Author: Sebastian Fittko
I held this lecture and workshop as part of the E-Entrepreneurship lecture series at Zeppelin University. The Presentation in German. I will update the slide deck in english soon.
Aim of the workshop was to provide a first view on the idea of lean startup, hypothesis development and testing, and qualitative UX testing.
Author: Peter Hanschke
Here’s the situation: Your development team is busy creating a Minimum Viable Product (MVP). You have people off in all directions trying to secure some funding. But do you have a Market Validation Plan? Furthermore, are you executing this plan along with all the other activities? In other words, is this an activity that you are currently performing?
As the name suggests, a Market Validation Plan (another MVP for those who like TLAs) is about reaching out to your target market to determine whether:
The market likes your product or product concept
The market is willing to buy your product when you have it ready
“Like” is a bit of a weak word. But at this stage of development, the product may simply be an idea or a very early prototype. So “like” in this context is appropriate. As the development process advances and the product and concept solidify, you will require stronger validation. A vital aspect to validating the market is to determine if the market that you are targeting is willing to pay for your product. Are prospective customers willing to part with their cash either up-front or through a subscription model?
The three steps of an MVP
Step One: First, and probably most obvious, is to talk to people or companies directly in your target market. These, in fact, are your target customers. Many companies are reluctant to do this. They feel that they may lose a sale if they don’t have the product just right. It becomes a Catch-22 between sales and development. Sales says, “The product is not ready to sell,” while Development says, “We need to validate with potential customers to make sure the product is ready.” My philosophy is that it’s better to lose some of these early sales and learn what the product needs to be than to develop the product with no validation and lose every sale!
Author: Marty Zwilling
Many entrepreneurs work hard on the proof of concept (technical), but skip any proof of the business model (revenue flow). In other words, once they are convinced that the product works, they assume their price, sales channel, and marketing will bring in the customers. These days, the technical side may be the easy part.
Proving the business model requires a different approach than proving the technical concept. For example, one CEO I know gave away his software product to the first ten customers. Customer personnel seemed to like it, and it worked, so he was totally devastated when he couldn’t sell one for a “reasonable” price in the first two months of hard work.
So how do you go about proving the business model? It starts with a customer problem or need, and includes proving the technical concept, but starts earlier and goes much further, per the following key steps:
Quantify problem cost-of-pain first. Before you design your new solution idea, gather evidence and estimates of how much money a customer is willing to spend (if any) to solve the problem. Factor in your margin, and you will have an upper bound on your solution cost. You won’t succeed with a product that is too expensive for the market.
Author: Sebastian Fittko
For every startup it is critical to market their first product successfully to (a) prevent the startup from wasting time and money on poor opportunities and (b) selecting those opportunities that are good ones wisely, focus the team and understand what will be required to succeed and how to define that success. Go through the following 10 questions to evaluate the opportunities of your product initially:
Start with a minimum viable product and repeat the evaluation of the questions continuously by each customer and market feedback.
My last post was about agile ideologies, the practice of suspending disbelief and trying something without too much thinking or tweaking for long-enough to collect quality data but not long-enough to go native and lose perspective.
A great starting point for practicing agile ideology in startups is The Startup Holy Trinity:
- Agile development for high-velocity product execution
- Cloud deployment for managing operating costs
- Customer development for achieving product/market fit
