Entrepreneurship

Session 6

Dr James Hickie
j.hickie@ucl.ac.uk
Agenda for this week
1. Reminder of where resources are for Assessment 1
2. Completing ethics form for Assessment 2
3. Assessment 2 marking criteria – e.g. for customer
development (Research criterion)
4. Review of key customer development terms
5. Persist/ Pivot/ Abandon
6. Prototyping and Minimum Viable Product
Office hours
• Any questions about assessments or concepts covered, we can
address individually or in groups in office hours.
• James has a Zoom office hours every Tuesday at 5.30pm
bookable through Moodle link under ‘one to one meetings links’
• Zillur Rahman (3pm to 4pm) and Evangelos (2pm to 3pm) both
have a Zoom office hours every Friday – see Moodle for details
• This can also be a good way to discuss aspects of
Entrepreneurship you’d like to know more about if you’ve not
studied it before
 Ethics form
▪ This is now available on Moodle
▪ Make sure you do complete this, one per team
▪ You will go through this in your seminar
▪ You need to submit an ethics form to the module leader,
James Hickie (j.hickie@ucl.ac.uk)
▪ Deadline: Friday 23rd February 11.59pm.
Business frameworks and tools for your First
Assessment (from Lecture 3)
• ‘Business Model Generation’ book, includes business model
canvas, including pre-reading set before this lecture
• Strategyzer, a website tool you can try out at home that
enables you to develop your own business model canvas – do
register for this!)
• ‘Business environment’ textbook for specific tool (e.g.
‘Business Environment’ textbook by Worthington et al) (Week
4 e.g. Porter’s Five Forces and SWOT)
• ‘Running Lean’– e.g. Trinity diagram (Week 2 and page 35)
• CB Insights – a library tool that allows you to research and
analyse entrepreneurial businesses (Emily Selvidge, Business
Librarian, can help you with registration if it’s not clear)
Useful frameworks for Assessment 1 cont’d (from
Lecture 3)
▪ New Business Road Test, (see book of this name by Mullins, also
Lecture 3)
▪ Porter’s Five Forces (Lecture 3 and ‘Business Environment’
textbook by Worthington et al)
▪ SWOT (Lecture 3 and ‘Business Environment’ book by Worthington
et al (edition 8))
Customer discovery in Assessment
2
Answer 4-6 questions for Assessment 2: Page 4

▪ The 3,000-word feasibility plan will cover a range of issues that may include:
▪ What is the envisioned product/service and what does it do? (Emphasize benefits to targeted customers.)
(Strongly recommended to answer)
▪ What real and strong customer need(s) does the product/service address? (Strongly recommended to answer)
▪ How is the envisioned product/service unique and/or innovative? (Optional)
▪ Who are the first customers that you have targeted for the product/service and what are they like? (Optional)
▪ What is the estimated total size (market potential) of the initial customer group (market segment)? Will this market
segment be adequate to support the business associated with the product/service idea? (Optional)
▪ What is the underlying technology for the envisioned product/service idea? (Optional)
▪ What is the likely intellectual Property (IP) protection for the product/service idea? Who owns the current IP associated
with your product/service idea? (Optional)
▪ What is the current state of the technology? What are the steps needed to get to a prototype? How much will this cost?
(Optional)
▪ Does the opportunity provide an attractive return on investment? (Optional)
▪ What is the sustainable competitive advantage of the product/service idea? (Optional)
Where are we up to with customer development?
▪ Customer discovery: Chapter 3, ‘Four Steps to the Epiphany’ (Lectures 5 and 6), Definition:
“Most of what a start up’s founders initially believe about their market and potential customers are
just educated guesses. A startup is in reality a “faith-based enterprise” on day one. To turn the
vision into reality and the faith into facts (and a profitable company), a startup must test those
guesses… and find out which are correct [with interviews!]” (Page 43)

▪ Problem/solution fit (Lecture 6): “The customer discovery process searches for
problem/solution fit: ‘have we found a problems lots of people want us to solve (or a need they
want us to fill)?’ and ‘does our solution (a product, a website, or an app) solve the problem in a
compelling way?” (‘The Start up owner’s manual’, Blank and Dorf: Page 57) Do you have a
solution to a genuine customer problem?

