How To Get From Big Idea To A Validated Business Case: An Overview Of The Testing Process

Business ideas is really important if you're launching a startup or you're trying to drive an innovation project in a large company. We understand that when we're working on breakthrough ideas, most of the things we think we know may not necessarily be true. So today you have a chance of watching a startup that has volunteered to be dissected and investigated and poked and prodded by David and Alex to find out exactly what kind of business model they have, what assumptions they're making, how to prioritize those assumptions, and how to make those decisions. So hosting you today is me, Tendayi Vicky, associate partner at Strategizer. But we're also joined by the two authors of the book Testing Business Ideas, the illustrious David Bland. I call him DJ Bland because that just works with his name. And then of course, the inventor of the business model campus himself, Alex Osterwolder.

And.

And we'll be working together today with Marisa Toldo, who joins us from Germany. Right, Joining us from Germany, yes. And the startup is Space youe Place. And this is a company that helps organizations that are people that are working from home set up the home offices and make them comfortable and also really great for the work that they're supposed to be doing. So given what's going on in the world today, I think this is a really appropriate kind of workshop to have. So the going to be fun, I think, to sort of go through this. And so what we're going to do is Marisa will quickly describe her business model to us so that we understand exactly how the company works. And then she will get tested by Alex, who's going to be questioning what her assumptions are. And Alex will write down those assumptions and then David will do some assumptions mapping where they'll be prioritizing which assumptions she should focus on first. And then after that, we'll move on to how you design experiments or how you choose the right experiments with the assumptions that would have been prioritized. And then finally we'll go to experiment sequencing, which is something you want to do. Like, in which order do you test your ideas, like which experiments go first and then which experiments go later. And that's something that's also important to think about. Now, all these concepts and principles will be part of our virtual masterclass on testing business ideas. Coming to you live September 15th. And because you joined us today, you get access to this discount code. It's a 10% discount code. And the link, Matt is putting it in the chat right now. So you can click on the link and you can sign up for the masterclass running 15, 16 and 17th of September this year 2020. So please join us. And with that we now move to the main show. Welcome Marissa.

Thank you.

It's good to have you. It's really, really good to have you. So I'm going to put up your business model canvas and then you're going to have to talk us through it so that people can understand exactly what your business is before Alex and David start working with you on that. So here we go.

So our value and proposition is to provide employees of a mid sized enterprise's life workshops to select employees to help them improve productivity and well being. Our customer segment is the enterprises because they will pay directly by them and our sales channels, they will pay us through one of the workshop fees. Secondly, we provide a video series to the whole company through a recurring revenue model based on licensing fees. Our main activity is to build up a brand through networking and promotional offers provided by our sales team, which adds quite a bit of marketing costs to our cost structure. The other key activity is to share our knowledge around building a well functioning workspace. This is our key resource which also adds significant legal cost as this kind of knowledge sharing requires a lot of legal consulting. Thank you.

All right, so I'm going to have to do that again. So I think folks just need to understand so you can explain a little bit. Right, so this is not going into people's houses and helping them design their workspaces. You're doing it via live workshops and sort of pre recorded videos, right?

Yeah, we like to teach the people how to fish and not just give the fish. So we believe that help people giving the right tools. So we say that we give them like a toolbox so they are able to do the thing by their own.

Right. So they get the toolbox and then they get to do and then they set up their space on their own, given the resources that you've given them and you obviously you work with the mid sized enterprises to kind of help this happen. Okay, so, so that's very clear. If folks have questions about it, they can also type them in the chat window. But Matthias, if you can take over my screen now so that Alex can start working with Marisa on mapping the assumptions. So over to you Alex and welcome to the show, brother.

Thank you, Tendai. So just a first quick remark. Right, so this session is not about judging the business model per se from a design perspective. What we're really going to focus on is testing the business model. Does it fly in the market so we've done other sessions before where we looked at business model design. Just the first quick comment, maybe, you know, for people who are listening, enterprises sounds like a segment, but we would have to normally break that down into the decision makers in the enterprise, the people who participate in the course, etc. Right. So we didn't go too deep to keep it simple for this short session. So, Marissa, I would like to start with asking you a couple of questions. And I know your business is not from scratch. You've been playing around with some of these things for two years. So some of the assumptions are validated. But let me ask you, what are some of the things that need to be true for this idea to work? So what are the underlying assumptions? And reminder for the public? There are three types of or four types of assumptions. Desirability assumptions around do customers want it? Feasibility assumptions, can we actually build this? Viability assumptions, can we make money from it? Can we earn more money than we spend? And adaptability assumptions, is it the right timing? So when you started out, that's now two years ago, you can even mention those assumptions so we actually know what you figured out and what you didn't. Maybe give us the top three assumptions that you already know are true by now because you did some testing. What are some of the assumptions that you now know are true? You didn't know when you started?

No, when I started, pre Covid situation was another word. And the point is, I thought that the people want to have that, but they, they didn't understand why. So after we do the testing and we were at their space and we helped them, they say, wow, this is really important. We didn't realize that and for me was the urgency and let me stop.

