[statement of key beneﬁt/key reason to buy]. unlike
[primary alternative], our product [statement of primary
differentiation].
Describe your
venture accordingly
(4 min.)

PEER PRESENTATIONS
As Presenter
1) What is this? (pos. statement)
2) Who is the persona? What kind of
shoes do they wear?
3) What problem scenario(s) are you
looking at? What alternatives does
the persona use now?
4) What’s your value proposition?
5) What do you need to learn more
about?
As Audience
- Focus on the process; avoid
editorial
- Ask a lot of questions
- Think about it like an investor
5 min./
each

STORYBOARDING: ORIGINS
copyright Fred Moore & Disney Pictures

STORYBOARDING EXAMPLE

ENABLE QUIZ: PROBLEM SCENARIOS
X
Helen the HR Manager
“It’s hard for me to screen on
technical skill sets and I end up
sending Frank unqualiﬁed recruits.”
Frank the Functional Manager
“I have limited time and I don’t
want to be a jerk. It’s hard to screen
for all the relevant technical skill
sets.”
PERSONA
PROBLEM
SCENARIO
- Call references
- Take their word for it
- A few probing questions
- Take their word for it
?ALTERNATIVE(S)
!VALUE
PROPOSITIONS
New ability for meaningful screening
of technical candidates, increasing %
of successful hires and lowering
Frank’s workload on recruiting.
Less time doing interviews, and
better hires sooner.

STORYBOARDING A PROBLEM SCENARIO- BEFORE AND AFTER
AFTER
BEFORE

EXERCISE- BEFORE AND AFTER BOARDS
1. Using the squares, create a before and then after
storyboard- 3 panels each (10 min.)
BEFORE
(using the
Alternative)
AFTER
(with the Value
Proposition)

Foundation in
Design Thinking
Personas Problem Scenarios
Alternatives
Your Value Propositions
SELLING
STUFF
Who’s buying?
Where?
Why?
Who are we selling
to?
Where do we reach
them?
With what
proposition?
MAKING
STUFFWhat does the user
actually do?
What does the user
(most) want?
DESIGN THINKING- USING PERSONAS

DESIGN THINKING - CREATING PERSONAS
MVP
Tell me about yourself.
What do you do? How often?
How does it make you feel?
Interviews
AdWords, etc. + Landing
Page Tests
Real-Time Analytics
& Recording
Minimum Viable
Product
What language, propositions resonate?
What is the customer prepared to do?
What do users actually do?
Do customers like it? Buy it? Use it?
Tell others about it?

FULL CIRCLE
!
THINK SEE
FEEL DO
PERSONAS
Who?
X
PROBLEM
SCENARIOS &
ALTERNATIVES
What?
VALUE
PROPOSITIONS
& ASSUMPTIONS
What if?
!
USER
STORIES &
PROTOTYPES
How?
Scale?
Pivot?
PRODUCT &
PROMOTION
/
CUSTOMER
DISCOVERY
&
EXPERIMENTS
Tell me…?

4 TYPES OF LEAN HYPOTHESES
PERSONA
HYPOTHESIS
PROBLEM
HYPOTHESIS
VALUE
HYPOTHESIS
CUSTOMER CREATION
HYPOTHESIS

PERSONA HYPOTHESIS
Does this person exist?
Can you identify them?
Do you understand them really well?
What do they think-see-feel-do in your area?

PERSONA HYPOTHESIS
‘Everyone is my customer!’
Possibly true at some point,
but you need to nail early
adopters to get traction.

PERSONA HYPOTHESIS
‘There are a few customers
to focus on- I’m not sure
which one’.
Pick the one with the most
compelling need and choose.
Or guess. But don’t diffuse
your focus.

PERSONA HYPOTHESIS
‘I can’t find anyone to
interview’
Then I would step back. This
almost certainly means you’ll
have trouble with the next
steps as well.

PERSONA HYPOTHESIS
‘I think I get this persona, but I’m not
sure about the whole think-see-feel-
do thing.’
Think-see-feel-do is not the
only way to go but it’s pretty
good. Solid personas are the
stitch in time that saves 9.

