Interprenuer Mind-AMA

1. The Inventor
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1/As an entrepreneur, one of the keys
to business success is knowing how to
turn your ideas into the right products
and services that customers are
willing to pay for.
In this topic, we will introduce tools that can help you create a
valuable and sellable product based on your vision, and how to
create a business model around it.
What will you learn?
How to identify and develop your ideas to give you a
competitive edge.
How to solve your customers’ problems by developing the right
products or services.
How to create a Business Model Canvas to help you structure a
functioning business around your product or service.
How to prototype and test your product to prepare it for selling
to customers.
2/Develop a product to meet an actual
need
Think for a moment about a product or service that’s made a
big difference in your life. Maybe it was your first mobile phone,
which made it easier for you to connect with your friends, or a
car, which made it easier for you to get around.
As an entrepreneur, you aim to achieve your vision with your
mission, which is creating a product or service that will change
people's lives for the better. So now that you’re ready to start
your own business, it’s time to consider how to develop a
product or service that fits the bill.
Create solutions that meet existing needs.
Just like the helpful product or service that you thought of
earlier, most successful products and services are developed
as solutions to real-life problems. Therefore, they can survive in

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a competitive market because customers see the value in
paying for those solutions!
For example, the refrigerator as a product meets a very large
demand to store food at a safe temperature for a much longer
period of time. No wonder it gained so much popularity quickly
after it was invented!
When you imagine your own product, try to focus on what value
your product has to offer others.
Once you have a clear solution that you would like to develop,
it is important to gather a team of people with the right
combination of skills who can turn your idea into reality.
However, let’s still stay in the ideation phase for now by taking
a look at the following cards.
3/Brainstorming products starts with
challenges and solutions
Think in advance: Imagine if someone would pay you 100
dollars for every new idea you could make in just 20 minutes
time. How many new ideas could you come up with before the
time is up?
Chances are when faced with such a great reward, you would
be able to come up with quite many new ideas in a short
amount of time. And that’s the whole point of brainstorming!
Brainstorming is all about generating as many ideas as possible
in a short period of time while letting go of criticism and
allowing ideas of all kinds to flow. It’s a great alternative to
simply trying to advance with the very first idea you have and
working only with that.
It aims for quantity over quality: 10 good ideas are much more
valuable than just 1 great idea while brainstorming.
Don’t be afraid of unusual ideas!
Before you begin brainstorming ideas for products or services,
remember: start with the why. This means to start with a
challenge that you aim to solve with your solution: the value
you aim to create.

3. The Inventor
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Let’s take a look at a few brainstorming principles before
moving on to an exercise:
All ideas are welcome and encouraged
In brainstorming, there are no bad ideas. During brainstorming,
all ideas are welcome and encouraged, and are treated with
curiosity, not judgment. For example, try to encourage
everyone’s participation by saying “That's a great idea! Let me
write that down,” even if you don’t think it’s the best idea of the
round. Remember, at this stage quantity is greater than quality!
Generating quality ideas takes going through a lot that are not
so great.
Bring in random influences to spark new thinking
Even if some of your ideas seem silly or impossible, this is the
time to really let your imagination run wild!
All ideas are noted down
Write down every idea you have, to make sure that everything
can be saved and shared with the team. You can do this, for
example, with post-it notes or small pieces of paper, so you can
write your ideas down, then stick them onto a poster or board.
4/Brainstorming exercise
Everyone owns the ideas together
If you already have a team for this great, but no
Encourage everyone to participate and practice their listening
and sharing skills. This will help everyone on the team
understand each other’s thinking. Leave the ownership of your
own ideas at the door. Constructive criticism can be given to
help develop ideas together, but critique should not be used to
tear other people’s ideas down. This is a team effort after all!
worries if you are still processing your idea alone. Here is a
practical team exercise you can try with your friends, or
preferably next time you meet with your team. If you are
currently working on your own, not to worry: you can still
practice brainstorming on your own and do the team
deliberation parts on your own as well. However, please note
that the point in encouraging you to do this exercise as a team
is because different people have different viewpoints, which
adds variety and quality to your brainstorming.
ideation phase,