You there because then we'll break it down. So Matthias, who's in the background typing this from our platform team. So the first assumption, if I heard you correctly, is you believed. So we'll write the assumption was that people need this kind of workshop. Is that a fair characterization? Yes, and we won't put too much detail right. I'll just say this type of workshop, we have the details in the business model canvas. Okay, so that's the first assumption. What else?

Second, we thought that we could not make money about that. And Covid show us that it's a huge market there unexplored.

So let me understand this because I've never heard an entrepreneur who said, I believe I can't make money from it. So when you started out, you probably believed you could make money with something Right. What did you think you could make money with? What was the first assumption? To earn revenues.

The first idea was to make like a interior design thing and not a workshop thing.

Okay.

And we were structuring other type of clients. We were thinking about the self. How do you call it that?

The.

Self employees and not the self employed. Yeah.

So let me. Let me ask you to clarify a little bit. So we had people need this kind of workshop first assumption, but you weren't going to earn money from that, is that right?

We thought that we could earn money, but after Covid, it shows that we could make a lot of money of it.

Okay, okay, okay. But that was an assumption. So the second assumption I didn't really deeply understand. So it was that people would. If I understood right, you did think you could earn a fee from that. So people would pay for that workshop. Right. Okay. But you also thought there was another revenue stream. If I heard you direct correctly, what was that other revenue stream?

The idea was to go to the people's place and do interior design service there.

Okay. So the second. The third assumption then that I would put there is people would pay. This is a new one. People would pay for interior design. Is that right? More or less, yeah.

Okay, cool.

David, don't hesitate to jump in.

Yeah, I was just listening. So a couple things. One, we typically put like we believe in front of these, so we'll get there. And then also I saw referrals in here. I was really curious. What assumptions are you making around referrals here?

Ask again.

Because, for example, I'm assuming referrals are. Is it employees referring other employees in a company? Is it people from a company referring people to another company? It seems like referrals are a channel. And I'm just wondering. It feels like the assumption that people will refer this to other people, it's kind of where I'm coming from.

Yeah, for me it was a big assumption that if you're happy with your environment and you feel happy with the service, you will make a referral. And that's happened also with the company. Because the first cost for a company is the employees. And you want to have a productive and healthy employees.

Let me stop us there for a second because what's happening right now is what we call at Strategizer, blah, blah, blah, when there's a disconnect between what we're saying and what we have on the sticky notes. And this is happening because Matthias has to write and, you know, so let's just catch up with the writing. Right? So one assumption that is missing there is people and we took that away. Right. But still should see there. People will pay for workshops. Right. So that was there. So that's an additional one to interior design. So you need to keep that one and what you just said. Let's capture that one as well that David just asked around referrals. So your assumption and always correct me if. Because I'm putting words in your mouth. So if I write, if I say wrong, you got to tell me, Alex, that's bullshit. So the fourth one here was people will refer your service. Is that correct? Is that what we heard based on David? Okay, so and the general remark in the workshops you do please always make sure that the capturing the writing is up to date with what people say. Because it happens very often. People get so into the conversation that we don't have the visual aligned. And this is really, really important because otherwise we're just talking and we're not capturing. Right. So sometimes it's good to slow down. So sorry if I was slowing you both down. David and Marissa. David, anything else?

People also get so into the conversation they lose track of time. So what I'm gonna do now is force you to move to another category of assumption so that we at least cover maybe feasibility and viability.

Yeah, perfect. So excellent. You know, Swiss timekeeper, Tendai, a general remark. Right. And David, maybe you can say, how long would an exercise like this usually take to do the full generation of hypothesis? How much time would you allocate to this?

Yeah, at least 90 minutes. And if possible, this is almost like a fishbowl exercise where we're all giving you feedback. But ideally you would have your co founders and have a cross functional team. So you have a well rounded view of what your assumptions are. Not just technical or not just design or not just business, but having a nice, well rounded view of all your assumptions.

Great. So let's move to the next exercise, otherwise Tendai is going to whip us.

I'll just ask a quick clarification question. So the people who pay for the workshops assumptions, Right. Those are viability assumptions. Right. They're not desirability assumptions.

Right.

Okay, great.

So if we wanted to color those, we could keep those green and then we could put people need that's more of a desirability one. So that one could be orange if we want to color code.

It's an excellent question, Tendai, because often people go right away to viability, but then we don't really know, well, why are they not paying? Maybe they actually need the service. But it's something in the value proposition. So that's why it's really important to take a longer time frame for this. David and I would really go deep and ask you questions, tons of questions to get all of those assumptions out there.

Yeah. Another way I also do this is sometimes I have teams silently write them just so they don't talk over each other. But then you have to dedupe and all that too. So. But this looks good. And the referral is also a viability because that is part of your. I believe that was in your revenue box. Don't get too caught up in the themes. The point where you start arguing over themes is usually where this exercise stops being.

And then we've also got like a minute. Right. So there's a question that's being asked about. People can't see what the problem being solved is here. Is it mental health collaboration, et cetera, et cetera. And the problem hypothesis is something we often capture as well.

Right.

Under the desirability. So what assumptions are we making about what would make people want the workshop? So we're going to dive deeper. So Marisa, just quickly, if you could just say something about that and then we can move on.

