The document discusses business model assumptions and provides examples to illustrate how to identify and test assumptions. It begins with an example of the business model behind Quirky.com, which is a co-creation platform and e-shop. It then discusses how to identify the key assumptions within business model transactions and provides tips for testing assumptions, such as using minimum viable products to gather customer feedback in a cost-effective manner. The document emphasizes testing assumptions to reduce risk and learn quickly about customer needs and the viability of the business model.

1. Business model assumptions

2. 1. Understand assumptions
2. improve your Business Model

3. Nick De Mey - @nickdemey
co-founder Board of Innovation

4. Example: What is this?
Order by
phone
Visit client
at home
Food
Work with
students
Shifts
Work at
night
Big
discounts
Small
product
portfolio
Products
can be
personalized
Retailshops

5. What else could this be?
Order by
phone
Visit client
at home
Food
Work with
students
Shifts
Work at
night
Big
discounts
Small
product
portfolio
Products
can be
personalized
Retailshops

6. Many components.
Every Business Model =
Many different ingredients.

7. A lot more than revenue
streams!

8. Do A-brands pay
a retailer to be in its stores?
- or -
does a retailer pay A-brands
to have them in its portfolio?
1.

9. What is the most expensive?
!
1 liter of homeopathic water
- or -
1 liter of water served at
Lebua, State Tower Bangkok?
2.

10. Who needs the biggest team?
The world’s most popular
photo app?
- or -
The #1 co-creation platform
for new products?
3.

11. What has the biggest
revenue potential?
Selling unprepared wood in
large quantities for fuel
consumption
- or -
selling a few wooden logs as
design objects at a price of
€200 per piece?
4.

12. What is most convenient?
!
Building a factory at a remote
location?
- or -
Shipping all windmills over
there one by one?
5.

13. You could easily tell which one
of these rings is being sold for
double the price of the other.
($99 vs $49)
!
Virtual Valentines Ring in the
online game Team Fortress 2
- or -
Gold Cat Ears ring sold on
Etsy.com
6.

14. You know which sales concept
offers the highest
commission ... and most fun?
!
Tupperware Home Parties
- or -
ManCave Worldwide
7.

15. List your assumptions
Know where to improve your business model.

16. Start with an example:

17. The Business Model behind Quirky.com
!a co-creation platform + e-shop
Inventors pay $99 to submit their idea to this co-creation platform. After
selection a community of designers will co-design and improve this product.
pitch your business model visually via this free template
IncIncHQHQ
Quirky.com
Product idea
initiator
Product idea
Exposure
Product
Designer
IncIncIncInc
Design company
Community
Co-design product
5
$99
by BoardofInnovation.com

18. The Business Model behind Quirky.com
!a co-creation platform + e-shop
Suppliers will set a minimum amount on the pre-sales. If enough people buy
this product, it will be go into production.
pitch your business model visually via this free template
IncIncHQHQ
Quirky.com
Product idea
initiator
Product idea
Exposure
Product
Designer
IncIncIncInc
Design company
Community
Co-design product
Product Buyer
New product
5
Money
5
$99
Supplier
production only starts
when enough pre-sales
by BoardofInnovation.com

19. The Business Model behind Quirky.com
!a co-creation platform + e-shop
Revenues from the e-shop are shared with the community. 30% of profit goes
to the initiator. 30% will be proportionally divided amongst the influencers.
pitch your business model visually via this free template
IncIncHQHQ
Quirky.com
Product idea
initiator
Product idea
Exposure
Product
Designer
IncIncIncInc
Design company
Community
Co-design product
Product Buyer
New product
5
Money
5
$99
5
30% of profit
5
part of 30% profit
based on contribution
5
part of 30% profit
based on contribution
Supplier
production only starts
when enough pre-sales
by BoardofInnovation.com

20. IncIncHQHQ
Quirky.com
Product idea
initiator
Product idea
Exposure
Product
Designer
IncIncIncInc
Design company
Community
Co-design product
Product Buyer
New product
5
Money
5
$99
5
30% of profit
5
part of 30% profit
based on contribution
5
part of 30% profit
based on contribution
Supplier
production only starts
when enough pre-sales
First Check:
Does every player gets
something back?

21. Start with the key transaction.
IncIncHQHQ
Quirky.com
Product idea
initiator
Product idea
Exposure
Co-design product
5
$99
5
30% of profit
production only st
when enough pre-s
There are always 10
assumptions hidden in each
transaction.

22. As an example:
1. People will share innovative ideas.
2. People even pay, to share their concept.
3. $99 is not too much. (Why not $900 or $9?)
4. 30% is a fair return for handing over your idea.
5. Design feedback by amateurs has value.
6. It’s clear to a user what type of idea can be shared.
7. An inventor trusts a new platform.
8. An amateur with no technical background can contribute.
9. A potential monetary reward is the most important driver.
10. Doing a lot of work upfront is a risk people are willing to take.
!