▪ Product/market (or need) fit (Lecture 6): Defined as the reason customers buy. “In some
markets customers rationally recognize they have a problem and search for a product that can
solve it (e.g. software or snow tires). In other markets products may be purchased for an
emotionally perceived need. (Movies, fashion, video games, social networks)” ‘Start up owner’s
manual’, Page 538. (Product Market Fit also in ‘Lean Start up’ by Eric Ries, pages 219-221.) Do
you have a product there is genuine market demand for?
 Problem/Solution Fit – do you have a genuine solution to a real customer problem?

▪ The customer discovery process searches for the problem/solution

fit: “have we found a problem lots of people want us to solve (or a
need they want us to fill)” and “does our solution (a product, a
website, or an app) solve the problem in a compelling way?” (Blank
and Dorf, 2020: 57)
▪ What are the results of your customer discovery interviews and how
will you use them to build a prototype?
Product/Market (or need) Fit – Does the market want to buy your product?

• Blank and Dorf (2020: 257): “Has your customer discovery

effort turned your hypotheses (or educated guesses) into
hard facts?...”
• “Have we found a product/market fit? Is there sizable
demand for solving the problem? Does the product fill that
demand well in the customers’ eyes?”
• Could desk research support customer feedback here?
• See ‘The Startup Owners Manual’ pages 57, 298; and
‘Running Lean’ under the concept of’ ‘Product/Market fit’
pages XLI to XLIII (and further references in latter book)
Prototyping – working towards a Minimum Viable Product – ‘Lean
Start up’ by Eric Ries

…..the minimum viable product (MVP)

is a product with just enough features to
satisfy early customers, and to provide
feedback for future development.

https://en.wikipedia.org/wiki/Minimum_viable_product
 Building prototypes means making ideas
tangible, learning while building them and
sharing them with other people: Minimum
Viable Product

Even with early and rough prototypes, you can receive a direct
response and learn how to further improve and refine an idea .
Prototyping provides evidence for problem/solution fit

Services
— “concierge” (e.g. no back end to
website and high customer focus)

IT Applications
— Slideware to Software

Physical products
— Virtual to Real “New Technologies
for Doing1”

See ‘Technology ventures’ by Byers et al (2019) in the library (e.g. 175-177), and Chapter 4 in ‘Entrepreneurship’ by

Zacharakis et al (2021, Fifth edition) on prototyping.

.
 Prototypes - why not create:
▪ a storyboard
Visualize the complete experience of
your idea over time through a series of
images, sketches. Use Post-it Notes or
individual sheets of paper to create the
storyboard so you can rearrange their
order.
▪ a diagram
Map out the structure, network, journey
or process of your idea. Try different
versions of your visualization.
• an ad
Create a fake advertisement that promotes
the best parts of your idea. Have fun with it,
and feel free to exaggerate shamelessly.
• a mock-up/website
Build mock-ups of digital tools and websites
with simple sketches of screens on paper.
Paste the paper mock-up to an actual
computer screen or mobile phone when
demonstrating it.
• a model
Put together simple three-dimensional
representations of your idea. Use paper,
cardboard, pipe cleaners, fabric and
whatever else you can find. Keep it rough
and at a low fidelity to start, and evolve the
resolution over time.
Landing pages
“a single web page that appears in response to
clicking on a search engine optimized search
result, marketing promotion, marketing email,
or an online advertisement”

Landing pages are used for lead generation.

Examples:
https://blog.hubspot.com/marketing/landing-pag
e-examples-list

Many tools to create great pages

https://en.wikipedia.org/wiki/Landing_page
▪ https://wordpress.org
▪ http://www.squarespace.com
Let’s start this exercise with
▪ http://landingi.com
Wix!
Introduction to Wix – making your
own landing page

Video to watch: https://youtu.be/pVee_YkEYWk

a storyboard
Visualize the complete experience of your idea over time
through a series of images, sketches, cartoons or even just
text blocks. Stick figures are great— you don’t need to be an
artist. Use Post-it Notes or individual sheets of paper to create
the storyboard so you can rearrange their order.
“Amazon's approach to new product development is about working backwards from the
customer. The product manager starts by writing a press release announcing the finished
product. The press release is targeted at the end customer and contains information
about the customer's problem, how current solutions are failing, and why the new product
will address this problem.

