Test your Business Idea. Jun.-Prof. Dr. Mario Geißler

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1 Test your Business Idea Jun.-Prof. Dr. Mario Geißler

2 Great entrepreneurs don t take risks; they manage them.

3 Background Risk 1 Company value Quelle: Gilbert, Eyring: Beating the Odds When You Launch a New Venture, In: Succeeding as an Entrepreneur, Harvard Business Review, 2011, S Time

4 Example: Startup Online-Shop Risk 1 Development of a website 2 Company value Creation of warehousing capabilities 3 Inventory and consignment 4 Customer demand 5 Operating 6 Product-Mix Time Gilbert, Eyring: Beating the Odds When You Launch a New Venture, In: Succeeding as an Entrepreneur, Harvard Business Review, 2011, S

5 Methods for dealing with risk and uncertainty Risk 1 Development of a website 2 Company value Creation of warehousing capabilities 3 Inventory and consignment 4 4 Customer demand 5 Operating 6 Product-Mix Time Quelle: Gilbert, Eyring: Beating the Odds When You Launch a New Venture, In: Succeeding as an Entrepreneur, Harvard Business Review, 2011, S

6 Methods for dealing with risk and uncertainty Risk 4 Customer demand Company value 6 Product-Mix 1 Development of a website 2 Creation of warehousing capabilities 3 Inventory and consignment 5 Operating Time Quelle: Gilbert, Eyring: Beating the Odds When You Launch a New Venture, In: Succeeding as an Entrepreneur, Harvard Business Review, 2011, S

7 How to systematically reduce risks?

8 Experiments Test your assumtions

9 Methods for dealing with risk and uncertainty Reduce risks with efficient experiments Early und cheap tests (before it is to late) Limited time frame (learn fast in the market and adopt) Test one single assumption at one point of time (cause and effect) Gilbert, Eyring: Beating the Odds When You Launch a New Venture, In: Succeeding as an Entrepreneur, Harvard Business Review, 2011, S

10 Methods for dealing with risk and uncertainty Important Define your assumptions: What is supposed to happen? Implementation Analyze the reality: What happened? What could you learn and how could you apply your learning in the future? Gilbert, Eyring: Beating the Odds When You Launch a New Venture, In: Succeeding as an Entrepreneur, Harvard Business Review, 2011, S

11 Lean Start-up Build-Measure-Learn Start with a hypotheses and its implementation in a MVP Insights for product improvement / adjustment of your hypotheses Build Implementation of an experiment Learn Measure Analyze your data

12 Product development

13 Lean Start-up Minimum Viable Product (MVP) "It is not necessarily the smallest product imaginable...it is simply the fastest way to get through the Build-Measure-Learn feedback loop with the minimum amount of effort. Eric Ries in The Lean Startup

14 Experiments?!?

15 The Lean Playbook Folge 3: https://www.youtube.com/watch?v=cshg5mkyjsm

16 Building e c n e i d Au Concie rg e Wizard of Crowdfunding Oz Non-Functional Prototypes d Storyboar A/B Testing Landing P age The Lean Playbook Folge 3: https://www.youtube.com/watch?v=cshg5mkyjsm

17 Methods for dealing with risk and uncertainty Concierge MVP Idea is an automated service but you manually guide your user through the solution of the customer problem Example: Assistant-App, that provides information automated to your target group Huge programming effort search and send information manually Goal: Learn how you could solve the customer problem most effective (and efficient)

18 Methoden zum Umgang mit Risiko und Unsicherheit

19 Methods for dealing with risk and uncertainty Storyboard Prototype different value propositions Define scenarios Create visuals Test in front of real customers and ask, ask, ask What really helps you? What should we keep and what should we develop further? Do you miss something? Ask why questions to go below the surface Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons,

20

21 ERASMUS-Box

22 Methods for dealing with risk and uncertainty Sorting of cards that represent product features (e.g., 10 cards) Attention, what your customers tell you and what they let buy your products could be different (e.g., wish list) Card order gives you no evidence regarding the importance of the single features (the first card could be very important and the others nice-to-have ) Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons,

23 Methods for dealing with risk and uncertainty Early prototype without functions Pitch Deck, illustrations, dummy / mockup, 3D-Printert etc. represents specific assumption / hypotheses (you do not need all features) Test your hypotheses (e.g., importance of different product features) Sometimes observations of product in use can be helpful Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons,

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25 Methods for dealing with risk and uncertainty Analyze unique links bit.ly; goo.gl etc. For test customers after presenting your idea (e.g., with special sales brochure or flyer) Test of customer interest with unique links possible Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons,

26 Methods for dealing with risk and uncertainty Landing-Pages Short presentation of your product / service (your most important features etc.) Goal: Visitors should show a certain behavior call to action (e.g., newsletter registration, pre-order, download app etc.) Test of real customer interest Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons,

27

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29 beta.my-startup-assistent.com

30

31 Methods for dealing with risk and uncertainty Landing-Pages A/B Split-Test Design different landing-pages differentiate in one single feature (price, scope of features etc.) Test what site leads to more customer behavior Quelle: Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons,

32 Methods for dealing with risk and uncertainty Test with payed acquisition GoogleAdwords (75 coupon), Bing, Facebook Choose appropriate keywords (competitor analysis) Set your maximum cost per click (intensity of competition) Write an add / design an add Link your landing-page... get started Analyze your click through rate (CTR) Analyze your traffic on your landing-page Test of potential markets and customer interests

33 https://adwords.google.com/cm/campaignmgmt

34

35

36 Methods for dealing with risk and uncertainty Tools Landing-Pages Unbounce.com (Templates; A/B-Testing, etc. ab 49 $ / Monat) KickoffLabs.com (Templates; A/B-Testing, etc. ab 39 $ / Monat) Optimizely.com (A/B-Testing, free) Pagewiz.com (Templates; A/B-Testing, etc. ab 29 $ / Monat)

37 Wizard of Oz Wizard of the Oz Quelle: Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons,

38 Wizard of Oz Quelle: Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons,

39 Methods for dealing with risk and uncertainty Further tests: Pre-Order offers à test willingness to buy Mock-Sale à test willingness to buy Explainer video Quelle: Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons,

40 Methods for dealing with risk and uncertainty Summary Identify your major risks and decrease them before you start your company Don t invest to much resources in your first strategy (it is wright and wrong) Little bets test your hypotheses cheap and fast Stay flexible Quelle: Gilbert, Eyring: Beating the Odds When You Launch a New Venture, In: Succeeding as an Entrepreneur, Harvard Business Review, 2011, S

41 Methods for dealing with risk and uncertainty Summary Experiments Audience Building Concierge Crowdfunding A/B-Tests Wizard of Oz Landing-Pages Payed Acquisition Prototypes Storyboards Explainer video Mockup Pre-Order

42 Great entrepreneurs don t take risks; they manage them. Task How could you manage your risks?

Test your Business Idea. Jun.-Prof. Dr. Mario Geißler

Test your Business Idea. Jun.-Prof. Dr. Mario Geißler Test your Business Idea Jun.-Prof. Dr. Mario Geißler Great entrepreneurs don t take risks; they manage them. Background Risk 1 Company value 2 3 4 5 6 Quelle: Gilbert, Eyring: Beating the Odds When You

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