So I spent quite a lot of time yesterday working on the lean canvas with someone else and made some real progress so I just wanted to share them with you. I am really now in a position to get out and start formally testing the assumptions.
I’ll tidy this all up and present it in an easier to read format when I get a second.
The next step for me is to spend a little time brainstorming my business model. This is where the business planning comes in rather than a traditional business plan.
To do this I will be following the process initially laid out by Alexander Osterwalder in Business Model Generation. This is a great book but the process by which it all came together is more interesting, it is a crowdsourced book written with over 470 contributors in 45 countries. In fact I will be using a slightly modified version of the original aimed at startups that was developed by Ash Maurya that he has named Lean Canvas.
The aim of using a ‘canvas’ is to get an overall view of the business in one place and to encourage and challenge you to focus and distill your proposition on to one single page. You can see a picture of a blank canvas below but I will be experimenting with the best way of writing this up and sharing it.
In the first instance I will throw down everything on the one canvas and then break it down into an individual canvas for each customer segment.
The sections of the plan are as follows and I will proceed in this order:
PROBLEM (AND CUSTOMER)
Highlight the top 3 problems
What are the existing alternatives that people are using to solve this problem?
CUSTOMER SEGMENT
Make sure to break it down into users and customers.
Continue to break it down to customer segments with shared behaviour and common needs
UNIQUE VALUE PROPOSITION
What problem are we solving and what value will we provide?
SOLUTION
Highlight the top 3 solutions
What is the simplest Minimum Viable Product that can test the problem and my assumptions.
CHANNELS
One of the key areas to establish that is often overlooked in the early stages of a startup is how do we get the product to the customer segments highlighted above?
REVENUE STREAMS & COST STRUCTURE
Will someone pay to solve the problem that we have highlighted? This is an area that needs to be addressed in the customer interviews.
What is the revenue model?
How much will it cost to carry out 30-50 customer discovery interviews?
How much will it cost to define, build and launch an MVP?
What is the burn-rate? Fixed and Variable results.
Once all this information is gathered it will give an idea of both the break even point and the runway.
KEY METRICS
What are the key activities I will measure to judge progress?
A common set of metrics used is Dave McClure’s pirate metrics: (Can you work out why they are referred to as Pirate metrics?
UNFAIR ADVANTAGE
This is the thing that sets you apart from the competition, it is something that can’t be easily copied or bought. It is also one of the hardest sections to fill in at this stage and often only makes itself known in the face of competition.
While many people think the approach is ‘to simplistic’, I have shared this model with startup business and walked through the process with a few and every time I am amazed at its power.
A few pointers that I have to be cognizant of:
I am hoping to have the initial draft of this completed tonight and then I will share with you where I am up to tomorrow. Wish me luck!
We know that a startup can existing in a large corporations and we know that Lean Startup can be applied to non-web based business, a great example of this is Eric Reis’ work with the US Government. However, what is not so clear is how Lean Startup principles can be applied to starting up a business. As I have been going through the Lean Startup process and discussing it on and off-line I have been asked this question.
I may have lost you a little- the difference between starting business and a ‘startup’ is subtle yet often overlooked. I had already been thinking of this based on conversations with friends when I read Scott Allison’s first blog post for Forbes.
To re-iterate, the two most common definitions of a startup are:
“a human institution designed to deliver a new product or service under conditions of extreme uncertainty.”
“a company in search of a repeatable and scalable business model”
While Scott Allison focused on the difference between the two, particularly focusing on what a startup lacks compared to a business- certainty and a repeatable, scalable business model.
All this week I have been focusing on the one thing they most definitely share in common- they are both based largely on assumptions.
All decisions one makes in the early stages of a business are based on assumptions- the biggest problem is that most businesses don’t have a process in place for highlighting and testing these assumptions and too often businesses don’t find out their assumptions are wrong until it is too late.
As with uncertainty the presence of assumptions is only more apparent in startups because most of the time nothing has been produced. It is a deadly trap for businesses to get into to think that because they have a ‘proven’ business model, some degree of product market fit and some paying customers that they have everything sorted.
