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Innovation Management Workshop - #2

Innovation Management Workshop - #2

How to start a scalable business

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Manish Chiniwalar

October 01, 2016
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Transcript

  1. HOW-TO START AND SCALE IMPACTFUL BUSINESS IDEAS Kuldip Chakraborty @cooldip

    Manish Chiniwalar @manishrc Karthik Gupta @karthikvgupta
  2. WHY ARE WE HERE?

  3. 1.8 MILLION BOOKS ON BUSINESS & MONEY

  4. GOODKARMA • 4 Customers • 3 Pivots • 0 Lines

    of code “Help yoga practitioners grow with consistent and deliberate practice.”
  5. GOODKARMA PIVOTS 1. Inconsistent Students → Consistent Students 2. Add

    Teachers 3. Teachers → Yoga Studio Founders “Help yoga practitioners grow with consistent and deliberate practice.”
  6. CUSTOMER FACTORY LEAN CANVAS TRACTION MODEL

  7. 1961 John F. Kennedy I believe that this nation should

    commit itself to achieving the goal, before this decade is out, of landing a man on the moon and returning him safely to the earth.
  8. WHERE DO YOU WANT TO BE? “If you don’t know

    where you are going, any road will take you there.”
  9. DO IT NOW 1. Write your Minimum Success Criteria in

    terms of revenue per year Is it $1k, $10k, $100k, $1M, $10M? 2. Write when do you want to reach there Anytime between 2-5 years is a good timeframe 5 MIN
  10. “Don’t sell what you can build. Build what you can

    sell.” BUSINESS, NOT BUSYNESS.
  11. CREATE VALUE

  12. CREATE VALUE CAPTURE VALUE

  13. CREATE VALUE CAPTURE VALUE AT FRACTION OF THE COST

  14. CREATE VALUE CAPTURE VALUE AT FRACTION OF THE COST DO

    THIS WITH A LOT OF PEOPLE
  15. “It's not about ideas. It's about making ideas happen.” -

    Scott Belsky THE LEAN CANVAS
  16. ASH MAURYA’S LEAN CANVAS

  17. CUSTOMER SEGMENT 1. Identify your key customer segment 2. Identify

    the roles that will interact with this customer 3. Identify early adopters #1
  18. PROBLEM 1. List the top 3 problems 2. List existing

    alternatives #2
  19. UVP 1. Single, clear, compelling message that states why you

    are different and worth paying attention. 2. Tips for UVP: - Be different, but make sure your difference matters - Target early adopters - Focus on finished story benefits - Pick your words carefully and own them - Answer: what, who, and why - Study other good UVPs. 3. Good Formula Instant Clarity Headline = End Result Customer Wants + Specific Period of Time + Address the Objections 4. Create a high-concept pitch. #3
  20. SOLUTION Simply sketch out the simplest thing you could possibly

    build to address each problem. #4
  21. CHANNELS 1. Failing to build a significant path to customers

    is among the top reasons why startups fail. 2. Write both inbound and outbound paths to your customers. #5
  22. REVENUE STREAMS List your sources of revenue. Don’t let cost

    drive your price. Base it on the “Perceived Value” and existing alternatives. #6
  23. Image credits: vox.com

  24. “What we document is that price is not just about

    inferences of quality, but it can actually affect real quality,” BABA SHIV
  25. “What we document is that price is not just about

    inferences of quality, but it can actually affect real quality,” “So, in essence, [price] is changing people's experiences with a product and, therefore, the outcomes from consuming this product.” BABA SHIV
  26. REVENUE STREAMS List your sources of revenue. Don’t let cost

    drive your price. Base it on the “Perceived Value” and existing alternatives. #6
  27. COST STRUCTURE List your fixed costs and variable costs #7

  28. KEY METRICS What will tell you how your business is

    doing? #8
  29. A B

  30. UNFAIR ADVANTAGE Something that cannot be easily be copied What

    will prevent a big company ripping off your product? #9
  31. “If you want to unleash more creativity in your company,

    you need to allow for a little contamination. It is the sand in the oyster that creates the pearl.” - Fred Wilson LOCAL MAXIMA
  32. None
  33. DO IT NOW 1. Copy the canvas & create more

    versions 2. Start with changing the Customer Segments 3. Rank and pick one, based on: - Customer Pain Level - Ease of Reach - Gross Margins - Market Size - Tech Feasibility 60 MIN
  34. How many trees are left in Bangalore today? FERMI ESTIMATE

