From Pretotype to PrototypeFrom Crowd funding to Business

April, 2014

WHAT IS PRETOTYPING From Pretotyping to Prototyping

What is innovation?

> Innovation vs conservative– Conservative understand the problem and the market

very well and confident their business model is best and the world is not changing fast enough for them to change.

– Innovation is well aware of the world change and believe there will be a new model to solve problem different from what we already used to right now.

Where is good idea coming from?

> Long Time! 10000 hours?

> Coffee Shop?> Connection?

If all you have is a hammer, everything looks like a nail!

> Engineer want to build the perfect architect

> Designer want to build the perfect user interface

> Financer want to build the perfect number

> Innovator want to build the coolest idea

> Sorry Customer will not be a nail for your Hammer

How fast and how many times can we fail?

> Soho? How much are you earning? – Good company Average PE = 20 months income

> Co-Founder? How much do you need to invest? – Paul Gramham 1 / ( 1 – N )

> Incubator? How much share you need to sell out? – 4-7% in the silicon valley

> How many pivot can you do? – MVP in 3 months? 6 months? What’s the different?

What is pretotype? < NOT Prototype> Make sure – as quickly and as cheaply as you can – that

you are building the right it before you build it right. > Faking it before making it.

“The Fake Door” ( Market )

> “The Fake Door” captures the % of those exposed to the offer who are interested enough to respond – E.g. calling or clicking

through). – E.g. a brochure for an

unbuilt product a search engine keyword campaign, e.g., Google AdWords.

“The One Night Stand” ( Product / Market )

> “The One Night Stand” test the initial level of interest in a service experience whose customer benefits depend upon the complex interactions between several environmental factors– Example: a pop-up or

temporary service environment such as a kiosk.

“The Mechanical Turk” ( Production / Product )> “The Mechanical Turk” is

good for testing the initial level of interest in product or service that depends upon as-yet unbuilt complex technology such as software or hardware.Example: human expertise used to simulate artificial intelligence proposed for an app.

“The Impersonator” ( Relabel Product )

> “The Impersonator” is good for testing the initial level of interest in as-yet unbuilt products or services that require full-scale exposure to customers. Especially valuable for food and beverage products. – Example: repackaged or

re-”skinned” existing product masquerading as a developed product.

“The Pinocchio” ( Product )

> “The Pinocchio” test the appeal of the basic form factor and esthetics of a proposed new offer– Example: a wood or

composite model– e.g., Hawkins’ Palm

Pilot dummy.

WHY PROTOTYPINGPrototyping is a process

What is MVP?

> What is Viable– 1) Valuable to someone– 2) A reasonable market size willing to pay for it

> How do we measure value?– 8 Core is not better then 4 core but open your app faster

is– Value + Viable = Long term customer

> Opportunity cost– Value Delta = New MVP Value – Cost

How to build MVP?

> Validating MVP ( having a lesser product )– Selling your IDEA before you building it– False Negative

• E.g. Dropbox can’t dell it to Digg

> Invalidating MVP ( having a better product )– Selling a better version of your product and see– False Positive

• E.g. People love to rent expensive cloth

Product Market Fit

> Viability is determined by the market. – Data no feeling

> “Knowing” is a trap, make sure you get data to review.> Functionality above and beyond viable, does not make you

more viable– It can actually destroy viability

> Don’t release your MVP to the world, but rather to a select group– E.g. Early adopters

> Once you’ve learned, execute on what you’ve learned, while also maintaining new learning

How Difficult to Build a Prototype?

> Do you need Front end ( Mobile – App, Web ) > Do you need Backend ( SaaS, PaaS, IaaS ) > Do you need Hardware? ( PBC, 3D Printer ) > Do you need Design? ( Graphic, 3D model,

Script )> Do you need Finance? ( Angle/VC, CloudFunding) > Do you need Mentor? ( Incubator )

How much does it cost you?

> Hosting service? ( 0 to 100K ) > Designer ( 20K to 100K )> Developers? Outsourcing? ( 20K to 200K ) > Hardware? ( 1Mil to 10Mil )

> What about building 1?

Why Product Fail?

> Time is revenue. Delay on more. > Too many changes, consumes too much time and money.> Spend too much time on R&D.> All factors of scalability, viability, accountability needs to be

looked at.> All revenues on a single product.> Product should also be user friendly, people should

understand the purpose its delivering to them.> When product is conceived clarity in terms of revenue also

should be thought when designing product.

WHAT TOOLS AREUSEFUL FOR PROTOTYPING

Knowing is Hard? Doing is Hard?

> If knowing is hard– Keep it to yourself– Product and Service know how is experience it is hard to

get it but once you get it, no one can take it away from you.

> If Doing is hard– Open to the world– Technology is very difficult to break thought, it require

lots of time and investment to get it. Without a viable product and service, it is not useful to anyone.

Knowing the IDEATION process

Innovation

DESIRABILITY(Human)

FEASIBILITY(Technology)

VIABILITY(Business)

CustomerNeeds

• Business Strategy• Business Goals• Industry expertise

• Feature building blocks• Technology building

blocks• Agile Engineering

Process• Distributed team

• Design Thinking Process• Product design team

Value of Scalability

> How valuable is a line of code is not deterministic– Market share? – Market size? – Cost of distribution?

• product and service

– Cost of reproduction?• Scale and Finance model

Creativity Profitability Scalability

Target is more important then goal

> Aiming the right target is more important then hitting the wrong goal– Education system :

• High Score = Education?

– Company profile :• Good Finance Report =

Health Business?

Why Open Source is useful?

> Faster Time to Market

> Stable and Tested> Highly

customizable> Use at zero cost> Is it your core

value?

> Front end– Boostrap.js, jQuery

> Back end– Drupal, WordPress

Why SaaS is useful?

> Scale and Cost> Rent vs Buy> Partner and

Ecosystem> Is it your core

value?

> User information– Launchrock

> Billing– Chargify, Spreedly, Recurly,

CheddarGetter

> Customer Support– LiveChat, WeChat, Twilio,

ZenDesk, desk.com:

> Online Storage– Wufoo, BaiduYun

> Big Data– Kissmetrics, mixpanel,

GoodData, RJ Metrics

Why using Online Marketing?

> Professional ROI> Looking good =

Profession

> Marketing– Facebook, Twitter,

WeChat

> Creating Video– Grumo Media, Epipheo

Studios, and wdysd

> CrowdFunding– Kickstarter, Indigogo,

FlyingV, DemoHours

Why sex sell being aesthetic is important?

> Technology won’t sell, Science won’t sell> Human is emotional, relationship and perception

are important to trigger buying decision> Very little people make rational buying decision> Being sexy NOT equal Being cheap or low