Lecture 2 from our 5-Day Lean Launchpad Class discussing how to put customer discovery to work out of the building. Based on the acclaimed book, Talking to Humans, by Giff Constable & Frank Rimalovski. More at http://talkingtohumans.com.
6. @NYUEntrepreneur
The Business Model Canvas
Revenue Streams
Channels
Customer SegmentsValue PropositionsKey ActivitiesKey Partners
Key Resources
Cost Structure
Customer Relationships
Designed by: Date: Version:Designed for:
designed by: Strategyzer AG
The makers of Business Model Generation and Strategyzer
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.
strategyzer.com
What are the most important costs inherent in our business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?
is your business more
Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)
Value Driven (focused on value creation, premium value proposition)
sample characteristics
Fixed Costs (salaries, rents, utilities)
Variable costs
Economies of scale
Economies of scope
Through which Channels do our Customer Segments
want to be reached?
How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efļ¬cient?
How are we integrating them with customer routines?
channel phases
1. Awareness
How do we raise awareness about our companyās products and services?
2. Evaluation
How do we help customers evaluate our organizationās Value Proposition?
3. Purchase
How do we allow customers to purchase speciļ¬c products and services?
4. Delivery
How do we deliver a Value Proposition to customers?
5. After sales
How do we provide post-purchase customer support?
For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
For whom are we creating value?
Who are our most important customers?
Mass Market
Niche Market
Segmented
Diversiļ¬ed
Multi-sided Platform
What type of relationship does each of our Customer
Segments expect us to establish and maintain with them?
Which ones have we established?
How are they integrated with the rest of our business model?
How costly are they?
examples
Personal assistance
Dedicated Personal Assistance
Self-Service
Automated Services
Communities
Co-creation
What Key Activities do our Value Propositions require?
Our Distribution Channels?
Customer Relationships?
Revenue streams?
categories
Production
Problem Solving
Platform/Network
What Key Resources do our Value Propositions require?
Our Distribution Channels? Customer Relationships?
Revenue Streams?
types of resources
Physical
Intellectual (brand patents, copyrights, data)
Human
Financial
Who are our Key Partners?
Who are our key suppliers?
Which Key Resources are we acquiring from partners?
Which Key Activities do partners perform?
motivations for partnerships
Optimization and economy
Reduction of risk and uncertainty
Acquisition of particular resources and activities
What value do we deliver to the customer?
Which one of our customerās problems are we helping to solve?
What bundles of products and services are we
offering to each Customer Segment?
Which customer needs are we satisfying?
characteristics
Newness
Performance
Customization
āGetting the Job Doneā
Design
Brand/Status
Price
Cost Reduction
Risk Reduction
Accessibility
Convenience/Usability
types
Asset sale
Usage fee
Subscription Fees
Lending/Renting/Leasing
Licensing
Brokerage fees
Advertising
fixed pricing
List Price
Product feature dependent
Customer segment
dependent
Volume dependent
dynamic pricing
Negotiation (bargaining)
Yield Management
Real-time-Market
Hypotheses & the BMC
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
9. @NYUEntrepreneur
Your job is not to validate
your productā¦.
Itās to validate the
problem and how best to
solve it?
10. @NYUEntrepreneur
Customer Discovery
uļµāÆApply the scientiļ¬c method to
business model development
10
Modify
hypothesis
Observe
phenomena
Formulate
hypothesis
Test
hypothesis
via rigorous
experiments
Establish
theory
based on
repeated
validation of
results
11. @NYUEntrepreneur
Customer Discovery
uļµāÆApply the scientiļ¬c method to
business model development
PIVOT!
Observe
phenomena
Formulate
hypothesis
Test
hypothesis
via rigorous
experiments
Establish
theory
based on
repeated
validation of
results
You are here
____
v
12. @NYUEntrepreneur
Talk to >50 People!
uļµāÆ GOTB: The #1 lesson of this class
uļµāÆ Within ļ¬ve days
uļµāÆ You must gain insight into your
customer & market
uļµāÆ You are doing pattern recognitionā¦
Must have suļ¬cient data points to see
uļµāÆ It worksā¦It is proven
15. @NYUEntrepreneur
Meet People You Donāt Know
uļµāÆ People you know will be nice and tell
you what you want to hear
uļµāÆ Those interviews are possibly harmful
uļµāÆ Let other teams use people you know
uļµāÆ People you donāt know have no
relationship to protectā¦Only they will
tell you the truth
18. @NYUEntrepreneur
What do you want to learn?
18
The Business Model Canvas
Revenue Streams
Channels
Customer SegmentsValue PropositionsKey ActivitiesKey Partners
Key Resources
Cost Structure
Customer Relationships
Designed by: Date: Version:Designed for:
designed by: Strategyzer AG
The makers of Business Model Generation and Strategyzer
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.
strategyzer.com
What are the most important costs inherent in our business model?
Which Key Resources are most expensive?
Which Key Activities are most expensive?
is your business more
Cost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)
Value Driven (focused on value creation, premium value proposition)
sample characteristics
Fixed Costs (salaries, rents, utilities)
Variable costs
Economies of scale
Economies of scope
Through which Channels do our Customer Segments
want to be reached?
How are we reaching them now?
How are our Channels integrated?
Which ones work best?
Which ones are most cost-efļ¬cient?
How are we integrating them with customer routines?
channel phases
1. Awareness
How do we raise awareness about our companyās products and services?
2. Evaluation
How do we help customers evaluate our organizationās Value Proposition?
3. Purchase
How do we allow customers to purchase speciļ¬c products and services?
4. Delivery
How do we deliver a Value Proposition to customers?
5. After sales
How do we provide post-purchase customer support?
For what value are our customers really willing to pay?
For what do they currently pay?
