Lesson 4 - Business Model Validation.pptx

Lesson 4 - Business Model Validation.pptx - Business Model...

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Business Model Validation Lesson 4
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Would you rather struggle to discover a problem your customers experience . . . or build a product nobody wants ?
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What matters is not the accuracy of your assumptions, but your ability to analyze and validate them
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Validating Your Business Model In Lesson 3, Idea Generation, you hypothesized the customers you are uniquely suited to solve problems for, and hypothesized the problems you are uniquely suited to solve. In this lesson you’ll take the next step, figuring out how you’re going test the customer and problem hypotheses, so you can validate your business model as developed in the BMC. 4
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Validating Your Business Model So how do we figure out if the problems we hypothesized are problems that are generating strong emotions from those customers? By actually interacting with the customers in any of the following ways: Surveys Focus groups Interviews Observation 5
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Validating Your Business Model So how do we figure out if the problems we hypothesized are problems that are generating strong emotions from those customers? By actually interacting with the customers in any of the following ways: Surveys Focus groups Interviews Observation 6
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Surveys: Pros & Cons Pros Fast Can produce statistically significant results Cons Difficult to get responses to open- ended questions Don’t provide insights on emotional level Difficult to probe/ask follow-up questions Often expensive (time & money) to collect enough data 7
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Focus Groups: Pros & Cons Pros More in-depth discussion of problems More emotional Ability to ask probing/follow-up questions Cons Some people talk more than others Discussions of solutions can distract Groupthink Lack of safety/intimacy More work than surveying
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Interviews: Pros & Cons Pros Significant emotional depth Probe as deeply as necessary No distractions by other participants Collect data from introverts and extroverts Cons Takes more work to facilitate than surveys Results aren’t statistically significant
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Validating Your Business Model The best way to begin the process of validation is to interview potential “Early Adopters” and validate your problem hypothesis. The business model validation involves two steps: Step 1: Customer Interviews Step 2: Problem Hypothesis validation 10
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Validating Your Business Model There are techniques that can help you interview customers in a way that helps you test the assumptions about the problem you may have identified. However it takes some practice to get good at, and comfortable with these interview techniques. It’s normal to feel awkward or nervous interviewing at first, everyone does, but that after awhile, it becomes as natural as having a conversation with a close friend.
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