venture design 1 day building the right solution

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© 2015 COWAN+

VENTURE DESIGN CRASH COURSEPART I- SOLVING THE

RIGHT PROBLEM Alex Cowan



© 2015 COWAN+

ABOUT ME

Entrepreneur (5x)Intrapreneur (1x)



© 2015 COWAN+

THE VENTURE DESIGN PROCESS

S C A L E ?

P IV O T ?

PRODUCT &

PROMOTION

USER STORIES

& PROTOTYPES

CUSTOMER

DISCOVERY &

EXPERIMENTS

VALUE

PROPOSITIONS &

ASSUMPTIONS

S H O W

M E …

?

W H A T

I F ?

Is the problemrelevant? Is theproposition bettervs alternatives?

Do we understand

this person? Whatmakes them tick?

Did theimplementationdeliver on the story?

Was the implementedstory relevant to theproposition?

How did the customer /user react?

WHO ?

PERSONAS

W H A T ?

PROBLEM

SCENARIOS &

ALTERNATIVES



© 2015 COWAN+

www.alexandercowan.com

ABOUT ME



© 2015 COWAN+

ALEX COWAN

alexandercowan.com

@cowanSF

WHY WOULD THIS CLASS BE IMPORTANT TO YOU?

ScaleFriendly

Innovation

Friendly

$ !?

? ! ? ? ?



© 2015 COWAN+

WHY WOULD THIS CLASS BE IMPORTANT TO YOU?

$ !?

? ! ? ? ?

#1: Start with the

individual

#2: Anchor toproblems,

not solutions

#3: Become a better

storyteller

#7: Learn first,

scale second

#8: Find yourself,

then create new identities

#4: Circulate ideas

#5: Test early, test often

#6: Let ideas die

with dignity



© 2015 COWAN+

4. HOW WILL WE WORK TOGETHER?

time

a l t e r n a t i v e s

divergence convergence

source: adapted from ‘The Design of Everyday Things’

generate

divergent ideas

(by working

individually)

converge the best

of what you’ve

created (as a

group)



© 2015 COWAN+

HOW WILL WE WORK TOGETHER?Finding the Right

PROBLEM

time



Finding the RightSOLUTION





© 2015 COWAN+

WHAT WORK WILL WE DO?Finding the Right

PROBLEMFinding the Right

SOLUTION

time


divergence convergence divergence convergence


User Stories

PersonasProblems

Alternatives

Field

Discovery

Value Hypothesis &

Assumptions

Product

Hypothesis

Software

Prototypes

Experiments on Motivation



© 2015 COWAN+


S C A L E ?

P IV O T ?

PRODUCT &

PROMOTION

USER STORIES

& PROTOTYPES

CUSTOMER

DISCOVERY &

EXPERIMENTS

VALUE

PROPOSITIONS &

ASSUMPTIONS

S H O W

M E …

?

W H A T

I F ?

Is the problemrelevant? Is theproposition bettervs alternatives?

Do we understand


Did theimplementationdeliver on the story?


How did the customer /user react?

WHO ?PERSONAS

W H A T ?

PROBLEM

SCENARIOS &

ALTERNATIVES



© 2015 COWAN+


Do we understand


WHO ?PERSONAS

W H A T ?

PROBLEM

SCENARIOS &

ALTERNATIVES



© 2015 COWAN+

The Twin Anti-Poles of Design Failure

Doing precisely what the user asks

Assuming you know what’sbest and ignoring the user

! " # $ %

THE PRACTICE OF DESIGN THINKING



© 2015 COWAN+

THE PRACTICE OF DESIGN THINKINGFinding the Right

PROBLEMFinding the Right

SOLUTION

time




User Stories

PersonasProblems

Alternatives

Field

Discovery

Value Hypothesis &

Assumptions

Product

Hypothesis

Software

Prototypes




© 2015 COWAN+

THE PRACTICE OF DESIGN THINKING- WHY IS IT HARD?

Design Thinking

Now

Survival

Then



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THE PRACTICE OF DESIGN THINKING- FOUNDATIONS

Empathy Creativity



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Entry1

Urinate as they go2

Edges preferred3

Speedy4

PB > cheese5

Empathy



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1

2

3

4

5

Check & Repair

UV Validation

Relevant Placement

A Better Mouse Trap

Powered by Better Bait

Creativity



© 2015 COWAN+

THE VENTURE DESIGN PROCESS- PERSONAS

Do we understand


WHO ?PERSONAS

W H A T ?

