Idea Workshopping

These are notes from idea workshops held by Nick Himo (opens in a new tab), on really interrogating and developing ideas, as well as a collection of tools to help think about the problem from different perspectives. In general, the workshops were:

1. Defining the challenge
2. Generating and selecting ideas
3. Navigating the Landscape
4. Crafting Your Unique Value Proposition
5. Business Model Design
6. Proving your Concept: Testing Business Ideas

There was also a workshop on Working Remotely in Cross Cultural Remote Teams. The main takeaways from this were to establish with the entire team:

• Time zones & languages
• What tool will you use to communicate?
• How often will you check in?
• Expected response times
• How will you work out loud?
• How do you know who is doing what?
• How do you know what to work on next?

Defining the Challenge

The aim here is to arrive at a problem statement. To do this we think deeply about the who, what, where, when, why and how of the problem. You should genuinely use notes to answer the questions below.

Who?

Who refers to the people or group of people you are trying to help. This includes the end user of the potential solution, the decider, and the person who will pay for it.

• Who has a need?
• Who decides what solution is chosen?
• Who else is involved?

What?

What refers to the exact problems you want to help people solve. Also, think about the struggles people are facing while trying to solve the problem.

• What outcome do we want to achieve?
• What progress do customers/end users want to make?
• What type of struggle are people experiencing?

When? Where?

When and Where refer to all location or time-related aspects of the situation. Be as specific as possible around the "struggling moment".

• When does it occur?
• Where does it occur?
• When are the results expected?

Why?

Why relates to the reason behind what they're doing and why they're in their current situation. It also covers what’s at stake if they don’t find a solution.

• Why is it a problem?
• Why is this necessary or important?
• Why hasn’t this been solved yet?

Formulate the Problem Statement

Once you have answered the questions above, you can formulate a problem statement. This should be a clear and concise statement that describes the problem you are trying to solve. It should be specific and actionable.

• Who? Who has the problem?
• What? What is the problem about?
• Where? What is the context?
• Why? Why should we care about it?

Generating and Selecting Ideas

Here are some recommended videos to watch:

1. How to find the best business model for your company (opens in a new tab)
2. The Six Thinking Hats, Edward de Bono (opens in a new tab)

The objectives here, once we have a problem statement, are:

1. To explore creative approaches for generating and selecting ideas.
2. To understand the value of embracing all ideas, including those initially perceived as bad.
3. To develop a range of ideas for solving problems and selecting the most effective ones.

To do this, we answer a series of questions:

1. Which Should Be the Best Idea for Your Problem?
2. What makes this idea the best solution for your problem? What are its strengths?
3. Which Should Be the Worst Solution for Your Problem?
4. What makes this idea the worst solution for your problem? What are its flaws?
5. How Can You Solve Your Problem with No Money?
6. How Can You Solve Your Problem with No Time?
7. How Can You Solve Your Problem with All the Resources You Need?
8. How Can You Solve Your Problem with a 10-Year Timeframe?
9. How Can You Solve Your Problem Thinking Like Greta Thunberg?
10. How Can You Solve Your Problem Thinking Like Donald Trump?
11. How Can You Bring Smiles to People’s Faces with Your Idea?
12. How Can You Make Consumers Happy with Your Idea?
13. How Can Your Idea Make You Happy?

We should end up with a lot of ideas, some bad, some good. Next, we simply agree on the best idea or combination of ideas to begin developing them to find the most effective solution. From here, we:

• Write down all the reasons why this is a good idea. What are the benefits? How does it help us solve the problem?
• Write down all the reasons why this is a bad idea. What are the risks? Why might this idea fail?
• Generate ideas for how you could make the idea better. Think about the risks and come up with ideas to mitigate them.

These "thinking hats" above are a way to think about the solution from different perspectives. You can use them to interrogate and develop a more comprehensive understanding of the potential solutions.

The Landscape

Going from zoomed out to zoomed in, we can use the following tools to map the landscape:

• Environment map (opens in a new tab): Map the factors outside your business that could impact it.
• Business Model canvas (opens in a new tab): Map the factors inside your business that could impact it.
• Value Proposition Canvas (opens in a new tab): Map the value proposition of your business for customers.

