A P P L I C A T I O N I N S T R U C T I O N S

Thank you for your interest in applying for the 2016 Social Entrepreneurship Boot Camp at the Winthrop Rockefeller Institute. The goal of the Boot Camp is to help you and your team develop the tools you will need to be successful social entrepreneurs. Our partners for the Boot Camp are the Clinton School of Public Service, the University of Arkansas Office of Entrepreneurship and the Arkansas Regional Innovation Hub.

In this packet you will find instructions for completing two essential parts of the application for the 2016 Social Entrepreneurship Boot Camp: your lean canvas business model and business pitch. The lean canvas and the pitch will work together to help you define your social enterprise. They will also be refined and reshaped throughout the Boot Camp. Review the material about them carefully to give yourself the best foundation for the Boot Camp.

To start the process, complete your lean canvas. The lean canvas is designed to provide entrepreneurs with a quick way to define the core aspects of their businesses. The model used for the Boot Camp has been developed by Trish Flanagan. Flanagan is the cofounder of Noble Impact, an education initiative that provides students with entrepreneurial skills in and out of the classroom, and founder of the Future School of Fort Smith, a public, tuition-free charter school for 10th through 12th grades providing students with individualized, real-world training like concurrent college credit and tailored internships. The steps for completing the lean canvas are as follows:

1. Learn about the social lean canvas by watching this short video.

2. Review the enclosed “Building Blocks of Social Enterprise” presentation from Trish Flanagan. (attached)

3. Review the “Lean Canvas Workshop” handout. (attached)

4. Read the “How to Create Your Lean Canvas” handout, adapted from Ash Mauyra. (attached)

5. Print out copies of the blank lean canvas. Use this form to build your own lean canvas. (attached)

Once you have completed the lean canvas, you will be ready to develop a business pitch. The business pitch is a short description of your business. It is the tool you will use to explain your enterprise to other entrepreneurs, possible funders and the public. Use the attached “Elevator Pitch Video Guidelines” and work with your completed lean canvas to develop a polished pitch for your business concept. Your pitch video is a major component of your application. Come prepared to give your draft pitch on the opening night of the Boot Camp. You will receive guidance throughout the weekend to help you refine your pitch and will deliver your final pitch on the last day of the Boot Camp.

Lastly, you will need to complete the application form found here. The application will collect more information about you and your team and will be where you provide the links to your pitch video and upload your lean canvas. All three parts of the application are required, so be sure to complete your lean canvas, pitch and application form before the May 1, 2016, deadline.

Should you have any questions, please contact Payton Christenberry with the Winthrop Rockefeller Institute at 501.727.6255 or pchristenberry@uawri.org.

Building Blocks of a Social Enterprise Trish Flanagan 2013

What is Social Entrepreneurship?

[Entrepreneurship] is the pursuit of opportunity without regard to resources currently controlled. (H. Stevenson)

Trish Flanagan 2013

[Social Entrepreneurship] combines the passion of a social mission with business-like discipline, innovation and determination. (G. Dees)

[Entrepreneurs] shift resources from areas of low productivity to areas of higher productivity. (Baptiste-Say).

Creating common good by thinking & acting like an entrepreneur (visionary, takes risk, opportunistic).- (Yours Truly)

SE Insights

1.  In social enterprise, the driving force is the power of the individual stakeholders. 2.  Community ownership (buy-in) is essential to creating and managing a successful business. 3.  We need to test our assumptions about our business ideas. 4.  The entrepreneurial mindset: sees problems as opportunities, takes risks, welcomes

customers as partners. 5.  Failure is the entrepreneur's greatest teacher! 6.  An L3C is a legal, for profit business that prioritizes a social benefit. It can work together with

an NGO. 7.  Social entrepreneurs must be disciplined, relentless, empathetic and determined. 8.  Social entrepreneurship creates an opportunity for self-reliance rather than dependence in

communities. 9.  Our culture embodies many of the elements required for an entrepreneurial mindset:

collaboration, interconnectedness, resourcefulness, resiliency and patience. 10.  Certain community thought processes already align with the business development cycle. 11.  To merge into social business, a focus and drive to create one successful pilot project is

necessary. All other projects can be created and refined from this successful model.

