BOOTSTRAP YOUR BUSINESS MODEL

Transcription

1 Business Agility on the Back of a Napkin BOOTSTRAP YOUR BUSINESS MODEL 1

2 Let s start here SO, WHAT IS A BUSINESS MODEL? 2

3 Better yet SO, WHAT IS A BUSINESS MODEL? 3

4 Exercise 2 min each in pairs EXPLAIN YOUR BUSINESS (MODEL) TO A NEIGHBOR 4

5 HOW MANY COULD ACCURATELY DESCRIBE THEIR NEIGHBOR S BUSINESS? 5

6 OR, WAS YOUR EXPERIENCE LIKE THIS? 6

7 NO BUSINESS PLAN SURVIVES FIRST CONTACT WITH A CUSTOMER Steve Blank 7

8 PLANS ARE WORTHLESS, BUT PLANNING IS EVERYTHING Dwight D. Eisenhower 8

9 HOW COULD WE DRINK OUR OWN CHAMPAGNE? Build Learn Measure 9

10 ANY PROBLEM CAN BE MADE CLEARER WITH A PICTURE Dan Roam 10

11 Dan also wrote an earlier, worthwhile book: The Back of the Napkin 11

12 HOW CAN A BUSINESS BE PICTURED? 12

13 Source: BUSINESS MODEL CANVAS Partners Activities Offer Relationship Key Customers Resources Channel What it costs What you get 13

14 WHY IS A MODEL SIGNIFICANT? 14

15 WHY IS A MODEL SIGNIFICANT? DESIGN THINKING 15

16 DESIGN THINKING Freezing an idea early risks falling in love with it Refining an idea quickly risks become attached (sunk cost) Objective: Defer judgment & emphasize crude prototypes to help avoid these pitfalls Example: IDEO - an illustration of Design AND Agile 16

17 WHY IS A MODEL SIGNIFICANT? 17

18 Build Learn Measure Lean Startup / Eric Ries: Build-Measure-Learn 18

19 A MODEL MIGHT LOOK GREAT ON PAPER 19

20 REMEMBER IT S A SET OF HYPOTHESES guess 20

21 Build Learn Measure 21

22 COST PER TEST / LESSONS =? 22

23 COST PER TEST / LESSONS =? 23

24 HOW ABOUT AN EXAMPLE? 24

25 Better yet HOW ABOUT AN EXAMPLE? 25

26 BUS STANFORD Partners Activities Offer Relationship Key Customers Stanford Marketing direct Silicon Valley Experience in Product Management & Agile Personal (vs automated) Curious about Prod Mgt &/or Agile Guest Speakers Resources Brand Rooms Equipment Experience Live Class Channel Live Class Experienced & want increased results Very Early Entrepreneurs What it costs Prepare outline; develop materials; coordinate efforts; time to teach What we get Feedback; fresh perspective; resume enhancer; honorarium; contacts 26

27 BUS STANFORD Partners Activities Offer Relationship Key Customers Stanford Marketing direct Silicon Valley Guest Speakers Resources Brand Rooms Equipment Experience in Product Management & Agile Live Class Personal (vs automated) Channel Live Class Curious about Prod Mgt &/or Agile Experienced & want > results How could inspect/adapt be applied? Experience Very Early Entrepreneurs What it costs Prepare outline; develop materials; coordinate efforts; time to teach What we get Feedback; fresh perspective; resume enhancer; honorarium; contacts 27

28 HOW ABOUT? Partners Activities Offer Relationship Key Customers Berkeley Marketing direct East Bay Area Experience in Product Management & Agile Personal (vs automated) Curious about Prod Mgt &/or Agile Guest Speakers Resources Brand Rooms Equipment Experience Live Class Experience at Stanford Channel Live Class Experienced & want > results Very Early Entrepreneurs What it costs Prepare outline; develop materials; coordinate efforts; time to teach What we get Feedback; fresh perspective; resume enhancer; honorarium; contacts 28

29 OTHER VALUES OF THE BM CANVAS Ecosystems Win Microsoft Office itunes Search + Ads Canvas Maps an Ecosystem Fits a single visual field = shifts brain processes Looks at Market & Opportunity over chasing a competitor s tail lights 29

30 Partners Activities Offer Relationship Key Customers Resources Channel Ready for a Group Exercise? What it costs What we get 30

31 EXERCISE: BUSINESS MODEL CREATION Form Teams Product: Biodegradable Bag (ok for fertilizer) 5 minutes: Create (at least 1) business model 31

32 Source: BUSINESS MODEL CANVAS Partners Activities Offer Relationship Key Customers Resources Channel What it costs What you get 32

33 INSIGHTS: CREATING A BUSINESS MODEL 33

34 Partners Activities Offer Relationship Key Customers Resources Channel This is a crude prototype What it costs What we get 34

35 EXERCISE: BUSINESS MODEL CREATION Form Teams Product: Biodegradable Bag (ok for fertilizer) How could you unit test the product? 5 minutes: Create (at least 1) business model 35

36 THERE ARE NO FACTS IN THE BUILDING SO GET OUT AND TALK TO CUSTOMERS Steve Blank 36

37 CUSTOMER DEVELOPMENT Customer Discovery Customer Validation Customer Creation Company Building pivot Source: Steve Blank The Four Steps to the Epiphany 37

