Twelve Steps To Creating A New Innovation From Scratch. How to Go From Initial Idea to Scaled Solution With Product Market Fit

Transcription

1 Twelve Steps To Creating A New Innovation From Scratch How to Go From Initial Idea to Scaled Solution With Product Market Fit

2 Welcome Back! Hope you enjoyed our last session Markets, Technology and Business Models Four Types of Innovation This session is all about putting the pieces together into a easy to understand, step-by-step process to go from idea to scaled business Four Innovation milestones Steps to achieve each milestone Tools to make it easier and organized Time to dive in!

3 A Little About Why I Created This Process My first experience was with a company going through the massive scale process The business doubled every year for 3 years I worked there! My job was operations critical to scaling Second experience was working at a startup that went from $0 to $100M valuation in 3 years Learned a TON about the mechanics of creating a successful startup and the importance of a STRONG channel Third experience was as a product manager in a Fortune 150 company Led a product line that went from $4M to $30M+ My recent work focuses on creating new businesses in a giant company Created several new growth businesses from scratch, all within the confines and bureaucracy of a giant corporation Consulted with numerous startups and helped them organize their work and focus only on what moves the needle

4 In 2016, I Needed A Logical And Systematic Approach To Trying New Business And Product Ideas Lots and lots of innovation tools No good curation Hard to know which ones actually work (A LOT of tools created by people who ve not been through the process themselves) Some tools I needed didn t exist or if they did they were confusing to use No comprehensive, step-by-step system that explained the process of going from idea to scaled business There is no such thing as a silver bullet to ensure success but there is a repeatable system to follow that greatly improves your odds In this video I will outline a proven system to go from idea to business model fit

5 Agenda The world of innovation is haphazard and unorganized A proven, step-by-step system to take you from idea to scaled business What you can do right now to get started

6 Innovation is Invention Plus Commercialization Publishing in the 21 st Century Innovation is invention plus commercialization Christopher Freeman Invention + Commercialization

7 The Four Innovation Milestones There are many twists and turns throughout an innovation program but four milestones remain consistent You are tackling a real problem that a significant number of people care about You come up with solutions to that problem You come up with ways to take your solution to market You figure out how to sustainably scale your solution to many customers Problem / Opportunity Fit Problem / Solution Fit Product / Market Fit Business Model Fit

8 Innovation Milestone 1: Problem Opportunity Fit You are tackling a real problem that a significant number of people care about Signs that you re solving a real problem There are solutions available today they just could be a lot better Customers are doing manual workarounds right now to solve the issue Watch out for signs of apathy about the problem with your customer segment that s a red flag Signs that a significant number of people care about the issue There is already a large market with lots of people searching and paying for solutions There is a large group of specific people who are consistently frustrated by the issue Watch out for signs that there is no existing market for this job to be done that s a red flag People quickly pay for morphine, but slowly pay for vitamins Problem / Opportunity Fit

9 Innovation Milestone 2: Problem / Solution Fit You have solutions to that problem Signs that you have a solution to the problem People tell you they would pay you money if it were available right now Better yet, you show them a concept and they say I ll pay you right now to go build that for me. (e.g. Kickstarter model) Watch out for signs of people being nice instead of needy neediness is a good sign, being nice is a death knell Passionate, lively responses are what matter whether they love it or hate it The worst possible scenario is they tell you it s nice or a good idea for someone else (assuming you re segmentation is correct) Problem / Solution Fit

10 Innovation Milestone 3: Product / Market Fit You have a way to take your solution to market Signs that you have product / market fit Orders overwhelm you to the point where you are forced to turn away customers Customers refer your solution to others with glowing praise You are both excited and terrified by the momentum you have created Watch out for false starts that feel like real customer interest but are ultimately empty promises Product / Market Fit

11 Innovation Milestone 4: Business Model Fit You figure out how to sustainably scale your solution to many customers Signs that you have business model fit Your team of generalists is transforming into more specialized and consistent roles You have repeatable business processes and procedures that enable more efficient work Your business generates consistent and growing revenues You are able to take profits from the business and put them back in for more growth Business Model Fit

