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LAB #1: CUSTOMERS AND VALUE PROPOSITION
concept development labs
LOCAL FOOD LAUNCHPAD
welcome
join  the  conversa.on  on  twi0er  with  
@goodfoodproj  
@DoingSomeGood  
#LFLP15
DAVID  HOOD  
@DavidAHood
MELINA  CHAN  
@MelinaChan
doingsomething
good
STEPH  GESLING  
@StephGesling
Local  Food  Launchpad  brought  to  you  by
with  thanks  to…
#LFLP15
David  Hood  
DOING  SOMETHING  GOOD
@DavidAHood
workshop  program
• welcome  
• shaping  good  ideas  
• introducFon  to  Human-­‐Centred  Design  
• introducFon  to  Business  Model  Canvas  
• work  on  your  Business  Model  Canvas  
• 1.  Customer  Segments  
• 2.  Value  ProposiFon  
• geMng  to  know  your  customers/users/members/supporters
#LFLP15
Tasia  Karlis  
CITY  OF  MELBOURNE
@cityofmelbourne
check  in
check in
LFLP Concept Development Lab #1
shaping good ideas
http://dthsg.com/what-is-design-thinking/
“If  I  had  an  hour  to  
solve  a  problem  I'd  
spend  55  minutes  
thinking  about  the  
problem  and  five  
minutes  thinking  
about  solu:ons.”
the five phases of
design thinking
http://thinkingofdesign.blogspot.com.au/
LFLP Concept Development Lab #1
http://hci.stanford.edu/dschool/resources/design-process/readable.html
intro  to  Human-­‐centred  Design
https://dschool.stanford.edu/
shaping  great  ideas
Start  with  
why  
Why  are  you  doing  this?  What  is  the  situaFon  you  want  to  change  and  
why  is  it  important  to  change?  What  might  change  look  like?  What  do  
you  believe  is  possible?  What  is  your  preferred  future?
Build  your  understanding  
of  the  context
1 What  is  the  current  situaFon?  Who  does  it  impact?  What  is  it’s  impact  
on  people,  the  planet,  the  economy?  What  are  the  possible  causes?  
Observe.  Listen.  Learn.  Enquire.  
Iden7fy  your  target  
audience
Who  are  you  designing  your  service  or  product  for?  Be  specific.  Who  
believe’s  what  you  believe?  It’s  not  everybody.
Get  to  know  your  target  
audience
3 Seek  to  understand  their  needs  and  aspiraFons,  what  moFvates  them  
and  their  challenges.  Develop  user  personas  and  user  journeys  to  
provide  valuable  insights.
Iden7fy  the  problem  you  
are  solving  
How  does  your  idea  help  your  target  audience  to  get  what  they  need  or  
what  they  value?  How  does  it  help  them  to  overcome  challenges  and  
barriers?
Prototype  and  
test  ideas
Gain  insights  into  customers’  needs  by  designing  and  deploying  the  
smallest  amount  of  funcFonality  possible  (AKA  your  minimum  viable  
product/service).  Evolve  the  soluFon  based  on  insights  provided  by  
engaged  early  adopters.
1
2
3
4
5
6
START
WITH
WHY
People  don’t  buy  what  you  do  they  
buy  why  you  do  it.  ~  Simon  Sinek
‣ why:  belief,  moFvaFon  or  
purpose  
‣ how:  experience  or  process  
‣ what:  details  of  product  of  
service
LFLP Concept Development Lab #1
Why  do  you  believe  growing  and    
accessing  more  local  food  is  important?
research
LFLP Concept Development Lab #1
human-centred
design
why  use  a  human-­‐centred  design  approach?
“Because  it  can  help  your  organizaFon  connect  be`er  with  
the  people  you  serve.  It  can  transform  data  into  acFonable  
ideas.  It  can  help  you  to  see  new  opportuniFes.  It  can  help  to  
increase  the  speed  and  effecFveness  of  creaFng  new  
soluFons.”  
h`p://www.ideo.com/work/human-­‐centered-­‐design-­‐toolkit/
design  thinking
Getting to knowyour audience
LFLP Concept Development Lab #1
1000 true fans
LFLP Concept Development Lab #1
Who  needs  your  idea  the  most?
LFLP Concept Development Lab #1
What’s  their  history  in  
relaFonship  to  eaFng,  
growing,  preparing  and    
buying  food?
What’s  their  rouFne?  Daily,  
weekly,  monthly,  annually?
