Thank you very much for coming everybody. I want to say that the most important thing we're going to do tonight is to try to give you a chance to figure out what your business model is. Indeed, just gave me a perfect intro. He said he's not sure why he's here, or most of you probably aren't. Why do you need a business model? That's a really, really good question.
Now, by the end of this evening, I hope you will answer that for yourselves. Now, what is a business model? That's what I want to get to this evening. And I'm going to give you the agenda up front so you have a sense of it. We're going to talk about a few key concepts. Number one of which is how do you focus on the absolute essence of what you do? That's what we call a call. And then how do you multiply that to market in a way that's very efficient and also get leverage from it in a way that it is ultimately going to become sustainable for you so that you can operate your business for the long time. And you'll learn five initials, RSVPD.
And by the end of this evening, you should be able to save yourself. Okay, if I have an RSVPD model, you're great. Well, how are you going to remember those initials? When was the last time you went to an invitation to something and you didn't RSVPD? It's never a good thing to do. So you just remember it that way. You're going to be able to figure out a great business model by just RSVPing it. Great.
So we've already asked this question, but I want you to all write down one thing now that I've told you that we are going to define what's important about a business model. One thing that you think it might be, just write it down for yourself. This is for you, not for anybody else, just write down one thing.
So is anybody from HBS here, by the way? Okay, lots of HBS students. That means I'm doubly challenged tonight because there's Harvard students from all over the campus, all the different schools here tonight. And some of them haven't had the benefit that you've had of going through business school and learning some of the fundamentals of why business models are important. So I'm immediately going to bridge for you guys with the rest of the Harvard schools.
So when you go to HBS, for those of you who don't, you will learn something from a great professor, Tom Eisenman and many others, something called the diamond. And he describes the business model in terms of a customer value proposition, a go-to-market model, a technology and operations model and a cash flow formula. So as we are in business school, you're probably going, well, what are those things? So I'm going to make it super easy for the rest of you.
One, two, three and four in I-Lab terms tonight, we're going to talk about how you create, deliver, make money and do all of this sustainably. And therefore, the MBA student should walk out of here again. Okay, I know how to go about building a business model. You guys should all feel like you've been fully introduced to it and could also do the same. That's my challenge to myself tonight.
Great. So what is this framework that we're talking about? This thing that can help you create and deliver value to your customer and make money and keep that sustainable? It turns out it's a lot of different pieces. And so I'm really only going to cover three of them tonight. This creating and delivering will be the bulk of it, but making money we're not going to get to tonight. We'll give you the essence of it, but we will have it in a follow-up class. Doing it sustainably, we will talk about tonight. But again, all of these elements are covered in startup secrets classes in more depth going forward.
So I'm going to give you a sneak preview of those. Those of you are going to be coming to future classes. We will cover a lot of these in the startup secrets workshops going forward. So the particular one that I get excited about is next workshop. And the reason is it's the one that covers this customer value prop or how you create this value. And it's a whole workshop unto itself. And it is the most fundamental piece of a startup because if you haven't got the right value prop, in other words, if you're not solving a real meaningful problem or addressing a great opportunity, there's no point doing anything else. Because the number one reason startups fail is they're not creating value for anybody who cares about it. It's not a big enough or meaningful enough opportunity or it's not a significant enough problem that's worth solving. That's the number one reason things fail.
Paragraph 1: So we're actually in the tackle at next workshop. But what I'm going to do is get you settled in with a really fun way to think about it regardless of any of this of what's on the board.
Paragraph 2: How many of you think that your technology or your idea or your service is really a breakthrough? It's disruptive. Yep, in the back. My name is Maria and I'm building a digital health and tech business that is essentially helping people take charge of their health.
Paragraph 3: So Maria, thank you. First of all, for doing something that's as important as health addressing health. What is it that you think is breakthrough about it? I think the actual business is targeting non-consumers of the health market as of currently. Because I'm not targeting what the health care system is targeting, I would say.
Paragraph 4: Okay, very good. So you've seen what you might call a white space where there's something that's not being addressed and you think you can fill it by serving consumers, is that right? Okay, great. So even if your idea was terrible, which it isn't, if it was terrible, we would hope tonight to be able to get you to a place where the business model you come up with is itself a breakthrough.
Paragraph 5: And here's the thing that most people don't really recognize when they think about business models. It can be at least as impactful, if not more impactful, than your technology or your marketplace. And so what I want you to do is to think of tonight, how can you end up with such a disruptive business model that people go, wow, I need to go work with Maria because the way she's approaching this, enabling me as a consumer to get access to the health care I want is such a breakthrough that even if our service isn't an innovation, I would want to deal with her. Does that make sense, Maria?
Paragraph 6: So that's why business models are really exciting because they do give you that potential. And by the end of this evening, I hope that you will start to think that way. So here's a way to start approaching it that way. So Maria and all the rest of you, imagine that I gave you a completely new game tonight.
Paragraph 7: So let's start with one you all know. Who's played monopoly? Okay. What if I said monopoly was about how much money you lose? You don't go, well you're crazy. It's all about how much money I win and the properties I get. That's the idea that we want to come up with.
Paragraph 8: We want to come up with a game that nobody's ever played before or even if they have, we change the rules. And so now it's your game, your rules. Guess who's got the best chance of winning? You, you do. If you write the game and the rules, you have the best chance of winning of anybody. And by the way, especially if you change them in the middle, which is what my brother always used to do to me.
Paragraph 9: No, no, no, really love it. It's my younger brother is a lot younger than me. It's always great. But the point is this is what actually business is about too. People do this all the time. They do change the rules. Also sometimes the rules get changed on you, but that's not what you want. You want to create the game. You want to cause an innovator's dilemma if you can.
Paragraph 10: The late Clayton Christensen's great book is a wonderful way to get a handle on this because that's all what, what, what it's all about. And this business model approach can be as disruptive as technology.
Paragraph 11: So what's an example of this? So I'm sure none of you pay attention to virus these days. This is a long time ago. So I'm going to have to go backwards. Believe it or not, there wasn't even virus software 20 years ago because we didn't have viruses. They didn't exist. They first came out, really got prominent actually on the Macintosh. And I happened to be working in Symantec, which was the first antivirus solution on the Macintosh.
Paragraph 1: And it was a great business. We used to sell package software, believe it or not, in boxes through retailers and people would pay a lot of money for it. That's how old I am. It's embarrassing, but it's true.
Paragraph 2: All right. Now the piece that's not embarrassing is that we figured out a really disruptive business model that changed the game completely.
好的,现在说一下不尴尬的部分吧。我们已经想出了一种非常有颠覆性的商业模式,彻底改变了游戏规则。
Paragraph 3: And actually when Norton antivirus for the PC came out, which is we own Norton 2, it wasn't a good product at all. In fact, everybody's product was better than us that we could tell.
Paragraph 4: Dr. Solomon and then Macafean, all these other people had much better solutions. So this was pretty embarrassing for us.
第四段:所罗门博士和麦卡菲恩等其他人都有更好的解决方案。这对我们来说相当尴尬。
Paragraph 5: The press would literally come up to our stands at exhibitions and go, see if you can detect this virus and the answer would be, oh shoot, no.
Paragraph 6: So what do you do? You've now got this product that's not great. Our Mac product by the way was very good. And we can't even detect the viruses because we're not keeping up with them.
Paragraph 7: We rewrote the rules. We said we're not going to sell software. And remember, this is long, long time ago. So there weren't such things as SaaS models. It didn't even exist as a term. There weren't things like subscriptions.
Paragraph 9: But what happened was pretty interesting. We literally ended up completely disrupting that business. And the results were really fascinating. We took out two competitors within a year. They just were gone.
Paragraph 10: And we ended up serving the customer better because guess what? Customers don't want software. What do they want to stop viruses? It's just a protection for them.
Paragraph 11: All they really cared about was the notion that something somewhere would just make sure they didn't have to worry about viruses. And so by selling them that service and then creating much, much more importantly behind the scenes, the subscription model that said we would pay for the people in Ireland, mostly where we developed this, to sit there and get ahead of all the signatures of the viruses before they happened or create basis to even predict them.
Paragraph 12: And by selling that as a service, everybody won. We served the customers better. We started to be aware ahead of the viruses. We ended up creating a basis for them to say, okay, I'm paying for this for a reason because I saw 10 new viruses came out last week and I didn't get any of them. This is like going to the doctrine being saying, being able to say, look, I don't know what the next COVID is, but give me the shot in advance. That's what our subscription service did. Do you think people would pay for that? Hell yes.
Paragraph 13: Not only do they pay for it, but it actually changed the game totally. It ended up increasing the price of our products that we were selling by 50% per seat. And then better still, we rise.
Paragraph 14: Well, why are we selling all these other things like backup and noughton utilities and all these other tools? We're really about one thing which was securing your data. We just started selling a data subscription service. That got us 2.6 times the revenue and profit within some number of years.