How are they currently paying?
How would they prefer to pay?
How much does each Revenue Stream contribute to overall revenues?
For whom are we creating value?
Who are our most important customers?
Mass Market
Niche Market
Segmented
Diversiļ¬ed
Multi-sided Platform
What type of relationship does each of our Customer
Segments expect us to establish and maintain with them?
Which ones have we established?
How are they integrated with the rest of our business model?
How costly are they?
examples
Personal assistance
Dedicated Personal Assistance
Self-Service
Automated Services
Communities
Co-creation
What Key Activities do our Value Propositions require?
Our Distribution Channels?
Customer Relationships?
Revenue streams?
categories
Production
Problem Solving
Platform/Network
What Key Resources do our Value Propositions require?
Our Distribution Channels? Customer Relationships?
Revenue Streams?
types of resources
Physical
Intellectual (brand patents, copyrights, data)
Human
Financial
Who are our Key Partners?
Who are our key suppliers?
Which Key Resources are we acquiring from partners?
Which Key Activities do partners perform?
motivations for partnerships
Optimization and economy
Reduction of risk and uncertainty
Acquisition of particular resources and activities
What value do we deliver to the customer?
Which one of our customerās problems are we helping to solve?
What bundles of products and services are we
offering to each Customer Segment?
Which customer needs are we satisfying?
characteristics
Newness
Performance
Customization
āGetting the Job Doneā
Design
Brand/Status
Price
Cost Reduction
Risk Reduction
Accessibility
Convenience/Usability
types
Asset sale
Usage fee
Subscription Fees
Lending/Renting/Leasing
Licensing
Brokerage fees
Advertising
fixed pricing
List Price
Product feature dependent
Customer segment
dependent
Volume dependent
dynamic pricing
Negotiation (bargaining)
Yield Management
Real-time-Market
20. @NYUEntrepreneur
What do you want to learn?
uļµāÆ Do not sell! No demos! No presos!
uļµāÆ You are there to learn!
uļµāÆ Get stories, not speculation
uļµāÆ Ask open-ended questions
uļµāÆ Learn about their problems and how they
solve them today
uļµāÆ Ask why? Then why? They why again!
uļµāÆ Create a guide (not a script)
20
22. @NYUEntrepreneur
How do you ļ¬nd interview subjects?
uļµāÆ At least one degree of separation
uļµāÆ Learn to love LinkedIn
uļµāÆ Make referrals happen
uļµāÆ Get creativeā¦recruiting hacks
uļµāÆ Fish where the ļ¬sh areā¦
uļµāÆ ā¦In the wild
uļµāÆ Promise to be brief
uļµāÆ Play the student/researcher card
uļµāÆ Enterprise customers are people too!
22
24. @NYUEntrepreneur
How to ensure an eļ¬ective interview?
uļµāÆ Beware of conļ¬rmation bias
uļµāÆ Do it in person, one at a time
uļµāÆ Get subjects to tell a story
uļµāÆ Look for solution hacks
uļµāÆ Understand their priorities
uļµāÆ Follow your nose & drill down
uļµāÆ Listen and STFU!
uļµāÆ Have someone take notes
24
25. @NYUEntrepreneur
Pro Tips
uļµāÆ Practice, practice, practice
uļµāÆ NO email, focus groups or surveys
uļµāÆ Donāt start with your dream customer
uļµāÆ Being an entrepreneur means being
aggressive & persistent
uļµāÆ Flatter subjects
uļµāÆ Be transparent
uļµāÆ Follow up/stay in touch
uļµāÆ Write up key insights right away
25
28. @NYUEntrepreneur
Your Last >$100 Purchase
1.āÆ Write description of item on top of page
2.āÆ Find partner sitting next to you & swap
3.āÆ Create interview guide: ~5 questions
uļµāÆ Explain what you bought and why
uļµāÆ What was the process from desire to acquisition?
uļµāÆ What other options/alternatives did you consider?
uļµāÆ How did you decide to buy it? Who/what did you consult?
uļµāÆ How did you decide where to buy it?
4.āÆ 5 minute interviewā¦take notes
5.āÆ Switch
30. @NYUEntrepreneur
Documentation
uļµāÆ Assign someone to take notes
uļµāÆ Write down any key a-haās as they
happen
uļµāÆ Note questions that worked & use
them again!
uļµāÆ Take pictures or videos!
uļµāÆ Capture key insights
31. @NYUEntrepreneur
How do you make sense of what you learn?7B. How Do You Make Sense Of What You Learn
(Draft)
31
32. @NYUEntrepreneur
Gaining Insight
uļµāÆ Facts are interestingā¦Insights are your goal
uļµāÆ Be honestā¦Donāt be too quick to validate or
too slow to disprove your hypothesis
uļµāÆ Donāt just scratch the surface, dive deep
uļµāÆ Find the hidden motivations
uļµāÆ Ask why? And why? Then why again?
uļµāÆ Donāt fear picking the wrong market
uļµāÆ Depth of understanding always leads to
insight
36. @NYUEntrepreneur
Learning Is Paramount
uļµāÆ The knowledge you gain in customer
discovery is critical to the success or
failure of your business
uļµāÆ >Half of your assumptions are wrong
uļµāÆ You must not try to validate what you
already think or want to be true
37. @NYUEntrepreneur
Pro Tips v2
uļµāÆ Focus on actual behavior, not
speculative or abstract feelings
uļµāÆ If theyāve made an MVPā¦ask to see it!
uļµāÆ Listen, donāt talk
uļµāÆ Follow your nose & drill down
uļµāÆ Parrot back or misrepresent to conļ¬rm
uļµāÆ Ask for introductions
uļµāÆ Write up your notes ASAP
uļµāÆ Avoid premature conclusions