PROBLEM

SCENARIOS &

ALTERNATIVES



© 2015 COWAN+

DESIGN THINKING: EMPATHY & PERSONAS

ALEX COWAN

alexandercowan.com

@cowanSFbit.ly/2persona



© 2015 COWAN+

• Women

• Age 28-45

• Has kids

• Socialize with other mom’s

• Online with Facebook

• 86% said they’d like to be moreorganized

• 70% said they’d use an application that organizes them

PERSONA: BAD



© 2015 COWAN+

Bullet points are almost never

vivid or detailed

Stock photo- not real

This is a huge population-

not exact

These responses are ‘fake actionable’-

survey responses like this areunreliable

PERSONA: BAD

• Women

• Age 28-45

• Has kids

• Socialize with other mom’s

• Online with Facebook

• 86% said they’d like to be moreorganized

• 70% said they’d use an application that organizes them



© 2015 COWAN+

THE ART OF CUSTOMER DISCOVERY



© 2015 COWAN+

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 it’s not like having kids purged hercreative, social instincts. She wants to connect, she wants to

learn, she wants to interact. Being a mom is a job and she wants

to do it well. That means corresponding with other mom’s 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

PERSONA: BETTER



© 2015 COWAN+

the use of a first name helps w/

vividness (a little)

these full sentences look like a good

start towards something vivid and

detailed

this is a real photo of a relevant

person taken with an iPhone in the

real world

PERSONA: BETTER

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 it’s not like having kids purged hercreative, social instincts. She wants to connect, she wants to

learn, she wants to interact. Being a mom is a job and she wants

to do it well. That means corresponding with other mom’s 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



© 2015 COWAN+

ivid

eal

ctionable

dentifiable

xactetailedE

RAV

D



© 2015 COWAN+

EXERCISE- PERSONA CREATION

Mary the Working Mom

Susan the Stay-at-Home Mom

Douglas the Dad

Nathan the Nanny

Ivan the Infant

…

List at least 3 personas

(4 min)

use 1 index card/ persona



© 2015 COWAN+

Day in the LifeWe look at a few photos for a given persona (not a full picture, just snippets)

You make some guesses about them

There are no right answers BUT

There is a right process: observe and infer

OBJECTIVE:Get a feel for what’s real; start to create something vivid

A LITTLE GAME FOR BETTER PERSONA DISCOVERY



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PERSONAS- THINK SEE FEEL DO



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PERSONAS- ‘THINKS’?

Thinks: (The cognitive part. Often: the tension between how they’d ideally like things to be and how they are now.)

Sees

Feels

Does



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EXAMPLE- ENABLE QUIZ & HELEN THE HR MANAGER



© 2015 COWAN+


Thinks: Helen thinks the hiring process should be so much better- more systematic, fewer bad hires. Professional development issomething they’ve identified that they want to do better, but the functional managers aren’t engaged enough to get the whole

thing started.

Sees

Feels

Does

Example: Helen the HR Manager



© 2015 COWAN+

EXERCISE- DISCOVERING WHAT THEY THINKQuestion Form Examples Questions (‘Enable Quiz’)

Tell me about [yourself in the role of the persona]? - Tell me about being an HR manager?

- What do you most, least like about the job?

- What are the hardest, easiest parts of the job?

- I’ve heard [x]- does that apply to you?

Tell me about [your area of interest]? - Do you do screen new candidates? If not, who?

- Can you tell me about the last time? What was the trigger?

- Who else was involved? What was it like?

Tell me your thoughts about [area]? - How should it ideally be done?

- How is it actually done? Why?

Draft discovery questionsin the areas above

(If complete, convergewith your group)

(7 min)



© 2015 COWAN+


Thinks: Helen thinks the hiring process should be so much better- more systematic, fewer bad hires. Professional development issomething they’ve identified that they want to do better, but the functional managers aren’t engaged enough to get the whole

thing started.

Sees

Feels

Does

Draft the ‘Think’ portion for your top persona (If done, converge with your group.)

(4 min)




© 2015 COWAN+

CAN YOUR PERSONA DO THIS?

Capture

Attention

via Google

AdWord

Secure the

infamous

‘click through’

Engage Interest,

Desire on

landing page

Action,

onboarding,

retention



© 2015 COWAN+

CREATING AN ADWORD AD



© 2015 COWAN+

EXERCISE: CREATE AN ADWORD AD: THINK ANGLE

1. Select keywords (put in Notes section)

2. Draft ad copyHow does the draft follow from your personas?

Are you speaking in the language your customers use?

Are you connecting with the THINK in your Think-See-Feel-Do?

(NO RULE AGAINST UPDATING YOUR PERSONA WHILE YOU DO THIS!)

Create at least one Google AdWords ad on the paper template- specificallyusing the ‘think’ angle on your persona



© 2015 COWAN+

PERSONAS- ‘SEES’?


Sees: (The interactions that shape their Thinking- media, peers, education, training, casual observation.)

Feels

Does



© 2015 COWAN+


Thinks: Helen thinks the hiring process should be so much better- more systematic, fewer bad hires. Professional development is

something they’ve identified that they want to do better, but the functional managers aren’t engaged enough to get the whole thing

started.

