How to turn a guesstimate business model canvas into a fact-based one, and considerably minimize the...

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How to turn a guesstimate business model canvas into a fact-based one,

and considerably minimize the risk of failure

By William Choukeir

William ChoukeirVenture consultant, Designer, Generalist

Co-founded therefordesign.comCo-founded 1st TEDxBeirut

Mind, body, and rock climbing buff

Who are you?

Motive

Opportunity

Means

Took the opportunity

+

+

The Business Model Canvas

Revenue Streams

Channels

Customer SegmentsValue PropositionsKey ActivitiesKey Partners

Key Resources

Cost Structure

Customer Relationships

: Business Model Foundry AGThe makers of Business Model Generation and Strategyzer

This work is licensed under the Creative Commons Attribution-Share Alike 3.0 Unported License. To view a copy of this license, visit:http://creativecommons.org/licenses/by-sa/3.0/ or send a letter to Creative Commons, 171 Second Street, Suite 300, San Francisco, California, 94105, USA. strategyzer.com

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Revenue Streams

Channels


Key Resources

Cost Structure




FIND

Google

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Revenue Streams

Channels


Key Resources

Cost Structure




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Revenue Streams

Channels


Key Resources

Cost Structure




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Google

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Channels


Key Resources

Cost Structure




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Channels


Key Resources

Cost Structure




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Revenue Streams

Channels


Key Resources

Cost Structure




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Google

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SELFSERVICE

ALGORITHM

SERVERS

IMPROVE

EVERYONE


Revenue Streams

Channels


Key Resources

Cost Structure




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Google

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SELFSERVICE

ALGORITHM

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Revenue Streams

Channels


Key Resources

Cost Structure




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Channels


Key Resources

Cost Structure




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MARKETEERS

EVERYONE


Revenue Streams

Channels


Key Resources

Cost Structure




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Google

WEBSITE

SELFSERVICE

ALGORITHM

SERVERS

IMPROVE

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MARKETEERSEYES

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Revenue Streams

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Key Resources

Cost Structure




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Problem

Solution

Implementation

Scale+

+

Implementation: Backlinks

False sense of confidence


Revenue Streams

Channels


Key Resources

Cost Structure




Iridium 1991


Revenue Streams

Channels


Key Resources

Cost Structure




Iridium 1991

DEEPPOCKETS


Revenue Streams

Channels


Key Resources

Cost Structure




Iridium 1991

DEEPPOCKETS

PERSONALASSITANCE


Revenue Streams

Channels


Key Resources

Cost Structure




Iridium 1991

DEEPPOCKETS

PERSONALASSITANCE

CALL FROMANYWHERE


Revenue Streams

Channels


Key Resources

Cost Structure




Iridium 1991

DEEPPOCKETS

PERSONALASSITANCE

CALL FROMANYWHERE

SATELLITES

SATELLITES


Revenue Streams

Channels


Key Resources

Cost Structure




Iridium 1991

DEEPPOCKETS

PERSONALASSITANCE

CALL FROMANYWHERE

$3000 EACH

SATELLITES


Revenue Streams

Channels


Key Resources

Cost Structure




Iridium 1991

DEEPPOCKETS

PERSONALASSITANCE

CALL FROMANYWHERE

$3000 EACH

$7 / MIN


Revenue Streams

Channels


Key Resources

Cost Structure




Iridium 1991

DEEPPOCKETS

PERSONALASSITANCE

CALL FROMANYWHERE

$3000 EACH

$7 / MIN

