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Welcome to the HPE
Ideas Transformation Box.
You hold in your hands the tools you’ll need on your personal journey into
the heart of innovation. You will be guided step by step through imagining
something wonderful, experimenting to make it great, then turning your
vision into reality. The Ideas Transformation Box can light the way, but only
you can choose where the journey leads.
Start your idea transformation journey now.
Accelerate next.
Start Here
Inception
Ideate
Improve
Investigate
Iterate
Infiltrate
1
2
3
4
5
6
Stop. Rest.
Collect your green box.
Accelerate next.
Start
The box contains six levels, each with objectives called actions. Complete these
actions to advance to the next level. Once you begin, the Ideas Transformation
Box can only be exited by succeeding or by giving up. Here is the secret to
master the challenge: don’t give up.
If you conquer the Ideas Transformation Box, you earn an exceptional prize: a
green box. What awaits you in the green box? There is only one way to find out.
To start any journey without understanding your
true purpose is to fail before you begin. Your own
motivations illuminate the path to success.
Great ideas emerge from great insight. Learn to
spark your imagination by observing the world not
as it is – but as it should be.
All ideas begin life as bad ideas. Learn to grow bad
ideas into good ones and the secret of knowing
which is which.
Is an idea valuable? It’s a question only customers
can answer. Find out quickly by validating your
ideas with real-world experiments.
Assess the data from your experiments to evolve
your hypotheses. Devise clever experiments to
reveal the true nature of your idea.
Even great ideas must prove their worth in
corporate combat. To conquer the Ideas
Transformation Box, use data to sell an idea to
your organization or your customer who you want
to convince to fund your idea.
Begin
Inception
This is where it begins. There are no born innovators. Ordinary people become
great innovators when powerful motivations demand it. Corporate mission
statements are not enough. There must be compelling reasons. To start any
journey without understanding your true purpose is to fail before you begin.
On your idea transformation journey, you’ll find roadblocks to overcome, you’ll
have to defend your ideas against disbelievers and adapt them to better meet
your customers or market needs – knowing your motivations will help you to not
give up.
1. Inception
Complete action one. Go to Level 2.
Do not share this card. Your reasons are powerful because they’re yours.
1.	______________________________________________________
2.	______________________________________________________
3.	______________________________________________________
Before accepting the challenge of a personal innovation project, consider if it
matches your goals and motivations. Success is far more likely when work and
personal objectives align. In short, motivation matters. What personally meaningful
goals will a successful innovation project help you achieve? What personal
motivation drives you to take your idea through the transformation process?
Refer to card 1a for inspiration.
This box denotes an action. Mark when complete.
Why are you
starting this
innovation
project?
1. Inception
Motivations
•	Prove to myself I can do this.
•	Be a positive example for others.
•	Invent something that matters.
•	Make something that helps others.
•	Create something people love.
•	Make something cool.
•	Make a difference.
•	Show the world I can innovate.
•	Increase my company’s share price.
•	I love doing hard things.
•	I like surprising people.
•	I have a healthy ego. It has needs.
•	I want it. It doesn’t exist. Let’s fix that.
•	Create something that reflects my values.
•	Raise my visibility inside my company.
•	Raise my visibility outside my company.
•	Help my family.
•	Help my community.
•	A deep sense of personal satisfaction.
•	Get a raise or bonus.
•	Get a promotion.
•	Life is a game. This is how I ‘Level Up.’
•	Demonstrate my value.
•	Change the world.
•	Change one corner of the world.
•	Spend more time with customers.
•	 Directly drive new revenue.
•	 Do work I love.
•	 I’m an untapped natural resource.
•	Dammit, my company is doing it wrong!
•	 The whole industry is doing it wrong.
•	 Protect my job during the next layoff.
•	 Protect my group during the next layoff.
•	 Prevent the next layoff.
•	 I’m bored.
•	 The act of pure creation drives me.
•	 How smart am I? Let’s find out.
•	 How creative am I? Let’s find out.
•	 Create moments of astonishment.
•	 I have something to prove to myself.
•	 I have something to prove to family.
•	 I have something to prove to ________________________.
•	 Know myself better.
•	 Work with great people I like.
•	 No one else can do what I can.
•	 Learn to innovate so I can do a startup.
•	 Buff my resume.
•	 This is how I keep insecurity at bay.
•	 I hate my boss.
•	 I love my boss.
Motivations are different because people are different. None are right or wrong.
Choose wisely, if your reasons don’t motivate you to change, they certainly cannot
change the world.
1a. Motivations
2. Ideate
Ideate
Creativity is not mysterious. While the brain chemistry
that sparks neurons into creative connections is not well
understood, we can follow steps that are likely to trigger
the kind of creativity we’re after. Here’s how.
Innovation is the implementation of
creative ideas. But ideas have to be
relevant, novel and useful to those who
should benefit from them. To create
innovations that matter, we have to
understand which customer segments
we want to create value for. We need
to get insights on how these customers
manage the problem or job that we want to
improve, and what are the pains and gains
they are experiencing in getting this job
done. Once we have a good insight on that,
we can create ideas on how we can deliver
a better value proposition to the audience.
Complete actions on 2a and 2b. Go to Level 3.
Ideation begins
with inputs and
insights
It’s a two step process:
1.	Understand your customer first. Gain insights on your customer segment
and the job the customer wants to get done. Go to card 2a.
2.	Create the value propositions that’s designed to address your customer’s
needs, and describe the products and services required to support that
value proposition. Test it. Go to card 2b.
Create several canvases for different customer segments and prioritize
the most promising ones.
Do what works for you.
2. Ideate
The Value Proposition Canvas
The Value Proposition Canvas shows you how you’re creating value for your
customers. It helps you to design new products, services and experiences that
matter to your customer.
The Value Proposition
Canvas by Strategyzer
2a. Insight
Insights
Understanding your customer is key. In this part of the exercise, we are focusing
on the right side of the Value Proposition Canvas. Put yourself in your customer’s
shoes and try to understand what are the key jobs your customer tries to get
done, and understand the pains and gains your customers are experiencing in
getting their job done today.
1.	Define your customer segment1
Try to be as specific as possible in segmenting your target customers.
What characterizes the single segment you identified? Probably there is more
than one segment – what differentiates the various customer segments?
Create a separate Value Proposition Canvas for each customer segment.
Describe the customer segments
you want to focus on.
Segment 1 ___________________________________
___________________________________
Segment 2 ___________________________________
___________________________________
Segment 3 ___________________________________
___________________________________
2a. Insight
2.	Describe the customer jobs1
What customers are trying to get done in their work and their lives.
Customer jobs can be:
Functional Jobs – perform or complete a specific task to solve a specific
problem (get from A to B, pay for a service procured, obtain relevant news
information, help clients as a professional).
Social Jobs – how customers want to be perceived by others (get many
followers or likes, be perceived as competent or professional).
Personal / emotional Jobs – customers seeking a specific emotional state
(feeling secure with your investment or payment, feeling good about getting the
job done with a green footprint or as fair trade).
Supporting Jobs – Jobs supporting the main job (e.g. in the context of
purchasing and consuming – comparing prices, delivering a product, review
of a product).
Observe your customer segment and describe the jobs in your own words.
Finally, sort them by importance.
3.	Customer Pains1
Pains describe what the customer dislikes – or what prevents them from getting
the job done. What are the risks and drivers of those pains? Pains can be
undesired outcomes, problems or characteristics of the job that the customer
dislikes. It can be obstacles that keep them away from achieving the objectives
of the job.
4.	Customer Gains1
Gains describe the outcome, benefits or values the customer achieves
with getting the job done. They can be required, expected, desired and
unexpected gains. Gains include functional utility, social gains, positive
emotions and cost savings.
Describe pains and gains as concrete as possible and sort them by
importance or relevance and probability to occur.
Before you go to level 3,
complete these 2 actions.
After finishing your Value Proposition Canvases,
sleep on it and revisit them again. Any new ideas?
Any new thoughts?
Have a coffee with an interesting co-worker and
discuss your ideas along the Value Proposition
Canvases you created. Get feedback – they might
bring a different perspective.
2b. Value Proposition
2b. Value Proposition
3.	Testing
Finally we want to test our value proposition and our new offering, to see if they
are a good fit for the pains and gains of our customer segment.
a)	 Pain Relievers1
	How does your new offering mitigate or eliminate specific customer pains?
How does it reduce things that annoyed customers before or remove
obstacles that customers experience today to get their job done? It’s not
about finding a reliever for each pain, but your idea should address some of
the most relevant ones that matter to your audience. Sort them by relevance.
b)	 Gain Creators1
	How do your products and services create customer gains? How do they
produce the benefits and outcomes that your customer would expect or
desire – or at least be positively surprised about?
	Like pain relievers, it’s not as important to consider each and every gain,
but your products and services have to make a difference. Sort them
by relevance.
Will your customer get excited about your new value proposition when they’re
addressing an important job that has to be done?
If yes, congratulations – you have created a fantastic and relevant idea!
Does it fit in all aspects (functionally, socially, personally)? And how would
the new scenarios you listed in 2a impact your value proposition?
If no, go back to your value proposition – what does it take to make
it more relevant?
Creating a value proposition that is relevant for your customer segment
and differentiates you in your market requires a continuous back and forth.
You have to pivot your idea to understand if it would fit better another way.
2a. Insight
Complete these five actions below,
then advance to card 2b.
Do you have access to part of your customer segments?
