This document summarizes a seminar on validating business ideas. It introduces the concept of customer development and testing assumptions. Attendees were given exercises to identify their business hypotheses, assumptions, and the top 3 assumptions to test. They were also assigned to read about talking to potential customers to test whether there is problem-solution fit and if early adopters will pay for the product. The seminar emphasized the importance of getting feedback from customers early to avoid failing with an idea based on incorrect assumptions.

1. CitySpark
Seminars
Week 1
Validating your
business idea

2. Today’s session
• Recap and review
• Understand what you need to do to be successful in
stage two of the competition
• Introduce the concept of Customer Development
• Begin to apply it to your idea/vision

3. RECAP

4. A business design and
doing competition

5. Having ideas…

6. & making them happen!

7. Academic excellence for business and the professions
“Doing not learning to do,
is the essence of
entrepreneurship”
Guy Kawasaki

8. Stage one: Oct-Dec 2014
PROBLEM

9. Academic excellence for business and the professions
What’s the problem?
How big is the problem?
Whose problem is it?
How is it currently solved?
1
2
3
4
Startup design brief

10. Stage two: Feb-Mar 2015
SOLUTION

12. 4 x workshops
Feb – Mar 2015

13. Submission
deadline
Thursday 19th March

14. Deadline
Friday 21st November
www.citystarters.co.uk/
cityspark

16. Stage two final
Tuesday 31st March

22. 5 x £3,000
prizes

23. Stage three: July 2015
PROTOTYPE

25. The UK’s leading pre-accelerator programme
for early-stage startups
www.FFWDLondon.com

27. Back to
stage two…

28. Judging criteria
• Is there a clearly defined problem?
• Is there a clearly articulated & differentiated solution?
• Is the market clearly defined, addressable and
scalable?
• Is there a viable and sustainable business model?
• Is the plan backed-up by concrete evidence?

29. Sounds great, but
what are you really
looking for?

30. ACTION

31. TRACTION

32. Academic excellence for business and the professions

36. Where do all
startups start?

37. Academic excellence for business and the professions
I have a super
duper techy
innovation!!!
I have an
idea!!!
I have a
passion!!!
See: Bill Aulet, www.disciplinedentrepreneurship.com

38. Why do most
startups fail?

39. Academic excellence for business and the professions
concept Dev testing launch customer

40. Academic excellence for business and the professions
See: Giff Constance, www.talkingtohumans.com

41. Academic excellence for business and the professions
concept Dev testing launch customer
I’m sorry, but why
do I need this
again?

43. Academic excellence for business and the professions
Introducing
Steve Blank

44. Academic excellence for business and the professions

45. Key idea 1
Startups operate in Search mode

46. Academic excellence for business and the professions

47. Academic excellence for business and the professions
Established
companies
Execute against an established
business model
Startups
Need to search for a
scalable & profitable
business model

48. Key idea 2
The only way you can find a
business model is to “get out of
the building!”

49. Academic excellence for business and the professions

50. Academic excellence for business and the professions
See: Giff Constance, www.talkingtohumans.com

51. Academic excellence for business and the professions

52. Academic excellence for business and the professions
customer

53. Academic excellence for business and the professions
customer

54. Key idea 3
The Customer Development
process

56. Academic excellence for business and the professions
Customer
discovery
Customer
validation
Problem –
solution fit
Problem –
market fit

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

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

59. Academic excellence for business and the professions
Customer
discovery
Customer
validation
Problem –
solution fit
Problem –
market fit
Yay, this is
awesome!

60. Fail fast
Fail cheap
Fail small

61. Academic excellence for business and the professions

62. Exercise 1
• 15-mins, working individually or in teams
• Take the business hypothesis worksheet and
complete as many sections as possible
• Make sure your answers are as concise and specific
as possible
• Don’t over-think the exercise!!!

63. Exercise 2
• 15-mins, working in groups of 2 or 3
• What assumptions have we made that, if proven
wrong, would cause the business to fail?
• Take the second worksheet and list as many of these
assumptions as possible
• Make your assumptions as concise and specific as
possible

64. The Chillow®

65. Assumptions
• We believe that people care about pillow temperature
• We believe that people care about sleep quality when
purchasing a pillow
• We believe we can sell online to customers
• We believe our customers will be young urban professionals
• We believe that our very first customers will be new graduates
who need to outfit their apartments
• We believe that we can sell our pillows at a high enough price to
cover our costs
• We believe that we can raise enough capital to cover
investments in manufacturing

66. Exercise 2
• 15-mins, working in groups of 2 or 3
• What assumptions have we made that, if proven
wrong, would cause the business to fail?
• Take the second worksheet and list as many of these
assumptions as possible
• Make your assumptions as concise and specific as
possible

67. 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)

69. RECAP

70. 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.

71. CitySpark
Seminars
Week 2
Testing your
assumptions

72. Academic excellence for business and the professions