Venture Design II Iterating to Success

8/11/2019 Venture Design II Iterating to Success

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Copyright 2014 Cowan Publishing

ALEX COWANAlexanderCowan.com

@cowanSF

ABOUT ME

Entrepreneur (5x)Intrapreneur (1x)


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@cowanSF

ABOUT ME


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ABOUT ME

www.alexandercowan.com


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PRODUCT IDEAS?


@cowanSF

Do you have aproduct idea youcan use?


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PRODUCT IDEA: ENABLE QUIZ


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PRODUCT IDEA: WEDOTHAT


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PRODUCT IDEA: MY LETTER, MY STORY


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PRODUCT IDEAS?


@cowanSF

http://bit.ly/pconcepts


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VENTURE DESIGN


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VENTURE DESIGN


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VENTURE DESIGN


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VENTURE DESIGN


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VENTURE DESIGN


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@cowanSF

THE FULL STACK PRODUCT PERSON

Specialties

D E

S I G N & U X

U N

I X S Y S A D M I N

R U

B Y

P Y

T O N

J A V A

P H

P

. . .

E N

T E R P R I S E S A L E S

. . .

S E

O

A N A L Y T I C S

. . .

. . .

. . .

TechnicalLiteracy

ARCHITECTUREFUNDAMENTALS

App. & PlatformIntegration

ROLES &SYSTEMS

In a TechnicalTeam

FoundationConcepts

LEANDESIGNTHINKINGCUSTOMER

DEV. AGILE

SOFTWAREFUNDAMENTALS

Model-View-Controller


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@cowanSF

THE FULL STACK PRODUCT PERSON

Specialties

TechnicalLiteracy

FoundationConcepts

LEAN


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THE STARTUP: THEN AND NOW

Five YearPlan

Then

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3789:;

LeanManagement

Now

6.a PIVOT

experimentsdisprovehypothesis

01 IDEA!

02 HYPOTHESIS

03 EXPERIMENTAL DESIGN

04 EXPER IMENTATION

05 PIVOT OR PERSEVERE?

6.b PERSEVERE

ii


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OLD SCHOOL VS. NEW SCHOOL

OLDSCHOOL

NEWSCHOOL

$ !?

? ! ? ? ?


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EVIDENCE-BASED INNOVATION VIA LEAN STARTUPDo I have real evidence from my buyerthat this is compelling?

01 ID EA!

What are the key assumptions requiredto make this business work?

02 HYPOTHESIS

How do I denitely prove or disprove theassumptions with a minimum of timeand effort?

03 EXPERIMENTAL DESIG N

04 EXPE RIM ENTATION

Am I reacting or am I focused onvalidating my pivotal assumptions?

Pivot or persevere?


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01 ID EA!


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IDEATION & DESIGN THINKING


@cowanSF


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@cowanSF

PROBLEM SCENARIO X


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@cowanSF

PROBLEM SCENARIO XWhat job(s) are you doing for thecustomer?

What existing need or behaviorare you fullling?


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@cowanSF

ALTERNATIVE(S) ?

PROBLEM SCENARIO X


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@cowanSF

ALTERNATIVE(S) ?

PROBLEM SCENARIO X

If they currently use spreadsheets, watchthem use it and get a copy of it.

If they currently put notes on the familyfridge, ask about it, photograph it.


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@cowanSF

YOUR VALUE PROPOSITIONS !

ALTERNATIVE(S) ?

PROBLEM SCENARIO X


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YOUR PRODUCT HYPOTHESIS


@cowanSF

X and they have certainPROBLEMS S

? where theyre currently usingcertain ALTERNATIVE(S)

! and we have a VALUEPROPOSITION thats betterenough than the alternatives tocause the persona to act(purchase, use, etc.).

A certain PERSONA exists


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EXERCISE: YOUR VENTURE HYPOTHESIS

and they have a certainPROBLEMS S

where theyre currently usingcertain ALTERNATIVE(S)

and I have a VALUEPROPOSITION thats betterenough than the alternatives tocause the persona to act(purchase, use, etc.).