The press release itself is a gut-check for whether or not the product is worth building. If
the team is not excited about reading it then document needs to be revised or perhaps
the idea should be revisited altogether. As the team begins development the press
release serves as a guide for the team to reflect on and compare with what is being built”.

https://www.product-frameworks.com/Amazon-Product-Management.html

an ad: Create a fake advertisement or press release that promotes the

best parts of your idea.
Prototyping MVP’s

Slideware to software
▪ Paper prototypes

▪ Slideware

▪ Wire diagrams/Mockups

https://marvelapp.com/

https://marvelapp.com/pop

https://www.justinmind.com

https://www.justinmind.com/usernote/tests/
http://www.invisionapp.com/ 17386057/17386059/36028554/index.html#/screens/f25bbb63-30e3-
4c35-a767-bc1bfa17c128
Prototyping provides evidence for problem/solution fit

— Services
“concierge”
— Applications
Slideware to Software
— Products
Virtual to Real “New
Technologies for Doing1”

1
Dodgson, Gann & Salter (2005) Think, Play, Do. Ch.6.
Prototyping MVP’s
Digital to Physical
▪ Computer Aided Design
(CAD)
— Autocad/Microstation
— SketchUp

▪ Computer Aided
Manufacturing(CAM)
— Rapid Prototyping/3D printing
— http://youtu.be/0wWG_3MeyHk
https://www.jivr.co/
Persist? Pivot? Abandon?
Chapter 8, ‘The Lean Start up’
Learning from prototyping typically results in three common outcomes:

1. Persist
2. Pivot
3. Abandon

Based on what you have learnt so far in your group which is the right choice for you?

You repeat this process during the prototyping stage just as you did after your
customer problem interviews!
Pivoting
“No battle plan ever
survives first contact
with the enemy”

Helmuth von Moltke,

a 19th-century head of the Prussian army
What is a pivot?
“…structured course correction
designed to test a new
fundamental hypothesis about
the product, strategy or engine of
growth.”

Eric Ries, The Lean Startup

 Pivoting – the norm rather than the exception

Vlaskovits, P. & Cooper, B. 2010. The Entrepreneur's Guide to Customer Development: A cheat sheet to The Four Steps to the Epiphany
A catalogue of pivots
1 ZOOM-IN PIVOT
what previously was considered a single feature
in a product becomes the whole product.
2 ZOOM-OUT PIVOT
The reverse - what was considered the whole
product becomes a single feature of larger
product.
3 CUSTOMER SEGMENT PIVOT
Solving the right problem, but for a “wrong”
customer.
4 CUSTOMER NEED PIVOT
knowing customers extremely well we find that
the problem we’re trying to solve is not very
important. But we discover other related
problems that are important which we can solve
Adapted from: The Lean Startup by Eric Ries
5 PLATFORM PIVOT
From an application to a platform or vice versa.
6 BUSINESS ARCHITECTURE PIVOT
high margin, low volume (complex systems
model) low margin, high volume (volume
operations model).
7 VALUE CAPTURE PIVOT
Change “monetisation” models.
8 ENGINE OF GROWTH PIVOT
changes of growth strategy to seek fan or more
profitable growth.
9 CHANNEL PIVOT
a recognition that the same basic solution could
be delivered through a different channel with
greater effectiveness.
10 TECHNOLOGY PIVOT
achieve the same solution by using a completely
different technology.
 Instagram – Zoom-In Pivot
Source:https://
www.cbinsights.com/
Started as a simple prototype co-founder Kevin Systrom research/startup-pivot-
built while learning how to program. success-stories/

An early version, known as Burbn, included check-in

features, photo-posting options, and the ability to earn
points, among other functions.

Systrom and his co-founder Mike Krieger decided it was

too cluttered, so they pared it down to only posting,
comments, and liking features — and rebranded as the
app users now know as Instagram.

The simplicity of Instagram as a visual platform is

ultimately what helped it stand out.
YouTube – customer need pivot
YouTube didn’t start out as a place to find
hilarious cat videos and up-and-coming A-
listers.

