VicHealth Physical Activity Innovation Challenge Concept Development Workshop slides

VicHealth physical activity innovation challenge

concept development workshop

welcome

join the conversation on twitter with @VicHealth

@DoingSomeGood #VHinnov

DAVID HOOD @DavidAHood

JULIAN WATERS-LYNCH @jwaterslynch

doing something

workshop program• quick review of previous workshops

• intro to Business Models and Business Model Innovation

• develop Business Model Canvas for your Innovation Challenge concept

• discuss social impact measurement

• design an experiment to test your idea

purposeFor you to leave with:

• a good first go of your Business Model Canvas

final version to be submitted to VicHealth

• ideas and insights in to how you can improve your concept

http://www.businessmodelgeneration.com/book

check in

CHECK IN1. What questions or comments do you have about the

Business Model Canvas (BMC) so far?

CHECK IN1. What questions or comments do you have about the

Business Model Canvas (BMC) so far?

2. Which aspect/s of the Business Model Canvas (BMC) would you like to focus on today?

review

shaping great ideasStart with

why Why are you doing this? What do you believe you can change? What do you believe you can make different/better/easier? What do you believe is possible?

Build your understanding of the context

1 What is the current situation? Who does it impact? What is it’s impact on people, the planet, the economy? What are the possible causes? Observe. Listen. Learn. Enquire.

Identify your target audience

Who are you designing your service or product for? Be specific. Who believe’s what you believe? It’s not everybody.

Get to know your target audience

3 Seek to understand their needs and aspirations, what motivates them and their challenges. Develop user personas and user journeys to provide valuable insights.

Identify the problem you are solving

How does your idea help your target audience to get what they need or what they value? How does it help them to overcome challenges and barriers?

Prototype and test ideas

Gain insights into customers’ needs by designing and deploying the smallest amount of functionality possible (AKA your minimum viable product/service). Evolve the solution based on insights provided by engaged early adopters.

what are VicHealth looking for?Ideas that address the following criteria:

1. Get more people physically active

2. Point of difference: be clever, timely and unique.

3. Equity: reach the hard to reach and move the hard to move.

4. Scalability: able to be expanded, upscaled or transferred

5. Sustainability: will be able to stand on its own two feet.

6. Partners: recruited a project team that brings a unique perspective

7. Sharable: documented your project so we can share it online

8. Ready to roll!: must be able to test within 12 months

intro to HCD

THE FUTURE OF AUSTRALIAN SPORT SIX MEGATRENDS SHAPING THE SPORTS SECTOR

segments of non-club members with high potential for acquisition

Adults

1. Sidelined Sportsters

2. Club Wary

3. Ponderers

Children

1. Thrifty Enthusiasts

2. Ponderers

"Lean Startup" is a system for developing a business, product or service in the most efficient way possible to reduce the risk of failure. It is an approach that treats all ideas as having assumptions (or hypotheses) that must be validated by rapid experimentation in the marketplace. The approach relies on scientific experimentation, iterative product releases, and customers feedback to generate validated learning.

The key is to identify assumptions - would people actually buy or do this? Not by building the whole product, but by building a Minimum Viable Product (MVP).

The MVP is the most basic version of your product that is valuable to your user, that will enable you to test and learn.

Get more people physically active

Point of difference

Equity

Scalability

Sustainability

Partners

Sharable

Ready to roll

How would you score yourself so far?

VicHealth is committed to getting people

more active. The more physical activity you

do, the better your health! So, the more

people you can get being active, the more

impressed we’ll be. Need we say more?

We’re offering start-up funding

to kick-start smart ideas. Your

project should be clever,

timely and unique. Use your

imagination and think big!

We will be impressed by

proposals that cater for

everyone, including those that

are less likely to participate.

Will your project be fair,

accessible and inclusive?

We want to invest in ideas

that have the potential to

go from good to great. Will

it be expanded, upscaled

or transferred over time?

VicHealth can give you a kick

start, but your project will

need to stand on its own two

feet in time. Make sure you

think about the long term

business model from the start.

VicHealth plays a team game.

Who have you recruited to your

project team that brings a

unique perspective, are they

social entrepreneurs? Are they

corporate hot shots? Are they

changemakers?

We want to get as many

people talking about your

project as possible - so

whatever you do needs to be

documented in some way that

we can share online (photos

and video are our favourites)!