15ROCKETS SATELLITES


Revenue Streams

Channels


Key Resources

Cost Structure




Iridium 1991

DEEPPOCKETS

PERSONALASSITANCE

CALL FROMANYWHERE

$3000 EACH

$7 / MIN


66SATELLITES


Revenue Streams

Channels


Key Resources

Cost Structure




Iridium 1991

DEEPPOCKETS

PERSONALASSITANCE

CALL FROMANYWHERE

$3000 EACH

$7 / MIN


66SATELLITES

SALES


Revenue Streams

Channels


Key Resources

Cost Structure




Iridium 1991

DEEPPOCKETS

PERSONALASSITANCE

CALL FROMANYWHERE

$3000 EACH

$7 / MIN


66SATELLITES

SALES

MAINTENANCE


Revenue Streams

Channels


Key Resources

Cost Structure




Iridium 1991

DEEPPOCKETS

PERSONALASSITANCE

CALL FROMANYWHERE

$3000 EACH

$7 / MIN


66SATELLITES

SALES

MAINTENANCE

GOVERNMENTS


Revenue Streams

Channels


Key Resources

Cost Structure




Iridium 1991

DEEPPOCKETS

PERSONALASSITANCE

CALL FROMANYWHERE

$3000 EACH

$7 / MIN


66SATELLITES

SALES

MAINTENANCE

GOVERNMENTS

$6BILLION

7 Years

9 Months

False sense of confidence

What would Sherlock do?

Problem+

Solution +

Implementation

Scale

Motive+

Opportunity+

Means

Took opportunity

PROVE

Validate Problem

Validate Solution

Validate Business Model

Get Ready To Sell

Sell

Develop Company& Product Position

Deep Assessment:Pivot-or-proceedDo We Have Facts ThatThe Company Can Scale?

PHASE 3

Grow Customer Base & Demand

Preparation Develop Business Model & Hypotheses◉ Estimate the total market opportunity for the company

◉ Set long-term vision, product strategy, and 18-month schedule

◉ Develop hypotheses for customer segments, value proposition, product features and benefits and what’s a high fidelity MVP like?

◉ Develop hypotheses for distribution channels

◉ Set an initial Market Type and positioning hypothesis

◉ Develop hypotheses for customer relationships: Strategies and tactics to Get, Keep, and Grow customers

◉ Identify key resources required, and develop hypotheses for what each will cost, and how it’ll be found and secured

◉ Develop hypotheses for key partners, and the company's 'Value exchange' with each

◉ Develop revenue and pricing hypotheses and pricing tactics

◉ Design experiments for testing the hypotheses

◉ Develop a process to collect results and analyse the data

◉ Continuously run the experiments

◉ Build a low fidelity MVP to quantify interest in a solution to the problem

◉ Run low fidelity MVP, collect data, and reinforce learnings with live interviews

◉ Gather and gain in-depth understanding of customer segments

◉ Gather and gain in-depth understanding of the market environment

◉ Assemble all learnings, assess the data and determine whether to pivot or proceed

◉ Update the business model canvas, team, and 18-month delivery schedule

◉ Design a high fidelity MVP to quantify the intensity of customers’ enthusiasm for the product

◉ Identify critical metrics to determine customer enthusiasm and build them into the high fidelity MVP

◉ Assemble all learnings from day one, assess the data (focused around customer enthusiasm) and determine whether to pivot or proceed

◉ Update the business model canvas, team, and 18-month delivery schedule accordingly

◉ Begin to identify initial list of advisory board members

◉ Pause all e�orts to verify Product/Market Fit. Deeply assess each question: Serious problem/need? Does product addresses problem/need? Are there enough customers? Pivot or proceed. Update the business model canvas accordingly

◉ Develop a detailed understanding of who the customers are, how we reach them, and what it costs to get them. Update the business model canvas accordingly

◉ Determine if the company can be profitable: Reasonable estimate of the company’s revenue forecast across 4–8 quarters. Update the business model canvas accordingly

◉ Collect all learnings for all-hands-on-deck pivot or proceed meeting

◉ All stakeholders meet to deeply assessment whether the modified hypotheses provide a solid foundation for moving forward to larger-scale testing and test-selling (How much can the company scale and how?)