12 Innovator s Journey Overview Clarify Discover Create Scale Problem / Opportunity Fit Problem / Solution Fit Product / Market Fit Business Model Fit Customer Discovery Solution Discovery Market Development Business Execution Step 1: Document the Idea Step 4: Discover the Solution Step 7: Create Minimum Viable Product (or Service) Step 10: Define Business Vision & Strategy Step 2: Discover the Customer and Problem to Solve Step 5: Determine Solution Feasibility and Attractiveness Step 8: Create Minimum Viable Messaging Step 11: Prepare for Scale Step 3: Analyze the Market, Industry and Technology Step 6: Determine Strategic Fit and Form a Team Step 9: Create Minimum Viable Channel Step 12: Re-Organize Team and Scale the Business

13 Innovation Journey Overview Continued Clarify Discover Create Scale Problem / Opportunity Fit Problem / Solution Fit Product / Market Fit Business Model Fit Customer Discovery Solution Discovery Market Development Business Execution Step 1: Document the Idea Step 4: Discover the Solution Step 7: Create Minimum Viable Product (or Service) Step 10: Define Business Vision & Strategy The Innovator s Canvas Learning Log: Solution Experiments MVP Storyboard Low/Med/High Fidelity Prototypes Learning Log: Solution Experiments Solution Requirements Canvas Service Design Blueprint Vision and Strategy Canvas Solution Planning Canvas Step 2: Discover the Customer and Problem to Solve Step 5: Determine Solution Feasibility and Attractiveness Step 8: Create Minimum Viable Messaging Step 11: Prepare for Scale Learning Log: Problem Experiments Customer Empathy Map Customer Journey Map Customer Persona Template Solution Feasibility and Attractiveness Dashboard Learning Log: Messaging Experiments Brand Canvas Messaging Canvas Process Maps Step 3: Analyze the Market, Industry and Technology Step 6: Determine Strategic Fit and Form a Team Step 9: Create Minimum Viable Channel Step 12: Re-Organize Team and Scale the Business Market Distribution Map Tech and Business Model Runways 4 Types of Innovation Cheat Sheet Team Charter Canvas Learning Log: Channel Experiments Channel Design Canvas Process Models Stakeholder Check-In: Review the customer, problem, market opportunity and business canvas. Request funding to form full discovery team Stakeholder Check-In: Review prototype demo, feasibility, cost, IP and strategic fit for building the business. Request funding to create MVP Stakeholder Check-In: Review MVP results, assess product market fit and decide to pivot or persevere. Request funding for scaling resources Stakeholder Check-In: Review vision, strategy, solution plan and business processes to scale. Review ongoing needs of the business

