Prototyping digital business and services

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This is a presentation made during a 2 day digital business and service workshop in Colombia in March 2014.

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Prototyping digital business and services

  1. 1. ! Prototyping digital business and services Workshop in Colombia ! 26th-27nd of March, 2014 ! Magnus Christensson
 Partner, Socialsquare ! magnus@socialsquare.dk Twitter: @mchristensson
  2. 2. ! Since 2005 pioneering blogs, wikis, visual sharing, social media, social intranets, social products and services, building communities etc. Digital Strategy and Innovation Understand - Strategy - Action
  3. 3. Understand and prioritize ! ! Build-measure-learn Launch and repeat Lean 
 strategy Business 
 prototypes Build & Launch
  4. 4. 2013 - Long haul business innovation made by smart agile moves ! • Business model innovation process • Process and product owner for product dev and marketing teams • MVP approach build and launched in 3 months • Customer development via social media • Campaign and launch support • Community building and management • 1000 new titles published first 6 months • 10000 monthly downloads of material first 6 months
  5. 5. 2012 - Continuous product 
 roadmap, user profiles and data strategy ! • Product audit • Competitor and challenger review • Technology and trend research • Prototype • Userprofiles • Concept development of app • Interviews and user research • Strategic process with all stakeholders in the organization • Strategical advising the management • data strategy 11 Planlagt rejse Ad-hoc rejse Pendling Finde tog/busWayfinding Ændringer pårejsen? Kommed alternativer Planlægningog betaling PåmindelsePlads reserv.Billetter Informereom skift Wayfinding Ændringer pårejsen? Kom medalternativer KvitteringFeedback Lige før Lige før Skift Lige efter Skift Før Relevant i dag Mulighedsrum Lige efter Afgang Ankomst Rejsende har brug for at kunne søge, planlægge og købe hele den samlede rejse via Rejseplanen. Rejsende har brug for at blive notificeret omkring rejsen inden den begynder. Rejsende har brug for wayfinding til startdestination og mellem skift på rejsen, samt notifikationer om eventuelle ændringer på rejsen. Rejsende har brug for notifikationer på rejsen f.eks. om hvornår vedkommende skal af. Hvis der er ændringer på rejsen skal Rejseplanen tilpasse sig disse og komme med alternative forslag. Den rejsende kan orientere sig og få notifikationer f.eks. i forhold til mulige eller planlagte returrejser. Rejsende har typisk brug for at her- og-nu kunne finde en destination og købe den samlede rejse dertil. Typisk vil man søge og købe rejsen mobilt. Ad-hoc rejsende har typisk brug for her-og-nuinformation omkring de forskellige trin i rejsen, som man kommer frem. Rejsende har brug for notifikationer på rejsen f.eks. om hvornår vedkommende skal af. Hvis der er ændringer på rejsen skal Rejseplanen tilpasse sig disse og komme med alternative forslag. Den rejsende kan gemme destinationer, såfremt disse er af særlig relevans eller interesse. Rejsende har typiske ikke brug for at søge på Rejseplanen, men har et behov for at kunne trække information til sig baseret på tid og sted, at kunne se afvigelser fra køreplanen via mobil Rejsende har typisk brug for informationer omkring ændring på rejsen. og overblik over alternativer. Den rejsende skal have specifikke o Forskellige behov identificerer Rejseplanens mulighedsrum I dag er Rejseplanen kun relevant i forhold til planlægning og ved eventuelle skift på rejsen. De rejsende som har forskellige rejsetyper har dog forskellige behov. Disse præsenteres yderligere i modellen neden. Disse anskueliggører også det mulighedsrum Rejseplanen kan arbejde med hvis man ønsker at levere mere relevant information i forbindelse med rejsen.
  6. 6. 2014 - Global learning platform for the activist youth ! ! • User research • Concept and product development • agile sprint development with heavy end-user involvement • Organization building in a global organization • Community and social design • Content and launch support
  7. 7. 2013 - Making social happen in DI. Building a digital organisation through experiments ! • Social media strategy • Consulting and driving 5 Social media spearhead projects in different business units • Using LinkedIn as a strategic platform • Education in community management • Developing governance and guidelines
 through learning from experiments
  8. 8. 2013 - Understanding digital tourism from where the action is • Working closely with Wonderful Copenhagen R&D and Marketing department • Digital strategy for community building • Mapping the digital customer journey • +60 interviews with tourists • Providing deep quantitative and qualitative customer understanding of the digital tourist • Enabling internal units to design, plan and execute activities on digital platforms
  9. 9. How the internet and the digital domain is changing service-related business as we know it.
