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Our technicians are available to answer any question you may have even if you did not buy your unit or part from us. In a hurry? Order direct from our store. Call today and we ship today. The object of the MVP is to get a product out there for the early adapters (called earlyvangelists here) to play with. Putting out a MVP forces developers to focus on the important features, not the bells and whistles. The product can be refined once there’s customer feedback. Business Model Planning: The authors recommend the Business Model Canvas (laid out in Alexander Osterwalder’s Business Model Generation ) as a good tool to help explain how the company plans to make money. Customer Segments: Includes customer problems, needs or passions; customer types (for example, end users, influencers, recommenders, buyers, etc.); customer archetypes; a day in the life of a customer; and a customer organization and influence map. Channels Hypothesis: For physical products, this includes a description of how the product gets to the customer. Think about the suitability of channels for your product, and the authors recommend that startups pick just one channel that has the most potential for your product. Market-Type and Competitive Hypothesis: Describes which market a product fits into: established market, new market, extension of an existing market, re-segmentation, etc. Once you know the market, you know something about the competition, and you can come up with a preliminary plan for that. Customer Relationships Hypothesis: Describes how you will get, keep, and grow customers. For physical products, there are four “get” stages — Awareness, Interest, Consideration, and Purchase. Devise several different “get” strategies and test them. Customer retention programs come into play during the “keep” phase, and the “grow” phase focuses on selling more stuff to existing customers. The “keep” phase might involve some of the same retention programs as for physical products, but might also include components like emails, digital support, etc. The “grow” phase involves getting current customers to spend more or bring other customers to the product. Key Resources Hypothesis: Describes physical, financial, human, and intellectual property resources. This component also includes a dependency analysis: what are all of the things that have to happen that the company can’t control, and what are the risks if the things you’re dependent on end up failing. Contingency plans are important, here. Partners Hypothesis: Involves listing all of the partners you’ll need and identifying what you need from them and what they’ll get in exchange. Revenue and Pricing Hypothesis: Includes the following questions: 1) How many items will we sell? 2) What’s the revenue model? 3) How much will we charge.Use this tool beyond a one-time plan and update it once a week. Over time, you’ll have a record of the company’s evolution. Size of the Market: When it comes to estimating the size of your market, one way to think about it is as follows: Total Addressable Market (TAM): the universe where your product lives Served Available Market (SAM): the people that can be reached via your sales channel Target Market: those who are your most likely customers You’ve got to do research here. Look at industry reports, press releases, libraries — anywhere you can get metrics that help you gauge the size of the market. It’s going to be tricky to estimate brand new markets, so consider looking at adjacent markets and see if you can find any comparable companies. Get ready for customer contact: For physical products, contact potential customers that you can test your ideas on. Test how customers perceive the problem: A problem presentation (not a product demonstration) for physical products that illustrates your understanding of the problem and your proposed solution. Get information on the market and competition: Understanding the environment in which a physical product is operating may involve going to trade shows, conferences, competitor lunches, etc. Testing Your Solution: Following customer problem testing, this phase tests the solution, and the authors detail five steps here: Update the business model and team: See how the new information fits with the old hypothesis, and decide if a change of strategy (pivot) is needed or whether proceeding makes sense. This is also the time to share what you’ve learned so far about the customer with top management and investors. Update the business model (yes, again): Using what you’ve learned from the solution tests, update the business model and decide (yes, again) whether to pivot or proceed. Low customer enthusiasm at this stage is a huge red flag. Find board members: It’s good to get some friendly outside help. Verifying the Business Model: Still not at launch yet, this phase of the customer discovery process involves answering three critical questions: Have you found product-market fit. You have to be sure your product is a good fit with the market. Is this something a lot of people need. How well does it solve the problem it’s made to solve. How many people would buy this thing. Who are your customers and how do you reach them. Can you make money and grow the company. Figure out if your solution is a winning proposition. Crunch the numbers and do a rough estimate to see if there’s any chance that you can make money with your new product. And, you guessed it, at this point you should once again pause and decide whether to pivot or proceed. Blank and Dorf detail four phases in the customer validation process: Phase I. Get ready to sell. Phase II. Go live. Try to sell. Phase III. Refine your product. Position your company. Phase IV. Analyze. Pivot or proceed. Founders cannot lead from a distance here; they have to be directly involved in process. Phase I — Get ready to sell Steps for this phase of customer validation really are different for each channel, so it’s helpful to consider each separately.