14 Project Name Designed By Date & Iteration Problem Statement Sale Value Proposition Key Resources Human Intellectual Job to Be Done Gains Delivery Gain Creators Product or Service Physical Financial Revenue Structure Pricing & Frequency Pains Support Pain Killers Unfair Advantage Key Partners Cost Structure Total Cost of Running the Business Acquisition & Support Cost of Goods & Services General & Administrative Overall Market Dynamics Customer Trends Market Size Current Channels Current Solutions/Providers Technology Trends Industry Trends Regulatory Trends Business Model To Validate: # Start We asked this question on 1 1/9/00 0:00 Step 0: Focus We are focusing on Facebook ads Step 1: Question Step 2: Hypothesize Owner: Build Measure Learn Step 3: Metric & Criteria Our question is Our hypothesis is We are right if Can we generate phone call/sms for a smart / predictive maintenance agreement on facebook? That we can generate leads for smart maintenance using online ads and landing pages We can generate an average cost / lead for less than $175 ess We know who they are and they are actively seeking solutions Step 4: Resources The resources we need are People Scott Materials Facebook, ad concepts, landing page They consistently rate the problem as a 9 or 10 on the pain scale Step 5: Procedure Our procedure is Scott will create ads and landing pages and post them online Segment / Market Size Can the market size support your growth targets? Step 6: Observation Step 7: Conclusion End Our hypothesis was valid, We observed that We learned that invalid, uncertain We learned the ads performed better than expected Feasibility to Generate Awareness We can generate awareness of the solution cost effectively and at scale Feasibility to Drive Sales We can sell the solution cost effectively and at scale Valid We learned the answer on We can generate more demand than we 1/9/01 12:00 AM originally thought. Delivery We can deliver and support the solution cost effectively and at scale Solving Problem Customers who use the solution are passionate and positive about the value it creates for them old way to new way Switching costs for customers to adopt the solution are low Current State Future State Improveme The idea has the potential to reduce customer costs by 10X or increase customer value by 10X ONCE UPON A TIME (Customer Segment) BUT HE/SHE WISHED THAT (Main Solution and or Gains) to Create Solution Feasibility to create profitable unit economics To Create Solution Technical feasibility to create the solution Goals Fit between the idea and the investment goals of the business or its investors HE/SHE ALWAYS (Main Tasks) UNTIL ONE DAY (Awareness Channel) In Control of Your Own Destiny Idea has minimal dependencies on partnerships or tiered value props for getting solution to market Strength of Unique Advantage How likely your unique advantage is to create a moat around your solution through IP, Network Effect, etc. Unknown Unknown Unknown Unknown y to E.g. multiple layers of customers to convince and problems to solve BUT ALWAYS HAD A PROBLEM (Main Problem and or Pains) UNLIKE HIS/HER SOLUTION (Unique Advantage) Speed to a profitable model Unknown Unknown Unknown Unknown Unknown Unknown Unknown Unknown Unknown Unknown 17% of mkt Unknown Unknown Unknown Unknown Unknown Unknown Unknown Unknown Unknown Team Name Designed By Mission Goals Values What Specific, measurable, attainable, relevant and timely Objectives the team sets out to Why The reason the team exists and the purpose behind coming to work everyday. achieve. Limit to one or two. How Core beliefs about what is most important to the team. Acts as method for empowerment and guide rails for how the work gets done. Roles & Responsibilities Strengths & Skills Weaknesses & Risks Who The list of team members and their role(s) on the team. The things that are inside the teams realm of responsibility compared to those things that are outside the teams realm of responsibility. Team Member Signatures The set of strengths and unique abilities that are inherint to individuals on the team and to the team as a whole. The areas where the team has blind spots or gaps in skills or ability that may hinder progress toward achieving the team goals. Scope Norms Fun Events The manner in which the team agrees to work. For example, work hours, conflict resolution, decision making process, internal & external communications, meeting guidelines, etc. How the team will strengthen relationships, celebrate success and do team building activities. Scalability Feasibility of scaling the model HE/SHE TRIED TO SOLVE IT (Competing Solutions) HIS/HER WISH CAME TRUE (Customer's Aspiration) Brand Story Brand Symbols Project Name Product / Service Description Customer Pain(s) to Solve A description of the customer and their pain that your solution is designed to solve. Baseline Requirements MVP The baseline expectations the customer has The first iteration of the product that delivers that are general to every comparable a proof-of-concept toward solving the solution they would ever consider using. customer pain. By nature MVP's by These form the table stakes upon which the themselves usually are not polished, product or service is built. scalable nor profitable. Created By Date & Iteration Customer Use Case(s) An example of how the customer would use the solution. First Official Launch (1.0) Must Have Should Have Could Have Requirements beyond the MVP that the product can't sustain itself without Requirements beyond the must haves that Additional functionality that is to be included form the official design target(s) for the if possible product Target Cost Target Market Price Key Differentiator Success Metric Release Date for 1.0 The target marginal cost for creating the The target price to charge customers for the What is unique and useful about this The metric by which success of this solution Target date for launch of the initial solution product or service product or service solution versus the competition will be measured Designed For Designed By Date & Iteration No. Name The name of your business or product Personality 6 words that describe your brand personality, voice and values Positioning