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Q1 2014

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The e@ubc LLP-AP team

Paul Cubbon Thomas Hellmann

Andy Talbot Sean Lumb

Serena Johnson

Industry Mentors

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Course Introduction •  Customer discovery and b-model design •  Course objectives •  How the class works

–  Flipped classroom –  LaunchPad Central

•  The Contract –  Prep: reading, videos –  Do the work – first person customer research –  Document it: Launch Pad Central –  Classes: attend, learn from others, help others, stay

focused •  The Players

–  Instructors –  Administration –  Mentors –  teams

Lean Launchpad Roadmap

Overview. Presentations Canvas v1: RHS Topic 1: Value Proposition Customer Segment Topic 2: -map 1: “day in the life of customer” -interview scripts

Presentations Canvas v2: Channels Relationships: GET Topic 1: -Refining segs and day in life implications -MVP spec Topic 2: -market sizing: top down & bottom-up -Competition

Presentations Canvas v3:RHS Theme: Finding Pivots Topic 1: -Map 2: Influence ecosystem -Map 3: customer decision process Topic 2: -channels & revenue

Presentations Canvas v4: C.R. à Get Revenue model Cost structure Topic 1: Revenue Streams Topic 2: Canvas LHS: Partners, Costs, Resources, Activities

Session 1

Jan 31

Session 2

Feb 7

Session 3

Feb 14

Session 4

Feb 28

Details  on  next  slide  Prep  c1  read  &  watch          Deliverables  

Presentations Canvas v5: Video final Exit criteria for LLP-AP Alumni examples Next steps & e@ubc

Session 5

Mar 14

Details  on  next  slide  Prep  c3  read  &  watch    Research  “out  of    the  building”    Deliverables  

Details  on  next  slide  Prep  c4  read  &  watch    Research  “out  of    the  building”    Deliverables  

Details  on  next  slide  Prep  c5  read  &  watch    Research  “out  of    the  building”    Deliverables  

Details  on  next  slide  Prep  c2  read  &  watch    Research  “out  of    the  building”    Deliverables  

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Class 1 agenda •  Intros and overview of LLP-AP process •  Teams present

– Break •  Topic 1: customer segments and value

propositions •  Topic 2: qualitative market research

– building scripts – Mapping a day in the life of the customer to

get “the job” done – before and after YOU •  Next steps 5

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Buckle up – it’s a fast ride!

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Steve Blank’s “Customer Development” 2006, 2012, 2013

•  Problem: Startups fail from lack of customers, not lack of product

•  Solution: Develop Customers and Products together

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Company Building

Customer Development

Customer Discovery

Customer Development is as important as Product Development

Concept/ Bus. Plan

Product Dev.

Alpha/Beta Test

Launch/ 1st Ship

Product Development

Customer Validation

Customer Creation

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Steve Blank 2012

A startup is not a small version of a large company.

A startup is a temporary organization in search of a

scalable, repeatable, profitable business model.

Startup Owners Manual

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Search vs. Execution

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This course is all about

the Search

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Teaching Philosophy •  Flipped classroom •  Learning by doing •  Direct critique & feedback •  Failing fast and failing forward •  Uncovering significant unknowns

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LLP-AP: 5 session program •  In Class

– Team Presentations •  Process, Theory, Personal Skills

– Canvas, Experiments, #Calls •  In Between Classes

–  “You” Get Out of the Building –  “You” document Your Progress –  “We” monitor & comment on your work

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How the Class Works

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Principles •  Hypothesize & test your value proposition,

customer segments, revenue model... •  Get out of the building and talk to

customers. •  Fail early, pivot fast!

Our focus is on customers and the market, not the technology or product.

