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@NYUEntrepreneur
Startup School: Getting to Product-Market Fit - Part I
Lindsey Gray Senior Director, NYU Entrepreneurial Institute Adjunct Faculty, Tandon School of Engineering Instructor, NSF Innovation Corps (I-Corps) September 20, 2016
@NYUEntrepreneur
75% of startups fail to return investors capital Shikhar Ghosh Harvard Business School
@NYUEntrepreneur
(At least) Three Parts to Building a Successful Startup 1. Advancing the product/service
2. Beginning to build a team
3. Finding a repeatable business model
u Most focus on #1 and/or #2
u Successful efforts require all three
9
@NYUEntrepreneur 18
“In preparing for battle I have always found that plans are useless, but planning is indispensable.”
@NYUEntrepreneur
Business Model Canvas The Business Model Canvas
Revenue Streams
Channels
Customer SegmentsValue PropositionsKey ActivitiesKey Partners
Key Resources
Cost Structure
Customer Relationships
Designed by: Date: Version:Designed for:
designed by: Strategyzer AGThe makers of Business Model Generation and Strategyzer
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit:http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
strategyzer.com
What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?
is your business moreCost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)Value Driven (focused on value creation, premium value proposition)
sample characteristicsFixed Costs (salaries, rents, utilities)Variable costsEconomies of scaleEconomies of scope
Through which Channels do our Customer Segments want to be reached? How are we reaching them now?How are our Channels integrated? Which ones work best?Which ones are most cost-efficient? How are we integrating them with customer routines?
channel phases1. Awareness
How do we raise awareness about our company’s products and services?2. Evaluation
How do we help customers evaluate our organization’s Value Proposition?3. Purchase
How do we allow customers to purchase specific products and services?4. Delivery
How do we deliver a Value Proposition to customers?5. After sales
How do we provide post-purchase customer support?
For what value are our customers really willing to pay?For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?
For whom are we creating value?Who are our most important customers?
Mass MarketNiche MarketSegmentedDiversifiedMulti-sided Platform
What type of relationship does each of our Customer Segments expect us to establish and maintain with them?Which ones have we established? How are they integrated with the rest of our business model?How costly are they?
examplesPersonal assistanceDedicated Personal AssistanceSelf-ServiceAutomated ServicesCommunitiesCo-creation
What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?
categories ProductionProblem SolvingPlatform/Network
What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?
types of resourcesPhysicalIntellectual (brand patents, copyrights, data)HumanFinancial
Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?
motivations for partnershipsOptimization and economy Reduction of risk and uncertaintyAcquisition of particular resources and activities
What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?
characteristicsNewnessPerformanceCustomization“Getting the Job Done”DesignBrand/StatusPriceCost ReductionRisk ReductionAccessibilityConvenience/Usability
typesAsset saleUsage feeSubscription FeesLending/Renting/LeasingLicensingBrokerage feesAdvertising
fixed pricingList PriceProduct feature dependentCustomer segment dependentVolume dependent
dynamic pricingNegotiation (bargaining)Yield ManagementReal-time-Market
@NYUEntrepreneur
A temporary organization designed to search for a repeatable and scalable business model
@NYUEntrepreneur
A temporary organization designed to search for a repeatable and scalable business model
@NYUEntrepreneur
A temporary organization designed to search for a repeatable and scalable business model
@NYUEntrepreneur
A temporary organization designed to search for a repeatable and scalable business model
@NYUEntrepreneur
What is a Business Model?
