lean launchpad nyu itp 2.3.2014
DESCRIPTION
Lean LaunchPad NYU ITP - Value Proposition, with additional design and enthrography tools for how to talk to customers, observe, and get underneath the obvious pain points.TRANSCRIPT
Class 2 / 12
February 3, 2013
Jen van der Meer | jd1159 at nyu dot edu
Josh Knowles | chasing at spaceship dot com
LEAN LAUNCHPAD AT NYU ITP
Rockets Sketches borrowed from Harry Allen Design
6:00 – 6:40:
Customer Development + Value Proposition
Guests: Ajay Revels and Anthony Viviano
6:40 – 7:25 :
3 Teams present (5 minutes present, 10 minutes feedback)
7:25 – 7:35:
break
7:35 – 8:00:
2 Teams present (5/10)
8:00 – 8:55:
Tarikh Korula, Founder, Seen.co
TODAY:
.
WE ARE HERE
1/27Business ModelsCustomer DevelopmentUX Tools Intro
2/3Value PropositionUX Tools, Frameworks
2/10Customer SegmentsResearch Tools
2/17President’s Day
2/24Revenue StreamsDistributionProduct Definition
3/3Customer RelationshipsPartners,Product Development
3/10 Resources, Activities, Costs,Product Development
3/17Spring Break
3/24Customer DevelopmentProduct Development
3/31Customer DevelopmentProduct Development
4/7Customer DevelopmentProduct Development
4/14Customer DevelopmentProduct Development
4/21Product MVP
4/28Lessons Learned
What is your product or service?
How does it differ from an idea?
Why will people want it?
Who is the competition and how does your customer view these competitive offerings?
Where’s the market?
What’s the minimum feature set?
What’s the market type?
What was your inspiration?
What assumptions drove you to this?
What unique insight do you have into the market dynamics or into a technological that makes this a fresh opportunity?
CUSTOMER DEVELOPMENT
Eric Ries: A startup is a human institution designed to deliver a new product or service under conditions of extreme uncertainty.
A startup is a temporary organization designed formed to search for a scalable repeatable business model. – Steve Blank. *Most startups change their business model multiple times.
A scalable startup is a special class of startup – world class team, large vision, large target market, passionate belief and a reality distortion field.
A startup is a company designed to grow fast. –Paul Graham. Y Combinator.
-For a company to grow big, it has to make something a lot of people want.
-Reach and serve all of those people.
WHAT IS A STARTUP?
TYPES OF BUSINESSES STARTED 2012
Consulting 29%
Services: Other17%
Technology: Internet 14%
Real Estate14%
Service: Business Service
13%
Retail Store13%
Source: Kauffman Foundation Legal Zoom Startup Environment Index 2012
Small business or Main street: barber shop, gluten free bakery, grass fed butcher, farm-to-table pizza, deli, grocery, dry cleaner
Lifestyle business: strategy consultancy, PR film, jewelry-making, film production, digital media studios, and advertising agencies
Social enterprise: social or environmental purpose, may be willing to limit scale opportunities to meet more local goals, or directly serve the need. B-corp is a type of social enterprise
Social business (Yunnus): a for profit business that re-invests to meet a social need
Not-for-profit: an organization designed to solve a social/environmental need, that does not retain profits, nor distributes ownership
Intra-preneur startups: building a business inside of an incumbent company to prevent a Kodak moment
Buyable startups: designed for acqui-hire, or value to acquiree
Scalable startups: designed to scale, repeat
What are we doing HERE: experimenting to see what is possible with the teams we have in the room, figuring out the opportunity space, and most importantly your motivation
KINDS OF BUSINESSES
CUSTOMER DEVELOPMENT
Customer Discovery
Customer Creation
Customer Validation
CompanyBuilding
Iteration Execution
Turn hypothesesInto facts
Identify scalable And repeatableSales model
CUSTOMER DEVELOPMENT
Customer Discovery
Customer Creation
Customer Validation
CompanyBuilding
The first part of class: develop a hypothesis about each component of the business model.Customer discover = a set of experiments to test each hypothesis.Our goal: find a market to fit your vision, with a large enough addressable market to fit your aspirations.
