Month: October 2013
Lessions Learned Session 6
Hello everybody!
We have had another session last Thursday with João and we also had an interesting guest who is an entrepreneur and former Catolica student. Once again we want to share with you what we learned and what we experienced during the last week:
Before last weeks class we were having 20 interviews with Portuguese people in order to validate our most important hypothesis. Most of the interviews where held on the Catolica Campus. Since we are all international students we have rather few contacts outside university at the moment. However, we managed to get several interviews with several professionals which was important for our sample. The results of our interviews are quite positive. It was confirmed that there is a problem and that it is significant enough. At the end of the interviews the big majority of our interviewees thought that a heatable lunchbox is a fantastic product idea and that it is a great alternative to hot food from the canteen/cafeteria/restaurants. Some of the interviewees, who are used to bring food (e.g. sandwiches and other cold snacks) to work/university, said that they would prefer hot food might change their habits if they were able to heat their food on the go.
However, the interviews have also shown that several interviewees do not look for a solution for the problem. They are not bringing food to university because preparing it or even just carrying it is considered inconvenient by them. Not matter how well the product would be designed or how good its functionality would be, they would never change their habits and start bringing food. It was interesting to see, that almost exclusively male students samples had that opinion. However, they thought it would be a great product for people who bring food, even though they never would.
Last class:
In the beginning all the teams were presenting their Personas and empathy maps, which lead to an interesting discussion among the class member.
Later we had a guest lecture, held by young entrepreneur and former Catolica student was very interesting. She gave us very useful tips and shared her experiences with us. She told us her personal story how her first start-up has failed and it seems like most entrepreneurs have failed before succeeding at some point. She gave us a lot of useful instructions on how to build a landing page for a product and that is exactly what we will start working on right now! We will share it with you as soon as it is finished. Stay tuned!
Interview summary – briefings
Debriefing interviews – The Heat Able Lunch Box
These are the short summaries of the interviews. The names are fictional due to anonymity:
Andre, 24, student: Andre eats during the day, but only if he has the time. He always buy food at school, and thinks that the offer is good enough, however he does not believe the food is suited for healthy, allergic or vegetarian people. Andre would prefer to have a more complete meal during the day. He is against food on the go because he wants warm food. He thinks it is inconvenient to prepare food at home to bring it, and he lives close to campus so he would rather go home to eat than bring it. He would not by the product. On the other hand, he thinks the idea is really good and he definitely thinks that others would, he also adds that he might be converted over time, but it would be a process and it depends on what others are doing.
Inês, 24, student: Inês often bring food to school. Mostly sandwiches, snacks or fruits. She usually prepares it at home or stop by a market on the way to school to buy something. She does not think the school offers her preferences in food and it’s often a problem that the lines are too long. In addition, she thinks that the food is too expensive. Inês tol us that she and her friends are talking negatively about the offers the schools have for food, and is really positive towards the product in she would definitely buy it.
Sonia, 25, student: Sonia lives 1 hour by car outside Lisbon. When she is at school se always have long days. She brings her own food, but she also buys her lunch in the canteen. She believes there to be an easy access to food at school, but she does not get a hold of the food she prefers because she want it to be healthier. Sonia emphasizes healthiness, but also that when traveling by public transportation, the container should not be too heavy or big. Today she brings her food in Tupperware. She believes that bringing own food is becoming more common due to the economy and would like to save the money she use on food.
Ines, 24, student: Ines eats mostly snack during the day at school. She brings it from home. On long days she goes to the canteen and/or bar. She believes the access to food is good at school, however the lines are too long, the product range too small, and the quality/price-ratio could be improved. She would like to save the money she uses as school to buy food. She thinks the idea is good, she would like to heat up the food she brings, she does not find it inconvenient to prepare and plan food to bring at home. The things she likes the most is the ability to save money and time by not having to go to the canteen/bar.
