business plan 2.0 & the practice of venture design
TRANSCRIPT
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Business Plan 2.0 & ThePractice of Venture Design
COWAN+
Scale?
THINK SEE
FEEL DO
Who?
X
What? What if?
!
How?
Pivot?
/
Tell me?
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Copyright 2014 Cowan Publishing
ALEX COWANAlexanderCowan.com
@cowanSF
ABOUT ME
Entrepreneur (5x)Intrapreneur (1x)
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ALEX COWANAlexanderCowan.com
@cowanSF
ABOUT ME
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ABOUT ME
www.alexandercowan.com
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Copyright 2014 Cowan Publishing
ALEX COWANAlexanderCowan.com
@cowanSF
THE ARITHMETIC IS THE SAME
ProtDrivers
RevenueDrivers
Tighter Proposition (website, pres., etc.)
Finite Cost
Finite Deliverables
Increased Use of Channels
Ease of Entry
Easy to See What's on MenuUpsell
Intellectual Property Multipliers
Tighter Talent Denition
Simpler Training, Eval., Promotion
Cost of DeliveryCostDrivers
Less Consultative Selling
Simplied ContractingCost of Sales
Standard Project Management
Comparable Post Mortems
EngagementManagement
(example: product-driven consulting)
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WHAT DRIVES VALUE HAS CHANGED
Infrastructure-DrivenUTILITIES TELECOM COMMODITIES
Scope-DrivenRETAIL BANKING CORP. LAW
Product-DrivenPACKAGED GOODS APP. SOFTWARE MEDIA
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OLD SCHOOL VS. NEW SCHOOL
How itwas done
How todo it
$ !?
? ! ? ? ?
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OLD SCHOOL VS. NEW SCHOOL
Output vs. OutcomeScaling vs. Learning
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THINK SEE
FEEL DO
PERSONAS
Who?
X
PROBLEMSCENARIOS &ALTERNATIVES
What?
VALUEPROPOSITIONS& ASSUMPTIONS
What if?
!
USERSTORIES &PROTOTYPES
How?
Scale?
Pivot?
PRODUCT &PROMOTION
/
CUSTOMERDISCOVERY &EXPERIMENTS
Tell me?
FULL CIRCLE
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THINK SEE
FEEL DO
PERSONAS
Who?
X
PROBLEMSCENARIOS &ALTERNATIVES
What?
VALUEPROPOSITIONS& ASSUMPTIONS
What if?
!
USERSTORIES &PROTOTYPES
How?
Scale?
Pivot?
PRODUCT &PROMOTION
/
CUSTOMERDISCOVERY &EXPERIMENTS
Tell me?
FULL CIRCLE
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Empathy Creativity
DESIGN THINKING
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ALEX COWANAlexanderCowan.com
@cowanSF
DISCOVERY & LEARNING: PERSONAS
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ALEX COWANAlexanderCowan.com
@cowanSF
DISCOVERY & LEARNING: PERSONAS
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NOT A GOOD PERSONA
Women Age 28-45
Has kids Socialize with other moms Online with Facebook 86% said theyd like to be more
organized
70% said theyd use anapplication that organizes them
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Women Age 28-45
Has kids Socialize with other moms Online with Facebook 86% said theyd like to be more
organized
70% said theyd use anapplication that organizes them
NOT A GOOD PERSONA
Bullet points are almostnever vivid or detailed
Stock photo- not real
This is a hugepopulation- not exact
These responses are fakeactionable- survey responses
like this are unreliable
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A BETTER PERSONA
Mary is a mom by choice. She had a successful career in accounting,
but welcomed the opportunity to be a stay at home mom. She loves it.
But its not like having kids purged her creative, social instincts. She
wants to connect, she wants to learn, she wants to interact. Being amom is a job and she wants to do it well. That means corresponding
with other moms on child education and keeping track of what works.
She posts to Facebook at least twice a week and responds to other
moms items more often than that.
She has a few blogs and publications she reads regularly
Mary the Mom
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A BETTER PERSONAthe use of a rst name helps
w/ vividness (a little)
these full sentences look like agood start towards something
vivid and detailed
this is a real photo of arelevant person taken with an
iPhone in the real world
Mary is a mom by choice. She had a successful career in accounting,
but welcomed the opportunity to be a stay at home mom. She loves it.
But its not like having kids purged her creative, social instincts. She
wants to connect, she wants to learn, she wants to interact. Being amom is a job and she wants to do it well. That means corresponding
with other moms on child education and keeping track of what works.
She posts to Facebook at least twice a week and responds to other
moms items more often than that.
She has a few blogs and publications she reads regularly
Mary the Mom
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OUR CAST
Sally theSingle Mom
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WAKE UP!
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WAKE UP!
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GEARING UP FOR THE DAY
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AT WORK
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AFTER WORK
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PRE-BED
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GEAR
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IF I HAD 3 EXTRA HOURS
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ABOUT SALLY THE SINGLE MOMWhats her favorite kind of music?Band/composer?Where did she buy her last pair of shoes?