Statement For who are dissatisfied with, our product is a that provides, unlike we have assembed. Persona Promise Storyboard A descriptive summary of your target customer segment The bumper sticker for your brand The heart and soul of your brand - the story of how your solution helps your target customer achieve their deepest held aspirations Logo Color Palette Typography Imagery The 2-5 colors that represent your brand personality Example images and guidelines used to ensure the images The arrangement of type (typeface, size, line length, The primary symbol used to embody and communicate the brand and help communicate your brand story to your target used in conjunction with your brand are consistent with the spacing, etc.) that best helps convey your brand's story customers brand story Current Path To Model Proposed Future Path Key Metrics Project Name Segment Name Tangible / Physical Evidence Customer Actions Line of Interaction Front Stage Line of Visibility Back Stage Line of Internal Interaction Support Processes Created By Date & Iteration Project Name Designed By Date & Iteration Customer Segment Aspirations Channels Empowerment Mission Statement The inspirational vision of the person your Channels describe the modes you will use to The story your brand conveys to empower your customer wants to become deliver your value proposition to customers customers to achieve their aspirations These are the people who have a problem that you understand better than they do that you can potentially solve with your value proposition A clear and bold declaration of the company s mission of create a positive impact Problem Statement Mental Models Awareness Analogy Bridge Value Proposition The mental models or frameworks your How customers will become aware of your The analogy that connects your solution to the customer uses to frame the problem they face solution customer's existing mental models The fundamental reason your customer is dissatisfied with their current experience The solution statement describes what your offer is and what it will do for your target customers Job to Be Done Gains Feelings Wished For Sale Feelings Gained Gain Creators Product or Service The extra emotional highlights your customer wishes they could experience that are above The primary objective your customer Customer needs that go beyond the is trying to achieve core utility of getting the job done and beyond the feelings related to resolving the pain of the situation Project Name Designed By Date & Iteration No. Customer A description of the target customer segment Problem The problem to solve for that customer segment How your solution will be explained and sold Those above-and-beyond emotions your customer experiences during or after using your solution Value created by your product/service above and beyond merely solving the Pains Feelings of Pain Delivery Feelings of Resolution Pain Killers The main attribute of your The pain inherent in existing solutions The primary negative emotions related to the The primary positive emotions your customer How your solution will be delivered product/service that solves the when getting the job done problem statement that must be resolved will experience as a result of using your solution customer's pain problem These are the products and/or services you intend to sell. Testimonial of Problem Problem Truth Bombs Unique Advantage Solution Truth Bombs Testimonial of Solution A written or recorded video where someone who has experienced the Factual statements or statistics that poignantly The one or two things that make your solution Factual statements or statistics that illustrate A written or recorded video of someone who has experienced the problem, problem describes it in their own words and the feelings they felt because of describe the problem the customer has valuably different from other alternatives how your product or service solves the problem solved it with your solution and describes their experience it Channel Awareness Sale Delivery The means by which the customer How customers become aware of The means by which the solution was presented the benefits of the the solution was delivered to the customer solution Solution A description of the solution to the customer's problem Provider Names of the solution providers Marketing Costs Customers Acquired Entry Exit Entry Exit Entry Exit Acquisition Cost Conversion Rate Sum of all marketing costs over a Sum of all customers acquired E.g. Clicks to E.g. Positive E.g. FB ad E.g. sign E.g. Order Total non-fixed marketing costs Awareness exit divided by Delivery specified period of time during the same period E.g. opens purchase on review / impressions ups confirmations divided by total customers acquired entry sales page testimonial Innovation Process Overview Clarify Discover Create Scale Problem / Opportunity Fit Problem / Solution Fit Product / Market Fit Business Model Fit Customer Discovery Solution Discovery Market Development Business Execution Step 1: Document the Idea Step 4: Discover the Solution Step 7: Create Minimum Viable Product (or Service) Step 10: Define Business Vision & Strategy Customer Segment Channel(s) Mission Statement Business Structure Awareness Legal Entity Owner(s) Project Name Designed By Solution Requirements Canvas Service Blueprint Step 2: Discover the Customer and Problem to Solve Step 5: Determine Solution Feasibility and Attractiveness Step 8: Create Minimum Viable Messaging Step 11: Prepare for Scale Business Model Feasibility and Risk Dashboard Project Name Created By Date and Iteration Feasibility Assessment for Each Idea Definition Segment Attractiven Customer Channel Value Proposition Business Problem / Pain Level Feasibility to Handle and Support Solution Strength at Switching Costs from Potential for 10X nt in Cost or Value Cost Feasibility Technical Feasibility Fit with Investment Risk and Complexit Execute Model Speed to Breakeven Brand Canvas Messaging Canvas Step 3: Analyze the Market, Industry and Technology Step 6: Determine Strategic Fit and Form a Team Step 9: Create Minimum Viable Channel Step 12: Re-Organize Team and Scale the Business Team Charter Canvas Channel Design Canvas

