twelve steps to creating a new innovation from scratch › jakenielsonicm › free+mini+co… ·...

Twelve Steps To Creating A New Innovation From Scratch

How to Go From Initial Idea to Scaled Solution With Product

Market Fit

Welcome Back!

• Hope you enjoyed our last session

– Markets, Technology and Business Models

– Four Types of Innovation

• This session is all about putting the pieces together into a

easy to understand, step-by-step process to go from idea to

scaled business

– Four Innovation milestones

– Steps to achieve each milestone

– Tools to make it easier and organized

• Time to dive in!

A Little About Why I Created This Process…

• My first experience was with a company going through the massive scale process– The business doubled every year for 3 years I worked there!

– My job was operations – critical to scaling

• Second experience was working at a startup that went from $0 to $100M valuation in 3 years– Learned a TON about the mechanics of creating a successful startup and the

importance of a STRONG channel

• Third experience was as a product manager in a Fortune 150 company– Led a product line that went from $4M to $30M+

• My recent work focuses on creating new businesses in a giant company– Created several new growth businesses from scratch, all within the confines

and bureaucracy of a giant corporation

• Consulted with numerous startups and helped them organize their work and focus only on what moves the needle

In 2016, I Needed A Logical And Systematic Approach To

Trying New Business And Product Ideas

• Lots and lots of innovation tools

– No good curation

– Hard to know which ones actually work (A LOT of tools created by people

who’ve not been through the process themselves)

– Some tools I needed didn’t exist or if they did they were confusing to use

• No comprehensive, step-by-step system that explained the

process of going from idea to scaled business

– There is no such thing as a silver bullet to ensure success but there is a

repeatable system to follow that greatly improves your odds

• In this video I will outline a proven system to go from idea to

business model fit

Agenda

• The world of innovation is haphazard and unorganized

• A proven, step-by-step system to take you from idea to scaled

business

• What you can do right now to get started

Innovation is Invention Plus Commercialization

“Innovation is invention plus

commercialization”

– Christopher Freeman

Invention

+

Commercialization

“Publishing in

the 21st Century”

The Four Innovation Milestones

• There are many twists and turns

throughout an innovation program but

four milestones remain consistent

– You are tackling a real problem that a

significant number of people care about

– You come up with solutions to that

problem

– You come up with ways to take your

solution to market

– You figure out how to sustainably scale

your solution to many customers

Problem / Opportunity Fit

Problem / Solution Fit

Product / Market Fit

Business Model Fit

Innovation Milestone 1: Problem Opportunity Fit

• You are tackling a real problem that a significant number of people care about– Signs that you’re solving a real problem

• There are solutions available today – they just could be a lot better

• Customers are doing manual workarounds right now to solve the issue

• Watch out for signs of apathy about the problem with your customer segment – that’s a red flag

– Signs that a significant number of people care about the issue

• There is already a large market with lots of people searching and paying for solutions

• There is a large group of specific people who are consistently frustrated by the issue

• Watch out for signs that there is no existing market for this job to be done – that’s a red flag

– People quickly pay for morphine, but slowly pay for vitamins


Innovation Milestone 2: Problem / Solution Fit

• You have solutions to that problem

– Signs that you have a solution to the problem• People tell you they would pay you money if it were

available right now

• Better yet, you show them a concept and they say “I’ll pay you right now to go build that for me.” (e.g. Kickstarter model)

• Watch out for signs of people being nice instead of needy – neediness is a good sign, being nice is a death knell

• Passionate, lively responses are what matter –whether they love it or hate it

– The worst possible scenario is they tell you it’s “nice” or a “good idea for someone else” (assuming you’re segmentation is correct)


Innovation Milestone 3: Product / Market Fit

• You have a way to take your solution to

market

– Signs that you have product / market fit

• Orders overwhelm you to the point where you are

forced to turn away customers

• Customers refer your solution to others with glowing

praise

• You are both excited and terrified by the momentum

you have created

• Watch out for false starts that feel like real customer

interest but are ultimately empty promises


Innovation Milestone 4: Business Model Fit

• You figure out how to sustainably scale

your solution to many customers

– Signs that you have business model fit

• Your team of generalists is transforming into more

specialized and consistent roles

• You have repeatable business processes and

procedures that enable more efficient work

• Your business generates consistent and growing

revenues

• You are able to take profits from the business and

put them back in for more growth

Business Model Fit

Step 1: Document the

Idea

Step 2: Discover the

Customer and Problem

to Solve

Step 3: Analyze the

Market, Industry and

Technology

Innovator’s Journey Overview


Customer Discovery


Solution Discovery


Market Development

Business Model Fit

Business Execution

Clarify Discover Create Scale

Step 4: Discover the

Solution

Step 5: Determine

Solution Feasibility and

Attractiveness

Step 6: Determine

Strategic Fit and Form

a Team

Step 7: Create

Minimum Viable

Product (or Service)