You must be able to

test your project

within 12 months of

receiving start-up

funding

Having a great idea doesn't guarantee success. A great business idea must also have a great business model to support and sustain it.

Alex Osterwalder

intro to business models

What is a business model?

8.40 5 mins

Who has used BMC before this workshop?

What are the advantages of BMC over traditional BP?

What was easy about it?

What was hard?

Remaining questions?

What is most useful to explore today?

Def_Business Model

A business model describes the rationale of how an organisation creates, delivers, and captures value.

Source: Business Model Generation

Which part needs more detail?

Unclear Clear

business model innovation

Innovators 2.5%

Early Adopters

Early Majority

Late Majority

Laggards 16%

A shared language for describing, visualizing, assessing, and changing business models

The Business Model Canvas

bmgen_final.indd 12 6/15/10 5:31 PM

The Business Model Canvas is a tool for you to design, analyse, test and describe your business model and how your organisation intends to create, deliver, and capture value in a profitable way.

Why use Business Model Canvas?

Fundamentally, it delivers three things:

1. Focus: Stripping away the 40+ pages of ‘stuff’ in a traditional business plan, it can help to clarify and focus on what’s driving the business (and what’s non-core and getting in the way).

2. Flexibility: It’s a lot easier to tweak the model and try things (from a planning perspective) with something that’s sitting on a single page.

3. Transparency: Your team will have a much easier time understanding your business model and be much more likely to buy in to your vision when it’s laid out on a single page.

DISTRIBUTION CHANNELS

CUSTOMER RELATIONSHIPS

CUSTOMER SEGMENTS

REVENUE STREAMS COST STRUCTURE

KEY ACTIVITIES

PARTNER NETWORK

KEY RESOURCES

ʻs business model

poor entrepreneurs!

branches!

personal!

micro-loans!

capital!

branches!brand/trust!

lending & collecting payments!

risk management!

government!

people!

capital costs!

interest rates!

getting started

Customer SegmentsAn organization serves one or several Customer Segments.

Value PropositionsIt seeks to solve customer problems and satisfy customer needs with value propositions.

ChannelsValue propositionsare delivered to customers through communication, distribution, and sales Channels.

Customer RelationshipsCustomer relationships are established and maintained with each Customer Segment.

[ The 9 Building Blocks

CS VP CH CR1 2 3 4

Revenue StreamsRevenue streams result from value propositions successfully oΩered to customers.

Key ResourcesKey resources are the assets required to oΩer and deliver the previously described elements . . .

Key Activities. . . by performing a num-ber of Key Activities.

Key PartnershipsSome activities are outsourced and some resources are acquired outside the enterprise.

Cost StructureThe business model elements result in the cost structure.

R$ KR KA KP C$5 6 7 8 9

guessguess

guessguess guess

• use multi-coloured post-its

• can use editable version of PDF

9 business model canvas building blocks

1. description of each block - role/function

2. key question and supporting questions to be asked

3. examples of types of responses

4. things to think about

5. case study

6. work on your own Business Model Canvas

7. questions for Jules and David

1. customer segments

The Customer Segments Building Block defines the different groups of people or organizations an enterprise aims to reach and serve.

Customer Segments

There are different types of market segments:

1. Mass market

2. Niche market

3. Segmented

4. Diversified

5. Multi-sided platforms (or multi-sided markets)

Key Questions1. For whom are we creating value?

2. Who are our most important customers?

segments of non-club members with high potential for acquisition

Adults

1. Sidelined Sportsters

2. Club Wary

3. Ponderers

Children

1. Thrifty Enthusiasts

2. Ponderers

sidelined sportsters

club wary

ponderers

thrifty enthusiasts

ponderers

Customer groups represent separate segments if:

• Their needs require and justify a distinct offer • They are reached through different Distribution Channels • They require different types of relationships • They have substantially different profitabilities • They are willing to pay for different aspects of the offer

activity1. Which market segment are you targeting?

2. Is there a particular niche within that market segment that you are targeting? What is it?

next…• develop 2-3 personas for each of your customer segments

• identify what they value & identify what problems they have

• identify the barriers they face to getting active

• map out a day in the life for each customer segment

• what is their usual routine?

• what are their habits?

• which trend/s are you tapping in to with your concept?