Discuss the jobs they want to get done and the pains
and gains they experience first-hand.
Browse trend-spotting websites until you discover
two interesting trends for your audience you did not
know about.2
Read a research paper in the area of interest and find
market reports of the market segment or customer job
you’re focusing on.
Identify scenarios impacting the customer’s job looking
forward. New competitors entering market space
(e.g. startups), legislative or regulative changes, etc.
Identify other industries or businesses where
comparable customer jobs get done differently
and note down potential learnings for your new
value proposition.
2b. Value Proposition
Value Proposition
Knowing the customer better, the jobs he/she wants to get done and the pains
and gains he/she experiences allows us to focus on the left side of the Value
Proposition Canvas.
With your idea, you want to create a new value proposition, one that helps the
customer in getting the job done better and more efficiently – perhaps with
a completely new approach. One that mitigates pains and increases the gains
driving new values, which differentiates your idea in the market.
1.	Design Value Proposition1
This is the core of the ideation process – define the value proposition you
want to offer to your customer segment to get their jobs done better. Your
value proposition should be crisp and short, but ensure that it matters to
your customer segment.
2.	Product and Services1
Translate this value proposition to the products and services it builds on,
and which are required for it to deliver end to end. These include:
• Physical or tangible products such as manufactured goods
• Intangible products such as copyrights or after-sales services
• Digital products such as content or online recommendations
• Financial products such as financing or insurance services.
1. strategyzer.com
2. trendone.com
2. springwise.com
2. trendwatching
.com
2. trendhunter
.com
2. trends.alltop
.com
2. trendcentral
.com
2. jwtintelligence
.com
1. strategyzer.com
YouTube
1. value
proposition
1
Also compare “Value Proposition Design” book written by Alexander Osterwalder,
Yves Pigneur, Greg Bernarda and Alan Smith, published by Wiley visit:
strategyzer.com, youtube.com/user/businessmodeltv and
https://strategyzer.com/books/value-proposition-design for further information.
2
Examples are: trendone.com
	 springwise.com
	 trendwatching.com
	 trendhunter.com
	 trends.alltop.com
	 trendcentral.com
	 jwtintelligence.com
Improve
Raw ideas have great potential, but they aren’t yet
ready to be tested with potential users. First, they
must grow stronger and prove that they work in a
business environment.
Ideas need to generate valuable outcomes for the customer – we
already checked this in Level 2. In Level 3, we generate Business
Models for each of our ideas to further test and improve them. We want
to understand what it takes to turn them around, and to understand
potential cost structures and revenue streams that we can achieve. We
also want to understand how we bring our idea to the market to ensure
a strong customer relationship. But before we begin, first run through
these 2 exercises:
Capture
It’s helpful to express each idea in a consistent product statement.
Boiling a product or service down to one sentence is hard. You must
decide what really matters, and how you can sharpen the idea in
powerful ways.
“A product/service description for target customer that key value
enabling primary benefits unlike existing alternatives”.
An example would be: “A portable music player for audiophile music
lovers that plays music files from lossless formats enabling improved
quality unlike iPods and other compressed file players”.
Combine
Many of your raw ideas may have similarities. Go through your list and
consider each idea based on relevant criteria such as problem space,
value proposition, customer type, distribution channel, delivery platform
and technical components. Can any ideas be logically combined?
Maybe one idea is an enhancement of another idea, or partially
leverages the same resources. If combining ideas strengthens them
without losing focus, consider combining them.
3. Improve
3. Improve
Business Model Canvas1
A Business Model Canvas (BMC) defines the key elements it takes to deliver
the value proposition (along with your products and services) to your customer
segment. It allows you to describe, design, challenge, invent, and pivot your
business model, and to understand if it delivers a commercial outcome. The BMC
is easy to grasp and allows you to discuss your business model in a structured
way with others.
For more information on the Business Model Canvas, see strategyzer.com/canvas
Complete a Business Model Canvas for each customer segment by:
3a. completing the right side of the canvas representing the value side of the
business model.
3b. complete the left side of the canvas representing the efficiency side of the
business model.
Hint
Do not spend more than 20 minutes on the creation of one business model.
Instead develop several versions to optimize or alternate certain aspects.
Complete 4 actions. Go to Level 4.
Who are you competing with in your business model?
Complete a Business Model Canvas for the business model
of each of your competitors, and explore differences. How
do you have to twist your model to be successful in this
environment?
Is your business model differentiated enough or is it easy
to copy? Finding good unfair advantages is very rare.2
Assess your business model and those of your key
competitors along the 7 business model mechanics.
You don’t have to lead in each of the 7 areas but you
should have an advantage in at least 2-3. How can you
improve your business model?3
Which of your business models are the most promising?
Which do you feel have the most potential? Focus on the
most promising ones going forward.
Present your most promising business models to at least
three colleagues and get their feedback by having them
complete scorecards. Compare their scores with yours and
explore differences.
Value
The value side of the Business Model Canvas starts with the customer
interaction. How does our company communicate and reach the target
customer segment to sell and deliver the identified value proposition?
What aspects of the relationship will we build on within our customer
segment? Which revenue streams are most impacted by delivering the
value proposition?
To start – create a Business Model Canvas for each Value Proposition
Canvas – or cluster of Value Proposition Canvases you defined in the
Combine exercise of Level 3. Transfer the Customer Segment in the
Canvas as well as the Value Proposition along with your offering you
defined. In the case of clustered value propositions, for each customer
segment use a separate color throughout the BMC.
Channels
Here we want to define how we raise awareness in our customer
segment for our products and services, and help them understand
our value proposition. In other words, how can customers purchase
products, and how are the purchased products and services delivered
and supported after sales? Should your business model sell directly via
a dedicated sales force, a web page or own outlet stores, or would you
consider working with partners who have their own sales organizations,
retail stores and webstores? Both models have advantages: while
distributing via your own channels increases margins, the indirect model
increases reach and utilizes your channel partners’ existing customer
relationships.
Don’t forget – you can also consider a mixed model, if you feel it better
suits your business.
3a. Value
Customer Relationship
Define the relationship the company will establish with each of the
customer segments. Which motivation drives the relationship strategy?
– Customer acquisition to grow the customer base?
– Customer retention to protect a customer base?
– Upselling to grow the business with the existing customer base?
What are the activities and offerings in your value proposition that
support this strategy?
What does your customer experience look like and what could be done
to improve it?
What is the cost for your customer segment to change to a
potential competitor?
Is there an aspect in your offering that could increase this, like the
App Store in the iPhone business model?
The way your company interacts and supports your customer has a
huge influence on your customer relationship and loyalty. This can
be done a number of different ways:
– Personal (either direct or via a channel partner), Self-services basis
– Automated
– Via communities (e.g. with other customers) or in social media
– Co-creation way – inviting your customer to assist in designing an
improved value proposition or contributing to your value proposition.
3a. Value
Cost
What are the costs to deliver your value proposition to the customer?
These are driven by the key resources, the key activities and your
partners, but also by your customer relationships and your channels.
There are cost-driven business models where you need to minimize cost –
especially in Business Models with small margins – and value driven
Business Models where the delivered value is more important than the
cost structure – as customers are prepared to pay a premium anyway.
Costs can be characterized as:
– Fixed Costs – these remain the same for the operation, independent
of the volumes of products and services produced. Try to keep fixed
costs as low as possible – use alternative sourcing strategies that
scale well with your Business Models to mitigate them
– Variable Costs – these scale with your volumes of services and
products.
Look where you can use synergies to achieve:
– Economy of Scale – by ensuring critical mass to lower the cost
– Economy of Scope – by utilizing already existing assets and
capabilities – to deliver new Business Models or layer Business
Models on existing ones. Leverage these to reduce cost.
A good example that delivers both was Amazon’s creation of a new
business model on top of the existing one, by opening their own retail
platform for other retailers. This increased the scale, reduced the cost
per transaction and increased the scope, while also generating new
revenue streams.
List your costs, both fixed and variable, and calculate your margin
by assuming realistic quantities – when will you start to break even?
3b. Efficiency
Partnerships
Describe the network of partners and suppliers required to deliver the
value proposition. What areas can you source from others rather than
create yourself? Can you leverage expertise, technologies, relationships or
assets from others, so you don’t have to build up by yourself?
Partnerships can be exclusive, or partial, where the partner delivers the
same commodity to others, or even competes with your business model.
Partnerships can be joint ventures to develop new business, or traditional
suppliers you buy services or products from.
Partnerships help to reduce cost by leveraging the partners’ core abilities,
creating a better scale of economy, and reducing risk.
Which core partners do you need for your company to efficiently operate
your business model?
3b. Efficiency
Revenue Stream4
How much are customers willing to pay for your value propositions?
Look at achievable revenue streams for the value contribution your
offering delivers to a customer segment. Customers might value a more
expensive product or service more than a lower cost one – as it provides
a higher trust or quality. There are different pricing mechanisms such
as fixed list prices, haggling, auctioning, volume dependent prices, day
pricing, as a service pricing, etc.
Revenue streams can be transactional revenues, where the customer
pays once for acquiring a product or recurring revenues, like the “as a
service business model”, a subscription model, support model, a license
model or a leasing or rental rate. Recurring revenues also occurs in “Bait
 Hook” business models where the customer buys an initial attractive,
low-priced product or service, that will trigger further revenue streams
like consumables or functional extensions which drive the real revenue
growth. Current examples are Nespresso or “in-app purchases” in
Apple’s App Store. Recurring revenues can also strengthen the customer
relationship.
