traditional business planning process · business planning process. determine which process is most...
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Ideation Workshop
Learning Objectives:Distinguish between a lean start-up process and a traditional start-up
business planning process.
Determine which process is most appropriate for your business.
Create value propositions for your customers.
Develop and analyze different business models.
Identify and test value proposition and business model assumptions.
Understand ways to design minimum viable products or prototypes.
Divergence
GenerateNo Logic
No JudgementOpen
QuantityChild-like
Free flowingDefer Judgement
Withholding judgement allows for open divergent thinking to flourish!
Convergence
GenerateNo Logic
No JudgementOpen
QuantityChild-like
Free flowingDefer Judgement
Withholding judgement allows for open divergent thinking to flourish!
EvaluateLogic
JudgementClose
QualityDiscipline
Filter
No thank you(likely outcome)
Traditional Start-up Business Planning
Process
Draft business plan narrative
Estimate financial projections
Pitch plan to potential
investors/lenders
Yes, but with unfavorable terms
Build business infrastructure
Start selling
Customer feedback
Source: Journal of Entrepreneurship Education
When to use traditional business planning
• Established business
• Establishing infrastructure to grow or scale an already validated business model.
• Financing your business via a loan, investment or crowdfunding.
Business plan
Proof of concept validatedLean Start-up Process
Value proposition assumptions
Develop a minimum viable
productTest assumptions Customer
feedbackIterate
and refine
Crowdfund
Pitch plan to potential
investors/lenders
Source: The Lean Startup
Business Model Canvassing
Source:
Key Partners Key Activities Value Propositions Customer Relationships
Customer Segments
Key Resources
Cost Structure Revenue Streams
Channels
• A snack paired to your beer
• Quick, cheap snack
• Unique, differentiated snack with a backstory
• Retail• Bars• E-commerce
• Beer connoisseurs
• bars
• College students
• Small specialty retail grocers
• Pick up & process spent grain
• Marketing and promotion
• Bar demos/tastings• Specialty grocer
demos/tastings• Social media
• Spent grain• Packaging• Commercial kitchen• Human resources
• Brewnola single-serve snacks for B2C sales• Wholesale orders in bulk
• Co-packing• Customer acquisition• Commercial kitchen
• Bars
• Micro-breweries
• Co-packer
Key Partners Key Activities Value Propositions Customer Relationships
Customer Segments
Key Resources
Cost Structure Revenue Streams
Channels
Parents and Grandparents with
children and grandchildren ages
8-13
• Illustrated historical fiction for young readers, ages 8-13.
• Engage young readers in Irish heritage and history
• Planned series & multiple formats helps to create a product funnel
Readers interested in Irish history and
mythology
IllustratorsEditors
ProofreadersBeta readers
Royalties
Advertising
Copyright fees
Work for hire
Platform fees In-person sales
Wholesale
Identify Customer Segments
Source:
Tools to better define your customer segments:
Customer Journey Mapping
Tell us about a business you recently visited or a product you recently used.
How was your interaction with the business or product initiated?
Understanding the Customer’s Journey
Touchpoints
Cust
omer
Exp
erie
nce
Delightful
Satisfactory
Neutral
Painful
Bad
Scheduled appointment online.
“I had to wait 20 minutes for a scheduled appointment!”
Map and compare the customer journey with your business v. your direct competitor’s
Customer Segmentation
• Demographic: gender, age, household income, highest level of education attained, etc.
• Psychographic: values, attitudes, opinions, interests, etc.
• Behavioral: What do they do? What are their habits, routines, etc?
• Needs-based: What do they need or want? What causes them discomfort or pain?
Source: Olsen, Dan. The Lean Product Playbook. Pages 26-34
Customer Personas
• Brief snapshot of a typical target customer.
• This tool clusters customers based on demographic, psychographic, behavioral, and needs-based characteristics.
• Include their pain points.
Source: Olsen, Dan. The Lean Product Playbook. Pages 26-34
How do we learn from customers?
How do we learn from customers?
Network
SurveyObserve
Focus group Interview
Create Value Propositions
Source:
Value Proposition• Customer-centric product/service development
• Value driven design
• Create products and services that customers will demand
• Create better alignment between product development, sales and marketing
• Save time and money by getting valuable products and services to market quickly and inexpensively.
Source: www.strategyzer.com/vpd
Value Proposition Statement
• Who are your target customers?
• What are their unmet or underserved needs?
• What product(s) and/or service(s) will you offer this customer?
• What are the benefits to the customer?
• Why would customers choose your offering over competitors?
Source:Moore, Geoffrey
Kumar, Vijay: 101 Design Methods
Value propositions start with understanding customers
Understanding customers better reveals opportunity
Opportunity
How do we know whether or not our value propositions are actually creating value for the
customer?
Minimum Viable Product (MVP):A product or service that is designed with the least amount of features and
complexity needed to receive valuable feedback and insights from early adopters.
• Minimum viable products and services are much closer to prototypes than fully developed products.
• Cheaper and quicker to design and build.
• Their primary purpose is for learning what works and what doesn’t.
• They are far from perfect and that’s okay.
Minimum Viable Food Service Business?
Farmer’s market
Food truck/trailer
Restaurant (brick & mortar)
Catering
Food vendor at event
Personal chef
Start Minimally and Grow a Viable Business
The “one-stop-shop” Pet Business?
Pet sitting
Pet supplies
Pet grooming
Kenneling
Dog walker
Dog trainer
Start Minimally and Grow a Viable Business
What do you know?
List things that you know about your business,
industry, product,
competitors, customers, etc.
on 1/3 of a piece of paper.
Challenge and Test Assumptions:“What gets us into trouble is not what we don't know. It's what we know for sure that
just ain't so.” – Josh Billings or Mark Twain (who knows for sure?)
• Aspiring entrepreneurs often show symptoms of:
• Optimism bias causes a person to believe that they are less at risk of experiencing a negative event compared to others.
• Overconfidence effect, in which someone believes subjectively that his or her knowledge or judgment is better or more reliable than it objectively is.
What might have we assumed?
• Get into groups of 3. • Each person will share
what they wrote down. • The other 2 group
members will ask probing questions to learn more about the business.
• 5 minutes per round (15 minutes total)
Prototyping
3D printing Wireframes or mock-upsSolution sketching or storyboarding
First 2 Reverse Pitch Winners Demonstrated their MVPs at the Pitch!
Design and Test your Website using only Paper
Solve Big Problems and Test New Ideas in Just Five DaysDeveloped by John Zeratsky and Braden Kowitz from Google Ventures
Make a map
This will be a simple diagram with around 5-15 steps.
Sketch
The process goes step-by-step to make it easy.
Sketch
Prototype
Test
How might you test your value proposition assumptions?
Complete the Business Model Canvas
Source:
Next Steps• Create a customer journey map
• Complete customer persona profile (www.xtensio.com)
• Complete all sections of the business model canvas
• Sign up for a coaching session* (all of the above are prerequisites for requesting an appointment)
• Take another Small Business Program BizAid℠ Class
Recommended Reading:
Appendix
• Templates
Key Partners Key Activities Value Propositions Customer Relationships
Customer Segments
Key Resources
Cost Structure Revenue Streams
Channels
Customer Journey Map
Touchpoints
Cust
omer
Exp
erie
nce
Delightful
Satisfactory
Neutral
Painful
Bad