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CitySpark Seminar - Validating your market

This document summarizes a seminar on validating business ideas. It introduces the concept of customer development and testing assumptions. Attendees were given exercises to identify their business hypotheses, assumptions, and the top 3 assumptions to test. They were also assigned to read about talking to potential customers to test whether there is problem-solution fit and if early adopters will pay for the product. The seminar emphasized the importance of getting feedback from customers early to avoid failing with an idea based on incorrect assumptions.

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CitySpark Seminars Week 1 Validating your business idea
Today’s session •  Recap and review •  Understand what you need to do to be successful in stage two of the competition •  Introduce the concept of Customer Development •  Begin to apply it to your idea/vision
RECAP
A business design and doing competition
Having ideas…
& making them happen!
Academic excellence for business and the professions “Doing not learning to do, is the essence of entrepreneurship” Guy Kawasaki
Stage one: Oct-Dec 2014 PROBLEM
Academic excellence for business and the professions                                 What’s the problem? How big is the problem? Whose problem is it? How is it currently solved? 1 2 3 4 Startup design brief
Stage two: Feb-Mar 2015 SOLUTION
4 x workshops Feb – Mar 2015
Submission deadline Thursday 19th March
Deadline Friday 21st November www.citystarters.co.uk/ cityspark
Stage two final Tuesday 31st March
5 x £3,000 prizes
Stage three: July 2015 PROTOTYPE
The UK’s leading pre-accelerator programme for early-stage startups www.FFWDLondon.com
Back to stage two…
Judging criteria •  Is there a clearly defined problem? •  Is there a clearly articulated & differentiated solution? •  Is the market clearly defined, addressable and scalable? •  Is there a viable and sustainable business model? •  Is the plan backed-up by concrete evidence?
Sounds great, but what are you really looking for?
ACTION
TRACTION
Academic excellence for business and the professions
Where do all startups start?
Academic excellence for business and the professions I have a super duper techy innovation!!! I have an idea!!! I have a passion!!! See: Bill Aulet, www.disciplinedentrepreneurship.com
Why do most startups fail?
Academic excellence for business and the professions concept Dev testing launch customer
Academic excellence for business and the professions See: Giff Constance, www.talkingtohumans.com
Academic excellence for business and the professions concept Dev testing launch customer I’m sorry, but why do I need this again?
Academic excellence for business and the professions Introducing Steve Blank
Academic excellence for business and the professions
Key idea 1 Startups operate in Search mode
Academic excellence for business and the professions
Academic excellence for business and the professions Established companies Execute against an established business model Startups Need to search for a scalable & profitable business model
Key idea 2 The only way you can find a business model is to “get out of the building!”
Academic excellence for business and the professions
Academic excellence for business and the professions See: Giff Constance, www.talkingtohumans.com
Academic excellence for business and the professions
Academic excellence for business and the professions customer
Academic excellence for business and the professions customer
Key idea 3 The Customer Development process
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
Academic excellence for business and the professions Customer discovery Customer validation Problem – solution fit Problem – market fit Yay, this is awesome!
Fail fast Fail cheap Fail small
Academic excellence for business and the professions
Exercise 1 •  15-mins, working individually or in teams •  Take the business hypothesis worksheet and complete as many sections as possible •  Make sure your answers are as concise and specific as possible •  Don’t over-think the exercise!!!
Exercise 2 •  15-mins, working in groups of 2 or 3 •  What assumptions have we made that, if proven wrong, would cause the business to fail? •  Take the second worksheet and list as many of these assumptions as possible •  Make your assumptions as concise and specific as possible
The Chillow®
Assumptions •  We believe that people care about pillow temperature •  We believe that people care about sleep quality when purchasing a pillow •  We believe we can sell online to customers •  We believe our customers will be young urban professionals •  We believe that our very first customers will be new graduates who need to outfit their apartments •  We believe that we can sell our pillows at a high enough price to cover our costs •  We believe that we can raise enough capital to cover investments in manufacturing
Exercise 2 •  15-mins, working in groups of 2 or 3 •  What assumptions have we made that, if proven wrong, would cause the business to fail? •  Take the second worksheet and list as many of these assumptions as possible •  Make your assumptions as concise and specific as possible
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)
RECAP
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.
CitySpark Seminars Week 2 Testing your assumptions
Academic excellence for business and the professions
CitySpark Seminar - Validating your market