And let's add that. So let's add that, Matias. So what Marisa is going to tell us is the core kind of challenge and problem, if we want, but could also be an opportunity. Right. So what is that? In one sense, what's the core hypothesis? That they care about what well they need.

They care about the productivity and the health. So you really need to have a well designed workspace because many people work from the sofa, from the floor. And then you have a back pain, neck pain, you work with that terrible lighting and then you're wondering why your eyes are so tired and you have a headache. Etc, etc, etc. It's really quite interesting topics.

Yeah, yeah. So Matthias, just a quick comment there. Make two stickies. People care about productivity and then another one that says people care about health because those are separate assumptions. And then color code them orange and move them to the desirability section. And then David can take over.

What I would also add is because you got more granular, Marisa. I would add that people care about productivity, people care about health as a general. But you actually added they care about productivity and health related to the office design. Right. That's a completely different assumption. One is very high level and one is much lower level. So we need to actually add that one. Right.

Perfect. Okay, cool. So with that kind of deep dive. And you can see the analysis that we're making here. We want to know all the things that have to be true for an idea to work because if it turns out that those things are not true, then we either have to change the idea or, or maybe stop working on it entirely. So now I'm going to hand over to you, David, and you can take Marisa through the assumptions mapping prioritization exercise.

Yeah. And really quickly just to dive on this kind of unpacking the problem. If you use the value prop canvas, right, we're talking about jobs, pains and gains and then how you solve them. Products and services, pain relievers, gain creators, those are all desirability assumptions typically. So we do dive into that level too. Today we're keeping it at the business model canvas level. Okay. So this is a really interesting exercise. So basically the reason we do this is because we want to give you focus. So not everything is the most important leap of faith assumption that if proven wrong, will kill your business. Okay. And so some people grapple with this and they go, wow, unimportant. I didn't write anything that's unimportant. Maybe. However, they're not all the most important things. So I typically start with desirability. And if you look at the other axis, it's do you have any evidence, so observable evidence that's quantitative or qualitative or both. And, and do you not have any observable evidence? And so this is somewhat subjective. We're not trying to quantify this. We're basically looking for things to be relative here. But with desirability, you know, people need this kind of workshop. Do you have any supporting evidence, any evidence, observable, quantitative or qualitative that supports that statement?

Well, when you. We made already like 10 free workshops. And the good point, all the attendees were extremely happy. And then they sent me an email or they called me and say thank you after 1, 2 weeks. Thank you a lot. We didn't realize how much important was this and that and that and we change it and now we feel better, we are more happy there and we are more productive. So we tested in that way.

Okay. So I would put that in at the top. And so it's really important because they don't need it, it doesn't matter. And kind of in the middle there. And I think eventually, again, this is a kind of speed dating version of this. We would start to break these out into like what kind of people, what different types of workshops, and be much more specific. But we're just trying to give people a sense of how this works today. What about people care about their productivity? That's pretty general statement.

Well, if normally you have like two words. When the people work from home, the ones they love it, the one they hate it because they cannot get to concentrate. And everything and everything depends on the needs of the people. And this is a point that normally is not there. So we ask the people, what are your needs? What do you want to have in order to check and to allow the space work for them? And productivity means you can get concentrated in your space. You get tired after working few hours. Why this is something that disturbs you in the space and you don't realize why.

I think you can also use proxy metrics here. For example, in general looking at adjacent industries and seeing do people actually care about their productivity? Just be careful how far you extrapolate there. But I believe that would go to the top left of the previous sticky. So over a little bit more. I know it's weird because I'm telling you like it's like moving furniture here. And it's relative, right? So once you get one or two of these up, you can say is it more or less important to the success of my business? And do we have more or less evidence with regards to supporting the statement? So people care about their health is the next one. Do you feel like that with regards to, let's say people who need this kind of workshop? Do you feel like you have more or less evidence on that or is that more or less important than people needing the workshop?

Well, 80% of the population have a back pain. We sit in too much. One of the main points. So sitting is the new smoking. This well known phrases and we don't realize how important is to have a good sitting, a good distancing and an ergonomic place. So we pay that in our body. We pay that when we don't have the proper distance with our screen, when we work many hours in that way this is killing our neck and et cetera. So I'm trying to keep short things.

Okay. So I would put that actually in between the other two. Then just giving you kind of a feel for how this works. Viability, I think is.

Can I jump in for a second? David, just one thing. This is actually very important. So I think there when we go deeper on evidence, it's not evidence that 80% of people have back pain. That's evidence of their pain. It's not evidence that they actually care and do something right. So we always ask Very deep questions and say, well, okay, people, 80% of people have back pain. How many percent of those 80% actually are doing something about it? So we go really deep and make a difference because those high level statistical reports mean nothing to an entrepreneur. Right. So what you really want is that real data. And so we always drill deeper. Sorry, David, I just wanted to jump in because sometimes people mix up some kind of fact that you can see in reports and then the entrepreneurial reality of actually selling a solution.

