business model validation, reload greece boot camp 2016

Business Model ValidationReload Greece Boot Camp 2016

Athens September 6th, 2016

Christos MakiyamaSilicon Planet

1995Photo: Yuri Samoilov

Photo: Yuri SamoilovAsynchronousTransferMode

SONET/SDH

VoiceoverIP

MPEG2

ScalableVideoCodec

MPEG2overATM

H.323

VoiceoverFrames

TDMHDSL

ADSL

VDSL

AAL1

TrafficShapingV5.1

V5.2

VB5.x

Ethernet

IPoverATM

Bluetooth

W-CDMA

EMModeling

InductorSynthesis

SoftwareDefineRadio

SuperResolution

MPEG2

3DImageprocessing

Searchengine

Videocommunication

DataCenterVirtualization

DiesensitizedSolarCells

FuelCells

AutomaticFiberManagement

SpectralImaging

IP-PBXDLNA Indoorpositioning

TDMoverIP

VPN

OC-3/STM-1

OC-12/STM-4

OC-48/STM-16

ISDN

T-1/E-1

Cellswitching

G.723.1

G.729PON

WDM

CWDM

H.264

H.264-SVC

FDDI

TokenRing

L2Switch

CTI

PSTNtoSIP Videostabilization

NoiseReduction

Echocancelling

Powerlinecommunications

Videorecognition

GPU

802.11b/g/n

802.11ac

MIMO

MEMS

OpticalSwitching

LTE

ADAS

NATtraversal

IPSec

VoiceCompression

OSGi

SemiconductorsOptical NetworksBroadband Access NetworksLocal Area NetworksPersonal Area NetworksWireless CommunicationsAudio & Video Communications

Photo: Yuri Samoilov

Websplanet

Transwitch

Telesoft

Tdsoft

Metalink

Routerware

Odetics

TUT Systems

Efficient Networks

Routerware

RADLAN

Audiocodes

Fiberzone Networks

Westbay

PMC-Sierra

JDTC

Cygnet

HypercommJungo

Arel

Bycast

Nicevision

Resolute Networks

Helic

Vidyo

Forth Photonics

Merlynet

Theon Sensors

AntcorInAccess Networks

Atecom

Irida Labs

Yodiwo Wavenet

3DMediaBrite Solar

Axsh

Electro Power Systems

Eblana

Mirtemis

Qubulus

Softether40+Startups

August 9, 1995 Netscape IPO - $2.9Billion

August 24, 1995

vs

vs

vs

vs

vs

vs

Bothbasicallyaddressedthesameneedsbutcreatedvalue inamorescalablewayusingdifferentmethods(aka.BusinessModel)

Photo: Yuri Samoilov

New Business Models

New Platforms

New Systems

New Technologies

Business Model,the protagonist ofDigital Revolution

Photo: Susan Nilsson

What is a Business Model?

12

MeAlex Osterwalder

BusinessModelCanvas

KeyPartnerships KeyActivities ValueProposition

CustomerRelationships

CustomerSegments

KeyResources Channels

RevenueStreamsCostStructure



CustomerSegments



BusinessModelCanvas

Defines the different groups

of people or organizations a company aims to reach and serve



CustomerSegments



BusinessModelCanvas



Describes the bundle of products and services that create value for a specific Customer

Segment



CustomerSegments



BusinessModelCanvas




Segment

Describes the types of

relationships a company establish

with specific Customer Segment.

GET, KEEP, GROW



CustomerSegments



BusinessModelCanvas




SegmentDescribes how a

company communicates with

and reach its Customer Segments to deliver a Value

Proposition




GET, KEEP, GROW



CustomerSegments



BusinessModelCanvas




Segment




GET, KEEP, GROW

Represents the cash a company generates from each customer segment

Describes how a company

communicates with and reach its

Customer Segments to deliver a Value

Proposition

BusinessModelCanvas




Segment


Describes the most important assets

required to make a business model

work



CustomerSegments






GET, KEEP, GROW




Proposition



CustomerSegments



BusinessModelCanvas




Segment




work

Describes the most important things a company must do to make its business

model work




GET, KEEP, GROW




Proposition



CustomerSegments






Segment




work

Describes the network of

suppliers and partners that

make the business model work


model work

BusinessModelCanvas




GET, KEEP, GROW




Proposition



CustomerSegments






Segment




work




Describes all costs incurred to operate a business model

BusinessModelCanvas




GET, KEEP, GROW


model work




Proposition



CustomerSegments



BusinessModelCanvas




Segment



with specific Customer Segment




work




Describes all costs incurred to operate a business model RevenuesExpenses <

Profits


model work




Proposition

Example: Smart Phones

AppleiPhoneJune2007

SamsungGalaxySJune2010

Xiaomimi1August2011

Apple,iPhone

Quality Control

Chips & compone

nts

Manufacturing

Apple Brand

R&D iOS

Branding

BoM R&D



CustomerSegments



Apps Store

IT operation

cost

Samsung,GalaxyS

BoMManufacturing Operation cost



CustomerSegments



Market Promotion

Marketing



CustomerSegments



Xiaomi,mi1

User Forums

SONY

Google

Services & Software

development

BoM R&D Distribution

IT operation

cost

XiaomiBrand

Developnewuser

experiences

OfferfeaturesthatwillhelpMobileOperatorsattractnewcustomersorincreaseARPU

Offerfeaturesandservicesthatwillfulfillcustomer

needs

Business Models make the difference and not the

products

Credit: Procsilas Moscas

What makes Business Models work?