A certain PERSONA existsHR and functional managers are in charge oftechnical hiresand they struggle to effectively screen fortechnical skill sets, making the hiring processslower and more labor intensive and

producing worse outcomes than they shouldreasonably expect.

Currently they implement a patchwork ofcalling references and asking a few probingquestions.

By offering an easy, affordable, lightweighttechnical quizzing solution, Enable Quiz canacquire and retain these customer personas,delivering material value. (4 min.)

Enable Quiz example:


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01 ID EA!


02 HYPOTHESIS





Pivot or persevere?


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EVIDENCE-BASED INNOVATION VIA LEAN STARTUP


02 HYPOTHESIS




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ASSUMPTIONS: ORGANIZED AND PRIORITIZEDPriority Key Assumption Needs Proving? Experimentation

1 [A key assumption about thebusiness][Whether it needsproving

[Experiment toprove or disprove]

1

Hiring managers would

prefer a lightweight quiz appover calling references andad hoc probing.

Yes

* Customer interviews on problem

scenario* Value testing through minimumviable product

2 Managers want to be able toadd their questions as well Yes* Show prototypes with choices* Test in beta

2 Parents have smart phones No n/a

Focus on strategic,pivotal assumptions


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FOCUS AND THE LEAN STARTUP

Crossing ts

Dotting isDoesnt matter unless ithelps prove (or disprove)your pivotal assumptions


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FOCUS AND THE LEAN STARTUP

Subject

all youractivities +metrics to

that litmustest.


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4 TYPES OF LEAN HYPOTHESES

PERSONAHYPOTHESIS


@cowanSF


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PERSONAHYPOTHESIS

PROBLEMHYPOTHESIS


@cowanSF


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PERSONAHYPOTHESIS

PROBLEMHYPOTHESIS

VALUEHYPOTHESIS


@cowanSF


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PERSONAHYPOTHESIS

PROBLEMHYPOTHESIS

VALUEHYPOTHESIS

CUSTOMER CREATIONHYPOTHESIS


@cowanSF


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PERSONAHYPOTHESIS


@cowanSF


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PERSONA HYPOTHESIS- CHECKLIST

Hypothesis Experiment

! This persona exists (in non-trivialnumbers) and you can identify them.

- Can you think of 5-10 examples?- Can you set up discovery interviews with them?- Can you connect with them in the market at large?

! You understand this persona well. - What kind of shoes do they wear?- Are you hearing, seeing the same things across your discovery

interviews?! Do you understand what they Think in

your area of interest?- What do you they mention as important? Difcult? Rewarding?- Do they see the work (or habit) as you do?- What would they like to do better? To be better?

! Do you understand what they See inyour area of interest?

- Where do they get their information? Peers? Publications?- How do they decide whats OK? Whats aspirational?

! How do they Feel about your area of

interest?

- What are their triggers for this area? Motivations?- What rewards do they seek? How do they view past actions?

! Do you understand what they Do in yourarea of interest?

- What do you actually observe them doing?- How can you directly or indirectly validate thats what they do?


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EARLY MARKET VS. LATER MARKET


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EARLY MARKET VS. LATER MARKET


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EXERCISE: WHOS YOUR EARLY MARKET?

1) How do they differ within your existing persona denitions?

Example: At Enable Quiz, theyre startups doing lots of hiring

2) How will you locate them?

Example: At Enable Quiz, theyll read tech rags to see who just got funded.

3) How will they help you transition to your next segment?

Example: At Enable Quiz, via case studies, references, and incented posts on LinkedIn.

Answer each as best you can: ~ 1 min/each

(4 min.)


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EXERCISE: PERSONA DISCOVERY QUESTIONS (5 MIN)Question Form Examples Questions (Enable Quiz)

Tell me about [yourself in the role of the persona]? - Tell me about being an HR manager?- How did you choose that line of work? Why?- What do you most, least like about the job?- What are the hardest, easiest parts of the job?- Ive heard [x]- does that apply to you?

Tell me about [your area of interest]? - Do you do screen new candidates? If not, who?- Can you tell me about the last time? What was the trigger?- Who else was involved? What was it like?