Yeah. And also some of the comments I'm reading, obviously these would be, if we had more time, we refine the wording even more. So people, we would be like the specific customer segments. Exactly what kind of health do they care about? And also we pull from kind of a lot of Steve Blank's work. Right. With regards to do people have the problem? Are they aware, are they seeking a solution to the problem? Right. So that sort of pyramid helps us see where we are on that spectrum as well. So we do factor that in. Okay, really quickly, let's talk about viability. Yeah, let's talk about people will pay. What evidence do you have that people will pay for this?

Well, people don't like to pay about that, but the companies like it. And then we shift that. They say we are working, why we should pay for that. Self employed people don't want to invest on that because they think they know. And for that reason we shift that pay to the people to pay to the company and people enjoy the benefit.

So people in this case is really the employer. Is it kind of digging in a little bit deeper now? It would be careful time tonight. Is it like hr, Is it like the HR director? Like who would in the company would actually sponsor this?

Human resource and office managers, basically, because they are in our point of view, they are the ones aware about the healthy and the productive and they care about the people.

Okay, so human resources and office managers. And then what evidence do you have that they will pay for this? Well, have they paid?

We are working on that. So we already sent few now we already sent few budgets. And when you talk to them, they are the one who are aware of that. And they want the people, they want their employees feel healthy and feel productive.

Okay, but they haven't paid yet. But they haven't paid yet.

No. Okay, so that's why we have some budgets run away. And yeah, we changed the model a few months ago.

Let me, let me also ask a question. Right? Because when we say a lot of evidence, no evidence. Right. You said we talked to People. How many people did you talk to? Let me be more specific. How many HR and office managers did you talk to about paying for this workshop? Approximately, you know, ballpark figure.

Okay.

In South America we talk about with 15 peoples and in Berlin with 10.

Okay, so there's some evidence. So we can move it maybe. David, if you agree a little bit to the right. But as we know what people say and do is not the same thing. Right, but we have some evidence. Not completely zero. Right.

I'm just chiming in. David, do you want to quickly map the last two, kind of put them where they are? Because what I would love for people to see you do. And so. And that's the alarm there. What I would love for people to see you do is to refine a hypothesis.

Right, which is. Yeah, yeah, so just quickly place those.

Two without asking too many questions and then we can move on.

Yeah, so people would pay for interior design? I feel like that seems like it's still important, but it's not as important as HR managers. It's pretty related. So maybe a little bit below the HR and office manager will pay. And then people refer our service. It seems like it's important, but it's not the most important thing. Like it's a channel, but it's not your only channel. Referrals and word of mouth. So I would put it maybe a little bit higher, a little bit more to the right because you really don't know if they'll actually refer. But you can test it. Right. So okay, so again we're just trying to get a feel for what this looks like. Again, we're giving you a very rushed version of it, but I think you're getting the sense of how this. Just organize your thoughts, right? Because you already have some desirability evidence, but really your risk moves around. So now it's moving kind of more to the viability. It's like, is this a startup or is this a hobby? Okay.

And then so David, you can pick any one of those you like as the one that you know, we can focus on for the experiment design. Maybe it's the top one, maybe do some call to action experiments later, whatever. But we need to move to. Yeah, making those hypothesis more precise, testable, etc.

Yeah. And so this is a question I get a lot because it's called assumptions mapping. Right. And people like are these are hypothesis or assumptions? And really a hypothesis testable assumption. We also apply a couple more kind of characteristics to that. But be mindful, you at home trying to do this don't put your teams through like some kind of crazy rigorous exercise to work everything and then map. And then they map a lot of stuff that's unimportant. And they're like, you literally wasted my time mapping stuff that doesn't matter. So you have to walk a balance there. Believe me, I've learned from experience, learned from my mistakes. And basically the whole thing above, you can really just take any sticky that's a blow that line and just throw it away. It just doesn't matter. It's not going to be short term experimentation stuff and people have a hard time with that too. So just little facilitation tips there. Okay, so moving over, let's take HR and office managers will pay for workshops. So let's drag that one over. Thank you. And then we have some. I believe we have some of the criteria here. Yeah, yeah. So testable, precise and discreet. And it's something that Alex and I have been going back and forth in the book and just really trying to apply some rigor to this. So one, I think these are two different hypotheses. Right? HR is a little different than an office manager. So the first thing I would do would split these out into two. So I would say HR managers will pay for workshops, then office managers will pay for workshops. And then I'd also kind of challenge you on what kinds of workshops. I mean, do you just have one? Do you have different types of workshops? Let's kind of dig into that and make it a little more precise.

Well, we start with one workshop that we call it the Toolbox and we package there in 90 minutes, a lot of stuff. And we are testing now and we decide to focus on that because it's like all around workshop to give the people the tools. So for that reason we start with one. I already have two in mind, but I didn't want to mix it up. And we still offer the one on one consultancy service.

So what do you charge for your toolbox workshop?

90 Euro per person.

Okay, so that's again, you can say HR Manager will pay 90 Euro per person for our toolbox workshops. All right, perfect.

That's really precise.