Iteration Execution
CUSTOMER VALIDATION
Customer Discovery
Customer Creation
Customer Validation
CompanyBuilding
What happens after customer discovery: The business is tested and iterated to find a scalable, repeatable business model The goal: deliver the volume to build a profitable company Test the ability to scale: Product, acquisition, pricing, channel, sales plan
Iteration Execution
CUSTOMER VALIDATION
Customer Discovery
Customer Creation
Customer Validation
CompanyBuilding
Verify core features Verify market’s existence Locate customers Tests the product’s perceived value
and demand Idenfity the economic buyer Establish pricing and channel
strategies Check out proposed sales cycle
and process
ESCAPE VELOCITY
Iteration Execution
ESCAPE VELOCITY(IT’S NOT JUST FOR THE BAY AREA)
CUSTOMER CREATION
Customer Discovery
Customer Creation
Customer Validation
CompanyBuilding
Step on the gasSpend to create demand
Iteration Execution
COMPANY BUILDING
Customer Discovery
Customer Creation
Customer Validation
CompanyBuilding
Scalable repeatable business model is
found – startup becomes a company
Iteration Execution
VALUE PROPOSITION
16
WHAT IS IT
Product?
Service?
Ecosystem?
All?
WHAT IS YOUR INTENTION?
Your team values
Your vision
Why do you want to do this?
Then find a segment, a market, and a value proposition that fulfills this vision.
VALUE PROPOSITION
Value Proposition Canvas – Osterwalder
VALUE PROPOSITION CANVAS
PAIN DRIVEN DESIGN
“Design is not art. Design should solve a problem for humans. We can find the problems that we’re causing for humans by looking for pain points. Usability testing helps us understand the very obvious pain that we’re causing for users, which is fantastic. But beyond discovering user pain in our products, we should be doing user research on various demographics and understanding what in their lives is causing them pain.”
Laura Klein, UX for Lean Startups
As a customer, it has to hurt enough that you would go out of your way to pay for it.
It has to feel way better than staying the course, stasis, or inertia (which make people sometimes feel warm, and comfortable, and your thing scary, and risky).
WHY PAIN????
THE PAIN IN PAIN-DRIVEN DESIGN
How do you move beyond superficial needs?
How do you know when someone is telling the truth?
How do you get to unspoken, deeper needs?
PAIN DRIVEN DESIGNArtifacts
Behavior
Expressed Needs
VISIBLE: IN AWARENESSIN CONSCIOUSNESS
HIDDEN, INVISIBLE: OUT OF CONSCIOUSNESS
Norms
Beliefs Assumptions
Values
Plans
TraditionsAttitudes
PAIN DRIVEN DESIGN What just happened?EVENTS
WAYS OF EXPLAINING REALITY: SYSTEMS THINKING
PATTERNS What’s been happening?
TRENDS What are the common forces at play?
STRUCTURES How do processes and organization impact?
MENTAL MODELSHow does our thinking allow this to persist
HOW TO CONSTRUCT A VALUE PROPOSITIONLEAN LAUNCHPAD @ NYU ITP
DEVELOP EMPATHETIC MUSCLE MEMORY
PRACTICE THROUGH CUSTOMER DEVELOPMENT
ARTICULTATE PAIN POINTS + NEEDSSTATED, VISIBLE, AND HIDDEN, TACIT
HOW TO CONSTRUCT A VALUE PROPOSITIONLEAN LAUNCHPAD @ NYU ITP
DEVELOP EMPATHETIC MUSCLE MEMORY
PRACTICE THROUGH CUSTOMER DEVELOPMENT
ARTICULTATE PAINPOINTS + NEEDSSTATED, VISIBLE, AND HIDDEN, TACIT
Diverge Converge
DEVELOPING EMPATHY
From: D-School Bootcamp Bootleg:
Observe: View users and their behavior in the context of their lives.