Tell me your thoughts about [area]? - How should it ideally be done?- How is it actually done? Why?

What do you see in [area]? - Where do you learn whats new? What others do?- Who do you think is doing it right?- How did you make your last decision?

How do you feel about [area]? - What motivates you? What parts of it are most rewarding? Why?Tell me about the last time?

- What would it be like in your perfect world?

What do you do in [area]? - Would you show me your interview guide? Example notes? - Whatthe vetting process was like on the last few candidates?


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KEY TO GOOD PERSONA DISCOVERY

PERSONAHYPOTHESIS


@cowanSF

1) Create a level of person-ability and comfort

2) Acclimate them to the idea that youre not justwondering about the general picture

3) Assure them by demonstration that youre notselling anything or advocating a point of view


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PERSONAHYPOTHESIS

PROBLEMHYPOTHESIS


@cowanSF


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PROBLEM HYPOTHESIS- CHECKLIST

Hypothesis Experiment! Youve identied at least one discrete

problem (job, desire, etc.)- Can you describe it in a sentence? Do others get it?- Can you identify current alternatives?

! The problem is important - Do subjects mention it unprompted in discovery interviews?- Do they respond to solicitation (see also value and customer creation

hypotheses)?! You understand current alternatives - Have you seen them in action?

- Do you have artifacts (spreadsheets, photos, posts, notes, whiteboardscribbles screen shots ?


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PROBLEM HYPOTHESIS- OUTPUTS & PIVOTS

Outputs Common Pivots1) Pivot to a more material problem area2) Strategic pivot

Template: bit.ly/personast

ALTERNATIVE(S)

?

PROBLEMSCENARIO(S) X


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EXERCISE: PROBLEM DISCOVERY QUESTIONS

(5 min.)

Question Form Examples Questions (Enable Quiz)

What are the top [5] hardest things about [area ofinterest]?

- What are the top 5 most difcult things about making good techhires? Why?

How do you currently [operate in area of interest- ifyou dont have that yet]? OR Heres what I got on

[x]- is that right?

- How do you currently screen for technical skill sets?- Who does what?-

How does that work?Whats [difcult, annoying] about [area of interest]? - Whats difcult about screening technical candidates?

- How do you validate they have the right skill set?- How are the actual outcomes? Examples?

What are the top 5 things you want to do betterthis year in [general area of interest]?

- What are the top 5 things you want to do better in technicalrecruiting and hiring?

Why is/isnt [your specic area of interest on thatlist]?

- Why is/isnt screening for technical candidates on that list?


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KEY TO GOOD PROBLEM DISCOVERY

PROBLEMHYPOTHESIS


@cowanSF

1) Avoid prompting, progressing to it only as alast ditch effort

2) Get them in storytelling mode- focus onspecics and details

3) Focus on just getting them talking- mind thetime but be careful about interrupting for course

corrections


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Do I have real evidence from my buyerthat this is compelling?

01 ID EA!


02 HYPOTHESIS





Pivot or persevere?


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Pivot or persevere?


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PERSONAHYPOTHESIS

PROBLEMHYPOTHESIS

VALUEHYPOTHESIS


@cowanSF


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VALUE HYPOTHESIS- CHECKLIST Hypothesis Experiment

! Your product is better enough than thealternative to make sales (trafc, etc.)

- You successful execute a (paid?) concierge MVPor- You successfully pre-sell the productor- You successfully drive drive sign-ups online

! Customers will readily perceive thissuperiority if you [x]

- (see above)


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PROBLEM HYPOTHESIS- OUTPUTS & PIVOTS

Outputs Common Pivots1) Pivot from pre-conceived solution/

proposition2) Pivot to new problem area3) Strategic pivot

Template: bit.ly/personast

VALUEPROPOSITION(S)

X

?

!


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EXERCISE: VALUE DISCOVERY QUESTIONS

(2 min.)

Question Form Examples Questions (Enable Quiz)

How do you decide on and buy [stuff in generalarea of interest]?

- How do you buy [access to recruiting services, resumesearches, HR software, training, prof. ed. books]?

- Whos involved? Whats the scope of individual discretion?How much did you spend [last period]? - How much do you spend on [items of interest]?