2. VALUE PROPOSITIONS

The Value Propositions Building Block describes the bundle of products and services that create value for a specific Customer Segment.

Value Propositions

Elements from the following non-exhaustive list of quantitative or qualitative values can contribute to customer value creation:

1. Newness

2. Performance

3. Customization

4. “Getting the job done”

5. Design

6. Brand/status

7. Price

8. Cost reduction

9. Risk reduction

10. Accessibility

11. Convenience/Usability

Key Questions

1. What value do we deliver to the customer?

2. Which one of our customer’s problems are we helping to solve?

3. Which customer needs are we satisfying?

4. What bundles of products and services are we offering to each Customer Segment?

Simple Fix for Blown Head Gaskets !

Repairs Blown Head Gaskets in Just One Hour

Tips• Make it as plain as day

• Use your customer’s language. How would they describe the benefits themselves?

• Strengthen your case

• Customer testimonials

• Assurance

• Social proof

3. channels

The Channels Building Block describes how a company communicates with and reaches its Customer Segments to deliver a Value Proposition.

Channels

Channels serve several functions, including:

• Raising awareness among customers about a company’s products and services

• Helping customers evaluate a company’s Value Proposition

• Allowing customers to purchase specific products and services

• Delivering a Value Proposition to customers

• Providing post-purchase customer support

Channel Types & Phases

Key Questions1. Through which Channels do our Customer Segments want

to be reached?

2. How are we reaching them now?

3. How are our Channels integrated?

4. Which ones work best?

5. Which ones are most cost-efficient?

6. How are we integrating them with customer routines?

ActivityCreate a user journey map for each of your personas:

• What touch points do they have with you?

• Where are you best able to give them maximum value on (i.e. a great experience)?

• Which ones might be costing you a good deal but not providing much value for customers?

• Which ones could you potentially create a lot more value through without much effort or resources?

Tourism Australia

4. customer relationships

The Customer Relationships Building Block describes the types of relationships a company establishes with specific Customer Segments.

Customer Relationships

Relationships can range from personal to automated. Customer relationships may be driven by the following motivations:

1. Customer acquisition

2. Customer retention

3. Boosting sales (upselling)

Key Questions1. What type of relationship does each of our Customer

Segments expect us to establish and maintain with them

2. Which ones have we established?

3. How costly are they?

4. How are they integrated with the rest of our business model?

We can distinguish between several categories of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment: 1. Personal Assistance

We can distinguish between several categories of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment: 1. Personal Assistance 2. Dedicated Personal Assistance

We can distinguish between several categories of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment: 1. Personal Assistance 2. Dedicated Personal Assistance 3. Self-service

We can distinguish between several categories of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment: 1. Personal Assistance 2. Dedicated Personal Assistance 3. Self-service 4. Automated services

We can distinguish between several categories of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment: 1. Personal Assistance 2. Dedicated Personal Assistance 3. Self-service 4. Automated services 5. Communities

We can distinguish between several categories of Customer Relationships, which may co-exist in a company’s relationship with a particular Customer Segment: 1. Personal Assistance 2. Dedicated Personal Assistance 3. Self-service 4. Automated services 5. Communities 6. Cocreation

customer development principles1. There Are No Facts Inside Your

Building, So Get Outside

2. Failure is an Integral Part of the Search for the Business Model

3. Iterations and Pivots are Driven by Insight

4. Validate Your Hypotheses with Experiments

5. Success Begins with Buy-In from Investors and Co-Founders

6. No Business Plan Survives First Contact with Customers

7. Not All Startups Are Alike

8. If it’s not About Passion, You’re Dead the Day You Opened your Doors

9. Preserve Cash While Searching. After It’s Found, Spend

10.Communicate and Share Learning

5. revenue streams

The Revenue Streams Building Block represents the cash a company generates from each Customer Segment (costs must be subtracted from revenues to create earnings).

Revenue Streams

A business model can involve two different types of Revenue Streams:

1. Transaction revenues resulting from one-time customer payments

2. Recurring revenues resulting from ongoing payments to either deliver a Value Proposition to customers or provide post-purchase customer support

Key Questions• For what value are customers willing to pay?

• How much are they willing to pay?

• How do they want to pay?

• How will you price your product or services? Will it be a one off purchase? Will their be tiered pricing structure? Will it be fixed, variable or subscription?

• What are other sources of revenue? How much do they contribute to overall revenue?