Sees: Helen is at the tail end of every bad hire and sees the damage it does to the employee and company, alike. Helen sees thatonline learning has rocketed forward in the last few years. If someone wants to learn a specific skill, there’s a number of highquality options online, many of them free. They just need a way to help employees organize select into these courses.

Feels

Does




© 2015 COWAN+

EXERCISE- DISCOVERING WHAT THEY SEEQuestion Form Examples Questions (‘Enable Quiz’)







- Who else was involved? What was it like?Tell me your thoughts about [area]? - How should it ideally be done?


What do you see in [area]? Where do you learn what’s new? What others do? Who do you think is doing it right?How did you make your last decision?

Draft discovery questions

in the areas above(If complete, convergewith your group)

(4 min)



© 2015 COWAN+




started.

Sees: Helen is at the tail end of every bad hire and sees the damage it does to the employee and company, alike. Helen sees thatonline learning has rocketed forward in the last few years. If someone wants to learn a specific skill, there’s a number of highquality options online, many of them free. They just need a way to help employees organize select into these courses.

Feels

Does

Draft the ‘See’ portion for your top persona. (If done, converge with your group.)Example: Helen the HR Manager



© 2015 COWAN+

EXERCISE: CREATE AN ADWORD AD: SEE ANGLE




Are you connecting with the SEE in your Think-See-Feel-Do?


Create at least one Google AdWords ad on the paper template- specificallyusing the ‘see’ angle on your persona



© 2015 COWAN+

PERSONAS- ‘FEELS’?



Feel: (The emotional driver. What are the predominant emotions around the relevant activity? What is the emotional outcome of the actions they take around the activity?)

Does



© 2015 COWAN+




started.

Sees: Helen is at the tail end of every bad hire and sees the damage it does to the employee and company, alike. Helen sees that

online learning has rocketed forward in the last few years. If someone wants to learn a specific skill, there’s a number of high

quality options online, many of them free. They just need a way to help employees organize select into these courses.

Feels: Helen feels like crap whenever they have to let someone go. She hates it. The employee hates it. The manager hates it. It’s

incredibly destructive and de-motivating for everyone involved. Helen would love to be more involved, more included infunctional skills evaluation and improvement. She’s love to have a success story to talk about. Most HR departments don’t do awhole lot in this area.

Does




© 2015 COWAN+

EXERCISE- DISCOVERING WHAT THEY FEELQuestion Form Examples Questions (‘Enable Quiz’)









What do you see in [area]?Where do you learn what’s new? What others do?

Who do you think is doing it right?

How did you make your last decision?

How do you feel about [area]?Tell me about the last time?

What motivates you? What parts of it are most rewarding? Why?

What would it be like in your perfect world?

Draft discovery questionsfor the ‘feel’ area


(4 min)



© 2015 COWAN+




started.





incredibly destructive and de-motivating for everyone involved. Helen would love to be more involved, more included infunctional skills evaluation and improvement. She’s love to have a success story to talk about. Most HR departments don’t do awhole lot in this area.

Does

Draft the ‘Feel’ portion for your top persona. (If done, converge with your group.)Example: Helen the HR Manager



© 2015 COWAN+

EXERCISE: CREATE AN ADWORD AD: FEEL ANGLE




Are you connecting with the FEEL in your Think-See-Feel-Do?


Create at least one Google AdWords ad on the paper template- specificallyusing the ‘feel’ angle on your persona



© 2015 COWAN+

PERSONAS- ‘FEELS’?



Feel: (The emotional driver. What are the predominant emotions around the relevant activity? What is the emotional outcome of the

actions they take around the activity?)

Do: The ‘actuals’. As applicable: What triggers? How often? For how long? How much money?



© 2015 COWAN+




started.





incredibly destructive and de-motivating for everyone involved. Helen would love to be more involved, more included in functional

skills evaluation and improvement. She’s love to have a success story to talk about. Most HR departments don’t do a whole lot in

this area.

Does: Helen’s relatively responsive to new ideas, particularly if someone knowledgeable is willing to come in and talk about it. Ifshe likes it, she’ll bring it to the functional managers, who are usually the ultimate decision makers since without their supportshe can’t get the system online and working. Post-sale, Helen will help keep the program organized, moving, and otherwise on

the functional managers radar. All this is predicated on Helen being equipped with the right messages, facts, and best practices to make the purchase and use of Enable Quiz effective.




© 2015 COWAN+

EXERCISE- DISCOVERING WHAT THEY DOQuestion Form Examples Questions (‘Enable Quiz’)









What do you see in [area]?Where do you learn what’s new? What others do?

Who do you think is doing it right?

How did you make your last decision?

How do you feel about [area]?

Tell me about the last time?

What motivates you? What parts of it are most rewarding? Why?

What would it be like in your perfect world?

What do you do in [area]?How many new openings/quarter?How many interviews/position?