Define what is driving your revenue streams and which price and revenue
model might be the most successful to make your business model work
in your different customer segments.4
3a. Value
Efficiency
Here, we want to evaluate what it takes to deliver the value propositions
to the various customer segments and what is the most efficient way to
achieve that. Define what is central to our business model, any existing
assets we can use, and what can be sourced from our partners. What
are the core tasks and resources required that are, at the same time, the
drivers for cost?
Key Resources
Identify the key resources required to make the business model work.
These can be:
– Physical Resources – like assets (machines, buildings, vehicles), raw
materials, components or supplies we need to produce our products
and services
– Intellectual Resources – like patents, brands, copyrights,
partnerships, content or information
– Human Resources – people who get the business model running
– Financial Resources – guarantees like cash and credit lines and
credit ratings.
Key Activities
What are the key activities required to make the business model work?
Important things our company has to do – or subcontract from partners
in order to deliver the value proposition. Key activities include:
– Production Activities – producing the product or service
– Problem Solving Activities – like the operation of consultancies or
other service organizations tasks
– Platform or Network Activities – areas that manage different
aspects to solve the customers problems, like design, rollout and
management of the platform, as well as the promotion of the
platform
– Go To Market Activities – Activities that make your product or
service known and sold to the customer.
Don’t cover all activities any company has to perform – focus on those
which are core for your business model.
3b. Efficiency
3b. Efficiency
1
Also compare “Business Model Generation” book written by Alexander Osterwalder and
Yves Pigneur visit: strategyzer.com and youtube.com/user/businessmodeltv for further
information.
2
For more on the good Unfair Advantages read this:
blog.asmartbear.com/not-competitive-advantage.html
3
Why some Business Models are better than others:
http://blog.strategyzer.com/posts/2015/4/7/why-are-some-business-models-better-
than-others
4
+30 Business  Revenue Model Examples:
http://www.boardofinnovation.com/business-revenue-model-examples/
5
Also compare book “Dealing with Darwin” of Geoffrey Moore and corresponding diagrams:
http://www.dealingwithdarwin.com/resources/pptDownloads.php
1. strategyzer.com
2. Unfair
advantage
3. STGZY Some
models better
4. 30+ examples
5. Dealing with
Darwin
1. strategyzer.com
YouTube
channel
Investigate
Level 4 is where you engage potential customers to gather data. This data
will indicate whether your idea should be pursued, changed or dropped. It
begins with two steps: Discovery and Validation. You can also think of them
as Ask and Sell, or Learn and Confirm.
The key to success is proving your product or service and your business
model hypotheses as quickly and cheaply as possible. Validating key
assumptions against actual customer behavior quantifies risk and reduces
uncertainty. The worst validation result is one that says, “Everyone loves
everything!”. You need to discover which parts of the idea aren’t going to
work. Discovering what’s bad – is good. Very good. You can then adapt and
iteratively retest in hours or days instead of weeks and months.
Level 4 shows you how to confirm the customer problem, validate your
solution and prove out a viable sales channel. Your experiments may also
reveal new ways to profoundly improve the idea and delight customers.
“There are no facts in the building…
So get the hell out and talk to your customer”
Steve Blank, Entrepreneur  Educator1
4. Investigate
4. Investigate
Business Model Hypothesis
Before you start testing, define what you need to test. Revisit your
Value Proposition Canvas and your Business Model Canvas and define
the most important things you assumed must be true to make your idea
work. Understand what are the deal breakers, those hypotheses that are
core for your business model to survive.
Sort those hypotheses – most critical ones first.
Design your Experiment2
Download the Test Card from the Strategyzer site.
The Test Card will help you to structure your Experiments.
1.	Start putting your most critical hypothesis in the
hypothesis field.
2.	Define in the test field what will be the experiment you’re
going to design to test if this hypothesis is correct. You’ll find
different testing methodologies in the next paragraph.
3.	How do you want to measure if you are correct?
4.	What is the threshold which confirms if your hypothesis is
correct or not relevant?
Fill in for each of the hypotheses you
want to test and cluster them if you
can test several hypotheses in one
test. Decide which tests you can
run fast and which are the
most critical tests. Focus on
those first.
Other Testing Platforms
There are other testing platforms that let you focus on specific questions.
Crazyegg.com allows you to observe how customers click through your site,
where they click and what is most relevant for them.
Usabilityhub.com allows you to test your page design and ask users
questions in specific situation, so you get more background information
to why they were clicking on an element or not.
Usertesting.com allows you to test your Minimum Viable Product, getting
video responses from your target audience.
Instant.ly provides a wide variety of testing tools to create surveys, test
sites as well as product and concept testing, providing you more insights
in your target audience.
Most of the testing platforms cost small amounts of money for your tests –
some offer some trial tests.
With the debit card in your Ideas Transformation Box you can shop for
those testing capabilities without the need to justify expenses in an expense
report or to ask for an invest. Use it wisely – you will also need it in Level 6.
4. Investigate
Before you go to Level 5,
perform the following tasks.
Capture the learnings of all your tests in a learning card
by summarizing the hypothesis you wanted to test, the
observations you made, the learnings you derived from
them and the actions you take as a learning out of these
test results.
Evaluate if there are other aspects you need to test due
to the learnings you took from your initial tests. Perform
those and document the results in a learning card again.
Discuss your results and observations with colleagues.
Get others to judge on your results. Others might bring
up new learnings from the results you did not see.
Document those on your observation cards.
Minimal Viable Product³
The minimal viable product is that version of a new product
(service/offering) which allows a team (or individual) to collect the
maximum amount of validated learning about customers with the
least effort.
The minimal viable product is the brainchild of Eric Ries, a Silicon
Valley entrepreneur. It can be everything from a mockup of the physical
product to test key functionality to a visualization of the product like a
3D rendering or a video. It can be just a flyer or a webpage describing
the product you’re offering, along with some of the key features and
aspects which are relevant for the target customer audience.
The minimal viable product lets you test your offering without the
need and the costs to fully produce it – so you can test its relevance
and value it delivers towards your target customer audience. It allows
you to learn new aspects which you didn’t consider before – aspects
and learnings you can take to improve your offering to better meet the
expectation of your customers.
4. Investigate
IDEAS
BUILD
PRODUCT
MEASURE
DATA
LEARN
Testing Methodologies
The interview
You have access to your target customer audience – so you can
present them your minimal viable product and start a structured
discussion. Take care how you phrase your questions. Avoid suggestive
questions (e.g. “Do you like what you see ?”) and Yes/No questions,
focus on open questions and find out what your audience likes
or dislikes.
Steve Blank’s “Customer Problem Presentation”4
is a scripted
interview first outlining the top 3 customer problems you are
addressing, the current solution to those problems and those you
anticipate. Pausing after each section gives your interview partner
room to talk. Listen to what you customers say and prioritize the
problems, as well as your solution. Put the comments in “must-have”,
“nice to have” and “don’t care”.
Don’t forget to ask the customer if he would buy your product and what
he/she would be prepared to pay for the value you deliver.
Online Surveys
Online surveys help you to test certain hypotheses you made in
designing your business model. Testing platforms like:
surveymonkey.com
gutcheckit.com
aytm.com
surveygizmo.com
google.com/forms
provide you with a low cost, full service tool to design your online
survey and get it answered by your target audience. Also keep your
questions as open as possible, avoid suggestive questions and test
the commitment of your audience (if they are prepared to buy in your
offering and what they are willing to pay).
4. Investigate
Web Survey and A/B Testing5
While you can also do the testing of different alternatives in interviews
or surveys, the testing with alternative landing pages might deliver
your statistically more relevant results. Present your minimum viable
product on a simple landing page along with your value proposition,
the benefits summary and a call to action to get interested visitors of
the page registered for more information. Create different versions of
this page changing aspects of your value proposition or your offering.
A preorder button will make convinced customers register for the price
you ask for – testing the customer’s commitment towards different
price points and value propositions might result in interesting findings.
And registered customers are willing to participate in a second follow-
up test, which will allow you to start a communication – e.g. via an email
campaign where you can ask them what they’d like to get improved or
changed. You also build up a first group of potential pilot customers.
Keep the pages simple – no fancy user interfaces, logos or animations
you don’t want to sell your offering, you want to test the essence and
relevance in the target audience. Once they are setup, promote them
with Google Advert.
Measure how many people care about the problem you describe or
want to know more by clicking deeper in the site. How many provide
the email address for more information or to preorder the offering. How
much time do they spend on your site. The more they engage with
your idea the better it is. Offer a ‘Refer to Friends’ program where the
audience can share your sites easily with friends.
There are several low-cost full service platforms which allow you to
build, promote and test webpages. You don’t need to be a web designer
or an internet advertising specialist – most of those platforms offer you
a 360 degree service to perform your test.