  10. 10. Digital Strategy and Innovation Agency Helping The Challengers Disrupt Filed for bankrupcy 2012 Iphone launched in 2007 Flickr launched in 2004 Instagram launched in 2010 1998 2000 2002 2004 2006 2008 2010 2012 0$ 20$ 40$ 60$ Kodak share price 133 years old Invented the digital camera + 300.000 Facebook likes
  11. 11. 2 years after launch used by every 4. th dane 7 months after launch in 400.000 Danish households
  12. 12. If we look at the education market…
  13. 13. You might say that this change have two angles…
  14. 14. A technology (or rather web) angle
  15. 15. The hotel industry made by web people
  16. 16. Culture support made by web people
  17. 17. Employment services made by web people
  18. 18. Banking made by web people
  19. 19. And a service angle (which often is pretty social or collaborative)
  20. 20. Peer-to-peer parking
  21. 21. Peer-to-peer lending services
  22. 22. Peer-to-peer car sharing service
  23. 23. Services The service paradigm shift happen in the 80s • Fewer tangible components • Difficult do judge quality before purchase • Simultaneous production and consumption • Time-dependent • No transfer of ownership
  24. 24. Customers pay for outcomes or solutions to their needs or challenges. ! This is increasingly through services, where technology and sociality adds new perspectives to the value services can provide or the economy of scale behind them.
  25. 25. “Software Is Eating The World” Marc Andreessen
  26. 26. If you look five years out, every industry is going to be rethought in a social way. You can remake whole industries. That’s the big thing.” Mark Zuckerberg www.ft.com/reports/connected-business-dec2010
  27. 27. What does this means for how we develop businesses?
  28. 28. There was not much literature on developing new businesses a few years back. ! Most academia focused on managing existing businesses. And the literature that was there did not take the digital disruption we see today in to account.
  29. 29. “An organization dedicated to creating something new under conditions of extreme uncertainty” “A startup is not a smaller version of a large company” !
  30. 30. Ash Maurya Steve Blank Eric Ries Jason Fried David Heinemeier We are inspired by… and many more…
  31. 31. ! Meet the 
 challengers ! http://www.socialsquare.dk/ startup-research-project/
  32. 32. We* believe we can learn a lot from how a start-up is developing their business and services. ! *) so does General Electric, Toyota, UK Government Digital Services, Microsoft and many other incumbents and large organizations.
  33. 33. There are typically 2 types of start-ups
  34. 34. Tech-first (like Google) are those that need to be built to show they work
  35. 35. Service-first (like Airbnb or Facebook) are those that depend on a service or community
  36. 36. If you’re not a developer… fight the tech-first mentality with a service-first business approach
  37. 37. A startup have… ! • Limited ressources • A unknown product meeting an unknown need • A lifetime dependent of reaching its customers
  38. 38. Therefore a start-up works towards… ! • Finding a plan that works • Risk minimizing • Ressource optimizing • … through customer focus
  39. 39. • Minimize the time in each iteration. • Iterate as many times as possible
  40. 40. A approach related to design thinking ! • Knowledge generated through action • Knowledge building process + knowledge using process • Focusing on what and how rather than why • Focusing on humans • Having a holistic, systemic and visual approach
  41. 41. CUSTOMER DISCOVERY Problem/ Solution fit 3 stages CUSTOMER VALIDATION Product/Market fit CUSTOMER CREATION Scale
  42. 42. “Before investing months or years of effort towards building a product, the first step is determining if this product is something worth doing” Ash Maurya
  43. 43. PROBLEM/ SOLUTION FIT High-touch, Market risk, Qualitiative First: problem/solution fit • No clear understanding of the problem • Mitigate the market risk • Goal: Find a problem worth solving and discover customers • Through formulating a set of hypotheses… • …and then testing them hands-on through customer interviews • Can take weeks or a couple months to complete
  44. 44. From a lot of potential users come a few customers 100 users 10 customers
  45. 45. PRODUCT/ MARKET FIT Self-serve, Tech risk, Quantitative Then: product/market fit • Go from hands-on and high-touch to automated service and high-tech • Mitigate the tech risk • Goal: to build something people want and validate your business model • Through iterations of your service (MVP) • …and increased customer acquisition • The riskiest part of the work which can take months or years to navigate