Luckily I have had the chance to sit down with an early stage (off-line) businesses run by a friend of mine this weekend and get some first hand experience of this problem.
This business would not fall into the descriptions of a startup above but it is definitely facing uncertainty and was in danger of making significant and as it turned out incorrect decisions based on assumptions masquerading as facts.
By questioning the reasoning for actions, the assumptions these decisions were made on and how to test these assumption it allowed us to gain perspective.
I have far from gotten my head around this subtle but important distinction but this week has been really enlightening as it put a whole different perspective on my business outlook. This is an on-going project and I will continue to work with my friend and her business and as I start to shed some light I will share my experiences and learning.
I have found that this is a topic that generates much debate and discussion and I would love to hear your thoughts and opinions.
In the interest of following my progress I thought I would put up a quick post to let you know my goals/aims for the coming week after the intense over-load of information last week that was the first draft of the C-P-S hypothesis.
I think the first thing to say is that I definitely need to work on getting each stage of the C-P-S hypothesis boiled down to concise statement that can be taken out and tested.
Once this is done I need to get brainstorm my initial thoughts on the business model- I will do this on the Lean Canvas; a revised version of Alexander Osterwalder’s original canvas outlined in Business Model Generation). In Wednesday’s post I will outline the Lean Canvas process and what I am looking to achieve and on Thursday I will share my findings.
I have a busy week out and about and I will be speaking to anyone who will listen to get their input but I also need to put more focus this week on getting through the reading list including getting the first book summary up. I also need to spend some time working on the look and layout of the blog- it is my intention to get a video up on the About Me section of the site.
In the meantime make sure you are following me on Twitter (@scottorrance) to keep up to date with the progress and as always I am keen to hear your thoughts, feedback and input…
So we finally come to the solution- my offering to solve the problem for the customers identified. I apologise in advance, trust me this is the summary!
So what exactly does an on-line platform for the delivery, implementation and monitoring of training and personal development mean? And how do I plan to help increase the chances of individuals achieving their goals?
I have broken down the stages that all training goes through; this will form the repeatable platform that content can be added to. At this stage it doesn’t necessarily matter who is providing the content. While is good for explanation, invariably many of the concepts flow from one section to the other.
I have broken down the stages as follows:
DELIVER CONTENT/THEORY
Regardless of what the user is looking to achieve they must first understand the theory behind what they are looking to achieve. The desire to change their life must be congruent with their values and principles, this will ensure everything moving forward is built on strong foundations. This is an important step that is often skipped. The user will not be able to move onto the next session until they have completed the prior section.
The content must be delivered as easily to a laptop as to a mobile device in whichever medium the user prefers- written word, video or podcast.
If we look at providing the content to users we do not mind what your goal is and we will not preach to users, instead we will provide them with a structured approach to ensure that their goals are set on the right foundations and that they follow through on them.
However, if we look to focus on coaches and trainers then the content is not our main focus. We will be providing them a platform to deliver their content in a more efficienct and effective manner.
APPLICATION OF LEARNING
There has been and continues to be a lot of great developments made in the ‘e-learning’ space and I need to spend a lot more time researching this area.
I would like to explore how we can effectively facilitate the following methods of learning:
Rather than bombarding the user with information it is my intention to provide small doses of relevant information followed by action. Until that has been completed they do not move on to the next stage.
For example, rather than just read about the importance of writing down their goals the user must follow the actions/questions to build up their goals. This document will be stored in a central repository that can be accessed through an online portal or their mobile device making it easily to reference.
PLAN OF ACTION/IMPLEMENTATION STAGE
The user will develop their own content and programme to follow. The site will provide a repository of content and individually tailored action plans that can be accessed either on-line or through a mobile device as well as pushing actions and notifications to the user.
During the implementation stage the content can be pushed to mobile devices as well as requesting input from users at pre-determined times of the day.
For example anyone who has read a book or been on a goal setting training session will know that it is very important to refer to your goals daily. Why then can’t I have my goals pushed to me on my phone first thing in the morning when I wake up?
