How to validate hypotheses regarding the business model? – Workshop as part of the #OMGKRK pre-accelerator
Education and support for early-stage Krakow startups in the proper research with users is the main goal of the workshops conducted by our team for participants of the Dargons Cave pre-acceleration program created by the #OMGKRK Supporting Foundation.
In May 2019, the #OMGKRK Support Foundation contacted us to develop a workshop scenario for participants of the Dragons Cave pre-acceleration program. Startups from Kraków and Małopolska in the early stages of development participated in the program. More specifically, startups looking for their business model in the phase before problem-solution fit.
The initial proposal of the subject concerned one of the canvases supporting the development of a business model of startups: Business Model Canvas (BMC) or Lean Canvas (LC). Based on our experience, however, we proposed a workshop going one step further: not on how to create/write a business model on a sheet of paper, but on how to test it.
The reason for our recommendation was the fact that startups have access to many free materials, trainings and courses that cover the subject of supplementing BMC or LC. Moreover, supplementing these models is relatively easy. However, validating whether what has been written into them is true and factual, not a hypothesis, is much harder.
Paul Kulon, who was responsible for the #OMGKRK pre-accelerator program, accepted our offer with great openness. The result was the workshop “How to validate …”, which helped startups design and verify their research scenarios based on Lean Canvas.
The workshops were conducted by Beatę Mosór-Szyszka i Grzegorza Górzyńskiego at Bióro Coworking. The startups that took part were: eMoSystem, Walle, Pethero (vel Reksio, Mobilis, Mentorist.app (vel HabitCoach), Acai.
Sprint 1: Design, conducting the workshop and feedback
Getting startups ready for workshops
Being aware of the fact that we are dealing with startups at the initial stage of development, we decided to rely on Lean Canvas, which is the most adequate tool before the product-market fit phase. Startups were asked to complete the LC themselves by performing a task we call “Facts and Hypotheses.”
What is the “Facts and hypotheses” exercise about?
- We asked startups to complete the LC according to the instructions of its author, Ash Maurya: https://leanstack.com/LeanCanvas.pdf
- The next step was marking with the green color (with a green marker, for example) phrases, elements of the business model that are reflected in the facts (studies, tests, numbers) that have already been tested and validated by the startup.
- The next step was marking with the red color these phrases of business model elements that are a hypothesis – basically all but the elements marked in green.
Development of the workshop scenario
Our basis for the workshop scenario was a real assessment of the correctness of preparation of research scenarios by startups, which would allow them to get more familiar with their audience. We wanted startups – after the workshops – to know:
- what questions to ask their audience to learn about their problems and motivations;
- what questions not to ask their audience;
- how to construct a research scenario with their audience in the phase of searching for problem-solution fit.
We based the workshop scenario (as always) on the Kolb cycle, which supports effective adult learning.
As part of the planned scenario, startups were first to create a research scenario based on their base knowledge, then validate it with good practices (a list of good and bad practices developed by us). Then we were to go through self-reflection – who made mistakes in constructing the script most often, as well as how many questions were constructed correctly. Then the trainers planned on sharing with the workshop participants the theory of research on recipients in the problem-solution fit phase. Finally, research scenarios (which, this time, were correct) were to be created.
You can view the presentation prepared for the workshop here.
The workshop got very positive feedback from startups. We’ve received a lot of very specific questions not only about research scenarios, but also about the types of research, when and which tests to carry out, as well as about the search for problem-solution fit.
The most impressive element of the workshop was the experience of deleting poorly formulated questions from the list, as well as creating the ratio of incorrect and correct ones. Some startups formulated 20 questions, but only a few correctly. Some – not a single one. There were also teams with a sociological background that developed their scripts correctly.
The most common mistakes were:
- suggestive questions (including suggestion of answers),
- closed questions (do/does…, instead of why, when, how?),
- too long and detailed research scenarios,
- questions whose answers were declarative (for example: would you buy such a solution?).
In addition to the tools included in the workshop scenario, we presented additional tools that allowed participants to understand the mechanisms of creating persona, market mechanisms regarding target groups, as well as creating solutions. These were, for instance:
- Rogers diffusion curve,
- Gartner Hype Cycle
- proto-persona vs persona.
In the last part of the workshop, we focused on creating tests and experiments. And also on the choice of those methods that would give us the most knowledge about the user using Experiment Sprint Canvas.
After the workshops, participants received a set of materials, including a presentation from the workshop, a checklist of good practices in doing qualitative research, as well as a list of supplementary materials (links to books, articles, case studies).
Furthermore, for the needs of further development of startups, we have prepared a list of recommendations for startups:
- what they should pay attention to in their further development,
- what the next steps could be,
- how mentors and following trainers can add value to startups based on what has already been developed.
The feedback prepared this way allowed startup mentors, as well as those conducting next workshop sessions, to focus on supporting the strengths of startups. And startups to eliminate elements that need improvement.
Summary of our work – in numbers and more
What happens next with startups? We stay in touch with some of the startups and observe their market development. Six months after the end of the pre-accelerator, some of them have working MVP, which is very popular among users. We support each one of startups 🙂
And here’s how the cooperation with us was assessed by the client:
“Project: People is a well established Lean Strategy Agency in Krakow, so when I was organizing the Dragon’s Cave Pre-Accelerator it was a natural choice to engage the Project: People team in the workshop program. Beata And Grzegorz did an outstanding job leading an extensive lean canvas workshop for 8 early-stage teams working on their client personas and product-market fit. Beata and Grzegorz are great and experienced facilitators who get the most out of their workshop participants who shared that they found the exercise valuable for their projects.”
Case study isn't enough?
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