Session 1 - Introduction to lean and problem interviews

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Standard Bank Lean Bootcamp

Who we are?Standard Bank Incubator Justin Coetsee Paul Smith Andrew RoyTeboho Khauoe

Bootcamp Goals 1 Apply lean startup to your business2 Select entrepreneurs

Entrepreneurs count off into team of 5Audience selects 30 random words to use for a name Each team selects 2 words to use for a name (example. Blank-blank.com) Each team has 5 minutes to create a business plan The business plan should consist of: A taglineA product or service (your solution)A business model (How do you make money)A go-to-market strategy (How do you get customers) Each team has 60 secs to pitch their plan Networking game: half baked.com

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How we used to launch startups

Business PlanLaunchProduct Development

Learn if idea will work!Months / Years

The founders believed it would revolutionize transport and get the wealthy to trade in their BMWs. Instead security guards and tour guides were about the only market besides R380 million in startup capital. 6

Steve Blank

Eric Ries

A lean startup

Run ExperimentsLaunchProduct Development

Learn if idea will work!Months / Years

Quickly learn if a business idea will work!

Quickly learn if a business idea will workby running experiments

Move from Plan A to a plan that works!

A search for a repeatable and scalable business model!

SearchExecution

The story of anyperk: 3 months1 Dating site Mieple (Through friends)

2 Introductions to investors (Through friends) 3 Introductions to jobs (Through friends) 4 A translation company 5 Movie advice company 6 Teaching through Skype7 AnyPerk (Offer discounts and perks to employees)

Lean Startup: Blue River

Key assumptions

What assumption do startups most often get wrong?

1 Build a product no one wants2 Dont know how to attract customers to buy

The only thing that matters is product/market fit- Marc Andreessen

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You can always feel product-market fit when its happening. - Marc Andreessen

The customers are buying the product just as fast as you can make it or usage is growing just as fast as you can add more servers. Money from customers is piling up in your company checking account.

Social networkFacebookDont know who is going to be in my class.Harvard StudentsPersonal inviteDont know who is single.Visit the websiteSign up on website Return to website Invite friendsFriend invitesLanding pageMessagingProfilesView classesSearch friendsFeatures Message friendsCreate profileRegister coursesFind out who are in your classesLook up friends of friends Search for people at your universityDont know who that person isFriend invite feature

Black like meBlack like meBurns and Smelt terribleBlackFemale ConsumersFormulas developed for real ethnic hairNot designedFor black hairMeet with sales personOrder productReorder productFace-to-face sellingSales pitch SamplesProduct to help with perms and curlsMaximum hair Car protectionUses natural oilsRepeat visitsPhone calls

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Retail shopJenny ButtonLook great at workCareer womenClothes for international and local career womenNo high quality Fashionable Executive wearVisit storePurchase products Tell their friendsRetail outletSales pitch SamplesFashionable Female Executive clothesManufactured In Cape TownEvery collection is sewn in houseRepeat visitsRetail outlet

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A repeatable and predictable way to get customers

You can always feel when product-market isnt happening. - Marc Andreessen

The customers aren't quite getting value out of the product, word of mouth isn't spreading, usage isn't growing that fast, press reviews are kind of "blah", the sales cycle takes too long, and lots of deals never close..

Choose your early adopter customer

What is the one thing every successful business has?

Customers

How do new businesses get customers?

1 Have a problem 2 Trying to solve it 3 Spent time or money

1 Have a problem 2 Want it solved

1 Have a problem

Overweight people spending money on trainers, diets, exercise programmes, etc.Overweight people trying to lose weight on their own with no help. Overweight people that have no interest in losing weight.

ExerciseApp

EveryoneHStart with an early adopter marketEliteUniversitiesUSUniversitiesAllUniversities

Step 1: Guess who you think your early adopter customer will be.

Easy to reach - Big pain - Ability to pay

Rich Environmentalistthatbuy sports carsTESLA

Corporate employees looking to start a business.IGNITORTask (5 MINS)1 Brainstorm potential customer segments.

2 Choose the customer segment you believe is your early adopter.

3 Place it on your canvas.

4 Return to your seats asap. Hint: Choose a market with the biggest pain, is easy to reach and will pay.

Customer problemWhat problems are you solving for customers?