Environment Map

There are things outside your control that could destroy or benefit your business. The sooner you know what they are, the sooner you can do something about them. In general, the agenda here:

1. Key trends: Important changes in society, technology, laws, and the economy that impact businesses.
2. Market forces: Factors that affect customer behavior and the appeal of different customer groups.
3. Industry forces: Pressures and factors within the sector that affect how companies compete.
4. Macro economic forces: Broad financial and resource conditions that impact the business environment on a large scale.

The outcome here is a map of everything that is going on outside your business that could impact/kill your idea. We want to zoom out and look outside the business and see all the factors that could impact it.

Key Trends

• Technology trends: New technologies that can impact your business. For example, the adoption of 5G networks enabling more efficient smart city applications.

  • What new technologies are emerging that could impact our business?

• Regulatory trends: Changes in laws that affect your business. For example, new regulations promoting the use of renewable energy sources in city planning.

  • What changes in laws and regulations might affect us?

• Societal and cultural trends: Changes in societal values and norms that influence how people behave. For example, increasing public demand for sustainable and eco-friendly urban solutions.

  • What shifts in societal values and norms are influencing our customers?

• Socioeconomic trends: Changes in economic and social conditions, like income levels and population growth. For example, urban population growth leading to higher demand for smart housing solutions.

  • What changes in income levels and population growth are relevant to us?

Market Forces

• Market segments: Different groups of customers based on characteristics like age or needs. For example, urban residents who prioritize sustainable living and smart technology integration.

  • Who are the different groups of people we serve? What are their main characteristics?

• Needs and demands: What customers want and require. For example, citizens need efficient public transportation systems powered by real-time data.

  • What do our customers need the most? What are their biggest desires and requirements?

• Market issues: Important trends and problems in the sector. For example, growing concerns about data privacy in smart city technologies.

  • What are the major trends and problems in our sector? What changes are happening?

• Switching costs: How hard it is for customers to change to a competitor's product. For example, the challenge for a city to switch from one smart traffic management system to another due to infrastructure compatibility.

  • What makes it hard for our customers to switch to a competitor?

• Revenue attractiveness: Factors that determine how much money can be made. For example, high revenue potential from smart utility solutions that reduce energy consumption.

  • What factors determine how much money we can make? Where can we achieve the highest margins?

Industry Forces

• Competitors (Incumbents): Established companies that dominate the market. For example, large tech companies like IBM and Siemens leading in smart city solutions.

  • Who are the established companies dominating our market? What are their strengths and weaknesses?

• New entrants (Insurgents): New companies entering the market. For example, startups developing innovative IoT devices for smart city applications.

  • Who are the new players entering our market? How are they different from us?

• Substitute products and services: Alternative products or services that customers might use instead of yours. For example, traditional city management systems being replaced by smart city platforms.

  • One of the greatest design thinkers, Clay Christensen, eloquently illustrated the difference between knowing customers and profoundly understanding them. He shared the story of How he helped Mcdonald's increase the sales of their Milkshake. The McDonalds Milkshake's competitors are not BurgerKing or Mindy's milkshakes, but they are bananas, bagels, doughnuts, snickers, coffee, and a bunch of others.
  • What alternative products or services could our customers use instead of ours?

• Stakeholders: People or groups that can influence your business, like government agencies. For example, city councils and urban planners who influence smart city project approvals.

  • Who are the people or groups that can influence our business? How can they affect us?

• Suppliers and other value chain actors: Key players in your supply chain and their impact on your business. For example, suppliers of smart sensors and data analytics tools critical for smart city infrastructure.

  • Who are the key players in our supply chain? How do they impact our business?

Macro-economic Forces

• Global market conditions: Growth in developing countries leading to increased investment in smart city projects.

  • What is the overall state of the world economy? Is it growing or shrinking?

• Capital markets: Availability of government grants and private investments for smart city initiatives.

  • How easy or hard it is to get funding for your business? What are the sources of funding available?

• Commodities and other resources: Prices and availability of essential materials and labor. Fluctuating prices of construction materials can impact your project costs.