  35. Enrico Fermi

  36. REQUIRED CUSTOMERS = REVENUE/YEAR REVENUE/CUSTOMER/YEAR

  37. REQUIRED CUSTOMERS = REVENUE/YEAR REVENUE/CUSTOMER/YEAR Minimum Success Criteria

  38. REQUIRED CUSTOMERS = REVENUE/YEAR $1,000,000 REVENUE/CUSTOMER/YEAR (Number of Students/Studio) x

    (Price per Student)
  39. REQUIRED CUSTOMERS = REVENUE/YEAR $1,000,000 REVENUE/CUSTOMER/YEAR = (STUDENTS/STUDIO) x (PRICE/STUDENT)

    x (12 MONTHS)
  40. REQUIRED CUSTOMERS = REVENUE/YEAR $1,000,000 REVENUE/CUSTOMER/YEAR = (50 STUDENTS/STUDIO) x

    ($4/STUDENT) x (12 MONTHS)
  41. REQUIRED CUSTOMERS = REVENUE/YEAR $1,000,000 REVENUE/CUSTOMER/YEAR $2,400

  42. REQUIRED CUSTOMERS = 416 ACTIVE CUSTOMERS

  43. REQUIRED CUSTOMERS = 500 ACTIVE CUSTOMERS Over 100,000 yoga studios

    in the world
  44. CUSTOMER PRODUCTION RATE = REVENUE/YEAR $1,000,000 CUSTOMER LIFETIME VALUE =

    (REVENUE/CUSTOMER/YEAR) x (LIFETIME)
  45. CUSTOMER PRODUCTION RATE = REVENUE/YEAR $1,000,000 CUSTOMER LIFETIME VALUE =

    ($2,400 REVENUE/CUSTOMER/YEAR) x (2 YEAR LIFETIME)
  46. CUSTOMER PRODUCTION RATE = REVENUE/YEAR $1,000,000 CUSTOMER LIFETIME VALUE $4,800

  47. REQUIRED CUSTOMERS = 208 ACTIVE CUSTOMERS

  48. REQUIRED CUSTOMERS = 200 NEW CUSTOMERS/YEAR

  49. REQUIRED LEADS = CUSTOMER PRODUCTION RATE CONVERSION RATE

  50. REQUIRED LEADS = CUSTOMER PRODUCTION RATE 200 CONVERSION RATE

  51. REQUIRED LEADS = CUSTOMER PRODUCTION RATE 200 CONVERSION RATE 1%

    OR 0.01 For SaaS Companies, It’s usually single digit
  52. REQUIRED LEADS = 20,000 LEADS PER YEAR

  53. 200 NEW CUSTOMERS EVERY YEAR 500 ACTIVE CUSTOMERS $1M REVENUE/YEAR

    20,000 LEADS PER YEAR
  54. REQUIRED CUSTOMERS = REVENUE/YEAR $1,000,000 REVENUE/CUSTOMER/YEAR = (50 STUDENTS/STUDIO) x

    ($4/STUDENT) x (12 MONTHS) $4 → $8
  55. 200 100 NEW CUSTOMERS EVERY YEAR 500 250 ACTIVE CUSTOMERS

    $1M REVENUE/YEAR 20,000 10,000 LEADS PER YEAR
  56. DO IT NOW 30 MIN 1. Determine time-boxed minimum success

    criteria Keep time box under 3 years Frame the outcome in terms of revenue (or throughput) goal 2. Estimate LTV 3. Calculate the required Throughput 4. Refine and adjust your model Can you Increase Pricing? 5. Eliminate any models that don’t work
  57. To achieve a large fuzzy goal, it is best to

    break it down into smaller measurable steps STARTUP STAGES
  58. None
  59. None
  60. PROBLEM-SOLUTION FIT PRODUCT-MARKET FIT SCALE Understanding the value that can

    be delivered Delivered value > Captured value Delivering value to more and more customers
  61. Lean Canvas : Business Plan :: Traction Model : Financial

    Model THE TRACTION MODEL
  62. GROWTH (#Customers) TIME 3 months 1 year 2 years

  63. GROWTH (#Customers) TIME 3 months 1 year 2 years

  64. PROBLEM-SOLUTION FIT PRODUCT-MARKET FIT SCALE

  65. GROWTH TIME 3 months 1 year 2 years 10X PROBLEM-SOLUTION

    FIT PRODUCT-MARKET FIT SCALE 100X MINIMUM SUCCESS CRITERIA RISK - CUSTOMERS RISK - TECH
  66. WHY 10X WORKS

  67. You have a single goal from ideation to scale The

    10X model requires non-linear thinking The 10X model works to expose the riskiest parts of your business
  68. GROWTH TIME 3 months 1 year 2 years 10X PROBLEM-SOLUTION