Trish Flanagan 2013

Social Enterprise V Non-Profit Trish Flanagan 2013

Social Enterprise NGO/Government

Funds Investment & Customers Grants Secure Funding

Business plan, presentations

Write grants

Orientation Market Driven Need Driven Stakeholders Community, investors,

customers Community

Big Difference: Customers, Not Grants

•  For-profit businesses rely on revenues and must be able to articulate an ROI (return on investment).

•  Revenues come from customers purchasing a product or service.

•  It is critical that a social enterprise (L3C) knows what their customer wants and is able to deliver.

•  No one is going to buy an ice cream cone in a blizzard or a sweater at the beach!

Trish Flanagan 2013

Social Entrepreneurship

Non-Profit Organization Non-Profit Organization with a For-Profit Entity Hybrid For Profit Organization that creates social value

Trish Flanagan 2013

Social Impact via Entrepreneurship

Case Study: Trade High School for Young Women

Trish Flanagan 2013

The Noble Canvas Trish Flanagan 2013

Problem((D3) Solution((D3) Unfair(Advantage Customer(Segments((D3)

Key(Metrics((D4) Exit(Strategy((D4)

Channels((D5)

What(resources(will(you(need?(Staff(salaries?(Rent?(Promotional(materials?(Bills?(

How(will(you(pay(your(staff?(How(will(pay(for(the(project?(How(will(you(buy(materials?(How(is(your(project(viable?(Sustainable?

How(will(you(reach(your(customer/users?Who(will(help(you(to(do(this?(

What(are(the(top(3(viable(solutions?(

(Unique(Impact(Value(Proposition)(Is(this(being(done(already?(How(is(your(solution(different?(Better?(Worth(paying(for?

What(makes(your(solution(hard(to(copy(or(imitate?(

Who(are(you(serving?(Feasibility(Study1)(Analysis(of(financial(feasibility2)(What(does(the(industry/market(say?3)(Who(are(the(people(you(need(to(involve(in(your(social(enterprise?(For(example,(whoare(your(consumers(and(who(are(your(partners((see(channels)?

How(will(you(know(you(are(successful?(How(do(you(measure(the(ROI((return(on(investment)((time,(energy,(passion,(resources)?(How(do(you(measure(impact/success?(

What(are(the(top(3(problems?

Noble(Canvas

Budget/Expenses((D8) Funding($$$((D8)

How(does(your(project(eliminate(the(problem/challenge((in(part(or(whole)?

UIVP((D4)

Tag(Line((D5)Describe(your(project(in(one(sentence!

9 Elements of the Process

1.  Problem 2.  Customer Segments 3.  Solution 4.  UVP 5.  Unfair Advantage 6.  Channels 7.  High level concept 8.  Revenues 9.  Expenses

Trish Flanagan 2013

Identify a problem

1.  In the problem box of your canvas, write down 3 of the top problems (what they want) you think your customer has.

2.  In the margin, write down existing alternatives.

Trish Flanagan 2013

Brainstorm Customers Trish Flanagan 2013

1.  Yellow: Target customers- They will be the first to buy your product/service. They will be the easiest to sell to.

2.  Red, blue, black: Potential customers- They will eventually purchase from you, but it might be harder. They might not feel as much “pain” or demand for your product.

3.  Write down your list of potential customers in the “customer” box.

Unique Value Proposition

1.  “Unique Value Proposition: A single, clear compelling message that states why you are different and worth buying.”- Steve Blank

2.  UVP- This is one of the most important boxes on the canvas and also the hardest to get right.

3.  Write down your UVP for your company/product. Think about what you’re offering. How is it different or better than the competition?

