Virtual Prototype

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Build the tallest freestanding structure
The entire marshmallow must be on top
Use as much or as little of the kit
Break up the spaghetti, string or tape
The challenge lasts 18 minutes
Certainty /
Known
Traditional
Management
Uncertainty /
Unknown
Entrepreneurial
Management
Uncertainty = Assumptions
“Get the heck outside the building!” –Steve Blank

The goal is to fail fast and inexpensively

Redefine failure
 The only failure is wasting your time and money
when you could avoid it
▪ 1000 Markets Example
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Common Learning Traps
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Confirmation bias
Motivation bias
Familiarity bias
Superstitious learning
Goal: Listen to understand the world as it really
is
 Attitude of wisdom
 Willingness to be wrong and to fail
 Example: Mike Cassidy, Xfire

Experiment with virtual prototypes

Identify your assumptions and turn them into
facts

Power in low cost, simple, rapid
 Example: Jam experiment
 Example: Classtop and the $300 software
package
Which Problem Is
Worth Solving
(Nail the Pain)
Which Solution
Solves that
Problem
(Nail the
Solution)

Objective:
 Discover the Monetizable Market Pain
▪ Discover the “job” your customer is trying to get down without
being biased by the solution
 Develop the Big Idea Prototype

Steps:
▪
▪
▪
▪
▪

Step 1: Don’t build anything
Step 2: Write down Monetizable Pain hypothesis
Step 3: Write down Big Idea Prototype
Step 5: Quick test with customers
Step 5: Quick exploration of markets
Test:
 Customers return your cold call

The bigger the pain the easier to build a business
 Motive Communications
▪ Problem search
What about
Instagram?

Customer observation and empathy
 Put yourself in your customers shoes?
 What keeps them up at night, causes them
trouble, leads them to develop work-around?

Test your assumption with customers

Example: Motive Communications

Step 1: Profile customer segment
 I am ___________________________(who, with
at least 3 characteristics)
 I am trying to ___________________
(outcome/job trying to solve)
 But it’s difficult because ___________(identify
problems/barriers)

Step 2
 Story board of the journey of how customer solves

Step 3
 Identify biggest pain … do root cause (five whys)

Step 4
 Identify most important root cause

Step 5
 What questions do you need to answer about the root
cause
 Who could you talk to in order to answer these
questions?

Objective:
 Discover the Minimum Feature Set that drives
purchase

Steps:
▪ Test 1: Virtual Prototype Test
▪ Test 2: Prototype Test
▪ Test 3: Solution test

Test:
 Customers purchase
Most entrepreneurs build products …
Customers don’t want

Achieve Product / Market Fit
 Exact match between pain and
solution

Prototypes
 From virtual
prototypes to
actual prototypes

Minimum Feature Set

Can be
 Drawing
 Powerpoint
 Video

Test
 What will customers purchase
▪ Even before you build it

If you had to sell a customer today …
 For the skeptics … AtTask

Objective:
 Discover customer buying process and unique sales
process for your customers

Steps:
▪ Test 1: Buying process discovery
▪ Test 2: Market infrastructure discovery
▪ Test 3: Pilot customer validation
Customer
Awareness
Customer
Evaluation
Customer
Purchasing
Customer
Use
5
Target Customer
4
Advertising / Marketing / Social Media
3
Influencers
2
Partners
1
Company

Draw a map of customer buying process

Prioritize 3 most important inflection points

Set two dates on your calendar to investigate

Objective:
 Validate financial model & ignite business model

Steps
▪
▪
▪
▪
▪

Leverage customer conversations to predict business model
Validate the financial model
Iteratively launch product and go-to-market strategy
Business dashboard with continuous information flow
Adjust speed depending on market type
Examples:
 Webvan
 Webmetrics, Knowlix, Yahoo

Objective:
 Scale discovered model until it breaks
▪ Phase change recognition & management
▪ Recognize changes
▪ Shift process, structure and employees
▪ Emphasize with visual management
▪ Consciously define culture
▪ Succession and transition
▪ Leaping between markets

Examples:
 Intuit, Fusionsoft, Craigslist, SodaStart, IMVU
Product development
 Before you build anything:
 Identify hypotheses about customers
 Test those hypotheses as cheaply as possible
 Identify exactly customer pain and your solution with
customer
 Use a virtual prototype

Sales development
 Discover exactly how customers buy
 Develop a replicable sales model
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