◉ Cra� company positioning statement: clear, compelling message explaining why the company is di�erent and the product is worth buying

◉ Devise plans for getting customers to the app to sign up or buy: Aquire and activation plans

◉ Create a polished High Fidelity MVP which will be used to generate a steady stream of customer and product behavior data to refine the business model and product

◉ Determine which key business metrics to measure and develop a system or dashboard for collecting and monitoring data

◉ Hire a dedicated analytics expert on the senior management team

◉ Formally engage advisors who can facilitate high-level introductions and are top-notch “out of the box” thinkers

◉ Assemble all data, reports, questionnaires, map, diagrams, business model components, etc., for full review

◉ Use facts gathered to validate the business model and ensure all business model hypotheses have been converted into facts

◉ Ensure the startup can become a profitable, scalable business before it runs out of money

◉ Further validate the business model to determine if the company is making the best bet possible, and that the revenue is as high and costs as low as they can realistically be

◉ Decide whether to execute the business model and start creating demand and building a user base

◉ Agreement among investors, founders, and team on commitment to the process outlined here.

◉ Initial agreement on Market Type & appropriate funding needs (Re-segmented Market)

◉ Cash burn rate in # of months (Runway). Is there enough funding for 2-3 pivots?

◉ Agree on approximate time frame

◉ Agree on exit criteria for customer discovery

◉ Agreement on founders being present during customer interviews

◉ Agreement on who leads the team

◉ Agreement on responsibilities and roles-to-be-aquired (Is this the right team)

◉ Agreement on 3 to 5 Core Values of the founding team. What does the company believe in?

◉ Develop a plan that defines acquisition metrics to optimize, and how customer behavior will be monitored and optimized

◉ Implement the plan and optimise continuously by testing and improving the plan

◉ Optimize “Keep” And “Grow” Results, and validate sales potential of app

◉ Test Sell Tra�ic Partners: Get deals or firm commitments from prospective tra�ic partners

◉ Formalize the product’s positioning through customer validation

◉ Ensure product positioning matches company’s market type through customer validation

◉ Develop Company Positioning statement that fully articulates the company’s vision and mission

◉ Validate product and company positioning, and product features through detailed feedback about the marketplace and product from key analysts and influencers

PHASE 1

Validate Problem,

Solution, & Business

Model

PHASE 2:

Validate How Much

We Can Scale & How

there for design therefordesign.com

Interviews

Ad tracking

Landing page

Low /High fidelity MVP

Unique link tracking

A/B testing

Prototype

Video

Brochures & data sheets

Wizard of Oz

Mock sales & pre sales

A|B

Validate Problem

Validate Solution

Validate Business Model

Get Ready To Sell

Sell

Develop Company& Product Position

Deep Assessment:Pivot-or-proceedDo We Have Facts ThatThe Company Can Scale?

PHASE 3

Grow Customer Base & Demand

Preparation Develop Business Model & Hypotheses◉ Estimate the total market opportunity for the company

◉ Set long-term vision, product strategy, and 18-month schedule

◉ Develop hypotheses for customer segments, value proposition, product features and benefits and what’s a high fidelity MVP like?

◉ Develop hypotheses for distribution channels

◉ Set an initial Market Type and positioning hypothesis

◉ Develop hypotheses for customer relationships: Strategies and tactics to Get, Keep, and Grow customers

◉ Identify key resources required, and develop hypotheses for what each will cost, and how it’ll be found and secured

◉ Develop hypotheses for key partners, and the company's 'Value exchange' with each

◉ Develop revenue and pricing hypotheses and pricing tactics

◉ Design experiments for testing the hypotheses

◉ Develop a process to collect results and analyse the data

◉ Continuously run the experiments

◉ Build a low fidelity MVP to quantify interest in a solution to the problem

◉ Run low fidelity MVP, collect data, and reinforce learnings with live interviews

◉ Gather and gain in-depth understanding of customer segments

◉ Gather and gain in-depth understanding of the market environment

◉ Assemble all learnings, assess the data and determine whether to pivot or proceed