[most of this needs to be obtained through direct experimentation (nextsection); the following are useful but probably not pivotal]


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TESTING YOUR HYPOTHESIS VIA MVP

MVP

inimum What is the fastest,cheapest way tovalidate orinvalidate thisoption so we give

ourselves moreoptions on futuresuccess?


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MVP

iable Will it give us adenitive result?What are the

actionable metrics?

inimum


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is not necessarily actual software/product(see concierge MVP)

is a rst and foremost learning vehicle vs. a project plan

(OK to do those things but always subordinate them to the learning mission)

vs. a product development project

MVP roduct

iableinimum


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THE MVP LITMUS TEST

output !=outcomeIs your MVP driving anextraordinary outcome?

Or is it a vehicle to create outputas usual?


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CASE STUDY: DROPBOX

OPPORTUNITYUnderlying demand and supportinginfrastructure ready for a great le sharingapp.

CHALLENGEBuilding a great cross-platform app.required VC funding. VCs saw a spacewith lots of existing competitors strugglingto get traction.


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CASE STUDY: DROPBOX

Persona

ProblemScenario

Alternatives

Value Prop.

Tom the Techie- early adopter who works on projects that require swapping a lot of les between ashifting network of collaborators.

Its difcult to share les between a network of collaborators, particularly if theyre: big or numerous orchange a lot.

Many existing products, but none of them super compelling and widely adopted.Also, custom setups which work but are cumbersome to set up and maintain.

A le sharing service that truly feels transparent to the user across all major platforms- OSX, iOS,Windows, etc.

What Minimum Viable Product (MVP)?

That you can bootstrap?

That doesnt require software at all?


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EXAMPLE: ENABLE QUIZ

OPPORTUNITYHiring quality technical talent is critical formany companies, but screening for skillsets is time consuming and awkward.

CHALLENGEThe founding team wants to bootstrapwithout external funding so they need tofocus on a specic technical domain, onethat will get them strong early traction.


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EXAMPLE: ENABLE QUIZ

Persona(s)

ProblemScenario

Alternatives

Value Prop.

Helen the HR Manager- responsible for sourcing and screening job candidatesFrank the Functional Manager- hiring manager responsible for acquiring and managing talent

Helen: hard to screen for technical skillsFrank: never has enough time for recruiting and doesnt want to be a jerk during interviews

Helen: call references, take their word for it (on skills)Frank: ask a few probing questions

A lightweight quizzing app that has Helen can use to do quick, effective screening.

What Minimum Viable Product (MVP) for deciding on the right rst topics?




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THE PRE-SALES MVP

Target Outcome: Informed

selection of starter topics (andbaseline on initial conversions).

Ran Google AdWordcampaigns across top rankingtechnical topics, measuringclick through rate and landingpage sign-ups.


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CASE STUDY: LEONID SYSTEMS

OPPORTUNITYMajor disruption and new productopportunities among telecom providerswith introduction of voice-over-IP and cloud

communications.

IT systems need to be rethought.

CHALLENGEAs a one-person startup, Leonid had

actionable ideas but not enough resourcesto execute an end-to-end solution.


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CASE STUDY: LEONID SYSTEMS

Persona

ProblemScenario

Alternatives

Value Prop.

Chris the CTO- has funding and mandate to transition the business towards hosted services; manybases to cover

IT is the most expensive, most risky area when making changes to the business.

1) Place large, risky bets on major new system upgrades. 2) Make small incremental updates (but risknot keeping pace).

Leonid will offer modular, integration-friendly applications in two critical areas: 1) services provisioningand 2) end user self-service portals.





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LEONID MVPs: FROM CONSULTING TO PRODUCT

Started with consulting as aconcierge vehicle to createtactical solutions, evolving tofull-edged product.

Result: Steady step-wisegrowth with consistently better

understanding of key customerproblem scenarios.


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CASE STUDY: ZAPPOS

OPPORTUNITYAn observed problem scenario around thedifculty of nding the right shoe at localretail and a giant (but nascent) market in

online retail (1999).CHALLENGEConsumers still in the early stages ofadopting and habituating to online retail.Founder (Nick Swinmurn) wanted to

bootstrap.