Step 8: Create

Minimum Viable

Messaging

Step 9: Create

Minimum Viable

Channel

Step 10: Define Business

Vision & Strategy

Step 11: Prepare for

Scale

Step 12: Re-Organize

Team and Scale the

Business

Step 1: Document the Idea Step 4: Discover the SolutionStep 7: Create Minimum Viable


Step 10: Define Business Vision &

Strategy

The Innovator’s Canvas

Learning Log: Solution Experiments

MVP Storyboard

Low/Med/High Fidelity Prototypes


Solution Requirements Canvas

Service Design Blueprint

Vision and Strategy Canvas

Solution Planning Canvas

Step 2: Discover the Customer and

Problem to Solve

Step 5: Determine Solution

Feasibility and Attractiveness

Step 8: Create Minimum Viable

MessagingStep 11: Prepare for Scale

Learning Log: Problem Experiments

Customer Empathy Map

Customer Journey Map

Customer Persona Template


Attractiveness Dashboard

Learning Log: Messaging Experiments

Brand Canvas

Messaging Canvas

Process Maps

Step 3: Analyze the Market,

Industry and Technology

Step 6: Determine Strategic Fit and

Form a Team


Channel

Step 12: Re-Organize Team and Scale

the Business

Market Distribution Map

Tech and Business Model Runways

4 Types of Innovation Cheat Sheet

Team Charter Canvas Learning Log: Channel Experiments

Channel Design CanvasProcess Models

Stakeholder Check-In:Review the customer, problem, market

opportunity and business canvas.

Request funding to form full discovery team

Stakeholder Check-In:Review prototype demo, feasibility, cost, IP

and strategic fit for building the business.

Request funding to create MVP

Stakeholder Check-In:Review MVP results, assess product

market fit and decide to pivot or persevere.

Request funding for scaling resources

Stakeholder Check-In:Review vision, strategy, solution plan and

business processes to scale.

Review ongoing needs of the business

Innovation Journey Overview Continued…


Customer Discovery


Solution Discovery


Market Development

Business Model Fit

Business Execution





Strategy


Problem to Solve








Form a Team


Channel


the Business

Innovation Process Overview


Customer Discovery


Solution Discovery


Market Development

Business Model Fit

Business Execution


Project Name Designed By Date & Iteration

Customer Segment � Channel(s) � Mission Statement � Business Structure �Awareness Legal Entity Owner(s)

Problem Statement � Sale Value Proposition � Key Resources �Human Intellectual

Job to Be Done ✔ Gains � Delivery Gain Creators � Product or Service � Physical Financial

Pains ☹ Support Pain Killers � Unfair Advantage � Key Partners �

Revenue Structure Pricing & Frequency � Cost Structure Total Cost of Running the Business �

Acquisition & Support Cost of Goods & Services General & Administrative

Overall Market Dynamics

Customer Trends Market Size Current Channels Current Solutions/Providers Technology Trends Industry Trends Regulatory Trends

Business Model To Validate: Owner:

Build Measure Learn

Start

Step 0:

Focus

Step 1:

Question

Step 2:

Hypothesize

Step 3:

Metric & Criteria

Step 4:

Resources

Step 5:

Procedure

Step 6:

Observation Step 7: Conclusion End

#We asked this

question on…

We are

focusing

on…

Our question is… Our hypothesis is… We are right if…

The resources we

need are…Our procedure is… We observed that…

Our hypothesis

was valid,

invalid,

uncertain

We learned that…

We learned

the answer

on…People Materials

1 1/9/00 0:00Facebook

ads

Can we generate phone call/sms for a smart /

predictive maintenance

agreement on facebook?