What  are  their  personal  
goals  around  eaFng,  cooking,  
health  &  wellbeing?  
What  moFvates  them?
What  are  the  challenges  
they  face  to  growing  or  buying  
local  food?  What  are  
the  constraints/barriers?
What  sort  of  experience  are  
they  looking  for?  What  sort  
of  interacFon  do  they  want  
to  have  with  others/you?
What  sort  of  thing  might  
you  expect  them  to  say  
about  their  ideal  experience  
and  why  they  love  it?
Empathyis not just about walking

in another's shoes.
First you must
remove your own.
EMPATHY MAP
What do I see?
What do I say and do?
What do I hear?
How do I feel?
What do I think?
Pain Gain
Fears | Frustrations | Obstacles Wants/Needs | Measures of Success
Persona: Scenario:
getting ready arrive depart fall asleep
ENABLING
CONDITION
SCENARIO
Persona: Scenario:
POINT OF
DECISION
POTENTIALH
URDLE
Having  a  great  idea  doesn't  guarantee  success.  
A  great  business  idea  must  also  have  a  great  
business  model  to  support  and  sustain  it.  
Alex  Osterwalder
LFLP Concept Development Lab #1
intro to business models
What  is  a  business  model?
Def_Business  Model
A  business  model  describes  
the  raFonale  of  how  an  
organisaFon  creates,  delivers,  
and  captures  value.
Source: Business Model Generation
LFLP Concept Development Lab #1
A shared language for describing, visualizing,
assessing, and changing business models
The Business
Model Canvas
1. customers 2. value
proposition
3. channels 4. customer
relationships
5. revenues 6. key
resources
7. key
activities
8.
partnerships
9. costi Business
Model
Canvas
The
Business Model
explained to my
Grandmother
info@hugowiz.itAnche in Italiano http://slidesha.re/eGZRLO
62%
9 building blocks > summary
9
Business Model
building blocks
customers
value proposition
channels
customer relationship
revenues
key resources
key activities
partnerships
costs
1.
2.
3.
4.
5.
6.
7.
8.
9.
66%
Business Model Canvas > intro
Let's organize the 9
building blocks: the
Business Model Canvas
Who:
the Business Model
Canvas was invented by
Alexander Osterwalder
and published in his book:
Business Model Generation
What:
a framework showing
the building blocks'
relationships
The  Business  Model  Canvas  is  a  tool  for  
you  to  design,  analyse,  test  and  
describe  your  business  model  and  how  
your  organisaFon  intends  to  create,  
deliver,  and  capture  value  in  a  profitable  
way.
LFLP Concept Development Lab #1
LFLP Concept Development Lab #1
LFLP Concept Development Lab #1
Why  use  Business  Model  Canvas?
Fundamentally,  it  delivers  three  things:  
1. Focus:  Stripping  away  the  40+  pages  of  ‘stuff’  in  a  tradiFonal  business  plan,  it  
can  help  to  clarify  and  focus  on  what’s  driving  the  business  (and  what’s  non-­‐
core  and  geMng  in  the  way).  
2. Flexibility:  It’s  a  lot  easier  to  tweak  the  model  and  try  things  (from  a  planning  
perspecFve)  with  something  that’s  siMng  on  a  single  page.  
3. Transparency:  Your  team  will  have  a  much  easier  Fme  understanding  your  
business  model  and  be  much  more  likely  to  buy  in  to  your  vision  when  it’s  laid  
out  on  a  single  page.
getting started
guess
guess
guess
guess
guess
guess
guess
guess
guess
guess
guess
guess
guess
guessguess guess
LFLP Concept Development Lab #1
1. customer segments
The  Customer  Segments  Building  Block  
defines  the  different  groups  of  people  or  
organizaFons  an  enterprise  aims  to  
reach  and  serve.
Customer  Segments
There  are  different  types  of  market  segments:  
1. Mass  market  
2. Niche  market  
3. Segmented  
4. Diversified  
5. MulF-­‐sided  plamorms  (or  mulF-­‐sided  markets)
Key  QuesFons
1. For  whom  are  we  creaFng  value?  
2. Who  are  our  most  important  customers?
7ps
Customer  groups  represent  separate  segments  if:  
• Their  needs  require  and  jusFfy  a  disFnct  offer  
• They  are  reached  through  different  DistribuFon  Channels  
• They  require  different  types  of  relaFonships  
• They  have  substanFally  different  profitabiliFes  
• They  are  willing  to  pay  for  different  aspects  of  the  offer
ac>vity
1. Which  customer  segment  are  you  targeFng?  
2. Is  there  a  parFcular  niche  within  that  market  segment  that  
you  are  targeFng?  What  is  it?
next…
• develop  2-­‐3  personas  for  each  of  your  customer  segments  
• idenFfy  what  they  value  &  idenFfy  what  problems  they  
have  
• idenFfy  the  barriers  they  face  to  geMng  acFve  
• map  out  a  day  in  the  life  for  each  customer  segment  
• what  is  their  usual  rouFne?  
