Class 2 / 12

February 9, 2015

Jen van der Meer | jd1159 at nyu dot edu

Josh Knowles | chasing at spaceship dot com

LEAN LAUNCHPAD AT NYU ITP

Rockets Sketches borrowed from Harry Allen Design

6:30 – 7:00

Guest Speaker: Chris Milne, Sacrificial Prototypes

7:00 – 8:00

5 minute business model canvas presentations

5 minute questioning of key business model hypotheses

8:00-8:15

Break

8:50 – 9:10

Discussion – Value Proposition, Research Methods

8:30–9:30

Guest Speakers:

Travis Hardman, CTO Daily Voice

TODAY:

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CLASS TIMEFRAME 2015

2/2Business ModelsCustomer Development

2/9Value Proposition Research tools

2/16President’s Day

2/23Customer SegmentsResearch Tools

3/23Spring Break

3/9Customer RelationshipsProduct Development

3/23ResourcesActivities + Costs

3/30Product DevelopmentUX and User InterfaceDesign

4/6UI UX Part 2

4/13Product DevelopmentUser test

4/20Product development

4/27Product MVP

May!Delicious CelebrationLessons Learned

3/2Revenue StreamsDistribution Channels

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LEAN AT NYU ITP OUR APPROACH

Customer research is about getting out of the building.

It must be done by you, the founding team, because:

• Key customer feedback points are random, unpredictable, and often painful to hear.

• Employees have far less at stake, may fear reporting bad news, and they don’t get heard adequately when they report back.

• There are good consultants (like our UX advisors for the class) and bad ones, who weed out the negative commentary and who look for upsell opportunities. Learn how to tell the good from the bad by doing the work yourself.

CUSTOMER DEVELOPMENT

“ONLY a founder can embrace the feedback, react to it, and adeptly make the decisions necessary to change or pivot key BUSINESS MODEL components?”

AGREE?

A Value Proposition creates value for a Customer Segment through a distinct mix of elements catering to that segment’s needs.

Quantitative, Qualitative.

VALUE PROPOSITION

A Value Proposition creates value for a Customer Segment through a distinct mix of elements catering to that segment’s needs.

Quantitative, Qualitative.

VALUE PROPOSITION

Newness

Performance

Customization

“Getting the job done”

Design

Brand/Status

Price

Cost Reduction

Risk Reduction

Accessibility

Convenience/Usability

_The Business Model Canvas

VALUES

GO DEEPER ON VALUE PROP:

VALUE PROPOSITION FIT

VALUE PROPOSITION FIT

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WHERE DO YOU FIND A VALUE PROPOSITION?

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LEAN SIMULATES ENTREPRENEURSHIPBY REQUIRING FOUNDERS TO GET OUT OF THE BUILDING…AND INTO YOUR CUSTOMER’S WORLD.

Customer Discovery

Customer Creation

Customer Validation

CompanyBuilding

Pivot

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TALKING TO CUSTOMERS IS INTIMIDATING – WHAT DO I SAY, WHAT DO I DO?

OBSERVING CUSTOMERS IS TRICKY – WHAT DO I LOOK FOR, WHAT DO I WATCH?

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TEAMS GET OVER THE HUMP, BUT FIND ITS VERY HARD TO GET TO A TRUE PAIN POINT

“I think I only scratched the surface, and never really got to the core problems.” “I don’t know if my customers really understand what they need enough to articulate it to me.” “Customers said they would pay, but then they didn’t when it came time to pay.”

CUSTOMER DISCOVERY YIELDS SURFACE LEVEL INSIGHTS

BUT WITHOUT DEEPER UNDERSTANDING, TEAMS STRUGGLE TO DISCOVER THE HIDDEN, INVISIBLE, OUT OF CONSCIOUSNESS TRUTHS. THE DEEPEST PAIN POINTS THAT CUSTOMER WANT SOLVED.

CUSTOMER DISCOVERY YIELDS SURFACE LEVEL INSIGHTS

PAIN DRIVEN DESIGNArtifacts

Behavior

Expressed Needs

Norms

Beliefs Assumptions

Values

Plans

TraditionsAttitudes

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Find the outlier unmet needs that inspire novel approaches

Most startups fit the bell curve of sameness

AS A RESULT, MANY STARTUPS CHASE THE SAME PAIN POINTS

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SELECTING QUICK HIGH IMPACT DESIGN RESEARCH METHODS TO GET UNDER THE ICEBERG

WHAT’S DIFFERENT FROM DESIGN RESEARCH

Customer development IS different than ethnography or design research inquiry –

Founders are NOT neutral observers. While you can practice the art of neutral observation, you, as a founder, are making contact with your first potential customers.

We’re going to start wide, and expansive, and go deep, getting to deeply unmet needs that can drive a successful business model.

But we will be quickly moving to understand the business model that will fuel your vision.

Customer Discovery- test customer reactions- is the business model scalable? - build customer demand

Design Research- clarify customer needs- is the customer need significant? - test product features

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DESIGN RESEARCH METHODSTO COMPLEMENT CUSTOMER DISCOVERY

Getting Ready Designer/Researcher Text/Source

Empathy exercises D-School D-School Bootleg

Brain Dump Steve Portigal Interviewing Users

Design Pass/Vail Tests Giff Constable Talking to Humans

Listening Methods

Create Contrasts Steve Portigal Interviewing Users

Probe for the Unsaid Steve Portigal Interviewing Users

Observing Methods

Tours or Games Ajay Revels Politemachines

AEIOU Harrington Universal Methods of Design

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GETTING READY

GETTING READY: DEVELOPING EMPATHY

The problems you are trying to solve are rarely your own – and you won’t find a market until you can understand the needs that other have. Make sure you are not just getting out of the building, but getting into the context of your customers’ lives.