Paragraph 15: I can't remember the exact number, but the point is completely changed the games and it was all business model. And remember where I started, which is we had a worse product. That's why I wasn't meaning to be belittling to Maria. I'm sure she's going next on the product, but even if she didn't, you can have a disruptive business model that can change the game and set you off on the right direction.
Paragraph 16: So that's why this evening's important. It's one of the reasons. Okay, so what are some of these models?
所以今晚很重要,这是其中一个原因。好的,那么这些模型有哪些呢?
Paragraph 17: You will know these companies, I would imagine. So how many of you have used, for example, Netflix or Spotify? I use both a bit too much.
Paragraph 18: So what is their model? Anybody raised their hand or anybody else who didn't? What is their model?
那么他们的模式是什么?有人举手或者有人没有举手吗?他们的模式是什么?
Paragraph 19: It's subscription. Yeah, what else is it? It's a what? A library, yes. So it's got content in it. What else about it? Do you pay for it all up front? No. That's the subscriptionator of it. How do you get value from it?
Paragraph 20: Like when you're watching Netflix, what value are you getting? Pleasure. Yeah, it's pure joy, but how do they measure that? From how often you watch? Yeah.
Paragraph 21: I already would tell. They kind of will be watched. They've had some basically watches everything. They don't just say that, oh, you seem to be enjoying this movie so much. Maybe we will share your, what's it called, login details with?
Paragraph 22: So Abby is smart enough to have raised a whole bunch of things. So first of all, she started talking about, for example, are we getting pleasure out of this? And they know that by how often we watch? And that translates into data. And that data helps them.
Paragraph 1: You didn't mention it yet, but we all see it recommendations, right? Why do you go back to Netflix? Because hopefully they recommend something that you actually really like. So they can also sell that for ads and they haven't yet to date. But that changed.
Paragraph 2: And if you haven't already noticed it, it changed for a reason because their stock price plummeted when they started losing subscribers and they couldn't compete with all the other services that come out. And so they said, shoot, we need to be able to compete. So they introduced this other aspect to their business model.
Paragraph 3: So what I'm trying to do here is illustrate for you. You don't even realize it when you're watching a movie that actually there's a business model behind this that keeps Netflix in business. And if there isn't, guess what? They're not sustainable. So they don't meet that key criteria, which is ultimately the outlast their competitors and be the surviving winner.
Paragraph 4: So you've got to think about this stuff. Even though sometimes it's like not obvious. So now how do I help you guys? Well, first thing I'm going to get you to do in this time, I'm going to get you as a group to pick one person in the group who's working on a business.
Paragraph 5: So it could be yourself, for example, and you get everybody around you and you say, okay, I want to know what is an example of a business model I could use. Doesn't mean it has to be the right one.
Paragraph 6: And to get you going, is it a process or a product? So if it's a process, for example, to get people healthcare, then it's probably something you sell as a service. Is it software or is it service? So for example, Clint, remind me, is that it's your product, a software product or is it a service? Better describe it as a service.
Paragraph 7: Okay, so can you just describe, not everybody was here last time you were here. What does City bricks do? Yeah, sure. We're trying to give aspiring homeowners access to investing in their local housing market while they're saving up for down payment.
Paragraph 8: Okay, that sounds very much like a service to me rather than something you're going to go sell them software physically because that's not what they care about. Okay, great. So, content or data.
Paragraph 9: So who thinks they have something that's data, for example, that they're selling? Remember Netflix didn't say that they were selling data. Oh, sorry, they were acquiring data. They just did it in the background. Yeah, go ahead. I'm operating a marketplace for data. So literally that. Perfect. So your product is data. Awesome.
Paragraph 10: And then finally, how could you realize this? Would you do this with an open-source type model of proprietary premium or premium subscription or license? We're going to talk about that later. So I'm not going to say you have to do this now, but be thinking about that as you pick the first thing.
Paragraph 11: So go to the whiteboards. I'll give you, you really don't need more than a couple of minutes. Just pick one person first of all and then brainstorm quickly about what do you think would be the best starting point at the core of your business model? All right, have fun.
Paragraph 12: Okay, everybody did really, really well just to be clear. So I didn't see any team not get going once we started letting you quiz each other. And so any one of you want to volunteer, otherwise, I'll just pick somebody to talk about what you did and how you went through the thinking.
Paragraph 13: Great. Up you come, Lisa. Yeah, well, actually, why don't you grab the board, come to the board and talk about it. Great. Okay. My business time credit, I'm Naga. Don't say the deed. The business that I'm building is using generative AI to translate accounting tables and into written form like memos and documents that worked in public accounting for seven years.
Paragraph 14: It's very boring work that a computer can do now. So that's the product and it is obviously software. And so we went back and forth a little bit whether it's data or content. I think we ended up with data because like the more you use it, the more the ML like learns, then like the product, the actual memos and written reports end up more improving in terms of tone. Yeah.
Paragraph 15: Perfect. So let's give first of all a warm round of applause. And you had a great team obviously. So you can sit, don't worry. So Naga actually has a very clear idea of what she's doing, which is awesome. She knows who she's doing it for. She knows what she's selling them, which is potentially software or data. But is that the business model? What does anybody think?
Paragraph 16: Because there's a difference. Next week, we're going to talk about what you're doing and that value prop. But what's the business model without you answering? How could we help Naga? So she's taking some terribly important. This boring work that's done in accounting is now going to be done by Gerrit Generative AI. That's fabulous.
Paragraph 1: It's going to, I'm going to stop making this up. But free up people's time, potentially giving them much more accurate results, and all sorts of good things to come from that.
Paragraph 2: How should she make a business model out of that? Anybody want to volunteer? Vivian?
第二段:她该如何将这个想法转化为一个商业模式呢?有人愿意志愿吗?Vivian?
Paragraph 3: In my understanding, a business model also includes like an excellent table that addresses how big the market is, how much people would pay for it, how many of them would pay for it, how often? That is an important aspect. That's sizing your market. That's something we'll talk about in the go-to-market session.
Paragraph 4: But how's she going to make money? Remember what we said? We want to figure out how we create value. We deliver value. How we do that on a sustainable basis, etc.
Paragraph 5: Anybody have any ideas about what Naga should do in that regard? We need an MBA student to step in here. You guys have studied this.
大家对纳加应该怎么做有什么想法吗?我们需要一位MBA学生来介入这里。你们都学过这个,有什么建议吗?
Paragraph 6: How about yourself? Oh, gosh. For a business model, I guess you identify maybe like a customer segment, as well as products like pathway or...
Paragraph 7: Okay, let's pick that one. How should she sell it through what channel? Since we're all going to be interested to figure out how she can get this to the customers as fast as possible and as cheaply as possible. Any ideas?
Paragraph 8: And then when I last Naga, yeah, go ahead. You can go to Accounting Forms. Great.
然后当我最后一次去到 Naga 的时候,没问题,你可以去会计表格。太好了。
Paragraph 9: That's all I want to hear. So you already just learned the secret to this class, which is I don't actually teach you anything. All the people in this room are great peers who you can learn all this stuff from. So you don't need me. I really seriously mean this.
Paragraph 10: One of the most important things you could get out of the startup secrets classes is meeting each other and quizzing each other about how do you do these things. So you do need to talk.
Paragraph 11: And now tell us how you're thinking about it. So yes, it would be... I would start with Accounting Forms and charge a monthly rate per user. That's how it would be... price and there would be like a basic and premium, no premium, but in terms of like the enterprise tearing.
Paragraph 12: Yeah, that's the plan. Fabulous. Not sure why you're in the class because you're way ahead of it. It's really great.
第12段:是的,那是计划。太好了!不太确定你为什么要上这个课程,因为你已经超前了。真的很不错!
Paragraph 13: Honestly, that's exactly what we're trying to do. Trying to tease this out for you and separate things like what your product is versus how you sell it, get it to market and indeed how you're going to charge for it and make money from it. So you're in great shape.
Paragraph 14: I'm going to take one more because I want to make sure that there's an opportunity to get through the rest of the material. Anybody else really dying to bring this up and also challenge us to get some value to it. Add some value to it. Yeah, in the back.
Paragraph 15: All right, so yeah, the product is coffee in a T-bag. This is a product or one from Whole Foods if anybody is interested in trying it. And that's a product. Our business model is willing to buy the coffee directly from farmers in Kenya and we sell it to coffee buyers directly.
Paragraph 16: Coffee buyers get direct disability to farmers. Farmers get instant payment. They paid more. So that's the business model. And yeah, we have all these other benefits. It's locally sourced, more money for farmers, higher quality coffee, organic. We are trying to improve the domestic consumption of coffee in Kenya.