MEASURE/MONITOR PROGRESS
The idea initial came to me as I was playing with my Fitbit and exploring the world of self quantification. I wanted to explore how we can apply similar principles that are being applied predominantly to the health and fitness industry to the more ethereal subject of personal growth.
How do we measure progress as people look to change their lives? In my experience people give up too early for a number of reasons- they are not seeing the changes quickly enough they lack the motivation they are not held accountable for their actions following the initial learning process and often life simply gets in the way.
I set out to explore how we can use the technology available to us to try and remove as many of these obstacles to growth as possible.
I started to get quite excited about the self quantification angle, I loved the idea of being able to view my progress on-line and pull together info from lots of different people and aggregate, correlate and analyse their actions with the aim of improving understanding for all. This is a model that is at the core of Managed Security Service Providers and there is a couple of Positive Psychologists at Harvard University using a similar approach in conjunction with an iPhone app to assess the science of happiness. However, as I started speaking to people, even those who are really into their personal development they weren’t getting excited about it, no matter how enthusiastic I was.
This was definitely one of these situations where I was appealing to my geeky tendencies and forming a solution for myself. I am not going to lie, I was quite disheartened by the rejection of the idea by nearly everyone I spoke to. It forced me to think of it from a different angle. I was contemplating this when I read the follow article in TechCrunch that got me thinking about how we can implement gamification principles to help in the tracking and monitoring. The problem necessarily with the theory- most people I spoke to got the idea and saw the value of it but weren’t enamoured with how I was presenting it to them. Once I started to position it as a ‘game’ then it really started to open up.
In reality many of the players in the training field are operating in the dark a little. No-one has any data and as such find it hard to identify where and why people are failing. As a deliverer of training wouldn’t it be useful to know that 80% of users activity drops off after day 6. From this point you can start to take action- maybe the structure/delivery of the content is not in the correct order or maybe you simply need to throw in a wee webinar to re-engage and motivate users?
Not to mention the potential benefits to employers in being able to better track the learning actions of their employees and tie this into wider development objectives.
This also opens up the potential of users sharing their progress ‘socially’. In my experience people are not necessarily interested in sharing their goals but they do appreciate public recognition for consistent action and mastery of the self and are likely to want to share this progress with like-minded people on social media.
There is also scope for including some sentiment analysis to the content that the users generate. For example, if the user is writing in a weekly journal or reflecting on their progress the program can be searching for specific language and highlighting groupings of negative words. However, this is a little down the way.
As is always the case with on-line platforms the User Experience is key, we must ensure that the experience closely mirrors the in person interaction and make the whole process as easy as possible for the user. Throughout the whole process it is important that the conversation is bi-directional. If a user is to miss a couple of days training it should be easy enough for us to get in touch and ask if they would like to put the training on hold or re-start at a specific point.?
All of this requires the ability to track specific actions. We need to be tracking the activity of the user- are they logging into their account? What device are they using to log in? Are they completing the exercises and following through on the activities?
Once again I would like to re-iterate at this point that these are simply hypothesis that need boiled down and tested.
So in the second part of the series of posts on my C-P-S hypothesis I am focusing on the target CUSTOMER. If you have missed the previous post you can read about the process I am following here.
So I have been spending the last month talking about this business idea with friends, family and business associates and through these discussions the idea has morphed and changed and I hope that it continues to do so.
One of the most common pivots in Lean Startups is the Customer Segment Pivot- where after some investigation you find out that you have a solution that is solving a problem but not for the customer segment you initially thought.
As I mentioned briefly yesterday my initial focus was on individuals. Particularly those who are passionate about personal development and are willing and keen to improve elements of their lives; but who are frustrated at both the resources available and who are frustrated at spending money on resources that are not delivering results.
At the first Lean Startup Meetup in Edinburgh on Monday two main points came up when we were discussing the idea:
The first was whether there was actually enough people who are interested in improving their lives? Granted this was coming from a self-confessed cynic of self-help but this is definitely something I would like to quantify. My gut says that while there is a lot of apathy out there, there is also a lot of very driven and passionate people (many of whom I am glad to call friends). Not to mention that Heidi Grant Halvorson recent blog post Nine Things Successful People Do Differently on Harvard Business Review is the most viewed blog in HBR’s history. This blog post speaks very much to my target audience.
