coaching startups under conditions of extreme uncertainties

COACHING START-UPS UNDER CONDITIONS OF EXTREME UNCERTAINTIES High-Tech Gründerfonds | Family Day 2016 Bonn, Germany | May 31st, 2016 Bernhard Doll | doll@orangehills.de

Note: Optimised for presentation with tablets

Start-ups can be game changers

in many industries...

…and sometimes a great way to burn

your money.

Many start-ups fail…

…because they build things nobody wants.

Atypicalchallenge:Fromtechnology...

...tofunc�onalprototypes

Affordable3Dprin�nghardware

Easy-to-useso�ware(evenfornon-engineers)

(Costly)consumablestomakeyourCFOhappy

...toproductsandservicesforpeople

...toinnova�vebusinessmodels.

Technology

Customers

Economics

Strategy

Istheinnova�ondesiredbycustomersandusers?

Istheinnova�ontechnologicallyfeasible? Istheinnova�on

suitabletoreachyourstrategictargets?

Istheinnova�oneconomicallyviable?

Innovation

Innovation is about dealing with uncertainties in areas where you are not

expert in.

Building start-ups is still in many ways an unstructured

and chaotic process.

How do you deal with uncertainties?

Ignoring the level of uncertainties by pretending the start-up process can be planned

2 �me

levelofuncertain�es

Embracing uncertainties by structuring the learning process in the most efficient way

Wewantstart-upsteamstoworkwiththeprecisionofsurgeons,architectsorscien�sts…

Business design StrategicManagement

Kanban

DesignThinking

(Social)Prototyping

BusinessModelling

BehavioralEconomics

LeanStartup

TeamResearch

Howdowedobusinessinthefuture?

Whatisourbetonthefuture?

Howcanweexcite

customerswithsimplemeans?

Howdoweworktogetherasateam?

…with

Howcanweexcite

Business Design is an integrative process model to design new business under conditions of extreme uncertainties.

visualworksheets

7weeksperitera�on

Let’s talk about a startup that didn’t fail…

Germany’slargestdistributorofresiden�almortgages

BUSINESS MODEL Team DateIteration 1 2 3

Target groups

Who are our sales targets and who will be using our offerings?

Resources Partners

Primary

What is our primary customer and user segment that unlocks the most value in our business and is easilyaccessible?

Customers Users

InvestmentsCostsPricing & revenue streamsPatternHow much money do we need to spend before we earn?What are our revenue streams and how much do our customers pay (per unit)?How, when and how often do we charge our customers? What are the most important costs of creating and delivering the offerings?

Brand & messages Offerings

Channels

Relationships

Channels

Processes

Profit formula

What (internal) key resources do we need to create and deliver the offerings?

Who are our (external) key partners to create and deliver the offerings?

What bundle of products and services do we offer to our customers and users?

How do we want our brand to be perceived and what is our story to sell the offerings?

Through which channels do our customers and users want

to be reached?

What kinds of relationships do our customers and users expect?

Through which channels do our partners want to be reached?

What (internal) key processes do we need to create and deliver the offerings?

Delivery R&D

Design your business in your browser | http://www.rapidmodeler.deBusiness Design GAME | Playing seriously with innovation Download | http://blog.orangehills.de/#bml_en

Orange HillsTM GmbH | www.orangehills.de | Follow us on Twitter: @orangehillsgmbh

What job(s) are our customers and users trying to get done?

Job(s) to get done

What do we do better than our competitors to create the value, which is hard to copy?

Unfairadvantage

What value do we create for customers and users to get their job(s) done?

Core value

Incrementalredesign

Disruptiveinnovation

Use the “Hypotheses & Experiments Canvas” to challenge your business model by revealing critical assumptions and simple ways to test them.

Use the ”Target Groups Canvas” to segment customers and users based on behavioural attributes.

Thefirstbusinessmodelofinterhyp.de...

