Test your Business
Idea
Jun.-Prof. Dr. Mario Geiler
Great entrepreneurs dont take risks;
they manage them.
Background
Risk
Company value
1
2
3
4
5
6
Time
Quelle: Gilbert, Eyring: Beating the Odds When You Launch a New Venture, In: Succeeding as an Entrepreneur, Harvard Business Review, 2011, S. 1-18.
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Example:
Startup Online-Shop
Risk
Company value
1
Development
of a website 2
Creation of
warehousing 3
capabilities
Inventory and
consignment 4
Customer
demand 5
Operating
6
Product-Mix
Time
Gilbert, Eyring: Beating the Odds When You Launch a New Venture, In: Succeeding as an Entrepreneur, Harvard Business Review, 2011, S. 1-18.
05.01.16 [Link]/wirtschaft/egn 4
Methods for dealing with risk
and uncertainty
Risk
Company value
1
Development
of a website 2
Creation of
warehousing 3
capabilities
Inventory and
consignment 4
Customer
demand 5
Operating
6
Product-Mix
Time
Quelle: Gilbert, Eyring: Beating the Odds When You Launch a New Venture, In: Succeeding as an Entrepreneur, Harvard Business Review, 2011, S. 1-18.
05.01.16 [Link]/wirtschaft/egn 5
Methods for dealing with risk
and uncertainty
Risk
4 Company value
Customer
demand
6
Product-Mix
1
Development
of a website
2
Creation of
3
warehousing
Inventory and 5
capabilities consignment Operating
Time
Quelle: Gilbert, Eyring: Beating the Odds When You Launch a New Venture, In: Succeeding as an Entrepreneur, Harvard Business Review, 2011, S. 1-18.
05.01.16 [Link]/wirtschaft/egn 6
How to systematically reduce risks?
Experiments
Test your assumtions
Methods for dealing with risk
and uncertainty
Reduce risks with efficient experiments
Early und cheap tests (before it is to late)
Limited time frame (learn fast in the market and adopt)
Test one single assumption at one point of time (cause and effect)
Gilbert, Eyring: Beating the Odds When You Launch a New Venture, In: Succeeding as an Entrepreneur, Harvard Business Review, 2011, S. 1-18.
05.01.16 [Link]/wirtschaft/egn 9
Methods for dealing with risk
and uncertainty
Important
Define your assumptions: What is supposed to happen?
Implementation
Analyze the reality: What happened?
What could you learn and how could you apply your learning in the
future?
Gilbert, Eyring: Beating the Odds When You Launch a New Venture, In: Succeeding as an Entrepreneur, Harvard Business Review, 2011, S. 1-18.
05.01.16 [Link]/wirtschaft/egn 10
Lean Start-up
Build-Measure-Learn
Start with a
hypotheses and its
implementation in
a MVP
Insights for product Build Implementation of
improvement / an experiment
adjustment of your
hypotheses
Learn Measure
Analyze your data
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Product development
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Lean Start-up
Minimum Viable Product (MVP)
"It is not necessarily the smallest product
imaginable...it is simply the fastest way to
get through the Build-Measure-Learn
feedback loop with the minimum amount
of effort. Eric Ries in The Lean Startup
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Experiments?!?
The Lean Playbook Folge 3: [Link]
d i e n c e Building Wizard
of Crowdfunding A/B Testing
Au Oz
Concie Non-Functional d Landing P
rg e Storyboar age
Prototypes
The Lean Playbook Folge 3: [Link]
Methods for dealing with risk
and uncertainty
Concierge MVP
Idea is an automated service but you manually guide your user
through the solution of the customer problem
Example:
Assistant-App, that provides information automated to your target
group
Huge programming effort
search and send information manually
Goal: Learn how you could solve the customer problem most
effective (and efficient)
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Methoden zum Umgang mit
Risiko und Unsicherheit
Methods for dealing with risk
and uncertainty
Storyboard
Prototype different value propositions
Define scenarios
Create visuals
Test in front of real customers and ask, ask, ask
What really helps you? What should we keep and what should we develop
further? Do you miss something?