Draft discovery questionsfor the ‘do’ area


(4 min)



© 2015 COWAN+




started.





incredibly destructive and de-motivating for everyone involved. Helen would love to be more involved, more included in functional

skills evaluation and improvement. She’s love to have a success story to talk about. Most HR departments don’t do a whole lot in

this area.

Does: Helen’s relatively responsive to new ideas, particularly if someone knowledgeable is willing to come in and talk about it. Ifshe likes it, she’ll bring it to the functional managers, who are usually the ultimate decision makers since without their supportshe can’t get the system online and working. Post-sale, Helen will help keep the program organized, moving, and otherwise on

the functional managers radar. All this is predicated on Helen being equipped with the right messages, facts, and best practices to make the purchase and use of Enable Quiz effective.

Draft the ‘Do’ portion for your top persona. (If done, converge with your group.)Example: Helen the HR Manager



© 2015 COWAN+

EXERCISE: CREATE AN ADWORD AD: DO ANGLE




Are you connecting with the DO in your Think-See-Feel-Do?


Create at least one Google AdWords ad on the paper template- specificallyusing the ‘do’ angle on your persona



© 2015 COWAN+

PERSONAS & PROBLEM SCENARIOS

Do we understand this person? What

makes them tick?

WHO ?PERSONAS

W H A T

?

PROBLEM

SCENARIOS &

ALTERNATIVES



© 2015 COWAN+


XPROBLEM SCENARIO



© 2015 COWAN+


XWhat job(s) are you doing for the

customer?

What existing need or behavior

are you fulfilling?

PROBLEM SCENARIO



© 2015 COWAN+


X

?

PROBLEM SCENARIO

ALTERNATIVE(S)



© 2015 COWAN+


X

?If they currently use

spreadsheets, watch them use it

and get a copy of it.If they currently put notes on the family

fridge, ask about it, photograph it.

PROBLEM SCENARIO

ALTERNATIVE(S)



© 2015 COWAN+


X

It’s hard for the HR manager to send good notes on

candidates to the functional manager.(Too Detailed, A Feature vs. a Product/Venture)

‘Hiring technical talent is difficult.’

(Too Broad, Abstract)

‘Screening technical talent is difficult.’

(Probably About Right)



© 2015 COWAN+


X

?

PROBLEM SCENARIO

ALTERNATIVE(S)



© 2015 COWAN+


ALTERNATIVE(S)?

PROBLEM SCENARIOXProblem: Helen doesn't have a software

engineering background, so it's hard for her to

screen engineering candidates. She ends up

sending the functional manager too many

unqualified candidates. .

Alternative: She calls references and mostly ends

up taking their word for it.

Brainstorm Problem Scenario+Alternative Pairs.

(4 min)



© 2015 COWAN+

EXERCISE: CREATE AN ADWORD AD: PROBLEM SCENARIOS


2. Draft ad copyHow does the draft follow from your problem scenarios?


(NO RULE AGAINST UPDATING YOUR PROBLEM SCENARIOS WHILE YOU DO THIS!)

Create at least one Google AdWords ad on the paper template- specificallyusing the your top problem scenarios (and alternatives as you see fit)



© 2015 COWAN+


XPROBLEM SCENARIO

?ALTERNATIVE(S)

YOUR VALUE PROPOSITIONS !



© 2015 COWAN+


XPROBLEM SCENARIO

?ALTERNATIVE(S)

YOUR VALUE PROPOSITIONS !Are they better enough than the

alternative(s)?



© 2015 COWAN+


ALTERNATIVE(S)?

PROBLEM SCENARIOXProblem: Helen doesn't have a software

engineering background, so it's hard for her to

screen engineering candidates. She ends upsending the functional manager too many

unqualified candidates. .

Alternative: She calls references and mostly ends

up taking their word for it.

Value Proposition: New ability for meaningful

screening of technical candidates, increasing % of

successful hires and lowering Frank the Functional

Manager's workload on recruiting.

Brainstorm Problem Scenario+Alternative Pairs.(If done, converge with yourgroup.)

(4 min)

YOUR VALUEPROPOSITIONS!



© 2015 COWAN+

EXERCISE: CREATE AN ADWORD AD: VALUE PROPOSITIONS


2. Draft ad copyHow does the draft follow from your value propositions?


(NO RULE AGAINST UPDATING YOUR PROBLEM SCENARIOS WHILE YOU DO THIS!)

Create at least one Google AdWords ad on the paper template- specificallyusing the your top value propositions



© 2015 COWAN+

AND NOW THE ‘PRODUCT HYPOTHESIS’

X

?

!

… and they have a certain

PROBLEMS(S) …

… where they’re currently using certain

ALTERNATIVE(S) …

… and I have a VALUE PROPOSITION

that’s better enough than the alternatives

to cause the persona to act (purchase,

use, etc.).