How do we Value things?

Example: Water

Credit:Trocaire,flickr

$04hours/dayBarefoot,notpavedpathDaytimehousework,nightschoolFear

SafewaterSocializetime

Patience,FeelvaluedGetstronger

BusinesswomanStressandtensionFIJIRainforestWater$60/monthAmazon.com

FeelrefreshedBeHealthy

SavesmoneyfromskincareproductsCredit:Papre

Valuecannotbedeterminedonlybyfinancialterms…

Maslow‘shierarchyofneeds

• Weneedaframeworktohelpusdefine,design,analyzeandmeasurethevaluecreatedbyourBusinessModel!

• Whatdocustomersspendandearnintheprocesstofulfilltheirneeds?

“The4CurrenciesValueModel”

Financial

Money

Emotional

Impact to our emotions

Effort

Time

Physiological

Impact to our body

Wemonetize(value)everythinginourlifeinto4“currencies”.Theseareourbasicresourceswespend,earnorstock.

(beta)TheValueBarometer

Physiological EmotionalEffortFinancial

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How to test an idea

BusinessModelValidationProcess

1.FindaProblemFindabigcustomerproblemworthsolvingandwritedownallyourkeyhypothesesaboutthebusinessmodeltosolvethisproblem.

2.TesttheProblemGetoutsidethebuildingandinterviewcustomersface-facetounderstandthe“job”customersaretryingtoaccomplish,theircurrentpain,andhowtheysolvethatpain.Pivotwhenyoudiscoveryouarewrong.

3.TesttheSolutionDevelopaminimumviableproductprototypeandgetoutsidethebuildingface-to-facewithcustomerstotestyourvisionofthesolution.Pivotwhenyouarewrong.Repeatthesetestsuntilyounailthesolution.

4.TesttheGo-to-MarketStrategyGetoutsidethebuildingtounderstandtheend-to-endcustomerbuyingprocess,themarketcommunicationinfrastructure,thedistributioninfrastructure.Identifytheleveragepoints.Pivot.

5.TesttheBusinessModelUsethefactsdiscoveredtovalidatetherevenuemodelforthebusiness.

Step 1: Find the Problem

“Fall in love with the problem, not the solution”Uri Levine, Waze co-founder & President

?



CustomerSegments



1.Findacustomerproblemworthtosolve

?

Get a sense of the opportunity size!

Prospects ✕ Spending

1.Findacustomerproblemworthtosolve- CollectData

• Google,Google,Google• TheWorldBank- www.worldbank.org• OECD- www.oecd-ilibrary.org/statistics• EUROSTAT- ec.europa.eu/eurostat• USOpenGovernmentData- data.gov• WorldEconomicForum- www.weforum.org

TIP: Do not spend too much time collecting data at this stage. Just get a sense of the opportunity size!

Step 2: Test the Problem

“Get out of the building!Get insights,

turn your guesses into facts”

Steve Blank, “The Startup Owner’s Manual”

CustomerDevelopmentInsightCycle– SteveBlank

DesignExperiment

Test

Hypothesis

Insight



CustomerSegments



ValuePropositionCanvas– AlexOsterwalden

CustomerSegment

ValuePropositionCanvas– AlexOsterwalder

CustomerJobs

Gains

Pains

ValueProposition

GainCreators

PainRelievers

Products&Services

Describe the economic, physiological, effort and emotional gains that your customer expects, desires

or would surprised of

Describe how your product and services will create

the economic, physiological, effort and emotional gains

that your customer expects, desires or would

surprised of

Describe how your product and services will reduce, or

eliminate the economic, physiological, effort and emotional costs that your

customer experiences

Describe what your specific customer

segment is trying to accomplish (Jobs to get

done)

List up all the product and services that your Value Proposition is

built aroundDescribe the economic, physiological, effort and

emotional pains(costs) that your customer experiences before or after getting the

Job done

2.Profileyourcustomer- Hypothesis

CustomerSegment

CustomerJobs

Gains

Pains

• Whoisthecustomer?• Whatheneedstoaccomplish?• Whatisthecustomer’sperceptionoftheproblem?(Pains)

• Whatisthecustomer’sneedtosolveit?(Gains)

?

??

?

?

? ?