These are platforms like:
unbounce.com
leadpages.net
quickmvp.com
seedling.io
google.com/adwords
4. Investigate
4. Investigate
1
Also read HBR Article of Steve Blank: “Why the lean Startup Changes Everything”
https://hbr.org/2013/05/why-the-lean-start-up-changes-everything/ar/1
2
Also compare:
http://blog.strategyzer.com/posts/2015/3/5/validate-your-ideas-with-the-test-
card?rq=test%20design
3
Also compare: http://leanstack.com/minimum-viable-product/
4
Also read the book: “The Four Steps to the Epiphany” by Steve Blank
http://www.amazon.com/Four-Steps-Epiphany-Steven-Blank/dp/0976470705
5
Also compare:
http://www.inc.com/steve-blank/how-test-prototype-minimum-viable-product.html
5
http://www.inc.com/guides/201109/how-to-assess-the-market-potential-of-your-new-business-
idea.html
6 
http://blog.strategyzer.com/posts/2015/3/9/capture-customer-insights-and-actions-with-the-
learning-card?rq=Learning%20Card
1. Lean startup
article
2. Test card
3. Minimum
viable product
4. Four steps
to epiphany
5. Test MVP
5. Asset market
value
IterateAt this point you have a functioning experimental platform running
with traffic, customers expressing interest and data being captured.
Now it’s time to use that platform to optimize your idea. Start by
identifying which learnings are central to the idea working.
Bring the learnings back in your Value Proposition Canvases and your
Business Model Canvases and pivot your Business Model Idea by
retesting it.
Before development ever starts, you can test customer’s behavioral
response to various value propositions, the relative desirability of
particular features and the effectiveness of explaining the product
different ways. That insight is priceless. Your experimental platform can
also explore wild variations, revealing new opportunities that shift the
entire product concept while such changes are still essentially free.
Occasionally, it can appear that a certain user behavior or business
metric cannot be tested without actually building the entire product.
This is rarely true, a little cleverness can go a long way. Ask “How could
we get some data right now, even if it is only preliminary?” For example,
to learn if a “Be Anonymous” feature is desirable to users, begin by
adding a checkbox option for the feature. If visitors click on it, present
a message informing them this feature is not yet available but capture
the click in your metrics. This allows you to measure customer interest in
various features.
When doing iterative testing, don’t make the mistake of changing things
too slowly or incrementally. Feel free to push changes daily. Don’t just
change the text of your headline, try extreme changes to see what
happens. Since the Ideas Transformation Box brings the cost of learning
dramatically lower, you can now afford to ask “What won’t work at all?”
and try that. You might find some unquestioned assumptions to be
wonderfully wrong. Try doing A/B testing where visitors are randomly
shown two different versions and measure the difference in response.
Services like optimizely.com can be useful and implemented in minutes.
5. Iterate
5. Iterate
Complete two actions. Go to Level 6.
Drive 100+ more visitors than Level 4.
Get 20+ more sign-ups.
Infiltrate
This is the final level. The path behind you
is long. You have reached the last level of
the Ideas Transformation Box. Well done!
You’ve acquired arcane knowledge on
your customers’ needs and desires, built
unique skills and turned raw data from your
hypothesis into powerful evidence. Every
action on your journey has been preparing
you for this moment.
Only one action remains ahead. You must
infiltrate your idea to win a sponsor to turn
it around. This can be your management,
a venture capitalist or your customer’s
management for whom you developed
the idea.
Level 6 is about winning over your Sponsor
with all your excitement, supported by the
facts and findings you gathered over the last
5 levels. There is only one challenge – you
have to bring your story to life – crisp, clear
and exciting in no more than 10 minutes.
You’ve now fought your way here, so you’re
ready for the truth. You can’t win, if you
always play by the rules. But innovators
excel with rules. Not at following them,
but making their own.
Innovation is not a thing one does.
It is a way of being.
Ready? Let’s begin.
6. Infiltrate6. Infiltrate
The Pitch
Your entire executive presentation must be no more than ten minutes.
Before you start working on it, understand what drives the Sponsor.
What might be their questions, doubts and fears after listening to your
idea? Write them down so you can check if you addressed them in
your storyline once you developed it.
Conclude your presentation by an explicit ask. Your ‘ask’ could be in the
form of time, money or other resources you would need for the next
steps to turn your idea into reality. You’re also asking for the executive’s
endorsement and ongoing engagement in guiding your project forward.
Be realistic in your ask and demonstrate what they would get in return.
What you hear after you ask (whether yes or no) will be the most
valuable feedback you get. The structure of your presentation will be:
• Customer
• Problem
• Mockup
• Experiment
• Data
• Ask
Create an engaging story underlined with the facts of your tests
and demonstrate your idea out of the perspectives of the different
stakeholders (the customers, the company delivering the new value
proposition to them, partners and competitors). You have to have
proof why your idea will work.
When using the Business Model Canvas or the Value Proposition
Canvas in your presentation, build them up as you speak.
6. Infiltrate
Explanation Videos
Explanation videos are getting used more and more to explain complex topics
efficiently in a short time.
Simple animations and white boarding animations alongside a recorded audio
track allow you to explain complex topics along optimized scripts. You can use
those videos for part of your presentation e.g. to describe the current problem
and dilemma and how the customer would cope with his job with the new value
proposition. But at the same time, you should ensure that they don’t take more
than 30-40% of your presentation time. Videos cannot express your passion for
your project.
There are several tools and platforms to create such videos with minimum effort:
- Sparkol.com4
- Simpleshow.com5
- PowToon.com6
- GoAnimate.com7
Visual Meetings8
Keep your presentation as visual as possible. Avoid long text on your slides or
presentation canvas. It takes your audience attention away, as they try to follow
you as well as the content of your slides.
David Sibbet published two great books “Visual Meetings” and “Visual Leaders”.
Working with Sibbets’ approach of Grove Story maps in a Prezi presentation can
be powerful approach.
6. Infiltrate
6. Infiltrate
Complete these 3 actions to exit the box.
Prepare a ten-minute presentation explaining your
idea or business model and test it by presenting it
to at least 2-3 peers.
Review your presentation with a mentor.
Review your asks with a senior executive or a mentor
to ensure they are strong enough to achieve relevant
results, while not being completely unrealistic.
Target Practice
Make no mistake, innovation is as much about selling as it is creating.
You’ve successfully ‘sold’ your idea to customers but selling inside your own
company can be even harder. To gain internal support, even the best ideas must
be packaged and presented as attractive business opportunities. You must spark
the imagination, curiosity and vision of business stakeholders.
Who are your targets? Managers with resources you might ‘re-appropriate’ for
your project. Take a Value Proposition Canvas and put the targets you want to
present to into the customer segment. Understand the “jobs they want to get
done”, the pains and gains they have and evaluate which aspects of your idea are
the most relevant for them. Put those aspects or hypothesis on cards so you can
sort them by relevance and prioritize them for your short presentation.
Understand who might be your opponents1
– classically existing business areas
you could potentially be taking resources away from or business areas that might
feel offended as your business model is potentially competing with their long
term established practices. People who fear this idea could compromise their
job or responsibilities. Plan your political budget wisely and try to avoid having
too many of your opponents in your presentation. Mitigate these political risks,
by proposing in your ask to incubate your business model in a separate unit –
perhaps even an outside startup.
6. Infiltrate
When asking for resources, be specific on the skills and attitude levels you need.
Existing resources might not always fit your criteria, especially if they come from
the incumbent business model, as their legacy thinking might slow down and
question your new business model.
You need to do more than convince a potential sponsor your idea is ‘good’. You
must convince them it’s better than at least one idea they’re already funding.
If you follow the rules and wait patiently in the endless line for these mythical
“uncommitted resources”, you’ll find they are as rare as the unicorns that deliver
them. If you know your idea is worthy, go get the data, then use it to convince
others to support you.
Meeting your potential sponsors in-person or via video is recommended for your
presentation. Your sponsor-to-be needs to see the fire in your eyes because
they’re taking a chance on you as much as your idea. Before pursuing your
executive supporters, practice your pitch first on your peers and direct managers.
Then develop a list of executives overseeing areas related to your idea. Finally,
identify those people your executive target interacts with, such as direct reports
or peers. Exclude the potential opponents, which you will not be able to win.
Pitch the remaining people first before pitching the executive target. If their peers
and reports ‘get it’, ask them to mention the project favorably to your target. If
they don’t, ask why not. They understand your target’s business priorities. Listen
to them and apply their advice. This can be the key to earning a “yes”.
Telling Stories2
The most effective way to tell your story is to tell it as a story, not a sequence of
dull eye-chart slides. Funding decisions are not based solely on market studies,
customer personas and competitive analysis. Those are weak proxies we’re
forced to use when we don’t have real user behavioral data. You have real data.
So use it to tell a compelling story. What makes a story compelling? When it’s
personal. When it’s easy to understand and it’s fun to listen to.
Build up your story like a picture – start with the customer of your Value
Proposition Canvas and sketch the problem/dilemma he or she is in.
Then explain your solution approach – your new value proposition and illustrate
how that will impact the customer in doing his job.
Explaining your business model behind it – why and how this will make the
company successful. To use the Business Model Canvas might be a good
approach but it’s not mandatory.
Underline your hypothesis with the insight of your tests and finally get to
your ask.
There are some technologies in the market which can help you to make
your presentations more exciting:
Prezi.com³
Prezi allows you to present your story on one large canvas, which means you can
pan and zoom to various parts of the canvas and emphasize the ideas presented
there. It is easy to embed multimedia files. A Prezi presentation also allows you
to build in a lot of detailed information by zooming further on the canvas –
information that is not intended to be used in the main presentation, but in
the QA session or a conversation following the presentation.