38 TWO PHASES Search Execution Customer Discovery Customer Validation Customer Creation Company Building pivot 38

39 ENLIGHTENED TRIAL & ERROR SUCCEEDS OVER THE PLANNING OF LONE GENIUS Peter Skillman 39

40 APPLY THE SCIENTIFIC METHOD: RUN EXPERIMENTS test 40

41 WITH VALIDATION, ITERATE (PIVOT) MODEL AND RUN FURTHER EXPERIMENTS valid 41

42 PIVOTING: LEARNING CHEAPLY FROM FAILURE 42

43 Build Learn Measure 43

44 THE WAY TO SUCCEED IS TO DOUBLE YOUR FAILURE RATE Thomas Watson Founder of IBM 44

45 HP MEDIASMART (RETAIL) TVS Partners Activities Offer Relationship Key Customers Asian TV Brand Set Devel mnt Leading Edge Indirect B2B2C Volume Retail You know Internet TV Best Buy Asian TV Brand New to USA CinemaNow Netflix Microsoft Manufacturing Licensing Resources Glass TV KnowHow Internet Content future proofing American Brand Known Brand Direct B2C Channel Retail Electronics Direct CircuitCity IPTV Visionary Adopters Costs Cost-plus Mat l; Design; Supply Chain; Placements Revenues Just enough to break even at intro, Not enough to sustain price drops 45

46 HP COMMERCIAL TVS Partners Activities Offer Relationship Key Customers Asian TV Brand Set Devel mnt Competive Indirect B2B2B You know Price Asian TV Brand New to USA Manufacturing Direct B2B CDW Resources Glass TV KnowHow American Brand Known Brand Channel Commercial Suppiers HP Sales Direct HP Accounts Costs Cost-plus Mat l; Design; Supply Chain; Revenues Sustainable Margin 46

47 VIZIO TVS (2006) Partners Activities Offer Relationship Key Customers Asian TV Brand Set Devel mnt Value Indirect B2B2C You know Costco Pricing Asian TV Brand New to USA Manufacturing Direct B2C Resources Glass TV KnowHow American Brand Channel Warehouse Clubs Direct Value Buyers Costs Competitive Mat l; Design; Supply Chain; Revenues Sustainable Margin Sustainable Volume 47

48 LAYERING IN MARKET RESEARCH Partners Activities Offer Relationship Key Customers Value Pricing Costs Resources Leading Edge Internet TV Revenues Channel Retail Electronics 1Ks Commercial Suppiers IPTV Visionary Adopters Value Buyers 1M+ 48

49 PIVOTS ARE BUSINESS MODEL CHANGES WITHOUT CRISIS Steve Blank 49

50 Test & Adapt the model until you can prove it works Customer Discovery Customer Validation Customer Creation Company Building pivot 50

51 HOW TO PROVE IT WORKS? MVP Minimum Viable Product Sale of a Product (it s viable!) PMF Product Market Fit Is it the right customer segment? Is the segment sustainable? Is the product / model sustainable? 51

52 Earn $ Build Release Learn Measure Measure Noted by Jeff Patton (Aug 12 DFWScrum) 52

53 Search MVP PMF Execution Customer Discovery Customer Validation Customer Creation Company Building pivot 53

54 EXERCISE: BUSINESS MODEL CREATION Form Teams Product: Biodegradable Bag (ok for fertilizer) Want a model comparison? 5 minutes: Create (at least 1) business model 54

55 BASIC SANITATION Image Source: 55

56 ACCESS TO SANTIATION 4 out of 10 people lack even simple latrines (2.6 billion people) A solution? 56

57 PEEPOO BAG Single use toilet bag Self sanitizing Low production cost Biodegradable turns into fertilizer (initially) targeted at poor people People already pay for sanitation 57

58 WHO / WHERE ELSE COULD USE THIS? Partners Activities Offer Relationship Key Customers Resources Channel What it costs What you get 58

59 MULTIPLE MODELS FOR 1 PRODUCT 59

60 Partners Activities Offer Relationship Key Customers Resources Channel This is a crude prototype of a business What it costs What we get 60

61 MULTIPLE MODELS FOR 1 PRODUCT Want another Group Exercise? 61

62 EXERCISE: BUSINESS MODEL CREATION Form Teams Product: Coffee 7 minutes: Create a business model AND 3 systems Tests of PMF 62

63 Source: BUSINESS MODEL CANVAS Partners Activities Offer Relationship Key Customers Resources Channel What it costs What you get 63

64 INSIGHTS: CREATE + TEST A BUSINESS MODEL 64

65 EXERCISE: BUSINESS MODEL CREATION Form Teams Product: Coffee 5 minutes: Create (at least 1) business model Want a model comparison? 65

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68 ALTERNATIVE: LEAN CANVAS 68

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70 BUSINESS VALUE CANVAS Partners Activities Offer Relationship Key Customers gain creators gains Resources products & services Channel customer jobs pain relievers pains What it costs What you get 70

71 EXTENDING THE BUSINESS MODEL CANVAS 71

72 BUSINESS TO CONSUMER B2C 72

73 BUSINESS TO BUSINESS TO CONSUMER B2B2C 73

74 OR AN ENTIRE VALUE CHAIN 74

75 OR MULTIPLE MODELS FOR 1 PRODUCT 75

76 ARE PRODUCTS THIS EASY TO ITERATE? 76

77 WHICH ONE(S) BEST FIT MARKET? 77

78 Each Experiment amounts to an (Agile) Iteration of the Business the Ecosystem Customer Discovery Customer Validation Customer Creation Company Building pivot 78

79 IF YOU DON T WORK UNDER TIME CONSTRAINTS, YOU COULD NEVER GET ANYTHING DONE. IT S A MESSY PROCESS, IT COULD GO ON FOREVER. Dave Kelley 79

80 FAIL OFTEN, IN ORDER TO SUCCEED SOONER IDEO 80

81 Ut Prosim. Namaste. FIN 81

82 Bernie Maloney, CSP PE, CSM, CSPO Agile Coach Accelerating Genius Turning Strategies into Results From Startup to Beyond $100M bit.ly/speedmygenius 82