◉ Update the business model canvas, team, and 18-month delivery schedule

◉ Design a high fidelity MVP to quantify the intensity of customers’ enthusiasm for the product

◉ Identify critical metrics to determine customer enthusiasm and build them into the high fidelity MVP

◉ Assemble all learnings from day one, assess the data (focused around customer enthusiasm) and determine whether to pivot or proceed

◉ Update the business model canvas, team, and 18-month delivery schedule accordingly

◉ Begin to identify initial list of advisory board members

◉ Pause all e�orts to verify Product/Market Fit. Deeply assess each question: Serious problem/need? Does product addresses problem/need? Are there enough customers? Pivot or proceed. Update the business model canvas accordingly

◉ Develop a detailed understanding of who the customers are, how we reach them, and what it costs to get them. Update the business model canvas accordingly

◉ Determine if the company can be profitable: Reasonable estimate of the company’s revenue forecast across 4–8 quarters. Update the business model canvas accordingly

◉ Collect all learnings for all-hands-on-deck pivot or proceed meeting

◉ All stakeholders meet to deeply assessment whether the modified hypotheses provide a solid foundation for moving forward to larger-scale testing and test-selling (How much can the company scale and how?)

◉ Cra� company positioning statement: clear, compelling message explaining why the company is di�erent and the product is worth buying

◉ Devise plans for getting customers to the app to sign up or buy: Aquire and activation plans

◉ Create a polished High Fidelity MVP which will be used to generate a steady stream of customer and product behavior data to refine the business model and product

◉ Determine which key business metrics to measure and develop a system or dashboard for collecting and monitoring data

◉ Hire a dedicated analytics expert on the senior management team

◉ Formally engage advisors who can facilitate high-level introductions and are top-notch “out of the box” thinkers

◉ Assemble all data, reports, questionnaires, map, diagrams, business model components, etc., for full review

◉ Use facts gathered to validate the business model and ensure all business model hypotheses have been converted into facts

◉ Ensure the startup can become a profitable, scalable business before it runs out of money

◉ Further validate the business model to determine if the company is making the best bet possible, and that the revenue is as high and costs as low as they can realistically be

◉ Decide whether to execute the business model and start creating demand and building a user base

◉ Agreement among investors, founders, and team on commitment to the process outlined here.

◉ Initial agreement on Market Type & appropriate funding needs (Re-segmented Market)

◉ Cash burn rate in # of months (Runway). Is there enough funding for 2-3 pivots?

◉ Agree on approximate time frame

◉ Agree on exit criteria for customer discovery

◉ Agreement on founders being present during customer interviews

◉ Agreement on who leads the team

◉ Agreement on responsibilities and roles-to-be-aquired (Is this the right team)

◉ Agreement on 3 to 5 Core Values of the founding team. What does the company believe in?

◉ Develop a plan that defines acquisition metrics to optimize, and how customer behavior will be monitored and optimized

◉ Implement the plan and optimise continuously by testing and improving the plan

◉ Optimize “Keep” And “Grow” Results, and validate sales potential of app

◉ Test Sell Tra�ic Partners: Get deals or firm commitments from prospective tra�ic partners

◉ Formalize the product’s positioning through customer validation

◉ Ensure product positioning matches company’s market type through customer validation

◉ Develop Company Positioning statement that fully articulates the company’s vision and mission

◉ Validate product and company positioning, and product features through detailed feedback about the marketplace and product from key analysts and influencers

PHASE 1

Validate Problem,

Solution, & Business

Model

PHASE 2:

Validate How Much

We Can Scale & How

there for design therefordesign.com

What would Yoda do?

Sherlock v/s Yoda

Thank you!–William Choukeir

bit.ly/agileyoda

Get these resources:• These slides• Prezi: Business Model Validation Phases & Milestones• Google Spreadsheet: Channel metrics & funnel• Books• Links & videos

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