How Scalable Lean Startups Can Use the ROD Map to Inspire Today's Investors ... While Getting Needed Funds and Higher Valuations

How Scalable Lean Startups Can Use The Red Ocean Disrup;on (ROD) Map

To Inspire Today’s Investors While Ge(ng Needed Funds and Higher Valua4ons

Dr. Rod King

Worksheet of

The Red Ocean Disrup4on (ROD) Map

#4ROD. Dr. Rod King. [email protected] & hMp://businessmodels.ning.com & hMp://twiMer.com/RodKuhnKing

Red Ocean Disrup;on (ROD) Map Date: ………………………..….

q Vision Experiment q Problem-‐Solu;on Experiment q Product-‐Market Experiment q Op;miza;on & Scaling q Renewal

Project Vision (Cause/Final Result/Outcome): ……………………….…………..………………………………………………………..…………………..…..…… Customer (Segment/Base/“Tribe”/Benefactor): …..…………………………………………….….……….………..……………………………..…………..…… Goal/Strategy/Job-‐To-‐Get-‐Done: …………………...…………..…………………………………………………………..……………..….…………………………….…… Conven4onal Tool (Product/Service/Business Model): ………………………………..…….……………………………………………………………………..


D: Define Problem (Needs)

B: Build Solu4on (Pilot)

M: Measure Problem (Effect)

A: Analyze Problem

I: Improve Solu4on

L: Learn What’s Valued

Date: ………………………..….



Red Ocean Disrup;on (ROD) Map





A: Analyze Problem

I: Improve Solu4on


Customer Story Business Story Learning Story

Date: ………………………..….








A: Analyze Problem

I: Improve Solu4on


Customer Story (ROD Problem)

Business Story (ROD Solu:on)

Learning Story


Date: ………………………..….

Experim

ent/

Cycle 1

Experim

ent/

Cycle 2

Experim

ent/

Cycle …







A: Analyze Problem

I: Improve Solu4on


Date: ………………………..….

Business Model Analysis

Business Model Disrup4on Strategy

Red Ocean Business Model (Product/Service)

Minimum Viable Business Model (Product/Service)

Blue Ocean Business Model (Product/Service)

Business Model (“PEAR”) Metrics








A: Analyze Problem

I: Improve Solu4on


Date: ………………………..….








P.I.E.S. Features

Note: P.I.E.S. is an acronym for Physical; Intellectual; Emo:onal; Spiritual

Disrup;ve ……………………………… (Prototype/Demo)







A: Analyze Problem

I: Improve Solu4on


Date: ………………………..….



P: Process (Trade-‐off) E: Engagement A: Acquisi4on A: Ac4va4on R: Reten4on R: Referral R: Revenue






P.I.E.S. Features









A: Analyze Problem

I: Improve Solu4on


Date: ………………………..….








Lifecycle Experiments q  Vision (Leap of

Faith) Experiment

q  Problem-‐Solu4on Experiment

q  Product-‐Market Experiment

q  Op4miza4on & Scaling Experiment

q  Renewal/ Disrup4on Experiment


P.I.E.S. Features









A: Analyze Problem

I: Improve Solu4on


Date: ………………………..….



E: Eliminate

R: Reduce

I: Increase

C: Create







Faith) Experiment






P.I.E.S. Features









A: Analyze Problem

I: Improve Solu4on


Date: ………………………..….



E: Eliminate

R: Reduce

I: Increase

C: Create






q  PRODUCT/ VALUE PROPOSITION

q  CHANNELS/CUSTOMER RELATIONSHIPS

q  PROFITABILITY

q  COST (PAIN)

q  REVENUE (DELIGHT)

q  UNFAIR ADVANTAGE


Faith) Experiment






P.I.E.S. Features





Red Ocean Disrup;on (ROD) Maps of

The World’s Most Successful Scalable Lean Startups

“Reinvent (Disrupt) The Customer Experience

In The Tradi;onal X-‐Industry”


RED OCEAN DISRUPTION (ROD) VISION The North Star of the World’s Most Innova:ve Companies


A Scalable Lean Startup Story About the Evolu;on of Man (Homo Sapiens) How Nature Uses the Lean Startup Method in a Fractal Lifecycle of 5 Experiments

Problem-‐Solu;on Experiment

Chasm

Vision Experiment (“Big Bang” Disrup:on)

Product-‐Market Experiment

Op;miza;on & Scaling Experiment

Renewal Experiment

?