How a company creates value for itself
while delivering products or services for
customers
@NYUEntrepreneur
A temporary organization designed to search for a repeatable and scalable business model
@NYUEntrepreneur
The Business Model Canvas
Revenue Streams
Channels
Customer SegmentsValue PropositionsKey ActivitiesKey Partners
Key Resources
Cost Structure
Customer Relationships
Designed by: Date: Version:Designed for:
designed by: Strategyzer AGThe makers of Business Model Generation and Strategyzer
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit:http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
strategyzer.com
What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?
is your business moreCost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)Value Driven (focused on value creation, premium value proposition)
sample characteristicsFixed Costs (salaries, rents, utilities)Variable costsEconomies of scaleEconomies of scope
Through which Channels do our Customer Segments want to be reached? How are we reaching them now?How are our Channels integrated? Which ones work best?Which ones are most cost-efficient? How are we integrating them with customer routines?
channel phases1. Awareness
How do we raise awareness about our company’s products and services?2. Evaluation
How do we help customers evaluate our organization’s Value Proposition?3. Purchase
How do we allow customers to purchase specific products and services?4. Delivery
How do we deliver a Value Proposition to customers?5. After sales
How do we provide post-purchase customer support?
For what value are our customers really willing to pay?For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?
For whom are we creating value?Who are our most important customers?
Mass MarketNiche MarketSegmentedDiversifiedMulti-sided Platform
What type of relationship does each of our Customer Segments expect us to establish and maintain with them?Which ones have we established? How are they integrated with the rest of our business model?How costly are they?
examplesPersonal assistanceDedicated Personal AssistanceSelf-ServiceAutomated ServicesCommunitiesCo-creation
What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?
categories ProductionProblem SolvingPlatform/Network
What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?
types of resourcesPhysicalIntellectual (brand patents, copyrights, data)HumanFinancial
Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?
motivations for partnershipsOptimization and economy Reduction of risk and uncertaintyAcquisition of particular resources and activities
What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?
characteristicsNewnessPerformanceCustomization“Getting the Job Done”DesignBrand/StatusPriceCost ReductionRisk ReductionAccessibilityConvenience/Usability
typesAsset saleUsage feeSubscription FeesLending/Renting/LeasingLicensingBrokerage feesAdvertising
fixed pricingList PriceProduct feature dependentCustomer segment dependentVolume dependent
dynamic pricingNegotiation (bargaining)Yield ManagementReal-time-Market
The Business Model Canvas
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
@NYUEntrepreneur
Customer Development How you search for the business model
Test assumptions about customer needs/problem & develop MVPs
Seek validation that people are interested in your product/ solution
Begins to build demand & improve efficiency of customer acquisition
Drive growth aggressively & execute business model
@NYUEntrepreneur
“New ideas come from watching something, talk(ing) to people, experimenting, �asking questions �and getting out of �the office!”
@NYUEntrepreneur
The Business Model Canvas
Revenue Streams
Channels
Customer SegmentsValue PropositionsKey ActivitiesKey Partners
Key Resources
Cost Structure
Customer Relationships
Designed by: Date: Version:Designed for:
designed by: Strategyzer AGThe makers of Business Model Generation and Strategyzer
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit:http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
strategyzer.com
What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?
is your business moreCost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)Value Driven (focused on value creation, premium value proposition)
sample characteristicsFixed Costs (salaries, rents, utilities)Variable costsEconomies of scaleEconomies of scope
Through which Channels do our Customer Segments want to be reached? How are we reaching them now?How are our Channels integrated? Which ones work best?Which ones are most cost-efficient? How are we integrating them with customer routines?
channel phases1. Awareness
How do we raise awareness about our company’s products and services?2. Evaluation
How do we help customers evaluate our organization’s Value Proposition?3. Purchase
How do we allow customers to purchase specific products and services?4. Delivery
How do we deliver a Value Proposition to customers?5. After sales
How do we provide post-purchase customer support?
For what value are our customers really willing to pay?For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?
For whom are we creating value?Who are our most important customers?
Mass MarketNiche MarketSegmentedDiversifiedMulti-sided Platform
What type of relationship does each of our Customer Segments expect us to establish and maintain with them?Which ones have we established? How are they integrated with the rest of our business model?How costly are they?
examplesPersonal assistanceDedicated Personal AssistanceSelf-ServiceAutomated ServicesCommunitiesCo-creation
What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?
categories ProductionProblem SolvingPlatform/Network
What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?
types of resourcesPhysicalIntellectual (brand patents, copyrights, data)HumanFinancial
Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?
motivations for partnershipsOptimization and economy Reduction of risk and uncertaintyAcquisition of particular resources and activities
What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?