Revenue Streams

There are several ways to generate revenue: 1. Asset Sale

Revenue Streams

There are several ways to generate revenue: 1. Asset Sale 2. Usage Fee

Revenue Streams

There are several ways to generate revenue: 1. Asset Sale 2. Usage Fee 3. Subscription Fees

Revenue Streams

There are several ways to generate revenue: 1. Asset Sale 2. Usage Fee 3. Subscription Fees 4. Lending/Leasing/Renting

Revenue Streams

There are several ways to generate revenue: 1. Asset Sale 2. Usage Fee 3. Subscription Fees 4. Lending/Leasing/Renting 5. Licensing

Revenue Streams

There are several ways to generate revenue: 1. Asset Sale 2. Usage Fee 3. Subscription Fees 4. Lending/Leasing/Renting 5. Licensing 6. Brokerage fees

Revenue Streams

There are several ways to generate revenue: 1. Asset Sale 2. Usage Fee 3. Subscription Fees 4. Lending/Leasing/Renting 5. Licensing 6. Brokerage fees 7. Advertising

Revenue Streams

8. Freemium

Revenue Streams

8. Freemium 9. Crowdfunding

Fixed Menu PricingPredefined prices are based on static variables

Dynamic PricingPrices change based on market conditions

List price Fixed prices for individual products, services,

or other Value Propositions

Negotiation

(bargaining)

Price negotiated between two or more partners

depending on negotiation power and/or negotiation skills

Product feature

dependent

Price depends on the number or quality of

Value Proposition features

Yield management Price depends on inventory and time of purchase

(normally used for perishable resources such as hotel

rooms or airline seats)

Customer segment

dependent

Price depends on the type and characteristic

of a Customer Segment

Real-time-market Price is established dynamically based on supply

and demand

Volume dependent Price as a function of the quantity purchased Auctions Price determined by outcome of competitive bidding

Pricing Mechanisms

Case Study 1: Skype

Payment Providers

Distribution Partners

Telco Partners

Software Development

Software Developers

Software

Free Internet & Video Calling

Cheap Calls to Phones (SkypeOut)

Mass Customized

Skype.com

Headset Partnerships

Web Users Globally

People Who Want to Call Phones

Software Development

Complaint Management Free

SkypeOut Pre-Paid or Subscription

Hardware Sales

6. key resources

The Key Resources Building Block describes the most important assets required to make a business model work.

Key Resources

Key Resources can be categorised as follows:

1. Physical

Key Resources

1. Physical

2. Intellectual

Key Resources

1. Physical

2. Intellectual

3. Human

Key Resources

1. Physical

2. Intellectual

3. Human

4. Financial

Key Questions• What physical, intellectual, human and financial resources

will you need to deliver your:

•Value proposition?

•Distribution channels?

•Customer relationships?

•Revenue streams?

7. key activities

The Key Activities Building Block describes the most important things a company must do to make its business model work.

Key Activities

Key Activities can be categorised as follows:

1. Production

Key Activities

1. Production

2. Problem solving

Key Activities

1. Production

2. Problem solving

3. Platform/network

Key Questions• What key activities are require to deliver your:

•value propositions?

•distribution channels?

•customer relationships?

•revenue streams?

8. key partnerships

The Key Partnerships Building Block describes the network of suppliers and partners that make the business model work.

Key Partnerships

We can distinguish between four different types of partnerships:

1. Strategic alliances between non-competitors

Key Partnerships

2. Coopetition: strategic partnerships between competitors

Key Partnerships

3. Joint ventures to develop new business

Key Partnerships

3. Joint ventures to develop new business

4. Buyer-supplier relationships to assure reliable supplies

Key Partnerships

It can be useful to distinguish between three motivations for creating partnerships:

1. Optimisation and economy of scale

Key Partnerships

2. Reduction of risk and uncertainty

Key Partnerships

2. Reduction of risk and uncertainty

3. Acquisition of particular resources and activities

Key Questions• Who are your key partners?

• Who are your key suppliers?

• Who can help you fill any resource gaps or help you provide greater value to customers?

• Who can provide distribution or marketing channels to help you reach your target audience?

• What key activities might they deliver?

9. cost structure

The Cost Structure describes all costs incurred to operate a business model.