• what  are  their  habits?  
• which  trend/s  are  you  tapping  in  to  with  your  concept?
2. VALUE PROPOSITIONS
The  Value  Proposi7ons  Building  Block  
describes  the  bundle  of  products  and  
services  that  create  value  for  a  specific  
Customer  Segment.
Value  Proposi7ons
Elements  from  the  following  non-­‐exhaus:ve  list  of  quan:ta:ve  
or  qualita:ve  values  can  contribute  to  customer  value  crea:on:
1. Newness  
2. Performance  
3. CustomizaFon  
4. “GeMng  the  job  done”  
5. Design  
6. Brand/status  
7. Price  
8. Cost  reducFon  
9. Risk  reducFon  
10.  Accessibility  
11.  Convenience/Usability
Simple  Fix  for  Blown  Head  Gaskets  
Repairs  Blown  Head  Gaskets  in

Just  One  Hour
Tips
• Make  it  as  plain  as  day  
• Use  your  customer’s  language.  How  would  they  describe  
the  benefits  themselves?  
• Strengthen  your  case  
• Customer  tesFmonials  
• Assurance  
• Social  proof
LFLP Concept Development Lab #1
LFLP Concept Development Lab #1
Key  Ques7ons
1. What  value  do  we  deliver  to  the  customer?  
2. Which  one  of  our  customer’s  problems  are  we  helping  to  
solve?  
3. Which  customer  needs  are  we  saFsfying?  
4. What  bundles  of  products  and  services  are  we  offering  to  
each  Customer  Segment?
‘Means  Values’    
vs  
‘Ends  Values’
Homework
Watch  videos  from  pre-­‐Lab  email  
Develop  three  personas  
Fill  out  an  empathy  map  for  at  least  one  of  your  personas  
Iden:fy  key  problems  you  are  solving  for  them  
Iden:fy  what  value  you  provide  for  them  
Fill  out  Customer  Segments  and  Value  Proposi:on  on  BMC  
Research  
“Some  men  see  things  as  they  are,  
and  say,  ‘Why?’  I  dream  of  things  that  
never  were,  and  say,  ‘Why  not?’”    
~  George  Bernard  Shaw

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LFLP Concept Development Lab #1

  • 2. LAB #1: CUSTOMERS AND VALUE PROPOSITION concept development labs LOCAL FOOD LAUNCHPAD
  • 3. welcome join  the  conversa.on  on  twi0er  with   @goodfoodproj   @DoingSomeGood   #LFLP15 DAVID  HOOD   @DavidAHood MELINA  CHAN   @MelinaChan doingsomething good STEPH  GESLING   @StephGesling
  • 4. Local  Food  Launchpad  brought  to  you  by
  • 6. #LFLP15 David  Hood   DOING  SOMETHING  GOOD @DavidAHood
  • 7. workshop  program • welcome   • shaping  good  ideas   • introducFon  to  Human-­‐Centred  Design   • introducFon  to  Business  Model  Canvas   • work  on  your  Business  Model  Canvas   • 1.  Customer  Segments   • 2.  Value  ProposiFon   • geMng  to  know  your  customers/users/members/supporters
  • 8. #LFLP15 Tasia  Karlis   CITY  OF  MELBOURNE @cityofmelbourne
  • 13. “If  I  had  an  hour  to   solve  a  problem  I'd   spend  55  minutes   thinking  about  the   problem  and  five   minutes  thinking   about  solu:ons.”