characteristicsNewnessPerformanceCustomization“Getting the Job Done”DesignBrand/StatusPriceCost ReductionRisk ReductionAccessibilityConvenience/Usability
typesAsset saleUsage feeSubscription FeesLending/Renting/LeasingLicensingBrokerage feesAdvertising
fixed pricingList PriceProduct feature dependentCustomer segment dependentVolume dependent
dynamic pricingNegotiation (bargaining)Yield ManagementReal-time-Market
The Business Model Canvas
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
Hypothesis
@NYUEntrepreneur
Customer Discovery u Apply the scientific method to
business model development
Modify hypothesis
Observe phenomena
Formulate hypothesis
Test hypothesis via rigorous experiments
Establish theory
based on repeated
validation of results
PIVOT!
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Value Proposition
u describes the benefits customers can expect from a bundle of products and services
@NYUEntrepreneur
Key Questions for Value Prop u Problem Statement: What is the problem?
u Technology / Market Insight: Why is the problem so hard to solve?
u Product: How do you solve it today?
u Competition: Who is delivering that solution?
u Utility: What level of improvement in efficacy/safety/cost/etc. is needed?
u Market Size: How big is this problem?
@NYUEntrepreneur
Define Customer Archetype u Who are they?
o Position / title / age / sex / role
u How/where do they buy? o Discretionary budget (name of
budget and amount)
u What matters to them? o What motivates them?
u Who influences them? o What do they read/who do they
listen to?
@NYUEntrepreneur
Customer Profiles Describe the person: name, age, relevant personal info Image
Jobs To Be Done Existing Solutions
How They Buy
Pains
Gains
Influencers
Barriers
@NYUEntrepreneur
…they want a quarter-inch hole!"
“People don't want to buy a quarter-inch drill…
SOLUTION (WHAT)
JOB (WHY)
Innosight LLC
@NYUEntrepreneur
“Make me efficient at my work”
FUNCTIONAL
“Convey my professional status”
SOCIAL
“Make me confident that I can get the job
done”
EMOTIONAL
“Help me perform like a professional”
JOB
• Valueà demonstrate my ability to recognize value
• Prestigeà show others that I focus on quality starting with my equipment
• Confidenceà ensure me that I can count on my equipment
• Versatilityà give me the ability to work in different environments
• Powerà give me the ability to cut through thick/dense material
• Speedà help me get the project done quickly
Innosight LLC
@NYUEntrepreneur
Guess the product from the job
I want to feel confident when having a
close conversation
I want my mouth to feel refreshed
I want to kill the germs that cause bad breath
I want to show that I have the latest gadget
I want to be able to get information easily
when on the go
I want to kill small snippets of time
productively
I want feel ‘in-the-know’ about things happening
in my social circle
I want an efficient way to share my pictures
with all my friends and family
I want a way to reconnect with friends I haven’t talked to in a
while
I want to feel like I’m buying the best for my
family
I want to be socially conscious
I want access to high-quality grocery products
I want the convenience of shopping online
I want to be able to decide how much I will
pay for a product
I want an easy way to sell things I no longer
need
Innosight LLC
@NYUEntrepreneur
Guess the product from the job
I want to feel confident when having a
close conversation
I want my mouth to feel refreshed
I want to kill the germs that cause bad breath
I want to show that I have the latest gadget
I want to be able to get information easily
when on the go
I want to kill small snippets of time
productively
I want feel ‘in-the-know’ about things happening
in my social circle
I want an efficient way to share my pictures
with all my friends and family
I want a way to reconnect with friends I haven’t talked to in a
while
I want to feel like I’m buying the best for my
family
I want to be socially conscious
I want access to high-quality grocery products
I want the convenience of shopping online
I want to be able to decide how much I will
pay for a product
I want an easy way to sell things I no longer
need
Innosight LLC
@NYUEntrepreneur
Who’s the Customer?