Fractal Lifecycle Plan for Scalable Lean Startups

Lean Startup’s Journey &

Milestones


Red Ocean Disrup;on (ROD) Map of Apple (iPhone): 2007




A: Analyze Problem

I: Improve Solu4on




Not So“Smart”

Small Screen

Complex: Hard to Use

Fixed Key-‐board; Stylus

Touchscreen Mobile Phone/ Digital Music

Player/ Internet Navigator

“Insanely Great Customer Experience”

E: Eliminate Fixed plas:c

keyboard/buZons; Pen stylus; Manual

R: Reduce Size/Thickness;

Weight; Complexity; Learning/:me

I: Increase Price; Screen Size; Performance; Syncing; Design

C: Create Touchscreen;

Packaging; Visual Voicemail; Apps; Ads

Smartphones P: Process (Trade-‐off) E: Engagement A: Acquisi4on A: Ac4va4on R: Reten4on R: Referral R: Revenue

iPhone


Project Vision (Cause/Final Result/Outcome): Reinvent (Disrupt) the Customer Experience in the Phone Industry Customer (Segment/Base/“Tribe”/Benefactor): Luxury-‐Spot “Game-‐changers” Goal/Strategy/Job-‐To-‐Get-‐Done: Seamless Mul:-‐media Communica:on: Differently Phone, Listen to Music, and Browse Internet Conven4onal Tool (Product/Service/Business Model): Cell phones; Smartphones: Moto Q; Blackberry; Palm Treo; Nokia E62; Digital Music Player; Desktop/Laptop Computer




Disrup;ve Smartphone

(Prototype/Demo)


Faith) Experiment






P.I.E.S. Features q “Supersmart”

Phone q Dead Simple to

Use q Cool, Sexy Design q Ultra-‐slim q No Keyboard or

Stylus



Red Ocean Disrup;on (ROD) Map of Apple (iPod): 2001




A: Analyze Problem

I: Improve Solu4on




Limited Song Storage

Limited BaMery Life

“Ugly” Design; Bulky

Skipped Songs

Ultra-‐Portable Digital Music

Player: “A Thousand Songs in Your

Pocket”

“Insanely Great Customer Experience”

E: Eliminate Control BuZons; Gray/Black Color; On-‐off Switch

R: Reduce Size/ Weight; Thickness;

Complexity

I: Increase Price; Song Storage; BaZery Life

C: Create LCD Screen; Wheel; Fast Download

Music Players P: Process (Trade-‐off) E: Engagement A: Acquisi4on A: Ac4va4on R: Reten4on R: Referral R: Revenue

Classic iPod


Project Vision (Cause/Final Result/Outcome): Reinvent (Disrupt) the Customer Experience in the Music Player Industry Customer (Segment/Base/“Tribe”/Benefactor): Luxury-‐Spot “Game-‐changers” Goal/Strategy/Job-‐To-‐Get-‐Done: Seamless Music Experience (Everywhere): Differently Listen to Music Conven4onal Tool (Product/Service/Business Model): Portable Music Players – CD-‐Player; Flash Player; MP3-‐CD Player; Hard-‐Disk Jukebox




Disrup;ve Music Player

(Prototype/Demo)


Faith) Experiment






P.I.E.S. Features q “Unlimited” Song

Storage q Cool, Sexy Design q Long Bagery Life q No Skipped

Songs



Red Ocean Disrup;on (ROD) Map of Cirque du Soleil: 1984




A: Analyze Problem

I: Improve Solu4on







Animal Cruelty

High Price of Aisle Seats

Divided AMen;on in 3-‐Ring Venue

Expensive Star Performers

Avant Garde Circus

Unique

Circus-‐Theater Entertainment

E: Eliminate Star Performers; Animal Shows;

Aisle Concessions; Mul:ple Show Arenas

R: Reduce Fun and Humor; Thrill and Danger

I: Increase Unique Venue

C: Create Theme; Refined Environment;

Mul:-‐Produc:ons; Music and Dance

Tradi;onal Circus P: Process (Trade-‐off) E: Engagement A: Acquisi4on A: Ac4va4on R: Reten4on R: Referral R: Revenue

Cirque du Soleil


Disrup;ve Street Performance

Act (Road Show/Demo)

Project Vision (Cause/Final Result/Outcome): Reinvent (Disrupt) the Customer Experience in the Tradi:onal Circus Industry Customer (Segment/Base/“Tribe”/Benefactor): Sweet-‐Spot “Game-‐changers” Goal/Strategy/Job-‐To-‐Get-‐Done: Differently Experience Live Entertainment (Circus) Conven4onal Tool (Product/Service/Business Model): Tradi:onal Circus; Musical; Broadway Theater; Spor:ng Events


