Mike Kyriacou - CEO, Strattica Labs

1. Getting to
Problem-Solution Fit
A Presentation by Mike Kyriacou
19th July 2019 | Hong Kong

2. Introduction
Observe - Customer Profile
Design – Value Map
Next Steps
Getting to
Problem Solution Fit

3. Introduction

4. • Frustrated, left
• Exact Steel: Learned Iron Ore about to explode. Invested in mining town.
• As values and rents took off, used rents as income to seek out
value-add opportunities:
 Radio station: Buy & licence to nearby competitor.
 Telco: Built team, negotiated partnerships & raised capital to buy out assets.
 Bought 50-person Electro Acoustics Co.
Designed our own products suite. Superior, plug-compatible with competitors.
Became market leader.
Sold as products company, 2010. ELA Security (spin-off) sold in 2015.
• Selected for a SV program – led to working and consulting for VC firms.
• Stanford University Continuing Studies , UC Berkeley Centre for Entrepreneurship and
Expert-In-Residence at Bootstrap Labs (VC firm).
• Breakthrough AI Financial Analysis. Two national deals. Cust. pipeline $120B A.U.M.
Who IS This Guy?
Exact Steel
Strattica Group
Silicon Valley
Strattica Labs
Advising
ERG Group
Aussie Entrepreneur
to Silicon Valley Founder & Adviser

5. The Sins of
Ventures Past

6. The Sins of
Ventures Past
BUILD IDEA! SCALE UP!! -$2M LOSS

7. • Near impossible – and very expensive -
to push a product out into the unknown
and have it be successful.
• NEVER invest vast time or money on a
blind guess.
The Mind of
“The Customer”
DEEP,
COMPLEX,
NUANCED,
DYNAMIC
The Customer

8. The Riddle of
The Customer
The Customer
“Interesting, but just not
important to us.”
“YOU JUST DON’T UNDERSTAND
MY PROBLEM”
“You just don’t get it”
“Meh”
“Rubbish”
“Nope”
“Nahh”
“Not if you PAID me!”
Highly Detailed Guesses
Years of Effort Loss of Money, Hope, Youth

9. , 544 BC

10. Solution to
The Riddle
1. Start FIRST with The Customer.
2. Build what They Really Need.
3. Check & Iterate: Small experiments.
4. Scale. (Like a madman.)

11. • Shock: You are NOT here to build the exact app you though of.
• You are here to solve A Much Bigger and Even More Thrilling Goal:
• Builds Great Wealth | Positively Impacts Lives | Changes The World.
• Our passion comes from cracking the problem of finding a
sustainable product customers love.
Why you are
REALLY here…
Who is my customer,
and how can I build my insights
into an engine that generates value?

12. design observe
High Level:
The Value Prop Canvas
Powerful mental model for how to think
about designing Value Propositions.
Fit

13. Observe - Customer Profile

14. Selecting A
Customer Segment
• Focus: Laser focus to start: Select one specific customer segment.
• Access: Which segments can you access most easily? Of those,
which can you access cost-effectively at scale?
• Learning Speed: How long is the sales cycle? Can you learn fast
enough before your company dies? In start-ups, energy, passion,
and cash all drain over time: If learning is too slow, you’ll exhaust
these resources before you reach a viable solution.

15. Jobs:
Functional, Social
& Emotional
• Observe: List the jobs your customer needs to get done.
• Deeper: Make sure you include not just Functional (what they must get done), but also
 Social (interpersonal impact they want to have), and
 Emotional (how they want to feel)
• WHY? Ask “WHY? … why? … and why is that?”.
Important because it forces us to focus on THE NEED BEHIND THE NEED
• Revisit: Interpretation is always imperfect with incorrect inclusions, misunderstandings
and wrongful omissions. Revisit, iterate once we have a value prop.
• IMPORTANT: Customer jobs are INDEPENDENT OF your value proposition!

16. NEVER ask questions about the future.
“Would you use Uber for Dog Food if we build it?” --- “YES. (Yeah, yeah – sure, I guess, whatever…)”

17. Pains
• List all
o negative issues,
o emotions,
o blocks and
o other undesired outcomes
…that affect or block the customers ability to get the job done.