4. The Inventor
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1. Brainstorm challenges
What are you, or what is your community lacking?
What is a problem in your community, or even in a wider area,
which you would be interested in solving?
Come up with as many challenges as possible within 15
minutes, writing them down as they come along. More ideas
will equal more chances of coming up with something great. Try
not to think of practical limitations at this point, but instead,
allow all ideas to flow.
2. Choose 1-3 challenges you want to work with further
Organize the ideas on a table or wall, so that everyone can see
them. Take another 15 minutes to have a conversation amongst
your team, discussing the challenges or problems you’ve come
up with, without judgment. Amongst yourselves, choose 1-3
challenges you are most interested in working with further. If
you are having trouble choosing, you can vote by having each
team member select and give a "star" to their 3 favorite ideas.
3. Brainstorm solutions
In this phase of the exercise, take 15 minutes to brainstorm
solutions for your chosen challenges: the ones that were
favorites in the previous phase. Just like in phase 1 of this
exercise, come up with as many solutions as possible, write
them down, and try not to think of any limitations. Allow all
ideas to flow. Use the question "How might we…?" to formulate
what problems you are creating a solution for: for example,
“How might we provide affordable and clean energy to
everyone in the community?”
4. Choose 1-3 solutions you want to work with further
Just as in phase 2, take 15 minutes to discuss the ideas you
have generated, and choose 1-3 solutions you think are best to
work with further. Build off the ideas of others: you can merge
or further develop the ideas you think are best. Draw out the 1-3
ideas you have chosen to work with and elaborate on them.
Use notes, figures, and simple sketches to help you build a
clear image of each idea.
And there you go! Using 1 hour of time, you and your team can
brainstorm together and leverage collective thinking. This will
provide you with a variety of ideas for solutions solving actual

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challenges, which in turn will provide a stronger foundation to
continue working on your solution.
5/Market research and putting your
customers first
Challenge: Imagine that you are an entrepreneur who has
developed a product that replaces plastic bags. What features
might your product have that can improve the customers’
everyday life so that they want to buy your product instead of
plastic bags?
Selling products or services is what brings money into your
business. This means you need to be able to create and
communicate your value so that others actually buy what you’re
selling. To do so, you’ll need to determine the needs and wants
of your customers through market research.
Focus on the customer and create inclusive solutions
How well will your solution work for your customers? Is your
idea something they will be willing to pay for? Can they pay the
amount you are hoping to receive for the product? Include your
customers early on in your journey of developing a product for
them. Go out and speak with potential customers if you can,
and see what they think of your idea. Make use of your
listening skills, and gather as much feedback as you can. Use
that feedback to help you, starting from the early stages of
product development or service planning.
You can only succeed when you manage to build a valuable
solution that customers are willing to pay for.
Ask your customers for feedback at different stages of product
development. That way, you are sure to keep going in the right
direction!
At the end of the day, no one knows your product better than
those who use it. Meet with them face to face, or get in touch
via communication channels, such as social media, email, or by
phone. A common pitfall for an entrepreneur is to only make
assumptions about what customers really want or need
because if the assumption is wrong, no one ends up buying.
That’s why successful businesses make it a priority to
communicate with their customers.
Try not to be defensive when your customers ask you difficult
questions or make requests, as this can provide you with

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valuable insight into your operations. Thank them for their
contribution to helping improve your product!
6/Master your market and define your
niche
All of the information you receive from your customers will help
you identify what customers find the most valuable and
attractive about your product, and help you improve your
product-market fit.
Your customers make up your market. Product-market fit is a
term that describes how your product responds to a need in
the market and satisfies the needs of your customers.
During your market research, you will also need to gather
in-depth information about the industry in which you operate
and your competitors.
What are some of the other similar products or services that
already exist?
How could they be improved?
Is there something about their product or service that is
completely missing?
This information can help you identify a niche to focus on.
A niche is a part of the market, or market segment, which may
be underserved as is, and therefore, easier for you to find
customers in.
For example, a company who sells products for left-handed
people only, such as left-handed guitars, is a niche company.
But on the other hand, a company who sells products for
everyone, such as t-shirts in all sizes, is not a niche company.
Market information, and comparing your suggested product
with those that are already out there, can also help you identify
how you should be pricing your products.
Don’t forget to determine how you will deliver your products to
your customers: for example, will you be delivering them
directly to end-users, will you have a sales point, or will you be
selling them through a reseller?