RankyourCustomer’sPains(Cost)andGains- Hypotheses


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TIP: The accumulate gains are expected to be higher than pains(cost)

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3.Designyourexperiment

2. Get insights by observation

3. Get insights by interviews

1. Collect Data

3.1Designyourexperiment- CollectData

• GoogleTrends• GoogleKeywordPlanner• Government&organizationsstatistics

– WorldBank,OECD,Eurostatetc.• University&Thinktank’sreports

– MITTechnologyReview,HarvardBusinessReview,McKinsey,DeloitteTohmatsu,PwC

• GoogleAnalytics– Trackingyourwebsitetraffic

• SocialMediaAnalytics….andmanymore

3.2Designyourexperiment– GetInsightsbyObservation

• Diveintoyourcustomer’sworldfrom“ValuePropositionDesign”AlexOsterwalder andothers

– B2C:Staywiththefamily– B2C:Staywiththefamily– B2C:Shadowyourcustomerforaday– B2B:Workalongside/consultant

3.3Designyourexperiment– GetInsightsbyInterviews

• Face-to-Faceinterviews– Customers,Industryinsiders….

• Polltools– Pollfish,Facebook,SurveyMonkey…

• Q&Atools– Quora,Facebook,Linkedin…

TIPS: 1.Get facts not opinions! Ask “Who, What, When, Where is….”2. Ask “How…” to understand how he deals/manages the problem3. Ask “Why... ” to understand his real motivations

3.Designyourexperiment

Learning Card

We believed thatstep 1: hypothesis

Insight Name

Person Responsible

Date of Learning

From that we learned thatstep 3: learnings and insights

We observedstep 2: observation

Therefore, we willstep 4: decisions and actions

Data Reliability:

Action Required:

The makers of Business Model Generation and StrategyzerCopyright Strategyzer AG

Test Card

We believe that

Test Name

Assigned to

Deadline

Duration

And measure

To verify that, we will

We are right if

The makers of Business Model Generation and StrategyzerCopyright Business Model Foundry AG

Test Cost: Data Reliability:

Critical:

Time Required:

Step 3: Test the Solution

3.DesignyourSolution– ValueProposition

ValueProposition

GainCreators

PainRelievers

Products&Services

• Whatisyourproduct?• Howyourproductwillreliefyourcustomer’spains?• Howyourproductwillcreategainstoyourcustomer?

CustomerSegment

CustomerJobs

Gains

Pains?

?

??

?

?

? ?Fit?

Rankhowyoursolutionwillimpactcustomer’sPains(Cost)andGains-Hypothesis


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LEARN BUILD

MEASURE

IDEAS

CODEDATA

MinimumViableProduct– TheLeanStartUp,EricRies

Kickstarter

Indiegogo

ToolsMatrixDE

SIGN

TEST

ING

BUSINESS MODEL VALUE PROPOSITION CUSTOMER CREATION

BUSINESS MODEL CANVAS

VALUE PROPOSITION CANVAS

CUSTOMER CREATIONCANVAS

CUSTOMER DEVELOPMENT LEAN START UP CUSTOMER DEVELOPMENT

RecommendedReading

BusinessModelDesign BusinessModelTest&Validation

ValuePropositionDesign,Test&Validation

RecommendedReading

SharingVision&MissionUnderstandingCustomerPatterns

ProductTest&Validation

Questions?

Appendix

Step 4:Test the Go-To-Market strategy



CustomerSegments



Connecting valuepropositionwithcustomers…

Get,Keep,GrowModel

Awareness

Interest

Consideration

Purchase

Up-sale

NextSale

CrossSale

Referral

Viralloop

GETKEEPGROW

Time Flow

CustomerCreationCanvas

PARTNERS

KEY RESOURCES

KEY ACTIVITES

GETKEEPGROWUp-saleNext SaleCross SaleReferral Purchase Consideration Interests Awareness


PARTNERS

KEY RESOURCES

KEY ACTIVITES


STEP1: How will you reach your target

customers and make them aware of your

product and services?

STEP5: How will you sustain the benefits your customer gets

from your product and services?

STEP6: How will you create new benefits for

your customers and purchase additional

products and services from you?



CustomerSegments





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Designedfor: Designedby: Date: Version:

CopyrightofSiliconPlanetCorporation

DRAFT

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The Value Barometer

PARTNERS

KEY RESOURCES

KEY ACTIVITES


Customer Creation Canvas

CopyrightofSiliconPlanetCorporation

Designedfor: Designedby: Date: Version:

DRAFT

Credits• BusinessModelCanvas&ValuePropositionCanvascreatedbyAlexOsterwalder• Get,Grow,KeepModel&CustomerDevelopmentMethodarecreatedbySteve

Blank• Icons:DesignedbyFreepik,Vectorgraphit,100SlimIcons,Becris ,Madebyoliver and

distributedbyFLATICON