Sofia, 24, student: Sofia normally eats sandwiches and snacks during the day at school. When she has long days she will buy something in the canteen/bar. She believes the access to food is easy, but she see the long lines and small product range as an issue. In addition she believes the prices to be too high and the quality too poor. Without knowing the product she said that a solution to her problem would be to be able to heat food she could bring from home. She never goes to restaurants outside campus. All in all she is sensitive to price and would benefit the most from saving the money she is currently spending.
Diogo, 25, student: showed interest in the product and asked several questions about it. He believes that there is a market for it, but he doesn’t bring food himself. He normally doesn’t have leftovers and considers it inconvenient to prepare food to bring. He doesn`t like to took. Also the social aspect of lunch plays an important role for him. The problem the lunchbox is trying to solve is not a problem for Diogo. He is not very picky about the food and the food he can get hold of is fine for him. However he liked the idea and thought that for people who bring lunch it would be very useful. His habits would not change though.
Carlos, 23, student: Even though he prefers light and healthy food he is satisfied with the lunch options he has at university. Carlos also does not like to prepare food. He doesn’t consider the food at university expensive so he believes that it is a waste of time and not worth it to prepare food and home to bring it. It would not change his habits but he understands the advantages and liked the idea but he just does not consider bringing food and for him there is not lack of choice/quality ect. Hence, there is no problem to solve.
Raquel, 25, student: She was criticizing that there is no place at university where food can be heated. When I explained the product to her she was enthusiastic about it. For her it would be important that the box has an efficient design, not taking too much space and that it would not be heavy. She cooks regularly at home and she would bring leftovers or just prepare a bit more the evening before. The clearly saw the advantages of being able to bring whatever she wants. She also considered bringing food cheaper and healthier. But in general she is also satisfied with the food at university. However she thinks that value for money is quite bad. It is a little expensive for what you get.
Jorge, 26 student: He did not really show interest in the product. Bringing food and heating it up is not appealing to him as he doesn’t consider it fresh food. He answered the questions but did not give a lot of personal input. He mentioned that in Portugal usually like to go for lunch together and that waiting a bit for it is not a big problem. He would not change habits. He thinks that it could be useful for people who are used to bring lunch though. A comment of him was that he would not like to have a plastic design because he thinks plastic container can be harmfull for you health in the long run. But in general he considers it inconvenient and he would not spend time on preparing food to bring.
Joao, 24, Business Developer and Head of Strategy at Minitel: Sees the clear advantages of being able to heat food on the go, finds it so much more convenient as so busy throughout the day. If he didn’t have time to leave his desk but could eat something hearty and warm would definitely appreciate it as this would be more in line with his needs and habits. As he either goes home to a cooked dinner or has a business lunch unless he is too busy with work. Then he would work through lunch as it is the only time the office is empty and quiet, for this reason he doesn’t want to spend time in the canteen using the microwave when all employees are there. He seemed very open to the idea of bringing food, yet seemed fairly reluctant to preparing it especially in the morning. He would be fine with making extra dinner or bringing precooked foods that can be heated. Overall i would say he probably would be a potential customer, particularly if it was small and neat enough to fit in his back pack as he usually rides a motorcycle to work – so the flexibility is essential.
Joao, 24, Auditor at KPMG: He saw the advantages of being able to heat food on the go, believe it would be good to save money and not always eat at the food court at the bottom of his building. However he has only recently joined KPMG and has many activities, a busy schedule and eats at the food court to be social and get to know the team. He was keen on the idea of saving money and would be open to the idea of bringing lunch when he becomes more settled in his job. However i get the impression that he may miss the social interaction that comes with lunch time and so would only bring home foods a few days a week and then buy lunch with his colleagues the remaining days. Overall i would say he is 75% likely to purchase the product.
Briana, 27, student: She was definitely interested in the product and shared her thoughts about it. She does regularly bring food to university but only if she has really long days. However, she does only bring cold dishes (e.g salads, vegetables, healthy sanwitches). She doesnt consider it inconvenient but she does not know if she would use a lunchbox. Since she has warm dinner most of the time she is fine with cold lunch and going to the canteen ocassionally. However she might change her habits if the product is convenient to use. She still lives with her perents so she often has the possibility to bring leftovers. In general she has the impression that not a lot of people bring food to university.