4.  Example: Eco-hotel on the Reservation versus the Holiday Inn in Flagstaff. What is the UVP of the eco-hotel?

Trish Flanagan 2013

Solution

1.  Building a business is an iterative process. 2.  Entrepreneurs start with an initial solution and if they

actively pay attention to the COMPETITION, MARKET AND CUSTOMER DEMAND, they will adjust their solution accordingly.

3.  Brainstorm possible solutions and write down your top 3 in the “solutions” box.

Trish Flanagan 2013

Customer Channels

1.  A customer channel is the method your business will use to reach their customers. A channel allows you to communicate your offering to your customers and invite them to purchase your product/service.

2.  List the channels you expect to develop to reach your customers.

Trish Flanagan 2013

Revenues

1.  Brainstorm all the possible ways your business can make money. List these in your canvas.

2.  If you have time, create a 5-year revenue forecast. How much will you earn in year 1, year 2, ….? Think about how many sites/stores you might have each year and the volume of goods you will sell.

Trish Flanagan 2013

Expenses

1.  Brainstorm all the possible expenses your business will have. List these in your canvas.

2.  If you have time, create a 5-year expense forecast. How much will you spend in year 1, year 2, ….? Think about how many sites/stores you might have each year and the expenses associated with each.

Trish Flanagan 2013

If you build it, will they come? Test your assumptions

1.  On a sheet of paper, write down 2-3 falsifiable hypotheses ( more explanation in the readings) you would like to ask potential customers to find out if they would purchase your solution.

2.  If you can, interview potential customers/users. This will help you test your assumptions of your solution.

Trish Flanagan 2013

Time for Action

1.  Now that you have an introduction to the building blocks of a for-profit enterprise, get out of the “building” and test your plans.

2.  It is essential to identify the management team that will move the initiative forward.

3.  What to look for in a management team: hard-working, relentless, creative, good communicator, ambitious, strong.

4.  Once you have built your management team, they need support. Surround them with mentors, resources, love and coffee! Encourage them when failure comes and help them move forward. Failure is the entrepreneur's greatest teacher!

Trish Flanagan 2013

 

 

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Lean  Canvas  Workshop  Change  Makers  Creating  Common  Good  as  Entrepreneurs  

   Through  this  workshop,  participants  from  diverse  backgrounds  will  have  an  opportunity  to  expand  their  social  impact  toolboxes.  Working  with  the  lean  canvas,  we  will  experiment  with  thinking  like  an  entrepreneur.  In  the  business  world,  entrepreneurship  offers  strategies  to  create  products  and  services  for  customers  such  as  testing  assumptions  of  customer  demand.  This  strategy  is  also  useful  for  those  seeking  to  create  innovative  and  sustainable  solutions  to  societal  challenges.    As  social  change  makers,  an  entrepreneurial  mindset  allows  us  to  appreciate  opportunities  where  others  see  problems,  identify  a  unique  value  proposition,  articulate  a  return  on  investment  in  time,  money  and  resources  and  develop  an  exit  strategy  prioritizing  the  intended  impact  of  a  service  project  and  ultimately  consider  a  plan  to  “put  ourselves  out  of  business”.    

   

 

   

 

   The  Noble  Canvas  (adapted  from  Ash  Maurya’s  Lean  Canvas)  

Here  is  our  version  of  the  lean  canvas  that  we  have  used  with  various  groups  to  design  sustainable  solutions  to  create  social  impact.  

 Problem((D3) Solution((D3) Unfair(Advantage Customer(Segments((D3)

Key(Metrics((D4) Exit(Strategy((D4)

Channels((D5)

Noble(Canvas

Budget/Expenses((D8) Funding($$$((D8)

How(does(your(project(eliminate(the(problem/challenge((in(part(or(whole)?

UIVP((D4)

Tag(Line((D5)Describe(your(project(in(one(sentence!

What(resources(will(you(need?(Staff(salaries?(Rent?(Promotional(materials?(Bills?(

How(will(you(pay(your(staff?(How(will(pay(for(the(project?(How(will(you(buy(materials?(How(is(your(project(viable?(Sustainable?