PROBLEM HYPOTHESIS
Have you identiﬁed a discrete problem/need?
How important is it to the target persona(s)?
What alternatives do they use today? How?

PROBLEM HYPOTHESIS
‘During customer discovery interviews, the
subjects consistently mentioned our problem
scenario’
Excellent! That’s a good
preliminary validation you’re
on the right track.

PROBLEM HYPOTHESIS
‘We did a questionnaire and >80% of
subjects said they wish [our problem
area] was better.’
Don’t trust questionnaires,
especially with leading
questions. Focus on face-to-
face.

PROBLEM HYPOTHESIS
‘I am in this business/I am one of these personas
and I know I have this problem- and I’m sure it
exists for most others like me.’
Good start but approach
discovery like you know
nothing.

PROBLEM HYPOTHESIS
‘Our product doesn’t really address a problem,
exactly, so this isn’t relevant for us.’
There are no new problems
or habits. Make sure you
know what you’re after.

PROBLEM HYPOTHESIS
‘Our product is so fundamentally novel
that there are no current alternatives.’
(see previous)

PROBLEM HYPOTHESIS
‘We’ve mapped out the alternative and
observed or key personas in action with
them.’
Excellent! You’re ready to
synthesize, tune and test
your value proposition!

VALUE HYPOTHESIS
How much better than the best alternative is
your product?
How obvious is that to the customer?

VALUE HYPOTHESIS
‘Over 80% of the people we asked said they’d
buy our product!’
Can’t trust it- Yellow
Walkman data

VALUE HYPOTHESIS
‘We did a concierge test and [got paid, got
asked by the customer when they could buy
our product].’
Excellent! You’re on the fast
track of iterating to a
successful outcome. Time to
look at an actual MVP.

VALUE HYPOTHESIS
‘We finished our concierge test. They liked it
but as a result it was a long way to
conclusive.’
Now that you know how,
could you get paid for the
next one? Try other test and
then if negative, consider
pivot.

VALUE HYPOTHESIS
‘We made a bunch of pre-release sales, but
they’re non-binding.’
That’s OK (as long as you
made the agreement with a
real decision maker). You’ve
got a reasonably good
validation of value
hypothesis.

VALUE HYPOTHESIS
‘We couldn’t make any pre-release sales.’
Why not? No interest? That’s
bad. Need to sell real
product (and that’s really
why), consider what’s behind
that.

VALUE HYPOTHESIS
‘We found a few AdWord-landing page
combinations that had better than expected click
through and conversion rates to email sign-up’s.’
Excellent! That’s a good
validation of your value
hypothesis and you’re gotten
a jump start on your
Customer Creation
Hypotheses.

VALUE HYPOTHESIS
‘We tried a few things with AdWords and
landing pages, but the results weren’t great.’
What happens when you try
the same thing out in the
real world? Search is a good
way to connect with existing
demand but not necessarily
learn about its fundamentals.

CUSTOMER CREATION HYPOTHESIS
How will you get the customer’s: attention,
interest, desire, action, onboarding, retention?
How will you know if it’s working?

CUSTOMER CREATION HYPOTHESIS
Most of these results are
pretty deﬁnitive.

“HOMEWORK”
1. Draft a working set of personas
Pick the most important buyers and/or users. More is not necessarily better- you can
always add more (re-segment) later. Finish think-see-feel-do. Find a photo.
2. Draft a working set of problem scenario-alternative-value proposition trios.
3. Finish a working product hypothesis and positioning statement.
4. Finish a working interview guide to validate your persona and problem
hypotheses.
GOOGLE DOC TEMPLATE: http://bit.ly/venturetemplate
RESOURCES: http://bit.ly/VDsprint1

FINI
@cowanSF
www.alexandercowan.com/venture-design
bit.ly/venturedesign
Slides: bit.ly/GA-VD1
acowan@alexandercowan.com
Resources: bit.ly/VDsprint1

Venture Design, Session I at General Assembly (GA SF)

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