How to use Design Thinking, The Business Model Canvas, and The Customer Development Process to generate, prototype, test, and validate new business ideas. A simple, innovative approach to take your ideas from startup to a company with scalable, repeatable business
2. Tools & Methods for
Generating,
Prototyping, and
Testing Business Ideas
3. Village offers design thinking & strategic
design services to help you transform
complexity into unique opportunities for
innovation and change.
design. innovation. change
khaya@villagedesign.co.za
4. - Charles Spurgeon
The way to do a great deal is
to keep on doing a little. The
way to do nothing at all is to
be continually resolving that
you will do everything
”
16. C$
KR
KP KA
R$
VP
CC
CR CS
Example: Apple iPod
seamless music
experience
hardware
design
marketing
people
record
companies
manufacturers
content &
agreements
apple brand
iTunes
Software
iPod
hardware
lovemark
switching
costs
retail stores
apple stores
iTunes store
apple.com
mass market
hardware
revenues
music
revenuesmarketing
& sales
manufacturing
people
Source: Alex Osterwalder & Yves Pigneur, Business Model Generation
19. Value
Proposition
VP
The Offering / Value Proposition
• What value do we deliver to
customers
• Which of our customers
problems do we solve
• Which bundles of products/
services are we offering to
different customer segments
A. Performance of product/service
B. Newness
C. Customisation and co-creation
D. Getting the job done
E. Design
F. Brand/status
G. Better pricing
H. Cost reduction
I. Risk reduction
J. Accessibility (e.g. fractional ownership
etc.)
K. Convenience/usability
20. Key Resources
KR
Key Partnerships
KP
Key Activities
KA
Infrastructure: Feasibility
• The network of suppliers and
partners that will make the
business model work
• The most important assets to
create value, reach customers,
and earn revenue
• What must the company do
deliver value and operate
successfully
Source: Alex Osterwalder & Yves Pigneur, Business Model Generation
21. Customer
Channels
CC
Customer
Relationships
CR
Customer
Segments
CS
Customers: Desirability
• The types of relationships or
service that will drive
acquisition, retention, and sales
A. Personal assistance
B. Dedicated personal assistance
C. Self-service
D. Automated service
E. Community of interest
F. Co-creation
G. Direct sales force
H. Direct web sales
I. Own stores
J. Partner stores
K. Wholesaler
Relationship Types Channel Types
• How you communicate and
reach customers with value
proposition
• For who are you creating value
22. Cost Structure
C$
Revenue Streams
R$
Finances: Viability
• What you capture from delivering
value to customers
• Can be one-time or recurring
sources
• Fixed pricing or Dynamic pricing
• What it costs to operate the
business model
• Cost driven to minimise costs
• Value driven to maximise value
Source: Alex Osterwalder & Yves Pigneur, Business Model Generation
23. Cost Structure
C$
Key Resources
KR
Key Partnerships
KP
Key Activities
KA
Revenue Streams
R$
Value
Proposition
VP
Customer
Channels
CC
Customer
Relationships
CR
Customer
Segments
CS
Efficiency Value
29. Customer Discovery
• The beginning of a learning process
• Founders develop a vision, then find customers for that vision
• Get out of the building, talk to customers
• Try to learn in depth about their problem
• Learn what your customers care about
• Create low fi of minimum viable product
• Test customer reactions to slowly turn business model hypothesis into fact
• Learn how customers make buying decisions
• Customer discovery is complete when customers positively confirm the
importance of the problem and the solution
30. 01
Customers
03
Infrastructure
04
Financial Viability
02
Offer
Business Model Design Logic
Cost Structure
C$
Key Resources
KR
Key Partnerships
KP
Key Activities
KA
Revenue Streams
R$
Value
Proposition
VP
Customer
Channels
CC
Customer
Relationships
CR
Customer
Segments
CS
Source: Alex Osterwalder & Yves Pigneur, Business Model Generation
31. Founder’s Vision
the best coffee shop in town
Value
Proposition
VP
image source: https://stocksnap.io/photo/3QX7WQCK52
32. Learn about your customers
know what they care about
Value
Proposition
VP
Customer
Segments
CS
image source: http://www.shutterstock.com/pic-385284079/stock-photo-coffee-tasting-with-baristas-smelling-the-aroma-of-many-cups.html
33. Minimum Viable Product:
coffee in a cup
Key Resources
KR
Key Activities
KA
Value
Proposition
VP
Key Partnerships
KP
image source: http://www.gettyimages.com/photos/cup?sort=mostpopular&excludenudity=true&mediatype=photography&phrase=cup
34. Customer Validation
• Test ability to repeat and scale with more customers
• Create high fidelity minimum viable product
• Test sales with paying customers or user engagement
• Prove that the market and customers exist with serious intent to purchase
• Verify core product features
• Test perceived value and demand for product
• Identify economic buyer
• Establish sales, pricing, and channel strategies
• Customer validation is complete when enough customers, with repeatable
and scalable sales, make the business model profitable
35. High Fidelity MVP:
build on the core
Key Resources
KR
Key Activities
KA
Value
Proposition
VP
Customer
Segments
CS
Key Partnerships
KP
Cost Structure
C$
image source: https://www.pexels.com/photo/restaurant-coffee-cup-cappuccino-2709/
36. Verify core features
focus on what matters most
Key Resources
KR
Key Activities
KA
Value
Proposition
VP
Customer
Segments
CS
image source: http://www.eater.com/2016/3/13/11214194/how-to-taste-coffee
37. Establish Sales
pricing, channels, cycles etc
Key Activities
KA
Value
Proposition
VP
Customer
Channels
CC
Revenue Streams
R$
Cost Structure
C$
Customer
Relationships
CR
image source: http://www.businessinsider.co.id/starbucks-ex-manager-describes-chaotic-working-conditions-2015-10/#ouZldGPFaP1GwIsy.97
38. Customer Creation
• The beginning of execution
• Build on initial sales success
• Step on the gas and drive scale
• Get serious about marketing activity: spend
• Drive demand into sales channel to scale the business
39. Drive Sales
spend on marketing to drive demand
Customer
Channels
CC
Key Activities
KA
Value
Proposition
VP
Key Resources
KR
Revenue Streams
R$
Customer
Relationships
CR
Customer
Segments
CS
Cost Structure
C$
Key Partnerships
KP
image source: http://uiconstock.com/30-flyers-designers/free-coffee-shop-a4-flyer-preview-1/
40. Company Building
• When you know who your customers are
• You know what value to deliver to them
• The startup has found a predictable, repeatable, scalable business
• Begin transition from startup to company
• Set up structured departments to execute what has been validated in
previous phases
• Hire people with clearly defined roles
41. Deliver, Scale, Repeat
but don’t forget to keep on learning
Cost Structure
C$
Key Resources
KR
Key Partnerships
KP
Key Activities
KA
Revenue Streams
R$
Value
Proposition
VP
Customer
Channels
CC
Customer
Relationships
CR
Customer
Segments
CS
image source: http://capturedmarin.com/
43. Customer Discovery
Customer Validation
Customer Creation
Company Building
Take founder’s vision and turn it into a Business
Model hypothesis
Test business model for repeatability and
scalability
Build and drive user demand
Scale and repeat the validated model
Source: Steve Blank & Bob Dorf, Startup Owner’s Manual
44. - Charles Spurgeon
The way to do a great deal is
to keep on doing a little. The
way to do nothing at all is to
be continually resolving that
you will do everything
”