How(will(you(reach(your(customer/users?Who(will(help(you(to(do(this?(

What(are(the(top(3(viable(solutions?(

(Unique(Impact(Value(Proposition)(Is(this(being(done(already?(How(is(your(solution(different?(Better?(Worth(paying(for?

What(makes(your(solution(hard(to(copy(or(imitate?(

Who(are(you(serving?(Feasibility(Study1)(Analysis(of(financial(feasibility2)(What(does(the(industry/market(say?3)(Who(are(the(people(you(need(to(involve(in(your(social(enterprise?(For(example,(whoare(your(consumers(and(who(are(your(partners((see(channels)?

How(will(you(know(you(are(successful?(How(do(you(measure(the(ROI((return(on(investment)((time,(energy,(passion,(resources)?(How(do(you(measure(impact/success?(

What(are(the(top(3(problems?

 

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4  Key  Elements  of  the  Noble  Canvas  

Test  Assumptions  

Testing  assumptions  is  a  critical  process  entrepreneurs  must  engage  in  to  ensure  their  product  or  service  will  meet  customer  needs.  From  the  standpoint  of  developing  an  entrepreneurial  mindset  in  solving  social  challenges,  we  need  to  test  our  assumptions  about  the  problem  at  hand.  As  traditional  entrepreneurs  must  understand  their  customer’s  “pain”  to  create  a  solution  in  order  to  start  a  business,  so  must  social  entrepreneurs  ascertain  the  root  cause  of  the  problem  and  the  marketability  of  the  solution.  The  concept  of  testing  assumptions  by  interviewing  customers  is  fundamental  to  the  lean  canvas  approach  and  allows  us  to  look  beyond  the  outward  symptoms  of  the  problem  to  gain  a  deeper  understanding  of  what  can  be  improved.  For  example,  to  increase  sales  Circle  K  spent  $11mm  in  one  year  on  a  “smiles”  campaign.    Company  leadership  assumed  that  if  store  attendants  smiled  at  customers  and  were  friendlier,  sales  would  increase.  This  was  not  the  case  and  the  company  lost  money.    

Identify  a  Unique  Value  Proposition  

Entrepreneurs  must  identify  a  unique  value  proposition  for  their  product  or  service,  which  will  ensure  it  beats  the  competition.  This  proposition  is  often  in  the  price  or  other  physical  quality  of  the  product  or  service.  In  solving  a  social  challenge,  there  is  a  parallel  for  identifying  what  qualities  of  a  social  solution  make  it  necessary  and  effective.  If  the  solution  designed  has  already  been  created,  we  can  consider  either  joining  forces  with  that  solution  or  improve  on  the  model  already  in  existence.  In  this  way,  scarce  resources  available  to  solve  social  issues  could  best  be  utilized  rather  than  depleted  in  supporting  multiple,  similar  remedies  to  the  same  challenge.    

Articulate  a  Return  on  Investment  

Similar  to  the  unique  value  proposition,  considering  a  return  on  investment  (ROI)  in  time,  money  and  resources,  helps  us  to  create  not  only  a  viable  plan  but  also  to  secure  support  for  our  idea.  In  designing  our  solutions,  we  consider  the  inputs  as  well  as  the  outputs.  For  example,  we  can  consider  our  social  return  of  inputs  such  as  a  $1000  donation  or  10  hours  of  volunteer  work.    