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The 9 deadly sins

1.  Assuming “I know what the customer wants.” 2.  The “I know what features to build” flaw 3.  Focus on launch date 4.  Emphasis on execution….instead of hypotheses, testing,

learning, iteration 5.  Traditional b-plans assume no trial and error 6.  Confusing traditional job titles with what a start-up needs

to accomplish 7.  Sales & Marketing execute to a plan 8.  Presumption of success leads to premature scaling 9.  Management by crisis leads to a death spiral

The 9 deadly sins (Blank)

16 Technology Ventures: From Idea to Opportunity Chapter 7: Figure 7.3

Resources Financial Physical Intellectual

Deal Reward, Risks Incentives Ownership Harvest

People The Team Capabilities Attitude Reputation

Opportunity Customers Strategy Business Model

The Business

Plan

The Biz Plan

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The Business Model Canvas

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B-model vs. b-plan B-model vs. B-plan

• B-model •  Hypotheses •  Test •  Assess •  Iterate or Pivot •  Repeat •  Identify product,

customer & competitive advantage

• B-plan •  A pitch document for:

•  Approval •  Resources •  Funding starter

•  To implement an implicit promise of future success

From a “faith-based” business plan to an “evidence-based” business model

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Keep Track of Iterations

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Week n

Week 1

Week 2

test

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Hypotheses

Guess Guess Guess Guess Guess

Guess Guess

Guess Guess

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The Customer Development Manifesto The customer development manifesto

1.  There are no facts inside your building, so get outside 2.  Pair customer development with agile or lean product

development 3.  Failure is an integral part of the search 4. Make continuous iterations and pivots 5.  No b-plan survives first contact with customers, so use a

b-model canvas 6.  Design experiments and test to validate your

hypotheses 7.  Agree on market type. It changes everything 8.  Start-up metrics differ from those in existing companies 9.  Fast decision-making, cycle time, speed and tempo 10. - 11. – 12. – 13. – 14.-

What do we mean by “lean?” •  Lean, agile and minimum viable product

•  Beware the excuses to slow down •  Beware feature creep •  How lean and minimum can you go?

•  Purpose is not to launch but to learn

•  Rapid learning cycles: accelerate learning •  Speed matters •  Working too long on something has an

opportunity cost •  Working on the wrong thing has dire

consequences

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What’s your market type?

•  Existing •  Re-segmented •  New •  clone

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What’s your business model type?

•  Physical good •  Service •  Web-mobile •  Asset sale, lease •  One-sided, two-sided, multi-sided •  Direct or with partners or intermediaries •  SaaS •  Freemium •  hybrid 24

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New Market “Chasm”

Chasm

!Early Adopters!

Pragmatists! Conservatives!

Laggards!

Copyright © Geoffrey A. Moore, 2005, from the book “DEALING WITH DARWIN”

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It’s The Scientific Process

•  Hypothesis •  Develop Test •  Observe •  Analyze Results

•  Revise Hypothesis •  Do it again

( many times … Quickly )

•  Apply to Customers

•  Product / Market Fit is what you are looking for.

•  Is not obvious

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Search vs. Execution

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Execution Looks Like This

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Bill Buxton, “Sketching User Experience”

Search Looks Like This

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Expect multiple iterations

http://blog.startupcompass.co/what-the-fortune-1000-can-learn-from-the-star

Presentations •  C1: practice and shorter •  5 mins max per team •  Use application decks •  Instructors highlight key learning points for all –

not deepdive on any one (that is for out of class)

•  Future weeks – longer and based on your progress as documented in LaunchPad Central

•  Use of Launch Pad Central for peer feedback – short gap after each presentation

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Presentation formats going forward

•  Hypothesis: here’s what we thought •  Experiments: so here’s what we did •  Results: so here’s what we found •  Iterate: so here’s what we are going to do next •  Setting criteria for pass/fail tests is important

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Break

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Part 2

•  Topic 1: customer segments and value propositions

•  Topic 2: qualitative market research – building scripts – Mapping a day in the life of the customer to

get “the job” done – before and after YOU

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Themes

•  Tighten up your value proposition •  Tell your story tight and fast. That

doesn’t mean talk faster! •  What 3 questions must you have

answers to this week, in order to move forward

•  Plan your questions •  Day in the life of the customer to get the

job done: before and after

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Qualitative Research techniques

Qualitative research •  Observation •  Indirect questions •  Drawing inferences •  One on one interviews with prospective customers •  For LLP-AP surveys and focus groups don’t count

•  Notes on the myth that Steve Jobs did not do market research –  UI: Klingons –  Physical design: Cuisuine Art

•  A word or two on quantitative research

Observation, indirect questions and inferred insights

•  Be careful not to start by asking people what they want – they often don’t know or cannot tell you.