7. The Inventor
7/25
Let’s move forward to learn more about how you can improve
your solution!
7/Ideate your solution further
Challenge: Can you guess the three most effective ways to
ideate solutions? Take 3 minutes to try and answer!
Once you have a specific customer problem and a proposed
solution in mind, you should further evaluate and develop your
idea in order to strengthen and improve your product or
service. This is known as ideation.
You have already learned about the importance of maintaining
focus on your customers’ needs. Below are some additional
guiding principles to help you carry out ideation in an effective
way:
Build upon experience
During your market research, you will have found out what
makes other businesses in your industry successful or
unsuccessful. Include these findings in your ideation process.
This doesn't necessarily mean that you should recreate
pre-existing solutions, rather that you should attempt to
improve on your industry as a whole while creating your own
product or service.
As an example, if you are running a restaurant, you can serve a
worldwide favorite such as the hamburger, but you can also
adjust this classic dish by applying local flavors, making it
unique in its own way! That way, you can utilize the existing
experience of others, and find a market niche that you want
your solution to address.
Create sustainable solutions
Make sure your solutions are sustainable, not only financially,
but also environmentally and socially. For example, a company
which is creating single-use food packaging can use materials
that are biodegradable, which means that when the packaging
is thrown away, it will be broken down easily without harming
the environment.
Think about how your product will impact the environment
around you. Consider whether or not your solutions are energy
efficient and ecological, or on the other hand, how your product

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will influence the community around you. Will you be able to
create more jobs, for example? Or solve pressing challenges?
How can you emphasize the positive impact of your product or
service, and minimize its negative impact?
Not only can planning for sustainability at the start of your
journey pay off in the future, but it can also ensure that your
business operates effectively and ethically. High-quality and
sustainability are often tied together, as high-quality products
lead to less waste. Customers also prefer high-quality products,
so everyone wins!
Create scalable solutions sustainably
Remember the sustainability aspects mentioned above while
scaling up your product or service. Do not attempt to force
growth. However, start thinking early on about how scaling your
product or service would come most smoothly.
A classic example of a scalable solution is software. The costs it
takes to build the first version of a software may be large, but
only occur once. After the first version of the software is made
and released, a nearly unlimited amount of additional copies
can be produced, packaged, and sold for only a fraction of the
cost it took to build the software itself.
On the other hand, products such as custom-made clothing are
not as easily scalable. This is because custom-made clothing
must be fitted to the individual desire of each customer. Copies
of custom-made clothing can be made, but at the same costs
as the original, as they typically only suite only a handful of
customers at a time.
Whenever you picture your solution serving a single customer,
can you also extend the same solution to serve 20 customers
easily? How about 100? Or 1 000? Or even 1 000 000? If you
find you aren’t quite there yet, ask yourself, what are the
challenges involved in scaling your product? Make sure from
the very start that the solutions you’re selling actually work, and
that customers are willing to buy your product. When you have
proven this on a smaller scale, you’ll have a much better
chance of proving it on a larger scale.
8/Build a Business Model Canvas

9. The Inventor
9/25
2. Value propositions
4. Customer relationships
6. Key resources
7. Key activities
8. Key partnerships
Now that you’ve been brainstorming on an idea for a product or
service, let’s take a look at the Business Model Canvas and
how it can be used to visualize the big picture of your business.
A business model describes how an organization creates,
delivers, and captures value. A Business Model Canvas is a
visualization tool for the building blocks of the business model.
A Business Model Canvas will help you define certain aspects
of your business.
These can include the types of customers your business will
serve, how you’ll distribute your product to them, and how you
will make a profit for your company.
You can download and print a copy of a Business Model
Canvas here* and begin filling it in on your own, or you can use
the layout to draw it yourself on any paper you have on hand. In
the following cards, you will find in-depth explanations of the
nine building blocks included in the Business Model Canvas
(BMC), and how to use them.
The nine building blocks of the BMC include:
3. Channels
5. Revenue streams
9. Cost structure
Many of these concepts may seem new to you at this stage, but
have no fear! The point is not to take in everything at once, but
to awaken your thoughts. Start working on your canvas, and
keep adding to it every time you learn something new along
the way.
9/BMC part 1: Customer segments
Challenge: Can you name a few different types of customers
your product may have?
1. Customer segments