Create  an  Exit  Strategy    

“I  should  not  like  any  poverty  relieving  institution  started  which  did  not  contain  in  itself  the  causes  which  would  make  it  shrivel  up,”(Marshall,  1893).  In  the  context  of  the  seminar,  this  “shriveling  up”  refers  to  an  exit  strategy,  which  is  a  new,  yet  potentially  effective  concept  for  designing  solutions  to  social  challenges.  This  type  of  strategy  promises  that  there  will  be  an  ultimate  benefit  from  the  investment  of  time,  money  and  resources  of  all  stakeholders  including  clients,  volunteers,  staff,  investors  and  funders.  Simply  put,  an  exit  strategy  outlines  how  and  when  the  solution  becomes  either  internalized  and  owned  by  the  community  or  eradicates  the  challenge.  From  an  economic  standpoint,  “The  greatest  success  for  a  social  entrepreneur  would  be  to  tackle  the  problem  with  positive  externalities  in  such  a  way  that  the  externality  is  internalized  for  the  benefit  of  society  and  the  work  of  the  social  entrepreneur  is  no  longer  necessary,”(Santos,  2012).    

In  the  traditional  sense,  an  exit  strategy  is  the  plan  formulated  by  the  original  founders  of  a  start  up  in  order  to  sell  the  company  or  get  acquired.  In  order  to  get  financial  investment,  an  exit  strategy  is  essential  to  attract  investors  who  would  invest  in  companies  that  have  a  quick  ramp  up  and  high  growth  potential,  ultimately  providing  a  substantial  return  on  the  original  investment.  While  our  priority  is  not  profits,  we  consider  the  concept  of  an  exit  strategy  in  order  to  engage,  stakeholders  to  invest  time,  money,  resources  into  an  initiative  (ngo,  program,  project,  community,  etc.).    

 

 

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Additional  Resources    Allison-­‐Jacobs,  R.  Measuring  the  Impact  of  Academic  Social  Entrepreneurship  Programs.  Queens  University  of  

Charlotte.    Austin,  J.,  Stevenson,  H.  and  Wei-­‐Skillern,  J.  (2006).  Social  and  Commercial  Entrepreneurship:  Same,  different  or  both?.  

Baylor  University.      Binkley,  C.  (2009).  Charity  Gives  Shoe  Brand  Extra  Shine.  The  Wall  Street  Journal.  Dow  Jones  &  Company.      Dees,  G.  (1998).  The  meaning  of  social  entrepreneurship.  Center  for  the  Advancement  of  Social  Entrepreneurship.      Denhardt,  J.,  and  Denhardt,  R.  (2003).  The  New  Public  Service:  Serving  rather  than  steering.  Arizona  State  University:  

549-­‐559.      Illich,  I.  (1968).  To  hell  with  good  intentions.  University  of  Chicago  Press.      Mair,  J.  and  Marti,  I.  (2004).  Measuring  the  Impact  of  Academic  Social  Entrepreneurship  Programs.  University  of  

Navarra.    Maurya,  A.  (2012).  Running  Lean:  Iterate  from  Plan  A  to  a  Plan  that  Works,  O’Reilly  Publishing.      McLean,  M.  and  A.  Peredo.  (2006).  Social  entrepreneurship:  A  critical  review  of  the  concept.  Journal  of  World  

Business:  56-­‐65.      Net  Impact.  (2012)  Talent  Report:  What  workers  want.  www.netimpact.org/whatworkerswant.  Last  retrieved  

11/26/13.      Santos,  F.  (2006).  A  Positive  Theory  of  Social  Entrepreneurship.  Springer  Science  and  Business  Media.      Skoll  Foundation.  (2009)  Skoll  World  Forum-­‐Investing  for  Impact:  Catalyzing  an  Emerging  Industry.  

https://itunes.apple.com/us/podcast/skoll-­‐world-­‐forum-­‐investing/id348258086?i=79774456&mt=2.  Last  retrieved  on  11/3/13.    

 Sommerrock,  K.  (2010).  Social  entrepreneurship  business  models:  Incentive  strategies  to  catalyze  public  goods  

provision.  New  York:  Palgrave  Macmillan  Limited.    US  News  &  World  Report  (2013)  Business  School  Overview,  University  of  Arkansas,  Fayetteville.  http://grad-­‐

schools.usnews.rankingsandreviews.com/best-­‐graduate-­‐schools/top-­‐business-­‐schools/university-­‐of-­‐arkansas-­‐fayetteville-­‐walton-­‐01011/  Last  retrieved  on  10/31/13.    