Observe: View users and their behavior in the context of their lives.

Engage: interact and interview users through scheduled and short “intercept” encounters.

Immerse: Experience what your user experiences.

From: D-School Bootcamp Bootleg:

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Convene a brain dump.

Get what’s in everyone’s heads out on the table. Assumptions, expectations, closely held beliefs, perspectives, hypotheses.

Contradictions are inevitable, and become great fodder for hypotheses to test on your business model canvas.

“Think about it as a transitional ritual of unburdening, like men emptying their pockets of keys, change, and wallet as soon as they return home.”

– Adapted from Steve Portigal, Interviewing Users.

GETTING READY: BRAIN DUMP

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Set targets now, to see if you can disprove your riskiest hypotheses.

Customer discovery is qualitative at first, but after 100 interviews, you will start to get quantitative understanding.

What do you expect to be true?

What constitutes a pass?

A fail?

Set goals for key questions and track results. – Giff Constable, Talking to Humans

DESIGN PASS/FAIL TESTS

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LISTENING METHODS

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To check against a “cover story” or get underneath the obvious truths:

Compare processes: “How is applying for preschool different than applying for pre-k.”

Compare to others: “Do you learning habits differ from your fellow grad students in your program”

Compare across time: “How have your shopping habits changed from the time you lived with roommate, to living alone, to living with a partner.”

• Adapted from Interviewing Users, by Steve Portigal

LISTENING METHOD:CREATE CONTRASTS

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To get underneath to values, latent needs, reasons why:

Ask for clarification: “When you said everything changed after September, what happened then.”

Ask about code words: “What does that acronym stand for.”

Ask about emotional cues: “Why do you laugh when you mention Seven Eleven.”

Probe delicately: “You mentioned that changes in your organization led to a different decision – can you tell me what that situation was.”

Probe without presuming: “Some people have strong opinions about teaching children to read before they enter first grade, while other’s don’t. What is your take.”

• Adapted from Interviewing Users, by Steve Portigal

LISTENING METHOD: PROBE FOR THE UNSAID

OBSERVING METHODS

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Tours are a form of immersive observation that allow you to experience the whole context of the customer problem you’re interested in. Tours can be as broad as “shopping for shoes” or as specific as sending a message to a family member.

Games or simulations are a playful form of interactive observation that allow you to experiment with different aspects of the customer problem.

Your mission is to capture:

Who (who are we observing)

What (what are they doing)

How (how are they doing it)

Why (are they doing it)

When (are they doing it)

Where (are they doing it)

-- Ajay Revels, Polite Machines

WATCHING METHOD:TOURS & GAMES

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WATCHING METHOD:AEIOU

AEIOU is an organizational framework when you get into the natural habitat of the person you are interviewing, and gives you a construct to look, listen, and observe (rather than talk, and hear):

Activities: goal directed sets of actions. What are the pathways that people take toward the things they want to accomplish, including specific actions and processes?

Environments: include the entire arena in which activities take place.

Interactions: between a person and someone, or something else, and are the building blocks of activities.

Objects: Building blocks of the environments, key elements put to complex or even unintended uses, possibly changing their function, meaning, and context.

Users: people whose behaviors, preferences, and needs are being observed. Who is present? What are their roles and relationships? What are their values and biases.

From: Universal Methods of Design. Bella Harrington, Bruce Hanington.

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DESIGN RESEARCH IS FUN, WHEN DO WE STOP?

HOW TO CONSTRUCT A VALUE PROPOSITIONDRIVEN BY DESIGN RESEARCH

DEVELOP EMPATHETIC MUSCLE MEMORY

PRACTICE THROUGH CUSTOMER DEVELOPMENT

ARTICULTATE PAIN POINTS + NEEDSSTATED, VISIBLE, AND HIDDEN, TACIT

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BUT DON’T DESIGN RESEARCH FOREVER

Customer Discovery

Customer Creation

Customer Validation

CompanyBuilding

Move forward to quantitative proof when you seek to validate your business model, testing and iterating until you find scalability, and repeatability.The goal: deliver the volume to build a profitable company

Designers and Design Researchers are known, fairly or unfairly, for “avoiding the work of the sales funnel” – but as a founder – you have to test your ability to scale: Product, acquisition, pricing, channel, sales plan

Iteration Execution

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WHAT CAME BEFORE STEVE AND ERIC

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Interviewing Users: How to Uncover Compelling Insights: Steve Portigal

Universal Methods of Design: Bella Harrington, Bruce Hanington.

DSchool Bootcamp Bootleg

Talking to Humans, Giff Constable with Frank Rimalovski

Ajay Revels Polite Machines

DESIGN RESEARCH CONTRIBUTORS

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NEXT WEEK PREP:

Watch Customer Segments lecture.

Business Model Generation, 126-145.

The Founder’s Dilemma (HBR) and optional – The Founder’s Dilemma Noam Wasserman (Stanford Entrepreneurial Thought Leaders Podcast)

The Lean UX Manifesto by Anthony Viviano

Talk to at least 5 potential customers. Post discovery narratives on your team blog, or in an appendix in your presentation.

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NEXT WEEK PRESENTATION:

Prepare a presentation – guidelines below:

· Cover slide

· Latest version Business Model Canvas with changes marked

· Market size (TAM, SAM, Target Market)

Total addressable: how big is the universe

Served available market: how many can I reach with my sales channel?

Target market: who will be the most likely buyers?

· Propose experiments to test your value proposition. What constitutes a pass/fail signal for each

test?