  46. 46. Developing your service and business PROBLEM/SOLUTION FIT High-touch, Market risk, Qualitiative 100 users 10 customers 1000 users 100 customers 10.000 users 1000 customers 100.000 users 10.000 customers PRODUCT/MARKET FIT Self-serve, Tech risk, Quantitative PHASE 1 PHASE 2 PHASE 3 PHASE 4 TIME GROWTH This model is inspired by and adapted from Ash Maurya’s 10x Product Launch Plan FOCUS
  47. 47. You all have services and businesses you want to launch - or you want to help others develop their businesses
  48. 48. Lean canvas
  49. 49. Business model canvas
  50. 50. Lean canvas Problem Solution Key Metrics Value Proposition Unfair advantage Channel Customer segments Cost structure Revenue streams Existing alternatives Early adopters
  51. 51. Lean canvas Problem Solution Key Metrics Value Proposition Unfair advantage Channel Customer segments Cost structure Revenue streams Top 3 problems Top 3 features Key activities you measure Single, clear compelling message that states why you are different Can’t be easily copied or bought Path to customers Target customers Acquisition cost Distribution cost People, etc Revenue model Gross margin Etc. Existing alternatives Early adopters
  52. 52. Lean canvas Problem Solution Key Metrics Value Proposition Unfair advantage Channel Customer segments Cost structure Revenue streams Top 3 problems Top 3 features Key activities you measure Single, clear compelling message that states why you are different Can’t be easily copied or bought Path to customers Target customers Acquisition cost Distribution cost People, etc Revenue model Gross margin Etc. Existing alternatives Early adopters
  53. 53. Lean canvas Problem Solution Key Metrics Value Proposition Top 3 problems Top 3 features Key activities you measure Single, clear compelling message that states why you are different Customer segments Target customers Existing alternatives Early adopters
  54. 54. Excercise Develop the problem area of your lean canvas
  55. 55. Problem Problem Top 3 problems Existing alternatives Are we working on a problem worth solving? What do we think is the problem we are trying to solve? ! ! ! ! What existing alternatives is there today?
  56. 56. Excercise Develop the solution area of your lean canvas
  57. 57. Solution What do we think is the right solution? What 3 features does it have? How does it work? How does it look? Solution Top 3 features
  58. 58. “A Minimum Viable Product is that version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort” Eric Ries
  59. 59. How Vayable was developed… 1. Finding the guides Jamie Wong (the founder) started locally in San Francisco and her first step was finding tour guides. She talked to friends, friends of friends, and travel bloggers to be guides in SF. She even hosted meet-ups to find interesting people. ! 2. Finding the tourists With some tour guides on hand, she set out to find tourists. Her initial batch of tourists came from a genius move: she hosted Airbnb guests, figured out what they wanted to see, and set up tours for them. ! 3. Set-up and deliver tours She was able to find these things out and get people to pay her real money with no tech. Just a blog with a bit of info, a couple pictures of the guides, a few video testimonials, and a whole lot of hustling.
  60. 60. MVP • Explore only ideas that require no more tech than maybe a wordpress blog or simple website. • Think about how to make a service or community work in a tiny way. • Provide your service 100% manually until you just can’t do it without more people or tech.
  61. 61. How can we make a MVP for a service?
  62. 62. Service blueprints Its a way to specify and detail each individual aspect of a service. This involves creating a visual schematic with both user and service provider perspectives.
  63. 63. Service phase 1 Service phase 2 Service phase 3 Service phase 4 Service phase 5 Service Blueprint Group: Date: Version: Customer activityTouch-pointService
  64. 64. Developing touch-points DEVELOP SKETCHES DESIGN WIREFRAMES DESIGN PROTOTYPES
  65. 65. AuthorConsultantBlogger Business owner Scientist Cultural institution Professional Speaker yes! no! ?! no! no! yes! yes!yes! ?! Company
  66. 66. Excercise Identify your customers
  67. 67. Customers Who is having the problem? ! ! ! ! ! Who really want your service now? Customer segments Target customers Early adopters
  68. 68. From a lot of potential users come a few customers 10 users 1 customer
  69. 69. Excercise What is your value proposition?
  70. 70. Unique value proposition What do we offer? ! The UVP is a marketing promise. You develop it from your hypothesis about the Problem and the Solution. Value Proposition Single, clear compelling message that states why you are different
  71. 71. Value proposition Template “We help X do Y by doing Z” ! Example We help manufacturers develop great products quickly by giving them access to 3D printers as a per hourly service fee
  72. 72. How do you test your MVP?