Tiago, 35, Lead Product Manager at Minitel: Tiago seemed happy to bring food from home and does do so regularly. Sometimes he brings leftovers or food his wife/maid prepared for home. Tiago does so to save money for the family and because it saves him from going to the shop everyday for food (as there is no cafeteria in his place of work). However Tiago uses the microwave in the kitchen at his work to heat his food whilst watching the TV during his lunch break. Overall i don’t think Tiago would be a potential customer because he already has a solution and does not find his current routine inconvenient. Therefore i would say he is only 25-30% likely to purchase the product.
Guilherme, 25, Lawyer (& PR for Urban Beach), Guilherme seemed happy enough to bring food from home. When he is busy at work and working late he often goes without substantial food and snacks. Guilherme wasn’t too conscious of spending lots of money on food but if given the choice would rather save it. Overall i think Guilherme could be a potential customer, as he often does not have the time to get his preferred food choice or any at all. However, i did not get the impression that he would want to prepare food. He often buys ready foods from the supermarket but he prefers them warmed, therefore i believe he would find great benefit in the heatable lunch box.
Margarida, 25, Marketing/Design Intern at Minitel: Margarida thought that the ability to heat food on the go would be cheaper and more convenient. She would also be open to the idea of making simple foods of leftovers but not every day. In the company she works at their is a microwave but she doesn’t use it very often as it is on a different floor and she doesn’t always spend her lunch time in the kitchen. Margarida seemed keen to prepare dinner at home, especially if it was leftovers. However the boss ensures the company take their lunch hour properly, so never really at her desk for lunch and would therefore probably not use the heatable lunch box as there are other alternatives around. However, Margarida snacks a lot throughout the working day, mostly fruit and popcorn in the summer but throughout the winter I am under the impression that Margarida would prefer warmed snacks sometimes and so I would consider her a potential customer. Margarida is keen to save money as she buys lunch every day but she is only paid an interns salary of 700 Euros per month. Therefore i think that she would be around 75% likely to purchase the lunchbox if it was the right price but she may not use it every day.
Ru, 26, Singer/Songwriter: Ru thought that the ability to heat food on the go was a great idea as she is always very busy and on the move. Ru’s lifestyle is very hectic as she spends her days taking singing lessons and practising with her band, she also spends the evenings performing in many concerts and gigs, with the weekends travelling. Therefore Ru thought the ability to multi-plug was crucial as she spends a lot of time driving between cities and practising in buildings without the appropriate facilities or performing at hotels where the food is expensive. Ru also expressed that she spends a lot of money on food when she is working and therefore would really like to find a way to save money. I believe Ru would be keen to purchase the product as she complained about the lack of availability of food choice and also that she finds it difficult to get nutritious food when she’s performing.
Pedro, student, 22 years old
Pedro is a student of catolica. He doesn’t really cares about eating healthy, he eats especially hot food from the cantine, and he is ok with the restaurants that are in catolica, the only thing he doesn’t like is the value for money, he says it is too expensive for the quality they offer. Also he says that there is a lack of different food, he would like to have more choice to eat.
He is receptive to the fact that he could bring food from home and heat it instantly, but he says that it has to be very convenient and discrete so that people can’t really see it. And also sometimes he feels lazy to cook food at home to bring it after. And he has not a lot of time to cook either.
He said an interesting fact, that if he has to go to the beach or something he would like the lunch box to keep the food fresh. Indeed, he likes the fact that the food can stay fresh all the day, he seems to be more interested in that kind of feature, that is the feature that would make him buy the product.
Overall, the answers of Pedro makes us think about putting emphasize on the fact that the box is also a way to keep food fresh during the all the day. And that would conserve the quality of the food, so they can save the money by bringing the lunchbox and at the same time eat quality food => solve the problem of value for money. This aspect of the product has to be highlighted more.