10. The Inventor
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The first building block of the Business Model Canvas (BMC) is
the customer segment.
Customers are the heart of all business models!
Your customer segments include the people you intend to
serve your product to. Some supporting questions to answer
and fill in for this part of the BMC are as follows:
For whom are you creating value?
Who are your most important customers?
Customers are grouped into segments by common behaviors,
needs, or other attributes that separate them from other
customers. A business can have one or several customer
segments. What is most important is that you make a conscious
decision about which customer segments to serve and which to
ignore. This will allow you to focus your efforts on segments
you feel will be most profitable. You can serve customers in any
of the following markets:
Mass market
A business focusing on mass market as a customer segment
means that it does not distinguish between different customer
segments, but rather, serves one large group of customers who
share similar problems and needs. Consumer electronics is a
good example of this type of market.
Niche market
Niche markets are all about specific, specialized customer
segments, as you have learned earlier. Serving a niche market
is done in a tailored manner. An example would be
supplier-buyer relationships, such as a bakery which makes
custom cakes according to the occasion and according to
customer wishes.
Segmented market
Segmented markets are broken down into customer segments
based on specific customer traits, like how profitable of a
customer they are. The needs of these customers are similar
but slightly varying. For example, a bank may provide similar
services to all of its customers, such as a free bank account and
a debit card, regardless of if they deposit 1 000 or 100 000
dollars. But the bank might also offer additional services, such

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as investment opportunities, to the customers who deposit
more.
Diversified markets
A company serving diversified markets serve customer
segments that have very different needs and problems, and
therefore, the value provided to these customers is completely
different. For example, a supermarket can offer its customers a
wide variety of different products, from foods to hygiene
products. There is almost always something for everyone at a
supermarket, and that’s why every customer in the checkout
line has a basket of items that differ from those of the others!
Multi-sided platform
Multi-sided platform organizations serve customer segments
that are interdependent of one another. An example of this is a
free newspaper, for which large bases of both readers and
advertisers are necessary in order for the business model to
work. This is because the advertisers pay the newspaper
company for visibility to large amounts of readers, and the
newspaper only gains revenue from publishing the
advertisements that the readers see while also reading their
stories. The readers "pay" for the free newspaper by seeing the
advertisements.
10/BMC part 2: Value proposition
The value proposition building block defines why your
customers buy from you instead of someone else. For example,
the value proposition of WhatsApp is the ease of sending and
receiving messages and media without fees, providing great
value for its users.
What part of your product or service can you provide that is of
value?
This is what solves a customer’s problem. A value proposition
can consist of a product or service, or a bundle of them, aimed
at a specific customer segment. The following questions will
help you figure out your value proposition:
What value do you deliver to the customer?
What problem are you helping your customers solve?
What customer needs are you satisfying?

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What bundles of products and services are you offering each
customer segment?
You can provide value to a customer by offering them
something new, or simply by improving what already exists.
Value can consist of quantitative or qualitative elements.
Quantitative value may be related to price, for example, and
qualitative value to the customer experience.
The following are examples of characteristics that customers
may find valuable:
Novelty
Performance
Customization
Convenience
Design
Brand or status
Price
In your product design, marketing, and sales, highlight the
characteristics that are most important to your chosen customer
segments!
11/BMC part 3: Channels
Now that you’ve thought about what your customer segments
are and what value you can provide them with, let’s look at how
you can deliver that value to them through channels.
You deliver value to your customers through communication,
distribution, and sales channels: they are your interface with
your customers.
Think about the following questions:
Through which channels do your customer segments want to
be reached?
How are you reaching them now?
Which channels work best?
Which ones are most cost-efficient?
How are you integrating your channels with customer routines,
to make it as simple as possible for them to gain access to the
value you provide?