15 Innovation Process Overview Clarify Discover Create Scale Problem / Opportunity Fit Problem / Solution Fit Product / Market Fit Business Model Fit Customer Discovery Solution Discovery Market Development Business Execution Business Model Evolution Alternatives Discovered Minimum Model Built Model To Scale Core Idea Pivot Fix fundamental flaw with the model Product Market Fit Persevere Fix flaws in execution Feasibility Dashboard Idea to Pursue

16 Innovation Process Overview Clarify Discover Create Scale Problem / Opportunity Fit Problem / Solution Fit Product / Market Fit Business Model Fit Customer Discovery Solution Discovery Market Development Business Execution Product Evolution Low-fidelity prototype Landing Page Idea Video Presentation Sales Brochure MVP - Beta - Vertical experience slice Version 1 - Refined - Scalable - Profitable Med-fidelity prototype High-fidelity prototype - Alpha

17 Innovation Process Overview Clarify Discover Create Scale Problem / Opportunity Fit Problem / Solution Fit Product / Market Fit Business Model Fit Customer Discovery Solution Discovery Market Development Business Execution Product Service Evolution Low-fidelity prototype Idea Med-fidelity prototype MVP - Beta - Vertical experience slice Version 1 - Refined - Scalable - Profitable High-fidelity prototype - Alpha

18 Innovation Process Overview Clarify Discover Create Scale Problem / Opportunity Fit Problem / Solution Fit Product / Market Fit Business Model Fit Customer Discovery Solution Discovery Market Development Business Execution Metrics That Matter Pain Score 0-10 Market Size Willingness to Buy Score 0-10 # Signed LOI s Sales Volume Sales Revenue (not profit) Sales Volume Profit Business Process (Operations) Metrics Customer Metrics Product Metrics Channel Metrics Customer Satisfaction Metrics

19 Innovation Process Overview Clarify Discover Create Scale Problem / Opportunity Fit Problem / Solution Fit Product / Market Fit Business Model Fit Customer Discovery Solution Discovery Market Development Business Execution Team Evolution Founder Discovery Team Build Team Founder with an Idea Business Lead + Technical Lead + Design Lead Business Lead + Technical Lead + Design Lead + Project Lead + Marketing Lead + Sales Lead Execution Team Build Team + Business Analyst + Functional Leads

20 Innovation Process Overview Clarify Discover Create Scale Problem / Opportunity Fit Problem / Solution Fit Product / Market Fit Business Model Fit Customer Discovery Solution Discovery Market Development Business Execution Stakeholder Reviews (occur at the end of each stage) Agenda: - Review [updated] Canvas - Review findings from customer interviews including personas, empathy maps and journey maps - Review market size, distribution map, technology and business model runways and the type of innovation you plan to pursue - Request funds to form a full discovery team - Business Lead - Engineering (or Construction) Lead - Design Lead Agenda: - Review Customer Willingness To Buy scores - Review LOI s - Review solution Feasibility and Attractiveness Dashboard - Review rationale for strategic fit - Request funds to hire team and build MVP - Project Lead - Sales Lead - Marketing Lead Agenda: - Review findings from solution experiments - Review Solution Requirements Canvas or Service Blueprint - Review Brand Canvas - Review Messaging Canvas - Review Channel Design Canvas - Determine if Product / Market Fit was achieved - Request funds to begin scaling - Functional Leadership - Business Analyst Agenda: - Review Vision and Strategy Canvas - Review Solution Planning Canvas - Review business model financial performance - Review business process maps and models - Ongoing Board Meetings - Review business financial performance - Review all key functional areas of the business