Paragraph 17: Because coffee is very expensive in Kenya so not everybody can afford it. So yeah, those are the benefits.
因为在肯尼亚,咖啡非常昂贵,不是每个人都买得起。所以嗯,这些就是好处。
Paragraph 18: Where's the round of applause for Zipura? That's brilliant. Fabulously done.
第18段:Zipura在哪里的掌声?太棒了!太厉害了!
Paragraph 19: So anybody think that we could help Zipura in any way? I felt like she was doing great. But is there anything you think, hey, Zipura, for what you're doing, there's something I would want to call out that's at the core of your business model. That is what you're doing. That's the essence of it. What do you think?
Paragraph 20: Anybody want to take a shot of this? Like, if you were going to sell one thing, yeah, go ahead.
有人想拍这个吗?比如,如果你要卖一样东西,就去吧。
Paragraph 21: One thing about coffee is really the extraction process. So how are you going to sell that to coffee people that are really into coffee when you're something get into tea bags? Because to them, this is like the enemy, you know, tea versus coffee.
Paragraph 22: So how are you combining the both of them? You don't have to answer. I want to just make sure. So what do you think that should do in the business model?
所以你是如何将它们结合起来的呢?你不必回答。我只是想确认一下。那么你认为在商业模式中应该怎么做呢?
Paragraph 23: I think she should highlight that. Like why this is a premium product compared to the what we have on the market, the regular coffee, the parts or like, for example, if you have a fancy machine, then how is this superior to that? Just to answer that question. Like why should you use this product as opposed to using the regular product in the market?
Paragraph 24: So that has to be highlighted in the business model.
第24段:所以在商业模式中必须突出这一点。
Paragraph 1: That's a fabulous example again of where I would sit down, challenge each other, have that discussion. And it's very interesting because your premium pricing immediately calls people to say, so why? And so your business model somehow is going to be supporting that and also making sure that you're making money and being able to improve the supply chain that you've got. But fantastic job. Thank you very much.
Paragraph 2: All right, well done. So like I said, the beauty of this group is that you're all smart enough to be able to help each other. So all I'm going to do is provide some frameworks now so you can have the discussions amongst each other.
Paragraph 3: So first of all, if you haven't already taken away this key message and you've already hopefully heard me espouse it, and I gave the example with Samantha, an antivirus and going subscription, all these things are what adds up to the perfect storm for a startup. You obviously want the breakthrough technology. You obviously want to be able to discover some new market like consumers in healthcare or for example, some different kind of way to get coffee to people. But in the end, if that can become a disruptive business model that in of itself is so significant, you have the perfect storm because nothing's better than being in a place where nobody else is with a product that nobody else has got and being able to sell it in a way nobody else can beat.
Paragraph 4: That's like, wow, we're in a great place. So that's what we're trying to get you to and that's why this is so important. So back to what this business model is. It's about how you create, deliver and make money and then do that sustainably. Let's get onto the create piece.
Paragraph 5: Question on the...Oh please do, yeah. On the Ben diagram. So I guess I've been looking maybe at things like energy and climate space B2B and in that one, I guess some of the advice I've received is don't don't don't change all the circles, right? If you have a new technology, definitely don't disrupt the business model on the way you're delivering it. Don't disrupt it.
Paragraph 6: Yeah, I mean if you have a new disruptive technology, I guess like...Very well said. So Lace is bringing out an extremely important point which I want to make on two levels. First of all, not every one of these things is an answer. Like there is no right answer to all these things. So in certain circumstances, you're going to have such a disruptive technology that the last thing you want to do is change everybody's way of buying it because already you've got too much disruption. So you don't want to jump five steps at once, for example, because you fall down the stairs.
Paragraph 7: But what's important in what you're saying is how you judge this is at the end of the day about what your product is and who's buying it and how they will consume it best. So remember the title of the session is the customer centric business model. So now, Lace, how could you find out whether you are disrupting too much at once?
Paragraph 8: I probably start finding some customers. Bingo. So you don't need me to answer this question. In fact, I'm the worst person to answer it. Your most important guide to anything you do is your customer. A period end of story. Doesn't matter whether it's your value prop, your business model, or your distribution or anything else that you get to work on.
Paragraph 9: So don't take anything for granted. What I said at the beginning is what I really care about. And this is the second key point is I'm here to bring you to think about the right things, not to give you answers. So none of these things I'm telling you are answers that just frameworks you don't get the right questions. So Zipora's thinking is so good. I think she's way down the track on this. But I'm really glad that we've got a challenge to. Okay, but how is she positioning this?
Paragraph 10: Now, honestly, it's great you're getting challenged that here because this is safe. But really what you want to do is go and ask your customers. So why would you pay a premium? If I could do all these things to improve the supply chain, why would this be something you would engage and pay money for? Does that make sense? Does that answer your question? Okay, great.
Paragraph 11: So next class, we're going to take a part the value prop statement. And at the highest level, it's what do you do uniquely well for who? That's the customer value prop on the other side of this board. It is this segment here. And you probably spent some time on that in the MBA course already. But what we'll do next week is talk about how do you actually get it down to its absolute minimum essence so that you can get in an elevator, for example, and pitch it.
下一节课,我们要解构价值主张陈述。最高层面上,我们要问自己的是,我们在为谁提供独特的服务。这是客户价值主张,就在这个白板的这一部分。你们 MBA 课程中可能已经花费了一些时间来研究它。但下周我们将讨论如何实际将其精炼到最简本质,以便你举个例子可以在电梯里快速介绍。
Paragraph 1: So that's next week.
所以那就是下周的事了。
Paragraph 2: But I've got good news for you.
但是我有个好消息告诉你。
Paragraph 3: We're going to cheat this week.
第三段:这个星期我们打算耍小聪明。
Paragraph 4: We're going to give you the advantage before we even get there.
在我们到达之前,我们将为您提供优势。
Paragraph 5: We're going to tell you what the most important thing in this is.
我们要告诉你这件事中最重要的东西是什么。
Paragraph 6: And it's what I call the call.
第六段:我所谓的“召唤”就是这个。
Paragraph 7: And we really want to focus on it tonight.
我们今晚真的想把注意力集中在它上面。
Paragraph 8: you, I was a terrible student so everything has an acronym.
你知道的,我以前是个很糟糕的学生,所以我为每样东西都能想出一个缩写。
Paragraph 9: So the acronym for this is it is your capability of really exceptional value.
所以它的缩写是指你真正卓越价值的能力。
Paragraph 10: It's the thing that when somebody says they will say because X, and ideally it would be like one word, like incredible experience.
第10段:就是当有人说他们会说因为X,理想情况下应该像一个词那么简短,就像是不可思议的经历。
Paragraph 11: So it's the taste.
所以这就是味道的问题。
Paragraph 12: That would be, for example, if you were selling a food product.
比如说,如果你卖的是一种食品产品。
Paragraph 13: Or maybe if it's Netflix, it's the recommendations.
也许如果是 Netflix,那么就是推荐内容的原因。
Paragraph 14: Well, you pick it.
好的,你来挑选它。
Paragraph 15: But it should be something that is so easy for you to test with customers that whenever they think of you, they say, yeah, that's what you guys do.
Paragraph 76: I always saw Patagonia as the specific brand associated with a certain type of people and community.
我一直认为Patagonia是与特定人群和社区相关的特定品牌。
Paragraph 77: So it's almost like it embodied a certain culture where it was the finance, bro, the VC, bro, but that whole.
所以它几乎就体现了某种文化,在这个文化中它代表着金融、风投,但其实是全部的文化。
Paragraph 78: So it was kind of like, okay, so Patagonia sleeveless vest.
所以有点像,好的,Patagonia无袖马甲。
Paragraph 79: Okay.
79段:好的。
Paragraph 80: So listen to all this great feedback here.
所以听听这里的所有好评反馈。
Paragraph 81: I will say that that's one of the things that Drew Claire, who helps me with startup secrets.
我要说,这是Drew Claire帮我启动秘密的其中之一。
Paragraph 82: She produces all this great content.
她能制作出所有这些优秀的内容。
Paragraph 83: So thank you, Claire.
所以谢谢你,克莱尔。
Paragraph 84: She put this in here because she thought we should have something that's about social missions.
她把这放在这里是因为她认为我们应该拥有一些关于社会任务方面的信息。
Paragraph 85: Actually, a lot of people buy Patagonia because of the social mission or the culture or what it represents.
实际上,很多人购买Patagonia是因为它的社会使命、文化或代表了什么。
Paragraph 86: Because you can buy the same clothing from all sorts of different places.
因为你可以从各种不同的地方购买相同的服装。
Paragraph 87: And sometimes cheaper.
有时候也更便宜。
Paragraph 88: I mean, you can go to REI and buy, you know, five different other kinds of alternative to Patagonia.