That we can generate leads for smart

maintenance using online

ads and landing pages

We can generate an average cost / lead for

less than $175

Scott

Facebook, ad concepts,

landing page

Scott will create ads and landing pages and post

them online

We learned the ads performed better than

expected

Valid

We can generate more demand than we

originally thought.

1/9/01 12:00 AM

Project Name Designed By

Cu

rre

nt

Sta

te

ONCE UPON A TIME…(Customer Segment)

HE/SHE ALWAYS…(Main Tasks)

BUT ALWAYS HAD A PROBLEM…(Main Problem and or Pains)

HE/SHE TRIED TO SOLVE IT…(Competing Solutions)

Fu

ture

Sta

te

BUT HE/SHE WISHED THAT…(Main Solution and or Gains)

UNTIL ONE DAY…(Awareness Channel)

UNLIKE HIS/HER SOLUTION…(Unique Advantage)

HIS/HER WISH CAME TRUE…(Customer's Aspiration)

Business Model Feasibility and Risk Dashboard

Project Name Created By Date and Iteration

Feasibility

Assessment

for Each Idea

Customer Channel Value Proposition Business

Segment Attractiven

ess

Problem / Pain Level

Segment / Market

Size

Feasibilityto

Generate

Awareness

Feasibility to Drive

Sales

Feasibility to Handle

Delivery

and Support

Solution Strength at

Solving

Problem

Switching Costs from

old way to

new way

Potential for 10X

Improveme

nt in Cost or Value

Cost Feasibility

to Create

Solution

Technical Feasibility

To Create

Solution

Fit with Investment

Goals

In Control of Your

Own

Destiny

Strength of Unique

Advantage

Risk and Complexit

y to

Execute Model

Speed to Breakeven

Scalability

Definition

We know who they are and

they are actively seeking

solutions

They consistently

rate the problem as a

9 or 10 on

the pain scale

Can the market size

support your growth

targets?

We can generate

awareness of the solution

cost

effectively and at scale

We can sell the solution

cost effectively

and at scale

We can deliver and

support the solution cost

effectively

and at scale

Customers who use the

solution are passionate

and positive

about the value it

creates for them

Switchingcosts for

customers to adopt the

solution are

low

The idea has the potential

to reduce customer

costs by 10X

or increase customer

value by 10X

Feasibility to create

profitable unit economics

Technical feasibility to

create the solution

Fit between the idea and

the investment goals of the

business or its investors

Idea has minimal

dependencies

on partnerships

or tiered value

props for getting solution

to market

How likely your unique

advantage is to create a

moat around

your solution through IP,

Network Effect, etc.

E.g. multiple layers of

customers to

convince and

problems to

solve

Speed to aprofitable model

Feasibility of scaling the

model

Unknown Unknown Unknown Unknown

Unknown Unknown Unknown Unknown

Unknown Unknown Unknown Unknown Unknown Unknown

17% of mkt Unknown Unknown Unknown

Unknown Unknown Unknown Unknown Unknown Unknown

Team Name Designed By

Mission � Goals � Values �

Why The reason the team exists and the purpose behind coming to work everyday.

WhatSpecific, measurable, attainable, relevant and timely Objectives the team sets out to

achieve. Limit to one or two.

HowCore beliefs about what is most important to the team. Acts as method for

empowerment and guide rails for how the work gets done.

Roles & Responsibilities � Strengths & Skills � Weaknesses & Risks �Who

The list of team members and their role(s) on the team.The set of strengths and unique abilities that are inherint to individuals on the team and

to the team as a whole. The areas where the team has blind spots or gaps in skills or ability that may hinder

progress toward achieving the team goals.

Scope � Norms � Fun Events �

The things that are inside the teams realm of responsibility compared to those things that are outside the teams realm of responsibility.

The manner in which the team agrees to work. For example, work hours, conflict resolution, decision making process, internal & external communications, meeting

guidelines, etc.

How the team will strengthen relationships, celebrate success and do team building activities.

Team Member Signatures

Team Charter Canvas

Project Name Created By

Product / Service Description Date & Iteration

Customer Pain(s) to Solve Customer Use Case(s)A description of the customer and their pain that your solution is designed to solve. An example of how the customer would use the solution.