  • 14. the five phases of design thinking http://thinkingofdesign.blogspot.com.au/
  • 19. shaping  great  ideas Start  with   why   Why  are  you  doing  this?  What  is  the  situaFon  you  want  to  change  and   why  is  it  important  to  change?  What  might  change  look  like?  What  do   you  believe  is  possible?  What  is  your  preferred  future? Build  your  understanding   of  the  context 1 What  is  the  current  situaFon?  Who  does  it  impact?  What  is  it’s  impact   on  people,  the  planet,  the  economy?  What  are  the  possible  causes?   Observe.  Listen.  Learn.  Enquire.   Iden7fy  your  target   audience Who  are  you  designing  your  service  or  product  for?  Be  specific.  Who   believe’s  what  you  believe?  It’s  not  everybody. Get  to  know  your  target   audience 3 Seek  to  understand  their  needs  and  aspiraFons,  what  moFvates  them   and  their  challenges.  Develop  user  personas  and  user  journeys  to   provide  valuable  insights. Iden7fy  the  problem  you   are  solving   How  does  your  idea  help  your  target  audience  to  get  what  they  need  or   what  they  value?  How  does  it  help  them  to  overcome  challenges  and   barriers? Prototype  and   test  ideas Gain  insights  into  customers’  needs  by  designing  and  deploying  the   smallest  amount  of  funcFonality  possible  (AKA  your  minimum  viable   product/service).  Evolve  the  soluFon  based  on  insights  provided  by   engaged  early  adopters. 1 2 3 4 5 6
  • 21. People  don’t  buy  what  you  do  they   buy  why  you  do  it.  ~  Simon  Sinek
  • 22. ‣ why:  belief,  moFvaFon  or   purpose   ‣ how:  experience  or  process   ‣ what:  details  of  product  of   service
  • 24. Why  do  you  believe  growing  and     accessing  more  local  food  is  important?
  • 28. why  use  a  human-­‐centred  design  approach? “Because  it  can  help  your  organizaFon  connect  be`er  with   the  people  you  serve.  It  can  transform  data  into  acFonable   ideas.  It  can  help  you  to  see  new  opportuniFes.  It  can  help  to   increase  the  speed  and  effecFveness  of  creaFng  new   soluFons.”   h`p://www.ideo.com/work/human-­‐centered-­‐design-­‐toolkit/
  • 29. design  thinking Getting to knowyour audience
  • 33. Who  needs  your  idea  the  most?
  • 35. What’s  their  history  in   relaFonship  to  eaFng,   growing,  preparing  and     buying  food? What’s  their  rouFne?  Daily,   weekly,  monthly,  annually? What  are  their  personal   goals  around  eaFng,  cooking,   health  &  wellbeing?   What  moFvates  them? What  are  the  challenges   they  face  to  growing  or  buying   local  food?  What  are   the  constraints/barriers? What  sort  of  experience  are   they  looking  for?  What  sort   of  interacFon  do  they  want   to  have  with  others/you? What  sort  of  thing  might   you  expect  them  to  say   about  their  ideal  experience   and  why  they  love  it?
  • 36. Empathyis not just about walking
 in another's shoes. First you must remove your own.
  • 37. EMPATHY MAP What do I see? What do I say and do? What do I hear? How do I feel? What do I think? Pain Gain Fears | Frustrations | Obstacles Wants/Needs | Measures of Success Persona: Scenario:
  • 38. getting ready arrive depart fall asleep ENABLING CONDITION SCENARIO Persona: Scenario: POINT OF DECISION POTENTIALH URDLE
  • 39. Having  a  great  idea  doesn't  guarantee  success.   A  great  business  idea  must  also  have  a  great   business  model  to  support  and  sustain  it.   Alex  Osterwalder
  • 42. What  is  a  business  model?
  • 43. Def_Business  Model A  business  model  describes   the  raFonale  of  how  an   organisaFon  creates,  delivers,   and  captures  value. Source: Business Model Generation
  • 45. A shared language for describing, visualizing, assessing, and changing business models The Business Model Canvas
  • 46. 1. customers 2. value proposition 3. channels 4. customer relationships 5. revenues 6. key resources 7. key activities 8. partnerships 9. costi Business Model Canvas The Business Model explained to my Grandmother info@hugowiz.itAnche in Italiano http://slidesha.re/eGZRLO
  • 47. 62% 9 building blocks > summary 9 Business Model building blocks customers value proposition channels customer relationship revenues key resources key activities partnerships costs 1. 2. 3. 4. 5. 6. 7. 8. 9.
  • 48. 66% Business Model Canvas > intro Let's organize the 9 building blocks: the Business Model Canvas Who: the Business Model Canvas was invented by Alexander Osterwalder and published in his book: Business Model Generation What: a framework showing the building blocks' relationships
  • 49. The  Business  Model  Canvas  is  a  tool  for   you  to  design,  analyse,  test  and   describe  your  business  model  and  how   your  organisaFon  intends  to  create,   deliver,  and  capture  value  in  a  profitable   way.