13. The Inventor
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There are five phases of reaching and communicating with your
customers.
These five phases include:
1. Awareness: How do you raise awareness about your
company's products and services?
2. Evaluation: How do you help customers evaluate your
value proposition?
3. Purchase: How do you allow customers to purchase
specific products and services?
4. Delivery: How do you deliver a value proposition to
customers?
5. After-sales: How do you provide post-purchase
customer support?
You will need to have channels in place to communicate with
your customer in each of these different situations. Some
channels you may be able to set up yourself, and others you
may want to organize through a partner. For example, having a
shop and carrying out your own after-sales services are
channels you might be able to set up on your own, but utilizing
professional marketing and delivery services might require
help.
12/BMC part 4: Customer
relationships
You interact with your customers through the relationships that
you establish and maintain with them. These relationships may
vary with your different customer segments if you are
addressing several.
Customer relationships can be anything between very
personalized to fully automated, depending on how big of a
role a direct customer relationship is in your value proposition.
Different examples of customer relationships include:
Personal assistance, meaning direct human interaction.
Personal assistance can happen through, for example, email or
call centers, or through a dedicated assistant for certain
customers.
Self-service, on the other hand, means that there is no human
interaction between the customer and your business, and the
customer serves themselves. An example of this is an ATM,
where people can withdraw money using self-service.

14. The Inventor
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Automated services are a mix of self-service and automated
processes, such as personal online profiles that customers can
manage.
User communities are increasingly being utilized in the
relationships between businesses and customers. Users may,
for example, be able to exchange knowledge through online
platforms for communities. Communities also help companies
understand their customers better.
Co-creation of value is a customer relationship type where
companies go beyond traditional relationships with their
customers and engage them in designing products or services.
An example of this is setting up a workshop for your customers
to brainstorm ideas for new product features.
Think of the following questions when defining what sort of
customer relationships you want to engage in with your
customers:
What type of relationship does each of your customer
segments expect you to establish and maintain with them?
Which relationships have you established already?
How costly is establishing and maintaining customer
relationships for you?
13/BMC part 5: Revenue streams
Challenge: If you are the CEO of Disneyland and you need to
report the revenue streams of the company to your board, what
would your report include?
Now let’s take a look at how your customers generate revenue
for your business! Revenue streams, the arteries of a company,
keep the company’s blood flowing. Each customer segment
generates at least one revenue stream, which may have a
differing pricing mechanism than others.
Revenue streams result from value propositions successfully
delivered to customers.
Let’s first clarify a few basic terms: the difference between
revenue and profit.
Revenue equals the money coming in based on purchases that
your customers make.

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left over from the money that has come in from customers after
Profit equals revenue minus all your expenses, which is what is
you have deducted what you have had to spend.
In other words, profit = revenue - costs.
For example, if you’re revenue for a given period would be 100
dollars, and the costs to earn that revenue was in total 20
dollars, then your profit would be 80 dollars. Costs and
expenses will be further discussed in a later card.
Revenue streams can come from one-time transaction
revenues, or from recurring revenues such as monthly or
annual payments. Examples include:
Asset sales - means the selling of ownership to specific
products, whether a customer purchases fruit from a
supermarket or a car from a car dealer.
Usage fees - paid by a customer for a service, depending on
how much they use that service. For example, a customer pays
for their stay in a hotel according to the number of nights they
stay there.
Subscription fees - grant customers continual access to a
service, such as a gym membership, or services selling access
to online series, movies, or music.
Lending / renting / leasing - grants the customer access to a
specific asset for a specified period of time. For example,
renting a home, a car, or an office space.
Licensing - grants the customer access to certain services that
are the intellectual property of a company, which may be
common in the information and communications technology
(ICT) industry, or the media industry. For example, you may buy
software licenses to use certain software on your computer.
Advertising - generates revenue by promoting the brand of
another company whose product or service you are
advertising. An example of this is the advertisements you might
often see online, in newspapers, or on TV.
Questions to help you map out your revenue streams include:
For what value are your customers willing to pay?
How are they currently paying?
How would they prefer to pay?
How much does each revenue stream contribute to overall
revenues?