  • What are the current prices and availability of essential materials and labor? How do they impact our business?

• Economic infrastructure: The quality of systems like transportation, schools, and public services in your area.

  • What is the quality of economic infrastructure in your area? How does it affect your business?

Crafting Your Unique Value Proposition

Entrepreneurs often waste resources on products and services nobody wants. This workshop aims to help you avoid this pitfall.

This is done first by understanding your customer deeply by identifying their jobs, pains, and gains. This becomes almost like our brief, and its important that its accurate.

Use these provided templates and steps to deeply understand your customer, identify how your product or service can meet their needs, and craft clear messages to communicate your value proposition effectively.

Jobs to Be Done

Understanding what customers say and do is crucial, as they often differ. Clayton Christensen's "Jobs to Be Done" theory highlights the importance of understanding the underlying motivations of customers. In his milkshake example, a fast food company discovered that customers bought milkshakes primarily for long, boring commutes. The milkshakes were hired to keep drivers occupied and satiate their hunger until mid-morning. By observing and interviewing customers, the company learned that milkshakes were competing with alternatives like bananas, donuts, or bagels. The key to selling more was to make sure they lasted longer and were convenient for commutes, by making the straw thinner, the milkshake thicker etc. This story underscores the need to understand the specific jobs customers hire products to do, rather than focusing solely on product features.

We will use Value Proposition Design from The Strategyzer books (opens in a new tab) for this purpose.

Recommended Resources

• The Strategyzer books (opens in a new tab) have a lot of tools and resources to help you understand your customers better.
• Explaining the Value Proposition Canvas (2024) (opens in a new tab)
• Strategyzer's Value Proposition Canvas Explained (opens in a new tab)

Consider creating customer profiles for various stakeholders, not just the end user:

• Recommenders
• Influencers
• Decision Makers
• Economic Buyers
• Saboteurs

The Customer Profile Template

The Customer Profile (opens in a new tab) helps you understand the customer jobs-to-be-done and the pains and gains that come with them. It forms the basis of understanding our customer archetype. It consists of three main sections:

• Gains: Positive outcomes or benefits your customer wants to achieve. What makes them happy or satisfied.
• Customer Jobs: Tasks, problems, or needs your customer is trying to address. What they are trying to achieve or accomplish.
• Pains: Negative experiences, emotions, or risks your customer faces. What frustrates or annoys them.

Gains and pains are not opposites. For example, paying for a bill on a date: if it works, it's expected, not a gain. If it doesn't work, it's a pain. A coffee arriving in 2 minutes isn't a gain, but arriving in 20 minutes is a pain.

The steps to fill one out are:

1. Customer Segment: Write down your customer segment.
2. Customer Jobs: Write specific tasks or problems on yellow sticky notes and place them in the "Customer Jobs" section, including social and emotional jobs.
3. Prioritize Customer Jobs: Move the most important sticky notes to the top.
4. Pains: Write down specific pains on red sticky notes and place them in the "Pains" section.
5. Prioritize Pains: Move the most important sticky notes to the top.
6. Gains: Write down specific gains on green sticky notes and place them in the "Gains" section.
7. Prioritize Gains: Move the most important sticky notes to the top.

Value Proposition Canvas

Identify how your product or service will help customers achieve gains and relieve pains (opens in a new tab). The main sections here are:

• Products and Services: List your products and services.
• Pain Relievers: Features, benefits, or capabilities of your products and services that fix customer problems, remove obstacles, or avoid frustrations.
• Gain Creators: Features, benefits, or capabilities of your products and services that make customers' lives better, help them achieve their goals, or add extra value.

Link each of these to the related gain or pain. The steps to fill one out are:

1. Customer Segment: Write down your customer segment.
2. Copy Top 5: Copy the top 5 Customer Jobs, Pains, and Gains sticky notes from the previous exercise.
3. Products and Services: List your products and services.
4. Gain Creators: Note down Gain Creators and link them to Gains using arrows.
5. Pain Relievers: Note down Pain Relievers and link them to Pains using arrows.

Value Proposition Messaging Canvas

Craft clear and compelling messages that communicate the value of your product or service to your customers. This messaging will be used in your marketing and sales materials.