  • 53. Why  use  Business  Model  Canvas? Fundamentally,  it  delivers  three  things:   1. Focus:  Stripping  away  the  40+  pages  of  ‘stuff’  in  a  tradiFonal  business  plan,  it   can  help  to  clarify  and  focus  on  what’s  driving  the  business  (and  what’s  non-­‐ core  and  geMng  in  the  way).   2. Flexibility:  It’s  a  lot  easier  to  tweak  the  model  and  try  things  (from  a  planning   perspecFve)  with  something  that’s  siMng  on  a  single  page.   3. Transparency:  Your  team  will  have  a  much  easier  Fme  understanding  your   business  model  and  be  much  more  likely  to  buy  in  to  your  vision  when  it’s  laid   out  on  a  single  page.
  • 58. The  Customer  Segments  Building  Block   defines  the  different  groups  of  people  or   organizaFons  an  enterprise  aims  to   reach  and  serve.
  • 59. Customer  Segments There  are  different  types  of  market  segments:   1. Mass  market   2. Niche  market   3. Segmented   4. Diversified   5. MulF-­‐sided  plamorms  (or  mulF-­‐sided  markets)
  • 60. Key  QuesFons 1. For  whom  are  we  creaFng  value?   2. Who  are  our  most  important  customers?
  • 61. 7ps Customer  groups  represent  separate  segments  if:   • Their  needs  require  and  jusFfy  a  disFnct  offer   • They  are  reached  through  different  DistribuFon  Channels   • They  require  different  types  of  relaFonships   • They  have  substanFally  different  profitabiliFes   • They  are  willing  to  pay  for  different  aspects  of  the  offer
  • 62. ac>vity 1. Which  customer  segment  are  you  targeFng?   2. Is  there  a  parFcular  niche  within  that  market  segment  that   you  are  targeFng?  What  is  it?
  • 63. next… • develop  2-­‐3  personas  for  each  of  your  customer  segments   • idenFfy  what  they  value  &  idenFfy  what  problems  they   have   • idenFfy  the  barriers  they  face  to  geMng  acFve   • map  out  a  day  in  the  life  for  each  customer  segment   • what  is  their  usual  rouFne?   • what  are  their  habits?   • which  trend/s  are  you  tapping  in  to  with  your  concept?
  • 65. The  Value  Proposi7ons  Building  Block   describes  the  bundle  of  products  and   services  that  create  value  for  a  specific   Customer  Segment.
  • 66. Value  Proposi7ons Elements  from  the  following  non-­‐exhaus:ve  list  of  quan:ta:ve   or  qualita:ve  values  can  contribute  to  customer  value  crea:on: 1. Newness   2. Performance   3. CustomizaFon   4. “GeMng  the  job  done”   5. Design   6. Brand/status   7. Price   8. Cost  reducFon   9. Risk  reducFon   10.  Accessibility   11.  Convenience/Usability
  • 67. Simple  Fix  for  Blown  Head  Gaskets   Repairs  Blown  Head  Gaskets  in
 Just  One  Hour
  • 68. Tips • Make  it  as  plain  as  day   • Use  your  customer’s  language.  How  would  they  describe   the  benefits  themselves?   • Strengthen  your  case   • Customer  tesFmonials   • Assurance   • Social  proof
  • 71. Key  Ques7ons 1. What  value  do  we  deliver  to  the  customer?   2. Which  one  of  our  customer’s  problems  are  we  helping  to   solve?   3. Which  customer  needs  are  we  saFsfying?   4. What  bundles  of  products  and  services  are  we  offering  to   each  Customer  Segment?
  • 72. ‘Means  Values’     vs   ‘Ends  Values’
  • 73. Homework Watch  videos  from  pre-­‐Lab  email   Develop  three  personas   Fill  out  an  empathy  map  for  at  least  one  of  your  personas   Iden:fy  key  problems  you  are  solving  for  them   Iden:fy  what  value  you  provide  for  them   Fill  out  Customer  Segments  and  Value  Proposi:on  on  BMC   Research  
  • 74. “Some  men  see  things  as  they  are,   and  say,  ‘Why?’  I  dream  of  things  that   never  were,  and  say,  ‘Why  not?’”     ~  George  Bernard  Shaw