This week we reviewed all of the past reading and exercises. After that we walked through how to create a first experiment based on the business model canvas as well as how to analyze the data to determine next steps.
» 1: There are no facts inside the building, so get outside.» 2: Pair customer development with agile development» 3: Failure is an integral part of the search» 4: Make continuous iterations and pivots» 5: No business plan survives first contact with customers so use a business model canvas» 6: Design experiments to test and validate your hypotheses» 7: Agree on market type. In changes everything» 8: Startup metrics differ from those in existing companies» 9: Fast decision-making, cycle time, speed and tempo» 10: It’s all about passion» 11: Startup job titles are very different from large companies» 12: Preserve all cash until needed. Then spend.» 13: Communicate and share learning» 14: Customer development success begins with buy-in
» Problem / Solution Fit» Earlyvangelists» MVPs» Business Model Hypotheses» Product features & benefits
» What is a startup? First principles» Make no little plans – defining the scalable startup» A startup is not a smaller version of a large company
» 3-5 minutes ˃Market Size ˃Type of business: IP, Licensing, startup, unknown ˃Proposed experiments to test customer segment, value proposition, channel and revenue model of the hypotheses.
All new business ideas begin as educated guesses- We often begin with assumptions- Design experiments to capture customer behavior data- Make good decisions based this dataMove through the loop quickly- Test riskiest assumptions via hypotheses- Do it again based on what you learned
What is the biggest assumption that if false, will cause myproduct to fail? “If this is not true, we’re out of business”Rank assumptions in order of greatest risk, developexperiments to validate/in each assumption.What’s the difference between assumptions and hypotheses?- Hypotheses are numeric
• Tests your riskiest assumption…• Based on a numeric hypothesis…• Measures real behavior (or as close to it as possible)• Can be built and executed quickly!
Build the least amount required to get the behavioral data youneed to validate/invalidate your hypothesis. Rapid Experiments with Customers Ask yourself: Is this the minimum amount I can do to validate/invalidate my most important hypothesis?
Based on your Business Model Canvas…» Write down you top 5 riskiest assumptions, related to your customer and value proposition.
» Prioritize these assumptions, riskiest at the top (are you sure..? Focus on customer problem assumptions)
» What was your hypothesis?» What was the experiment you designed to test the hypothesis?» What was the result (pass/fail)» What did you learn?» What was surprising?» What will you do next?
» Document / review / re-prioritize 5 riskiest assumptions» Choose riskiest assumption» Write 3 measurable, behavioral hypotheses» Which one will provide best validation?» Brainstorm 3 experiments» Choose an experiment that will validate/invalidate your hypothesis fastest.
» Team presentation for next class: (5 minutes) ˃ Talk to as many customers as you can ˃ What were your value proposition hypotheses? ˃ What do customers think about your value proposition hypotheses? ˃ Post updates in the Google group (lessons learned, canvas changes)» Read: Business Model Generation p146-150, 161-168 and 200-211» Read: The Startup Owners Manual p85-97