Baseline Requirements MVPFirst Official Launch (1.0)

Must Have Should Have Could HaveThe baseline expectations the customer has

that are general to every comparable

solution they would ever consider using.

These form the table stakes upon which the

product or service is built.

The first iteration of the product that delivers

a proof-of-concept toward solving the

customer pain. By nature MVP's by

themselves usually are not polished,

scalable nor profitable.

Requirements beyond the MVP that the

product can't sustain itself without

Requirements beyond the must haves that

form the official design target(s) for the

product

Additional functionality that is to be included

if possible

Target Cost Target Market Price Key Differentiator Success Metric Release Date for 1.0The target marginal cost for creating the

product or service

The target price to charge customers for the

product or service

What is unique and useful about this

solution versus the competition

The metric by which success of this solution

will be measuredTarget date for launch of the initial solution


Project Name Created ByDate &

Iteration

Segment

Name

Tangible / Physical

Evidence

Customer Actions

Front Stage

Back Stage

Support Processes

Service Blueprint

Line of Interaction

Line of Visibility

Line of Internal

Interaction

Brand CanvasDesigned For Designed By Date & Iteration No.

Bra

nd

Sto

ry

Name ✏ Personality �Positioning

Statement �Persona � Promise ✌ Storyboard �

The name of your business or product6 words that describe your brand

personality, voice and values

For ___ who are dissatisfied with ___, our

product is a ___ that provides ___, unlike ___ we have assembed ___.

A descriptive summary of your target

customer segmentThe bumper sticker for your brand

The heart and soul of your brand - the story of how your solution

helps your target customer achieve their deepest held aspirations

Bra

nd

Sym

bo

ls

Logo ✪ Color Palette � Typography ✒ Imagery �

The primary symbol used to embody and communicate the brand

The 2-5 colors that represent your brand personality and help communicate your brand story to your target

customers

The arrangement of type (typeface, size, line length, spacing, etc.) that best helps convey your brand's story

Example images and guidelines used to ensure the images used in conjunction with your brand are consistent with the

brand story

Messaging CanvasProject Name Designed By Date & Iteration

Customer Segment � Aspirations � Channels � Empowerment � Mission Statement �These are the people who have a problem that you understand better than

they do that you can potentially solve with your value proposition

The inspirational vision of the person your

customer wants to become

Channels describe the modes you will use to

deliver your value proposition to customers

The story your brand conveys to empower your

customers to achieve their aspirations

A clear and bold declaration of the company ’s mission of create a positive

impact

Problem Statement � Mental Models � Awareness Analogy Bridge � Value Proposition �The fundamental reason your customer is dissatisfied with their current

experience

The mental models or frameworks your

customer uses to frame the problem they face

How customers will become aware of your

solution

The analogy that connects your solution to the

customer's existing mental models

The solution statement describes what your offer is and what it will do for

your target customers

Job to Be Done ✔ Gains � Feelings Wished For � Sale Feelings Gained � Gain Creators � Product or Service �

The primary objective your customer

is trying to achieve

Customer needs that go beyond the

core utility of getting the job done

The extra emotional highlights your customer

wishes they could experience that are above and beyond the feelings related to resolving the

pain of the situation

How your solution will be explained and sold

Those above-and-beyond emotions your

customer experiences during or after using your solution

Value created by your product/service

above and beyond merely solving the problem

These are the products and/or

services you intend to sell.

Pains ✔ Feelings of Pain � Delivery Feelings of Resolution � Pain Killers �

The pain inherent in existing solutions

when getting the job done

The primary negative emotions related to the

problem statement that must be resolvedHow your solution will be delivered

The primary positive emotions your customer

will experience as a result of using your solution

The main attribute of your

product/service that solves the customer's pain

Testimonial of Problem � Problem Truth Bombs � Unique Advantage � Solution Truth Bombs � Testimonial of Solution �A written or recorded video where someone who has experienced the

problem describes it in their own words and the feelings they felt because of it

Factual statements or statistics that poignantly

describe the problem the customer has

The one or two things that make your solution

valuably different from other alternatives

Factual statements or statistics that illustrate

how your product or service solves the problem

A written or recorded video of someone who has experienced the problem,

solved it with your solution and describes their experience

Channel Design Canvas Project Name Designed By Date & Iteration No.