It was originally a dating site that allowed

singles to upload videos of themselves
talking about what they wanted in a partner.
Few people took advantage of YouTube’s
value proposition, so its founders pivoted and
let people upload videos of any kind.
NETFLIX – tech pivot
Source:https://
www.cbinsights.com/
research/startup-pivot-
Netflix is nearly synonymous with content success-stories/
streaming, but there was once a much more
tactile component to the Netflix experience.

The company initially operated a mail-order

service through which customers could order
DVDs to rent that were sent directly to their
homes.

But as demands for digital content grew,

Netflix not only began offering access to
movies and TV shows online, it also began
producing its own original programming.
SHOPIFY – Platform Pivot
Shopify’s founders launched the platform in
2004 as an online storefront for selling
snowboarding gear, which was at the time
known as Snowdevil.

The e-commerce shop didn’t gain much

traction, but the founders realized the
platform they built had potential. The team
decided to rebrand not as a store in and of
itself, but as a way for other online retailers to
sell their wares via the web.

Source:https://
www.cbinsights.com/
research/startup-pivot-
success-stories/
 BioBean Pivots
1. Customer Segment "People think of us in a tiny little van or bicycle
going round and collecting 10 kilos from each coffee shop," says Kay, co-founder.
"We are instead focusing on the [waste streams] of large-scale coffee producing
factories in or around London.

2. Customer Need “The main market for the fuel is London's transport
system – the prospect of a "Bio-bean bus" is not far-fetched given some London
buses already run on biodiesel. Major coffee companies and high street chains
have expressed interest – fuelling their fleets or factories with waste coffee would
be a major PR boon”.
Persist? Pivot? Abandon?
Learning from customer development typically results in three
common outcomes:

1. Persist
2. Pivot
3. Abandon

Based on what you have learnt so far in your group which is the right
choice for you?
Four key milestones in search for repeatable,
scalable business model
Understand the problem: Engage potential customers and users to fully
understand the key dimensions of the problem you are seeking to address

• Develop candidate solution prototypes: Maintain focus on addressing

the most-significant needs for your specific beachhead segment

• Test Problem/Solution fit: Work with potential users to iteratively,

develop, test and refine solution prototypes and business model

• Product/Market fit: Confirm existence of repeatable and scalable

mechanisms for customer acquisition and retention
 ASSESSMENT 1 & 2 GUIDANCE:
A reader of your report might ask…

▪ What exactly does the title mean?

▪ What is this report concerned with?
▪ Headings – are they too specific? too generic (could be the
same for any subject)?
▪ What is this section about? – sub headings
▪ Where am I up to? - Page numbers would help
▪ What does this figure, diagram, table show in it (a label)?
▪ Where is this figure, table etc explained to me?
▪ What units are the scales, legends etc on the graph?
▪ …See your report from the reader’s perspective, ‘stand in their
shoes’
Structure: some things to check
▪ Conclusions: these must be drawn from the
information previously discussed in the report
▪ Recommendations/ Actions: is it clear to the
reader what action is required from them
having just completed reading the report?
Logical sequence
Information should be presented to the reader in a logical sequence with one
point progressing to the next.

Use a paragraph break and/or new heading when moving to the next theme

Order the information so that it is presented to the reader in a predictable,

logical sequence.

If you find yourself repeating points in several places or stating ‘as previously
mentioned’ these are warning signs that the structure could be simplified by
re-drafting and editing.
STRUCTURE: SOME
THINGS TO CHECK
▪ References: can the
reader find the source
information easily from
the reference provided?
▪ Appendix: ‘useful to
know’ additional
information that could
spoil the flow of the
report if in the main text
section.
Assessment 1
• Please submit by 10am on Monday 4th March
• SORA and Extenuating Circumstances students – please contact
module administrator, Ben Wood, if you need to check your deadline
• You will need to apply to your home school to be considered for
EC, as the Management School implements these but does not
decide them for non Management School students
• Ask me if you have any questions today or by email
• https://library-guides.ucl.ac.uk/harvard - use Harvard referencing
• The best of luck with your report!