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14/BMC part 6: Key resources
Next up, let’s look at what key resources you will need to make
your business model work! Key resources are the most
customer, deliver your product or service, maintain customer
relationships, and earn revenue.
Resources can fall into the following categories:
Physical resources - including assets such as manufacturing
facilities, buildings, machines, or vehicles.
Financial resources - funds such as cash or credit to run your
operations.
Intellectual resources - can include your brand, patents, or
copyrights, for example.
Human resources - are your workforce and their skills, which
are key in providing value to your customers, especially in
service industries.
What are the most important varieties of resources your
business needs to be able to create and deliver value to your
customers?
Next, let’s take a look at key activities that your business needs
to do to deliver that value.
15/BMC part 7: Key activities
Though key resources are the most important things you need
to have to make your business model work, your key activities
are the most important things you need to do to make your
business model work. For example, if you want to produce
apples, the key resource is the apple trees, and the key
activities are watering, fertilizing, and tending the trees.
Your key activities depend very much on the type of business
you have. If you sell products that you make, your activities will
most likely include purchasing components and compiling end
products. Whereas if you provide services, carrying out the
actual services you provide will be in your key activities.
Key activities can be divided into the following three categories:
Production - relates to designing, making, and delivering your
product or service. The key activities of manufacturing
companies focus on production.
important resources you’ll need to create value for your

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Problem-solving - creates solutions to the problems of
individual customers. Examples of these types of activities
include hospitals or consultant firms serving their customers.
Platform or network - activities that are relevant for companies
operating through, for example, an online store or through a
network of agents, where these platforms and networks need
to be continually developed and maintained.
Compile your key activities by thinking about the following
questions:
What key activities do your value propositions require?
What are your distribution channels?
How do you deal with your customer relationships?
What are your revenue streams?
As you can see, we are very much referencing back to the
other parts of the Business Model Canvas you have already
filled in.
That is the point of the BMC: to make sure that no matter from
what angle you’re looking at your business, everything fits
together smoothly, and all aspects are attended to.
16/BMC part 8: Key partnerships
It is very possible that in listing all of your key resources and
activities during the previous cards, you have realized you'll not
be able to take care of all of these on your own. That is why
we'll take a look at the key partnerships that you will need to
make your business model a success.
Key partnerships help you fill in the gaps of what your company
itself cannot do, or what you do not have. You might very well
be outsourcing some activities in the future, which means
purchasing them from another organization.
Motivations for partnerships fall into the following categories:
Optimization and economy of scale - this means that it is
illogical and inefficient for one company to do everything.
Instead, companies can become experts in performing their
chosen role, and build the rest of their business model upon
the services of partners or suppliers. This will allow companies
to scale up more quickly as well.
Acquisition of particular resources and activities - this again
allows for quicker scaling, as companies can gain access to

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is to map out the different types of costs your business incurs,
each others’ skills and knowledge through partnerships. An
example of this could be mobile phone manufacturers licensing
software, or the operating system, for their hardware.
Reduction of risk and uncertainty - is made possible through
partnerships when companies agree to cooperate and
supplement each other with their expertise instead of
competing head-on.
Go through the following questions:
Who are your key partners and suppliers?
Which key resources do you acquire from your partners?
Which key activities do your partners perform?
Good work! You only have one more part of the Business
Model Canvas to fill in: the cost structure.
17/BMC part 9: Cost structure
Now onto the last part of putting together your business model:
your cost structure.
Costs are incurred by your company engaging in the key
activities.
This includes creating value for your customer and keeping the
business model running from start to finish.
Your cost structure is similar to your revenue streams: the point
not so much to calculate concrete costs yet.
Cost structures can either be cost-driven or value-driven:
Cost-driven means you focus on minimizing costs. This may be
the case if you are operating on a low price value proposition
for your customer. A good example of this is cheap mobile
phones that are widely preferred due to a low price, even
though they may not have all the latest features.
Value-driven cost structures don't focus too much on
minimizing costs. Instead, they focus on maximizing value for
their customers with more premium-value propositions and
more personalized services. For example, luxury hotels provide
their guests with additional services and experiences, such as a
swimming pool and room service, making the customer more
willing to pay a higher price per night than they would at a
budget hotel.