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CASE STUDY: ZAPPOS

Persona

ProblemScenario

Alternatives

Value Prop.

Sam the shoe-hound- knows what he wants but not where to get it.

Sam is unable to nd the shoe he wants at local retailers, wasting time and getting frustrated.

Possibly mail order or wait until hes in a bigger market to go to the store.

Make the shoe Sam wants accessible online and make sure he has a great experience so hell comeback and not have to think about where to nd the shoe he wants anymore.





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CASE STUDY: ZAPPOS

Result: It worked and the restis history.

Photographed shoes and putthem online to observe

whether anyone bought them.


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CASE STUDY: SPRIG

source: as told to Lean Startup Circle, SF (Jan 2014)

Startup looking for early traction forinvestors: Whole Foods (deli) meets Uber.

OPPORTUNITY

Large opportunity to resegment anddisrupt food prep. and delivery business.Desire to move fast and learn fast.

CHALLENGESome existing competitors and slow

fundraising process. Food prep. anddelivery requires infrastructure.


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CASE STUDY: SPRIG

Persona*

ProblemScenario

Alternatives

Value Prop.

Paula the Professional- health conscious, short on time, moderate to high income, already usessimilar services like Uber.

I want to have a nice, healthy dinner with no hassle and at a price I can afford (like $12).

Going to the store or an expensive, take-out, or a slow delivery service (>20 minutes).

A healthy meal like you would order a cab (on Uber): Dinner on Demand Prep Time is 3 Taps Delectable Prices (Sprig Home Page)

What MVP?



* This is me interpolating/guessing on an item; not part of the Sprig teams explanation.



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SPRIG MVP & EXPERIMENTATION

Result: Excellent uptake andvaluable observations on the

proposition and customer journey.

Hire a chef for the day, put theoffer on Eventbrite, email

friends - concierge MVP.



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CASE STUDY: PAUL HOWE & ASSOCIATES


OPPORTUNITYFunded startup team rapidly iteratingthrough B2C concepts with lightweightexperimentation.

One idea: Some people would like to knowhow much their stuff is worth.

CHALLENGE

Iterate to a successful concept while thetime and money permits.


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CASE STUDY: PAUL HOWE & ASSOCIATES

Persona*

ProblemScenario

Alternatives

Value Prop.

?

I have a lot of stuff around that I might want to sell and/or Im just generally curious about how much itsworth, how much Ive spent.*

Going through credit card statements or receipts.

Its interesting and possibly useful to know how much stuff you have.*

What MVP?



* This is me interpolating/guessing on an item; not part of the teams explanation.



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CONCIERGE MVP: PAUL HOWE & ASSOCIATES

Result: They dont care. Timeto move on to the nextconcept.

Get a few sign-ups withaccess to email and bankaccount info. Review by handon a concierge basis andcompile a statement for them.Do they care?



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CASE STUDY: STEALTH PHOTO-SOCIAL STARTUP

OPPORTUNITYLots of exciting things happening in thephoto-social space.

CHALLENGEThe team had several ideas but fewresources.


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CASE STUDY: STEALTH PHOTO-SOCIAL STARTUP

Persona

ProblemScenario

Alternatives

Value Prop.

Existing poster of photos. Personas: Martha the Mom, Pat the Party Planner, Teresa the Teen SocialButtery

[I want to do something interesting with my photos so that my social graph rewards me with interest andacclaim]

Manually enhance photos, use alternative enhancers/ampliers like Instagram

[This is something users can do with photos that will generate engaging content for their social graph]


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USER JOURNEY: PHOTO-SOCIAL

ASSUMPTIONUsers social networkwill like and share theapps output

What MVP?

That you canbootstrap?

That doesnt requiresoftware at all?


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PHOTO-SOCIAL STARTUP: MVP & EXPERIMENTATION

MVPCreate the target outputby hand (conciergestyle)

Does anyone care?

ASSUMPTIONUsers social networkwill like and share theapps output


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ABOUT MVPS AND PRODUCTS IN GENERAL

You have to put the magic inthe software.