SUCCESSFUL BUSINESSES

SIMPLE SOLUTIONBIG PROBLEM

CUSTOMER GOAL


SIMPLE SOLUTIONBIG PROBLEMCd player jumps & mission to carry cdS!

CUSTOMER GOALListen to music while running and in the park


SIMPLE SOLUTIONBIG PROBLEMOVERSEAS CALLS ARE EXPENSIVE!

CUSTOMER GOALTalk to my girlfriend


SIMPLE SOLUTIONBIG PROBLEMIt is a headache getting a taxi!

CUSTOMER GOALGet to the party


SIMPLE SOLUTIONBIG PROBLEM

Pizza took forever to arrive!

CUSTOMER GOALEat a pizza

Every successful business helps customers achieve a goal and solve a problem

Rich Environmentalistthatbuy sports carsTESLAPollute the environment.Support the oil companies.Electric cars are slow, look terrible and have a problem with distance.

Corporate employees looking to start a business.IGNITORScared of failing.Dont find corporate work meaningful.Need help ensuring the business will succeed.Task (5 MINS)1 Brainstorm different customer goals and problems 2 Write the biggest customer problems and goals on a sticky note 3 Place the biggest customer problems and goals on the canvas 4 Return to your seats asap.

Pivots, problems and guesses

GuessBusiness NameGuess.GuessGuessGuessGuessGuessGuessGuessGuessGuessGuessGuessGuessGuessGuessGuessFriend invite feature

Most businesses get their initial guesses wrong

How do you ensure you are solving a problem the customer cares about?

Problem interview

Talk to your customers and deeply understand their goals and problems

Experiment #1:Problem interview

Why interview customers?

vs.Ensure you are building something people want!

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Save time

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I wish I had known about this earlier

I cant believe I have wasted a year building something that will never make money. F@#k!

How to conduct a problem interviewINTRODUCE

INDICATORS

INTERVIEW

INVITE

Reminder: 4Is

How to conduct a problem interviewINTRODUCE yourselfi.e. My name is [name] I am doing market research for a startup and I was wondering if I could take 5 minutes of your time.

Check customer INDICATORS i.e. Ask questions to test if they are in your target market.

Conduct INTERVIEWi.e. Story, Challenge, Solution.

INVITE them to meet with you again.i.e. Ask if they would be interested in seeing the product and giving feedback when it is done.

What questions to ask? STORY

CHALLENGE

SOLUTION

What questions to ask?SOLUTION:3. What if anything have you done to solve the problem? 3.2 What was not ideal about the solution?CHALLENGE: 2. What was most challenging about that? What frustrations or problems did you encounter?STORY: 1. Tell me a story about the last time you (describe the goal they are trying to achieve)?

What questions to ask? SOLUTION:3.1 What if anything have you done to solve the problem?3.2 What is not ideal about that solution?CHALLENGE: 2. What was most challenging about that? What frustrations or problems did you encounter?STORY: 1. Tell me a story about the last time you tried to get advice or help with starting your business?

How do you conduct a problem interview

1 RAPPORT 2 CUSTOMER INDICATOR 3 GIVE CONTEXT 4 PROBLEM QUESTIONS X35 WRAP UP6 REFERRALS 7 THANKS

Write your problem interview script (10 mins)INTRODUCTION: Introduce yourself and set the context.

Customer INDICATOR: What questions / observations will tell you if they are a potential customers?

INTERVIEW:STORY: Tell me a story about the last time you (describe task they are trying to achieve)?

CHALLENGE: What was most challenging about that? Why was that challenging?

SOLUTION:What if anything have you done to solve the problem? Why did you dislike that solution?

INVITE: We are actually developing a solution [mention their biggest problem]. Can I contact you if we develop a solution?

