Evaluating Your Business Idea With Better Customer Discovery Questions

As someone who is fascinated with start-ups and business ideas, I loved this post called “100 Questions You Can Ask In Customer Interviews”.

In it, the author compiles an inventory of questions you might need to better understand the problem you are trying to solve for the customer, how important is it for them in the context of their life, how they currently solve it (or not), and so on.

Having founded start-ups and advised many other founders, it still surprises me that many people do not take the time to do this work to the quality and depth required. Many do not even know about it or value its importance, which really baffles me. Obviously it is more ‘exciting’ to get on with it and ‘start building’, although this is fraught with serious risks.

In any case, the tool above is certainly a great way to have better conservations with potential customers and shape propositions accordingly.

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Building Resilient Growth

The creators of Blue Ocean Strategy recently a wrote Harvard Business Review article called “How to Achieve Resilient Growth Throughout the Business Cycle”

In it they address this fundamental question: How do you build growth and resilience, irrespective of the stage of the business cycle?

Below I summarise some of the key insight from the article:

Strategize like a market-creator

The authors Chan Kim and Renee Mauborgne argue that based on their 30 years of research, they have identified two types of strategy:

1.     Market-competing strategy, which focuses on beating rivals in existing markets, and

2.     Market-creating strategy, which focuses on generating new markets.

While both types of strategy have their role to play, companies pursuing market-creating strategies are not only better positioned to unlock a growth edge when economic conditions are favorable. They are also able to generate resilient growth during unfavorable economic conditions.

Red ocean and blue ocean strategies are not a binary choice. You need both. But while you’re already focusing on market-competing strategies, ask yourself how much of your focus is going to market-creating moves that generate the resilient growth.

How to build resilient growth

There are four actions companies take to best manage growth through market cycles:

1.     Focus on building a healthy, balanced portfolio of market-competing and market-creating strategic moves.

Both are important. While market-competing moves generate today’s cash, market-creating moves ensure tomorrow’s growth.

2.     Don’t wait for growth to slow to make market-creation a strategic priority.

Prepare in advance. You’ll be buffered by your market-creating move in a downturn cycle only when your market-creating move is already launched or set to launch. Don’t wait. Act now.

3.     Ensure your market-creating efforts are a core component of your strategy.

It shouldn’t be siloed into a function, effectively a side show. If you want to achieve market-creation you need to make it a priority.

4.     Remember, technology itself doesn’t create markets.

What creates new markets is the use of technology and whether it provides a leap in value to the buyer. Ask yourself: Is it linked to value innovation or not?

In a nutshell, the principles focus on both (i) leaders being aware and fully committing to exploring opportunities beyond the short-term and (ii) organisations being organised – or ‘building the muscles’ – through culture, systems, processes and talent to embed the focus on exploring and exploiting market-creating growth opportunities.

The late Professor Clayton Christensen and co-authors applied these theories to the prosperity and income inequality challenges the world faces and continues to face today with the book The Prosperity Paradox

This book and Blue Ocean Strategy is a must-read for anyone wanting to learn more about market-creating innovations. 

 

Rethinking Education and Learning

“Direct to learner” (DTL) business models and start-ups that leverage online, mobile, AI and other technologies have been an area of much focus within the ‘Edtech’ sector for over a decade.

The late Professor Clayton Christensen had made the topic one of his core areas of focus in the last decade of his life with books including Disrupting Class and The Innovator’s University. 

Companies like Coursera, Udemy, Duolingo, Quizlet, Skillshare, Codecademy, Outschool and Lambda are just a few examples. 

Just this sample reaches hundreds of millions of learners all around the world each month. Many learners use these products for free. A small percentage of learners pay. And yet this portfolio will generate close to a half a billion dollars of revenue in 2020.

Another interesting thing about this portfolio is that none of these companies have spent a lot of capital building their businesses. They have all been very capital efficient and most are cash flow positive at this point.

So, what?

• Direct to learner businesses are obviously very attractive for consumers and investors
• They can serve a very large number of learners very efficiently
• They can lightly monetize and yet produce massive revenues because of their scale
• They don’t require a huge amount of capital to build

As they are competing with a sector which broadly, looks exactly the same as it did 100 years ago (schools, universities, training), the current pandemic will massively accelerate significant structural changes in the way people and companies learn, train and educate. 

The University segment in particular is in for a massive shock. I can’t see as much change happening in junior schooling (e.g. ages 3-7) mainly as the main job that these bodies do is child-care. I’m currently parenting a 3 and 4 year old and this is the main reason why I’m sweating on schools (safely) re-opening soon. 

I’ll share further thoughts on these topics in later posts.  

 

Reimagine The Future Online Conference

This Reimagine The Future virtual conference starts today and I have signed up for it.

It is being run by Thinkers50 and Outthinker and features 24 top management experts doing 24 sessions in 24 hours including Renee Mauborgne (INSEAD and Blue Ocean Strategy), Scott Anthony (Innosight), Daniel Pink, and Hal Gregerson. Recordings of every session will be available on-demand so there’s no need to be live.

All profits are going to a range of charities involved in COVID-19 relief. You can access tickets here.