And so this is kind of like again, it's not. I mean, I know, I mean it's for Tyndall. Right. It's more like a social science in a way. We're not proper. Well, besides Tendai, we're not proper scientists here. But basically this is kind of where it gets hard is okay. It's not just take something like people will pay and Try to design, experiment. If you try that with your team, you're going to have a really hard time running that and realizing, did it actually help or hinder what we're trying to do? But when you start kind of picking it apart and deconstructing it and saying, okay, can we be more precise? Is this testable? Is this discrete? And this is sort of what we're talking about again, what I'm trying to say is don't do all that rigor right away because it's going to overwhelm your teams. Try to do it, lead them in through this exercise. I'm really curious, out of these two, Alex, do you have anything else you would refine here or change about these two? Or is there another one that you would think.

Yeah, two comments right before some of suggestions, you know, and I'm sure you can confirm this, David. This is actually the thing that is rarely done, right? So the hypothesis that teams, even if they, you know, sometimes people don't even think about hypothesis, they go ahead and build something, right? Because engineers love building shit. But so actually working on the hypothesis and getting very precise is extremely important. And the more precise, you know, the better, because you want to see it this way. And if you could give that hypothesis to somebody else and they would immediately understand who are you talking about and what are you talking about? That's a good hypothesis, right? So here, I think this is great already. We got the price, we got the type. But what we didn't say is, what are we talking about in terms of geography? Does it matter? I would add, is it worldwide or is it a country? Is it a continent? We didn't say the size of the company either, because an HR manager at Nestle or an HR manager strategizer, not the same thing, right? So I think we need to get a little bit more granular with what type of HR manager. We don't need to overdo it. But if we're too vague, what's going to happen? We're going to have two conversations with an HR manager and an SME, and we're going to have two conversations with an HR manager at Neste. If we didn't say we want those two segments, you know, it's not really good because then it's random. So I would make that. What do you think, David?

Yeah, I agree. And it gets the process we just keep refining. Right now there are diminishing returns to refining, so you don't want to spend a day on this. But yeah, I think just because it was Euros. I was just assuming it was you, but yeah, is there a specific geography you're looking for? And then is there a specific type of company that not just mid size but is it tech related who would benefit the most? And again I'm more believer of the niche to win strategy. Where it is you try to do something very specific for a very narrow segment and you get a better signal whether you're onto something or not and then you can pivot from there. But instead of trying to do something for everyone and then not doing it that well for everyone and then realizing, oh, I don't know where to kind of place my bets to go forward. So yeah, maybe a question back to you. What kind of geography would you focus on? And is there a specific type of company you'd think would be an early adopter to this?

Well, I decided to start where I have my own resources. So South America and Germany. Yeah, I was born in Venezuela and grew up there. So I decided, well I will try and I'm an architect, I'm a creative. So I say we spread the word. So we start with webinars in Spanish to test Spain also because I live in Barcelona many years also and we also did some webinars in Germany so in Berlin specific with co working spaces and we thought that it will be interesting for a middle sized company.

But.

We start to have some contact with the big companies and they are more appealing and to understand the potential of the workshops and to be honest, I like to work in South America because Spanish is easy for me and I know the culture and I like Berlin. So we decided we start with these two and then we check also Spain and in Italy where I have relatives and contacts. So I say, well open my agenda and let's check where I have the contacts.

Cool.

Quick question to David. Would you separate, you know, the different countries into different hypothesis or not?

And then I think because I do believe the jobs gains and gains and I see this with teams I'm working with even this week the jobs pains and gains differ for region. So I've literally like even ran workshops in like Toronto, coming from the US and people just say, well it worked in the us, it's going to work here. And it's like, well just because the US and Canada are next to each other doesn't mean they're a lot alike, especially now. So basically don't just assume that the jobs pains and gains of HR managers in Germany are the same jobs pains and gains in the ones in South America. So I would actually Kind of break it out. But again, there are diminishing returns here. But this seems like we're closer to a level where we could actually design actionable experiments for.

Exactly. One last comment. Marisa, I see you wanted to say something there.

Yeah. Here the cultural background of the country and the people play a main point. But also companies who work with a lot of expats, they have another environment. So I live in different countries and I'm able to be flexible on that. And I understand quite easy. And when you design office, you are quite standard with the requirements.

So.

Okay, perfect. I think those are very good conversations. The interesting thing about this is people might think that this is being too pedantic to break things down like this, to make them testable, precise and discreet. But it's really helpful when you come back with data, because remember, the reason why we run experiments is so we can gather data that allows us to make decisions. So now when you. I've seen teams come back with data and one team is like, customers love it. And then another member is like, customers hate it. That's weird. Like, who did you talk to? Oh, well, I spoke to the HR managers in South America. What did you talk to? I spoke to the HR managers in Germany. Okay, well, that's the problem. So we really have to be precise and discreet and really make sure that the hypothesis that we're developing are actually testable. Okay, cool. So now we're going to move on to the third part of our workshop. So we now have our hypothesis. It's testable, precise and discrete. And so now David and Alex are going to help Marisa choose and design an experiment for these hypotheses.