“Interhyp is Germany‘s largest distributor of residential mortgages. As a broker, Interhyp does not act as a lender but instead selects the best mortgages for its customers among offers from over 250 commercial banks, saving banks and insurance companies. We focus on competent, personal and objective consulting by our approximately 316 mortgage consultants. Private customers receive advice from our homepage www.interhyp.de and through 23 regional offices in key German cities.”

Source: Interhyp Annual Report 2011

…reliedondigitalsaleschannelsandacall-centertointeractwithcustomers.

What was their “big bet” on the future in their sales approach?

1.  Discuss this question with your right neighbor

2.  Describe your key hypothesis and how you would test it to manage your uncertainties

H: “They believed…” E: “I would have tested H by…”

1.  Discuss this question with your right neighbor

2.  Describe your key hypothesis and how you would test it to manage your uncertainties

© 2016 Orange HillsTM GmbH. All rights reserved. Design your business in your browser | http://www.rapidmodeler.deBusiness Design GAME | Playing seriously with innovation Download | http://blog.orangehills.de/#hyp_en

HYPOTHESES & EXPERIMENTSAnalogs

What things are new to us but we can learn from others because they have proven that it just works?

What things are new to us, new to the market, and we can’t learn from anyone?

+ Customers+ Users+ Brand & messages+ Channels+ Relationships+ Offerings+ Resources+ Processes+ Partners+ Profit formula+ Business DNA

Look at every single element of your business model to find analogs and antilogs:

Test focus

Uncertainties

Make sure your analogs are reliable sources to learn from

others. In many cases, analogies eventually turn out to be somehow

different to your business when you look under the hood.

What experiments are required to explore antilogs even furtherbefore you turn them into testable hypotheses?

Antilogs Exploration

ValidationExperiments

How can we test the identifiedhypotheses with the least effort?

Hypotheses

Which antilogs are both very important and uncertain?

Lean offeringspost-launch

Experimentpre-launch

“We do...” “We are convinced, if...”incl.+ threshold+ timeframe

“...which will result in...”

What hypotheses grow out of relevant antilogs in our test focus?

“We believe...”

How to test hypotheses?1. Break down a high-level hypothesis into a set of low-level hypotheses.2. Run experiments, if it is sufficient to reflect the status quo or possible to simulate affected parts of the future in a realistic way.3. In any other case, build a MVP first and test the hypotheses afterwards. Never let people predict the future – not even their own behaviour. It‘s a waste of time! ...and keep in mind that most hypotheses can’t be proven “right”. It’s about getting a professional gut feeling.

“...which will result in...”“We believe...”

Team DateIteration 1 2 3

Use the “Action Plan Canvas” to investigate important analogs even further to see what we can learn from others.

Use the “Action Plan Canvas” to define and assign tasks to run your experiments in short cycles.

Use the “Lean Offerings Canvas” and start designing your first products and services to hit the market and excite customers.

Willthebigbanksacceptusasbusinesspartners?

DopeopletrustanITpla�ormformortgagebusiness?

Canwepreventcustomersfromtakingourratesanddefec�ngtootherbanks?

…thatX%ofourvisitorsonlandingpagesubmitanapplica�on

MVPwithleanwebfrontendandclosedALPHAcommunity

…applica�onsinourdatabaseandcustomers

connectedwithbanks

...thatXoutof50closethedealwithinMVPtestrunof2weeks

...thatXbigbanksjointhepla�ormandtransfertheirinterestratesdaily

LOInego�a�onswithbanks(S,M,

...widerangeoffinancialproductsindatabase

Xoutof10bigbanksin

GermanysignanLOIwithinnext4

months

“Interhyp is Germany‘s largest distributor of residential mortgages. As a broker, Interhyp does not act as a lender but instead selects the best mortgages for its customers among offers from over 250 commercial banks, saving banks and insurance companies. We focus on competent, personal and objective consulting by our approximately 316 mortgage consultants. Private customers receive advice from our homepage www.interhyp.de and through 23 regional offices in key German cities.”

Source: Interhyp Annual Report 2011

Interhyp.detodaywith100physicalofficesacrossGermany.

What’s your “big bet” on the future in your real startup today?