A certain PERSONA exists…



© 2015 COWAN+



PROBLEMS(S) …

… where they’re currently using certain

ALTERNATIVE(S) …




use, etc.).

A certain PERSONA exists…‘HR and functional managers are in charge of

technical hires

and they struggle to effectively screen for technical skill sets, making the hiring processslower and more labor intensive and producing

worse outcomes than they should reasonablyexpect.

Currently they implement a patchwork of callingreferences and asking a few probing questions.

By offering an easy, affordable, lightweight technical quizzing solution, Enable Quiz canacquire and retain these customer personas,delivering material value.’

Enable Quiz example:

Draft your producthypothesis

(4 min)



© 2015 COWAN+

RECORDING ON THE BUSINESS MODEL CANVAS

Why do they buy? Who are they?

Broad Selection

Competitive Prices

Convenience

Do-it-yourselfer’s

Casual Shoppers

Contractors

Example: Home Depot

Customer

SegmentsValue

Propositions



© 2015 COWAN+

RECORDING ON THE BUSINESS MODEL CANVAS

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1. List Prioritized CustomerSegments/Personas

2. List Prioritized ValuePropositions

3. Note Linkages(if applicable)

(5 min)



© 2015 COWAN+

DELIVERABLES FROM WHAT WE JUST DID

Personas, including

Think-See-Feel-Do – Problem Scenarios

– Alternatives

–Value Propositions


makes them tick?

WHO ?PERSONAS

W H A

T ?

PROBLEM

SCENARIOS &

ALTERNATIVES

– Interview Guide

– 2 (or more) Interviews



© 2015 COWAN+

WHAT WE’LL WORK ON TODAY

Finding the RightPROBLEM

Finding the RightSOLUTION

time

a l t e r n a t i v e

s



Personas

Problems

Alternatives

Field

Discovery

Value Hypothesis &

Assumptions

Product

Hypothesis




© 2015 COWAN+

DELIVERABLES FROM WHAT WE JUST DID


makes them tick?

WHO ?PERSONAS

W H A

T ?

PROBLEM

SCENARIOS &

ALTERNATIVES



© 2015 COWAN+

WHAT WE’LL COVER TODAY


makes them tick?

WHO ?PERSONAS

W

H A T ?

PROBLEM

SCENARIOS &

ALTERNATIVES

VALUE

PROPOSITIONS &

ASSUMPTIONS


makes them tick?

WHO ?PERSONAS

W

H A T ?

PROBLEM

SCENARIOS &

ALTERNATIVES

CUSTOMER

DISCOVERY &

EXPERIMENTS

VALUE

PROPOSITIONS &

ASSUMPTIONS

W H A T

I F ?


makes them tick?


WHO ?PERSONAS

W

H A T ?

PROBLEM

SCENARIOS &

ALTERNATIVES



© 2015 COWAN+



PROBLEMS(S) …

… where they’re currently using certainALTERNATIVE(S) …




use, etc.).

A certain PERSONA exists…‘HR and functional managers are in charge of

technical hires

and they struggle to effectively screen for technical skill sets, making the hiring processslower and more labor intensive and producing

worse outcomes than they should reasonablyexpect.

Currently they implement a patchwork of callingreferences and asking a few probing questions.

By offering an easy, affordable, lightweight technical quizzing solution, Enable Quiz canacquire and retain these customer personas,delivering material value.’

Enable Quiz example:

As a group, converge your product hypothesis

(5 min)



© 2015 COWAN+

WORKING YOUR PRODUCT HYPOTHESIS

A certain PERSONA exists… PERSONA HYPOTHESIS

QUESTIONS

Does this person exist?

Can you identify them?

Do you understand them really well?

What do they think-see-feel-do in yourarea?

TOOLS

Photos

Think-See-Feel-Do

Discovery Interviews

Storyboards

Day in the Life Boards



© 2015 COWAN+



PROBLEMS(S) …

… where they’re currently using certainALTERNATIVE(S) …

PROBLEM HYPOTHESIS

QUESTIONS

Have you identified a discrete problem/need?

How important is it to the target

persona(s)?What alternatives do they use today? How?

TOOLS

Problem Scenario + Alternative + ValueProposition Trios

Discovery InterviewsStoryboards



© 2015 COWAN+





use, etc.).

VALUE HYPOTHESIS

QUESTIONS

How much better than the best alternativeis your product?

How obvious is that to the customer?

TOOLS

Structured Assumptions

Structured Experiments (including MVP)



© 2015 COWAN+

HYPOTHESIS-DRIVEN INNOVATION VIA ‘LEAN STARTUP’Do I have real evidence from my buyer that

this is compelling?01 IDEA!

What is our ‘value hypothesis’ and what areits key assumptions?

02 HYPOTHESIS

How do I definitely prove or disprove the

assumptions with a minimum of time andeffort?

