business plan 2.0 & the practice of venture design

8/10/2019 Business Plan 2.0 & The Practice of Venture Design

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Copyright 2014 Cowan Publishing

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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ALEX COWANAlexanderCowan.com

@cowanSF

ABOUT ME

Entrepreneur (5x)Intrapreneur (1x)


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@cowanSF

ABOUT ME


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ABOUT ME

www.alexandercowan.com


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@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


What?


What if?

!


How?

Scale?

Pivot?

PRODUCT &PROMOTION

/


Tell me?

FULL CIRCLE


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Empathy Creativity

DESIGN THINKING


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@cowanSF

DISCOVERY & LEARNING: PERSONAS


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@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


@cowanSF


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@cowanSF

XPROBLEM SCENARIONEEDFINDING: PROBLEM SCENARIOS


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@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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@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



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@cowanSF

YOUR VALUE PROPOSITIONS !

ALTERNATIVE(S) ?

PROBLEM SCENARIO X



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@cowanSF

X

Are they better enough than thealternative(s)?

!

?

YOUR VALUE PROPOSITIONS

ALTERNATIVE(S)

PROBLEM SCENARIO



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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


What?


What if?

!


How?

Scale?

Pivot?

PRODUCT &PROMOTION

/


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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@cowanSF

STORYBOARDING PROBLEM SCENARIOS

AFTER

BEFORE


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THINK SEE

FEEL DO

PERSONAS

Who?

X


What?


What if?

!


How?

Scale?

Pivot?

PRODUCT &PROMOTION

/


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


What?


What if?

!


How?

Scale?

Pivot?

PRODUCT &PROMOTION

/


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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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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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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All customers wantthis feature. We haveto do it.

Really all of them?That doesnt soundcredible.X


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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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[email protected]

@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

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