Ask why questions to go below the surface
Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons, 2014 .
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ERASMUS-Box
Methods for dealing with risk
and uncertainty
Sorting of cards that represent product
features (e.g., 10 cards)
Attention, what your customers tell you and what they let buy
your products could be different (e.g., wish list)
Card order gives you no evidence regarding the importance of
the single features (the first card could be very important and the
others nice-to-have)
Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons, 2014 .
05.01.16 [Link]/wirtschaft/egn 22
Methods for dealing with risk
and uncertainty
Early prototype without functions
Pitch Deck, illustrations, dummy / mockup, 3D-Printert etc.
represents specific assumption / hypotheses (you do not need all
features)
Test your hypotheses (e.g., importance of different product features)
Sometimes observations of product in use can be helpful
Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons, 2014 .
05.01.16 [Link]/wirtschaft/egn 23
Methods for dealing with risk
and uncertainty
Analyze unique links
[Link]; [Link] etc.
For test customers after presenting your idea (e.g., with special sales
brochure or flyer)
Test of customer interest with unique links possible
Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons, 2014 .
05.01.16 [Link]/wirtschaft/egn 25
Methods for dealing with risk
and uncertainty
Landing-Pages
Short presentation of your product / service (your most important
features etc.)
Goal: Visitors should show a certain behavior call to action (e.g.,
newsletter registration, pre-order, download app etc.)
Test of real customer interest
Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons, 2014 .
05.01.16 [Link]/wirtschaft/egn 26
[Link]
[Link]
Methods for dealing with risk
and uncertainty
Landing-Pages A/B Split-Test
Design different landing-Pages
differentiate in one single feature (price, scope of features etc.)
Test what site leads to more customer behavior
Quelle: Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons, 2014 .
05.01.16 [Link]/wirtschaft/egn 31
Methods for dealing with risk
and uncertainty
Test withpayed acquisition
GoogleAdwords (75 coupon), Bing, Facebook
Choose appropriate keywords (competitor analysis)
Set your maximum cost per click (intensity of competition)
Write an add / design an add
Link your landing-page ... get started
Analyze your click through rate (CTR)
Analyze your traffic on your landing-page
Test of potential markets and customer interests
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[Link]
Methods for dealing with risk
and uncertainty
Tools Landing-Pages
[Link] (Templates; A/B-Testing, etc. ab 49 $ / Monat)
[Link] (Templates; A/B-Testing, etc. ab 39 $ / Monat)
[Link] (A/B-Testing, free)
[Link] (Templates; A/B-Testing, etc. ab 29 $ / Monat)
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Wizard of Oz
Wizard of the Oz
Quelle: Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons, 2014 .
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Wizard of Oz
Quelle: Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons, 2014 .
05.01.16 [Link]/wirtschaft/egn 38
Methods for dealing with risk
and uncertainty
Further tests:
Pre-Order offers test willingness to buy
Mock-Sale test willingness to buy
Explainer video
Quelle: Osterwalder, Pigneur, Bernarda, Smith: Value Proposition Design, John Wiley & Sons, 2014 .
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Methods for dealing with risk
and uncertainty
Summary
Identify your major risks and decrease them before you start your
company
Dont invest to much resources in your first strategy (it is wright and
wrong)
Little bets test your hypotheses cheap and fast
Stay flexible
Quelle: Gilbert, Eyring: Beating the Odds When You Launch a New Venture, In: Succeeding as an Entrepreneur, Harvard Business Review, 2011, S. 1-18.
05.01.16 [Link]/wirtschaft/egn 40
Methods for dealing with risk
and uncertainty
Summary Experiments
Audience Building
Concierge
Crowdfunding
A/B-Tests
Wizard of Oz
Landing-Pages
Payed Acquisition
Prototypes
Storyboards
Explainer video
Mockup
Pre-Order
...
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Great entrepreneurs dont take risks;
they manage them.
Task
How could you manage your risks?