"我的意思是,你可以去REI买五种不同的替代品来代替Patagonia,你知道的。"
Paragraph 89: But a lot of people buy it because of the culture of the social mission behind it.
但是很多人购买它是因为它背后的社会任务文化。
Paragraph 90: Not because of the supply chain.
第90段:并不是因为供应链的原因。
并不是由于供应链的问题。
Paragraph 91: But by the way, you're not wrong.
顺便说一下,你没有错。
Paragraph 92: Everybody has their own reason for doing things.
每个人做事情都有自己的原因。
Paragraph 93: But you get into the point here where I hope you understand anybody not feel that they understand what I'm talking about when I say core now.
但是你到了这个地方,我希望你能明白,任何人都可能感觉不理解我现在所说的核心。
Paragraph 94: You pay pretty really exceptional value.
你所支付的价格非常优惠,超值得。
Paragraph 95: And please ask me any questions.
请问有什么问题吗?如果需要的话,请随时问我。
Paragraph 96: Yep.
96段: 对的。
Paragraph 97: Go ahead, Maria.
97段落:请说吧,玛丽亚。
Paragraph 98: Since so far we've seen that the core is such a diverse response.
自今,我们已经看到,核心呈现出了如此多样化的反应。
Paragraph 99: And you were saying that it's the first thing that people think about.
你说的是人们想到的第一件事。
Paragraph 100: So essentially what I'm getting at is like, if you as a founder think the core of your business is one thing, many of your customers think will think that the core of your business is in something else.
Paragraph 101: So innovationally just accept that like diversity because even with our room here, there were so many different cores.
所以,创新性地接受多样性,因为即使在我们这里,也有很多不同的核心。
Paragraph 102: So is that okay?
那样可以吗?
Paragraph 103: And how can we leverage that diversity of cores in the business model?
那么我们该如何在商业模式中利用这些不同的核心技术呢?
Paragraph 104: So let's draw this like this because Maria's asking a great question.
所以让我们这样画,因为Maria问了个很好的问题。
Paragraph 1:
Let's say your markets. here, you're sitting in the middle of it here and you've got all these customers telling you all these different things all over the place.
假设这是您的市场。您现在坐在市场的中央,周围的顾客都在向您不停地讲述各种不同的事情。
Paragraph 2:
Somebody in this room tell me whether that matters or not and what you should do about it. Anybody wanted to help Maria with it answering that question?
有人在座上告诉我这是否重要,以及你应该怎么做。有人想要帮助Maria回答这个问题吗?
Paragraph 3:
Does it matter that you all came up with different reasons for buying Patagonia? Go ahead.
你们对购买Patagonia有不同的理由,这有关紧要吗?请自便。
Paragraph 4:
The product is going to be the protagonist of a brand. It has to have more than one core because you're appealing to target yes, but we need it to be attractive to different different desires.
Paragraph 7:
My name is Nakhul and I think what you pointed out to sounds like a problem where you want to understand your brand positioning and you want to convey your idea in the best possible manner.
我叫Nakhul,我觉得你所指出的问题好像是你想了解你的品牌定位,你希望以最好的方式传达你的想法。
Paragraph 8:
And you know truly through market research or knowing your position in the market in the best possible manner and stick to that position and portray that because ultimately as we saw, although initially customers said something else but at the core there is one particular reason why they're buying into it like Apple.
Paragraph 9:
It's not just the phone. It's about the feeling. So I guess it doesn't matter what others might be saying which might be a noise but it's better that how we understand where we are positioned.
Paragraph 10:
Okay. Very very good. Now just because of time I'm going to stop it to you and because next session we're going to answer a lot of these questions but where I want to recognize this group is that you are doing a great job of describing why business model is not one thing.
Paragraph 11:
It's not just your value prop and how you get positioned to the marketplace. It's sometimes actually how people are going to find you and buy you and indeed how you will actually make money from them and also how you will in process in the process of supplying for example your coffee make money yourself. It's all these elements.
Paragraph 12:
Therefore all I was really trying to get to was one thing here which is you still can't monetize everything.
所以,我真正试图说明的一件事是,你仍然无法将所有东西商品化。
Paragraph 13:
Like if Netflix decided they wanted to monetize their recommendations as well as their data as well as their advertising as well as their content that would be a very messy business. In the end you have to pick something that is at the core of what you're going to monetize for your business model. That's all this exercise is about.
Paragraph 14:
But what you're raising and I do not want to in any way shape or form stop this great thinking is all sorts of things that are about actually your customer value prop and that's what we're going to talk about next session.
Paragraph 15:
Now I'll give you a little guide to this because it's this clarinet challenged ourselves.
现在我会给你一个小指南,因为这个单簧管对我们来说是有挑战性的。
Paragraph 16:
We took too long on it last time we did the session so we will put this in the workbook for you.
上次我们在这个会议上花费的时间有些太长了,所以这次我们会把它放在工作簿里给你做。
Paragraph 17:
It turns out there is a trick to this though. When you're a startup of one like your one person trying to build your business and you have thousands potentially millions of customers even and they all pull you in different directions.
Paragraph 18:
What happens to your energy? It's delus it.
你的能量去哪了?它消散了。
Paragraph 19:
It's get dissipated. It's pulled in all sorts of different different directions.
它变得分散了,被拉向各种不同的方向。
Paragraph 20:
How's your business going to do? Not great.
你们的生意怎么样了?不太好。
Paragraph 21:
You have to pick something and we call this a minimum viable segment an MBS and it's where everybody has the same need.
你需要选择一些东西,我们称其为最小可行片段MBS,它是每个人都有相同需求的地方。
Paragraph 22:
So if everybody has the need for a faster supply chain for their coffee or for a culture that is the base so much they buy things or with a better means for a consumer to get access to health care.
Paragraph 24:
We will put that explanation up in the workbook for you and we'll give you some examples of it so you can go look at it because it's honestly the basis on which this conversation works for both of these points which is you do need focus because otherwise you'll never make any impetus but your brand or your customer value proposition might be recognized to your point with positioning that people say well Apple's lots of things to me but what is it actually stand for when you buy a product?
Paragraph 25:
Some people will say privacy other people will say usability doesn't matter those are brand attributes they're a different set of things can you monetize usability?
Paragraph 1:
Yeah you probably can can you monetize promise privacy probably well what is Apple actually monetize a complete integrated stack from top to bottom that you can rely on that's what I would say for example anyway great conversation let's keep going
Paragraph 2:
so I want to get through the material we have got through the most important thing which is an understanding of how you cut to the core and now I'm going to give you a chance to see this in action
Paragraph 3:
so great news the company I'm about to introduce you is called Tetriscience was started right here in the iLab and with students who are in this very room at one of the iLab one of the startup secret sessions and they actually came up with an idea that's really incredibly obvious which is that scientific instruments all over the world lack connectivity
Paragraph 4:
you can't actually get the data off them people all over the world in labs today still go and take readings from these instruments and they handwrite them into their notebooks or maybe electronic notebooks crazy right so it's like everything's connected these days no it's not tens and hundreds of thousands of instruments are not
Paragraph 5:
so they were addressing an emerging pain and the first thing they did was they created a hardware device it's like this was the year back six or seven years ago where everything was iot so they created a box sounded great I remember back in the launch lab over there going into the inventory room looking at that hardware and thinking oh my god all the different versions lots of expense of inventory etc so I can tell you fast forward that was not the right thing to monetize and that's just giving you that answer right off the bat it would actually nearly kill the company actually to be clear the whole first round that they raised flush down the train caused the founders huge challenges they ended up having unfortunately one founder fell out gone so this is how badly business models can mess you up
Paragraph 6:
the good news is they live to tell the tale and because they figured out what the right business model is and I'm going to let you try to do it for them so now you know that iot and hardware is not their business model let me tell you something other pain points the customers had they really struggle with basic things still required hardware for this by the way to detect when instruments failed they also really struggled to get the data in a form that they could use so I just told you you don't want to handwrite this stuff and they realized that if they could get this data in a form that they could store and sometimes it's huge amounts of data any of you working in bio yeah how big is it the DNA data record 10 to hundreds of gigabytes so imagine taking tens to hundreds of gigabytes you can't write that stuff down but you got to store it somewhere and they have it what's called in a temporal form which means over time they need to check the DNA so now imagine thousands of records of tens to hundreds of gigabytes you don't store that on your floppy drive well there's none existing more but CDs or or your hard drive that just you're going to run out of space on your iPad for sure right so where might they put that cloud okay somebody starting to think good
好消息是他们平安无事,因为他们找出了正确的商业模式,我会让你代替他们尝试这个模式。现在你知道了,物联网和硬件不是他们的商业模式。让我告诉你其他的痛点,客户们遇到的问题是,他们仍然需要使用硬件来检测仪器故障等基本的事情非常困难。他们也很难以一种能够使用的形式获取数据。所以我告诉你,你不想手写这些数据,他们意识到,如果他们能以一种可以存储的形式获取这些数据,有时候数据量是巨大的。你们有人在生物领域工作吗?DNA 数据记录有多大?10 到几百 GB。所以想象一下,处理成千上万条记录,每条记录是几十到几百GB的数据,你不能把这些都写下来,但是你必须要存储它们。它们以一种时间上的方式被存储,这意味着随着时间的推移,他们需要检查 DNA 数据。现在想象一下,数千条记录,每条记录有几十到几百GB的数据,你不可能将它们都存储到软盘上(已经不存在了),或者你的硬盘,你的 iPad 上的空间肯定不够,所以他们要把它们放到云上。
Paragraph 7:
so what is the right business model for tetrascience and I'm going to be a big clue this is the diagram that they came up with when they realized they could connect everything to everything so now they figured out they could do that so now as a group take a minute or two I'll give you two minutes to think what would you pick as the data as the business model excuse me for tetrascience and you might use some of the principles we were already going through to think well what's the core of that business opportunity and then how might they monetize it
Paragraph 8:
I'm hearing really good discussion about what it is in fact this table is in such big debate that there is a four to one vote against a particular viewpoint so we're actually going to go right there so Alan you said hardware tell us why you said hardware the the mics right there the core of their value proposition is hardware and that's what they should monetize how does you want to get the data into the cloud you need to be able to connect from the instrument to the cloud so you need that standard solution to because you have so many instrument providers it will be really difficult challenging for each of them to build a solution to connect to get their data into cloud in first place so you are standardizing that part fantastic answer I really agree with that absolutely agree with it you guys what do you think
Paragraph 1:
so we were thinking software either like a standard standardized cloud solution or marketplace to connect the people who produce the data and use it okay so as you can tell we have a fun and four of you said that right okay so let's just put this to the test in the room hardware we have one to four for software show of hands everybody thinks hardware it's just you and me sheepers we're in deep trouble really the rest of you asleep hands up those of you think software anybody's hands not up you've definitely had too much pizza all right great so there's an overwhelming belief at software all right what if I said none of you are are right in terms of where the company went where would you go
Paragraph 2:
so over here we had some good thinking going on you guys want to say what you came up with so we were kind of debating what to think about in terms of hardware versus software and I thought about like a garment versus a whoop was just like an athletic device and they each have their own um I guess apps or whatever where all the data goes and there's no way to really just connect both of those and to like compare them together I guess um so that's kind of where we were struggling to figure out a solution um but I think the concept of having um one hardware that is I think like Oracle maybe would be a good example of that um in terms of what what was it about Oracle that you thought was an example in terms of their hardware product um that I guess it's like it's very hard to switch um to a similar product um I don't know I was struggling to kind of think this is hard just to say it's really really hard does anybody have an idea thank you by the way for digging in on that
Paragraph 3:
I think a lot of things you're talking about are the right things to debate when you're trying to figure out your business model because it's not easy and what I just tell you if we get it wrong causes you to almost implode as a business found a fallout all sorts of challenges it was literally a couple of years written off because we couldn't figure that out uh anybody have a different view
Paragraph 4:
so our group actually thought about essentially what you have there is a problem of you initially thought connectivity but it's actually data management so we were thinking of a platform like a SaaS platform for enterprise where you are leveraging APIs and you're trying to build like an ecosystem for this data to start sitting somewhere so you can connect producers on the one side versus consumers of the data and any other people who help with analyzing the data in between we needed you on the founding team of Tetriscience you would have saved us years and millions of dollars if you had been able to help this team understand that
Paragraph 5:
so not only is Intato turning out to be right for Tetriscience but at the core of this and we they by the way this they you know in a very basic way describe this as spaghetti because that's what it looks like this bowl of spaghetti has at the core of it the ultimate need that the customer has which is to get at the data it doesn't matter how it gets there they couldn't care today whether they created the hardware to connect it or whether the instrument manufacturer did and in fact to your point in Tato about ecosystem if they kept producing the hardware they would have ended up competing with all the instrument manufacturers who themselves need to create the connectivity so instead they made an ecosystem to the exact word you used and all those people are partners to them and on the other side of it the people who want to use that data the farmer bio farmer companies that they've focused on so they pick bio farmer as their MBS those people don't care about how the data gets there either all they care about is that they have a data pipeline another great word you used that puts it in the form normalized for them and in fact makes it literally that usable to them that they think of it as Switzerland so in the middle of this they've become an envy leader because they connect all the data to all the places it might get used and provide it in a normalized form I'm dramatically simply this business has skyrocketed triple triple double double it's probably going to be one of the fastest companies to reach a hundred million dollars in less than five years after being nearly dead one reason business model make sense any questions okay let's keep moving
"Sirs, I've got great news for you, you only need to start where we've already been. We already had laser explained to us that she had something she wanted to test. Start with your customer, so take a moment, just as a group, and write one thing that you think that your customer needs - just one thing. So I'll give you 30 seconds, it shouldn't take more than that. So what did this table come up with? The main thing was personalization, personalization, okay great. So what is it about personalization that is going to be valuable to your customer, not you, to them? I think health is a personal journey and that's perfect, stop right there, well done. Of course, it is, health is a personalized journey."
"Fantastic, who else, what do we have over here? Abby, um, with representation, perfect. So why is representation what the customer really needs? The customer's actually students because what court is all about is a service for students who have teachers who actually look like them - especially in public schools in the US, especially if you have students in your class who are not Americans. So how can they have role models, representation, proper representation in schools, and we picked representation, perfect."
"What I love about Abby's um, one word there is that Cohort is trying to deliver this education to people who need to be represented by the people who are teaching them, it's like the teacher is themselves so they can understand what the student needs, is that right Abby, perfect? And it wasn't me who came up with it, it was you, and you've got a great name for it too. So now you understand what I mean by figuring this out actually isn't that hard if you can get from the customer standpoint. Okay, Claire, we're back to your table, have they figured it out yet?"
"All right, what is it? Uh, it's basically a faster evaluation time for the dataset they're looking at, so the turnaround time from when they want the data to be able to actually get their hands on the data, that's the biggest problem. Great, and were you describing this for Cold Press AI, perfect? Okay, you guys are doing great."
好的,有什麼事嗎?嗯,基本上是针对他们正在研究的数据集的更快评估时间,所以从他们需要数据到真正能够获取到数据的周转时间是最大的问题。太好了,您是在为 Cold Press AI 描述这个问题吗?太棒了,你们做得很好。
"So, we've got to the place now we're on the second piece of the business model, and that is okay, we figured out how to create the value, but how do we deliver this value, and what is the thing that's going to make that powerful and disruptive? What we're going to try to do is think about around your core, what is it that you can do to actually get a multiplier that will take your value higher and a lever that will take your costs lower, and it starts to address this issue of how do we get to make money in the cash flow formula for those in the MSMBA classes or how do you make your operations model effective. So what we want to do is think about that core, that word that you will come up with that key thing, or for example, if you want to think about Tetrascience, how they actually decided to take the data and create the ecosystem around it would give the people on both sides of it, the instrument manufacturers and then the biopharma companies, the usage of that data in an effective way."
"So, the two techniques are for multipliers, we want to increase revenue - you just sold a dollar for a dollar, you wouldn't make any money, just to state it the obvious. We want to increase reach, we want to get to more people that's part of the go-to-market. We want to increase coverage; when people buy your coffee, we want them to drink it lots of times a day, or when people buy your health care you don't want them just buying them as individuals, you want them telling friends about it, and so it spreads virally. For example, those are all multipliers that take up for those of you are interested in these things, your lifetime customer value, your LTV is often called. Or on the other side, we want to reduce the time, it takes you, so you just gave a great example if we can reduce for your customers the time it takes for them to get the data that's huge value to them. You're nodding your head, so think it must be right. And we obviously want to make sure that for you while you're doing that, you're reducing your costs as well as the customers' costs of actually using your product, and anytime you're reducing things like resources whether it's people, time, energy, etc., that's a lever. And if you're doing that around the core, you're going to increase the value, the ultimate value that the customer receives, and you're increasing your ability to be a sustainable business. So even if you have a nonprofit, this is important too because even if you're delivering a service that you don't want people to pay for, you've got to be able to sustain your business in order to be able to keep delivering that service."
"All right, so let me tell you how you designed that. First off, your product needs to feed the business model, so the user's got to have an experience that they love. So I've asked this question before, but I'm going to ask it again because it's so real, how many of you've downloaded an app on... " your phone hopefully all of you okay good how many of you have deleted one within the same period of for like five minutes of deleting it okay clearly not either a good experience or a good value honestly that happens all the time I mean it's it's part of experimentation so remember that when you're thinking about designing your value you want people to have a great experience of it right away it leads to four startup secrets that I'm going to walk you through and you can design these from the get go you don't even need to have a product you can start with for example literally your paper prototype and start thinking about this.