Cost Structures

Naturally enough, costs should be minimized in every business model. But low Cost Structures are more important to some business models than to others. Therefore it can be useful to distinguish between two broad classes of business model Cost Structures: cost-driven and value-driven (many business models fall in between these two extremes): 1. Cost driven

Cost Structures

Naturally enough, costs should be minimized in every business model. But low Cost Structures are more important to some business models than to others. Therefore it can be useful to distinguish between two broad classes of business model Cost Structures: cost-driven and value-driven (many business models fall in between these two extremes): 1. Cost driven

2. Value driven

Cost Structures

Cost structures can have the following characteristics: 1. Fixed costs

Cost Structures

2. Variable costs

Cost Structures

2. Variable costs

3. Economies of scale

Cost Structures

2. Variable costs

3. Economies of scale

4. Economies of scope

Key Questions• How much will it cost to initially develop the value

proposition?

• What are the most important costs?

• What’s the cost of your MVP?

• What key resources and activities are most expensive?

social impact measurement

What does success look like?

What can you learn?

PAY(FOR(FAILURE(OR(INVEST(IN(SUCCESS?(#ImpactAU2014$

CONNECTICUT(STATE(RESULTS(

Raised$the$Age$from$16$to$18$

Status$offenders$removed$from$deten)on$

Con)nuum$of$therapeu)c$and$evidence^based$services$at$the$community$level$

Progress$toward$reducing$dispropor)onality$

POLICY DATA

Over$80%$of$youth$comple)ng$supervision$without$re^arrest$

The$number$of$juveniles$referred$to$the$court$is$down$30%$$

Investment$in$family^based$services$for$court^involved$youth$from$$300,000$to$$39,000,000$

Recidivism$at$12$months$is$below$50%$

Between(2000(and(2010(( Between(2000(and(2010((

#ImpactAU2014$

NEW(YORK(POLICY(RESULTS(Between(2010(and(2012

New$&$Stronger$Rela)onships$Across$the$System$

Deeper$Knowledge$of$Programs$&$Services$

Significant$Policy$Changes:$The$Close$to$Home$&$Raise$The$Age$

Commitment$to$Data^Driven$Decision$Making$

Engagement$of$Local$Communi)es$

Empowerment$of$New$Stakeholders$

Exponen)al$Level$of$Original$Investment$

#ImpactAU2014$

NEW(YORK(QUANTIFIABLE(RESULTS(Between(2010(and(2012

Juvenile$arrests$dropped$by$24%$

Juveniles$admiSed$to$deten)on$declined$by$23%$

Juvenile$proba)on$intake$cases$declined$by$20%$

Juvenile$pe))ons$filed$declined$by$21%$

Juvenile$admissions$in$state$placement$were$down$28%$

Number$of$youth$in$state$custody$declined$by$45%$$

#ImpactAU2014$

minimum viable product

Barn Suppers. Image courtesy of Philip Dunda

testing assumptions

“Don’t test your ideas. Test the assumptions that have to be true to make your ideas work.”

Teresa Torres

Lean Startup Experiments

Assumption Testing!Experiment Design!

Hypothesis Participants

Approach & Activities

Expected Data & Actual Data

Learning Goals & Outcomes Decision

BMC Iteration

criteria1. Are there customers who will buy what you sell? What

evidence do you have?

2. Who are your competitors? Not just for similar products but for funds, time, attention?

3. Why would customers use your product or service instead of the competition? How different are you from the competition?

4. How will you respond to new competition?

criteria

5. Is this financially viable/sustainable?

6. Is this replicable and/or scalable? How will you increase your reach or impact?

the pitch

what makes a great pitch?1. Start with why.

1. What’s the problem you’re solving.?

2. Why is it important?

3. What’s the impact? Use memorable facts, figures, anecdotes and metaphors.

2. What’s your solution?

3. Who’s your audience?

4. What do they value?

5. How is your idea different from others out there?

what makes a great pitch?6. Who are you partnering with?

7. What are you building on that already exists?

8. Where are you in the stage of implementing your idea?

9. What do you need to take the next step?

10. How can we help you get there? What would you like us to do?

11. Share your passion.

12. Finish with your tagline.

rocket launch

thank you

join the conversation on twitter with @VicHealth

@DoingSomeGood #VHinnov

DAVID HOOD @DavidAHood

JULIAN WATERS-LYNCH @jwaterslynch

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