Customer

�

Problem

�

Channel � Solution

�

Provider

�Awareness Sale Delivery

A description of the target customer segment

The problem to solve for that customer segment

How customers become aware of the solution

The means by which the customer was presented the benefits of the

solution

The means by which the solution was delivered to the customer

A description of the solution to the customer's problem

Names of the solution providers

Cu

rre

nt

Pa

th T

o M

od

el

Pro

po

se

d F

utu

re P

ath

Ke

y M

etr

ics

Marketing Costs Customers Acquired Entry Exit Entry Exit Entry Exit Acquisition Cost Conversion Rate

Sum of all marketing costs over a specified period of time

Sum of all customers acquired during the same period

E.g. FB ad impressions

E.g. Email sign ups

E.g. Email opens

E.g. Clicks to purchase on

sales page

E.g. Order confirmations

E.g. Positive review /

testimonial

Total non-fixed marketing costs divided by total customers acquired

Awareness exit divided by Delivery entry



Customer Discovery


Solution Discovery


Market Development

Business Model Fit

Business Execution


Core Idea

Alternatives Discovered

Feasibility

Dashboard

Idea to Pursue

Minimum Model BuiltModel To Scale

Product Market

Fit

PivotFix fundamental flaw with the model

PersevereFix flaws in execution

Business Model Evolution



Customer Discovery


Solution Discovery


Market Development

Business Model Fit

Business Execution


IdeaMVP

- Beta

- Vertical experience

slice

Version 1

- Refined

- Scalable

- Profitable

Product EvolutionProduct Evolution

Low-fidelity

prototype

Med-fidelity

prototype

High-fidelity

prototype

- Alpha

Landing

Page

Video

Presentation

Sales

Brochure



Customer Discovery


Solution Discovery


Market Development

Business Model Fit

Business Execution


Idea

Low-fidelity

prototype

Med-fidelity

prototype

High-fidelity

prototype

- Alpha

MVP

- Beta

- Vertical experience

slice

Version 1

- Refined

- Scalable

- Profitable

Product EvolutionService Evolution



Customer Discovery


Solution Discovery


Market Development

Business Model Fit

Business Execution


Pain Score

0-10

Market Size

Customer

Metrics

Willingness to

Buy Score

0-10

# Signed LOI’s

Product

Metrics

Sales Volume

Sales Revenue

(not profit)

Channel

Metrics

Sales Volume

Profit

Business Process

(Operations)

Metrics

Customer

Satisfaction

Metrics

Metrics That Matter



Customer Discovery


Solution Discovery


Market Development

Business Model Fit

Business Execution


Founder with an Idea

Business Lead

+

Technical Lead

+

Design Lead

Business Lead

+

Technical Lead

+

Design Lead

+

Project Lead

+

Marketing Lead

+

Sales Lead

Execution TeamFounder Discovery Team Build Team

Build Team

+

Business Analyst

+

Functional Leads

Team Evolution



Customer Discovery


Solution Discovery


Market Development

Business Model Fit

Business Execution


Agenda:

- Review [updated] Canvas

- Review findings from customer

interviews including personas,

empathy maps and journey maps

- Review market size, distribution

map, technology and business

model runways and the type of

innovation you plan to pursue

- Request funds to form a full

discovery team

- Business Lead

- Engineering (or

Construction) Lead

- Design Lead

Agenda:

- Review Customer Willingness To

Buy scores

- Review LOI’s

- Review solution Feasibility and


- Review rationale for strategic fit

- Request funds to hire team

and build MVP

- Project Lead

- Sales Lead

- Marketing Lead

Agenda:

- Review findings from solution

experiments

- Review Solution Requirements

Canvas or Service Blueprint

- Review Brand Canvas

- Review Messaging Canvas

- Review Channel Design Canvas

- Determine if Product / Market Fit

was achieved

- Request funds to begin scaling

- Functional Leadership

- Business Analyst

Agenda:

- Review Vision and Strategy Canvas

- Review Solution Planning Canvas

- Review business model financial

performance

- Review business process maps and

models

- Ongoing Board Meetings

- Review business financial

performance

- Review all key functional

areas of the business

Stakeholder Reviews (occur at the end of each stage)

The Innovator’s Canvas Provides A Summary While The

Other Canvases and Concepts Go Deep In Each AreaProject Name Designed By Date & Iteration