 Walton  College  (2013).  The  Walton  MBA  Curriculum.  http://gsb.uark.edu/mba-­‐masters-­‐degree-­‐

program/curriculum/.  Last  retrieved  on  10/31/13.      Walton  MBA  (2013).  Percentage  of  MBA  students  employed  at  graduation.  http://gsb.uark.edu/mba-­‐masters-­‐degree-­‐

program/.  Last  retrieved  on  10/31/13.            

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HOW TO CREATE YOUR LEAN CANVAS-adapted from Ash Mauyra

Capture your business model in a portable 1-page diagram. The Lean Canvas is the perfect format for brainstorming possible business models, prioritizing where to start, and tracking ongoing learning.

Tips  to  Get  Started   1. Sketch a canvas in one sitting

While a business plan can take weeks or months to write, your initial canvas should be sketched quickly. You will sketch multiple canvases in the process.

2. It’s okay to leave sections blank

Rather than trying to research or debate the “right” answers, put something down quickly or leave it blank and come back to it later. The canvas is meant to evolve over time. Also- you can tackle each box in any order that makes sense to you.

3. Think in the present

Business plans try too hard to predict the future, which is impossible. Instead, write your canvas with a “getting things done” attitude. Based on your current stage and what you know right now, what are the next set of hypotheses you need to test to move your product forward?

4. Use a customer-centric approach- Who is your audience, what do they need?

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Step  1:  Create  First  Draft

Problem  and  Customer  Segments   I find that the “Problem-Customer” pair usually drives

the rest of the canvas which is why I tackle them together:  List  top  3  problems Describe the top 1-3 problems your customers/clients need solved.

List  existing  alternatives  Then document how you think your early adopters address these problems today. Unless you are solving a brand new problem (unlikely), most problems have existing solutions. Many times these may not be a readily obvious competitor.

Identify  other  user  roles  Next identify any other user roles that will interact with this customer.

Hone  in  on  possible  early  adopters  With these problems in mind, get more specific on the customer segment. Narrow down the distinguishing characteristics of your prototypical customer.

Brainstorm  Possible  Customers   You most likely already have an inkling of the problem, solution, and customer in mind. Start by brainstorming the list of possible customers you envision using your product/service.

Distinguish  between  customers  and  users  How can a social enterprise distinguish who benefits (user/client) and who pays for this (customer)? Can there be overlap?

Split  broad  customer  segments  into  smaller  ones  Initially, you can’t effectively build, design, and position a product for everyone. While you might be aiming to build a mainstream product, you need to start with a specific customer in mind. Even Facebook, with it’s now 500 million+ users started with a specific user in mind - Harvard college students.

3-STEP PROCESS 1. CREATE FIRST DRAFT 2. TEST ASSUMPTIONS 3. ITERATE YOUR CANVAS

HMMM…

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Unique  Value  Proposition   Dead-center in the Lean Canvas is a box for your Unique Value Proposition (UVP). This is one of the most important boxes on the canvas and also the hardest to get right. “Unique Value Proposition: A single, clear compelling message that states why you are different and worth buying.”- Steve Blank

The UVP is hard to get right because you have to distill the essence of your product in a few words that can fit in the headline of your landing page. Additionally, your UVP also needs to be different and that difference needs to matter.

The good news is you don’t have to get this perfect right away. Like everything on the canvas, you start with a best guess and then iterate from there.

How  to  Craft  a  Unique  Value  Proposition   Be different, but make sure your difference matters

The key to unlocking what’s different about your product/service is deriving your UVP directly from the #1 problem you are solving. If that problem is indeed worth solving, you’re more than halfway there already.

