Learned
Session 12 – Final session
Hi guys and thank you for your attention!
We have gotten to the last session of the course and a journey is coming to its end. We have enjoyed this course very much and we look forward to getting our feedback from the professors.
Here are the recaps from session 12:
First of all every group presented their first draft of their pitch. We got some really valuable feedbacks and were able to see more clearly what we have to change. The rest of the class we mainly talked about the business plan, the pitch, deadlines, contents etc.
The Business Plan
The Business Plan is indeed very important, but as our professors say: The pitch and the team will be the thing that makes the investor decide on investing or not. The plan is for us, the team, and not for the investors.
However, as this is a course we have to deliver the buinessplan and it should be about:
1. What are we going to do?
2. How do we plan to do it?
3. How will we make money from it?
Our businessplan will tell the story about the TempBox, how it is today, how it will be in the future, who will buy it, why, and so on.
We went to all the stages of the plan and we talked about how to build ours to be great!
Thank you all for following us!
Best wishes from The Lean Explorers!
Lessons Learned – Session 10
Lessons learned, session 10.
As usual we started the session with team presentations. We were first up and the presentation is available through slideshare or further down on this page. Our presentation went well and we got some constructive feedback which we can use to improve until next time, for instance we should make our organization chart contain fewer positions. A venture capitalist wants to know if the knowledge is in the team and one way to accomplish that is to present the organizational chart with team members and qualities only.
Theme of the lecture: cost structure and financial statements
What is the cost structure of our startup? This is a question which is challenging to answer. There is several assumptions which needs to be made after having identified the cost drivers in the company.
There are several types of costs where variable and fixed makes up the total. As we can see in the diagram, fixed will stay the same and variable costs varies with production volume.
One important feature for a startup is not having too much fixed costs. With a heavy load of fixed costs the business becomes more risky as fixed costs are much more difficult to do something about if needed.
–> We are going to out-contract most of our business and will not have large fixed costs. Our degree of variable costs will be higher.
Financial statements
To get funded, to gain profits and to be able to measure and monetize plans there is a need to develop a financial plan and forecast.
Financial decisions result from many different actions and choices. To get a future positive income there is a need to invest in assets, inventory, human resources etc. These investments will all influence the financial plan. The financial plan is an instrument to assist. Meaning that it will guide and assist the entrepreneurs to make decisions based on achieving the plan.
GOOD NEWS! The worst part is already done through planning for and making the business model. We can use information we already have researched and tested. Based on our findings we can build FORECASTS based on valid results rather than gut feeling.
Main components:
– Income statement
– Balance Sheet
– Cash Flow Statement
Capital needs
The first source of financing will be our saved capital or capital from family and friends. These amounts are often not sufficient and we need to get Venture Capital. For startups a business angels which is an investor in the near area interested in startup investments.
Angel investors base their investment decision on several criteria, but the MAIN CRITERIA IS THE TEAM and the size of opportunity. Judgment about people is a huge factor and it is made up in seconds à Make a good FIRST IMPRESSION!
This week we are working on our financial statements and pitch, we are improving our internet based tools, and perfecting the business model 2.0.
Lessons Learned – Session 9
This week we had a chance to practise our presentation for next week as both our teachers were away on business. Karina stepped in and asked us to present our business models and revenue streams to the class and provided us with loads of useful feedback for our presentation to the professors next week!
This weeks class was all about the key activities and key resources of our business. We had to really think about what the key activities our business would be undertaking and what we would need to make this happen. We discussed how the system has to be simple so that ordinary people can work it and achieve the goals set. To do this Karina discussed the use of processes in an organization and how they were vital to the efficient functioning of the company. These processes are a way to standardize and benchmark efficiency/quality/outcomes.
After carrying out exercises based on the process of our business we watched a really interesting video, that made us all realise that even though an activity may seem completely obvious and simple, we regularly forget to carry it out and often these are the most important activities. By forming check lists and processes these problems can be eradicated! The final part of the key activities section of the lecture was discussing value chains and to understand which parts of our business were they key parts and which were support activities.
After the break we discussed the key resources, so the organizational structure of the business, the roles played by the employees and their capabilities needed. We also discussed how it was better to hire employees with the right attitude as these people have a motivation for the job and to learn, than to hire someone with capability. This is because even though someone has the right capabilities for the job, if their attitude for the company or position is negative then it is extremely difficult to get integrate them into the company culture and to get the necessary results from them.
Partnerships were also discusses, we realised that we need to develop buyer-seller relationships to develop strategic supply and ensure that we gain a high quality low cost supply that meets our demand at all times.
Having learned all this, we now just need to put it all into practise for next weeks presentation and read the next pages of the required reading!
Lessons learned in session 8
The focus of this session was on the revenue streams:
One can say that a direct revenue stream show that you actually have customers.
The direct streams are: Transactions, usage, renting, subscription, pre-pay, freemeium ( free + premium), and pay-per-use which are the normal customer sales. In addition we have intermediation (Selling other firms stuff on your webpage for instance), and advertisement, which do not involve the sale of the product.
The indirect streams can be renting out your excess capacity or sales by referrals by others.
REVENUE STREAM EXERCISE:
As always we did an exercise which ha importance for our business model and idea. We did a rather quick analysis of what our main revenue streams will be, and these are the ones we decided on:
– Transactions: We might sell the Tempbox through channels like our webshop and through retail stores. With time it might develop to be a box in different colors and shapes, and it can be sold with or without the plugs for heating.
