CitySpark Seminar - Testing your asumptions

CitySpark
Seminars

Week 2
Testing your
assumptions

Today’s session
•  Recap and review week one
•  Understand how you can test your business
assumptions with customers
•  Before you invest time and money on product
development
•  Begin to apply it to your idea/vision

Key points
•  We’re not just looking for hypothetical business ideas or plans –
we want to see action, traction and evidence
•  Every new business idea is an article of faith precariously
perched on a big stack of assumptions
•  You need to challenge these assumptions right from the start –
not sail blissfully towards an epic fail at the end
•  This means that you need to understand what assumptions
you’re making
•  And then rank them in order of priority.

Homework
•  Before next week’s session
•  Review your list and mark the assumptions that would
have a large impact on your business and feel highly
uncertain

•  Prioritise your top-3 assumptions
•  Download Talking to Humans PDF and read pages 1-27
(www.talkingtohumans.com)

Academic excellence for business and the professions
(Re)introducing
Steve Blank

There are two
ways you can do
this…

CAUTION
The first way is
surprisingly hard!

IT’S NOT
Asking people to
design your product
for you

You are the
detective!

IT IS
Your job to learn
about your customers

Your goal is not to
compile statistically
significant answers

It is to look for
patterns that will
help you make
smarter decisions

Question 1
Who do you want to learn
from?

See: Giff Constance, www.talkingtohumans.com

Top tips
•  The first step in tying to learn rom the market is having an idea
about who your market actually is
-  The typical customer you imagine will buy your product
-  Your early adopter i.e. the people who will take a chance on you
before anyone else
-  Critical partners for distribution or fulfilment
•  Think through who the different users will be!
-  Hospital management system
-  Online veterinarian service
-  Online marketing place for plumbers
-  Colourful Coffins


Question 2
What do you want to learn?

Top tips
•  Go into every interview with a prepared list of questions
•  You’ll look more professional and it will keep you on point!
•  Identify your most risky assumptions and start here
•  Get stories, not speculation e.g. don’t ask “Would you like this
idea”, “Would you buy this product?”
•  Ask open-ended questions e.g. ask questions that start with
words like who, what, why and how.
•  Avoid questions that start with is, are, would, do you


Question 3
How will you get to them?

3 Golden Rules
•  Try to get one degree of separation away (don’t
interview people who already know you)
•  Be creative (don’t expect people to come to you)
•  Fish where the fish are (and not where they aren’t)


Top tips
•  Asking for advice should be your default mode early in the
customer development process
•  Be creative; if one route fails try something else
•  Find the moment of pain, purchase etc.
•  Make referrals happen; set a goal of walking out of every
interview with 2 or 3 new candidates
•  Conferences and meet-ups can be an amazing recruiting ground
•  Use being student to your advantage


Question 4
How can you ensure an
effective session?

Top tips
•  Do you interviews in person
•  Talk to one person at a time
•  Avoid focus groups!!!
•  Add a note taker
•  Get people to tell stories don’t ask them to predict their own
behaviour
•  Listen don’t talk
•  Do a dry run first


Question 5
How do you make sense of
what you learn?

Your goal is not to
learn for learning’s
sake

Your goal is to make
better decisions that
increase the odds of
success

Top tips
•  Take good notes
•  Dump and sort
•  Look for patterns and apply judgement – don’t get locked in
analysis paralysis
•  Expect false positives
•  Don’t just rely on qualitative research alone!!!


SECOND WAY
Quantitative*

(*Remember me!?!)

Introducing
Eric Ries

Key idea 1
The ‘Build, Measure, Learn’ loop

“The goal of a startup is to
figure out the right thing to
build – the thing customers
want and will pay for – as
quickly as possible.”

Validated learning

CREATIVITY
(AKA the jam sessions)
SONG ARRANGING
(Bothering to meet-
up and organise)
RECORDING
(Demo’s, albums etc.)
Record label, media &
PR support
SALES
(Singles, albums,
royalties, tickets,
merchandise etc.)
LEARN
(Drinking,
womanising,
breaking-up, rehab
and reformation)

Key idea 2
Minimum Viable Product (MVP)

“An MVP helps entrepreneurs
start the process of learning as
quickly as possible. It’s not
necessarily the smallest product
imaginable; it is the simply the
fastest route through the build-
measure-learn feedback loop”

Exercise – Mock Interviews
•  Working in pairs
•  Find out all about your partners dream car

•  Dig into the reasons behind your partners choice e.g.
When did you fall in love with the car and why? Of the
reasons you shared, why are these the most
important to you? How have you imagined using the
car etc.

•  Step 1: Interview Plan, 5-mins
•  Write a list of all the questions you could ask and
make a final selection of no more than 6-questions

•  Step 2: Pair Interviews, 7-mins each
•  Take it in turns to interview each other using the lists
of questions you have compiled
•  NB The person doing the interview should also take
as detailed notes as possible

Key points
•  Customer discovery is about gaining deeper insight into your
customer or your market
•  Being told your idea is cool is not useful; seeing behaviour that
validates your customer’s willingness to buy is very useful
•  Prepare an interview guide before you get out of the building
•  Get creative when trying to recruit people – if at first you don’t
succeed try something new
•  Sometimes observation is as powerful as interviews
•  Don’t forget to get quantitative!!!

Homework
•  Before next week’s session
•  Based on the key assumptions you’ve identified
prepare an interview guide and find 5-10 interviewees
at one degree of separation

•  Approach and try to set up an interview
•  Download Talking to Humans PDF and read pages
30-66

CitySpark
Seminars

Week 3
Refining your
business model

Customer
discovery
Customer
validation
Problem –
solution fit
Problem –
market fit

Problem-Solution fit =
You’ve identified a real-world
customer problem and a possible
solution

Product-Market fit =
You’ve built a product that early
adopters will pay you money for

Customer
discovery
Customer
validation
Problem –
solution fit
Problem –
market fit
Yay, this is
awesome!

CitySpark Seminar - Testing your asumptions

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