The second point that was discussed was the needs of businesses and the particular problems they face with training and development of their staff- this is something that I have to review and get out there and speak to businesses.
As I was reading Running Lean and contemplating the often overlooked distinction between a customer and a user it got me into thinking.
Rather than thinking of the business as a provider of content to individuals what about providing those with content-trainers, coaches and even businesses- with a platform to more effectively deliver and track the implementation of the training. The customer will be the content provider who will bundle it into their offering and the user will be the individuals who are going through the training.
I am looking forward to lining up some formal Customer Discovery interviews across all three customer segments: individuals, coaches/trainers and businesses. As I work through the Customer Discovery process and establish the customer this will have big impacts on the business model and the solution that we provide.
There is no doubt that I have had the best conversations with those who don’t know me. While speaking to friends and family is great for support and motivation very rarely do they challenge you and ask the hard questions that need to be asked.
If you fall into one of these groups and you are interested in getting involved in this process I would love to hear from you.
Tomorrow we will be looking at the SOLUTION to the problem.
As with many startups the idea for the business is borne out of frustration at what currently exists in the personal development/self-help and wider training space.
I spend a lot of time reading personal development books and attending/delivering training sessions (both in and out of the work-place) and while I have seen significant positive changes to my life I am often left wanting.
It is not that the content is lacking; there has never been more high-quality information available to individuals to help improve our lives or our businesses. Yet there remains a massive disconnect between the goals that we are setting and the results we achieve.
As I see it (and these are just assumptions that need validating) the problem comes in the delivery of the information, the implementation of the principles and the follow through.
At the moment most resources deliver (a lot of) content at once and suggest actions to follow through on. This is usually in the form of printing off a PDF and filling in the details- this is the same approach that Benjamin Franklin used in the 1700’s. So I print off the documents fill them in, plan to follow through and then invariably lose the PDF or leave it at home when I am travelling.
The issue with so much of the training that is delivered on-line at the moment is that it is a one way conversation. They continuously hit you with information with no input from the user. For example, in my research I signed up to the 100 day challenge on-line. I started on day 1 but by day 5 I was away from work and missed a couple of days. However the training continued without me and by the time I got back into it I had missed so much that I gave up. The program assumed I had been interacting and carried on anyways. That’s not to say anything about the videos not being viewable on mobile devices.
It is all very well spending lots of money on top training and resources but with the best will in the world if the individuals don’t follow through on what they have learned then it has been a waste of time, money and effort. We have all had the experience of reading a great book or attending a great training session and being full of motivation to carry out the learnings only for that motivation to wane as the days pass and life gets in the way. Trainers and coaches lack the ability/time to keep in touch with every individual and re-enforce the implementation of the concepts learnt through the training in between sessions.
When it comes to changing behaviour/habits (and that is what all training and personal development is about) it is not the amount of effort you put in but rather the consistency of the activity. The new behaviour is re-enforced by positive actions every day but this is not easily measured and monitored and often people give up too early because they are not seeing the results. Simply by re-enforcing the positive action of individuals and articulating the progress they are making can significantly increase the chances of them sticking with the process.
There are many, many reasons why people fail to achieve their goals not least because it is is a very hard thing to do. It ultimately comes down to the individuals desire to succeed. However, it is my belief that through the effective use of technology we can remove many of the barriers highlighted above make it much easier to succeed and thereby increase the chances of businesses and individuals achieving their goals.
If you are interested in or involved in training or personal development and you are facing problems that I have not highlighted I would love to hear from you.
I have recognised through my initial discussions with people that I have been approaching the problem from a very individual-centric point of view. There may be some value in exploring the problems that businesses are facing with training and personal development through the customer development. This is something I will explore more in the customer section of the C-P-S blog post.
So the first step in the process is to articulate the following areas in the business:
TARGET CUSTOMER
The focus in the early stages is to focus on what Geoffrey Moore in ‘Crossing the Chasm’ calls the early adopters. Too many startups fail because they try to target the mass market early on.