6. Infiltrate
1
Henry Chesbrough Business Model Innovation: Opportunities  Barriers
http://www.hh.se/download/18.341e6abb148eccb76f57f464/1416394294345/
Chesbrough+2010+Bussiness+model+innovation+opportunities+and+barriers.pdf
2
Also read: 8 classic storytelling techniques for engaging presentations
http://www.sparkol.com/engage/8-classic-storytelling-techniques-for-engaging-presentations/
3
Prezi.com Presentation Tool
http://prezi.com
4
Video Scribe  Tawe
http://sparkol.com
5
Simple Show Videos
http://simpleshow.com
6
Create Animated Videos and Presentations
http://powtoon.com
7
Create Animated Videos
http://goanimate.com
8
Also Read “Visual Meetings” and “Visual Leaders” of David Sibbet
http://www.grove.com/ir.html
6. Infiltrate
Business Model
Innovation
Classic
storytelling
techniques
Prezi
Sparkol
Simple show
PowToon
Go animate
Grove
Authors: Bernd Gill, Manuel Meyer, Yannick-Tjard Schütz
Adaption of https://kickbox.adobe.com/ – original
Kickbox created by Mark Randall at Adobe.

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HPE Ideas Transformation Box

  • 1. Welcome to the HPE Ideas Transformation Box. You hold in your hands the tools you’ll need on your personal journey into the heart of innovation. You will be guided step by step through imagining something wonderful, experimenting to make it great, then turning your vision into reality. The Ideas Transformation Box can light the way, but only you can choose where the journey leads. Start your idea transformation journey now. Accelerate next. Start Here
  • 2. Inception Ideate Improve Investigate Iterate Infiltrate 1 2 3 4 5 6 Stop. Rest. Collect your green box. Accelerate next. Start The box contains six levels, each with objectives called actions. Complete these actions to advance to the next level. Once you begin, the Ideas Transformation Box can only be exited by succeeding or by giving up. Here is the secret to master the challenge: don’t give up. If you conquer the Ideas Transformation Box, you earn an exceptional prize: a green box. What awaits you in the green box? There is only one way to find out. To start any journey without understanding your true purpose is to fail before you begin. Your own motivations illuminate the path to success. Great ideas emerge from great insight. Learn to spark your imagination by observing the world not as it is – but as it should be. All ideas begin life as bad ideas. Learn to grow bad ideas into good ones and the secret of knowing which is which. Is an idea valuable? It’s a question only customers can answer. Find out quickly by validating your ideas with real-world experiments. Assess the data from your experiments to evolve your hypotheses. Devise clever experiments to reveal the true nature of your idea. Even great ideas must prove their worth in corporate combat. To conquer the Ideas Transformation Box, use data to sell an idea to your organization or your customer who you want to convince to fund your idea. Begin
  • 3. Inception This is where it begins. There are no born innovators. Ordinary people become great innovators when powerful motivations demand it. Corporate mission statements are not enough. There must be compelling reasons. To start any journey without understanding your true purpose is to fail before you begin. On your idea transformation journey, you’ll find roadblocks to overcome, you’ll have to defend your ideas against disbelievers and adapt them to better meet your customers or market needs – knowing your motivations will help you to not give up. 1. Inception
  • 4. Complete action one. Go to Level 2. Do not share this card. Your reasons are powerful because they’re yours. 1. ______________________________________________________ 2. ______________________________________________________ 3. ______________________________________________________ Before accepting the challenge of a personal innovation project, consider if it matches your goals and motivations. Success is far more likely when work and personal objectives align. In short, motivation matters. What personally meaningful goals will a successful innovation project help you achieve? What personal motivation drives you to take your idea through the transformation process? Refer to card 1a for inspiration. This box denotes an action. Mark when complete. Why are you starting this innovation project? 1. Inception
  • 5. Motivations • Prove to myself I can do this. • Be a positive example for others. • Invent something that matters. • Make something that helps others. • Create something people love. • Make something cool. • Make a difference. • Show the world I can innovate. • Increase my company’s share price. • I love doing hard things. • I like surprising people. • I have a healthy ego. It has needs. • I want it. It doesn’t exist. Let’s fix that. • Create something that reflects my values. • Raise my visibility inside my company. • Raise my visibility outside my company. • Help my family. • Help my community. • A deep sense of personal satisfaction. • Get a raise or bonus. • Get a promotion. • Life is a game. This is how I ‘Level Up.’ • Demonstrate my value. • Change the world. • Change one corner of the world. • Spend more time with customers. • Directly drive new revenue. • Do work I love. • I’m an untapped natural resource. • Dammit, my company is doing it wrong! • The whole industry is doing it wrong. • Protect my job during the next layoff. • Protect my group during the next layoff. • Prevent the next layoff. • I’m bored. • The act of pure creation drives me. • How smart am I? Let’s find out. • How creative am I? Let’s find out. • Create moments of astonishment. • I have something to prove to myself. • I have something to prove to family. • I have something to prove to ________________________. • Know myself better. • Work with great people I like. • No one else can do what I can. • Learn to innovate so I can do a startup. • Buff my resume. • This is how I keep insecurity at bay. • I hate my boss. • I love my boss. Motivations are different because people are different. None are right or wrong. Choose wisely, if your reasons don’t motivate you to change, they certainly cannot change the world. 1a. Motivations
  • 6. 2. Ideate Ideate Creativity is not mysterious. While the brain chemistry that sparks neurons into creative connections is not well understood, we can follow steps that are likely to trigger the kind of creativity we’re after. Here’s how. Innovation is the implementation of creative ideas. But ideas have to be relevant, novel and useful to those who should benefit from them. To create innovations that matter, we have to understand which customer segments we want to create value for. We need to get insights on how these customers manage the problem or job that we want to improve, and what are the pains and gains they are experiencing in getting this job done. Once we have a good insight on that, we can create ideas on how we can deliver a better value proposition to the audience.
  • 7. Complete actions on 2a and 2b. Go to Level 3. Ideation begins with inputs and insights It’s a two step process: 1. Understand your customer first. Gain insights on your customer segment and the job the customer wants to get done. Go to card 2a. 2. Create the value propositions that’s designed to address your customer’s needs, and describe the products and services required to support that value proposition. Test it. Go to card 2b. Create several canvases for different customer segments and prioritize the most promising ones. Do what works for you. 2. Ideate The Value Proposition Canvas The Value Proposition Canvas shows you how you’re creating value for your customers. It helps you to design new products, services and experiences that matter to your customer. The Value Proposition Canvas by Strategyzer
  • 8. 2a. Insight Insights Understanding your customer is key. In this part of the exercise, we are focusing on the right side of the Value Proposition Canvas. Put yourself in your customer’s shoes and try to understand what are the key jobs your customer tries to get done, and understand the pains and gains your customers are experiencing in getting their job done today. 1. Define your customer segment1 Try to be as specific as possible in segmenting your target customers. What characterizes the single segment you identified? Probably there is more than one segment – what differentiates the various customer segments? Create a separate Value Proposition Canvas for each customer segment. Describe the customer segments you want to focus on. Segment 1 ___________________________________ ___________________________________ Segment 2 ___________________________________ ___________________________________ Segment 3 ___________________________________ ___________________________________
  • 9. 2a. Insight 2. Describe the customer jobs1 What customers are trying to get done in their work and their lives. Customer jobs can be: Functional Jobs – perform or complete a specific task to solve a specific problem (get from A to B, pay for a service procured, obtain relevant news information, help clients as a professional). Social Jobs – how customers want to be perceived by others (get many followers or likes, be perceived as competent or professional). Personal / emotional Jobs – customers seeking a specific emotional state (feeling secure with your investment or payment, feeling good about getting the job done with a green footprint or as fair trade). Supporting Jobs – Jobs supporting the main job (e.g. in the context of purchasing and consuming – comparing prices, delivering a product, review of a product). Observe your customer segment and describe the jobs in your own words. Finally, sort them by importance. 3. Customer Pains1 Pains describe what the customer dislikes – or what prevents them from getting the job done. What are the risks and drivers of those pains? Pains can be undesired outcomes, problems or characteristics of the job that the customer dislikes. It can be obstacles that keep them away from achieving the objectives of the job. 4. Customer Gains1 Gains describe the outcome, benefits or values the customer achieves with getting the job done. They can be required, expected, desired and unexpected gains. Gains include functional utility, social gains, positive emotions and cost savings. Describe pains and gains as concrete as possible and sort them by importance or relevance and probability to occur.
  • 10. Before you go to level 3, complete these 2 actions. After finishing your Value Proposition Canvases, sleep on it and revisit them again. Any new ideas? Any new thoughts? Have a coffee with an interesting co-worker and discuss your ideas along the Value Proposition Canvases you created. Get feedback – they might bring a different perspective. 2b. Value Proposition
  • 11. 2b. Value Proposition 3. Testing Finally we want to test our value proposition and our new offering, to see if they are a good fit for the pains and gains of our customer segment. a) Pain Relievers1 How does your new offering mitigate or eliminate specific customer pains? How does it reduce things that annoyed customers before or remove obstacles that customers experience today to get their job done? It’s not about finding a reliever for each pain, but your idea should address some of the most relevant ones that matter to your audience. Sort them by relevance. b) Gain Creators1 How do your products and services create customer gains? How do they produce the benefits and outcomes that your customer would expect or desire – or at least be positively surprised about? Like pain relievers, it’s not as important to consider each and every gain, but your products and services have to make a difference. Sort them by relevance. Will your customer get excited about your new value proposition when they’re addressing an important job that has to be done? If yes, congratulations – you have created a fantastic and relevant idea! Does it fit in all aspects (functionally, socially, personally)? And how would the new scenarios you listed in 2a impact your value proposition? If no, go back to your value proposition – what does it take to make it more relevant? Creating a value proposition that is relevant for your customer segment and differentiates you in your market requires a continuous back and forth. You have to pivot your idea to understand if it would fit better another way.