Let's pick the top one, right? Let's just pick one. Matthias, maybe you can throw the other one back. And you know, there are a lot of questions in the chat and obviously we can't go into all of it. We want to walk you through the process. We're staying very high level, so a lot of this would be more granularity and we take a lot more time for the business model canvas for generating the hypothesis. But I also want to emphasize, if you look at the last exercise, you don't need to go, I just want to repeat what David said. It's incredibly important. You don't want to go into crazy detail. For every hypothesis, you're going to select very few, and those are the first you test. Why is that important? Because if they're wrong, the rest doesn't matter. You might actually pack up your business and stop or pivot into a new direction. That's why you start with a lot of hypotheses. You narrow down on very few. And then for one or two, you're gonna make an experiment. Okay? So it's very important. So that's this phase we're getting into. So let's pick this one and let's see. Marissa, we have this one. HR managers in South America will pay €90 for workshops. Which experiment would you do you think could we do at this stage for your organization to test this assumption? So if we can stay for a second, just let's look at this. Which one would you pick? What's your. Just, you know, we'll make some comments. There's no right and wrong here. What do you think would be a.

Good one to do customers interview?

Okay, David, is that a good one to start with here for that first assumption?

I think it will provide some qualitative insights, but it's very low strength. So just keep in mind that when you're doing those interviews, one, you're B2B, right? So anytime you do an interview in a B2B, they're going to think you're trying to sell them something. Okay. And so if you're trying to learn, it's kind of different. You have to reframe things. So if you do a customer interview, I would recommend doing something like a card sorting or a speedboat or I don't know, Alex, we have product box. We have all kinds of different ways to kind of facilitate it so that you start to understand beyond just talking to them where they're really thinking. And then I think, Alex, also I'm really interested about letter of intent in this one because it's a non binding document, right. That they have to put in writing. And so you'll find out really quickly if they're not even willing to put it in writing. Their willingness to pay is probably not what they say, right? So like, oh, I'll do this, I want for 10. And they're like, great, can I do a letter of intent? They're like, oh, I don't know if I want to write that or I'm going to write five employees down. It's like, well, you said 10, but you wrote five. So you start to get kind of really drive into what evidence do you really have? Because what people say obviously is weak, but you should still try to get the qualitative insights.

And if we're talking about SMEs, I think an interesting starting point here could also be maybe not the first One. But since it's so easy to set up, could be a landing page, right? In the sense of it seems to be a product that is not crazy. Difficult to maybe explain. I don't know. Could be. So, David, what would you say if you pick here between letter of intent and landing page? What would you go for at this stage?

This is a great question. And again, this is somewhat subjective based on your experience and everything. But you've already spoken to these people, correct? Or some of these?

Yeah, we spoke with some of this. We did the landing page also, and we talked with companies who have contact to them and they are interested to sell that. So.

So then let's go with. Let's go with letter of intent. If you've already done interviews, you already did landing page, let's take David's direction and do a letter of intent. So the idea there is that, you know, it's, it's, it's not a legally binding contract, but they have to sign something, right? Something where their reputation or whatever is on the line a little bit. So let's choose that as an example. So we're going to take letter of intent. So if we can go now to the test card. Matias. So good to have somebody writing this. Matias, this is luxury concierge service. Okay. So we believe that HR managers in South America and Germany will pay €90 for workshops. Here's one comment I would make. I like to put it this way. A good test card is one that I can give to anybody, and they're going to replicate the same experiment here. We would fail this test. I'll tell you why. Because if you give this test card to two people, again, somebody might actually go talk to SMEs and somebody will talk to a major corporation. So I would suggest we put South America's fine. Or Germany. Let's stick to Germany. But let's put just something like an indicative number of employees, just to give a bit of a size. What size would you put in there?

450.

450 people. Okay. HR managers in Germany. And then we'll just put size behind managers in brackets. Matias. We'll put 450 people or employees. Something like that. Good, that's fine. So to verify that, we will. How would we formulate this best. David. To verify that we will get these HR managers to sign a letter of intent. How would you formulate this one?

Yeah, for, for the specific workshop here too. Right. So it's the toolbox workshop, correct? Yeah. So we will, we will basically get HR Managers in Germany to sign a letter of intent.

Okay, here. This might almost be too vague. Right. So you know, we would probably do more than one workshop.

Right.

Because otherwise, you know, letter intent almost seems like overdoing it. How many workshops would you want them to buy for this to be? Is it just one or is it, you know, maybe, you know, one every month or one every year or what do you think would work?

Well, we have, we decided to make the workshops more tailor made. We have up to 25 attendees. So the idea is to sell a package with 10 or 8 webinars per company and keep it posted that maybe the next year we can give some updates.

Okay. And that's it.

You guys have to finish this test card in two minutes.

Okay. So let's put that letter of intent to buy letter of intent and continue that sentence to buy 10 webinars. This is important because we want to again make this test card so people can replicate it. What are we going to measure? What would you measure, Marisa?

If they are going to buy the.

Thing, number of signups could be one. But what's important is not enough. We actually need to say how many people or how many HR managers convert to signing up. Right. Because if you speak to 10 people and 10 people sign up, that's very good. If you spoke to a thousand people and 10, 10 people sign up, that's not very good. Right. So it's important to point out we need actually the conversion rate. Okay. What do you think would be a good, a good conversion rate if you know how many out of your, all the people you talk to, what would satisfy you? 2 out of 10 or 5 out of 10 or how many percentage wise do you think should sign up?