Planning your problem interviews

Problem interviewsCorporate employees looking to start a businessStartup Events10 InterviewsSought advice or help with starting the business7 / 53Sought advice or helpMost people dont spend a lot of money on seeking helpLook for sponsors and offer the programme for free

Process overview

Problem &SolutioninterviewsNursesHospital VisitInterview 58 NursesSaid they would want to use it92% Said they wanted itNurses want this productKeep going. Talk to decision makers at the hospitalProblem & Solution interviewsHospital AdministrationsHospital visitsInterview 10 AdministratorsInterested In purchasing0 / 10 Were interested in buyingUser is not the customerPivotProblem & Solution InterviewMomsBaby shopsInterview 105 momsWould they purchase96%Interested in purchasingMoms are excited about the productDevelop Prototype

Video &Landing pageMomsMedia1000Online adsLeave email on landing page477 emailsBig demand for the productKeep goingInterviewsMomsVisit baby StoresInterview 139 customersMost they would payAverage pricing$182They would Pay moreRaise pricesLanding Page Price testWebsite VisitorsWebsite +Online ads1130Click on Buy buttonMax Profit$299It is more Profitable to raise pricesSelect price

Before you leave1 Filled in Customer, Problem2 You have a plan to talk to customers tomorrow3 You have written up your interview script

Interviewing Advice

Be super nice1 Small talk

2 Smile and laugh

3 Fun

4 Gifts or props

Have empathy1 Reward

2 Emphatic stories 3 Keep it conversational

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Note taking 1 Look for emotion 2 Keywords / phrases3 Word document / Note pad

The Mum Test

Do interviews in teams of 2 (If possible)One ask questions The other writes down answers

Use quick emotion symbolsHappy : ) Frustrated : ( Embarrassed : |Problem ! Obstacle []

Interview tips Get psyched to hear thing you dont want to hear Disarm politeness training Use the mom test (Behaviour not opinions) Listen, dont talk Encourage but dont influence Parrot back to confirm Say thank you

Mindset

This can save me months and years!

This is what the worlds best entrepreneurs do!

I am open to being wrong!

Customer insight is the key to startup success!

Customer insight is the key to startup success!

I will find a way or make one!

Be like when finding customers.

Talk to them like Keep looking until you find one

behaving like

Recording results

Paul SmithXXA bigger problem was having no time!XXXXXXXXMark BriggsSipho NdlovuMichaelMandyGregLindaJulianRichardSiya24XX6Older customersLived in a rural area!

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Problem interviewsCorporate employees looking to start a businessStartup Events10 InterviewsSort advice or help with starting the business3 / 10 Sort advice or helpMost people dont spend a lot of money on seeking helpLook for sponsors and offer the programme for free

CAN YOU find early adopters? 1 Do 1 round of interviewing

2 Write up actual results

3 Analyze what you have learnedNew customer definition New customer problem New channel

2 / 10 Spent money trying to solve the problem

2 / 10 Spent money, time or effort10 / 10 Spent money, time or effort

1 What was different about customers that had the problem? 2 Is there a bigger problem worth solving? 3 Should you try targeting a different customer segment? 4 Should you try a different idea?

Interview customersGet out of the building Conduct customer interviews (Phone or face-to-face)Aim to do at least 10 interviews (Ideally 20 interviews)Aim to run and analyse 2 experiments Next presentation at 16:00Feel free to ask for help from Justin or Paul after each round of interviews

Customer behavioursWhat do customers need to do to purchase?

What actions do customer need to take to purchase?

Create customer interview plan:Put together a plan to speak to at least 10 customers tomorrow morning: Friends and family (Facebook, Linkedin, Email, Cell phone) Social media (Twitter, Facebook, Google, LinkedIn) Online ads (Twitter, Facebook, Google, LinkedIn, OLX, Gumtree) Similar services (Competitor products, Products / services you use before/after)Events (Conferences, Sporting events, Seminars, Meetups)Bored people (Waiting in lines, Gautrain, Bus stops, Taxi ranks) Cold calling (LinkedIn, Facebook, Google)Public spaces (Events, Parks, conferences, Airports)

Corporate refugeesSoftware engineersOnline retailersBusiness with R1M+ turnover CorporatesSoftware EngineersDont know how to growNeed accountability Not using best practice Cant get customers Need to raise fundingDont know how to growStartup eventsLinkedIn ProfilesFriends on FacebookFriends on Linked inCell phone address book

StartupEvents

Customer definitionCustomer definitionCustomer definitionCustomer definitionCustomer definitionCustomer definitionTask (5 MINS)1 Brainstorm 5 different channels (Ways to find your customer)2 Select the best channel.3 Place your Channel / Experiment 1 column.4 Return to your seats asap. Customer problemCustomer problemCustomer problemCustomer problemCustomer problem Customer problemChannelChannelChannelChannelChannelChannel