A good example is Calendly (opens in a new tab), which is both a pain reliever (saves time) and a gain creator (makes you look professional).

The steps to fill one out are:

1. Target Customer: Write down your customer segment on a white sticky note next to "target customer".
2. Customer Jobs: Copy your top customer jobs from the previous exercise onto a yellow sticky note in the "what they are trying to do" section.
3. Substitutes/Alternatives: Write down substitutes/alternatives to your product on a black sticky note.
4. Limitations of Alternatives: Write down the limitations of these alternatives on a pink sticky note.
5. Relevant Pains: Copy relevant Pains from the previous exercise onto a red sticky note.
6. Capabilities: Write down relevant capabilities your product has on an orange sticky note.
7. Product Features: Write down the features of your product on a green sticky note (from Pain Relievers or Gain Creators).
8. Product Benefits: Write down the benefits of your product on a blue sticky note (from Pain Relievers or Gain Creators).
9. Core Product: Write down what your product is on a white sticky note at the end.
10. Refine Wording: Refine the wording on each sticky note to make sense as a sentence.

The flow of the Value Proposition Messaging Canvas is:

• What They Are Trying to Do (Use Case)
• How They Are Doing It (Current Way)
• Limitations of Current Way
• Problem (Blocker of Progress)
• Capability
• Feature
• Benefit
• Target Customer
• Core Product

Business Model Design

For this we use the Business Model Canvas (opens in a new tab). But first, what is it and why should we use it?

A business model is a description of how your company creates, delivers, and captures value and a business model canvas is a visual way to write it out. The Business Model Canvas is a strategic management and entrepreneurial tool. It allows you to describe, design, challenge, invent, and pivot your business model.

Why use the business model canvas?

• Show project members both the big picture and how they fit in it
• Focus on value creation instead of features and tech specs
• Stop wasting time and money on products that don’t work
• A lot of presentations for new business ideas are unclear
• We invest a lot in R&D but we aren’t getting results
• Establish as-is and to-be business models
• Easily illustrate how new business ideas make financial sense
• Help the process of building stuff people actually want to buy
• Get teams to think holistically about their business
• Create a common language
• Assess your business model
• Turn your business plan into a process

How to use the Business Model Canvas

The Canvas looks like this:

1. Customer Segments

• Definition: The different groups of people or organizations your business aims to reach and serve.
• Questions to Consider:
  • Who are our most important customers?
  • What are their characteristics and needs?
• Action: Write each customer segment on a separate sticky note and place them in the "Customer Segments" block.

2. Value Propositions

• Definition: The bundle of products and services that create value for your customer segments.
• Questions to Consider:
  • What value do we deliver to the customer?
  • Which of our customer's problems are we helping to solve?
• Action: Write each value proposition on a separate sticky note and place them in the "Value Propositions" block.

3. Channels

• Definition: How your company communicates with and reaches its customer segments to deliver a value proposition.
• Questions to Consider:
  • Through which channels do our customer segments want to be reached?
  • How are we reaching them now?
• Action: Write each channel on a separate sticky note and place them in the "Channels" block.

There are different stages with interacting with customers:

• Awareness: Raise awareness among customers about your products and services.
• Evaluation: Help customers evaluate your Value Proposition.
• Purchase: Allow customers to purchase specific products and services.
• Delivery: Deliver a Value Proposition to customers.
• Post-purchase: Provide post-purchase customer support.
• Referrals: Request customer referrals.

Platforms across each of these stages:

4. Customer Relationships

• Definition: The types of relationships you establish with your customer segments.
• Questions to Consider:
  • What type of relationship does each of our customer segments expect us to establish and maintain with them?
    • Transactional
    • Long Term
    • Personal Assistance
    • Self-Service
    • Automated Services
    • Communities
    • Co-creation
    • Fans
    • Lovemark
    • Value Based: Relate with the customer based on the value they bring to your business.
    • Switching Cost: Think Adobe, where the cost of switching to another software is high.
    • Lock-in: Adobe also locks you into contracts.
    • Direct vs Indirect
  • How are you going to get, keep and grow these types of customer relationships?
    • Get: Attract new people to buy from you
    • Keep: Make sure they stay happy with you
    • Grow: Get more value from existing customers over the long term
    • An excellent example is Monzo (opens in a new tab).
• Action: Write each type of relationship on a separate sticky note and place them in the "Customer Relationships" block.

