Value Propositions Customer Development MVPs/Product Roadmap Lean Canvas Product Market Fit

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DKParker, LLC
2017
OHUB KC Month 2
Dave Parker
@DaveParkerSEA
www.dkparker.com/blog
Dave@dkparker.com
@DaveParkerSEA

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DKParker, LLC
2017
https://www.dkparker.com/ohub-kc/

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2017
Mentor Feedback
¤ Please do Peer Review of your deliverables with your
tablemates
¤ Research, competitive analysis, etc
¤ Pick an order of feedback
¤ Mentors – in addition to their work completed, what
additional information would you like them to find?
¤ What was missed?
¤ Madlibs info

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2017
Dave’s Madlibs Pitch
Hi, I’m <your name here>, and my company <your Company
name here> the problem I’m solving is <insert problem here>. Our
product <insert product info here> is designed for our target
customer of <insert target customer here>. We make money by
<insert method here> and our team is the right team because
<insert why you’re awesome here>. I need help with <insert help
needed here>.

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2017
Learnings From Last Month
¤ Big picture thoughts?
¤ Any Research “Ahas?”
¤ Competitive Analysis
¤ Co-Founder discussions

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2017
13 Slides – update

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2017
13 Slides for Your Pitch
1. Title, Value Proposition,
Contact Info
2. Presentation Overview
3. Problem/Solution
4. Traction*
5. Market
6. Timing
7. Product Roadmap/Demo
8. How You Make Money/Key
Metrics
9. Go-To-Market
10. Secret Sauce/Moat/IP
11. Team*
12. Competitive Analysis
13. Clear Ask
*See Blog Post

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Month 2 Agenda
¤ Value Propositions
¤ Customer Development
¤ MVPs/Product Roadmap
¤ Lean Canvas
¤ Product Market Fit

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2017
Value Propositions

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2017
Positioning
¤ Positioning is holding a place in your customer’s mind –
not as everything, what’s memorable?
¤ Who is the initial customer
¤ Think about limiting service and customer first – before
you expand
¤ You’re not precluded from selling other services or products
¤ What claim or promise will you make?

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Value Proposition Uses
¤ Tagline on your title page
¤ Madlibs description
¤ Website and marketing content
¤ Repeatable by investors
¤ Learn from each pitch
¤ How did you competitors change over time? “Wayback
Machine”

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Don’t Bury the Lead
¤ Think of this like journalism
¤ What’s the headline?
¤ What’s the Lead?
¤ What’s the Story?

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2017
Workshop
¤ Write out:
¤ What makes you different?
¤ Why should people buy from you?
¤ Write your websites tagline and opening paragraph
¤ What claim/promise will you make
¤ Compare this to your Pitch
¤ This isn’t your Founder Origin Story – it’s forward looking
not backward looking

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2017
Customer Development

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2017
Converging Definitions
¤ Design Thinking
¤ Stanford “D-School” IDEO U Crash Course
¤ Lean Startup
¤ Steve Blank
¤ Eric Reis
¤ Agile Development

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Lean Startup
¤ Entrepreneurs are everywhere
¤ Validate learning
¤ Build, Measure, Learn

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Customer Development
¤ Parallel process with Product Development
¤ “Get out of the Building”
¤ Develop for a few not Many
¤ Prioritize features based on Needs not Wants
¤ Validate with Revenue/Commitment

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2017
What is Customer Development?
¤ Four Steps of an Epiphany – Steve Blank

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2017
Customer Dev Goals
¤ Acute focus on problem – not product
¤ Find out if customers care?
¤ What do they want?
¤ Determines the difference your product at launch and at
scale
¤ Feature priorities & Product Roadmap

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2017
Customer Segmentation/Discovery
¤ Customer Segmentation
¤ What do you do professionally?
¤ Who handles this (problem/workflow) at your home office
¤ How much time do you spend on this problem (workflow)?
¤ Problem Discovery
¤ What’s the hardest part of your day
¤ What are some unmet needs
¤ What tasks take up most of your day
¤ What are your biggest/most important professional
responsibilities/goals?
Blog

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2017
Problem Validation/Product
Discovery
¤ Problem Validation – if they didn’t talk about your
problem
¤ Do you find it hard to [process/problem]?
¤ How important is [value you’re delivering] to you?
¤ Product Discovery
¤ What do you think could be done to help you with
[problem]?
¤ What would your ideal solution to this problem look like?