Let's say that I will really happy the 40% starting they will buy. So I'm quite humbled.

Okay. How do you feel about this test card, David?

It's pretty close, I think. I, maybe we're rushing through this, but I think you want to know that you're on the right track, you know, and so this is probably the hardest step of the whole card. Sometimes is like, how do I know if I'm right? And I tend to set the bar pretty high, but you don't want to skip this step. And then out of a thousand, one wants it and you go, yes, we got this, we got one. And you get excited about it because you didn't write it down. Right. So writing it down is important.

And writing it down before you do the experiment. Right. Not after. Because I have never Met a team that when they got a 1 out of 10 conversion, decided to stop. They justify, they're like, yeah, that person is fantastic. We can find more like them.

And then if you don't write it down, your brain plays tricks on you too.

Exactly. It's like a confirmation bias. So that's really important. So thank you again. Just to let the audience know we're rushing through this when we're doing it in a real situation, we take a little bit more time, really dive deep and really design really, really great test cards. But before we move on and before we come to the end of this, David, I'd like you to quickly talk people through how you sequence experiments.

Right.

So it's not just focusing and describing one, you also have to make a decision about the various experiments you can run to test the same hypothesis. So over to you.

Yeah. And so that's probably a big learning for me. Working with teams over the years was I always thought teams would want to run more experiments and they don't. I've worked with teams before where they would talk to five customers and they go build the app. Right. And they owe hundreds of thousands of dollars. So they make this big bet on something with really low strength of evidence where they only talk to maybe friends and family or a couple companies. So what we've been trying to basically recommend is do a series of things over time to individual to gradually decrease the risk in your initiative over time. And so don't just place these really big bets early on that actually it takes money to pivot. So you can't pivot if you're broke, as you know. And so you want to be able to kind of pay your risk down. And so I would be really interesting. So after an loi, let's say they sign the loi, like what's the next best test you could run? And it's probably, you know, you could probably do some kind of concierge. There's probably something there that you could do that is also builds on that but doesn't require doing the entire service offering. Right. So I'm just curious, have you explored any other ways to creatively deliver this value without building the whole thing?

Yes, it's two years process. We were trying many things. We start with the like one on one service and try to reach the people and it doesn't work. And we try with the. We are working now in our branding. So we Write in on LinkedIn, like how do you call it news. We try to be really online and we try to do A lot of networking because this is something that the people will need to hear. Because the first time I explained that, they look at me like, ah. And then you explain the benefit and they say, oh, wow. This is not like something that is already done, is quite new and needs a lot of marketing, I guess. Yeah.

Yeah. So I'm just going to think this through. You know, you could first start with your interviews, maybe then do a letter of intent and then maybe do a concierge. Really small and a concierge again, it's completely manual, it's not meant to scale. But you'll learn so much about the real value exchange. You'll learn about what it takes to do these and the cost incurred and everything. So, you know, there's not like a perfect sequence here. And also I want to advise those of you watching from home don't necessarily go out 20 experiments long and go, this is my waterfall experiment plan. That's not what we're trying to convey. It's more of just be thinking ahead about how you can take what you've learned and spin that into the next thing that pays down your risk. Alex, I wasn't sure if you had any other ideas here.

Yeah, I was just going to ask Matthias to put the sticky for interviews as well and move the interview customer. Yeah, that one. Because that's also one of the experiments, like almost first in the sequence.

Right, David? Yeah, she just had already done this. Yeah, go ahead, Alex.

And there was. And we heard that there was landing page before. Right. So again, I want to emphasize what David just said. You don't need to make a crazy roadmap of experiments ahead, but you actually should in a relatively short amount of time, you should get quickly to 10 to 20 experiments. Right. So I've not yet seen very many teams impress me with the number of experiments. I see corporate teams short Tendai and David can jump in. You know, they did two series of interviews and they strongly validated. There's no chance on earth that you could call that strongly validated because you want a whole series of. So this is something that is starting to be a bit more professional. But we start to measure would explode this workshop. We start to measure the reduction of risk and uncertainty. And I can guarantee you with two series of experiments of interviews, you reduce the risk of an idea being stupid or not feasible or just can't. You know, it's not going to fly in the market. You reduce it by maybe 5%. So we're scratching on the surface. So I really believe what we're showing you very briefly is already kind of scratching the surface. Teams do not test enough. That doesn't mean you need to plan thousand years ahead. But if you, after a couple of months are not at 10 experiments, you're not doing your job as an entrepreneur.

Exactly. And also the types of experiments matter.

Right.

So you don't want to do 10 experiments that are all low strength. Right. You want to make sure that some of the experiments are also call to action experiments where you measure people's behavior beyond just what people say. And then once you have that kind of combination of experiments, you're really able to make informed decisions rather than decisions based on your own gut feeling.

One question I actually picked up at the beginning, somebody was asking, oh, how can I do some research before doing the assumptions mapping is exactly the point that you want to do your assumptions mapping and you want to generate the hypothesis first. So you only start researching the most important ones. Right. So that you know that sequence we went through, that's the one you need to follow. You start with shaping your idea with the canvases. And yes, we could spend more time on that. Then you start to generate or pull out all the hypothesis. You only select those that you need to test. So it's very, very important because if you start building something immediately, you're actually wasting a lot of time and energy. So this is getting more and more structured. Not to stifle creativity, create the contrary, so you don't waste time, your creative efforts on stuff you shouldn't be doing.