Marta Sofia, Student, 22: She is from the medium wealthy range. But she is student and she doesn’t like to spend too much on money. She advocates for a healthy lifestyle. She often wants to eat healthy but has some difficulties because at university they put a lot of fat in the food at canteen. She also has a lot of difficulty (5) to find food which is lactose free. She is very receptive to our idea to heat the food, for her it is very important that our product has to heat the food. It would allow her to bring food that her mom prepares at home (which has lower fat than in the canteen, is healthier and it is higher quality).
She mentioned something interesting. That the canteen has very large queue and it takes a lot of time. Also she said the quality often not what he expects, namely : too much fat and sugar.She doesn’t make the food herself, so we don’t know if she would use the product if her mom doesn’t prepare the food for her. Overall, Marta answers are overall positive for us. This means that this interview allows us to pursue our heat able lunchbox. She would definitely buy the product, even if the price point is high, because she sees at as an investment. This profile describes typically one of our largest customer segments.
Joao Riveira, professional, 52: He likes to eat cold food because he digests it better. Bringing food is very convenient for him. He is not really concerned by the allergies but nevertheless he says that it is very difficult to find restaurants and businesses on the go that offers those kind of food. The heatability of the lunch box is not so important for him as he likes to eat cold food, but he is attracted to the fact that the lunch box keeps the food FRESH. He seem to like a lot this part of the product, as normally he keeps the food in a plastic bag during the day. Also, at the workplace, he thinks that the value for money is not good. Quality often not what he expects, namely: too much fat, sugar and salt.He insists on the fact that the lunch bag has to be very convenient in size, and also for people that go on public transports.
Overall, he makes a perfect profile of a professional we are planning to target. He was very positive in its answer, and he would buy the product, but it has to be VERY convenient in size, and can keep the food fresh all the day.
Felix, student, 23: From the interview, we can see that, for Felix it is a critical features (critical for making the decision to buy it), because he likes to save money, to eat hot food when he can. Bringing the food is not inconvenient from him but the problem is to heat it (there is not a lot of infrastructure to heat the food, like microwaves etc.), so this will bring convenience to the act of bringing food to school. The only fact that does not works for him is to cook food at home before going to class, he would not do that, but he said it was also because the food is not really good when you transport it all the day. He would change his habit if he could have the possibility to keep it fresh and then to heat it. On the other hand, Felix would definitely buy it in the occasion he has to travel, or going on holidays.
Felix is a specific profile, we expected to have a lot of people in his situation. He is the tipical kind of “lazy” guy that is not willing to cook, he prefers to spend money, unless the lunch box is relay convenient and can heat the food easily.
Cristobal, student, 23: He is not really the kind of segment we are aiming for. The interview was negative overall and not receptive to our product. He is not worrying about money, but he still cares about value for money. However, he said he wouldn’t do anything to change things. He would be happy if some new shops open with better quality/ and more food without lactose (he is lactose intolerant), but he doesn’t really cares about it and he doesn’t want to solve this problem. Nevertheless, he thinks that it is very important the capability to heat up the food on the go. The principal reasons he doesn’t like bringing food from home is namely: the food smells a lot, boxes are not very hermetic. But our lunchbox is very hermetic, we still have to test for the smells because I think is a very relevant fact to know about, as a lot of people would be bothered by this. He also doesn’t find convenient to bring food because it takes time compared to buying food, but if the lunch box is heat able in an instant it would add a good advantage in having this product. Overall, it seems that this kind of consumers would probably not buy the product for everyday use, but he would definitely buy for travelling by bus/car/plane.
Empathy map, Personas and Interview Debrief
So, as promised in the post about learnings from session 5, we managed to get to know our potential customers better.
We have interviewed 20 people to test and validate the hypothesis. We are happy to say that our value propostiton is mostly confirmed. There are some changes to be made so please stay tuned. They will come later!
Here is our presentation on our customers:
Lessons learned from session 5
Session five started with presentations of the teams’ SWOT analysis and evaluation of main competitors. We believe presentations are a useful tool for learning among the teams and they also make us gather and organize information in a systematic manner.
