MBA 6262 Blogpost 2 Gurudev Ramesh
Welcome to my second blog on the lessons learnt in the class MBA6262. Just a
quick review of my first blog. We were in a situation where we validated our
assumed value proposition of providing the convenience of laundry pickup and
delivery service. But our assumptions were not so realistic when we talked to
people. In this blog I am going to elaborate the further steps in validations we did,
what we learnt through the validation process, and our decisions based on that.
After the first round, we decided to validate our "leap of faith" assumptions again, which was to test our value hypothesis and growth hypothesis with our customers. Our value hypothesis was that we assumed laundry was a time consuming process, and people will be willing to pay for the services which gives them the convenience of someone else doing their laundry for them in just a click. To validate this we took many approaches as mentioned by "Eric Ries". First, we stepped out of the building and conducted face to face interviews. Face to face interview covered 3 focus groups - students living in the dorm (Assumption: they can probably afford the service), working professionals (Hard pressed for time) and finally the elderly (physically demanding work).
In our face to face interviews, we discovered our hypothesis was only partly correct. Everyone agreed it was a time consuming process but they thought that the pickup and drop service was expensive, and was not ready to pay more for it without even knowing how much it actually costs. This made us to do an another MVP based on Eric quotes on “Village laundry service”, where the CEO will mount the portable washing machine in a van and roam around the city to see whether people were really interested in it. We thought we could implement this methodology within our financial capacity. We printed professionally designed flyers to let people know that there is a company which offers free pickup and delivery of laundry and as an early bird offer their first laundry would be for free. We posted these flyers in the laundry rooms,dorms and bill boards to see if we would get any organic customers. If we can get that,then our value hypothesis holds true.
When the “Dropbox” CEO Drew Houston was pitching the idea of drop box to his investors, the most common questions from the investor was "like another file sharing application?". So he created a Minimum Viable Product as a video which explained the cool features associated with the service following which the beta waiting list of dropbox users went from 5000 to 75000 overnight. We used this as another validation process. We thought we could implement this to create the value awareness of our service. We believed our service does provide some value to the end user. So we listed down all the features we thought could mean something to our customer and made a simple animation video. Unfortunately, we did not get the results we expected from both the validation processes.
In the mean time, we validated the growth hypothesis by talking to the laundromats to see whether they were interested to be a part of our services? To our surprise we got the full conversion rate from the laundromats. We looked into our business model canvas again and realized the only problem we were facing were the customers, who are not interested to pay for the service initially. According to the Eric’s we have the answer for our “Analog” laundry and dry cleaning services are being used by the people in the day to day life. That’s the reason more than 100 plus laundromats and dry cleaning services exists in Ottawa. This lead us to explore the hidden barrier of “Trust issues". It's hard to convince people to give their valuable clothes to strangers who offer services at a cheaper price. To think about what I learnt from the week 1 of MBA6262 (Tim Hortons supply chain), why do we have to focus only on the end users, when there are numerous places where we can be a part of their existing business. Yes, our Eureka moment! We know the technology and we have better solution to improve their business. We will be providing value to them. Why can’t we act as “Software as a Service” (SasS) provider to the laundromats? So,finally we decided to enable the technology in the age old business. The lessons learnt in the class played an immense role in molding the business to the next level. Upon all that, I was inspired and realized that entrepreneurship is really a practice and anyone can be an entrepreneur provided the passion to learn from one’s own failure.
After the first round, we decided to validate our "leap of faith" assumptions again, which was to test our value hypothesis and growth hypothesis with our customers. Our value hypothesis was that we assumed laundry was a time consuming process, and people will be willing to pay for the services which gives them the convenience of someone else doing their laundry for them in just a click. To validate this we took many approaches as mentioned by "Eric Ries". First, we stepped out of the building and conducted face to face interviews. Face to face interview covered 3 focus groups - students living in the dorm (Assumption: they can probably afford the service), working professionals (Hard pressed for time) and finally the elderly (physically demanding work).
In our face to face interviews, we discovered our hypothesis was only partly correct. Everyone agreed it was a time consuming process but they thought that the pickup and drop service was expensive, and was not ready to pay more for it without even knowing how much it actually costs. This made us to do an another MVP based on Eric quotes on “Village laundry service”, where the CEO will mount the portable washing machine in a van and roam around the city to see whether people were really interested in it. We thought we could implement this methodology within our financial capacity. We printed professionally designed flyers to let people know that there is a company which offers free pickup and delivery of laundry and as an early bird offer their first laundry would be for free. We posted these flyers in the laundry rooms,dorms and bill boards to see if we would get any organic customers. If we can get that,then our value hypothesis holds true.
When the “Dropbox” CEO Drew Houston was pitching the idea of drop box to his investors, the most common questions from the investor was "like another file sharing application?". So he created a Minimum Viable Product as a video which explained the cool features associated with the service following which the beta waiting list of dropbox users went from 5000 to 75000 overnight. We used this as another validation process. We thought we could implement this to create the value awareness of our service. We believed our service does provide some value to the end user. So we listed down all the features we thought could mean something to our customer and made a simple animation video. Unfortunately, we did not get the results we expected from both the validation processes.
In the mean time, we validated the growth hypothesis by talking to the laundromats to see whether they were interested to be a part of our services? To our surprise we got the full conversion rate from the laundromats. We looked into our business model canvas again and realized the only problem we were facing were the customers, who are not interested to pay for the service initially. According to the Eric’s we have the answer for our “Analog” laundry and dry cleaning services are being used by the people in the day to day life. That’s the reason more than 100 plus laundromats and dry cleaning services exists in Ottawa. This lead us to explore the hidden barrier of “Trust issues". It's hard to convince people to give their valuable clothes to strangers who offer services at a cheaper price. To think about what I learnt from the week 1 of MBA6262 (Tim Hortons supply chain), why do we have to focus only on the end users, when there are numerous places where we can be a part of their existing business. Yes, our Eureka moment! We know the technology and we have better solution to improve their business. We will be providing value to them. Why can’t we act as “Software as a Service” (SasS) provider to the laundromats? So,finally we decided to enable the technology in the age old business. The lessons learnt in the class played an immense role in molding the business to the next level. Upon all that, I was inspired and realized that entrepreneurship is really a practice and anyone can be an entrepreneur provided the passion to learn from one’s own failure.
Idea validation is an essential part of any new product, particularly for startups. We provide professional idea validation services for startups to give them real-world feedback and assessment of their proposed innovation. We eliminate the guesswork, bust myths, correct assumptions, and bring the product to acceptable levels to the end-users.
ReplyDeleteIdea validation is an essential part of any new product, particularly for startups. We provide professional idea validation services for startups to give them real-world feedback and assessment of their proposed innovation. We eliminate the guesswork, bust myths, correct assumptions, and bring the product to acceptable levels to the end-users.
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