Engage: interact and interview users through scheduled and short “intercept” encounters.
Immerse: Experience what your user experiences.
The problems you are trying to solve are rarely your own – and you won’t find a market until you can understand the needs that other have.
INTERVIEW FOR EMPATHY: STORIES ARE WHERE THE RICHEST INSIGHTS LIE
Intentionally setting the context to get deeper into the truth.
All of you are working on businesses designed to make human life better- start their. Describe your intentions.
Work to get into the emotional reasons when testing your key hypotheses. When does someone light up? When do they resist?
From: D-School Bootcamp Bootleg
A – E – I – O – U FRAMEWORK
AEIOU is an organizational framework when you get into the natural habitat of the person you are interviewing, and gives you a construct to look, listen, and observe (rather than talk, and hear):
Activities: goal directed sets of actions. What are the pathways that people take toward the things they want to accomplish, including specific actions and processes?
Environments: include the entire arena in which activities take place.
Interactions: between a person and someone, or something else, and are the building blocks of activities.
Objects: Building blocks of the environments, key elements put to complex or even unintended uses, possibly changing their function, meaning, and context.
Users: people whose behaviors, preferences, and needs are bing observed. Who is present? What are their roles and relationships? What are their values and biases.
From: Universal Methods of Design. Bella Harrington, Bruce Hanington.
GET OUT OF THE BUILDING, AND
OBSERVE
GO HERE
GO HERE
AND HERE
GO HEREAND HERE
AND HERE
GETTING READY FOR CUSTOMER DISCOVERY
AND, GO OUT AND TALK TO PEOPLE:PREPARING FOR AN INTERVIEW
Customer development IS different than ethnography or design research inquiry –
You are NOT a neutral observer. While you can practice the art of neutral observation, you, as a founder, are making contact with your first potential customers.
We’re going to start wide, and expansive, and go deep, getting to deeply unmet needs.
But we will be quickly moving to understand the business model that will feed your vision.
THE BRAIN DUMP
Convene a brain dump.
Get what’s in everyone’s heads out on the table.
Assumptions, expectations, closely held beliefs, perspectives, hypotheses.
Contradictions are inevitable, and become great fodder for hypotheses to test on your business model canvas.
“Think about it as a transitional ritual of unburdening, like men emptying their pockets of keys, change, and wallet as soon as they return home.”
– Adapted from Steve Portigal, Interviewing Users.
INTRODUCE, BE HONEST, ORIENT, GIVE CONTEXT
Introduce yourself and any associates (note takers, equipment operators, unseen observers)
Obtain consent / agreement to be interviewed, recorded, photographed
Discuss: use a note taker or an audio recorder. Be sure to tell participants about it. (Don’t conceal a recording devices). And know when to go off the record to get the backstory.
1. Why we're here: Introduce the purpose of the conversation
2. Explain freedoms (let’s stop at this time, ask questions, take a break, etc)
3. Explain time constraints (we have only 30 mins, 45 mins, an hour, today)
4. Provide an overview of what will happen (I will walk beside you, I will watch you do XYZ)
5. Explain briefly what you'd like to hear about (Tell me what you're thinking, doing, looking for, etc)
-Ajay Revels, Polite Machines
SHOW ME AROUND: OPEN ENDED TOUR
Who (who are we observing)
What (what are they doing)
How (how are they doing it)
Why (are they doing it)
When (are they doing it)From: Ajay Revels
HOW TO AVOID LEADING QUESTIONS
Agree with me: Leading questions
• Interviewer wants a specific agreement
• Question narrows the focus of the conversation
• Typically Yes / No or Agree/ Disagree or Choice #1 vs Choice #2
• Examples/ leading question:
– The city is doing a great job of managing the subway aren't they?
– Given that you're a stay-at-home-mom, you agree that women shouldn't work?
– This app has a high rating so you'd expect it to work well, correct?