03 EXPERIMENTAL DESIG N

04 EXPE RIM ENTATION

Am I reacting or am I focused onvalidating my pivotal assumptions?

‘Pivot or persevere?’

VALUEHYPOTHESISsource: adapted from ‘The Lean Startup’



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HYPOTHESIS-DRIVEN INNOVATION VIA ‘LEAN STARTUP’

What is our ‘value hypothesis’ and what areits key assumptions?

02 HYPOTHESIS

VALUEHYPOTHESIS



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EXAMPLE: ENABLE QUIZ

Persona(s)Helen the HR Manager- responsible for sourcing and screening job candidates

Frank the Functional Manager- hiring manager responsible for acquiring and managing talent

ProblemScenario

Helen: hard to screen for technical skills

Frank: never has enough time for recruiting and doesn’t want to be a jerk during interviews

AlternativesHelen: call references, take their word for it (on skills)

Frank: ask a few probing questions

Value Prop. A lightweight quizzing app that has Helen can use to do quick, effective screening.

What is the core value hypothesis?



© 2015 COWAN+


Core Value Hypothesis

If Enable Quiz offers companies that hire

engineers lightweight technical quizzes that

screen job candidates for engineering positions,

then these companies would trial, use, adopt, andpay for such a service.



© 2015 COWAN+


As a group, draft yourcore value hypothesis

If Enable Quiz offers companies that hire

engineers lightweight technical quizzes that

screen job candidates for engineering positions,

then these companies would trial, use, adopt, andpay for such a service.

As a group, converge your product hypothesis

(5 min)



© 2015 COWAN+

UNBUNDLING THE VALUE HYPOTHESIS INTO ASSUMPTIONS

If we [do something] for [persona], they will [respond in a certain way]

Example Assumptions (Enable Quiz)

If we get HR managers to a landing page with a demo, 10% will sign up forour email product announcements.

If we create position-specific quizzes for HR managers, they’ll use them

~100% of the time and, after two positions, be willing to pay.

If we offer the service at [x] price with [y] supplemental assistance,companies that hire a lot of engineers will pay [z].



© 2015 COWAN+

TESTING YOUR ASSUMPTIONS VIA AN ‘MVP’

M

VP

inimum What is the fastest, cheapest

way to validate or invalidate

this option so we give

ourselves more options onfuture success?



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roductiable

inimumis not necessarily actual software/product (seeconcierge MVP)

is a first and foremost learning vehicle …

vs. a project plan

(OK to do those things but always subordinate them to the learning mission)

vs. a product development project

M

VP



© 2015 COWAN+


MVP Archetype Notes

Wizard of Oz Show or fake the customer experience

Concierge Hand create the user experience

Sales See if you can sell some.



© 2015 COWAN+


MVP Archetype Example Assumptions (Enable Quiz)

Wizard of Oz If we get HR managers to a landing page with a demo, 10% will sign up forour email product announcements.

Concierge

If we create position-specific quizzes for HR managers, they’ll use them


SalesIf we offer the service at [x] price with [y] supplemental assistance,companies that hire a lot of engineers will pay [z].




© 2015 COWAN+

CASE STUDY: DROPBOX

OPPORTUNITYUnderlying demand and supportinginfrastructure ready for a great file sharing app.

CHALLENGEBuilding a great cross-platform app. requiredVC funding. VC’s saw a space with lots ofexisting competitors struggling to get traction.



© 2015 COWAN+

CASE STUDY: DROPBOX

PersonaTom the Techie- early adopter who works on projects that require swapping a lot of files between a shifting

network of collaborators.

ProblemScenario

It’s difficult to share files between a network of collaborators, particularly if they’re: big or numerous or change a

lot.

AlternativesMany existing products, but none of them super compelling and widely adopted.

Also, custom setup’s which work but are cumbersome to set up and maintain.

ValueHypothesis

If Dropbox created a file sharing service that truly felt transparent to the user across all major platforms- OSX, iOS,Windows, etc., then a mass market of users would prefer it over the alternatives, subscribe to it and use it over

time.

What Minimum Viable Product (MVP)?

That you can bootstrap?

That doesn’t require software at all?



© 2015 COWAN+

THE WIZARD OF OZ MVP

Result: Excellent traction and

conversion to sign-up’s.

Strong validation signal.

Created a synthetic web demo tailoredfor early market (techies), promoted it,and measured email sign-up’s.



© 2015 COWAN+


OPPORTUNITYHiring quality technical talent is critical formany companies, but screening for skill sets is

time consuming and awkward.

CHALLENGEThe founding team wants to bootstrap withoutexternal funding so they need to focus on aspecific technical domain, one that will get

them strong early traction.



© 2015 COWAN+

THE CONCIERGE MVP

Metrics:

Do the HR managers use them? How often?

Do they want one for their next open position?

Do the functional managers care?

