SlideShare a Scribd company logo
1 of 19
Training Session for “ORANGE CORNERS
ANGOLA - OCA” to help young Angolan
Entrepreneurs test their Business Ideias
to reduce the Risk and Uncertainity.
Basics of Testing a
Business Idea…
• Reduce risk and uncertainity of your ideas for new Business
ventures by deciding What to test . Then, get started with
Testing Step-by-step and drawing from the Experiment
Library before Bringing All Together and measuring your
progress.
What to test?
• What are the main components of the testing process?
Design
Test
1. Hypotheses
2. Experiments
3. Evidence
4. Insights
5. Action
What to test?
DESIRABILITY
VIABILITY
Overview of the Testing Process
Make
Progress
!
Extract
Hypotheses
Prioritize
Hypotheses
Design
Tests
Prioritize
Tests
Run
Tests
Capture
Learnings
Apply these 10 principles when you start
testing your value proposition ideas with a
series of experiments. A good
experimentation process produces
evidence of what works and what doesn’t.
It also will enable you to adapt and change
your value propositions and business
models and systematically reduce risk and
uncertainty.
10 Testing Principles
Realize that evidence
trumps opinion
Experiment ≠ Reality
Test early; refine later
Learn faster and reduce
risk by embracing failure
10 Testing Principles
Balance learnings
and vision
Identify ideas killers Understand
customers first
Make it measurable
Accept that not all
facts are equal
Test irreversible decisions
twice as much
• Are the hypotheses critical to the success of your customer?
• Are the hypotheses critical to the success of your value
proposition?
• Are the hypotheses critical to the success of your business
model?
• Have you prioritized the most critical hypotheses first for
testing?
Assess your work
Testing Strategies
Consider testing the most critical hypotheses with several
experiments. Start with cheap and quick tests. Then follow up
with more elaborate and reliable tests if necessary. Thus, you
may create several Test Cards for the same hypotheses.
Prioritize your Test Cards. Rank the most critical hypotheses
highest, but prioritize cheap and quick tests to be done early
in the process, when uncertainty is at its maximum. Increase
your spending on experiments that produce more reliable
evidence and insights with growing certainty.
Design your experiment
with “Test Card”
Capture you insight
with “Learning Card”
Design your experiment
with “Test Card”
• Select a high priority hypothesis you
need to test.
• Start by outlining the experiment
you are going to design to verify if
the hypothesis is correct or needs to
be rejected and revised (TEST). Then
define what data you are going to
measure (METRIC). Lastly, define a
target threshold to validate or
invalidate the tested hypothesis
(CRITERIA).
HYPOTHESES
EXPERIMENT
METRIC
CRITERIA
Six Techniques to Gain Customer
Insights
• The Data Detective: Google Trends, Google Keyword
Planner, Census Data, etc.
• The Journalist: Interviews Search for patterns/insights
• The Anthropologist: Shadowing your customers
• The Impersonator: “Be your customer” and actively use
products and services. Spend a day or more in your
customer’s shoes. Draw from your experience as an
(unsatisfied) customer.
• The Co-creator
• The Scientist: Get customers to participate
• (knowingly or unknowingly) in an experiment.
Ground Rules for Interviewing
Rule 1 Adopt a beginner’s mind
Listen with a “fresh pair of ears” and avoid interpretation. Explore unexpected
jobs, pains, and gains in particular.
Rule 2 Listen more than you talk
Your goal is to listen and learn, not to inform, impress, or convince your customer
of anything. Avoid wasting time talking about your own beliefs, because it’s at the
expense of learning about your customer.
Rule 3 Get facts, not opinions
Don’t ask, “Would you...?” Ask, “When is the last time you have...?”
Rule 4
Ask “why” to get real motivations
Ask, “Why do you need to do…?”
Ask, “Why is ___ important to you?”
Ask, “Why is ___ such a pain?”
Ground Rules for Interviewing
Rule 5 The goal of customer insight interviews is not selling (even if a sale
is involved); it’s about learning
Don’t ask, “Would you buy our solution?” Ask “what are your decision
criteria when you make a purchase of…?”
Rule 6 Don’t mention solutions (i.e., your prototype value proposition) too
early
Don’t explain, “Our solution does…” Ask, “What are the most important
things you are struggling with?”
Rule 7 Follow up
Get permission to keep your interviewee’s contact information to come
back for more questions and answers or testing prototypes.
Rule 8 Always open doors at the end
Ask, “Who else should I talk to?”
HYPOTHESES
EXPERIMENT
METRIC
CRITERIA ACTION
LESSON LEARNED
EVIDENCE
ASSUMPTION
Evolve You Startup…
Business Model
Performance
Value Proposition
Performance
(Quantitative
Facts)
Customer
Satisfaction
(Perception)
Create Alignment;
Measure & Monitor
Improve Relentlessly;
Reinvent Yourself
Constantly.
Three Stages of a Startup
The acid test to know where you are standing between stages is
answering the following questions:
1. Product/solution fit: Do I have a problem worth solving?, Do I
have a feasible solution for it? is my concept desirable for
customers?
2. Product/Market fit: Have I discovered and attracted my first
customers? are they already paying for my product?
3. Scale: have I found a repeatable business model? Do I have a
plan to execute to accelerate growth?