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Product Validation
¤ Product Validation
¤ What do you think of this product? – this question is
intentionally vague. Listen to whether they talk about
wanting to use the product or how it could be improved.
Given how vague the question is, the former is positive, while
the latter may be a sign that improvement is needed.
¤ Would this product solve your problem?
¤ How likely are you/would you be to tell your friends about
this product?
¤ Would you ever use this product?

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Product Optimization / Ending
Interview
¤ Product Optimization
¤ Questions to help you improve your idea or product.
¤ What could be done to improve this product?
¤ What would make you want to tell your friends about this
product?
¤ What’s most appealing to you about this product?
¤ What might improve your experience using the product?

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2017
Ending Interview
¤ Ending Interviews
¤ Questions to ask at the end of an interview. You may also
need to ask for their contact information if you don’t already
have it.
¤ [Summarize some of your key takeaways] – is that accurate?
– I usually do this throughout the interview.
¤ So based on the conversation, it sounds like x is really hard
for you, but y is not. How accurate is that?
¤ If this project/product were to fail, why would it fail?

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2017
Customer Dev Mechanics
¤ Google Forms
¤ Structured questions
¤ Progression
¤ What do you really want to know?
¤ Will they pay for it? How much
¤ Why will it fail
¤ Neutral, not Guided Questions

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2017
Customer Dev Mechanics, Cont
¤ Build a list of interested parties
¤ Mail Chimp List setup
¤ Ask for permission to email
¤ Two week updates – Format: “What we did, what we’re
going to do and where we can use your help”
¤ This setups you up to make progress every two weeks!

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2017
What Not To Do
¤ You are not the customer
¤ Don’t tolerate a small sample set – this could delay your
success by Years
¤ Avoid “Selection Bias”
¤ “Isn’t our product amazing”
¤ No rhetorical questions
¤ No blind surveys
¤ Can’t outsource

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Workshop
¤ Go to Forms.Google.com
¤ Setup your form
¤ Single Google Sheet for answers
¤ Building a list of all interview
¤ Include
¤ Name
¤ Company (if B2B)
¤ Email
¤ Phone if willing
¤ Permission to email

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How Many Customer Interviews
¤ B2B – 25+
¤ Profile
¤ Job Title
¤ Type of Company
¤ B2C – 50+
¤ Demographic
¤ ¯_(ツ)_/¯ = bad

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Fundraising Note
You have opinions
You have Data
You get money!
Investors have opinions
They have money

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Hypothesis vs Fact
¤ If you are convinced you’re right you won’t be open to
radical feedback that could change the trajectory of
your business & life!
¤ Always testing what you think you know
¤ Permission to give negative feedback
¤ If this idea was to fail, why would it fail?
¤ Why is this idea stupid?

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DKParker, LLC
2017
Dave’s Madlibs Pitch
Hi, I’m <your name here>, and my company <your Company
name here> the problem I’m solving is <insert problem here>. Our
product <insert product info here> is designed for our target
customer of <insert target customer here>. We make money by
<insert method here> and our team is the right team because
<insert why you’re awesome here>. I need help with <insert help
needed here>.

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2017
Product

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2017
Product Vision
¤ Product vision is important
¤ Long term features
¤ Startup with PROBLEM not product – pivot product/
features around the problem
¤ It won’t be what you ship first
¤ What the world looks like before your product
¤ What the world looks like after your product

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2017
Minimum Viable Product (MVP)
¤ Narrow and list features
¤ PowerPoint/Keynote first as your demo
¤ What screens do you need to show (e.g. do you need to
really show registration – answer no)
¤ Have them rank the features
¤ Prioritize the build based on the feedback
¤ More Customer Development Interviews!