23. IncIncHQHQ
Quirky.com
Product idea
initiator
Product idea
Exposure
Product
Designer
IncIncIncInc
Design company
Community
Co-design product
Product Buyer
New product
5
Money
5
$99
5
30% of profit
5
part of 30% profit
based on contribution
5
part of 30% profit
based on contribution
Supplier
production only starts
when enough pre-sales
In no time you will find
100 different assumptions.

24. Write down
your main assumptions.

25. Do a quick & dirty ranking
For your most critical assumptions:
Look for way to test?

26. Feel free organise them that it makes sense to you:

27. Example of assumptions & tests:
https://www.youtube.com/watch?v=rS6fHW9pRek#t=327

28. Assume technology will solve everything!
Pitfall.

29. Triggered by technology.
“ A smart fridge with an integrated
computer to offers recipes, order food...”

30. Triggered by technology.
This idea lives almost half a century.
“ A smart fridge with an integrated
computer to offers recipes, order food...”
Honeywell 1969

31. Triggered by technology.
“ A smart fridge with an integrated
computer to offers recipes, order food...”
And comes back every 2-3 year.
Honeywell 1969
Winnipeg 1977
LG 2012
V-Sync 1998

32. Case (ninetees) car + home automation?
“Fill the bath when I head home.”
Could you name a similar case today?

33. Existing tech & infrastructure limits our thinking.

34. Existing tech & infrastructure limits our thinking.

35. Existing tech & infrastructure limits our thinking.

36. Existing tech & infrastructure limits our thinking.

37. What will we laugh with in the future?

38. Validate assumptions?

39. What was the hypothesis for the iPod?

40. Making Hypothesis, testing Assumptions

41. Making Hypothesis, testing Assumptions

42. Free Cars!
Innovate in
Automotive?
Look at other industries!
look for similar transactions in other markets.

43. Free Cars!
Innovate in
Automotive?
Learn from
Telecom!
Look at other industries!

44. Example: Subscripton models.
How do other solve this transaction? Can we add a twist?

45. Yes - Focus on specific niches
Every month a new box with other products linked to
the needs of a specific customer profile.

46. Yes - link with experiences!

47. Yes - Make it a membership (a movement!)
Your product becomes a symbol of fight against x.

48. Yes - but even better than a normal subscription!
Links Micro-leasing model?

49. Transaction: Transfer rights (shares, decisions rights)

50. Transaction: Become co-owner of another company.
Businesses: Shares, business case,...

51. Would you sell shares of your own life?
Mike Merrill

52. Would you sell shares of your own life?

53. Would you sell shares of your own life?

54. Look for the key numbers to
validate.

55. Count the numbers.

56. Testing of assumptions

57. Unusable product
(embarrassing)
Minimum Viable product
(loveable but limited)
Complete Product
(expensive)
What’s an MVP?
the product
you want to build
crappy products
nobody wants to use
Minimum Viable
Good features to test
the users responses

58. MVP is not about spending less money.
Nr. 1 goal MVP:
“maximum learning with minimal effort”
How?
“mix of experiments & prototyping.”

59. Most used options to learn (lean startup approach)
A. The explainer video - demo in a nutshell.

60. Most used options to learn (lean startup approach)
B. Landing page | mini-webpage.

61. Most used options to learn (lean startup approach)
C. Landing page | mini-webpage.

62. Most used options to learn (lean startup approach)
C. Landing page | mini-webpage.

63. Most used options to learn (lean startup approach)
D. Wizard of Oz (Fake it)
https://www.youtube.com/watch?v=zIEIvi2MuEk

64. Most used options to learn (lean startup approach)
E. Manual service (a.k.a. concierge service)

65. Most used options to learn (lean startup approach)
F. Sell before you build. (Crowdfunding - B2C)

66. Most used options to learn (lean startup approach)
F. Sell before you build. (Crowdfunding - B2B)

67. Most used options to learn (lean startup approach)
G. Animated functional prototype (paper, digital,…)

68. Most used options to learn (lean startup approach)
F. A temporary, but real product.

69. Our own Cardrops story.

70. What we tested & learned.

71. Tech check.

72. Pricing tests

73. Test pricing.

74. Ask for first feedback (customer insights)

75. Viral features (test marketing channels)

76. Create interest from partners.

77. Can the opposite be true?
Look at your assumptions.

78. Can the opposite be true?

80. Startups & Gamechangers love to work “the opposite way”
Free online game
-vs-
expensive in shops
couple of rooms everywhere
-vs- a lot of rooms at 1 place
Purchase 1 song
-vs-
Whole Album
Access to car (service)
-vs- owning a car (purchase)
Make money on calls (internet free)
-vs- Make money on internet (calls free)

81. “The opposite can also be true...”

82. Assumptions that are
often wrong:

83. Flickr: adam_jones
“An alert app for singles when they
match as they pass by on the street.”
Take a second, think about it.
What do you see as the most important pitfalls?
1.