  • 12. 2a. Insight Complete these five actions below, then advance to card 2b. Do you have access to part of your customer segments? Discuss the jobs they want to get done and the pains and gains they experience first-hand. Browse trend-spotting websites until you discover two interesting trends for your audience you did not know about.2 Read a research paper in the area of interest and find market reports of the market segment or customer job you’re focusing on. Identify scenarios impacting the customer’s job looking forward. New competitors entering market space (e.g. startups), legislative or regulative changes, etc. Identify other industries or businesses where comparable customer jobs get done differently and note down potential learnings for your new value proposition.
  • 13. 2b. Value Proposition Value Proposition Knowing the customer better, the jobs he/she wants to get done and the pains and gains he/she experiences allows us to focus on the left side of the Value Proposition Canvas. With your idea, you want to create a new value proposition, one that helps the customer in getting the job done better and more efficiently – perhaps with a completely new approach. One that mitigates pains and increases the gains driving new values, which differentiates your idea in the market. 1. Design Value Proposition1 This is the core of the ideation process – define the value proposition you want to offer to your customer segment to get their jobs done better. Your value proposition should be crisp and short, but ensure that it matters to your customer segment. 2. Product and Services1 Translate this value proposition to the products and services it builds on, and which are required for it to deliver end to end. These include: • Physical or tangible products such as manufactured goods • Intangible products such as copyrights or after-sales services • Digital products such as content or online recommendations • Financial products such as financing or insurance services.
  • 14. 1. strategyzer.com 2. trendone.com 2. springwise.com 2. trendwatching .com 2. trendhunter .com 2. trends.alltop .com 2. trendcentral .com 2. jwtintelligence .com 1. strategyzer.com YouTube 1. value proposition 1 Also compare “Value Proposition Design” book written by Alexander Osterwalder, Yves Pigneur, Greg Bernarda and Alan Smith, published by Wiley visit: strategyzer.com, youtube.com/user/businessmodeltv and https://strategyzer.com/books/value-proposition-design for further information. 2 Examples are: trendone.com springwise.com trendwatching.com trendhunter.com trends.alltop.com trendcentral.com jwtintelligence.com
  • 15. Improve Raw ideas have great potential, but they aren’t yet ready to be tested with potential users. First, they must grow stronger and prove that they work in a business environment. Ideas need to generate valuable outcomes for the customer – we already checked this in Level 2. In Level 3, we generate Business Models for each of our ideas to further test and improve them. We want to understand what it takes to turn them around, and to understand potential cost structures and revenue streams that we can achieve. We also want to understand how we bring our idea to the market to ensure a strong customer relationship. But before we begin, first run through these 2 exercises: Capture It’s helpful to express each idea in a consistent product statement. Boiling a product or service down to one sentence is hard. You must decide what really matters, and how you can sharpen the idea in powerful ways. “A product/service description for target customer that key value enabling primary benefits unlike existing alternatives”. An example would be: “A portable music player for audiophile music lovers that plays music files from lossless formats enabling improved quality unlike iPods and other compressed file players”. Combine Many of your raw ideas may have similarities. Go through your list and consider each idea based on relevant criteria such as problem space, value proposition, customer type, distribution channel, delivery platform and technical components. Can any ideas be logically combined? Maybe one idea is an enhancement of another idea, or partially leverages the same resources. If combining ideas strengthens them without losing focus, consider combining them. 3. Improve
  • 16. 3. Improve Business Model Canvas1 A Business Model Canvas (BMC) defines the key elements it takes to deliver the value proposition (along with your products and services) to your customer segment. It allows you to describe, design, challenge, invent, and pivot your business model, and to understand if it delivers a commercial outcome. The BMC is easy to grasp and allows you to discuss your business model in a structured way with others. For more information on the Business Model Canvas, see strategyzer.com/canvas Complete a Business Model Canvas for each customer segment by: 3a. completing the right side of the canvas representing the value side of the business model. 3b. complete the left side of the canvas representing the efficiency side of the business model. Hint Do not spend more than 20 minutes on the creation of one business model. Instead develop several versions to optimize or alternate certain aspects. Complete 4 actions. Go to Level 4. Who are you competing with in your business model? Complete a Business Model Canvas for the business model of each of your competitors, and explore differences. How do you have to twist your model to be successful in this environment? Is your business model differentiated enough or is it easy to copy? Finding good unfair advantages is very rare.2 Assess your business model and those of your key competitors along the 7 business model mechanics. You don’t have to lead in each of the 7 areas but you should have an advantage in at least 2-3. How can you improve your business model?3 Which of your business models are the most promising? Which do you feel have the most potential? Focus on the most promising ones going forward. Present your most promising business models to at least three colleagues and get their feedback by having them complete scorecards. Compare their scores with yours and explore differences.
  • 17. Value The value side of the Business Model Canvas starts with the customer interaction. How does our company communicate and reach the target customer segment to sell and deliver the identified value proposition? What aspects of the relationship will we build on within our customer segment? Which revenue streams are most impacted by delivering the value proposition? To start – create a Business Model Canvas for each Value Proposition Canvas – or cluster of Value Proposition Canvases you defined in the Combine exercise of Level 3. Transfer the Customer Segment in the Canvas as well as the Value Proposition along with your offering you defined. In the case of clustered value propositions, for each customer segment use a separate color throughout the BMC. Channels Here we want to define how we raise awareness in our customer segment for our products and services, and help them understand our value proposition. In other words, how can customers purchase products, and how are the purchased products and services delivered and supported after sales? Should your business model sell directly via a dedicated sales force, a web page or own outlet stores, or would you consider working with partners who have their own sales organizations, retail stores and webstores? Both models have advantages: while distributing via your own channels increases margins, the indirect model increases reach and utilizes your channel partners’ existing customer relationships. Don’t forget – you can also consider a mixed model, if you feel it better suits your business. 3a. Value
  • 18. Customer Relationship Define the relationship the company will establish with each of the customer segments. Which motivation drives the relationship strategy? – Customer acquisition to grow the customer base? – Customer retention to protect a customer base? – Upselling to grow the business with the existing customer base? What are the activities and offerings in your value proposition that support this strategy? What does your customer experience look like and what could be done to improve it? What is the cost for your customer segment to change to a potential competitor? Is there an aspect in your offering that could increase this, like the App Store in the iPhone business model? The way your company interacts and supports your customer has a huge influence on your customer relationship and loyalty. This can be done a number of different ways: – Personal (either direct or via a channel partner), Self-services basis – Automated – Via communities (e.g. with other customers) or in social media – Co-creation way – inviting your customer to assist in designing an improved value proposition or contributing to your value proposition. 3a. Value
  • 19. Cost What are the costs to deliver your value proposition to the customer? These are driven by the key resources, the key activities and your partners, but also by your customer relationships and your channels. There are cost-driven business models where you need to minimize cost – especially in Business Models with small margins – and value driven Business Models where the delivered value is more important than the cost structure – as customers are prepared to pay a premium anyway. Costs can be characterized as: – Fixed Costs – these remain the same for the operation, independent of the volumes of products and services produced. Try to keep fixed costs as low as possible – use alternative sourcing strategies that scale well with your Business Models to mitigate them – Variable Costs – these scale with your volumes of services and products. Look where you can use synergies to achieve: – Economy of Scale – by ensuring critical mass to lower the cost – Economy of Scope – by utilizing already existing assets and capabilities – to deliver new Business Models or layer Business Models on existing ones. Leverage these to reduce cost. A good example that delivers both was Amazon’s creation of a new business model on top of the existing one, by opening their own retail platform for other retailers. This increased the scale, reduced the cost per transaction and increased the scope, while also generating new revenue streams. List your costs, both fixed and variable, and calculate your margin by assuming realistic quantities – when will you start to break even? 3b. Efficiency
  • 20. Partnerships Describe the network of partners and suppliers required to deliver the value proposition. What areas can you source from others rather than create yourself? Can you leverage expertise, technologies, relationships or assets from others, so you don’t have to build up by yourself? Partnerships can be exclusive, or partial, where the partner delivers the same commodity to others, or even competes with your business model. Partnerships can be joint ventures to develop new business, or traditional suppliers you buy services or products from. Partnerships help to reduce cost by leveraging the partners’ core abilities, creating a better scale of economy, and reducing risk. Which core partners do you need for your company to efficiently operate your business model? 3b. Efficiency
  • 21. Revenue Stream4 How much are customers willing to pay for your value propositions? Look at achievable revenue streams for the value contribution your offering delivers to a customer segment. Customers might value a more expensive product or service more than a lower cost one – as it provides a higher trust or quality. There are different pricing mechanisms such as fixed list prices, haggling, auctioning, volume dependent prices, day pricing, as a service pricing, etc. Revenue streams can be transactional revenues, where the customer pays once for acquiring a product or recurring revenues, like the “as a service business model”, a subscription model, support model, a license model or a leasing or rental rate. Recurring revenues also occurs in “Bait Hook” business models where the customer buys an initial attractive, low-priced product or service, that will trigger further revenue streams like consumables or functional extensions which drive the real revenue growth. Current examples are Nespresso or “in-app purchases” in Apple’s App Store. Recurring revenues can also strengthen the customer relationship. Define what is driving your revenue streams and which price and revenue model might be the most successful to make your business model work in your different customer segments.4 3a. Value