18. Gains
• List
o customers benefits, and
o emotions they seek to gain
from completing the jobs.
• What is their ideal outcome?

19. Highest Value
Jobs

20. Critical: Rank
Observations
Rank to identify
Extreme Pains &
Essential Gains
Pains Gains
Extreme Pain Essential Gains
http://blog.strategyzer.com/posts/2017/3/26/the-high-value-customer-jobs-you-need-to-focus-on
TrivialTrivial
Jobs
High Value
Trivial

21. Identify
Extreme Pains &
Essential Gains

22. Design – Value Map

23. The Value Map
Addressing essential customer gains?
Addressing extreme customer pains?

24. Value Proposition Must Address
only High Value Jobs,
Extreme Pain & Essential Gains

25. Everything that can be built
Constraining
Solutions
Everything your team can build
Solutions that address ALL customer pains & gains
 
Solutions that address only
essential gains excruciating pains
Build something within this circle...
Your Team’s Solution.
…use good design principles & lean approach to find this implementation.

26. DESIGN: A Primer
Big Question: What solution could address top pains/gains?
4
Requires:
• Creative Thinking
• Logical Problem solving

27. WRONG USE:
“I am a black-hat
person”
CORRECT USE:
“Let’s put on our Red
Hats – how do we
feel about this
solution?”
“…Ok now let’s put on
our white hats – what
data do we need?...”
How do we
FEEL
about this?
Emotion
What are
ways this
WON’T
WORK?
Logical Negative
What
HIGH LEVEL
direction
should we
take?
Strategy
BRAINSTORM
different
possibilities.
Creative
What are
ways this
CAN
WORK?
Logical Positive
What
DATA
do we
need?
Information
The Power of The Six Thinking Hats

28. • Many people, many times
…or just a few people once a year?
• YOU can REACH the customers economically?
• Who can you reach AND be heard above the noise of all
the competitors?
Eg: No small business loans.
• Can you learn and achieve meaningful metrics fast enough?
• Can you conduct fast, inexpensive experiments?
Eg: No government bids
Ask: “how do we positively impact a billion people”
To make a billion, first think how to deliver a billion $s of value.
What does this look like?
High Volume /
High Frequency
Economic Customer
Acquisition?
Learning Speed/
Sales Cycle
Filter
Possible Solutions

29. Ease of Scalability
Slow,
Expensive
More Scalable Most Scalable
Talent Products
Cells Vs Atoms Vs Bits
Online
Ability to scale 1000x

30. Make Your Offering Unique

31. What Makes Your Solution Unique?
• Map out Competitors & Substitutes – including “doing without”
- all from your customers’ point of view.
• Please don’t do this:
NOTE: Any UX innovation (Eg: Pinterest) can be easily copied.
Our value prop is X
We’ll have a better UX. Their UX is terrible.
We don’t have a designer…
Ah. Who is your designer in the team?
Isn’t that like TripAdvisor? How are you different?

32. Executive: “We differentiate by our biscuits having crinkly edges.
So now we’ve made big investments in factories
that make biscuits with crinkly edges.”
Survey
Would you like a biscuit
with Crinkly Edges?
Yes
REALITY: Customers DIDN’T CARE about crinkly edges.
LESSON: Be unique…
…in a way that your customer CARES about.
DON’T BE A CRINKLY BISCUIT MANAGER!
Beware: The Story of the Crinkly Biscuits
CRINKLY
BISCUIT
MANAGER

33. Happy Customer
more likely after
iterations &
dialogue.
The MVP
One long, painful journey.
Multiple small experiments: Iteration & dialogue.

34. What if…
New Scenario

35. Long, painful, expensive journey ends in frustration.
Conversations and iteration leads to nuanced insights & minimal waste.
… and as a side-effect – a rapport and trust with customer.
The Power of
The Lean Approach

37. Next Steps

38. Getting Fit
On Paper
Identify a solution
to address
validated pains & gains.
Problem-Solution
Fit
In The Market
Customers love
(use/buy)
your product.
Product-Market
Fit
$$$
In The Bank
Scalable business model
that is
financially sustainable.
Business Model
Fit

39. Today’s Goals

40. Next Steps

41. Next Steps