Product Vision & Strategy Lessons Learned

PREPARED BY

Doug Henderson

FrostHub

www.frosthub.com

@dougehenderson

March 14, 2015

DEFINITION BUSINESS MODEL

A business model describes the

rationale of how and organization

creates, delivers and captures value

!

BUSINESS MODEL CANVAS

The Business Model Canvas

Revenue Streams

Channels

Customer SegmentsValue PropositionsKey ActivitiesKey Partners

Key Resources

Cost Structure

Customer Relationships

Designed by: Date: Version:Designed for:

designed by: 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.

What are the most important costs inherent in our business model? Which Key Resources are most expensive? Which Key Activities are most expensive?

is your business moreCost Driven (leanest cost structure, low price value proposition, maximum automation, extensive outsourcing)Value Driven (focused on value creation, premium value proposition)

sample characteristicsFixed Costs (salaries, rents, utilities)Variable costsEconomies of scaleEconomies of scope

Through which Channels do our Customer Segments want to be reached? How are we reaching them now?How are our Channels integrated? Which ones work best?Which ones are most cost-efficient? How are we integrating them with customer routines?

channel phases1. Awareness

How do we raise awareness about our company’s products and services?2. Evaluation

How do we help customers evaluate our organization’s Value Proposition?3. Purchase

How do we allow customers to purchase specific products and services?4. Delivery

How do we deliver a Value Proposition to customers?5. After sales

How do we provide post-purchase customer support?

For what value are our customers really willing to pay?For what do they currently pay? How are they currently paying? How would they prefer to pay? How much does each Revenue Stream contribute to overall revenues?

For whom are we creating value?Who are our most important customers?

Mass MarketNiche MarketSegmentedDiversifiedMulti-sided Platform

What type of relationship does each of our Customer Segments expect us to establish and maintain with them?Which ones have we established? How are they integrated with the rest of our business model?How costly are they?

examplesPersonal assistanceDedicated Personal AssistanceSelf-ServiceAutomated ServicesCommunitiesCo-creation

What Key Activities do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue streams?

catergoriesProductionProblem SolvingPlatform/Network

What Key Resources do our Value Propositions require?Our Distribution Channels? Customer Relationships?Revenue Streams?

types of resourcesPhysicalIntellectual (brand patents, copyrights, data)HumanFinancial

Who are our Key Partners? Who are our key suppliers?Which Key Resources are we acquairing from partners?Which Key Activities do partners perform?

motivations for partnershipsOptimization and economy Reduction of risk and uncertaintyAcquisition of particular resources and activities

What value do we deliver to the customer?Which one of our customer’s problems are we helping to solve? What bundles of products and services are we offering to each Customer Segment?Which customer needs are we satisfying?

characteristicsNewnessPerformanceCustomization“Getting the Job Done”DesignBrand/StatusPriceCost ReductionRisk ReductionAccessibilityConvenience/Usability

typesAsset saleUsage feeSubscription FeesLending/Renting/LeasingLicensingBrokerage feesAdvertising

fixed pricingList PriceProduct feature dependentCustomer segment dependentVolume dependent

dynamic pricingNegotiation (bargaining)Yield ManagementReal-time-Market

strategyzer.com

CUSTOMER SEGMENTS

FOR WHOM ARE WE CREATING VALUE?

WHO ARE THE MOST IMPORTANT CUSTOMERS?

WHO HAS PROBLEMS WORTH SOLVING?

CUSTOMER SEGMENT TYPES

MASS MARKET

NICHE MARKET

SEGMENTED

MULTI-SIDED PLATFORMS

DIVERSIFIED

TARGET CUSTOMERS

♀

YOU ARE NOT THE TARGET AUDIENCE

DON’T MAKE ASSUMPTIONS BECAUSE YOU WOULD USE IT

♂

CUSTOMER UNDERSTANDING

RESEARCH

$

OBSERVATIONS WHERE THEY WOULD USE YOUR PRODUCT OR SERVICE

TALK TO A LOT OF PEOPLE TO GAIN INSIGHT

FORMULATE YOUR IDEAL CUSTOMER

TEST YOUR HYPOTHESES

SKETCH A SIMPLE EXPERIENCE POSTER

$

OBSERVATION WHERE THEY WOULD USE YOUR PRODUCT OR SERVICE

TALK TO A LOT OF PEOPLE TO GAIN INSIGHT

DON’T GET HUNG UP ON THE DESIGN

VALUE PROPOSITION

SINGLE, CLEAR, COMPELLING MESSAGE THAT STATES WHY YOU ARE

DIFFERENT AND WORTH PAYING ATTENTION TO

%

DESCRIBES THE BENEFITS CUSTOMERS CAN EXPECT FROM YOUR

PRODUCTS AND SERVICES

Uber Lyft

CHALLENGES

BEING ABLE TO ARTICULATE THE VALUE TO A POTENTIAL CUSTOMER

GETTING YOUR TEAM ON THE SAME PAGE

CREATING THE VISION

BENEFITS

SIMPLE IS HARD

CUSTOMER PROFILE

NEED TO VALIDATE

%

VALUE MAP

NEED TO VALIDATE

%

USER STORIES

AS A {role}, I WANT TO {goal/desire} SO THAT {benefit}

%

DESCRIBES THE FUNCTIONALITY OF THE SYSTEM

As a driver, I want to set the truck’s cabin temperature so that the firefighters

are comfortable.

ANYONE SHOULD BE ABLE TO UNDERSTAND THEM

“It is a long way to the top if you want to rock and roll”

AC / DC

SCENARIO

RECENTLY FORMED BAND

&

MUSICIANS WITH PASSION

STARTING TO JAM AND GEL

PLAYING COVERS IN THE GARAGE

OPTIMISM HIGH AND SUCCESS IS UNKNOWN

START TO FOCUS

START FORMULATING A PLAN

'

WHAT ARE WE GOING TO PLAY?

WHO IS OUR AUDIENCE?

WHERE DO WE START PLAYING?

HOW DO WE WANT PEOPLE TO PERCEIVE US?

HOW DO WE DESCRIBE OURSELVES?

PROTOTYPING

CUT A DEMO

(

LOW COST & FIDELITY

FEW SONGS

GET FEEDBACK

SHOWCASE CAPABILITIES

WRITE MORE SONGS

TESTING THE MARKET

LOW COST MARKETING

)

TOUR IN A VAN

ON THE ROAD

BUILD A FOLLOWING

NOT GLAMOUROUS

GRINDING IT OUT

FUNDING

RECORD DEAL

*

GIVE UP OWNERSHIP RIGHTS

INVEST IN ALBUM AND TOURING

COMPROMISE YOUR VALUES?

THINKING SUCCESS IS LIKELY

CHANGES

REPLACE A BAND MEMBER

*

GET NEW MANAGEMENT

CHANGE THE SOUND

DISRUPTION

GREAT BAND CHANGES THE MUSIC SCENE

+

COMPETITION

COPY CATS

OTHER BANDS OBSOLETE

MAJOR SHIFT IN EXPECTATIONS