Use the next five minutes to reflect on your current business(es) as founder, investor, coach etc.

coretools

LEAN OFFERINGS / MVP Team DateIteration 1 2 3

Functional requirements

Design your business in your browser | http://www.rapidmodeler.deBusiness Design GAME | Playing seriously with innovation Download | http://blog.orangehills.de/#mvp_en

Should haveWhat is the extended set of user stories that increases the value of the product and/or service to the next level?

What is a lean offering / MVP (= Minimum Viable Product)?A minimal set of user stories that fulfills at least the following requirements:

+ Are your hypotheses covered?+ Can you charge your customers?+ Is your DNA embedded?+ Does your mother like it?

To define user stories, look through the lenses of customers and users.

Could haveWhat are optional user stories that can help us better serve our customers and users in the future?

Hypotheses

Keep in mind that each user story should be independent of any other user story.

Competitive benchmark

Non-functional requirements

What user stories has our No. 1 competitor (”DNA fit”) considered in its offering to customers and users?

What non-functional requirements should be embedded in our product and/or service?

...what non-functional requirements do they fulfill?

Ease of implementation

fitMust haveWhat is the minimal set of user storiescustomers and users expect to be implemented, in order to deliver the core value of the product and/or service?

Core value

Unfairadvantage

Job(s) to get done

Use the “Action Plan Canvas” to define and assign tasks to implement your lean offerings in short cycles.

Test focus

Uncertainties

Hypotheses

“We believe...”

Howcanweexcite

...andmanyothertools:+  BusinessEcosystem+  CustomerJourney+  KPIs+  TargetGroups+  Compe��veLandscape+  FinancialSanityCheck+  BusinessModelInspirator+  UIDesign

7weeksperitera�on

+  Agile process design to deal with uncertainties

+  Easy way to manage the “unmanageable”

+  Holistic thinking in business models, not just products

+  Strong emphasis on doing, not planning

+  Systematic learning based on evidence, not gut feeling

+  Prototyping to support learning and team development

+  Lean product design to generate cash quickly

+  Rigid task management with short cycles to get teams into flow

coretools

LEAN OFFERINGS / MVP Team DateIteration 1 2 3

Functional requirements

Design your business in your browser | http://www.rapidmodeler.deBusiness Design GAME | Playing seriously with innovation Download | http://blog.orangehills.de/#mvp_en

Should haveWhat is the extended set of user stories that increases the value of the product and/or service to the next level?

What is a lean offering / MVP (= Minimum Viable Product)?A minimal set of user stories that fulfills at least the following requirements:

+ Are your hypotheses covered?+ Can you charge your customers?+ Is your DNA embedded?+ Does your mother like it?

To define user stories, look through the lenses of customers and users.

Could haveWhat are optional user stories that can help us better serve our customers and users in the future?

Hypotheses

Keep in mind that each user story should be independent of any other user story.

Competitive benchmark

Non-functional requirements

What user stories has our No. 1 competitor (”DNA fit”) considered in its offering to customers and users?

What non-functional requirements should be embedded in our product and/or service?

...what non-functional requirements do they fulfill?

Ease of implementation

fitMust haveWhat is the minimal set of user storiescustomers and users expect to be implemented, in order to deliver the core value of the product and/or service?

Core value

Unfairadvantage

Job(s) to get done

Use the “Action Plan Canvas” to define and assign tasks to implement your lean offerings in short cycles.

Test focus

Uncertainties

Hypotheses

“We believe...”

Howcanweexcite

...andmanyothertools:+  BusinessEcosystem+  CustomerJourney+  KPIs+  TargetGroups+  Compe��veLandscape+  FinancialSanityCheck+  BusinessModelInspirator+  UIDesign

7weeksperitera�on

Downloadforfree:h�p://bit.ly/1TOdoG3

Thankyou.

Dr. Bernhard Doll Orange Hills GmbH Sendlinger Str. 25 80331 München, Germany

E. doll@orangehills.de T. +49-89-4520545-0 F. +49-89-4520545-69

Follow us on Twitter: @orangehillsgmbh

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