The first is my favorite so a long time ago I used to call this a startup secret called slippery and it's basically the same essence which is that we want to make something simple to use and install we wanted to make it low to no initial cost instant and ongoing value and then make sure it plays well in the ecosystem with everything else around it now I just set a lot but actually it's all brain dead simple and if you think about that app experience you had it clearly was simple to use an install or simple to install at least you just click to download it but it may not have been simple to use that may have been one of the reasons you you know through it away I see a lot of you nodding your heads was it delivering instant value or clearly not you through it away time to value is incredibly important it doesn't matter whether it's a service or a product or whether it's data if it gives you instant value you're going to keep it and then finally plays well in the ecosystem if you have to change your phone to use the app do you go are you going to use it I don't think so there are things that already exist so this is your point laser you don't want to change too much if it's disruptive to adopt something it's not going to work so I often say a startup secret that comes up lots of times is the best value props actually highly disruptive but non-disruptive to use and for example if you are building a an enterprise product these days you don't build it on stacks of hardware that you run into your desk which is how it was 20 years ago you build it in a container and you just deploy it to AWS or your favorite cloud provider that's incredibly non-disruptive to do and it gets you huge benefits so this is what you're looking for you're looking for products that have a slip which is now turned into a term that's become popular 15 years later called product-led growth so if you want to go and investigate more about this how do you make products that are slippery that are really friction-free and how they they can help you with product-led growth yep go ahead and don't go I was just wondering for example for enterprise software what the value would be for example having an API model versus something that can just be instantly downloaded where there might be a little bit more friction but it might also reduce churn because it's a little bit more personalized and then also a little bit more integrated that way wow you came up with a whole bunch of things again and I've thrown your board away but that's okay we will put it over here that are all great questions so I'm going to answer some of them later just to make sure that I keep the class on track but you said APIs and you said for example how do you reduce churn and there was one other thing you said so it would be more personalized and a little bit more integrated I imagine integrated yeah integrated personalized these are all good things so some of them I will answer next week one of them I'll just answer right now to give you a sense of this.
If you're selling an API are you selling that to a developer or are you selling that to an end user I guess the end user but through their technology department like I imagine there are the people integrating it okay so I'm going to give you two examples of companies that have played in this world one that was extremely successful one that failed and what I want you to take out of it is well what would you do so anybody know Twilio okay Twilio actually it's not doing terribly well at the moment of the stock market but incredibly successful story of an API first company in fact many people would say they kind of led the API economy not really true Amazon did years before but they started selling everything they did but they sold it to developers APIs because developers don't actually want a product that's finished because then they've got no job state the obvious right so you wouldn't sell it to a developer and users don't know how to program so would you sell them an API they don't know what to do with it so. you just got to be very clear what your audience is who your customer is who your buyer is and what they want to buy and what problem you're solving for them developers love APIs because it gives them the ability to get a multiplier on their experience and build things quicker that's why Twilio took off
如果你在销售 API,你是在向开发人员销售还是向终端用户销售呢?我猜是终端用户,但是需要通过他们的技术部门进行集成。所以我将给您两个在这个领域中扮演过的公司的例子,一个非常成功,一个失败,我想让您从中获得什么,那您会怎么做呢?有人认识 Twilio 吗?Twilio 实际上在股市上并没有做得太好,但是他们是一个 API 优先的公司的非常成功的故事,实际上很多人都会说他们领导了 API 经济,但这并不是真的,Amazon 几年前已经开始出售了所有东西,但是他们将其出售给了开发人员 API。因为开发人员实际上不想要一个已经完成的产品,因为他们就没有工作了,这很显而易见,对吧?所以你不会向开发人员出售,并且终端用户不知道如何编程,所以你会向他们销售一个 API 吗?他们不知道该怎么做。因此,您必须非常清楚您的受众是谁,您的客户是谁,您的买家是谁,以及他们想要购买什么,您解决了什么问题。开发人员喜欢 API,因为它们可以使他们的经验得到倍增,并更快地构建东西,这就是为什么 Twilio 取得了成功。
I'm actually not going to mention the name of the company because I was being embarrassing for them but a company that we have backed so I'm admitting this nature of venture capital is you back things some of us go wrong students came up with a brilliant API in the healthcare world it failed terribly because healthcare developers didn't actually have any clout they're not the people to hold the budget in healthcare and so even though they love the product they couldn't get anybody else to pay any attention to it or give them budget for it because they just wanted the solution the healthcare provider said I just want the solution give me the workflow give me the process give me anything but I don't want to develop to go for six months and customize this so what I hope you to realize take away from that is one simple thing it's about the audience back to the customer first and it's about what are you giving them that gives them a solution to a problem that's really significant to them that they can immediately use back to slip simple for them low to a no initial cost instant and ongoing value for them and it plays well in their ecosystem now does slip make sense great all right thank you good question so hopefully you wrote something down that's useful to you and you'll use after the workshop
and now second startup secret how you price and package this is incredibly important so if every app you wanted to try on the app store cost a thousand bucks I didn't even say anymore it usually is free right the first thing they do is say download it but what they don't tell you in a lot of instances that oh when you start using it by the way there's an in-app purchase I see a lot of you nodding your heads okay it's true with online banking too by the way oh free banking no fees everything else how do they make money interestingly lots of different ways sometimes it's on your data even though they don't tell you that sometimes it's on referring you so it's lead generation of getting you on boarded for their bank sometimes it's on the back end with the credit card that they then sell you that you do have pay for there's all sorts of ways that people do this but to start off with it's attractive when somebody says free so how you price and package is important it's often by the way true that when you figure this out it's a series of steps you take and I encourage you to think about where do you want to start and how would you get to a place where you ultimately delivering value and being paid for it that's what the business model is really all about
So next key example is a very easy one and you very used wistier by any chance if you're in marketing you do so um glad you wanted to describe what wistier does it's essentially a platform for hosting videos so they make it really easy for marketers who don't have a videographer and their team but want to use and promote video content to just upload stuff um and you see how they've tiered out their pricing they do it based on the number of videos that you store so the more stuff you create the more you end up paying them great thank you Claire so I was hoping that one of you would use it but thank Claire is thankfully the customer in this case it's drawn people like Claire in for a simple reason which is there's no cost to start trying to use it and if you have a great experience of it then you can play for the plus the plus piece if it really takes off it gets viral adoption you might have for example a work group that uses it and they pay the pro subscription and if your whole enterprise takes it then you start paying a lot more for it that's a classic strategy go ahead support right
I need to send them with products like buy one get one free also it just comes for buy one get one great question what is anybody else in the class yeah go ahead laser i feel like bundling or like bundling or these like buy one get one free feels a little different because there's still a cost to initial entry whereas this one it's almost like a it's like if your coffee had a taste up like for two weeks you can get free coffee at the kiosk in in Kenya like it's the free entry that I feel like it's different in this model versus the other ones which are more about for us selling all upsetting all converting great so zippura i know that wasn't a complete answer to your question but it's a good start to the thinking so bundling zip tanzat is a whole science into itself we will put a link in the workbook to one of the people who has a fantastic view on bundling is done a great video on it it's a guy called shashir mahotra in fact he's the founder of of koda the what the workbook is built in and he also used to run youtube before that and he's an expert at this so rather than me try to half answer your question i will say the following incredibly important question there's no right answer there's lots of times when bundling can make lots of sense but you have to think about it as a separate science in this but great question it's absolutely the kind of thing you should be thinking about all right next startup secret if you can co-create stuff so in other words not just build it on your own but co-created with other people you can create tremendous win wins
Also, how many of you know what open source software is before I explain that? All okay, about half the class. So, the notion of open source software is very, very simple, which is that anybody can build a piece of this code and put it in an open repository so that anybody can look at it, anybody can adapt it, and anybody can use it anyway they want. I'm grossly simplifying. Why did open source get started? Because people realized that actually it's a lot easier if I have the problem to design, and I'm a developer to design the solution myself.
Why do I have to go pay some other giant company to do that if I'm a coder? I just develop it. And guess what, if I want people to keep adding to it, I'll say, “Hey, take a look at this, see if you think we should do something better,” and pretty soon hundreds of thousands, in fact, millions of people have contributed to open source projects all around the world. The one I have in the back was called Droople, which became the largest enterprise software content management system.
So, it's actually used by everybody from Sony at one extreme to NBC at the other extreme to the White House at another extreme. Pretty much every website that is out there at real scale, for example, the Olympics, the Grammys, etc., is all built on Droople, and it's all open source. It's all free. The founder of it, Dris, is a brilliant guy who was solving his own problem as it turns out in his dorm room. He decided he needed to share information with a friend over literally what wasn't even ethernet, a cable, and he created his touch. Or, actually, Belgian, he created what effectively was a basis to share information.