We presented both our direct, but also the indirect competitors . See our presentation here:
After presentations we talked about the Problem – Solution – Market fit (S-C-P). The importance of this cannot be emphasized enough. The problem refers to a perceived problem or need, potential customers have. The pain of the problem must be strong enough to make customers want to solve it. This takes us to the solution. Can our business idea solve the problem and meet the needs? And if it does, are there enough customers having the problem we have the solution for?
Last session we sized the market using TAM, SAM and SOM. In this process it is profound to segment the market. Who are our customers? To answer this we looked at 3 tools:
- The empathy map is a map of a typical person in our customer segments mind. It tries to answer what makes the customer tick? What is important to the customer? What do they see, hear, do, think, and need
- The day in our customer’s life is an overview of a typical day in a typical customer’s life based on research, especially surveys. For us it can be important to figure out how many eat lunch at their work? At a restaurant? At a café? How many bring their own lunch? How many many prepare their own dinner? And so on.
- Personas is a fictional character who represent different types in the selected segment. We will make personas during the week, so keep reading!
–> These tools will make us understand our customer segment better.
This week we will also start interviewing people in our customer segment. This is of substantial importance as this will give us answers of things we have assumed. We will test our first and most important hypothesis regarding our value proposition. Do people have a problem with access to preferred food, are they looking to solve this problem and can our Heat Able Lunch Box help them?
The TAM, SAM and SOM
1. Segmentation and market sizing
We are starting a business that aims at giving people on the move the freedom to choose what and when to eat. Since people on the move have access to restaurants, cafes, bars, with more, our option must address those that are tired of one or more aspects by having to buy their meal. They want to eat meals of their own choice, having free access to preferred meals: either it is because of budget, diet, allergies, and/or other preferences. Or they might be tired of standing in line, using their spare time to wait for food.
è Heat-able lunchbox with multiple opportunities to plug helps solving these problems.
1.1 Total Available Market (TAM):
The total available market, which is also sometimes called the Total Addressable market can be seen as the market you would serve in a world with no constraints and competitors. Meaning that in established markets it would be the total sales in that market if the company was a global reaching monopoly (Technotes 2013)
1.1.1 Top Down method:
To find the TAM there are two different methods which are commonly used. The first is the top down which we will use. Here we start with the population in the world and work ourselves down to our market size.
Our Total Available Market is the population on the planet moving away from their home during the day, especially those in relation to work or school. We envision our TAM as in addition to be everyone with a lunchbox today, also as the entire work/school force of the planet which is searching for a better alternative to buying lunch out.
The total world population is the starting point, however it is not our market. Since the density of people on the move (especially students and workers) is largest in developed urban areas, and further the amount of people standing in lines to buy food, is on a diet, has special preferences etc. is probably higher in developed urban areas (do to a more consumption oriented economy), we use this as the first filter in our top down method:
In 2009, people living in urban areas is 3, 42 billion, which is slightly over half of the earth’s population (United Nations 2013).
Approximately 67% of these are in the workable age from 15 to 64 (Eurostat 2012): 3,42*0.67 = 2.29 billion people in urban areas in the workable age.
In general, looking at numbers from the US and EU, 60% of people in the workable age 15-64 is actually working (Eurostat 2013): 2.29*0.6 = 1.37 billion people.
As our numbers are based on mere estimations and show an unrealistic best case scenario, we will be cautious and reduce it and round it down to approximately 1 billion people:
Around 1 billion people in the world live and go to school in urban areas. Out of these people many will not be interested due to not having a problem with cues or budget, or they might have good and easy access at their work/school-place. That takes us to the SAM, which makes us able to apply the opposite approach.
1.2 SAM and SOM using the bottom up approach
The bottom up approach gives us a more realistic assumption of the market. Here we take constraints, competitors and demand into account. Here we identify customer segments and what we want to achieve.