9 Tools To Enhance Strategic Planning

In the midst of the COVID-19 crisis, strategic plans of every company around the world are being torn up and re-written. As an expert in strategy formulation – whether corporate, business, product, technology or operational – I have listed a number of useful tools which can help with this process.

There are many, many tools out there, however these are ones which I have used the most over the past 12 months.

If you have any feedback on these or other ones you have found valuable, be sure to let me know.

1. Strategic Planning Process

There are 100s of versions of this process, whether from academics, consultancies, or other practitioners. In fact, the topic occupies a huge amount space in the strategic management academic literature following decades of empirical studies.

Whilst I don’t have a specific view on this one or other tools, if you just want a rough, simple, logical guide on the general steps, this one works (sorry, I don’t know the source).

2. 11 Sources of Disruption 

This is from Amy Webb, a Professor of Strategic Foresight at NYU and Founder of the Future Today Institute. It is like PESTLE on steroids. I tend to add a few more categories, and you can read about those additions here

3. Strategy Introduction

This is a tool from Strategy Tools, founded by Norwegian academic and consultant Christian Rangen. You can read more about the tool here

4. Strategic Time Horizons 

Another tool from Amy Webb which links strategy to time. You can read more about it here

5. Strategic Innovation Canvas

Another tool from StrategyTools. It builds on the Horizon Planning map and links degree of innovation to time. You can read more about here

6. Industry Shifts Map

The Industry Shifts Map helps you identify, analyse, and develop capabilities to go after new market opportunities. You can read more about it here

7. Business Model Canvas

This is a popular one when looking for a simple way to analyse and present thinking about an existing or new product/service. You can more about it here.

8. Value Proposition Canvas

Another tool from Strategyzer, it allows you to map customer profiles with value to the created. You can more about it here

9. Go-To-Market (GTM) Strategy

There are 100s of GTM tools out there. Whilst I don’t have one which I have utilised every time, this one is a good, simple starting point (I don’t know the source, sorry).

 

Disruption 2020 Symposium

The MIT Sloan Management Review have released a Spring edition entitled Disruption 2020. On 21st April they are running a virtual symposium with about 5-6 speakers who are thought leaders on relevant topics including strategic response, trends, innovation, leadership and prosperity. For example, Scott Anthony (Innosight), Rita Gunter McGrath (Colombia Business School), Amy Webb (NYU and Future Today Institute), and Efosa Ojomo (Clayton Christensen Institute).

I have just signed up for it. Check out the link here if you are interested

 

 

Strategy Tools

Recently I came across Strategy Tools and the founder Christian Rangen. He has put together a series of simple tools and software to make it better, easier, and more fun to think about, and develop, strategies and plans within businesses large and small. There are multiple ways to use the tools, whether in-person or virtually via canvasses, simulations, games, apps, and more.

There are many other use cases for the tools (e.g. government, executive education etc) however the point is well made: the practice of strategy has become too hard.

As a strategy practitioner and consultant for over a decade, he is 100% right. Why this is the case is a post for another day.

For example, the below ‘Strategy Intro’ tool is visually, super simple. The hard part is obviously getting the details filled out. But having an easy way to represent something complex – in a way a teenager could understand – is a huge benefit for firms and practitioners.

This is especially relevant for those firms who believe that ‘strategy’ is spending 6-9 months every 3-5 years to create a 300 page document full of power-points which no-one ever reads, nor can remember.

There are 30+ more of these tools available for different business requirements (e.g. scale-up planning, transformation). Over the next few weeks I’ll be learning from Christian (via the Strategy Tools Coaching Course) deep-diving into these. I’ll be sure to write a few posts on how it goes, as well as the most relevant tools I come across.

Lockdown Learning

I saw a Ryan Holliday blog post today (here) where he talked about how to think about using your time effectively during the Corona Virus lockdown. In it, he referenced a quote from the author Robert Green:

There are two types of time: alive time and dead time. One is when you sit around, when you wait until things happen to you. The other is when you are in control, when you make every second count, when you are learning and improving and growing.

As we enter week 2 of lockdown, I certainly haven’t been proactive or strategic about learning or improving anything specific. But I have noticed the following changes in behaviours and habits:

• Running to make up for no sport (45min runs with our labrador every other day)
• Creative cooking (I cooked an amazing southern fried chicken – using panko breadcrumbs and buttermilk – and chips…on a Monday night!)

• Blogging activity has increased (have posted 5x compared to x1 over past 3 months)
• Significant more quality time with our 3 and 4yo (I’m doing the lion-share of home-schooling at the moment)
• Significant more VCs with family and friends (this includes a 5hr session using HouseParty on a Sat night with 3 other local friends…let’s just say Sunday was very tough)
• Sleeping has stayed about the same (I typically get around 8hrs per night, which I need)
• Podcasts, audiobooks, books, online articles etc have remained the same

I have downloaded Duolingo although am yet to take the next steps. I need to co-ordinate with Lydia on which language we should attempt.

Over the next few weeks, I anticipate that the above will continue. A major addition will be an independent work project or 2, and hopefully be in early development by the end of April. Whether this is research, a product (e.g. online course, e-book etc) or something else, I am yet to decide. But I will post an update here soon when I know more.