Target early adopters

Too many marketers try to target the “middle” in the hopes of reaching mainstream customers and in the process water down their message. Your product is not ready for mainstream customers yet. Your sole job should be finding and targeting early adopters which requires bold, clear, and specific messaging. Focus on finished story benefits

You’ve probably heard about the importance of highlighting benefits over features. But benefits still require your customers to translate them to their worldview. A good UVP gets inside the head of your customers and focuses on the benefits your customers derive after using your product.

So for instance if you are building a résumé-building service:

- a feature might be “professionally designed templates”

- the benefit would be an “eye-catching résumé that stands out”

- but the finished story benefit would be “landing your dream job”.

HMMM…

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Pick your words carefully and own them Words are key to any great marketing and branding campaign. Look at how the top luxury car brands have used a single word to define themselves:

Performance: BMW Design: Audi Prestige: Mercedes

Answer: What, Who, and Why

A good UVP needs to clearly answer the first 2 questions - what is your product and who is the customer. The “Why” is sometimes hard to fit in the same statement and I’ll frequently use a sub-heading for that.

Study other good UVPs

The best way to craft a good UVP is to study the UVPs of the brands you admire. Visit their landing pages and deconstruct how and why their messaging works.

Create a high-concept pitch

A high-concept pitch usually builds on other familiar concepts to quickly get an idea across and make it easily spreadable. Unlike a UVP, a high-concept pitch is best used in conjunction with something else that sets the right context such as an elevator pitch.

Examples:

1. YouTube: “Flickr for video”

2. Aliens (movie): “Jaws in space” 3. Dogster: “Friendster for dogs”

Solution   You are now ready to tackle solution possibilities.

As all you have are untested hypotheses, I don’t recommend getting carried away with fully defining a solution just yet. Rather simply sketch out the top features or capabilities next to each problem.

Bind a solution to your problem as late as possible.

HMMM…

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Channels   The good news is that following a “Customer Discovery/Interview” process forces you to build a path to customers early. Unfortunately, unless you are in a direct sales business, that path may not scale beyond Problem/Solution Fit.

In addition to defining the right product to build, it’s just as critical to start finding, building and testing a significant path to your customers from day one.

Revenue  Streams  and  Cost  Structure   A lot of startups choose to defer the “pricing question” because they don’t think their product is ready. Something I hear a lot is that a minimum viable product is by definition embarrassingly minimal. How can you possibly charge for it?

I believe that if you intend to charge for your product, it’s better to be upfront about it. It sets the right expectations, raises customer commitment, starts generating cash flow,

What you charge for your product is simultaneously one of the most complicated and most important things to get right. Not only does your pricing model keep you in business, it also signals your branding and positioning. It determines your customers.

Your price is part of your product.

Pricing is not unlike any other business model hypothesis and should be tested using the same criteria we covered earlier when building validated learning loops - create a testable hypothesis, time-box the experiment, and validate qualitatively, then verify quantitatively.

Take your costs into account

The ultimate goal is finding a scalable business model so it should go without saying that you also need to keep an eye on what it would cost you to deliver your solution and ensure you have a healthy margin built in.

One rule of thumb for building a successful business is ensuring the lifetime value of your customers exceeds the cost of customer acquisition by at least a factor of three.

HMMM…

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Key  Metrics   “Find the key number that tells you how your business is doing in real time, before you get the sales report.” - Norm Brodsky and Bo Burlingham

Startups are inherently chaotic, but fortunately, there are only a handful of key metrics that drive a web startup. We’ll cover five key startup metrics (Dave McClure’s Pirate Metrics) a little later but for right now document the one or two key activities you think will drive usage of your product.

Unfair  Advantage   This is usually the hardest section to fill which is why I leave it for last. Most founders list things as competitive advantages that really aren’t. An interesting perspective, via Jason Cohen, to keep in mind is that anything worth copying will be copied. So imagine your co-founder steals your source code, sets up shop in Costa Rica, and slashes prices. Do you still have a business?

You have to be able to build a successful business in spite of that which leads to the following definition:

“A real unfair advantage is something that cannot be easily copied or bought.”