THE PROBLEM WE ARE LOOKING TO SOLVE
It is really important that this is from the customer’s point of view.
Are potential customers aware of the problem?
What are people currently using, both technical and non-technical?
Where is the competition failing?
OUR SOLUTION TO THE PROBLEM
How will we solve these problems and what is the value that we will provide to customers and users?
As I started writing this out I realised that it was far too lengthy to publish in one blog post. As such I will tackle each area in individual blog posts every day this week so as not to overwhelm you.
Make sure you are signed up to receive updates by email if you don’t want to miss anything.
I am also working on the best way to present this info any advice or feedback please don’t be shy.
As anyone who has started with a seedling of an idea in their mind with the intention of building a business around will attest to; it can be very difficult to succinctly articulate what it is you are looking to achieve. In it’s first pass this will take the shape of a brain dump and I will work on boiling all this down into a few succinct hypothesis that can be tested. Following my last blog on the potential pitfalls of focusing too much on the solution without developing the problem I will be focusing on the problem in tomorrow’s blog post.
REMEMBER: Don’t mistake guesses for facts!
I was reading Running Lean by Ash Maurya while sitting in a coffee shop in SoHo in NYC when I realised that I that I was falling into a trap that catches out a lot of startups and I was starting down a path that was increasing my chances of failure.
Mauraya recommends identifying the greatest risks in the business and reducing the riskiest first. The book forced me to look at the business idea from a difference angle. The biggest risk in the majority of startups lies in developing an offering that nobody wants and this is one of the biggest reasons for the failure of startups.
I instantaneously recognised that I have been focusing too much attention on the solution and not enough time on the problem I am looking to solve. This is a sure-fire way to develop an offering that nobody wants.
I can attest from personal experience that this is a very easy trap to fall into. It is far too easy to get carried away once you realise that you can build a solution to a problem that you have identified, especially when a few people have validated the idea. This is not enough. With enough time, money and effort most things can be built. The question is no longer can it be built but rather should we build it, and can we build a sustainable business around the offering.
I can also see why many founders resist getting out and speaking to potential customers as that will inevitably result in many of the assumptions being challenged that will impact the solution and this isn’t always an easy thing to accept
While I was annoyed at myself for falling into a very obvious trap I am very glad that I recognised it early on as it allows me to take action.
Over the next week or two I will outline the business idea in more detail and the Customer Development process I plan on following and I welcome all your input, feedback and comments.
Good question. This blog post started off life as a brief foundation of The Lean Startup principles, with the aim of giving everyone an idea of what I am talking about. As with most things in life the original thought grew arms and legs and it has caused me to re-assess my approach.
When I first read The Lean Startup book it wasn’t so much the individual steps that hooked me but rather the over riding philosophy.
This philosophy runs through three books at the core of the Lean Startup and is more than any one book or author:
At this stage, rather than focus on the individual steps laid out in one book, I want to look at the common themes across the movement.
The one unifying theme among all proponents of the movement is to re-assess how we approach startups in the business world with the aim of increasing the success rate. We have all heard the statistics around the failure rate of new businesses the world over, clearly there is something wrong.
The one point that really hit home for me was the realisation that startups are not simply smaller versions of large corporations- often referred to as the dollhouse fallacy. Once we accept this we realise that the tools and procedures for measuring and monitoring the success of established corporations are not suitable for startups. The Lean Startup philosophy tackles this in an innovative way.
In the process of writing the post it became very apparent to me that while I have read The Lean Startup by Eric Reis I needed a better understanding of the wider process. This insight has prompted me to create and share a reading list to broaden my understanding and ensure that I have the right process in place for when the business launches. More on that to follow!
I am currently at the theoretical stage of starting the business and ultimately the real learning will happen when I start to implement the principles but it is imperative that I have a strong foundation to build on. I’d rather be spending my time doing this than a traditional business plan trying to guess my turnover in 1,3 and years.
I apologise if you were looking for a more comprehensive answer to the question of title but I promise that this approach will be much more beneficial in the long-run!
The journey continues….