What movie did she last see?What did she drink with dinner last night?If she had a dog, what kind?Whats her favorite magazine?
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NEEDFINDING: PERSONAS
ALEX COWANAlexanderCowan.com
@cowanSF
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ALEX COWANAlexanderCowan.com
@cowanSF
XPROBLEM SCENARIONEEDFINDING: PROBLEM SCENARIOS
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ALEX COWANAlexanderCowan.com
@cowanSF
XWhat job(s) are you doing forthe customer?What existing need orbehavior are you fullling?
PROBLEM SCENARIO
NEEDFINDING: PROBLEM SCENARIOS
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ALEX COWANAlexanderCowan.com
@cowanSF
?
X
If they currently usespreadsheets, watch themuse it and get a copy of it.If they currently put notes on thefamily fridge, ask about it,photograph it.
ALTERNATIVE(S)
PROBLEM SCENARIO
NEEDFINDING: PROBLEM SCENARIOS
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ALEX COWANAlexanderCowan.com
@cowanSF
YOUR VALUE PROPOSITIONS !
ALTERNATIVE(S) ?
PROBLEM SCENARIO X
NEEDFINDING: PROBLEM SCENARIOS
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ALEX COWANAlexanderCowan.com
@cowanSF
X
Are they better enough than thealternative(s)?
!
?
YOUR VALUE PROPOSITIONS
ALTERNATIVE(S)
PROBLEM SCENARIO
NEEDFINDING: PROBLEM SCENARIOS
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and they have a certainPROBLEMS(S)
where theyre currently usingcertain ALTERNATIVE(S)
and I have a VALUEPROPOSITION thats better enoughthan the alternatives to cause thepersona to act (purchase, use, etc.).
A certain PERSONA exists
NEEDFINDING: THE PRODUCT HYPOTHESIS
!
?
X
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THINK SEE
FEEL DO
PERSONAS
Who?
X
PROBLEMSCENARIOS &ALTERNATIVES
What?
VALUEPROPOSITIONS& ASSUMPTIONS
What if?
!
USERSTORIES &PROTOTYPES
How?
Scale?
Pivot?
PRODUCT &PROMOTION
/
CUSTOMERDISCOVERY &EXPERIMENTS
Tell me?
FULL CIRCLE
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FOCUS AND THE LEAN STARTUP
Crossing ts
Dotting isDoesnt matter unless ithelps prove (or disprove)your pivotal assumptions
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FOCUS AND THE LEAN STARTUP
MVP
inimumiableroduct
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B2B CASE STUDY: LEONID SYSTEMS
Bootstrapped startup to explore new ideasaround IT/back ofce for hostedcommunications services (business voice,messaging, etc.)
Large customers, big infrastructure.
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CASE STUDY: DROPBOX
Persona
ProblemScenario
Alternatives
Value Prop.
Tom the Techie- early adopter who works on projects that require swapping a lot of les between ashifting network of collaborators.
Its difcult to share les between a network of collaborators, particularly if theyre: big or numerous orchange a lot.
Many existing products, but none of them super compelling and widely adopted.
Also, custom setups which work but are cumbersome to set up and maintain.A le sharing service that truly feels transparent to the user across all major platforms- OSX, iOS,Windows, etc.
What Minimum Viable Product (MVP)?
That you can bootstrap?That doesnt require software at all?
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DROPBOX MVP & EXPERIMENTATION
Result: Excellent traction andconversion to sign-ups. Strongvalidation signal.
Create a Wizard of Oz demotailored for early market(techies) and measure sign-u s.
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CASE STUDY: ZAPPOS
In the beginning, just a guy with an idea tosell shoes online.
At the time, online retail still nascent.
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CASE STUDY: ZAPPOS
Persona
ProblemScenario
Alternatives
Value Prop.
Sam the shoe-hound- knows what he wants but not where to get it.
Sam is unable to nd the shoe he wants at local retailers, wasting time and getting frustrated.
Possibly mail order or wait until hes in a bigger market to go to the store.
Make the shoe Sam wants accessible online and make sure he has a great experience so hell comeback and not have to think about where to nd the shoe he wants anymore.
What Minimum Viable Product (MVP)?
That you can bootstrap?That doesnt require software at all?
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CASE STUDY: ZAPPOS
Result: It worked and the rest
is history.
Photographed shoes and putthem online to observe
whether anyone bought them.