  • 22. Efficiency Here, we want to evaluate what it takes to deliver the value propositions to the various customer segments and what is the most efficient way to achieve that. Define what is central to our business model, any existing assets we can use, and what can be sourced from our partners. What are the core tasks and resources required that are, at the same time, the drivers for cost? Key Resources Identify the key resources required to make the business model work. These can be: – Physical Resources – like assets (machines, buildings, vehicles), raw materials, components or supplies we need to produce our products and services – Intellectual Resources – like patents, brands, copyrights, partnerships, content or information – Human Resources – people who get the business model running – Financial Resources – guarantees like cash and credit lines and credit ratings. Key Activities What are the key activities required to make the business model work? Important things our company has to do – or subcontract from partners in order to deliver the value proposition. Key activities include: – Production Activities – producing the product or service – Problem Solving Activities – like the operation of consultancies or other service organizations tasks – Platform or Network Activities – areas that manage different aspects to solve the customers problems, like design, rollout and management of the platform, as well as the promotion of the platform – Go To Market Activities – Activities that make your product or service known and sold to the customer. Don’t cover all activities any company has to perform – focus on those which are core for your business model. 3b. Efficiency
  • 23. 3b. Efficiency 1 Also compare “Business Model Generation” book written by Alexander Osterwalder and Yves Pigneur visit: strategyzer.com and youtube.com/user/businessmodeltv for further information. 2 For more on the good Unfair Advantages read this: blog.asmartbear.com/not-competitive-advantage.html 3 Why some Business Models are better than others: http://blog.strategyzer.com/posts/2015/4/7/why-are-some-business-models-better- than-others 4 +30 Business Revenue Model Examples: http://www.boardofinnovation.com/business-revenue-model-examples/ 5 Also compare book “Dealing with Darwin” of Geoffrey Moore and corresponding diagrams: http://www.dealingwithdarwin.com/resources/pptDownloads.php 1. strategyzer.com 2. Unfair advantage 3. STGZY Some models better 4. 30+ examples 5. Dealing with Darwin 1. strategyzer.com YouTube channel
  • 24. Investigate Level 4 is where you engage potential customers to gather data. This data will indicate whether your idea should be pursued, changed or dropped. It begins with two steps: Discovery and Validation. You can also think of them as Ask and Sell, or Learn and Confirm. The key to success is proving your product or service and your business model hypotheses as quickly and cheaply as possible. Validating key assumptions against actual customer behavior quantifies risk and reduces uncertainty. The worst validation result is one that says, “Everyone loves everything!”. You need to discover which parts of the idea aren’t going to work. Discovering what’s bad – is good. Very good. You can then adapt and iteratively retest in hours or days instead of weeks and months. Level 4 shows you how to confirm the customer problem, validate your solution and prove out a viable sales channel. Your experiments may also reveal new ways to profoundly improve the idea and delight customers. “There are no facts in the building… So get the hell out and talk to your customer” Steve Blank, Entrepreneur Educator1 4. Investigate
  • 25. 4. Investigate Business Model Hypothesis Before you start testing, define what you need to test. Revisit your Value Proposition Canvas and your Business Model Canvas and define the most important things you assumed must be true to make your idea work. Understand what are the deal breakers, those hypotheses that are core for your business model to survive. Sort those hypotheses – most critical ones first. Design your Experiment2 Download the Test Card from the Strategyzer site. The Test Card will help you to structure your Experiments. 1. Start putting your most critical hypothesis in the hypothesis field. 2. Define in the test field what will be the experiment you’re going to design to test if this hypothesis is correct. You’ll find different testing methodologies in the next paragraph. 3. How do you want to measure if you are correct? 4. What is the threshold which confirms if your hypothesis is correct or not relevant? Fill in for each of the hypotheses you want to test and cluster them if you can test several hypotheses in one test. Decide which tests you can run fast and which are the most critical tests. Focus on those first.
  • 26. Other Testing Platforms There are other testing platforms that let you focus on specific questions. Crazyegg.com allows you to observe how customers click through your site, where they click and what is most relevant for them. Usabilityhub.com allows you to test your page design and ask users questions in specific situation, so you get more background information to why they were clicking on an element or not. Usertesting.com allows you to test your Minimum Viable Product, getting video responses from your target audience. Instant.ly provides a wide variety of testing tools to create surveys, test sites as well as product and concept testing, providing you more insights in your target audience. Most of the testing platforms cost small amounts of money for your tests – some offer some trial tests. With the debit card in your Ideas Transformation Box you can shop for those testing capabilities without the need to justify expenses in an expense report or to ask for an invest. Use it wisely – you will also need it in Level 6. 4. Investigate Before you go to Level 5, perform the following tasks. Capture the learnings of all your tests in a learning card by summarizing the hypothesis you wanted to test, the observations you made, the learnings you derived from them and the actions you take as a learning out of these test results. Evaluate if there are other aspects you need to test due to the learnings you took from your initial tests. Perform those and document the results in a learning card again. Discuss your results and observations with colleagues. Get others to judge on your results. Others might bring up new learnings from the results you did not see. Document those on your observation cards.
  • 27. Minimal Viable Product³ The minimal viable product is that version of a new product (service/offering) which allows a team (or individual) to collect the maximum amount of validated learning about customers with the least effort. The minimal viable product is the brainchild of Eric Ries, a Silicon Valley entrepreneur. It can be everything from a mockup of the physical product to test key functionality to a visualization of the product like a 3D rendering or a video. It can be just a flyer or a webpage describing the product you’re offering, along with some of the key features and aspects which are relevant for the target customer audience. The minimal viable product lets you test your offering without the need and the costs to fully produce it – so you can test its relevance and value it delivers towards your target customer audience. It allows you to learn new aspects which you didn’t consider before – aspects and learnings you can take to improve your offering to better meet the expectation of your customers. 4. Investigate IDEAS BUILD PRODUCT MEASURE DATA LEARN
  • 28. Testing Methodologies The interview You have access to your target customer audience – so you can present them your minimal viable product and start a structured discussion. Take care how you phrase your questions. Avoid suggestive questions (e.g. “Do you like what you see ?”) and Yes/No questions, focus on open questions and find out what your audience likes or dislikes. Steve Blank’s “Customer Problem Presentation”4 is a scripted interview first outlining the top 3 customer problems you are addressing, the current solution to those problems and those you anticipate. Pausing after each section gives your interview partner room to talk. Listen to what you customers say and prioritize the problems, as well as your solution. Put the comments in “must-have”, “nice to have” and “don’t care”. Don’t forget to ask the customer if he would buy your product and what he/she would be prepared to pay for the value you deliver. Online Surveys Online surveys help you to test certain hypotheses you made in designing your business model. Testing platforms like: surveymonkey.com gutcheckit.com aytm.com surveygizmo.com google.com/forms provide you with a low cost, full service tool to design your online survey and get it answered by your target audience. Also keep your questions as open as possible, avoid suggestive questions and test the commitment of your audience (if they are prepared to buy in your offering and what they are willing to pay). 4. Investigate
  • 29. Web Survey and A/B Testing5 While you can also do the testing of different alternatives in interviews or surveys, the testing with alternative landing pages might deliver your statistically more relevant results. Present your minimum viable product on a simple landing page along with your value proposition, the benefits summary and a call to action to get interested visitors of the page registered for more information. Create different versions of this page changing aspects of your value proposition or your offering. A preorder button will make convinced customers register for the price you ask for – testing the customer’s commitment towards different price points and value propositions might result in interesting findings. And registered customers are willing to participate in a second follow- up test, which will allow you to start a communication – e.g. via an email campaign where you can ask them what they’d like to get improved or changed. You also build up a first group of potential pilot customers. Keep the pages simple – no fancy user interfaces, logos or animations you don’t want to sell your offering, you want to test the essence and relevance in the target audience. Once they are setup, promote them with Google Advert. Measure how many people care about the problem you describe or want to know more by clicking deeper in the site. How many provide the email address for more information or to preorder the offering. How much time do they spend on your site. The more they engage with your idea the better it is. Offer a ‘Refer to Friends’ program where the audience can share your sites easily with friends. There are several low-cost full service platforms which allow you to build, promote and test webpages. You don’t need to be a web designer or an internet advertising specialist – most of those platforms offer you a 360 degree service to perform your test. These are platforms like: unbounce.com leadpages.net quickmvp.com seedling.io google.com/adwords 4. Investigate
  • 30. 4. Investigate 1 Also read HBR Article of Steve Blank: “Why the lean Startup Changes Everything” https://hbr.org/2013/05/why-the-lean-start-up-changes-everything/ar/1 2 Also compare: http://blog.strategyzer.com/posts/2015/3/5/validate-your-ideas-with-the-test- card?rq=test%20design 3 Also compare: http://leanstack.com/minimum-viable-product/ 4 Also read the book: “The Four Steps to the Epiphany” by Steve Blank http://www.amazon.com/Four-Steps-Epiphany-Steven-Blank/dp/0976470705 5 Also compare: http://www.inc.com/steve-blank/how-test-prototype-minimum-viable-product.html 5 http://www.inc.com/guides/201109/how-to-assess-the-market-potential-of-your-new-business- idea.html 6 http://blog.strategyzer.com/posts/2015/3/9/capture-customer-insights-and-actions-with-the- learning-card?rq=Learning%20Card 1. Lean startup article 2. Test card 3. Minimum viable product 4. Four steps to epiphany 5. Test MVP 5. Asset market value
  • 31. IterateAt this point you have a functioning experimental platform running with traffic, customers expressing interest and data being captured. Now it’s time to use that platform to optimize your idea. Start by identifying which learnings are central to the idea working. Bring the learnings back in your Value Proposition Canvases and your Business Model Canvases and pivot your Business Model Idea by retesting it. Before development ever starts, you can test customer’s behavioral response to various value propositions, the relative desirability of particular features and the effectiveness of explaining the product different ways. That insight is priceless. Your experimental platform can also explore wild variations, revealing new opportunities that shift the entire product concept while such changes are still essentially free. Occasionally, it can appear that a certain user behavior or business metric cannot be tested without actually building the entire product. This is rarely true, a little cleverness can go a long way. Ask “How could we get some data right now, even if it is only preliminary?” For example, to learn if a “Be Anonymous” feature is desirable to users, begin by adding a checkbox option for the feature. If visitors click on it, present a message informing them this feature is not yet available but capture the click in your metrics. This allows you to measure customer interest in various features. When doing iterative testing, don’t make the mistake of changing things too slowly or incrementally. Feel free to push changes daily. Don’t just change the text of your headline, try extreme changes to see what happens. Since the Ideas Transformation Box brings the cost of learning dramatically lower, you can now afford to ask “What won’t work at all?” and try that. You might find some unquestioned assumptions to be wonderfully wrong. Try doing A/B testing where visitors are randomly shown two different versions and measure the difference in response. Services like optimizely.com can be useful and implemented in minutes. 5. Iterate
  • 32. 5. Iterate Complete two actions. Go to Level 6. Drive 100+ more visitors than Level 4. Get 20+ more sign-ups.
