Module 5: Business Modeling
Lean Startup For Corporates
Why should validate your business model?
- Testing and validating your business model ensure your business is offering something that people actually want
- Using a build-measure-learn cycle decreases the uncertainty through testing and slowly increase investment over time
- This approach can be used to leverage innovation in large companies with some important caveats.
What is the Lean Startup approach?
The Lean Startup approach is based on a build-measure-learn cycle where a business can prototype and test their business model cheaply and with limited resources. The approach includes three major steps: design, test, and implement.
While the Lean approach can be applied to many types of business, there are important challenges you must address for established corporations.
How can validate your business model?
1. Design the business model
- Customer discovery: utilize the tools of human-centered design to discover your target customer’s needs and validate your assumptions.
- Continue going back to your customers to test your prototypes to make sure they are developing in the right directing and you are catching issues early.
- Design a minimum viable product (MVP).
- Design your business model, decide how to capture value.
2. Develop and run tests to verify your business model
- Extract the most important assumptions for the business’s success from the busines model
- Design and run testing procedures as cheaply as possible for each of these assumptions in your business model. This could include surveying customers about how much they would be willing to pay for your product, affordable marketing strategies, or getting quotes from manufacturers or developers.
3. Learn and implement
- Distill your insights in one document using quotes and visualizations. Reflect on the feedback you heard, did it validate your assumption or undermine it?
- For assumptions that were undermined or still uncertain after getting feedback, go back to your business model prototype and try testing different solutions.
- If you hit a wall or a problem too difficult, using other tools and frameworks like the Business Model Navigator or the Business Model Zoo™ could provide inspiration.
- If the risk of uncertainty seems low, you can begin preparations for scaling your business. As a final step, you can go back to your MVP and refine it until it is ready to go to market.
Customer insights from needfinding Business model canvas