    FIT PRODUCT-MARKET FIT SCALE GOODKARMA TRACTION MODEL 400 studios $1MM Revenue 40 studios 4 studios 7 months RISK - CUSTOMERS 100X RISK - TECH
  69. PROBLEM-SOLUTION FIT PRODUCT-MARKET FIT SCALE Don't have a product just

    yet! No product - No Customers.
  70. 100 Leads 10 Trials 1 Customer

  71. IN EVERY STAGE FOCUS ON REPEATABILITY GROWTH TIME 3 months

    2 years 3 years 10X PROBLEM-SOLUTION FIT PRODUCT-MARKET FIT SCALE 1 year 100X
  72. GROWTH TIME 3 months 2 years 3 years 10X PROBLEM-SOLUTION

    FIT PRODUCT-MARKET FIT SCALE 1 year 100X SINGLE BIGGEST THING TO BUILDING TRACTION GET OUT OF THE BUILDING
  73. DO IT NOW 30 MIN Stage: PS Fit 1x PM

    Fit 10x Scale 100x Timebox 3 months 1 year 2 years Customer Throughput 30 300 3000 Timebox and customer throughput: Using the funnel, come up with the throughput for Problem-Solution Fit: Stage: Leads Trials Customers Conversion 10% 10% Numbers ??? ?? 30
  74. “I’m Gonna Make Him An Offer He Can’t Refuse” -Don

    Corleone VALIDATE WITH AN “OFFER”
  75. - UVP - Demo - https://invis.io/ME8GASP8N - Pricing - 5%

    of the fees collected from students through the app GOOD KARMA OFFER
  76. DO IT NOW 15 MIN Create an OFFER

  77. Now that you have defined a goal and a path,

    you now need a repeatable process to keep delivering value one customer at a time. THE CUSTOMER FACTORY
  78. CUSTOMER FACTORY

  79. ACQUISITION GoodKarma: Identify the yoga studio founder and set up

    a call to place the offer Disneyland: People queuing up outside Disneyland
  80. ACQUISITION ACTIVATION GoodKarma: Install the Manager’s App at the studio

    and have the manager send an invite to enquiry Disneyland: After the visitor has taken the first ride
  81. ACQUISITION ACTIVATION REVENUE GoodKarma: Student makes a payment to the

    studio through the app Disneyland: Visitor is happy and takes all the rides
  82. ACQUISITION ACTIVATION REVENUE RETENTION GoodKarma: Student continues to use the

    app and maizntains the relationship with the studi Disneyland: Visitor takes more rides and spends more time
  83. ACQUISITION ACTIVATION REVENUE REFERRAL RETENTION GoodKarma: Student talking to another

    student in another studio Disneyland: Visitor talks to her neighbours
  84. AARRR!

  85. DO IT NOW 1. Identify the events corresponding to each

    of the steps in the customer factory: - Acquisition - Activation - Retention - Revenue - Referral 2. If you already have paying customers, Add current numbers. 30 MIN
  86. THEORY OF CONSTRAINTS

  87. “The chain is as strong as the weakest link”

  88. GOODKARMA’S CONSTRAINTS

  89. GoodKarma: Install the Manager’s App at the studio and have

    the manager send an invite to enquiry ACQUISITION ACTIVATION REVENUE REFERRAL RETENTION GoodKarma: Identify the yoga studio founder and set up a call to place the offer
  90. GoodKarma: Install the Manager’s App at the studio and have

    the manager send an invite to enquiry ACQUISITION ACTIVATION REVENUE REFERRAL RETENTION GoodKarma: Identify the yoga studio founder and set up a call to place the offer
  91. Taiichi Ohno

  92. You can contact any of us: • kuldip.c@multunus.com • manish.c@multnus.com

    • karthik.g@multunus.com Would you like to attend the follow-up workshop? WHAT’S NEXT?
  93. “If I have seen further, it is by standing on

    the shoulders of giants.” - Isaac Newton THANKS TO...
  94. ASH MAURYA #RunningLean, #ScalingLean ERIC RIES #TheLeanStartup JAKE KNAPP #GoogleDesignSprint

  95. YOU GUYS :)

  96. CREDITS Icons from TheNounProject - Factory by David - Graph

    by chance smith - Einstein by oksana latysheva - Dollar by thomas bruck