  73. 73. Why are we doing interviews ! • To make sure you have a problem worth solving and what that problem is • To identify those who have the problem - but especially those who are willing to pay for it now (the early adopters) • To understand what a solution to the problem might be and to validate your solution (MVP) • To test pricing (later on)
  74. 74. Interviews • What questions should you ask? Well, what do you want to know? (it’s a good idea to look at the hypothesis you identified yesterday) • Talk to the right people (the list of customers from yesterday should be able to answer your questions) • Write an interview guide (Cover all your areas of interest and make it comparable across interviews) • Get feedback on your prototype (Show/tell them how the service works, use your blueprint or mock-ups of touch-points) • Listen, don’t pitch your idea (don’t sell, don’t use leading questions, but open-ended questions. Be curious.) • Summarize what you learn (create overview, identify patterns, conclude and update your documents)
  75. 75. Testing prototypes Interview guide Prototype Interview summarizes Interview patterns
  76. 76. Excercise Establish an interview guide
  77. 77. Interview guide • What do we want to know? (it’s a good idea to look at the different hypothesis you developed yesterday) • How can you test your hypothesis related to the problem you are trying to solve? • How can you test your hypothesis regarding the solution? • Does our value proposition resonate with them? • What are your early adopters attitude and expectations towards the service? • What do they use today that is similar to what you offer? And why, do they use it? • What barriers hinders your early adopters from using your service?
  78. 78. Documenting and taking the consequences of what you’ve learned.
  79. 79. Updating your documents is important… ! • To document the learning you have made • To have a systematic way of developing your business idea and service • To update your interview guide and your focus of learning
  80. 80. How does the input we received effect our… ! • View on the problem? • Ideas about the solution? • The design of our service blueprint or touch-points? • Knowledge on our early adopters? • Hypothesis on what they find valuable? • Value proposition? ! • What new questions do you have to ask?
  81. 81. Excercise Fill out the metric area of your lean canvas
  82. 82. Metrics What are you measuring? Key Metrics Key activities you measure
  83. 83. Dave McClure, pirate metrics Aqcusition ! Activation ! Retention ! Referral ! Revenue How do users find you? ! Is their first experience with you great? ! Do they come back? ! Do they tell their friends and colleagues about you? ! How do you make money?
  84. 84. Focus on value before growth
  85. 85. Value metrics Aqcusition ! Activation ! Retention ! Referral ! Revenue How do users find you? ! Is their first experience with you great? ! Do they come back? ! Do they tell their friends and colleagues about you? ! How do you make money?
  86. 86. Excercise Please, have an increased focus on the solution and these metrics in future interviews ! • How do we deliver a great experience for the customer? • How do we make sure they want to come back? • How much do they want to pay?
  87. 87. Towards product/market fit and thoughts about scaling
  88. 88. From service need to scalable business PROBLEM/SOLUTION FIT High-touch, Market risk, Qualitiative 100 users 10 customers 1000 users 100 customers 10.000 users 1000 customers 100.000 users 10.000 customers PRODUCT/MARKET FIT Self-serve, Tech risk, Quantitative PHASE 1 PHASE 2 PHASE 3 PHASE 4 TIME GROWTH This model is inspired by and adapted from Ash Maurya’s 10x Product Launch Plan FOCUS
  89. 89. Scaling • Launch a “teaser” site with sign-up and start building e-mail list early • Use your 10 early adopters to help find the next batch of customers • Supplement the rest by setting up more interviews using your email list • Collect customer testimonials / case-studies • Start building a marketing website • Test early channels for user acquisition 1000 users 100 customers DESIGN OF WIREFRAMES DEFINE MINIMAL VIABLE PRODUCTDESIGN OF PROTOTYPES TEST OG VALIDATION OF HYPOTHESES ANALYSIS AND ADAPTION
  90. 90. Scaling 10.000 users 1000 customers • Use your marketing website to sign-up users • Use your learning to define multiple pricing plans • Manage the full user lifecycle from visitor to sign-up to paid • Move towards a more automated self-service model DEVELOP BETA & COMMERCIAL RAMP-UP VERSION DESIGN OF SOCIALITY EVOLVE MINIMAL VIABLE PRODUCT DEFINE CORE-LEVERAGE AND BUSINESS CASE DEFINE LAUNCH CRITERIA & PARTICIPATION ACTIVITIES
  91. 91. Scaling 100.000 users 10.000 customers • Start tackling scaling risks • Start testing other customer acquisition channels • Optimize cost structure • Product/Market Fit means a shift from finding a plan that works to accelerating that plan and focus on growth (e.g. new metrics) LAUNCH EVENTS PR ESTABLISHING PARTNERSHIPS SCALE THE TEAM
  92. 92. What did you learn?
  93. 93. ! Thanks and goodbye ! ! ! Magnus Christensson
 Partner, Socialsquare ! magnus@socialsquare.dk Twitter: @mchristensson

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