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Here are some additional characteristics of cost structures:
Fixed costs - stay the same despite how much of a product or
service your company produces. Examples of these include
rent of facilities or wages of permanent staff.
Variable costs - go up or down with the amount of product or
service you produce. These may include the materials you use
to create your product.
Economies of scale - are cost advantages that you receive
when you produce more, such as bulk rate discounts.
Economies of scope - are cost advantages resulting from the
broadening of the scope of your business. For example, you
may start selling five different products instead of only one,
which means that your marketing costs will now be divided
amongst all five products instead of just the previous one.
The following questions will help you map out your cost
structure:
What are the most important costs inherent in your business
model?
Which key resources and key activities are the most expensive?
Is your business more cost driven or value driven?
18/Summary
Great job, you have now learned about all the building blocks
of the Business Model Canvas! There has been a lot of
information and lots of questions to think about in the previous
cards. Coming back later to review these cards a few more
times will help you strengthen your learning.
A great resource to learn more about business models is the
book Business Model Generation (2010) by Alexander
Osterwalder and Yves Pigneur, which has also been a great
source for us in developing these learning cards.
Before you enter the next handful, here are two challenges for
you:
What are the most important things you’ve learned from this
handful, and why do you think they are important?
How can you use the Business Model Canvas to improve your
business?
In the next handful, we’ll take a look at how you can prototype
and develop your product. Use what you’ve learned about the

20. The Inventor
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Business Model Canvas this far to help you plan your prototype
and production!
19/Prototyping your product
After having taken a deeper look at the business model you
have created around your product or service, you may already
want to move into the stages of bringing your product or
service to life! If so, then it’s time to create a prototype and test
it.
A prototype is the first, basic version of your product or service
that you can test with customers.
This can be a very fun and somewhat challenging process, so if
you are wondering where to begin, here are a few guidelines to
help get you started.
The prototype phase of product development is the interactive
creation of products, together with your customers, allowing
you to gain feedback from them constantly. The process itself is
meant to answer any questions you may be having that are
keeping you from creating your final product. These questions
may typically include:
Do my customers find this product or service useful?
What do they most like about my product or service, and how
can I strengthen that?
What do they most dislike about my product or service, and
how can I improve that?
How can I improve my product before I put it on the market?
A prototype can be anything that a user can test.
In the beginning, prototypes should be simple, quick, and
affordable to make, but also be of good enough quality to test
for feedback.
They could be anything from a wall of post-it notes, a gadget
you’ve put together, or a role-playing activity. In later stages,
your prototype should become more concrete, and closely
resemble the product you intend to sell, all thanks to the
prototyping process!
20/Why is prototyping so important?

21. The Inventor
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There are several reasons why prototyping plays a key role in
building a steady foundation for your business. Let’s take a look
at a few in particular:
1. To ideate and problem-solve
Whenever you begin building a prototype, you can see for
yourself what actually works, and also catch any flaws in your
plans early on.
2. To communicate
If a picture is worth a thousand words, a prototype is worth a
thousand pictures! Your potential customer can give you much
more valuable feedback when they are able to test your
prototype, as opposed to when they merely hear a description
of the product or service from you.
3. To start a conversation
If you are prototyping an experience or service, try to create a
scenario in which could capture the real situation of your test
audience. You can use the following questions to help you
create your scenario:
Who is your customer?
What goals do your customers have?
Why does your customer use your product or service?
Interactions with potential customers are often much more rich
and illustrative when centered around a concrete prototype.
4. To fail affordably
Committing as few resources as possible to each prototype
from the very beginning will mean less time and resources
invested up front. Use this as an opportunity to catch any flaws
that might otherwise go unnoticed, and end up being costly.
Make adjustments to your product when needed, and keep in
mind that prototyping can also encourage you to break up
larger problems into smaller, more testable chunks to fully
understand what went wrong.
5. To test possibilities

