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By Jen van der Meer
Business Model Validation
30Weeks
We are born entrepreneurs
But starting a company is hard
More fail than succeed
US business deaths now outnumber business births
We make it seem too easy
Or that you can just wish your way or grind your way into success
Most companies do not survive
More than 50% close within the first five years
When companies fail
All reasons for failure point to a lack of customer need
Why did they fail?“No product market fit” “Didn’t listen to customers”
“Ran out of cash”
“Solving for a want to have, not a need to have”
“No market need”
“Never found a business model”
“Customers didn’t want to pay for it”
From autops.io and CB Insights Founder Post Mortems - Top 20 Reasons Why Startups Fail
Question: Have you ever failed, big time?
If so - why do you think you failed?
No market need for the solution
Not valuable to customers
KOLOS: the world's first racing wheel for full-sized iPads
What I should have done is actually gone out of my comfort zone and talked to them one-on-one about their lives, experiences and pains. Instead, I continued to perfectly execute the wrong plan.
Founder Ivaylo Kalburdzhiev, April 2015.
Failure to focus on customers
Quirky systematically broke the cardinal rule of startups: iterate rapidly to build a product people love. The Real Reason Quirky Failed, Ben Einstein, The Observer. 9.28.2015.
And here’s the thing about failure
We used to do this the harder way
Leading Entrepreneurship Training
Ideas
Build
Product
Measure
Data
Learn
Key Partners Key Activities Value Propositions
Customer Relationships
Channels
Revenue StreamsCost Structures
Key Resources Key Channels
Lean Startup Business Model Canvas
Customer Segments
Are you ready?
What are your assumptions?
Business Model Canvas
Key Partners Key Activities Value Propositions
Customer Relationships
Channels
Revenue StreamsCost Structures
Key Resources Key Channels
Customer Segments
1. Who are your customers?
2. Let’s create Personas
You Can’t Target Everyone
“Serve a unique customer segment”
“Target a specific niche”“Aim for your most
profitable segment” “It’s better to dominate a micro segment than to aim
for everyone and hit nobody”
“Define your Archetypes”
Context:
#stillathome #notanadultyet
Name: Peyton
Age: 24
Living with Mom at home
Goals: Independence Freedom Apartment Bike to work Pay off college loan
Interests: Roller derby Raising money for breast cancer Jewelry making
Pains: Can’t seem to save At breakeven/loss each month Bad credit rating
Fears + Secrets: Afraid of getting rejected for an apartment Really likes mom’s support
Persona: How it works
Persona
Context:
Social Digital Life:
Name:
Age:
Location:
Goals:
Interests:
Pains:
Fears + Secrets:
Draw Pic
Persona ___
The money question: which one first?
Context:
#stillathome #notanadultyet
Name: Peyton
Age: 24
Living with Mom at home
Goals: Independence Freedom Apartment Bike to work Pay off college loan
Interests: Roller derby Raising money for breast cancer Jewelry making
Pains: Can’t seem to save At breakeven/loss each month Bad credit rating
Fears + Secrets: Afraid of getting rejected for an apartment Really likes mom’s support
Context:
Name: Percy
Age: 28
Lives w/ Roomates
Goals:
Interests: Church volunteer
Pains:
Fears + Secrets:
Name: Peyton
Age: 24
Living with Mom at home
Name: Peyton
Age: 24
Living with Mom at home
Context:Goals:
Interests: Church volunteer
Pains:
Fears + Secrets:
Context:Goals:
Interests: Church volunteer
Pains:
Fears + Secrets:
Persona
Pain (!)
Pain is a shortcut
Scratch your own itch
Pains, gains, jobs to be done
From: Business Model Canvas, Value Proposition Design, Alexander Osterwalder, The Innovators’s Solution, Clay Christensen and Michael Raynor
The pain point secret:Plans Known needs
Behavior
Plans
Values
Known needs
Behavior
Norms
Assumptions
Taboo Beliefs
Unknown Needs
Go deeper
3. Value Proposition
Value PropositionMy company is developing
company name defined offering
to help
And here’s how we prove it
to solvetarget customer segment defined problem or pain
our secret sauce, and proof point
Value PropositionMy company is developing
company name defined offering
to help
And here’s how we prove it
to solvetarget customer segment defined problem or pain
our secret sauce, and proof point
For next time: test your assumptions and talk to people
How to: Go talk to people
