Frame a Value and Growth Hypothesis

Sanjay Vijayakumar

Why?

Reason #1: Customers use your product by paying a price

because of the value that it provides

Reason#2: Once you find initial customers, you will need to an efficient method to find more of them to grow into a

business.

Remember: Every Startup is on a journey/adventure to

become a sustainable business.

Remember: To become a sustainable business, a startup needs to generate

more money (income) than its expenses.

What is Value? What is Price?

Price is what customers pay.Value is what customers get.

Example:Bullet BikeValue : Riding

Pleasure

Example:Bullet Shares

Value : ROI

Facebook User: Price is Free

Value: Networking with friends

Facebook Stock: Price $$

Value:ROI

Food @ Regular Hotelv/s

Food@ 5 Star Hotel

At a 5 Star Hotel - You will get a high quality

AmbienceServiceRestroomsQuality of UtensilsQuality of Food

And this reflects in the price that you pay for the value (better quality ambience, service etc..) you get.

Tip: Technology is not your business. Its only an enabler to your business.

Business starts when

a. you provide value through a product to customers

b. who pays a price for the value andc. you find a way to grow profitably to repeat

a.

To Do#1:

Frame your value hypothesis statements

Hypothesis: We believe Customers will use product <Name of your product>

because/for <fill in the blanks with your value/reasons why customers will use the

product>

Growth Hypothesis is assumption how new users will find your

product.

To Do#2:

Frame your growth hypothesis statements

Statement: We will find our initial customers by..<fill in

the blanks with how you plan to get new customers>

Tip: These value and growth hypothesis are the assumptions that your team would be testing in

the coming six months.

Fundamental difference between college and SV.CO is this crucial step of finding customers.

You can move forward in steps 4-10 only by finding real customers in real world by providing

real value.

Time

Steps

1. Idea2. Prototype

3. Early Customers4. Efficiently adding customers

5. Scaling Business Operations6. Being Operational Break-even

7. Generating Business Profits8. Defending Profits from competition

9. Recovering Business Investments10. Return on Investment for Shareholders

Teams attempt at-least 4 products to find customers

T= 10 yearsT= 6 monthsT= 0

Useful Resource: https://blog.kissmetric

s.com/dropbox-hacked-growth/

Also write down your insight in your timeline entry as to what

you learnt by trying to formulate your value and

growth hypothesis.

Insight = new learning, action items or other todo tasks.

All because you performed this task.

Insight pointers: While choosing an idea from the ideas list, select a market you

understand or think you can learn the best, as it will allow you to go very deep into that domain/market and become and expert to

find the real customer pain.

Solving for this real customer pain will help you find the real value and growth

hypothesis.

Don’t forget to check the Rubric for

pointers.