- Jason Cohen

You may initially have to leave this box blank but it’s here to have you really think about how you can make yourself different and make your difference matter. Some examples of unfair advantages - insider information, the right “expert” endorsements, personal authority.

Exit  Strategy   Is it possible to eradicate this social issue? Can this be a goal of your enterprise?

Prioritize  Where   to  Start  Once you have your Lean Canvases sketched for each customer segment, lay them side by side and select the best business model to start with.

Your objective is to find a big enough market you can reach with customers who need your product that will pay a price you can build a business around.

HMMM…

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Here is the weighting order I use (ranked from highest to lowest): 1. Customer pain level

Pick customer segments that need your product the most. The goal is to have one or more of your top three problems as must-haves for them.

2. Ease of reach

Building a path to customers is one of the harder aspects of building a successful product. If you have an easier path to one segment of customers over others, take that into consideration. It doesn’t guarantee you’ll find a problem worth solving or a viable business model, but it will get you out of building faster and speed up your learning.

3. Price What price are people willing to pay that will allow you to cover your costs and reinvest profits?

4. Market Size

Lastly, you need to pick customers that represent a big enough market, or are a stepping stone to a big enough market, that you can build a business around.

Now  it’s  Your  Turn  Documenting your Plan A is a prerequisite for moving on. Too many founders carry their hypotheses in their heads alone which makes it hard to systematically build and test a business. You have to draw a line in the sand. The important thing is sharing it with at least one other person when you are done.

2.  Test  Your  Assumptions  &  Interview  In order reduce the risk of your enterprise, you must ‘get outside of the building’ and test your assumptions. Start-ups fail for many reasons; one of the most common is that people simply won’t value and pay for what you have created. You need to try to prove your assumptions wrong to ensure your solution will be accepted and desired by your market. So create a few falsifiable hypotheses from your assumptions. Then interview customers, stakeholders to gather more facts about your ideas. Sample falsifiable hypotheses for a new bakery:

1. There will be sufficient foot traffic on the corner where the bakery is located. 2. My grandmother’s secret chocolate chip cookie recipe will be in demand (maybe a taste test

here!) 3. By being open late night rather than early morning, we will attract more customers.

Then…  

3.  ITERATE! – Keep revisiting your canvas and interviewing customers until you begin to get the same information and your plan becomes feasible- investable!  

E L E V A T O R P I T C H V I D E O G U I D E L I N E S

Your elevator pitch gives a concise description of your business by explaining a product, service or value proposition in a short amount of time, as well as your needs. It is a tool that you can use to make a great first impression on a potential investor or new customer. It should provide a clear picture of your company and its solution to a social problem as well as how you would put any investment to good use. It should be delivered effectively and succinctly.

You will design your pitch from your lean canvas, so complete your lean canvas first. You will have 90 seconds to make your pitch, so be sure to practice in order to perfect the timing. Some things to keep in mind from your lean canvas that could help inform your pitch:

• Problem – What is the number one problem you identified through your lean canvas?

• Customer Segment – Who are you serving and what is their need?

• Unique Impact Value Proposition – What is meaningfully different about your business and the way it addresses a social challenge?

• Product or Service – Briefly describe the product or service and the problem it solves.

• Management – What about you or your team makes you well-suited to help your business succeed and make change?

Additionally, successful pitches will answer the following questions:

• What support do you need from an investor and how will you put that investment to work?

• What is your unfair advantage?

• What does success look like for you?

E L E V A T O R P I T C H S U B M I S S I O N

You pitch video should be a maximum of 90 seconds. The focus is on your content, not video production quality, so please use any recording device readily available to you (cellphone, computer, camcorder, etc.) with clear audio that you can then upload. You should upload your video to YouTube and include the link with your application materials. You may set the privacy settings to “Unlisted” (but not “Private”) if you wish to restrict viewing to the Boot Camp judges.

Your pitch video will be reviewed alongside your lean canvas and application form when considering you and/or your team for admission to the 2016 Social Entrepreneurship Boot Camp.