CONTACTOS:
Phone: (+244) 921386972 / 990 047 543
Whatsapp: (+244) 921 386 972
Facebook: Officina do Empreendedor
E-mail: officinadoempreendedor.ao@gmail.com
Coaching & Mentoring de Startups e
Desenvolvimento Pessoal & Profissional
*OFFICINA COACHING*

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Testing Business Models

  • 1. Training Session for “ORANGE CORNERS ANGOLA - OCA” to help young Angolan Entrepreneurs test their Business Ideias to reduce the Risk and Uncertainity.
  • 2. Basics of Testing a Business Idea… • Reduce risk and uncertainity of your ideas for new Business ventures by deciding What to test . Then, get started with Testing Step-by-step and drawing from the Experiment Library before Bringing All Together and measuring your progress.
  • 3. What to test? • What are the main components of the testing process? Design Test 1. Hypotheses 2. Experiments 3. Evidence 4. Insights 5. Action
  • 5. Overview of the Testing Process Make Progress ! Extract Hypotheses Prioritize Hypotheses Design Tests Prioritize Tests Run Tests Capture Learnings
  • 6. Apply these 10 principles when you start testing your value proposition ideas with a series of experiments. A good experimentation process produces evidence of what works and what doesn’t. It also will enable you to adapt and change your value propositions and business models and systematically reduce risk and uncertainty. 10 Testing Principles Realize that evidence trumps opinion Experiment ≠ Reality Test early; refine later Learn faster and reduce risk by embracing failure
  • 7. 10 Testing Principles Balance learnings and vision Identify ideas killers Understand customers first Make it measurable Accept that not all facts are equal Test irreversible decisions twice as much
  • 8. • Are the hypotheses critical to the success of your customer? • Are the hypotheses critical to the success of your value proposition? • Are the hypotheses critical to the success of your business model? • Have you prioritized the most critical hypotheses first for testing? Assess your work
  • 9. Testing Strategies Consider testing the most critical hypotheses with several experiments. Start with cheap and quick tests. Then follow up with more elaborate and reliable tests if necessary. Thus, you may create several Test Cards for the same hypotheses. Prioritize your Test Cards. Rank the most critical hypotheses highest, but prioritize cheap and quick tests to be done early in the process, when uncertainty is at its maximum. Increase your spending on experiments that produce more reliable evidence and insights with growing certainty.
  • 10. Design your experiment with “Test Card” Capture you insight with “Learning Card”
  • 11. Design your experiment with “Test Card” • Select a high priority hypothesis you need to test. • Start by outlining the experiment you are going to design to verify if the hypothesis is correct or needs to be rejected and revised (TEST). Then define what data you are going to measure (METRIC). Lastly, define a target threshold to validate or invalidate the tested hypothesis (CRITERIA). HYPOTHESES EXPERIMENT METRIC CRITERIA
  • 12.
  • 13. Six Techniques to Gain Customer Insights • The Data Detective: Google Trends, Google Keyword Planner, Census Data, etc. • The Journalist: Interviews Search for patterns/insights • The Anthropologist: Shadowing your customers • The Impersonator: “Be your customer” and actively use products and services. Spend a day or more in your customer’s shoes. Draw from your experience as an (unsatisfied) customer. • The Co-creator • The Scientist: Get customers to participate • (knowingly or unknowingly) in an experiment.
  • 14. Ground Rules for Interviewing Rule 1 Adopt a beginner’s mind Listen with a “fresh pair of ears” and avoid interpretation. Explore unexpected jobs, pains, and gains in particular. Rule 2 Listen more than you talk Your goal is to listen and learn, not to inform, impress, or convince your customer of anything. Avoid wasting time talking about your own beliefs, because it’s at the expense of learning about your customer. Rule 3 Get facts, not opinions Don’t ask, “Would you...?” Ask, “When is the last time you have...?” Rule 4 Ask “why” to get real motivations Ask, “Why do you need to do…?” Ask, “Why is ___ important to you?” Ask, “Why is ___ such a pain?”
  • 15. Ground Rules for Interviewing Rule 5 The goal of customer insight interviews is not selling (even if a sale is involved); it’s about learning Don’t ask, “Would you buy our solution?” Ask “what are your decision criteria when you make a purchase of…?” Rule 6 Don’t mention solutions (i.e., your prototype value proposition) too early Don’t explain, “Our solution does…” Ask, “What are the most important things you are struggling with?” Rule 7 Follow up Get permission to keep your interviewee’s contact information to come back for more questions and answers or testing prototypes. Rule 8 Always open doors at the end Ask, “Who else should I talk to?”
  • 17. Evolve You Startup… Business Model Performance Value Proposition Performance (Quantitative Facts) Customer Satisfaction (Perception) Create Alignment; Measure & Monitor Improve Relentlessly; Reinvent Yourself Constantly.
  • 18. Three Stages of a Startup The acid test to know where you are standing between stages is answering the following questions: 1. Product/solution fit: Do I have a problem worth solving?, Do I have a feasible solution for it? is my concept desirable for customers? 2. Product/Market fit: Have I discovered and attracted my first customers? are they already paying for my product? 3. Scale: have I found a repeatable business model? Do I have a plan to execute to accelerate growth?
  • 19. CONTACTOS: Phone: (+244) 921386972 / 990 047 543 Whatsapp: (+244) 921 386 972 Facebook: Officina do Empreendedor E-mail: officinadoempreendedor.ao@gmail.com Coaching & Mentoring de Startups e Desenvolvimento Pessoal & Profissional *OFFICINA COACHING*