Customer Relationships vs Channels:

• Customer Relationships are about the strategies the business will follow to GET-KEEP-GROW (e.g. social media networking)
• Channels is about the mechanisms to be used to deliver on those strategies (e.g. Facebook or Twitter)

5. Revenue Streams

• Definition: The cash your company generates from each customer segment.
• Questions to Consider:
  • For what value are our customers really willing to pay?
  • How would they prefer to pay?
  • Which model are you going for?
    • Transactional revenues: Resulting from one-time customer payment. Ikea, Zara
    • Asset sale
    • Usage fee
    • Recurring revenues: Resulting from ongoing payments to either deliver a value proposition to customers or provide post-purchase customer support.
    • Subscription fees
    • Lending/renting/leasing
    • Licensing
    • Advertising
    • Brokerage fees like credit card providers and real estate agents.
    • Free: Your product or service might be free to one or more customer segments.
• Action: Write each revenue stream on a separate sticky note and place them in the "Revenue Streams" block.

6. Key Resources

• Definition: The most important assets required to make your business model work.
• Questions to Consider:
  • What key resources do our value propositions require?
    • Physical
    • Intellectual
    • Human
    • Financial
  • Our distribution channels, customer relationships, and revenue streams?
• Action: Write each key resource on a separate sticky note and place them in the "Key Resources" block.

7. Key Activities

• Definition: The most important things your company must do to make its business model work.
• Questions to Consider:
  • What key activities do our value propositions require?
• Action: Write each key activity on a separate sticky note and place them in the "Key Activities" block.

8. Key Partnerships

• Definition: The network of suppliers and partners that help your company operate.
• Questions to Consider:
  • Who are our key partners?
  • Who are our key suppliers?
• Action: Write each key partnership on a separate sticky note and place them in the "Key Partnerships" block.

9. Cost Structure

• Definition: All the costs involved in operating your business model.
• Questions to Consider:
  • What are the most important costs inherent in our business model?
    • Fixed costs
    • Variable costs
    • Mixed costs
  • Which key resources and key activities are most expensive?
  • This is another area that is susceptible to too much information. Keep it simple, and tell a story.
• Action: Write each cost on a separate sticky note and place them in the "Cost Structure" block.

Examples

Useful Resources

• Business Model Canvas Explained (opens in a new tab)
• Business Model Canvas in 2 Minutes (opens in a new tab)
• How to Use the Business Model Canvas (opens in a new tab)
• Monzo Case Study (opens in a new tab)

Proving your Concept: Testing Business Ideas

"You need to get out the building and speak to customers", Steve Blank

This section covers Customer Profile Discovery Interviews and Value Scene Interviews. A lot of this content comes from the Book "Testing Business Ideas (opens in a new tab)" by David J. Bland and Alex Osterwalder. Testing Business Ideas explains how to increase the success of any venture by providing a practical guide to rapid experimentation. This practical guide contains a library of hands-on techniques for rapidly testing new business ideas to reduce the risk of failure.

The book explains how systematically testing business ideas can dramatically reduce the risk and increase the likelihood of success for any new venture or business project. It builds upon the Business Model Canvas and Value Proposition Canvas by integrating Assumptions Mapping and other powerful lean startup-style experiments. The book closes with practical tips for teams to help make experimentation a continuous, repeatable process.