Yeah. And then so now we're getting towards the end, right? And there's just one last question that I promised Thomas that I would ask you just to wrap up the session. And again, the sequencing of experiments is something that's important. And you know, during our. You can join the masterclass if you want to dive deeper on that. But I also want to thank Marisa, by the way, before we move on. Thank you so much for allowing us to review your idea and poke and produce. You are really wonderful. But it was great to have you. Thank you so much. But before we move on, Hamza is asking, how do I create this habit inside the organization, this habit of creating and testing assumptions? Is this an exercise that should be done monthly, quarterly? What is the general strategy around that?

David and Alex, I'll start and then I'll hand over to David. He has great insights on rituals. Right. When you're looking at this, think of entrepreneurs in general. This is on your mind all the time. So it's something you're actually doing in your head all the time. But then you have formal ritual meetings with the team where you might actually make some of the stuff more explicit. But this is all the time. As an entrepreneur, you think about business model, value proposition, assumptions, evidence all the time. Like this is 24 7, if I may put it that way. And then we have the rituals and I'm going to hand over to David for some of the rituals there.

Yeah, I think some people go like, how many is enough? Or when do I stop? And the short answer is you never stop. It's just your risk moves around. And even as you scale your company, your risk is going to move around. But my advice to you would be make it part of the way you work. Okay? It's not something you do on nights and weekends. It's not something you do in your spare time. This is part of just how you work. And if you look at the list of stuff you're probably going to try to do, I'm sure some of that stuff you feel really confident in. Some of you, like, I'm not sure about some of that stuff. If you ignore, it's okay. Some of that, if you ignore, it kills your business, you know. And so what we're trying to do is just give people a way of having these conversations of stuff they're already worried about. And instead of just not talking about it, let's just make a process and help you kind of make it your own so that you just continue to do it. Because once you figure out desirability, then your risk is going to move over to feasibility because you're like, oh, I don't know if we could do this. And then it's going to go to viability because people don't pay enough. And then you're going to pivot and it's going back desirability and then, you know, adaptability. We didn't even cover today, which is more around timing in the market. So it never stops. But just please, please don't try to treat this as a one off exercise. It's something that you just need to find time for throughout your day because it's really going to help you kind of generate evidence on whether or not you're on the right track.

Can I give a concrete example?

Sorry.

10 Abby, this is important, I think, because there's not, People sometimes think, oh, there's the one moment where, oh, now I know it's going to work. I would just want to emphasize what David said and there was another question. When do I stop? I'll give you an example from Strategizer. We have a new offer, Growth Portfolio Solutions for corporations. We know the value proposition is great. Right. And we know they want it. We have evidence for that, but we don't really know exactly how to sell it yet. Right. So we move from one type of evidence to another. Now we need to know how to scale. The problem is that entrepreneurs and innovation teams sometimes go to scaling before they have any, you know, other evidence. So it doesn't stop. There's not one kind of breakthrough moment. It just moves along and you'll reduce risk until you have a real business. Right. So it's not a one time event. And then one last one, people are asking, what platform are you using? This brilliant platform that does these things magically and comes with Matthias, who's going to even type your sticky notes. Strategizer platform. And you know, it's, it looks maybe a little bit like Mural or Miro, but this one is different in the sense that we're tailoring this for these kinds of processes. It's not just a whiteboard. We're designing intelligence into it. If you're interested. We use it for our technology enabled services. So when we do these kind of coachings in corporations, we always make sure we have this stuff visually on the platform so we can track it back to the rituals. Right?

Yeah. Okay. So, yeah, thank you everyone. And just to say that the whole world is thanking you, Marisa, for being so brave and sort of, you know, participating and allowing yourself to be a guinea pig for us. But I just want to hand over to David and Alex to wrap up just talking about the masterclass on testing business ideas from September 15th and what folks can expect in that.

Right? Yeah, I think, I mean, basically you're getting a taste of what we do. It's very, very short time box. We go much deeper in the class. But you're getting a taste of the flow, Alex, I'm not sure what you want to add there.

Yeah, so I wrote that actually a bit earlier in the chat box saying, look, we had to rush through this, not because we're not good at time, but we want to give you a teaser. We're going to do this three times, four hours to really go deep. How do you actually articulate a good hypothesis? How do you design a good experiment? We'll go through the experiment library. So this takes time. It's a profession. Right. You don't want a surgeon to go to a workshop, to a one hour session, a webinar. Hey, I'm going to do this new surgery, so we really go deep. So if you're really interested, join us at that virtual masterclass where we're really going to go deep on the topics you've seen today in lightning speed.

All right, so thank you, everyone, for attending, and thank you for scoring, and thank you for the comments once again. Thank you, Marisa. Thank you, Alex. Thank you, David. It's been really fun, and people really enjoyed it. I enjoyed it as well. And we look forward to seeing you at the master class. Coming to you live soon. Thank you very much.