– Intermediation: We are considering intermediation in our webshop. For instance we might sell books and accessories which complement a lunchbox like cooking books or preparation tools.
– Advertisement: We have a webshop and an internet community and will use some space on it for advertisement.
– Licensing: We might consider selling the license to the box to other firms in markets we are not able to, or willing to serve ourselves due to costs, uncertainty, too little knowledge of the market etc.
We also calculated the streams in price and quantity for the different streams, however, the numbers we got have to be done again, and we will post them when we have!
PRICING MODELS
What are the pricing models?
– Cost based: Cost + Margin à is not focused on the client
– Value based: Price based on the perception of the client. Can be used for high valued products or services. Not based on the cost of the resources à Depending on the value the clients gives the product.
– Competitive: You set your price close to the competitors because you are not too different. To high no-one buy, too low no-one buy
– Volume: price set to sell in a bigger quantity à Cost saving
– Portfolio price: Bundling services together, different products etc.
– Shaver price: The machine is sold at a low price, and then the cost of usage like the cartridge for a printer, is very high.
– Feature pricing: adding features like our customization increase the price – we can let them customize their own designs, share them with each other in the community.
THE MINIMUN VIABLE PRODUCT –MVP 3
In previous sessions and group-work we have been through the MVP 1 & 2, now it is time for 3. The MVP is a version of the product which gives the team the opportunity to collect the maximum amount of validated learning about the customers with the least effort.
We have decided to make a 3D design version of the product. We could make a box with a plug in it, but it would not represent very important features to our product like the design and flexibility. Hence, the 3D version will be the best MVP for us. With this version we will set up a fake sale and build a new landingpage to test the viability.
Thank you for reading, and until later!
Lessons Learned – Session 7
Hello again!
So this week we had another class with Joao and again, it began with each team presenting their work from the past week. We presented both our landing pages and the Values Curves, it was really helpful this week because we gained lots of constructive feedback from the professor, and from this, we understood that we needed to improve our landing pages to make them more effective. By the time of this weeks class we will have perfected our landing page and will be well on our way to gaining 200 views! Other than that, our presentation went well and our value curves were a hit!
Session 7 focused on channels:
We discussed their roles, for instance: Marketing, Sales, Distribution and After-sales Support. We discussed the various different means of marketing our product and the most affective ways of raising awareness and attention. We also differentiated between free and paid marketing channels. We carried out an exercise, picking the six most effective channels for our product, three from the free segment and three from the paid. For the free channels we chose a website, of course. Our professor stated that everybody needs a website in these times to be successful and it can be considered the most important marketing tool! The second free channel we chose was social media, social media has become a large part of many peoples lives and because of this it just makes sense to gain exposure by marketing our product through this channel. The final free channel we picked was SEO (Search Engine Optimization), being that we’re selling a product, it adds credibility to our brand, but also the earlier our page appears in the search results, the more visitors it is likely to receive from the search engine’s users.
For the paid marketing channels, we picked PPC (Pay per Click), SEM (Search Engine Marketing) and Direct Mail. We chose SEM because it is a way of promoting our website by increasing its visibility in search engine results, this is likely to increase traffic to our website and as a result may increase sales. For that reason we also picked PPC, as it is also a model of advertising that directs traffic to our website. Finally, we chose Direct Mail because it is a good way of increasing awareness, particularly if we use it to advertise in student and professional areas of both residence and work.
We also decided that our sales channels would mainly be online through our website and others such as Amazon but that we would also sell some through retail stores, such as El Corte Ingles and other smaller retailers, but for this we may need the help of a distributor to get our product placed.
In the second part of the class
our professors taught us about developing and maintaining relationships, we feel that our product maintains a transactional and fairly automated relationship, however we hope to retain customers so that we can sell more lunchboxes to them and their families.
The final part of the class was all about how to raise awareness online:
This started with a presentation about AdWords, I didn’t know that much about this before the class but having listened to the professor, they sound really useful and I’m excited to start using them for our project. For the remaining part of the class we discussed Facebook, Linkedin Groups and Blog Posts. We were once step ahead in this respect, in previous weeks we created a Facebook page for our product before the professor mentioned this as a marketing channel! He also discussed “Fake Sales” through the likes of Amazon or Ebay. Through this we can both direct people to our Facebook Page/Blog and gain feedback on our product to understand better our customers needs and if it will sell.
We then completed one final exercise before the end of class. For this we picked our most important channels (as discussed earlier) and decided upon how we could test and validate them. We decided that a fake sale on Ebay would best to test if online would be our main channel. We decided against using Amazon for the single reason that do not have a finished product and with Ebay, there’s many more points throughout the process where we can pull out of the sale before it is finalised and is therefore less likely to cause any problems. For the retail channel, we decided it would be most efficient to approach retail stores and distributors to see if they would carry/distribute our product. If some said yes, then it would be a success!
That’s all for this week! See you in week 8.
Landing Pages
Hey everybody!
We checked out the different Landing Page providers to see which is the most suitable for us. The fact that most of them are not free or have only very restricted free trials is a bit of an issue.
Here is one we made, which doesn’t fit our requirements.
http://thetempbox.launchrock.com
We wanted to use the layout which was recommended in class. But with launchrock.com it seems like we cannot add additional field in order to add Trust Indicators and the Safety net. Anyways… we are working on a new one right now 🙂
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!
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?
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.
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 