1.2.1 Serviceable Addressable Market (SAM):
SAM is the part of the market we will target, meaning the part of TAM we are actually planning to focus on. When targeting a market it must be segmented first. In addition, calculations of actual capacity must be taken into account. We have done a rough segmentation when making the Business Model 1.0 where we chose the market: People on the move, for instance workers and students.
Segmentation: As the whole working urban world is a highly visionary market (similar to TAM) due to the assumption that all these people have the problem we are trying to address. Hence, we need to segment the market further:
Capacity: We are only four members of the team. However we are outsourcing the production and distribution of the lunchbox and we are able to distribute to urban areas of Portugal just by ordering more from the selected outsourced production facilities. The most important aspect for us is to calculate the costs and prices we will face to be able to calculate the quantum we are able to sell at what price. Our hypothesis testing will enable us to dig deeper into this matter.
However, our knowledge of the market will be highly based on hypothesis tested by surveys and interviews made in Portugal. In addition, our company will be based in Portugal. Hence, starting with Portugal as the target market seems reasonable.
We have decided to divide the SAM into different stages of success. It goes from 1, which is the starting point, and if successful, we imagine taking the lunch-box out of Portugal also.
Different stages of SAM:
1.stage SAM: All of urban Portugal. In Portugal in 2010 61% of the population lived in urban areas. As Portugal has approximately 11.8 million people, 11.8*0.6 = 7.08 million people live in urban areas,
2. stage SAM: more urban parts in countries in Europe
3. stage SAM: Core segment. Students and workers in urban developed areas, 70% of people in developed urban areas (English Online 2011)
1.2.2 Serviceable Obtainable Market (SOM):
The SOM is the realistic share of the market taken competitors, demand, segmentation, and capacity into account. This means that it is a portion of the SAM as described over.
We have decided to also divide the SOM into stages due to the fact that a start-up SOM will look very different from a launched business SOM.
1. Stage SOM: Students and workers in Lisbon and Porto: We have chosen to focus on one country (Portugal) because of distribution, channels, and knowledge as explained in SAM. Further the capital which also is the biggest city is chosen as a starting point. This is due to the fact that the market is biggest. Due to its economic output, standard of living and market size the Greater Lisbon sub region is one of the major financial and economic centers of the Iberian Peninsula. It is also the political center of the country, the seat of the government and residence of the Head of State (IEPM School 2013). In addition, we live and go to school in Lisbon ourselves and the knowledge about the area will be an advantage when starting up.
There are 150.000 students in Lisbon (Portugal Global 2013).
Population: Lisbon 2.808 million: (Portugal Global 2013).Of these are approximately 67% in the workable age = 1,88 mill, and of these approximately 60% is actually working: = 1.12 million people.
Hence our SOM before taking constraints into account is 1, 27 million people .
When the geographical segment is calculated it is important to keep in mind the other segments based on demographics and psychographics. In addition we have to look at the threats from competition (this is done separately in a SWOT analysis). The three major constraints are:
– Customer need and demand
– Substitutes and competitors
– Resource constraints
2. Stage SOM: Students and workers in Porto in addition to Lisbon.
and 73.000 students in Porto = 223000 students in total
Porto 1.344 million (2009) = 4.152 million people
Total = 1 699 000 + 223 000 = 1 922 000 million people in our geographical segment.
3.Stage SOM: Further into European big cities.
2. In conclusion:
TAM = 1 Billion people
SAM stage 1 = 7, 1 Million people
SOM stage 1 = 1, 27 Million people
3. References (alphabetical)
English Online (2011). “World population.” Retrieved 10.10, 2013, from http://www.english-online.at/geography/world-population/urban-areas.html
Eurostat (2012). “Population Structure and Agening.” Retrieved 9.10, 2013, from http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Population_structure_and_ageing.
Eurostat (2013). Employment Rates. epp.eurostat.uc.
IEPM School (2013). “Lisbon.” Retrieved 10.10, 2013, from http://iepm.ibs.iscte.pt/?pt=Summer_School_Lisbon.