84. What is the chance that 2 potential users have
the app installed and would find each other?
!
Lesson
Don’t focus on products or matchmaking services that
could only work if nearly everybody needs to be a client first.
!
This is not just a Chicken & Egg problem. Offer value to your app even without a
large user base.
!
Similar: Poken.com, Real-time niche expert matching,...
1.
The-EverybodyWillLoveit-Guy

85. Flickr: thundershead
“Traffic jam solution via Car-to-Car
communication on highways. ”
Take a second, think about it.
What do you see as the most important pitfalls?
2.

86. Do you really believe you could integrate your
technology in every single car, signage, roads,...?
!
Lesson
As a startup you just can’t turn a whole value chain
upside down.
!
Have a clear view on the operational hassle to roll out such a concept. You’ll realize
that already the planning of the first meeting with a big player (BMW?) is a burden.
2. The-I’llChangeTheWorld-Guy

87. Flickr: reallyboring
“Walls that change color depending
on the mood of people.”
Take a second, think about it.
What do you see as the most important pitfalls?
3.

88. How frequently do people ‘replace’ their walls?
!
Learning
Don’t focus too much on slow moving industries
(e.g. housing) where the sale of products only happens
every few year.
!
Speed is crucial for your startup. If you target such an industry be sure to have a
specific strategy to move quickly. (e.g. partnership for sales & marketing)
Similar: Roads that generate electricity,...
3. The-NeedsaRealityCheck-Guy

89. Flickr: tuxthepenguin
“Small DVD renting machines for
retail stores.”
Take a second, think about it.
What do you see as the most important pitfalls?
4.

90. Will people start renting DVD’s again? - hell no -
!
Learning
You can’t stop change with your startup. Don’t fight it.
!
Sounds obvious but still many ‘ideas’ presented to us are just small
improvements on products for markets where customers already moved in a different direction.
!
Similar: Tweaked ads for television,...
4. The-BlindDenier-Guy

91. Flickr: mightyhorse
“A fridge that automagically orders
food when your run out of milk.”
Take a second, think about it.
What do you see as the most important pitfalls?
5.

92. It’s not because technology has a solution that
people have a problem to solve.
!
Learning
Check if your idea is based on a geek’s wet dream or
a real demand in the market.
!
Smart fridges with build in computers (as an idea) exist already +50 years.
There is a very good reason why our fridges aren’t robots yet.
!
Similar: Hologram meet-ups,...
5. The-TechFetisjist-Guy

93. Flickr: grumpy-puddin
“Device for patients to mix specific
drugs at home.”
Take a second, think about it.
What do you see as the most important pitfalls?
6.

94. What would it take to change regulation in
your favor?
!
Learning
If legislation needs to be updated to make your service
work, you better kill your idea.
!
Some rules are not ‘official laws’ but existing habits within cultures.
These unwritten rules or norms within society are similar obstacles.
Similar: new road signs, child monitor,...
6. The-ImTheKing-Guy

95. “Online platform for employees to
make their own time tables.”
Take a second, think about it.
What do you see as the most important pitfalls?
7.

96. Will the employees pay themselves?
!
Learning
The one who puts money on the table (the employer)
is not the one who uses the service. There might be a
conflict of interest. (Why hand over control to employees?)
!
!
!
Make sure that you understand the difference between ‘your clients’ and ‘your users’.
You will need 2 different pitches, one for each group.
7. The-MoneyIsNoIssue-Guy

97. “iPhone case with built-in wireless
charger! No more cables!”
Flickr: tyfn
Take a second, think about it.
What do you see as the most important pitfalls?
8.

98. Will travelers stop carrying charging cables?
!
Learning
Make sure you didn’t move the problem instead of
solving it. If charging pads are not available everywhere,
people will still carry their cables with them.
= carry more stuff = worse.
!
Replacing one problem with another is a mistake linked to gimmicks & gadgets.
8. The-100%MarketShare-Guy

99. “Cart that automatically hands out
food in an airplane. ”
Take a second, think about it.
What do you see as the most important pitfalls?
9.

100. Will you reduce the number of staff?
!
Learning
Always take a look at the whole process. Optimizing one part
(e.g. food) will not make one flight attendant obsolete.
= no costs being saved in the end.
!
This is a common pitfall. Often people focus on irrelevant problems and miss out
the real bottleneck in the process.
9. The-LivingInaSilo-Guy

101. Flickr: ifrc
“Stronger emergency shelter for
disaster areas.”
Take a second, think about it.
What do you see as the most important pitfalls?
10.

102. How much budget does an NGO or government
has available for you?
!
Learning
Purely from a business perspective you should not target
clients with limited budgets.
!
In the same domain: services that target young start-ups, students,... Although
they might spend money in the end, there are often easier clients to persuade.
10. The-Idealist-Guy

103. More info?
Good luck!