User Influencer Recommender Decision Maker
Saboteur Economic Buyer
@NYUEntrepreneur
“Customer” Ecosystem of people you need to understand, satisfy and appeal to in order to get them to buy your product
@NYUEntrepreneur
Who wants… u A combined phone, internet
browsing & mail device with o No copy & paste o No physical keyboard o Only 2G data speeds o No corporate email o No 3rd party apps o Only works on one carrier
@NYUEntrepreneur
Look familiar?
0
20
40
60
80
100
120
140
160
180
Year 1 (2007-08)
Year 2 (2008-09)
Year 3 (2009-10)
Year 4 (2010-11)
Year 5 (2011-12)
Year 6 (2012-13)
Year 7 (2013-14)
Uni
t Sa
les
(mill
ions
)
Apple iPhone Sales Since Introduction
Enthusiasts
Visionaries
Pragmatists
@NYUEntrepreneur
1. As a startup, you are not capable of serving the mainstream market With your half-baked product, small staff & non-existent sales & market budget
69
@NYUEntrepreneur
2. There is no point in building the features you will need when you have a million users Optimize your product for the immediate stage of growth
70
@NYUEntrepreneur
“Even though you target just those few potential customers today there is no law that says you are limited to those customers for eternity.”
@NYUEntrepreneur
I’ve figured out who I’m selling to and what pain point I’m solving!
I’m ready to start building and
selling… Right?!
@NYUEntrepreneur
? ✔ ✔?
?
?
? ? ?
Not so fast!
You can’t have a valid business until you test
both sides of the canvas!
@NYUEntrepreneur
The Business Model Canvas
Revenue Streams
Channels
Customer SegmentsValue PropositionsKey ActivitiesKey Partners
Key Resources
Cost Structure
Customer Relationships
Designed by: Date: Version:Designed for:
designed by: Strategyzer AGThe makers of Business Model Generation and Strategyzer
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit:http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
strategyzer.com
What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?
is your business moreCost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)Value Driven (focused on value creation, premium value proposition)
sample characteristicsFixed Costs (salaries, rents, utilities)Variable costsEconomies of scaleEconomies of scope
Through which Channels do our Customer Segments want to be reached? How are we reaching them now?How are our Channels integrated? Which ones work best?Which ones are most cost-efficient? How are we integrating them with customer routines?
channel phases1. Awareness
How do we raise awareness about our company’s products and services?2. Evaluation
How do we help customers evaluate our organization’s Value Proposition?3. Purchase
How do we allow customers to purchase specific products and services?4. Delivery
How do we deliver a Value Proposition to customers?5. After sales
How do we provide post-purchase customer support?
For what value are our customers really willing to pay?For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?
For whom are we creating value?Who are our most important customers?
Mass MarketNiche MarketSegmentedDiversifiedMulti-sided Platform
What type of relationship does each of our Customer Segments expect us to establish and maintain with them?Which ones have we established? How are they integrated with the rest of our business model?How costly are they?
examplesPersonal assistanceDedicated Personal AssistanceSelf-ServiceAutomated ServicesCommunitiesCo-creation
What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?
categories ProductionProblem SolvingPlatform/Network
What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?
types of resourcesPhysicalIntellectual (brand patents, copyrights, data)HumanFinancial
Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?
motivations for partnershipsOptimization and economy Reduction of risk and uncertaintyAcquisition of particular resources and activities
What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?
characteristicsNewnessPerformanceCustomization“Getting the Job Done”DesignBrand/StatusPriceCost ReductionRisk ReductionAccessibilityConvenience/Usability
typesAsset saleUsage feeSubscription FeesLending/Renting/LeasingLicensingBrokerage feesAdvertising
fixed pricingList PriceProduct feature dependentCustomer segment dependentVolume dependent
dynamic pricingNegotiation (bargaining)Yield ManagementReal-time-Market
9 Guesses
Guess
Guess
Guess
Guess
Guess
Guess
Guess
Guess
Guess
@NYUEntrepreneur
Customer Development How you search for the business model
Test assumptions about customer needs/problem & develop MVPs
Seek validation that people are interested in your product/ solution
Begins to build demand & improve efficiency of customer acquisition
Drive growth aggressively & execute business model
@NYUEntrepreneur
Customer Discovery The search for Problem-Solution Fit
Test assumptions about customer needs/problem & develop MVPs
Seek validation that people are interested in your product/ solution
Begins to build demand & improve efficiency of customer acquisition
Drive growth aggressively & execute business model
PSF
@NYUEntrepreneur
Problem-Solution Fit “Can you identify and validate a problem or need in the market that enough people care about?”