Design-Test-Repeat Cycle

We are in the design test loop here. Startups are learning institutions, and the design-test-repeat cycle is a way to learn quickly and efficiently. The cycle is:

1. Ideate: Generate ideas addressing the problems we aim to solve.
2. Business Prototypes:
   • Develop business prototypes, including tools like the Business Model Canvas and Environment Map.
3. Assess:
   • Evaluate these ideas to determine if they meet our criteria and objectives.
4. Decision:
   • Decide whether to proceed with testing the idea based on the assessment.
5. Hypothesize:
   • Identify assumptions underlying the idea.
   • Convert these assumptions into testable hypotheses.
   • Utilize the Assumptions Map to pinpoint the most critical assumptions with the least evidence.
   • Design and run experiments to test these hypotheses.
6. Test:
   • Record experiments using a "Test Card."
7. Learn and Decide Again:
   • Capture learnings from the experiments.
   • Decide on the next steps:
     • Pivot: Change one or more significant aspects of the business model.
     • Persevere: Conduct a new experiment to gather more data.
     • Kill the Idea: Abandon the current idea and move on to a new one.

The key principle here is to run experiments to quickly validate or invalidate ideas, saving time, energy, and resources by identifying unviable concepts early. Run the experiments to try and kill the idea. If the idea survives, it's worth pursuing!

Assumption Map

How do you focus that excitement into designing experiments that matter? While testing can be a powerful tool, you’ll need to focus experimentation efforts on high risk areas. The Assumption Map helps you identify the most critical assumptions in your business model. It helps you to focus on the most important assumptions and test them first.

We define a hypothesis as an assumption that is testable, precise and discrete. When you are first writing these out, they may not always be well formed. Instead of infinitely refining your statements, write these down as using the “We believe that…” format. This format helps you shift mentally to the idea of testing.

Since we already have a Business Model Canvas, simply write these down on sticky notes surrounding it. Use a different colour for each theme (desirable, viable, feasible) so that you can see what types of risk you have at a glance. This will also make it easier later on to match experiments to your risk using the experiment library.

Don’t forget the Value Proposition Canvas either - it is just as important to write down the hypotheses of the Value Proposition Canvas to deep dive into desirability risks.

The Innovation Project Scorecard

The The Innovation Project Scorecard (opens in a new tab) helps you assess your innovation project based on the amount and quality of evidence you've collected.

Customer Profile Discovery Interviews

This is used to understand your customer deeply by identifying their jobs, pains, and gains. To do this, we interview a customer ask them:

2. Introduce them to the customer profile and explain what each section is.
3. Share the customer jobs one by one.
4. Ask three questions:
   • a. What would you add? (because it's missing)
   • b. What would you change? (because it's not quite right)
   • c. What would you remove? (because it's wrong)
5. Use orange sticky notes to add new customer jobs.
6. If you make any changes to a sticky note make it purple.
7. If you remove a sticky note move it to the side.
8. Then do the same for the pains and gains.
9. Then get them to pick their top three jobs, pains, and gains.
10. Indicate the top three with numbered sticky notes.

The Customer Value Scene

Creating a storyboard for your product that you can use to get actionable feedback on is handy to distill what it is about, and can be used for visual feedback from customers. This follows three steps:

1. Moment of Need: What is the context that the customer realised they have a problem?
   • Where were they?
   • When was the last time it happened?
2. Today: How are customers currently solving their problem?
   • Are they paying for a solution?
   • How much is this problem costing?
   • How much have they spent to solve it?
3. Tomorrow: Show what your solution is and how it will help the customer complete their jobs to be done in a more satisfactory way.

To do this practically, we:

1. Draw a rough sketch for the moment of need, today, and tomorrow.
2. Present the moment of need to the customer in an interview.
3. Ask them if they have experienced the moment of need before.
4. If they have experienced it, ask them how often it occurs.
5. Ask how they solved the issue last time they experienced it.
6. Present the Tomorrow sketch. Ask them:
   • What would make this idea even more valuable for you?
   • What's missing?
   • What should be deleted and why?
   • How would you rate this idea on a scale from 1 - 10? Why did you give it that score?
   • If we made improvements based on your feedback, what would you score it then?
   • What would we need to do to get to a 10?

Resources

• Innovation Project Scorecard (opens in a new tab)
• The Customer Profile (opens in a new tab)
• Testing Business Ideas (opens in a new tab)

Recommended videos:

• Testing B2B ideas (opens in a new tab)
• Why we should avoid using the term MVP (opens in a new tab)
• How to pivot your company (opens in a new tab)
• The ethics of testing business ideas (opens in a new tab)