And then it became sharing it on websites, and then it became Droople. And, you know, literally, there are now tens of thousands of modules that have built for Droople that everybody around the world, as a Droople developer, contributes to. And it's free. How would you make money out of that? Go ahead. You start with the free service people.
The developers usually open source structure that exists today. And then for some enterprises, you can start offering things like they would develop, like the cloud storage, etc., as a service. And you monetize a part of what you can do for free, but you just add convenience and charge for the convenience. That's exactly what he did. They figured out how to give away the software and then create the services around it that made it, for example, secure, reliable, scalable. They eventually put it in the cloud. And what Droople became is a cloud service for anybody to create any website at any scale.
And it literally is used, as I said, by, for example, every major artist. Harvard uses it, for example. Everybody uses it as a service to be able to get that content, their website there. It's now media and their “experience.” So, they call it experience management, up and running. But what's the win-win in it? I'll go backwards. Who created it? Everybody did. So, a huge startup secret if you can tap a community.
For example, you're going to get into healthcare, right? Is there a community around healthcare? For sure there is. Imagine if you could tap the community that could help you create your product. Would that be a good thing? Absolutely. Who else has something that they think they could tap a community to help them build that solution? Yeah, go ahead, Charles.
So, I'm working on developing a line of products that for the first objective is to work on sex education and reproductive rights. And so, we're going to develop a line of products that are biodegradable, have embedded tech, and are there going to be so affordable that low-income and stringent individuals can buy them. Sounds like a great product. Now, how is the community going to help you do that?
So, we need experts on product design and also health experts because we don't only want to develop a pad or tampon, but like a complete line of products for that. What's great about what you're thinking is look there's a lot of elements to these products, and they're, you know, everything to do with health and safety but also really important for population control. For certain governments, probably have a basis for actually wanting that part of kind of products.
There's lots of people who could contribute to this need, and you're going to get them involved in a community to help you build your product. Is that what you're thinking? Yeah, I was thinking of an echo system. Okay, so I'm going to make sure that Cheryl doesn't get curtailed tonight by asking if you guys would actually spend a bit of time with Cheryl afterward.
What would you recommend to her to do to get the community engaged around this need? Because there must be many of you who've experienced this. You've said, okay, this I wish out a better biodegradable, much more low cost, or something that, for example, might appeal to low-income. How could you contribute to that?
What I will say is as follows, which is it's really important that this word win-win. It's two words, I guess. Is there for. your community to work so the reason that for example Drupal took off or any Rapunzel's project takes office that the person who has the problem wants to solve it so you're going to have to find the person that's in the medical world for example or in the bio world by um in that a world that you're solving this problem for that wants to solve this problem that will contribute to your community it has to be a win win otherwise they won't engage it can't be just your need if you keep asking that you need help that won't work but if you can get them to say but I want to solve this problem so I'd like to contribute then you're on the basis to get going on a win win that makes sense.
It's not as easy as saying I just want to start a community you have to find this win win see lots of people nodding do you still have your question.
这可不像说我只想建立一个社群那么容易,你必须找到一个双赢策略,看到很多人点头赞同,你还有问题吗?
I'm developing a new pre workout and I'm on a on the varsity rowing team and I think I have a certain problem with like getting more endurance um and whatever way so I created a product but wanted to ask other teams like what they would want in a product so I sent out a survey to all the other varsity teams um and kind of like cross reference different sports and um like what they wanted to come up with an ultimate solution that kind of would cover a lot of different sports um so it wasn't I guess me kind of creating it more of like Harvard athletics was helping me create it fabulous.
Um what Meredith did is really smart to go and get a win win you need to find out who else cares about the problem and if they care enough about it like there are other rowers or there are other athletes and they're in the same community as you Harvard for example and they would like to solve that problem too there you have the beginnings of something that could become a community and I bet that they would love to contribute to it it's going to help them so great great example thank you very much so win win doesn't always work but I gave you an example here because I really want to make sure you understand it's actually something that can play out in different ways not just in aqua's open source example but via strategic partnerships too.
So I'm almost going to guarantee that um none of you have what we call a whole product what I mean by that is you're going to be a piece of the puzzle so I'm going to pick on cold press AI because I think you have a very good example of this so you're going to get your data to people faster as the essence of the value of prop right what are they going to do with it and they're just going to say great I've got the answer there they're going to train their models with it yep they're going to train their machine very models okay and who has those models do you have them uh one day hopefully what right now is just it's on the customers to find another provider okay perfect so this is a perfect example of what I'm describing now which is that in order for cold press AI to have a whole product they're going to need a lot of things so first of all you need a cloud provider.
Okay and then as you said someday you hope to have models but you don't today so you need a partner for those models and I'm going to go one step further even when they've got all that what are they going to use it for they need to deploy it and use it in features on their on their applications in go so there's something they're going to use this for it doesn't matter whether that's a healthcare application at one extreme or a consumer application or something else right this is the notion of a whole product so you can't actually be successful for your customer to run x application with AI and data in it until you get all these pieces together you get the cloud the storage your product to get it that faster the models that make it useful and then it integrated into some application so good news these two people need you and actually because of that they'll help you get to market and they'll help you find customers and they'll help you build the success of those customers and there'll be a great multiplier for you to get to market as well as a lever they'll reduce your cross because you're not having to build all that stuff so strategic partnerships are incredibly important and the first thing I recommend you do is think about the end-to-end solution what we call the whole product and where do you fit in the ecosystem and who could you partner with and by the way it's not optional because if you just keep trying to sell your little feature or your little function or your little. product and there are all these other things that the customer needs it won't work but generally speaking by the way if you found a real need to solve I at the end of this there will be people out there who are solving some part of it and they'll be delighted that you come in and say I can make it faster for you better cheaper etc make sense any questions on that one good
好的,正如你所说,有一天你希望拥有模型,但现在你没有,所以你需要一个伙伴来帮你建立这些模型。我还要进一步说明,即使他们拥有了所有这些,他们将用它来做什么?他们需要将其部署在应用程序中,以便在 Go 中使用。因此,他们会用这个做些什么,无论是极端的医疗应用,还是消费者应用或其他应用,这就是一个完整产品的概念,所以直到你将所有这些部分整合完成,你才能真正让你的客户成功运行具有AI和数据的应用程序。好消息是,这两个人需要你,并且因此他们将帮助你进入市场,帮助你找到客户,并且帮助你建立客户的成功,他们将成为你进入市场的一个很好的乘数,也将成为你减少交叉的杠杆。因此,战略合作伙伴关系非常重要,我建议你首先考虑整体解决方案,也就是我们所说的完整产品,以及你在生态系统中的位置以及你可以与谁合作。顺便说一句,这不是可选的,因为如果你只是试图销售你的小功能或小产品,而客户需要的其他东西都没有,那这是不行的。但一般而言,如果你找到了真正需要解决的问题,那么在最后,一定会有人正在解决其中的某个部分,并且他们将非常高兴地听到你的到来,并说:“我可以为你更快,更好,更便宜地解决这个问题。”明白了吗?这方面有什么问题吗?
yeah what if the community that that when we exist is like the community of a competitor what do you think you're very smart you've been here before so I've got to challenge you back what would you do like obvious example obvious example a competitor has a form people on that forum talk about stuff that is needed yeah that does not being provided perfect so like but you can't I don't know like because there your competitors can lock you out of there for example it's hard to engage in there all true so you've got a potential threat and an opportunity the threat is that the competitors lock you out the opportunity is that you're identifying things that they're not doing so you you've got to play that with the classic skill of an entrepreneur and say I can see this competitor over here that's coming up against me cannot solve this problem so an example might be there an on-premise solution you're the first people are going to do it in the cloud and by the way that's a classic thing that's happened for the last 10 years and it's still going on people are figuring out how to decimate old solutions that were legacy enterprise based on premise by coming up with cloud versions it that's the whole SaaS movement another example let's stick with cold press a is almost every application is probably going to get reinvented with AI that's just my view of the world so the good news is you could go along to anybody who's got an application and say hey we could AI enable your application wow that's pretty cool because now they're not in the old guard you're enabling them as a partner to come into the forefront of what people want which is more intelligent applications that have better data that are faster delivering the solution to their problem make sense make sense to you great
All right, next one is what I call the three ups. So think about this as teeing up if you're looking for something, a solution to have a great go-to-market experience. So it turns out for your product to get adopted is just the beginning. You are always going to want to improve it, right? So you're going to want to update it. That sometimes is just for security fixes and things like that. Then you're going to upgrade it. You're going to upgrade it when, for example, new capabilities are needed or new technologies like AI come along or you want to make it mobile, etc. So those are the upgrades. And then, guess what? You're selling into some particular functions. So let me pick one of the teams here. Lisa, you actually haven't talked about your solutions. Where do you start with Foodprint trying to provide environmental information on groceries to consumers based on data, not marketing? So, easily comparable environmental information about the food you consume and buy.