86
“Do you have a feasible solution (innovation) for meeting this problem or need?”
@NYUEntrepreneur
Customer Validation The search for Product-Market Fit
Test assumptions about customer needs/problem & develop MVPs
Seek validation that people are interested in your product/ solution
Begins to build demand & improve efficiency of customer acquisition
Drive growth aggressively & execute business model
PSF PMF
@NYUEntrepreneur
Product-Market Fit “Can you build and deliver a product/ service that satisfies the customer problem or need?”
88
“Do the product / service features deliver value (alleviate pain, create gain) to the customer?”
@NYUEntrepreneur
Customer Creation The validation of Business Model Fit
Test assumptions about customer needs/problem & develop MVPs
Seek validation that people are interested in your product/ solution
Begins to build demand & improve efficiency of customer acquisition
Drive growth aggressively & execute business model
PSF PMF BMF
@NYUEntrepreneur
Business Model Fit “Can you build and validate a repeatable and scalable business model?”
90
@NYUEntrepreneur
Company Building The execution of Business Model Fit
Test assumptions about customer needs/problem & develop MVPs
Seek validation that people are interested in your product/ solution
Begins to build demand & improve efficiency of customer acquisition
Drive growth aggressively & execute business model
PSF PMF BMF
@NYUEntrepreneur
The Business Model Canvas
Revenue Streams
Channels
Customer SegmentsValue PropositionsKey ActivitiesKey Partners
Key Resources
Cost Structure
Customer Relationships
Designed by: Date: Version:Designed for:
designed by: Strategyzer AGThe makers of Business Model Generation and Strategyzer
This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit:http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA.
strategyzer.com
What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?
is your business moreCost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)Value Driven (focused on value creation, premium value proposition)
sample characteristicsFixed Costs (salaries, rents, utilities)Variable costsEconomies of scaleEconomies of scope
Through which Channels do our Customer Segments want to be reached? How are we reaching them now?How are our Channels integrated? Which ones work best?Which ones are most cost-efficient? How are we integrating them with customer routines?
channel phases1. Awareness
How do we raise awareness about our company’s products and services?2. Evaluation
How do we help customers evaluate our organization’s Value Proposition?3. Purchase
How do we allow customers to purchase specific products and services?4. Delivery
How do we deliver a Value Proposition to customers?5. After sales
How do we provide post-purchase customer support?
For what value are our customers really willing to pay?For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?
For whom are we creating value?Who are our most important customers?
Mass MarketNiche MarketSegmentedDiversifiedMulti-sided Platform
What type of relationship does each of our Customer Segments expect us to establish and maintain with them?Which ones have we established? How are they integrated with the rest of our business model?How costly are they?
examplesPersonal assistanceDedicated Personal AssistanceSelf-ServiceAutomated ServicesCommunitiesCo-creation
What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?
categories ProductionProblem SolvingPlatform/Network
What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?
types of resourcesPhysicalIntellectual (brand patents, copyrights, data)HumanFinancial
Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquiring from partners?Which Key Activities do partners perform?
motivations for partnershipsOptimization and economy Reduction of risk and uncertaintyAcquisition of particular resources and activities
What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?
characteristicsNewnessPerformanceCustomization“Getting the Job Done”DesignBrand/StatusPriceCost ReductionRisk ReductionAccessibilityConvenience/Usability
typesAsset saleUsage feeSubscription FeesLending/Renting/LeasingLicensingBrokerage feesAdvertising
fixed pricingList PriceProduct feature dependentCustomer segment dependentVolume dependent
dynamic pricingNegotiation (bargaining)Yield ManagementReal-time-Market
9 Guesses
Guess
Guess
Guess
Guess
Guess
Guess
Guess
Guess
Guess
@NYUEntrepreneur
Define Hypotheses
97
1
What must be true about for this venture to succeed? What are the ‘deal-killing’ assumptions?