•  Observe. •  Document the process: map activities

–  Who is involved? How? Doing what? Channels? Partners?

•  Ask indirect questions. •  Infer and hypothesize. •  Don’t sell •  Ask for your hypotheses and sketches to be

“corrected”

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Uncovering unmet needs

Uncovering unmet needs

•  Pain points •  Opportunities for significant utility

improvement

Validating the customer •  Have you identified the right or possible customer

that has a burning need of a problem that you have the solution to?

•  TIPS –  Beware of taking a cross-section of society –  Aim to identify early adopters who have the most

pressing need –  Be prepared to iterate or pivot on who your customer is –  Recognize different roles: user, buyer, influencer,

blocker, etc

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Worksheet exercise

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Interviewing for customer discovery

•  Asking for a meeting/interview – Leveraging networks –  “Who else should I be talking to?”

•  Question style – indirect vs. direct •  Scripting questions: know where you

will go when the inevitable dead-end is reached.

Leverage your mentors!

Some questions to consider •  Can you tell me about your job? •  What makes it interesting? •  What makes it challenging? •  What would you change if you could? •  Can you tell me more? •  Can you show me/draw that for me? •  Can I take a picture? •  Is there somebody else you can introduce

me to? 42

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Good Qs

•  How do you handle x today? •  What problems do you run into? •  How could this (your product/idea) be

improved? •  Could you introduce us to…?

Validating the “solution”

•  Expose the Value Proposition (VP) to the validated early adopting customer.

•  Let the customer “correct” you. You are listening and learning NOT selling.

•  Interpreting is key.

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Qs not to ask (in the early phases of discovery)

•  Yes/no questions •  Closed Qs •  Pricing or volume Qs

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A comment on interviewing in 2-sided markets

•  User •  Payer

•  The role of the MVP – Really minimal – s/w – static page or wireframe

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Exercise

•  Draft your initial Qs •  Interview script •  Who do you want to talk to? •  What’s your “ask” to get the warm lead

introduction? – Who, what, why?

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“Service/Product” Journey

•  “Who Is Your Customer or Customers?” –  :idea: Sketch Your Product and the People

it “touches” through it’s usage.

•  Often it is difficult to determine who is your customer. The service journey gives you a “top level” insight into the customer and in particular the user (more on other roles, later)

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A day in the life of your customer (think user)

•  Once you’ve focused in on who your customer really is, can you describe (and sketch) a day in their life? In detail?

•  What do they do? How do they do it? •  What are their pains? •  And potential gains? •  What would change if your product/

service was adopted?

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What did you observe?

•  What was surprising? •  Why? •  What context? •  Edited versus raw content •  Suspending your own judgment;

challenging assumptions and not automatically confirming biases or prior beliefs.

From observation to insight

•  Insights should be – Authentic

•  (rooted in observation data)

– Non-obvious •  (something you would not have come up with

before the observations, and that people you have observed would not likely have told you directly)

– Revealing •  (a basis for understanding motivation, feelings,

heuristics, habits etc)

From Experience Point and Ideo

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What does the end of LLP look like?

•  Owlet video

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Time •  How much time does an entrepreneur spend

each week on his/her start-up? •  How much time will you spend on this LLP

process? (outside of the lab or regular office.)

•  Think of 15 hours per week as part-time start-up effort.

•  How might you split this up? –  2 to 3 hrs read, view, think –  2-3 hrs to discuss in team, plan, set up calls –  8 hrs of customer research, outside the building –  2hrs to synthesize, find meaning and document

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•  Speed •  Tempo •  urgency

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Roller coaster deck and video

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Next steps •  Each team will be assigned a mentor •  Hypotheses: focus on right hand side of canvas, in particular

customer segments and value proposition –  Design tests to (in)validate or pivot –  List contacts; design questions

•  Get out of the building! –  Target: 10 to 15 interviews per team per week

•  Market size •  Market type •  Product/Competitor grid: specify initial MVP •  Competitor petal diagram •  V2 canvas and improved b-model •  Enter information into Launch Pad Central (LPC)

–  Mentors and instructors will interact in LPC •  Detailed readings/links posted end of day

Good luck!

Work hard! Be bold!

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