Portugal Global (2013). “Invest in Portugal.” Retrieved 10.10, 2013, from www.portugalglobal.pt/EN/InvestInPortugal/WhyPortugal
Technotes (2013). “Marketing explaining TAM SAM and SOM.” Retrieved 10.10, 2013, from http://technotes.tostaky.biz/2012/11/marketing-explain-tam-sam-and-som.
United Nations (2013). Population in urban areas. UN. un.org.
SWOT analysis – Revised
The SWOT (Strengths, Weaknesses, Opportunities, and Threats) analysis is a simple, however efficient tool to evaluate own internal strengths and weaknesses in addition to evaluating external opportunities and threats.
Please leave a comment for us if something is unclear or if you have other suggestions. We are Lean Explorers and are highly open to changes!
The old version:
Lessons Learned Session 4
Another week has passed and we have had another interesting class with Prof. João. In the beginning of the class the three groups have presented their most important hypothesis they have made up for their business model. In the course of that presentation we discussed why we consider these assumption crucial / a “Knock-Out Criteria” for our business model. At this stage we realized that the most important assumptions are in the category Value Proposition, which is the fundamental part of the business model canvas.
The first concept we were dealing with in class was P-S-M, which stands for Problem – Solution – Fit. This concept is used to determine whether a product/service is worth doing. I just want to shortly conclude which essential question have to be answered in order to know that.
Problem: What is the problem you want to solve and is it significant enough to represent a compelling need?
Solution: Does the product solve that problem solve that problem in a way that is desired by customers? Can it be done efficiently?
Market Fit: Which customer segment are you focusing on? Is that market big enough to be profitable?
We also learned about different market segmentation criteria in B2B and B2C. (Consumer and Organizational Criteria). Different segmentations criteria are easier to determine than others. Demographics for example can be easily measured and consumer behaviour is rather predictable, whereas psychological segmentation is more complex and involves more uncertainty.
Another topic was Market sizing – Are there enough potential costumers in our target market?
There are two different approaches to tackle that issue – “Buttom-up” and “Top-down”. We believe that in our case the “buttom-up” approach would give us a more appropriate estimate of our potential market.
Our hypothesis evaluation
Video Posted on Updated on
Since choosing our ten most important hypothesis last week, we selected ways to test each one and also decided upon how each hypothesis will be confirmed or validated. If you watch the video below, you will see a short presentation of the ten hypothesis forms. Check back in the coming weeks to see how the testing of each one went!
Evaluating the Potential Hypothesis
Earlier in the week we brainstormed potential hypothesis, based on our business model canvas, that we thought were important for the success of our product. We compiled these in the table below and then chose the ten most important statements that really would be crucial to the product success. We did this by scoring each individual hypothesis on importance and likelihood of failure. To get our final score we multiplied the scores for each hypothesis together and then picked the ten with the highest score. As you can see, the chosen ten are all highlighted in bold.
| Value proposition | Scale of importance | Probability of failing | Score | ||||||||||
| 1. Customers would appreciate the ability to bring their own lunch to work/school and heat it | 5 | 2 | 10 | ||||||||||
| 2. Many workers/students are facing a lack of food choice such as healthy, vegetarian, budget etc | |||||||||||||
| 3. Customers consider this a cheaper option/substitute to café/canteen/restaurants etc. | 4 | 2 | 8 | ||||||||||
| 4. Customers will not consider this product inconvenient | 5 | 3 | 15 | ||||||||||
| 5. Workers/Students are looking for an alternative to the traditional way of eating on the go | 4 | 3 | 12 | ||||||||||
| 7. People are willing to pay a price that will cover our costs and margin | 5 | 2 | 10 | ||||||||||
| 8. People think it is ok to cook extra food for dinner to bring the next day | 2 | 3 | 6 | ||||||||||
| 9. People will buy “heat up food” and bring it in their lunch box | 2 | 4 | 8 | ||||||||||
| 10. People will bring left over take away | 1 | 4 | 4 | ||||||||||
| 11. People appreciate the ability to have access to food when they want it | 3 | 2 | 6 | ||||||||||