Faith) Experiment






P.I.E.S. Features q Unique

(Broadway-‐type) Circus

q No Animal Cruelty

q Classy Venues



Red Ocean Disrup;on (ROD) Map of Southwest Airlines: 1971




A: Analyze Problem

I: Improve Solu4on







Delays on Ground

High Ticket Price

Unserved Prospects

Low Cost Airline

E: Eliminate Meals; Lounges;

Sea:ng Class Choices; Hub Connec:vity

R: Reduce Price of Air Ticket

I: Increase Friendly Service;

Speed

C: Create Frequent

Point-‐to-‐Point Departures

Short-‐Haul Transport P: Process (Trade-‐off) E: Engagement A: Acquisi4on A: Ac4va4on R: Reten4on R: Referral R: Revenue


Project Vision (Cause/Final Result/Outcome): Reinvent (Disrupt/Democra:ze) the Customer Experience of the Air Travel Industry Customer (Segment/Base/“Tribe”/Benefactor): Low Cost “Game-‐changers” Goal/Strategy/Job-‐To-‐Get-‐Done: Interstate Travel: Differently Travel Between Ci:es Conven4onal Tool (Product/Service/Business Model): Tradi:onal Airlines; Train; Taxi; Con:nental Airlines; Pacific Southwest

Disrup;ve Short-‐Haul Transport (Prototype/Demo)

Disrup;ve Short-‐Haul Transport

“The speed of a plane at the price of a car … whenever you need it”


Faith) Experiment






P.I.E.S. Features q Low Cost q Timely Flights



Red Ocean Disrup;on (ROD) Map of Google (Search Engine): 1998




A: Analyze Problem

I: Improve Solu4on







Banner Ads

Irrelevant/Paid Search Results

Complex User Interface

Disrup;ve Search Engine

E: Eliminate Banner Ads;

Paid/Sponsored Rankings

R: Reduce Delay in Displaying Search Results

I: Increase Relevance of

Search Results/Ads

C: Create Automated Ad

Purchasing System; Clean (Elegant/ Simple) Interface

Search Engines P: Process (Trade-‐off) E: Engagement A: Acquisi4on A: Ac4va4on R: Reten4on R: Referral R: Revenue


Project Vision (Cause/Final Result/Outcome): Reinvent (Disrupt) the Customer Experience of the Search Engine Industry Customer (Segment/Base/“Tribe”/Benefactor): Blue Ocean “Game-‐changers” Goal/Strategy/Job-‐To-‐Get-‐Done: (1) Differently Get Accurate Search Results (2) Differently Get Leads/Purchases Conven4onal Tool (Product/Service/Business Model): Tradi:onal Search Engines (Yahoo; Excite; GoTo.com; Lycos)

Untargeted and Costly Ads

Disrup;ve Search Engine

“Organize the world’s informa:on

and make it universally

accessible and useful”


Faith) Experiment





(Prototype/Demo)


P.I.E.S. Features q Simplicity q Relevance q Speed q  Inexpensive Ads Note: P.I.E.S. is an acronym for Physical; Intellectual; Emo:onal; Spiritual

Red Ocean Disrup;on (ROD) Map of

An Emerging Red Ocean Disrup;on

(ROD) Lean Startup





A: Analyze Problem

I: Improve Solu4on


Customer Story (ROD Problem)

Business Story (ROD Solu:on)

Learning Story

ü  Vision Experiment q Problem-‐Solu;on Experiment q Product-‐Market Experiment q Op;miza;on & Scaling q Renewal Experim

ent/

Cycle 1

Experim

ent/

Cycle 2

Experim

ent/

Cycle …

Red Ocean Disrup;on (ROD) Map for Red Ocean Disrup;on (ROD) University

ROD U

Date: October 2013

Project Vision (Cause/Final Result/Outcome): “Develop Tools for Collabora:vely and Rapidly Resolving the Global Healthcare Crisis” Customer (Segment/Base/“Tribe”/Benefactor): BLUE OCEAN “GAME-‐CHANGERS”: Macro/Meso/Microsystems (Disruptors) Goal/Strategy/Job-‐To-‐Get-‐Done: Cost-‐effec:vely Improve and Disrupt Exis:ng Tools, Services, Brands, and/or Business Models Conven4onal Tool (Product/Service/Business Model): Business/Strategic Plan; Lean/Six Sigma Method; Learning From Defect; A3 Problem Solving Template


