This week we reviewed all of the past reading and exercises. After that we walked through how to create a first experiment based on the business model canvas as well as how to analyze the data to determine next steps.

2. » 5/12 – What to Expect
» 5/19 – First Pitches
» 5/26 – Experiment Day
» 6/2 – Customers, Users, Payers
» 6/9 –Value Propositions
» 6/16 – Distribution Channels
» 6/23 – Customer Relationships
» 6/30 – Revenue Models
» 7/7 – Partners
» 7/14 – Key Resources & Costs
» 7/21 – Lessons Learned Presentations

3. - 09:05am - 404 Video
- 09:10am - Review assignments / homework
- 09:30am - Presentations
- 10:00am - Design first experiment
- 10:30am - Get out of the building!
- 03:30pm - Review data
- 03:45pm – Share-Out – What did you learn
- 04:00pm - Design second experiment
- 04:20pm – Homework + Coaching

4. Video

7. » 1: There are no facts inside the building, so get outside.
» 2: Pair customer development with agile development
» 3: Failure is an integral part of the search
» 4: Make continuous iterations and pivots
» 5: No business plan survives first contact with customers so use a business
model canvas
» 6: Design experiments to test and validate your hypotheses
» 7: Agree on market type. In changes everything
» 8: Startup metrics differ from those in existing companies
» 9: Fast decision-making, cycle time, speed and tempo
» 10: It’s all about passion
» 11: Startup job titles are very different from large companies
» 12: Preserve all cash until needed. Then spend.
» 13: Communicate and share learning
» 14: Customer development success begins with buy-in

8. » Problem / Solution Fit
» Earlyvangelists
» MVPs
» Business Model Hypotheses
» Product features & benefits

10. » Multi-sided
» “Free”
» Freemium
» Open Source
» Insurance
» Bait & Hook
» Open
» Outside-In
» Inside-Out

11. » Epicenters
» “What If?” questions
» Ideation process
» Team diversity
» Brainstorming

12. » What is a startup? First principles
» Make no little plans – defining the scalable
startup
» A startup is not a smaller version of a large
company

13. » 3-5 minutes
˃Market Size
˃Type of business: IP, Licensing, startup,
unknown
˃Proposed experiments to test customer
segment, value proposition, channel and
revenue model of the hypotheses.

21. All new business ideas begin as educated guesses
- We often begin with assumptions
- Design experiments to capture customer behavior data
- Make good decisions based this data
Move through the loop quickly
- Test riskiest assumptions via hypotheses
- Do it again based on what you learned

23. What is the biggest assumption that if false, will cause my
product to fail?
“If this is not true, we’re out of business”
Rank assumptions in order of greatest risk, develop
experiments to validate/in each assumption.
What’s the difference between assumptions and hypotheses?
- Hypotheses are numeric

24. • Tests your riskiest assumption…
• Based on a numeric hypothesis…
• Measures real behavior (or as close to it as possible)
• Can be built and executed quickly!

25. Build the least amount required to get the behavioral data you
need to validate/invalidate your hypothesis.
Rapid Experiments with Customers
Ask yourself: Is this the minimum amount I can do to
validate/invalidate my most important hypothesis?

26. Based on your Business Model Canvas…
» Write down you top 5 riskiest assumptions, related
to your customer and value proposition.

27. » Prioritize these assumptions, riskiest at the top (are
you sure..? Focus on customer problem assumptions)

28. » Select the top assumption!

29. » Write down at least three numeric hypotheses based
on behavior

30. » Select the hypothesis most likely to provide real
validation

31. » Create a list of 3 potential experiments based on this
hypothesis

32. » Choose first experiment to execute

33. » Return no later than 3:15pm

34. » What was your hypothesis?
» What was the experiment you designed to test the
hypothesis?
» What was the result (pass/fail)
» What did you learn?
» What was surprising?
» What will you do next?

35. » Document / review / re-prioritize 5 riskiest
assumptions
» Choose riskiest assumption
» Write 3 measurable, behavioral hypotheses
» Which one will provide best validation?
» Brainstorm 3 experiments
» Choose an experiment that will validate/invalidate
your hypothesis fastest.

36. » Team presentation for next class: (5 minutes)
˃ Talk to as many customers as you can
˃ What were your value proposition hypotheses?
˃ What do customers think about your value proposition hypotheses?
˃ Post updates in the Google group (lessons learned, canvas changes)
» Read: Business Model Generation p146-150,
161-168 and 200-211
» Read: The Startup Owners Manual p85-97