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LEONID MVP #1: CONSULTING
It pays
Its easy to scale
Consultants naturally do customer discovery
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LEONID MVP #2: PRODUCTIZED CONSULTING
Its easier to sell
Its easier to staff
Its easier to manage
Customer empathy-more scope, detail onproblem scenarios
Its a concierge MVP for software product
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LEONID MVP #3: SOFTWARE PRODUCTS
Customer empathy-more scope, detail onproblem scenarios
Validated problemscenarios withsubstantial detail
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LEONID MVP #3: SOFTWARE PRODUCTS
Validated problem scenarios
Existing customer relationships
Ability to pre-sell
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4 TYPES OF LEAN HYPOTHESES
PERSONAHYPOTHESIS
PROBLEMHYPOTHESIS
DISCOVERY
VALUEHYPOTHESIS
VALIDATION
CUSTOMER CREATIONHYPOTHESIS
CUSTOMERCREATION
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EXAMPLE PROBLEM SCENARIOS
XIts hard for me to screen ontechnical skill sets and I end up
sending Frank unqualiedrecruits.
Helen the HR Manager Frank the Functional Manager
I have limited time and I dontwant to be a jerk. Its hard to
screen for all the relevanttechnical skill sets.
PERSONA
PROBLEM
SCENARIO
- Call references- Take their word for it
- A few probing questions- Take their word for it?ALTERNATIVE(S)
!VALUEPROPOSITIONSNew ability for meaningfulscreening of technicalcandidates, increasing % ofsuccessful hires and loweringFranks workload on recruiting.
Less time doing interviews, andbetter hires sooner.
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ALEX COWANAlexanderCowan.com
@cowanSF
STORYBOARDING PROBLEM SCENARIOS
AFTER
BEFORE
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THINK SEE
FEEL DO
PERSONAS
Who?
X
PROBLEMSCENARIOS &ALTERNATIVES
What?
VALUEPROPOSITIONS& ASSUMPTIONS
What if?
!
USERSTORIES &PROTOTYPES
How?
Scale?
Pivot?
PRODUCT &PROMOTION
/
CUSTOMERDISCOVERY &EXPERIMENTS
Tell me?
FULL CIRCLE
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DEVELOPMENT
WaterfallThen
AgileNow
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AGILE & THE BEAUTY OF SMALL BATCHESPERSONASPROBLEM SCENARIOS
STORIES
Epic Stories
Stories
Test Cases
As a [persona],I want to [do something]so that I can [derive a benet]
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THINK SEE
FEEL DO
PERSONAS
Who?
X
PROBLEMSCENARIOS &ALTERNATIVES
What?
VALUEPROPOSITIONS& ASSUMPTIONS
What if?
!
USERSTORIES &PROTOTYPES
How?
Scale?
Pivot?
PRODUCT &PROMOTION
/
CUSTOMERDISCOVERY &EXPERIMENTS
Tell me?
FULL CIRCLE
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THE FULL STACK PRODUCT TEAM
The customers readyto buy, but they wantus to interface with oneof their internalsystems.
Are you kidding?That meansdeveloping andsupporting customsoftware- not our
business model.X
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THE FULL STACK PRODUCT TEAM
MVC &Arch.
E n
t e r p r i s e
A c c o u n
t s
DesignThinking &
Cust.Discovery
The customers readyto buy, but they wantus to interface with oneof their internalsystems.
Doing what they askwould mean writingcustom code againsttheir system- messy.
I found out the realproblem is theyreshort on resources.If we have to dosomething custom,maybe were betteroff writing somethingfor their system tointerface with ours.Might be reusable.
OK. The accountsimportant, so lets nd outmore about their systemand what they need andlook at that option.
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THE FULL STACK PRODUCT TEAM
We need to connectwith customers whenthey search.
MVC &Arch.
M a r k e
t i n g
/
S E O
, M
DesignThinking &
Discovery &Lean
Ill spend some timeobserving customersin their naturalenvironment and seewhat terms they usein our area. Then Illtest those.
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THE FULL STACK PRODUCT TEAM
All customers wantthis feature. We haveto do it.
Really all of them?That doesnt soundcredible.X
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THE FULL STACK PRODUCT TEAM
MVC &Arch.
P r o
d u c t
M a n a g e m e n
t
DesignThinking &
Lean
Ive observed thesethings happening withthese customers.
An enhancement in[such and such] areamight be the way toaddress it.
Here are someprioritized user storiesfor a minimalimplementation thatwould let us see if thisapproach delivers.
Sounds good. Illtake a look at theseand then lets sitdown and talk aboutsome ideas and
options.
Slides
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@cowanSF
www.alexandercowan.com/venture-design
Slides: bit.ly/1tOYIZO
www.alexandercowan.com/startup-sprints
FINI
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IMAGE CREDITSFACTORY FLOORBy Ministry of Information Photo Division Photographer [Public domain], via Wikimedia Commonshttp://commons.wikimedia.org/wiki/File%3ABritain_Builds_Light_Cars-_the_British_Automobile_Industry%2C_UK%2C_1945_D26138.jpg
MUMBAI WOMANBy Victorgrigas (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commonshttp://commons.wikimedia.org/wiki/File:Mumbai_Woman_using_phone_November_2011_-9-3.jpg
SPOTIFY SLIDESpotify, Inc.