customer development - what strategic planning can learn from startups

Customer Development-What Strategic Planningcan learn from StartupsAPGDBerlin, 29th of February 2013

Hello!

Education

Y&R ZurichStrategic Planning

Professional Experience

DDB /Tribal DDB BudapestStrategic Planning

Professional Experience

LHBS LightHouse Business Sociology

Knowledge & Ideation

Professional Experience

2 Main drivers that influence our work and business today

1. Complexity

People, Business and Brands behave different in a connected world

http://www.wired.com/wiredscience/2008/04/the-complexity/

2. Acceleration

Increasing speed of life and business demands a new way of working

http://doktorsblog.de/2010/01/24/innovation-timeline-1900-2050/

Management decision cycles are sometimes longer than technology

cycles. This creates even more pressure for agencies.

Disciplines and tasks merge

Strategy

Branding

Development

Research

Innovation

Sales

...

“Uncertainty is the biggest business barrier at the moment.”

Sir Martin Sorrell

http://img.new.livestream.com/events/00000000001b52f4/fdedfe80-ff9c-4149-979a-0be78a42e6f2_5307.jpg

Agencies & Strategic Planning

The way we work needs to adapt to the outside world.

“It is not the strongest of the species that survives, nor the most

intelligent, but the one most responsive to change.” Charles Darwin

http://www.glsc.org/darwin/images/8_Darwin.jpg

Adaptation

Context Company

In a complex and speed driven world there is a strong need for strategy. But the way strategy is done needs to change.

Strategy“When crafting a strategy, all companies need to make bets about what customers will want in the future, what competitors will do in the future, what the company itself is capable of accomplishing in the future, what will happen in the economy generally. None of these bets can be guaranteed.

Strategy means making the best possible choices you can make today and then being responsive when the bets do or do not come in as hoped.”

Roger Martinhttp://blogs.hbr.org/cs/2013/01/placing_strategic_bets_in_the.html?utm_campaign=Socialflow&utm_source=Socialflow&utm_medium=Tweet

Strategy

So rather than seeing strategy as a way to get rid of uncertainty, think about strategy as a way of dealing productively with life's inevitable

uncertainty, by continuously making and updating your bets about the future.

Who knows about continuously making and updating bets about the future?

Steve Blank

“Selecting a Business Model usually requires making a number of assumptions. In many cases, it is impossible to verify these assumptions before implementing the Business Model in real time or at least in a pilot study. You should test a Business Model whenever possible, and must always be prepared to revise it or explore alternatives.”

http://www.newmedianow.co.uk/wp-content/uploads/2012/05/steve_blank.jpg

The differencesCompaniesExecutingKnown environmentWaterfall developmentAction based on planBusiness planOperational excellenceDefined knowledge

StartupsSearchingenvironment of uncertaintyagile developmentAction based on behaviorBusiness modelCreativity and insightHypothesis

Traditional way of working

The definition of insanity is doing the same thing over and over and

expecting different results.

http://3.bp.blogspot.com/-IYq1IOKlQ2U/UNGpkdc3N8I/AAAAAAAAIW4/BnqwT1lJaDE/s1600/grayscale-albert-einstein-monochrome-scientists-black-background-portraits-HD-Wallpapers.jpg

Start up way of working

Hypotheses, Experiments

Data, Feedback, Insights

CustomerDevelopment

CustomerDiscovery

CustomerValidation

Pivot

Search

CustomerCreation

BusinessBuilding

Execute

Customer Development Manifesto

1. There are no facts inside your building, so get outside.2. Pair Customer Development with Agile Development3. Failure is an integral part of the search4. Make continuos iterations and pivots5. No business plan survives first contact with customers, so use a business model canvas6. Design experiments and test to validate your hypotheses7. Agree on market type, it changes everything8. Startup metrics differ from those in existing companies9. Fast Decision-Making, Cycle time, speed and tempo10. Communicate and share learnings

There are no facts inside your building,

so get the heck outside.

Insight Cycle

Hypothesis

DesignExperiment

Test

Insight

What consumers

want

Subconscious

Not desired but drives value

Conscious

Desired and drives value

Invisible

Not desired and does not drive value

Deception

Desired and does not drive value

Driv

es v

alue

Not

driv

e va

lue

Not desired Desired

The way LHBS works

Context

ResearchConsumer

Observation

Pivot

ConsumerInterviews

Pivot

ContextResearch

Understand the consumer environment:

Social / CulturalTechnologicalEconomicalPoliticalLegal

ConsumerObservation

Understand the consumer in it’s micro usage situation and context:

Observations of consumers in their natural environment:

where and how they search, buy and consume the product or service.

ConsumerInterviews

Understand the motivations, pains and gains behind their behavior.

Test Hypothesis based on previous learnings and fine tune the results.

Contact:Stefan Erschwendner

Managing Partner / LHBS Consulting GmbH0049 176 8455 2756se@lhbs.comwww.lhbs.com @eranium