| 12. The ability to heat the lunch box will influence the purchasing decision | 5 | 2 | 10 | ||||||||||
| 13. The multi-plug ability will influence the purchasing decision | 5 | 2 | 10 | ||||||||||
| 14. A sleek and stylish design adds value for the customer | 4 | 2 | 8 | ||||||||||
| Channels | |||||||||||||
| 1. Customers would buy the product on our webpage | 3 | 2 | 6 | ||||||||||
| 2. Stores would include our product in their assortment | 3 | ||||||||||||
| 3. Most sales will come from Amazon | 4 | 1 | 4 | ||||||||||
| 4. Promotion through different channels i.e. street sales and pop up shops will raise awareness of the product | 4 | 2 | 8 | ||||||||||
| Key resources | |||||||||||||
| 3. With a viable business model we will be able to raise adequate financial resources | 5 | 4 | 20 | ||||||||||
| Key partners | |||||||||||||
| 1. We will be able to outsource the production | 5 | 1 | 5 | ||||||||||
| 2. We will be able to outsource the design of the product | 5 | 1 | 5 | ||||||||||
| 3. We will be able to partner up with organizations/companies to sell higher quantities for a discounted price | 4 | 2 | 8 | ||||||||||
| Revenue Streams | |||||||||||||
| 1. People in different markets have similar problems that can be solved by the same product | 4 | 3 | 12 | ||||||||||
The Elevator Pitch
The Tempbox Elevator Pitch!
“Tempbox helps people on the move, such as, workers and students solve their lunch-time problems by providing them with the freedom of choice to eat whatever they want, wherever they want.
Tempbox provides a convenient, economical and, if you like, healthy alternative to dining out at fast food outlets or restaurants. It is also better than the traditional lunchbox because with the Tempbox your food will stay fresh until it is time to ‘be temped’, enabling you to eat any meal; hot or cold, simply by plugging the Tempbox into any plug, USB socket or car cigarette lighter to heat your meal of choice. And once you have finished with your Tempbox for the day, its flexible design allows you to neatly pack it away into even the fullest of handbags and backpacks.”
Session 3 – Lessons learned
Session 3
In the beginning of last weeks class we had a short elevator pitch about our idea. After that, each of the 3 teams in our class presented their first version – Business Model 1.0. Our professors feedback was good and it seems like it was ok for the first time. However, we think it is going to change a lot!
From what we have learned in class and from what we have read in the book we know very well now, that it is crucial to move away from the traditional approach of a Business Plan. The Business Model Canvas brings several advantages: It is more visual and more dynamic. It is all there at one sight and the sticky notes we attached to it can easily be changed or moved around. The Business Model Canvas is focusing on activities – not results. It is full of hypotheses which are our assumptions/guesses and during the next sessions we will determine whether they are true or not. We read an article and there was a statement we want to mention at this point: “You can’t think your way into a new way of acting, but you can act your way into a new way of thinking.” This is somehow true but somehow I believe it can work both ways.
During class we learned that the Customer Development is made up of 4 stages. During the first stage it is important to listen. It is not about what you think – it is about what the customer thinks. At the second stage the hypotheses are validated. If they turn out to be wrong it is not complicated to change the model, while taking in consideration what you have learned from the customer. Only after all the important hypothesis are proven true and once there is certainty that there is a market for a product, a Start-up should move on to the Customer creation phase, which is about 3 things: Marketing, Selling and SELLING!
We learned about different tools we can use for testing our hypothesis. This was very interesting because we haven’t heard of some of them and part of it was a very new approach to me. Among other things we learned about AdWords, Crowd funding, Landing pages and Prototyping.
At the moment we are continuing to read Steve Blank’s book and we really enjoy reading it. Now we are about to “get out of the building” and start with our validation process and to develop an understanding of potential costumers and the importance of the problem we want to solve. Our professor and the book have provided us with some tools that will help us to do that.
I am looking forward to our group meeting on Tuesday where all of this will be discussed in more detail and we will move forward and get things done. Stay tuned 
The Lean Explorers 