21 The Innovator s Canvas Provides A Summary While The Other Canvases and Concepts Go Deep In Each Area Project Name Designed By Date & Iteration Customer Segment Channel(s) Mission Statement Business Structure Awareness Legal Entity Owner(s) Articles of Incorporation Problem Statement Sale Value Proposition Key Resources Human Intellectual Customer / Problem Solution Support Structure Job to Be Done Gains Delivery Gain Creators Product or Service Physical Financial Channel Property, Equipment, Real Estate Patents, Copyrights, Trademarks Pains Support Pain Killers Unfair Advantage Key Partners Revenue Structure Pricing & Frequency Cost Structure Total Cost of Running the Business Acquisition & Support Cost of Goods & Services General & Administrative Pro-Forma P&L Overall Market Dynamics Customer Trends Market Size Current Channels Current Solutions/Providers Technology Trends Industry Trends Regulatory Trends Market Environment

22 Learning Log Experiments Log Business Model To Validate: Owner: Build Measure Learn # Start We asked this question on 1 1/9/00 0:00 Step 0: Focus We are focusing on Facebook ads Step 1: Question Step 2: Hypothesize Step 3: Metric & Criteria Our question is Our hypothesis is We are right if Can we generate phone call/sms for a smart / predictive maintenance agreement on facebook? That we can generate leads for smart maintenance using online ads and landing pages We can generate an average cost / lead for less than $175 Step 4: Resources The resources we need are People Scott Materials Facebook, ad concepts, landing page Step 5: Procedure Our procedure is Scott will create ads and landing pages and post them online Step 6: Observation Step 7: Conclusion End We observed that We learned the ads performed better than expected Our hypothesis was valid, We learned that invalid, uncertain Valid We can generate more demand than we originally thought. We learned the answer on 1/9/01 12:00 AM Setting Up The Experiment Observing The Results Summarizing The Insights

23 Innovation Process Overview Clarify Discover Create Scale Problem / Opportunity Fit Problem / Solution Fit Product / Market Fit Business Model Fit Customer Discovery Solution Discovery Market Development Business Execution Step 1: Document the Idea Step 4: Discover the Solution Step 7: Create Minimum Viable Product (or Service) Step 10: Define Business Vision & Strategy The Innovator s Canvas Learning Log: Solution Experiments MVP Storyboard Low/Med/High Fidelity Prototypes Learning Log: Solution Experiments Solution Requirements Canvas Service Blueprint Vision and Strategy Canvas Solution Planning Canvas Step 2: Discover the Customer and Problem to Solve Step 5: Determine Solution Feasibility and Attractiveness Step 8: Create Minimum Viable Messaging Step 11: Prepare for Scale Learning Log: Problem Experiments Customer Empathy Map Customer Journey Map Customer Persona Template Solution Feasibility and Attractiveness Dashboard Learning Log: Messaging Experiments Brand Canvas Messaging Canvas Process Maps Step 3: Analyze the Market, Industry and Technology Step 6: Determine Strategic Fit and Form a Team Step 9: Create Minimum Viable Channel Step 12: Re-Organize Team and Scale the Business Market Distribution Map Tech and Business Model Runways 4 Types of Innovation Cheat Sheet Team Charter Canvas Learning Log: Channel Experiments Channel Design Canvas Process Models Stakeholder Check-In: Review the customer, problem, market opportunity and business canvas. Request funding to form full discovery team Stakeholder Check-In: Review prototype demo, feasibility, cost, IP and strategic fit for building the business. Request funding to create MVP Stakeholder Check-In: Review MVP results, assess product market fit and decide to pivot or persevere. Request funding for scaling resources Stakeholder Check-In: Review vision, strategy, solution plan and business processes to scale. Review ongoing needs of the business

24 Pulling This All Together You can do this And I m going to hold your hand the entire way

25 A Quick Preview As to What Is Coming Next An Opportunity to Join The Innovator s Canvas Masterclass Keep An Eye Out To Your Inbox!

26 The Innovator s Masterclass Is Different Lots of folks out there say Follow the Lean Startup process But they don t tell you EXACTLY what to do step-by-step This is the most common thing I hear from entrepreneurs and business leaders We love the idea of the Lean Startup but don t know where to start in applying it to our situation. Can t find anyone who says Do this in step 1, step 2, step 3

27 What is The Innovator s Canvas Masterclass? 100% Step-by-Step Digital Course 12 Concentrated Modules of Actionable Information Limited Time Epic Bonuses

28 Next Up I ll go over all the details about The Innovator s Canvas Masterclass Keep an eye on your inbox for the next video in the series! Share the video with your friends / co-workers