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2017
Cost to Build

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2017
Writing a Specification
¤ A specification is a document developers can follow to
build your product
¤ It starts with workflows
¤ Can be built in PowerPoint or Keynote
¤ Wireframing
¤ Balsamiq, InVision
¤ Adding Design

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2017
Estimating Costs
¤ Write specification
¤ Required for launch
¤ Design & Flow
¤ Post project on Fiverr.com
¤ PPT/Keynote first with design
¤ Test design and flow
¤ Revise specification

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2017
Conference Call
¤ Create a $50 budget for each participant on the call
¤ Invite 3 of applicants/teams to the bridge call
¤ Share Google doc for comments in advance with all
three
¤ Ask them to take meeting minutes/notes
¤ Have a Q&A on the spec – all participate
¤ Have them submit their note plus a proposal for phase 1
to get paid via escrow

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2017
Detailed MVP Mechanics
¤ MVP Series
¤ Blog 1 – Launching a product
¤ Blog 2 – Writing a spec
¤ Blog 3 – picking a vendor
¤ Blog 4 – Contracts, Monitoring Progress
¤ Cost to market and sell – Next Month!

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2017
Business Model Canvas

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2017

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2017
Business Model Canvas
¤ Business Model Canvas
¤ Lean Canvas - https://leanstack.com

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2017
Workshop
¤ Register for LeanStack
¤ Setup a free account
¤ Share the document with your co-founders
¤ Fill out
¤ 1, 2, 4, 5
¤ After you get back proposals, you’ll know cost to build
¤ Next month we’ll talk about how startups make money

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DKParker, LLC
2017
Dave’s Madlibs Pitch
Hi, I’m <your name here>, and my company <your Company
name here> the problem I’m solving is <insert problem here>. Our
product <insert product info here> is designed for our target
customer of <insert target customer here>. We make money by
<insert method here> and our team is the right team because
<insert why you’re awesome here>. I need help with <insert help
needed here>.

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2017
BREAK

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2017
Product Market Fit – PMF

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Product Market Fit
Two Epoch’s of every startup
¤ Pre - Product Market Fit
¤ The only thing that matters is getting there
¤ Post – Product Market Fit
¤ A whole new set of questions – Scale, Culture and People

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2017
Pre – PMF
¤ Some Revenue
¤ Some Customers
¤ Some Marketing
¤ A lot Hypothesis

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2017
Post – PMF
¤ Predictable & Scalable Revenue
¤ Customer profiles
¤ Cohort analysis
¤ Churn
¤ Scalable marketing
¤ Hypothesis + Data

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2017
What is “Traction?”

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2017
Predictable/Forecastable Revenue
¤ De-risking your <time> investment
¤ Predictable revenue moves you from valuations based
on trailing 12 to future 12
¤ Target customer
¤ Sales Cycle
¤ Tools trail Strategy and Tactics

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2017
Customer Acquisition Hypothesis
¤ Cost of Customer Acquisition (CAC)
¤ Lifetime value of Customer (LTV)
¤ 36 month calculation in a mature business, 12 months for you
¤ Time to close sale
¤ How does this change with product/market maturity?
¤ Churn/Retention
¤ Average Revenue/measure (User, Account, etc)
¤ Word of mouth vs. Virality

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2017
Customer Newsletter

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2017
Monthly Customer Updates
¤ Using MailChimp Free Account
¤ Investors – Tagged
¤ Customers
¤ 30 day intervals
¤ What we thought
¤ What we learned
¤ What we’re doing about it
¤ Where we need help
¤ Regularly – put it on your calendar now

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DKParker, LLC
2017
Month 2 Deliverables
¤ Write out your Value Prop
¤ Customer Development
¤ Write your questions
¤ Build your forms
¤ Get first 25+ interviews
scheduled
¤ Review your results
¤ Metrics
¤ What are you tracking today?
¤ What should you be tracking
¤ Product Market Fit
¤ Forecast/predictable
revenue
¤ Write out your Product&
Company Roadmap
¤ Pick a:
¤ Marketing Method
¤ Sales Model
¤ Revenue Model
¤ Price

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DKParker, LLC
2017
Month 2 Resources
¤ Books
¤ Value Proposition Designs
¤ Business Model Generation – Alexander Osterwalder
(Business Model Canvas)
¤ Blogs
¤ LeanStack
¤ Wordstream – 7 of the Best Value Propositions

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DKParker, LLC
2017
THANKS!