All right, so I know nothing about your business, but I can think of three ups for you. What might they be? So, how might you update your solution, how might you upgrade it, and how might you upsell it? So, somebody's already bought it, and anybody wants to help Lisa, please join in. This is a chance to really get somebody going. Yeah, so I guess one thing I've been playing with is if someone is already kind of, in this case, imagine like an online browser extension that goes in and if you buy groceries online when you get to the basket, it suggests alternatives to switch out your products that have lower environmental footprint. So, in this case, there's a range of products that then gets recommended, and that's certainly like an upgrade version where you could say, "Well, those products that are being recommended right now, they're not paying any commission but that's pretty valuable if people actually swap it into their basket." So, there might be an upgrade there.
Perfect. So, I'm going to let you off the hook with coming up with all three of them, but that was fabulous. No, seriously, people buy her product, and they're figuring in this out with their groceries. The first thing I would say that you pointed out is you can give them an upgrade that makes recommendations for them. Great. You could sell that. If people really value it, they'll pay for it. That's both going to help you sell more because you're solving more of the problem because people want recommendations to find better products, but it's also going to increase value for you. So, that's a classic upgrade. By the way, the things I thought of are pretty obvious, which is you're going to constantly update the data, right? The data was out of date, you're dead. So, you need this, you need that, you, and then the upsell one would this apply to CPG as much as groceries? Yeah, so you could say, I mean, it's like a different value chain and less free can purchase things. So, it's not exactly clear how the like human nudging behavior would work, but absolutely like the idea that we should know the environmental footprint of any equilibrium by and of extensive universal. So there's both an update, an upgrade, and a huge potential set of upsells that could be done.
And guess what? I did only one thing. I kept the customer the same because if the customer is the same here, and this is why we always talk about this is customer-centric value propositions, and you can keep updating, upgrading, and upselling them, you have a fantastic business model. So, that's the secret. And guess what? It plays with what we've already talked with with your bat, which is if you make it really slippery for people to just land and expand to get the first customer, and then you keep updating, upgrading, and upselling them, you build, ultimately, a moat meaning a defensibility around you that is tremendously valuable. That's, by the way, how every social network works. I might come up with a fantastic new social network tomorrow, and let's say you will love posting photos. I guess some of you do, and I said, "I've got a way easier way. We've got, we figured out this slip for you to just instantly download this thing, but bad news, you've got to invite all your friends before it's actually of any value to you. You're not going to do it." That's the value. The value is that somebody did a really good job of building whatever social network you like, whether it's TikTok or Instagram or pick your favorite, of building that network to the point where they've got huge defensibility. Even if their features aren't that good, they keep bringing you in, sucking you up in their ecosystem, effectively.
So, somebody had a question. I saw a raised hand. Yep, go ahead.
所以,有人有问题。我看到有人举手了。好的,请讲。
Clint, is it fair to say that both update an upgrade or about user/customer retention whereas upsell is about increasing the value per user? Yeah, yeah, you haven't exactly right. And by the way, there's no reason why all of that can't be true.
So, remember my virus subscription example that was just updates? We actually. didn't change the product at all all we did was send you virus updates all the time so that you had the latest signature the latest virus before it even hit you we didn't have to change anything about the product we did ultimately end up upgrading it because people had different ways in which they wanted to monitor it for example and they wanted to see well how many viruses did I get they wanted analysis of that and then the people who were actually in the IT department said well I want to track whether it's happening in certain regions etc so there's lots of ways these things happen and then we upsold them I think I told you this by 2.6x by upgrading this functionality to being data security for everything so it wasn't just virus it was data backup and it was improving your performance of your PCs at the time etc it's a very very compelling business model startup secret basically just think of three upping everything and you have a great basis.
So what I've been doing here is quietly building what we started out talking about is multiplies and levers around your core and anything that you can do to do that whether it's create whole product strategic partnerships or for example find ways to make your product more friction free in the slip model or price and package it so it has pull you're not pushing it but customers demanding it because it's so easy it's so efficient for them to download it's free for them to try or how you co-create it with a community that makes it a real win-win or ultimately what we just talked about which is three upping it so it has a long life cycle and to clint's point you can keep selling and getting more value for it that's it you just got four startup secrets very quickly all around increasing your lifetime value for your customers and reducing your cost of acquisition it's a fun thing to play this game and I encourage you to just work on it very simply starting with this core as I said.
So in the end here and what I want to do is give you a chance to just for a moment brainstorm on this as your own venture could be a multiplier lever for your table but jump in everybody this is your chance to just brainstorm with each other.
I hear great discussion going on so top right what do we have this table set increased reach would be there one multiplier lever and what is it that your customer is going to benefit from that so our customer I had identified before our customers a low income consumer in Kenya at the moment they kind of fought coffee fresh coffee so they're going to benefit because of access so it's going to be affordable to them and convenience feel a support.
I actually don't need anybody else's answer tonight you just you expose the exact same thing that is perfect seriously because the next slide is you're designing this for your customers so what's great about what you answered right away was that yeah you want to get increased reach but why does your customer benefit and you just said it access by you getting that reach the low income people that couldn't have got access to this coffee can now get access to it fabulous again we need a round of applause here that was superb so we just came perfectly to the end for the session by bringing it all the way back to what I said was we need to design customer centric models so things that benefit the customer.
I'm going to give you just a quick flip through what will be on the portal and that is how you do this so what you do. The secret to it is following the customer journey which is actually when they first engage with you all they have as a problem and they spend a lot of time and it costs them money to basically figure out what solutions are out there. They buy it then they have to implement it then they have to get trained on it then they test it then they roll it out then they measure whether it's working then they optimize it and only at some point do they go you know what we got enough value from this thing that we should keep buying it we should go through the three-up process.
This is a whole journey that I encourage you to figure out and Clint you asked about this all of that you're trying to increase the dollars you're taking over the lifetime of your engagement with the customer and the more that they engage with you the longer they engage with you the higher your lifetime value which is going to make your business model much much better and obviously on the other side of this the question zipporan just nailed this so I don't really need to tell you but you're going to be answering questions for your customers like why is this better. for them does it save the money just like zipporan is saying it does or does it save them time like you're saying it does in terms of how you get the data to them or what's the margin improvement in their business not yours so in donge you've got probably plenty of examples of where you've been proven the customers ultimate business model themselves by what you're selling to them so these things are the things that make this a customer-centric model.
And for examples of these things think about Airbnb they're helping homeowners utilize their home they're getting paid money that they wouldn't have otherwise got wow what about for example Salesforce why would you sell Salesforce is a good model well pretty obviously people are getting better utilization out of their salespeople if they're more in touch with their customers their better relationships with them they can sell more to them sort of basic stuff but at the same time this stuff is what drives businesses so I won't ask you this question just because of time but I would leave you to think about it which is what's the one thing that makes your business profitable that your customer also gets profit from or benefit from if you can identify that this is the key to having a great sustainable business model.
That last thing I was talking about it's sustainable because it's not just you who's succeeding it's your customer you're making successful that's what makes for a great business model so to bring it all together this is the sustainable part it's what you're going to do to make your customer successful in the long run with all the different facets of the business model that you've built there's one phrase I said to you at the beginning you're going to remember if you can get a great business model it's going to be like that invitation you're going to RSVP to it it's going to be something that becomes repeatable in other words the customers will keep buying it'll become scalable because not only will they keep buying it but you can keep operating it at a profitable basis and importantly it's valuable along the way because the way in which you're actually creating that might be very effective.
For example from a community or you're making it very easy to sell through partners etc and it's disruptive because you're doing something that nobody else could do so open source disrupted for example many traditional software stacks or the ad model disrupted all the traditional software stacks so Google for example gives its apps away it calls Microsoft to have a stock price that was a dial turn for nearly a decade while they tried to catch up and compete that's what business models do though that disruptive and ultimately it becomes defensible because you build a motor around it with things like your network and that's what's so exciting about an RSVP model and obviously the bottom line of this is it's for you and your customer if you design this right so thank you for listening the summary of all this is going to be up online but you just learned four startup secrets you learn how to figure out how to build those around the core of what you're doing and you design and you've learned how to design an RSVP model that will create a very disruptive and defensible business for you real pleasure having you here.
I only have one question for you now do you now understand why a business model is important for you as a founder that was incredibly quiet okay good so I'll connect the dots for you in one way you probably didn't think of have you have a smart business model that will make you spend less it'll be very cash efficient you'll have better valuations you'll have lower delusion that'll give you higher ownership and the bottom line.
Is you'll have a much bigger outcome as a founder this directly impacts your bottom line outcome let's figure out how to do great jobs with it thanks a lot really appreciate it