(Not the other way around)Concierge and other non-software MVPs can be prettymagical.

Find 100 people that are reallyinto it and you can probablygrow.


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LEAN AT LARGEPriority Key Assumption Needs Proving? Experimentation

1 [A key assumptionabout the business][Whether it needsproving

[Experiment toprove or disprove]

1Parents want toorganize thedistribution of

Yes* Post the proposition in ads online* Measure sign-ups on a landing page

2 Parents want to linkallowances to chores Yes* Show prototypes with choices* Test in beta

2 Parents have smartphones No n/a


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VENTURE DESIGN


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PLANNING WITH LEAN AT LARGE

Lets assume.

Then test.

Lets not

argue


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PLANNING WITH LEAN AT LARGE


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THINK SEE

FEEL DO

PERSONAS

Who?

X

PROBLEMSCENARIOS &ALTERNATIVES

What?

VALUEPROPOSITIONS& ASSUMPTIONS

What if?

!

USERSTORIES &PROTOTYPES

How?

Scale?

Pivot?

PRODUCT &PROMOTION

/

CUSTOMERDISCOVERY &EXPERIMENTS

Tell me?

BY THE NUMBERS


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BY THE NUMBERS (IN REVERSE)

!PRODUCT &PROMOTION

USERSTORIES &PROTOTYPES

Did the implementationdeliver on the story?

/

CUSTOMERDISCOVERY &EXPERIMENTS

How did thecustomer/userreact?

VALUEPROPOSITIONS& ASSUMPTIONS

!

Was theimplementedstory relevant tothe proposition?

X

PROBLEMSCENARIOS &ALTERNATIVES

Is problemrelevant? Is thepropositionbetter vs.alternatives?

THINK SEE

FEEL DO

PERSONAS

Do weunderstand thisperson? Whatmakes themtick?


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CLASS PRESENTATIONS

As Presenter

1) What is it? Use pos. statement.2) How are you doing on the personaschecklist?4) The problem scenarios checklist?5) Where/how will you nd interviewsubjects? Whats your target number?6) Ideas for MVP? Next steps, timing?

As Audience

- Focus on the process; avoideditorial- Ask a lot of questions- Think about it like an investor

(5 min./each)


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POINT OF EMPHASIS

You are

the mostimportantpart of the

experiment

Make sureyoure

learning


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AGENDAPeriod Deliverables

Venture Design I: AchievingCustomer Relevance

PersonasProblem Scenarios-Alternatives-Value PropositionsStart Business Model CanvasStoryboardsCustomer Discovery

Venture Design II: Iterating toSuccess

Venture Planning- focal hypotheses, experiments, andminimum viable product

Venture Design III: Focusing &Validating Venture Progress

Review of eld work, renements of approach, planning nextsteps.

Venture Design IV: EngineeringYour Business Model

Detailing your business model and remaining focal assumptions.

Venture Design V: Designing theRight Product

Pairing your learnings on personas & hypotheses with highquality, actionable inputs (stories & wireframes) for productdevelopment and product validation.


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RECOMMENDED NEXT STEPS

Homework1. Draft a working set of assumptions

2. Design your experiments and execute.

GOOGLE DOC TEMPLATE FOR ABOVE:http://bit.ly/venturetemplate


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RECOMMENDED NEXT STEPS

Follow-On Workshops1. For Creating Strong PersonasDay in the Life Workshop: http://bit.ly/daynthelife

2. For Structuring Your Product Value Propositions into Testable AssumptionsVenture Design II: Iterating to Success: http://bit.ly/vdesignII

3. For Designing a Protable Business ModelVenture Design IV: Engineering Your Business Model: http://bit.ly/vdesignIV

4. For Linking the Above to an Effective Product Development ProgramVenture Design V: Designing the Right Product: http://bit.ly/vdesignV


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[email protected]

@cowanSF

www.alexandercowan.com/venture-design

bit.ly/vdesignII

www.alexandercowan.com/startup-sprints

FINI

Venture Design II Iterating to Success

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Transcript of Venture Design II Iterating to Success