Work with a set of HR managers to produceposition-specific quizzes by hand on paper (orGoogle Forms, etc.).



© 2015 COWAN+


A QUESTION?There are dozens of technical/engineer topicsEnable Quiz could offer. How can they assesswhich topics are most marketable?



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THE GOOGLE ADWORDS MVP

Metrics:Which topics have the highest click-through rate (CTR)?

Which then convert to sign-up’s to newsletters, etc.?

Pair their qualitative research with topics trendingonline and then run a series of Google AdWordscampaigns with different topics.



© 2015 COWAN+

CASE STUDY: LEONID SYSTEMS

OPPORTUNITY(2007) Major disruption and new productopportunities among telecom providers withintroduction of voice-over-IP and cloud

communications.

IT systems need to be rethought.

CHALLENGEAs a one-person startup, Leonid had actionable

ideas but not enough resources to execute anend-to-end solution.



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Persona(s) Chris the CTO- has funding and mandate to transition the business towards hosted services; many bases to cover

ProblemScenario

IT is the most expensive, most risky area when making changes to the business.

Alternatives1) Place large, risky bets on major new system upgrades. 2) Make small incremental updates (but risk not keeping

pace).

Value

Hypothesis

Leonid will offer modular, integration-friendly applications in two critical areas: 1) services provisioning and 2) end

user self-service portals.






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Started with consulting as a ‘concierge’ vehicle to create tactical solutions, focus problemscenarios, evolving to full-fledged product.

Result: Steady step-wise growth with

consistently better understanding of key

customer problem scenarios.



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CASE STUDY: ZAPPOS

OPPORTUNITY(1999) An observed problem scenario around

the difficulty of finding the right shoe at localretail and a giant (but nascent) market in online

retail.

CHALLENGEConsumers still in the early stages of adoptingand habituating to online retail. Founder (NickSwinmurn) wanted to bootstrap.



© 2015 COWAN+

Result:

It worked and the rest is history.

Photographed shoes and put them online toobserve whether anyone bought them.

CASE STUDY: ZAPPOS



© 2015 COWAN+

Persona(s) Sam the shoe-hound- knows what he wants but not where to get it.

ProblemScenario

Sam is unable to find the shoe he wants at local retailers, wasting time and getting frustrated.

Alternatives Possibly mail order or wait until he’s in a bigger market to go to the store.

Value

Hypothesis

Make the shoe Sam wants accessible online and make sure he has a great experience so he’ll come back and not

have to think about where to find the shoe he wants anymore.




CASE STUDY: ZAPPOS



© 2015 COWAN+

CASE STUDY: SPRIG

Startup looking for early traction for investors:Whole Foods (deli) meets Uber.

OPPORTUNITYLarge opportunity to re-segment and disruptfood prep. and delivery business. Desire tomove fast and learn fast.

CHALLENGESome existing competitors and slow

fundraising process. Food prep. and deliveryrequires infrastructure.

source: as told to Lean Startup Circle, SF (Jan 2014)



© 2015 COWAN+

CASE STUDY: SPRIG

Persona(s) Paula the Professional- health conscious, short on time, moderate to high income, already uses similar services

like Uber.Problem

ScenarioI want to have a nice, healthy dinner with no hassle and at a price I can afford (like $12).

Alternatives Going to the store or an expensive, take-out, or a slow delivery service (>20 minutes).

Value

HypothesisIf Sprig offers Paula a healthy meal like you would order a cab (on Uber), then she would use and reuse the service.




* This is me interpolating/guessing on an item; not part of the Sprig team’s explanation.



© 2015 COWAN+

THE CONCIERGE MVP

Result: Excellent traction and conversion to sign-up’s.

Strong validation signal.

Created a synthetic web demo tailored for earlymarket (techies), promoted it, and measured emailsign-up’s.



© 2015 COWAN+

CASE STUDY: PAUL HOWE & ASSOCIATES

OPPORTUNITYFunded startup team rapidly iterating throughB2C concepts with lightweightexperimentation.

One idea: Some people would like to know howmuch their stuff is worth.

CHALLENGEIterate to a successful concept while the time

and money permits.



© 2015 COWAN+

Persona ?

ProblemScenario

I have a lot of stuff around that I might want to sell and/or I’m just generally curious about how much it’s worth, how

much I’ve spent.*

Alternatives Going through credit card statements or receipts.

ValueHypothesis

If Paul Howe & Co. offered a service where you could quickly, automatically know how much your stuff is worth,

users would engage with such a service in large numbers.*




* This is me interpolating/guessing on an item; not part of the Sprig team’s explanation.




© 2015 COWAN+

Result: They don’t care. Time to move on to thenext concept.

Get a few sign-up’s with access to email and bankaccount info. Review by hand on a concierge basisand compile a statement for them. Do they care?