  • 33. Infiltrate This is the final level. The path behind you is long. You have reached the last level of the Ideas Transformation Box. Well done! You’ve acquired arcane knowledge on your customers’ needs and desires, built unique skills and turned raw data from your hypothesis into powerful evidence. Every action on your journey has been preparing you for this moment. Only one action remains ahead. You must infiltrate your idea to win a sponsor to turn it around. This can be your management, a venture capitalist or your customer’s management for whom you developed the idea. Level 6 is about winning over your Sponsor with all your excitement, supported by the facts and findings you gathered over the last 5 levels. There is only one challenge – you have to bring your story to life – crisp, clear and exciting in no more than 10 minutes. You’ve now fought your way here, so you’re ready for the truth. You can’t win, if you always play by the rules. But innovators excel with rules. Not at following them, but making their own. Innovation is not a thing one does. It is a way of being. Ready? Let’s begin. 6. Infiltrate6. Infiltrate
  • 34. The Pitch Your entire executive presentation must be no more than ten minutes. Before you start working on it, understand what drives the Sponsor. What might be their questions, doubts and fears after listening to your idea? Write them down so you can check if you addressed them in your storyline once you developed it. Conclude your presentation by an explicit ask. Your ‘ask’ could be in the form of time, money or other resources you would need for the next steps to turn your idea into reality. You’re also asking for the executive’s endorsement and ongoing engagement in guiding your project forward. Be realistic in your ask and demonstrate what they would get in return. What you hear after you ask (whether yes or no) will be the most valuable feedback you get. The structure of your presentation will be: • Customer • Problem • Mockup • Experiment • Data • Ask Create an engaging story underlined with the facts of your tests and demonstrate your idea out of the perspectives of the different stakeholders (the customers, the company delivering the new value proposition to them, partners and competitors). You have to have proof why your idea will work. When using the Business Model Canvas or the Value Proposition Canvas in your presentation, build them up as you speak. 6. Infiltrate
  • 35. Explanation Videos Explanation videos are getting used more and more to explain complex topics efficiently in a short time. Simple animations and white boarding animations alongside a recorded audio track allow you to explain complex topics along optimized scripts. You can use those videos for part of your presentation e.g. to describe the current problem and dilemma and how the customer would cope with his job with the new value proposition. But at the same time, you should ensure that they don’t take more than 30-40% of your presentation time. Videos cannot express your passion for your project. There are several tools and platforms to create such videos with minimum effort: - Sparkol.com4 - Simpleshow.com5 - PowToon.com6 - GoAnimate.com7 Visual Meetings8 Keep your presentation as visual as possible. Avoid long text on your slides or presentation canvas. It takes your audience attention away, as they try to follow you as well as the content of your slides. David Sibbet published two great books “Visual Meetings” and “Visual Leaders”. Working with Sibbets’ approach of Grove Story maps in a Prezi presentation can be powerful approach. 6. Infiltrate
  • 36. 6. Infiltrate Complete these 3 actions to exit the box. Prepare a ten-minute presentation explaining your idea or business model and test it by presenting it to at least 2-3 peers. Review your presentation with a mentor. Review your asks with a senior executive or a mentor to ensure they are strong enough to achieve relevant results, while not being completely unrealistic. Target Practice Make no mistake, innovation is as much about selling as it is creating. You’ve successfully ‘sold’ your idea to customers but selling inside your own company can be even harder. To gain internal support, even the best ideas must be packaged and presented as attractive business opportunities. You must spark the imagination, curiosity and vision of business stakeholders. Who are your targets? Managers with resources you might ‘re-appropriate’ for your project. Take a Value Proposition Canvas and put the targets you want to present to into the customer segment. Understand the “jobs they want to get done”, the pains and gains they have and evaluate which aspects of your idea are the most relevant for them. Put those aspects or hypothesis on cards so you can sort them by relevance and prioritize them for your short presentation. Understand who might be your opponents1 – classically existing business areas you could potentially be taking resources away from or business areas that might feel offended as your business model is potentially competing with their long term established practices. People who fear this idea could compromise their job or responsibilities. Plan your political budget wisely and try to avoid having too many of your opponents in your presentation. Mitigate these political risks, by proposing in your ask to incubate your business model in a separate unit – perhaps even an outside startup.
  • 37. 6. Infiltrate When asking for resources, be specific on the skills and attitude levels you need. Existing resources might not always fit your criteria, especially if they come from the incumbent business model, as their legacy thinking might slow down and question your new business model. You need to do more than convince a potential sponsor your idea is ‘good’. You must convince them it’s better than at least one idea they’re already funding. If you follow the rules and wait patiently in the endless line for these mythical “uncommitted resources”, you’ll find they are as rare as the unicorns that deliver them. If you know your idea is worthy, go get the data, then use it to convince others to support you. Meeting your potential sponsors in-person or via video is recommended for your presentation. Your sponsor-to-be needs to see the fire in your eyes because they’re taking a chance on you as much as your idea. Before pursuing your executive supporters, practice your pitch first on your peers and direct managers. Then develop a list of executives overseeing areas related to your idea. Finally, identify those people your executive target interacts with, such as direct reports or peers. Exclude the potential opponents, which you will not be able to win. Pitch the remaining people first before pitching the executive target. If their peers and reports ‘get it’, ask them to mention the project favorably to your target. If they don’t, ask why not. They understand your target’s business priorities. Listen to them and apply their advice. This can be the key to earning a “yes”.
  • 38. Telling Stories2 The most effective way to tell your story is to tell it as a story, not a sequence of dull eye-chart slides. Funding decisions are not based solely on market studies, customer personas and competitive analysis. Those are weak proxies we’re forced to use when we don’t have real user behavioral data. You have real data. So use it to tell a compelling story. What makes a story compelling? When it’s personal. When it’s easy to understand and it’s fun to listen to. Build up your story like a picture – start with the customer of your Value Proposition Canvas and sketch the problem/dilemma he or she is in. Then explain your solution approach – your new value proposition and illustrate how that will impact the customer in doing his job. Explaining your business model behind it – why and how this will make the company successful. To use the Business Model Canvas might be a good approach but it’s not mandatory. Underline your hypothesis with the insight of your tests and finally get to your ask. There are some technologies in the market which can help you to make your presentations more exciting: Prezi.com³ Prezi allows you to present your story on one large canvas, which means you can pan and zoom to various parts of the canvas and emphasize the ideas presented there. It is easy to embed multimedia files. A Prezi presentation also allows you to build in a lot of detailed information by zooming further on the canvas – information that is not intended to be used in the main presentation, but in the QA session or a conversation following the presentation. 6. Infiltrate
  • 39. 1 Henry Chesbrough Business Model Innovation: Opportunities Barriers http://www.hh.se/download/18.341e6abb148eccb76f57f464/1416394294345/ Chesbrough+2010+Bussiness+model+innovation+opportunities+and+barriers.pdf 2 Also read: 8 classic storytelling techniques for engaging presentations http://www.sparkol.com/engage/8-classic-storytelling-techniques-for-engaging-presentations/ 3 Prezi.com Presentation Tool http://prezi.com 4 Video Scribe Tawe http://sparkol.com 5 Simple Show Videos http://simpleshow.com 6 Create Animated Videos and Presentations http://powtoon.com 7 Create Animated Videos http://goanimate.com 8 Also Read “Visual Meetings” and “Visual Leaders” of David Sibbet http://www.grove.com/ir.html 6. Infiltrate Business Model Innovation Classic storytelling techniques Prezi Sparkol Simple show PowToon Go animate Grove
  • 40. Authors: Bernd Gill, Manuel Meyer, Yannick-Tjard Schütz Adaption of https://kickbox.adobe.com/ – original Kickbox created by Mark Randall at Adobe.