Red Ocean Disrup;on (ROD) Map for Red Ocean Disrup;on (ROD) University




A: Analyze Problem

I: Improve Solu4on







Time-‐consuming

Voluminous; Rigid; Costly

E: Eliminate •  Complexity R: Reduce •  Cost

•  Prepara:on Time •  Size/Thickness •  Waste (Failure)

I: Increase •  Relevance; Ac:on

•  Versa:lity •  Collabora:ve Problem Solving •  Flexibility C: Create

•  Heuris:c: DB-‐MAIL •  ROD Teams

Tradi;onal Planning & Problem Solving



Waste of Resources

ROD Quartet of Tools

(Con4nuous Problem Finding & Solving)

D B M A I L

hgp://businessmodels

.ning.com

Web Site (Sign up/Landing Page)

ROD U

ROD University

Date: October 2013

Disrup;ve Tool Lifecycle Experiments q  Vision (Leap of

Faith) Experiment





ü  Vision Experiment q Problem-‐Solu;on Experiment q Product-‐Market Experiment q Op;miza;on & Scaling q Renewal


P.I.E.S. Features q One-‐page q Simple q Fast q Versa4le q  Inexpensive

Project Vision (Cause/Final Result/Outcome): “Develop Tools for Collabora:vely and Rapidly Resolving the Global Healthcare Crisis” Customer (Segment/Base/“Tribe”/Benefactor): BLUE OCEAN “GAME-‐CHANGERS”: Macro/Meso/Microsystems (Disruptors) Goal/Strategy/Job-‐To-‐Get-‐Done: Cost-‐effec:vely Improve and Disrupt Exis:ng Tools, Services, Brands, and/or Business Models Conven4onal Tool (Product/Service/Business Model): Business/Strategic Plan; Lean/Six Sigma Method; Learning From Defect; A3 Problem Solving Template

ROD Cycle: Origin of

The Red Ocean Disrup4on (ROD) Map


q D: Define Problem q B: Build Solu4on q M: Measure Problem q A: Analyze Problem q  I: Improve Solu4on q L: Learn What’s Valued

Red Ocean Disrup;on (ROD) Cycle: DB-‐MAIL Red Ocean Disrup;on (ROD) Map for Product Innovators, Improvers, Planners, and Lean Startups

D: Define

B: Build

M: Measure

A: Analyze

I: Improve

L: Learn

Note: The ROD (DB-‐MAIL) Cycle is a synthesis of ideas from the Scien4fic Problem-‐Solving Process, Six Sigma’s “DMAIC” heuris4c, Eric Ries’s “Build-‐Measure-‐Learn (BML)” Loop, Kim & Mauborgne’s Blue Ocean Strategy, and Jean-‐Marie Dru’s Disrup4on.

Business Lifecycle Evolu4on 1.   Vision (Leap of Faith) Experiment Does the vision, cause, theme, or Job-‐To-‐Get-‐Done of the project empower the targeted customers (co-‐creators)?

2.   Problem-‐Solu;on Experiment Would a minimum viable product/service (prototype) solve a validated Big Urgent Market Problem (BUMP)? 3. Product-‐Market Experiment Is the proposed (more featured) product/service/business model effec:vely and profitably solving the Big Urgent Market Problem (BUMP)? 4.   Business Model Op;miza;on &

Scaling Experiment Can defects or waste in processes be rapidly and cost-‐effec:vely eliminated, i.e., brought to the level of Six Sigma (3.4 defects in 1,000,000)? Can the business model be scaled or repeated? 5.   Business Model Renewal/

Ecosystem Disrup;on Experiment How best to disrupt exis:ng (matured) product/service/business model?

ROD Cycle for

Each Evolu:on/Experiment (Project): DB-‐MAIL


5 Applica;ons of the Red Ocean Disrup;on (ROD) Map Red Ocean Disrup4on (ROD) Cycle: DB-‐MAIL

VISION DOCUMENTATION, PLANNING, EXECUTION, AND PRESENTATION

BUSINESS MODEL IMPROVEMENT: Lean/Six Sigma Projects; Process/Product/Service Improvement Projects

BUSINESS MODEL DISRUPTION (INNOVATION): Lean Startup Projects; Process/Product/Service Innova4on Projects

BUSINESS/STRATEGIC PLANNING: Business Plan Projects; Strategic Plan Projects

BRAND DISRUPTION: Brand Reinven4on/Disrup4on Projects; Disrup4ve Marke4ng Projects

You can use the Red Ocean Disrup4on (ROD) Cycle or Map to rapidly and cost effec4vely do the following projects:

q D: Define Problem q B: Build Solu4on q M: Measure Problem q A: Analyze Problem q  I: Improve Solu4on q L: Learn What’s Valued