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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 Testinga 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
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- 5. Overview of theTesting Process Make Progress ! Extract Hypotheses Prioritize Hypotheses Design Tests Prioritize Tests Run Tests Capture Learnings
- 6. Apply these 10principles 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 Balancelearnings 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 thehypotheses 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 testingthe 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
- 13. Six Techniques toGain 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 forInterviewing 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 forInterviewing 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?”
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- 17. Evolve You Startup… BusinessModel Performance Value Proposition Performance (Quantitative Facts) Customer Satisfaction (Perception) Create Alignment; Measure & Monitor Improve Relentlessly; Reinvent Yourself Constantly.
- 18. Three Stages ofa 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*