© 2015 COWAN+

CASE STUDY: STEALTH PHOTO-SOCIAL STARTUP

OPPORTUNITYLots of exciting things happening in the photo-social space.

CHALLENGEThe team had several ideas but few resources.



© 2015 COWAN+

Persona Existing poster of photos. Personas: Martha the Mom, Pat the Party Planner, Teresa the Teen Social Butterfly

ProblemScenario

[I want to do something interesting with my photos so that my social graph rewards me with interest and acclaim]

Alternatives Manually enhance photos, use alternative enhancers/amplifiers like Instagram

ValueHypothesis

If we offers Facebook users a way to [do something novel] with their photos, they will try the service and convert to

a paid version of the app.







© 2015 COWAN+


ASSUMPTIONIf the user shares a photowith this treatment, theuser’s social network willlike and share the app’s

output

What MVP?

That you canbootstrap?

That doesn’t requiresoftware at all?



© 2015 COWAN+

ABOUT SOFTWARE, TESTING MOTIVATION, AND MVP’S

You have to put the magic in the software.

(Not the other way around)

Concierge and other non-software MVP’scan be pretty magical.

Find 100 people that are really into it and

you can probably grow.



© 2015 COWAN+




ConciergeIf we create position-specific quizzes for HR managers, they’ll use them




Individually, begin decomposing your core valuehypothesis into testable assumptions

Pair them with ideas for experimentation (includingMVP’s if applicable)



© 2015 COWAN+

WHAT WE’LL WORK ON TODAY

Finding the RightPROBLEM Finding the RightSOLUTION

time




Personas

ProblemsAlternatives

Field

Discovery

Value Hypothesis &

Assumptions

Product

Hypothesis




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YOUR VENTURE, THE EXPERIMENT

Component Notes

What assumption will this test? How?

What is/are the pivotal metric(s)?

What is the threshold for true (validated) vs.

false (invalidated)?

What will you do next if the result is true?

False?

How much time, money will it take to set up?

Roughly, what will it take for each individual

test? Subsequent tests?

Roughly, how long will it take for each test torun and produce definitive, actionable results?



© 2015 COWAN+

EXAMPLE: ENABLE QUIZ CONCIERGE MVP

Component Notes


If we create position-specific quizzes for HR managers, they’ll use them ~100% of

the time and, after two positions, be willing to pay.

If the HR managers use the quiz, they’ll send through <1/2 as many candidates.

If we offer the service at [x] price with [y] supplemental assistance, companies that

hire a lot of engineers will pay [z].




[quizzes administered] / [candidates interviewed]

comparison on candidates screened out (historical)ability to sell


False?

True: Build a simple1.0

1 & 2 True: Look at customer creation hyp., value hypothesis

False: Consider value hyp., problem hyp.

How much time, money will it take to set up? see bit.ly/exp-test


test? Subsequent tests? see bit.ly/exp-test


see bit.ly/exp-test



© 2015 COWAN+

EXAMPLE: ENABLE QUIZ ADWORDS MVP

Component Notes

What assumption will this test? How? If Enable Quiz offers its quizzing solution in the area of [x], customers will subscribe.




absolute click-through-rate; we’d like to see >=2%

relative to CTR (on this basis we’ll select our top 10 topics)


False?

True (along with previous): Build a simple1.0 with selected topics.

False (all CTR’s <2%): Revise customer creation plan & test an alternate topic

assessment strategy





see bit.ly/exp-test

D ft t f i t t if



© 2015 COWAN+

EXAMPLE: ENABLE QUIZ CONCIERGE MVP

Component Notes


If we create position-specific quizzes for HR managers, they’ll use them ~100% of

the time and, after two positions, be willing to pay.

If the HR managers use the quiz, they’ll send through <1/2 as many candidates.

If we offer the service at [x] price with [y] supplemental assistance, companies that

hire a lot of engineers will pay [z].




[quizzes administered] / [candidates interviewed]

comparison on candidates screened out (historical)ability to sell


False?

True: Build a simple1.0

1 & 2 True: Look at customer creation hyp., value hypothesis

False: Consider value hyp., problem hyp.





see bit.ly/exp-test

Draft a set of experiments to verify your assumptions



© 2015 COWAN+

ASSIGNMENTS

1. Draft Project Personas, Problem Scenarios, and Alternatives (30-60 min).2. Draft Customer/User Discovery Questions (20-40 min.)

3. Complete at least Two (2) Subject Interviews (60-120 minutes)

4. Create Your Working Product Hypothesis (5-10 minutes)

5. Draft a Working Set of Assumptions Against Your Value Hypothesis (15-30

minutes)6. Design (an) Experiment(s) for Your Assumption(s) (30-60 minutes)



bit.ly/vdesignCheck outVenture Design

@cowanSFTwitter

[email protected] in touch!

Use Customer DiscoveryHandbook bit.ly/cdhandbook

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