CitySpark Seminar - Testing your asumptions

CitySpark Seminars

Week 2

Testing your assumptions

Today’s session

•  Recap and review week one

•  Understand how you can test your business assumptions with customers

•  Before you invest time and money on product development

•  Begin to apply it to your idea/vision

Key points •  We’re not just looking for hypothetical business ideas or plans –

we want to see action, traction and evidence

•  Every new business idea is an article of faith precariously perched on a big stack of assumptions

•  You need to challenge these assumptions right from the start – not sail blissfully towards an epic fail at the end

•  This means that you need to understand what assumptions you’re making

•  And then rank them in order of priority.

Homework

•  Before next week’s session

•  Review your list and mark the assumptions that would have a large impact on your business and feel highly uncertain

•  Prioritise your top-3 assumptions

•  Download Talking to Humans PDF and read pages 1-27 (www.talkingtohumans.com)

Answers

Academic excellence for business and the professions

(Re)introducing Steve Blank

There are two ways you can do

this…

FIRST WAY Qualitative

SECOND WAY Quantitative

CAUTION The first way is

surprisingly hard!

IT’S NOT Asking people to

design your product for you

IT’S NOT About pitching


You are the detective!

IT IS Your job to learn

about your customers

Your goal is not to compile statistically significant answers

It is to look for patterns that will

help you make smarter decisions

5key questions

Question 1 Who do you want to learn

from?


See: Giff Constance, www.talkingtohumans.com

Top tips •  The first step in tying to learn rom the market is having an idea

about who your market actually is

-  The typical customer you imagine will buy your product -  Your early adopter i.e. the people who will take a chance on you

before anyone else -  Critical partners for distribution or fulfilment

•  Think through who the different users will be!

-  Hospital management system -  Online veterinarian service -  Online marketing place for plumbers -  Colourful Coffins


Question 2 What do you want to learn?

Top tips •  Go into every interview with a prepared list of questions

•  You’ll look more professional and it will keep you on point!

•  Identify your most risky assumptions and start here

•  Get stories, not speculation e.g. don’t ask “Would you like this idea”, “Would you buy this product?”

•  Ask open-ended questions e.g. ask questions that start with words like who, what, why and how.

•  Avoid questions that start with is, are, would, do you


REMEMBER!

Question 3 How will you get to them?

3 Golden Rules

•  Try to get one degree of separation away (don’t interview people who already know you)

•  Be creative (don’t expect people to come to you)

•  Fish where the fish are (and not where they aren’t)


Top tips •  Asking for advice should be your default mode early in the

customer development process

•  Be creative; if one route fails try something else

•  Find the moment of pain, purchase etc.

•  Make referrals happen; set a goal of walking out of every interview with 2 or 3 new candidates

•  Conferences and meet-ups can be an amazing recruiting ground

•  Use being student to your advantage


Question 4 How can you ensure an

effective session?

Top tips •  Do you interviews in person

•  Talk to one person at a time

•  Avoid focus groups!!!

•  Add a note taker

•  Get people to tell stories don’t ask them to predict their own behaviour

•  Listen don’t talk

•  Do a dry run first


Question 5 How do you make sense of

what you learn?

Your goal is not to learn for learning’s

sake

Your goal is to make better decisions that increase the odds of

success

Top tips •  Take good notes

•  Dump and sort

•  Look for patterns and apply judgement – don’t get locked in analysis paralysis

•  Expect false positives

•  Don’t just rely on qualitative research alone!!!


SECOND WAY Quantitative*

(*Remember me!?!)


Introducing Eric Ries

Key idea 1 The ‘Build, Measure, Learn’ loop


“The goal of a startup is to figure out the right thing to build – the thing customers want and will pay for – as quickly as possible.”


Validated learning


CREATIVITY (AKA the jam sessions)

SONG ARRANGING (Bothering to meet-up and organise)

RECORDING (Demo’s, albums etc.)

Record label, media & PR support

SALES (Singles, albums, royalties, tickets, merchandise etc.)

LEARN (Drinking, womanising, breaking-up, rehab and reformation)

Key idea 2 Minimum Viable Product (MVP)


“An MVP helps entrepreneurs start the process of learning as quickly as possible. It’s not necessarily the smallest product imaginable; it is the simply the fastest route through the build-measure-learn feedback loop”

Exercise – Mock Interviews

•  Working in pairs

•  Find out all about your partners dream car •  Dig into the reasons behind your partners choice e.g.

When did you fall in love with the car and why? Of the reasons you shared, why are these the most important to you? How have you imagined using the car etc.


•  Step 1: Interview Plan, 5-mins

•  Write a list of all the questions you could ask and make a final selection of no more than 6-questions


•  Step 2: Pair Interviews, 7-mins each

•  Take it in turns to interview each other using the lists of questions you have compiled

•  NB The person doing the interview should also take as detailed notes as possible

Key points •  Customer discovery is about gaining deeper insight into your

customer or your market

•  Being told your idea is cool is not useful; seeing behaviour that validates your customer’s willingness to buy is very useful

•  Prepare an interview guide before you get out of the building

•  Get creative when trying to recruit people – if at first you don’t succeed try something new

•  Sometimes observation is as powerful as interviews

•  Don’t forget to get quantitative!!!

Homework

•  Before next week’s session

•  Based on the key assumptions you’ve identified prepare an interview guide and find 5-10 interviewees at one degree of separation

•  Approach and try to set up an interview

•  Download Talking to Humans PDF and read pages 30-66

CitySpark Seminars

Week 3

Refining your business model

Academic excellence for business and the professions Customer discovery

Customer validation

Problem – solution fit

Problem – market fit

Problem-Solution fit = You’ve identified a real-world

customer problem and a possible solution

Product-Market fit = You’ve built a product that early adopters will pay you money for


Customer discovery

Customer validation

Problem – solution fit

Problem – market fit

Yay, this is awesome!

CitySpark Seminar - Testing your asumptions

Business

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