22. The Inventor
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Prototyping allows you to pursue many different ideas without
being committed to just a single one. Whenever you start to
notice positive or negative changes in your progress, seek out
the root cause. This way, even if the prototype fails, you can
retrace your steps to find out exactly what went wrong, and
when it went wrong. You will also be able to pinpoint what
really works well for the customer, and how you can increase
that in your product.
Once it’s time to put all your hard work to the ultimate test, get
your product on the market for sale as early as you can without
compromising its quality. Collect reviews from your first round
of customers, and adjust your product accordingly if and when
you can.
21/Product development is about
continuous improvement
If you have already carried out prototyping and testing, you
should now have some valuable customer feedback to work
with.
Did you find from the feedback on hand that enough people
recognize and agree that your solution is necessary? Now is a
great time to update your Business Model Canvas according to
what you have found out about your customers’ preferences.
After all, developing your product and business model is an
iterative process: you build, you test and measure how it works,
you learn, and you loop through the same steps over and over
again.
Is your business model, according to your updated Business
Model Canvas, strong enough to create value for both you and
your customers?
Is now the time to pivot or persevere?
Sometimes you’ll find yourself in a position where your plan
needs re-evaluation. This could be because of negative
customer feedback, or because your business model shows
signs that you are not creating enough revenue from selling
your product or service. At this point, you may need to pivot.
A pivot is changing one or more parts of your business model
without giving up on your vision.

23. The Inventor
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Pivoting changes your approach on how you will achieve your
vision. It could be that your product or service needs to be
redesigned, or that you've learned that an entirely different
solution would work better for your customers.
Pivot whenever necessary, and keep trying until you find a
business model through which you can create value for both
your customers and your business financially. When you find
you are getting closer to getting it right, persevering will be the
best option to choose: continuing along the path you're on
while only making small improvements to your product or
service to finetune it.
22/Boost your skills
Did you know that the outcome of learning something by
reading the same text five times is less than by practicing
something just one time? If you want to acquire new
entrepreneurship skills quickly, the most effective way of doing
so is by practicing them as much as possible through working
on your own business idea. That is the only real way you will
find out what works.
All of the knowledge you’ve gained from this topic will become
more useful to you when you take the time to let it all sink in,
then bit by bit, test it out in your ideation and business
planning. Below are a few practical exercises for you to try. If
you find these exercises too challenging right now, feel free to
revisit them later on.
Try to have some fun with these tasks! If you’d like, invite your
teammates, if any, or a few friends to help you carry out these
exercises.
Carry out a market research
Take some time out of the next few days to venture into the
areas you plan to reach with your business.
Observe, explore, acknowledge, collect critical comments, think
This will help you clarify why your business exists, and if there
is any real need for what you want to offer.
outside the box, and dream.

24. The Inventor
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Mission: Find 5-10 people in your area that could be your
customers someday. Explain your product or service to them.
Ask them if they would be willing to buy the product you have
just described. Whether their answer is yes or no, ask them to
explain their answer, or ask them the following questions:
Is the product something they actually need to help them solve
a problem they have?
What specific features could the product or service have that
solve their problem?
Does a better solution already exist? If so, what’s so great
about it?
How much would the customer be willing to pay, or how much
do they already pay for a similar product or service?
Draft a Business Model Canvas
Exercise: Create a first draft of your Business Model Canvas by
using this PDF*. If you don’t have access to a printer, feel free to
draw it yourself on a large piece of paper.
Review handfuls 2 and 3 to find an in-depth explanation of each
building block of the Canvas, and fill in as many of the blocks as
you can. If you don’t have a business idea yet, use your
imagination to create a business idea for fun and practice with
that imaginary business idea for now.
23/Here is a takeaway summary of
what you’ve learned so far:
1. How to identify and develop your ideas to give you a
competitive edge.
Brainstorming product ideas will allow you to develop products
or services that really serve a purpose. Considering the
problems you will solve and the need for your solution is key to
creating a winning business idea.
2. How to solve your customers’ problems by developing
the right products or services.
Carrying out a market research allows you to get to know your
future customers personally. Understanding what their
everyday lives are like, what products or services they already
use and the unsolved areas in which your competitors could
improve upon will help you find your niche, and help you
develop a product or service that your customer will actually
want to buy.

25. The Inventor
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3. How to create a Business Model Canvas to help you
structure a functioning business around your product or
service.
Using a Business Model Canvas allows you to visualize your
business plan in action. Filling in each of the building blocks will
help you better understand any strengths and weaknesses in
your business plan, as well as pinpoint areas that need
improvement or more resources.
4. How to prototype and test your product to prepare it for
selling to customers.
Creating a simple, quick, and affordable product for
demonstration can help you deepen your market research and
test your products’ ability to meet the needs of your customers,
as well as attract investors or key partners.