-Ajay Revels, Polite Machines
CUSTOMER DISCOVERY IS NOT JOURNALISM
There is no value in leading questions – you are trying to get underneath the cover story people tell themselves.
(open) Charlie Rose:
You’re doing well at it too. So what’s the mission? Where is this thing going?
(closed / yes-no)
Charlie Rose:
Has the Groupon experience and has other things changed your sense of the timing of an IPO?
(closed / agreement)
Charlie Rose:
But you’re already getting in each other’s businesses. You know that. They have something called Google+.
42
WHAT CAME BEFORE STEVE AND ERIC
FOR NEXT WEEK2/10
.
NEXT WEEK PREP:
• Watch Customer Segments lecture.
• Business Model Generation, 126-145.
• The Founder’s Dilemma (HBR) and optional – The Founder’s Dilemma Noam Wasserman (Stanford Entrepreneurial Thought Leaders Podcast)
• The Lean UX Manifesto by Anthony Viviano
• Talk to at least 5 potential customers. Post discovery narratives on your team blog.
.
NEXT WEEK PRESENTATION:
• Cover slide WITH YOUR NAMES and your quick description.
• What hypotheses related to your value proposition and segments did you test last week. What did you validate. What did you invalidate. Who did you talk to in order to validate these hypotheses.
• Share the Latest version Business Model Canvas with changes marked
• Share any updates to your Market size (TAM, SAM, Target Market)
• Propose experiments to test your customer segments. What constitutes a pass/fail signal for each test?
APPENDIX
Value Proposition Canvas: Business Model Generation
Legal Zoom Kauffman Foundation Startup Environment Index 2012
Interviewing Users: How to Uncover Compelling Insights: Steve Portigal
Universal Methods of Design: Bella Harrington, Bruce Hanington.
DSchool Bootcamp Bootleg
And this just in from Ash Maurya: How to Interview Your Users and Get Useful Feedback
RESOURCES FOR FURTHER UNDERSTANDING
Ask about sequence: “Describe a typical day.”
Ask about quantity: “How many diapers do you change.”
Ask for specific examples: “What is the last movie you downloaded.”
Ask about exceptions: “Tell me when you had to solve that problem without using our software.”
Ask for a complete list: “What are all of the different toddler learning toys have you tried.”
Ask about relationships: “How do you work with vendors?”
Ask about organizational structure: “How do you work with the Board of Education?
A PALETTE OF CUSTOMER DISCOVERY TYPES: GATHER CONTEXT, COLLECT DETAILS:
Adapted from Interviewing Users, by Steve Portigal
Ask for clarification: “When you said everything changed after September, what happened then.”
Ask about code words: “What does that acronym stand for.”
Ask about emotional cues: “Why do you laugh when you mention Seven Eleven.”
Probe delicately: “You mentioned that changes in your organization led to a different decision – can you tell me what that situation was.” Probe without presuming: “Some people have strong opinions about teaching children to read before they enter first grade, while other’s don’t. What is your take.”
PROBE WHAT HAS BEEN UNSAID:
Adapted from Interviewing Users, by Steve Portigal
Compare processes: “How is applying for preschool different than applying for pre-k.”
Compare to others: “Do you learning habits differ from your fellow grad students in your program”
Compare across time: “How have your shopping habits changed from the time you lived with roommate, to living alone, to living with a partner.”
QUESTIONS THAT CREATE CONTRASTS TO UNCOVER FRAMEWORKS AND MENTAL MODELS:
Adapted from Interviewing Users, by Steve Portigal
Jen van der Meer, Adjunct Professor at ITP since 2008 ITP courses + workshops: Bodies and Buildings, Products Tell Their Stories, ITP VC Pitchfest, . Currently: Luminary Labs, Angel Investor, Health Data Challenges, Judge for startup competitions, + SVA PoD
Josh Knowles, ITP ’0715+ years as an independent developer/consultant, working with numerous brands and start-up clients (currently under the aegis of Frescher-Southern, Ltd.)
ITP TEACHING TEAM