Customer Segment � Channel(s) � Mission Statement � Business Structure �Awareness Legal Entity Owner(s)

Problem Statement � Sale Value Proposition � Key Resources �Human Intellectual

Job to Be Done ✔ Gains � Delivery Gain Creators � Product or Service � Physical Financial

Pains ☹ Support Pain Killers � Unfair Advantage � Key Partners �

Revenue Structure Pricing & Frequency � Cost Structure Total Cost of Running the Business �

Acquisition & Support Cost of Goods & Services General & Administrative

Overall Market Dynamics

Customer Trends Market Size Current Channels Current Solutions/Providers Technology Trends Industry Trends Regulatory Trends

Support

StructureSolution

Customer /

ProblemChannel

Market Environment

Pro-Forma P&L

Patents,

Copyrights,

Trademarks

Property,

Equipment,

Real Estate

Articles of Incorporation

Learning Log

Experiments Log

Business Model To Validate: Owner:

Build Measure Learn

Start

Step 0:

Focus

Step 1:

Question

Step 2:

Hypothesize

Step 3:

Metric & Criteria

Step 4:

Resources

Step 5:

Procedure

Step 6:

Observation Step 7: Conclusion End

#We asked this

question on…

We are

focusing

on…

Our question is… Our hypothesis is… We are right if…

The resources we

need are…Our procedure is… We observed that…

Our hypothesis

was valid,

invalid,

uncertain

We learned that…

We learned

the answer

on…People Materials

1 1/9/00 0:00Facebook

ads

Can we generate phone

call/sms for a smart /

predictive maintenance

agreement on facebook?

That we can generate

leads for smart

maintenance using online

ads and landing pages

We can generate an

average cost / lead for

less than $175

Scott

Facebook,

ad concepts,

landing page

Scott will create ads and

landing pages and post

them online

We learned the ads

performed better than

expected

Valid

We can generate more

demand than we

originally thought.

1/9/01 12:00 AM

Setting Up The Experiment

Observing

The

Results

Summarizing The

Insights




Strategy

The Innovator’s Canvas


MVP Storyboard

Low/Med/High Fidelity Prototypes



Service Blueprint

Vision and Strategy Canvas

Solution Planning Canvas


Problem to Solve





Learning Log: Problem Experiments

Customer Empathy Map

Customer Journey Map

Customer Persona Template



Learning Log: Messaging Experiments

Brand Canvas

Messaging Canvas

Process Maps




Form a Team


Channel


the Business

Market Distribution Map

Tech and Business Model Runways

4 Types of Innovation Cheat Sheet

Team Charter Canvas Learning Log: Channel Experiments

Channel Design CanvasProcess Models

Stakeholder Check-In:Review the customer, problem, market

opportunity and business canvas.

Request funding to form full discovery team

Stakeholder Check-In:Review prototype demo, feasibility, cost, IP

and strategic fit for building the business.

Request funding to create MVP

Stakeholder Check-In:Review MVP results, assess product

market fit and decide to pivot or persevere.

Request funding for scaling resources

Stakeholder Check-In:Review vision, strategy, solution plan and

business processes to scale.

Review ongoing needs of the business



Customer Discovery


Solution Discovery


Market Development

Business Model Fit

Business Execution


Pulling This All Together

You can do this

And I’m going to hold your hand the entire way…

A Quick Preview As to What Is Coming Next

An Opportunity to Join The Innovator’s Canvas

Masterclass

Keep An Eye Out To Your Inbox!

The Innovator’s Masterclass Is Different

Lots of folks out there say “Follow the Lean Startup process”

But they don’t tell you EXACTLY what to do step-by-step

This is the most common thing I hear from entrepreneurs and

business leaders “We love the idea of the Lean Startup but

don’t know where to start in applying it to our situation.”

Can’t find anyone who says “Do this in step 1, step 2, step 3…”

What is The Innovator’s Canvas Masterclass?

100% Step-by-Step Digital Course

12 Concentrated Modules of Actionable

Information

Limited Time Epic Bonuses

Next Up…

• I’ll go over all the details about The Innovator’s

Canvas Masterclass

• Keep an eye on your inbox for the next video in

the series!

• Share the video with your friends / co-workers

twelve steps to creating a new innovation from scratch › jakenielsonicm › free+mini+co… ·...

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