From experience with hundreds of entrepreneurs we know that every entrepreneur has an idea. To get from idea, to execution, to results requires turning it into a plan. To start with most ideas are pretty vague. They may focus on a problem, or a solution or perhaps even a customer segment which has particularly attractive characteristics.
Now lean, and the whole startup ecosystem has borrowed heavily from the stuff that we were taught in Chemistry class. That is we must have a hypothesis before we start, we must develop an experiment to test the hypothesis, we get some reliable results and then we decide whether our hypothesis is right.
So in the Chemistry lab our hypothesis may be that when we put sodium in water and it catches fire that the remaining liquid will be acidic. As it’s been a while since I’ve done any chemistry experiments I have no idea what the result is. I have an opinion but it may be wrong. Opinions – in lean – suck. We want data. So we pop the sodium into the water. Step back and watch it bang and fizzle and burn. Then we give the remaining liquid a good stir and add a piece of litmus paper. Litmus paper detects whether a liquid is acid or alkali and that gives us the answer.
Chemistry is easy when put that way. An entrepreneur’s idea is somewhat harder. So a good first step is to use something called the lean canvas. You can use the business model canvas which we have done a great deal of. The difference between the lean canvas and the business model canvas is that the business model canvas gives you a picture of the whole business and allows you to see how it should work. It’s an abstraction that lets you quickly and easily understand how all the parts relate to each other – and then play with the different parts of the business to make it more competitive or better or….
The Lean Canvas – First Draft
The lean canvas, in contrast, focuses far more on looking at the problem and finding a path to solutions that work and are profitable. They are complementary strategic tools and generally I will produce both when working with a startup.
So we started off when Leander noticed that in Malaysia it’s really difficult to get business cards simply and easily. Finding a designer, a printer and getting delivery of the cards are all much slower and difficult than in his native Netherlands.
So the first step was to map out the hypothesis on a lean canvas. this gives a bunch of structure and allows us to analyse the idea and this was the first draft
If we look at the lean canvas we can see that there are some clear problems.
There’s a great video (and podcast) at Stanford Ecorner that addresses problems.
Bernard Roth talks about reframing problems. What is the real problem here?
The real problem is that people don’t have time, that there is no standardised process for purchasing business cards in their company, or it is the first time they’ve done it. Think about it. Producing a business card is relatively complex and requires a lot of tasks to be done in a relatively short time – and especially for a single person the costs can’t be spread over 100 sales people who all need very similar business cards.
So we can frame the problem then a business cards are disproportionately difficult to get.
The question then is for who?
For the CEO of Google business cards just appear on his desk. It’s not a problem. The Queen of England doesn;t really care. She’s meta-business card and almost everyone in the world knows her address.
One of the approaches that Ash suggests is to think of problems and segments simultaneously. What we did on this lean canvas is to express one persons problems (Leander’s as he tried to get business cards printed for Business Model Guru) generalise it into a hypothesis and then look at a range of possible segments.
Fairly quickly we can see, given the reframed problem, that the key characteristics of segments is going to be that 1 or 2 people need a business card, and it may be the first time that the organisation has procured business cards.
At the same time there must be a payoff for them having a business card. Students in the case of our example don’t really have a strong need for business cards, so we are looking at some customer segments that coalesce around entrepreneurs and small businesses.
Unique Value Proposition
Moving onto the Unique Value Proposition
Steve Blank states it as the
Simple, clear compelling message that states why you are different and worth buying.
Our first attempt here is
Online ordering and smooth delivery of consumer designed business cards
As you can see we’ve jumped into the solution space a bit here and used the value proposition to hive off particular segments – people who are designing their own. So let’s rephrase the UVP to directly address the problem that customers are facing
Awesomely easy business cards
Now that’s unlikely to be the final value proposition but it clear offers a solution to the problems that we think that our target group has.
We’ve got something that we can test here. What are the problems that entrepreneurs and small business face with business cards? We can get out of the building and talk to them. We can ask them what an awesomely easy business card would look like and start to develop data driven solutions.
At the same time we still need to consider why, coming back to Bernard Roth’s point on problem solving, our target segment needs a business card. They want to have one so that they can use it to build relationships and sell something or get someone to do something. Their goal is not to have a business card, but to make a change in people’s behaviour.
As we iterate the lean canvas that’s something that we need to think about.
The next post will consider some of the other sections of the lean canvas and then thoughts on how we got out and start testing hypotheses