Hint: initially they should focus on VP and CSs
ü Recording attendance today is tedious and inefficient for teachers
ü Teachers want two-way communication with parents, and are dissatisfied with existing tools
ü Teachers bear the burden of tracking and reporting on student tardiness and absenteeism
@NYUEntrepreneur
Design an experiment
98
2
Who should I talk with to validate/invalidate that my ‘deal-killing’ assumptions are correct? Where can I find these people?
WHO?
ü Teachers – public school
ü Teachers – private schools
ü Principals (private/public)
ü Grade school teachers
ü High school teachers
WHERE?
ü Urban schools
ü Suburban schools
ü Your kids’ teachers
ü Your teacher friends
98
@NYUEntrepreneur
Conduct a test
99
3
What can I ask during customer interviews to test my assumptions?
ü How do you record attendance currently?
ü How long does it take you to record attendance? What works well about this? What doesn’t?
ü How often do you communicate with your students’ parents? What is typically the reason for this communication?
ü How do you keep track of how many days a student has been late or absent? What do you do with this information?
99
@NYUEntrepreneur
Extract insights 4
What did you learn from your interviews that will inform your business model?
ü Teachers currently record attendance with pencil and paper. They do it once to turn into their administrator, and then a second time for their own records. It doesn’t take long to do, but it’s annoying to have to do it twice.
ü The main way teachers communicate with parents is at parent-teacher conferences, which happens for the first time a couple months into the school year. When there’s a severe problem they try to get their phone number so they can call, which sometimes is effective and sometimes not.
100
@NYUEntrepreneur
Extract insights 4
What did you learn from your interviews that will inform your business model?
ü Teachers would like to be able to communicate with parents more frequently about issues they see, but they’d need easier access to the right contact information.
ü Some teachers have access to an iPad in their classroom, but not all. Many use their own personal smart phone for communications with parents. We got a mixed response when we asked teachers if they’d be comfortable giving parents their personal cell phone number.
101
@NYUEntrepreneur
Key questions to ask
u What are your riskiest assumptions?
u How can you best test them?
u Do these tests validate or invalidate what you thought? What needs further discovery?
u What new questions arose from these discussions?
102
@NYUEntrepreneur
Increase Likelihood of Success u Get customer feedback before building &
launching your product
u Launch products that customers actually want, more quickly & cheaply
u Secrets of success: § Experimentation over elaborate planning § Customer feedback over intuition § Iterative design over sequential design
103
@NYUEntrepreneur
TOTAL
Selecting Your Initial Target Customer Segment How to use this guide: Identify ≧3 potential customer segments that you believe are most likely to be your early adopters/enthusiasts, and list them across the top of each column. Identify ≧5 criteria (excluding market size) that you believe will determine your success, and list these on the left most column of each row. Honestly rate how you believe you can serve each segment today on a scale of 1 to 3, where 3 is best. Sum up your ratings at the bottom of each column. Put the segment with the highest score in the Customer Segments box on your Business Model Canvas.
Segment Criteria
Customer Archetype Profile
Describe the person: name, age, relevant personal info Image
Jobs To Be Done Existing Solutions
How They Buy
Pains
Gains
Influencers
Barriers
@NYUEntrepreneur
Tuesday 9/27, 4pm Getting to Product-Market Fit Part II
112
1 Next week’s Startup School:
bit.ly/nyustartupschool
@NYUEntrepreneur 113
2 Blackstone Launchpad coaching session
Say you went to Startup School!
entrepreneur.nyu.edu
@NYUEntrepreneur 114
3 NYU Prototyping Fund
Free $$$ to build your prototypes!
bit.ly/PrototypingFall16
@NYUEntrepreneur
Questions?
[email protected] @nyuentrepreneur entrepreneur.nyu.edu 16 Washington Place
116