- Write down their initial hypotheses for the 9 components of their company's business model (Who are the customers? What's the product? What's the value proposition, distribution channel? etc.)
- Come up with ways to test each of the 9 business model hypotheses
- Decide what constitutes a pass/fail signal for the test. (At what point would you say that your hypothesis wasn't even close to correct?)
- Consider if the business is worth pursuing? (Give us an estimate of market size)
- Start the team's blog/wiki/journal to record their progress during for the class
- Value Proposition: Labor costs in mowing and weeding applications are significant, and autonomous implementation would solve the problem.
- Customer Segment: Owners/administrators of large green spaces (golf courses, universities, etc.) would buy an autonomous mower. Organic farmers would buy if the Return On Investment (ROI) is less than 1 year.
- Channel: Mowing and agricultural equipment dealers
In one week talking to customers, Autonomow's first hypotheses started to shift: "For mowing applications, we talked to the Stanford Ground Maintenance, Stanford Golf Course supervisor for grass maintenance, a Toro distributor, and an early adopter of an autonomous lawn mower. For weeding applications, we spoke with both small and large farms from 40 to 8,000+ acres."
"We got some very interesting feedback, and overall interest in both systems," reported the team. "Both hypotheses (mowing and weeding) passed, but with some reservations (especially from those whose jobs they would replace!) We also got good feedback from Toro with respect to another hypothesis: selling through distributor vs. selling direct to the consumer."
Class feedback: be careful they didn't make this a robotics science project and instead make sure they spent more time outside the building.
To see the slide deck, click here.
- We solve enough pain for researchers to drive purchase
- Dollar size of deals is sufficient to be profitable with direct sales strategy
- The market is large enough for a scalable business
To see the slide, click here.
- Enterprise customers will be willing to purchase hosting capacity in a marketplace
- Excess capacity exists, and potential sellers are incentivized to sell and willing to take the required steps
- Virtualization technology can be developed that is safe, secure and interoperable between different seller machines
- Not just a product, a complete service (installation, rebates, finance when necessary)
- Reduce the manufacturing cost.
- Cool and Sustainable symbol ("Prius" status)
The Week 2 Lecture: Value Proposition
Our working thesis was not one we shared with the class. We proposed to teach entrepreneurship the way you would teach artists: deep theory coupled with hands-on experience, guided by seasoned, accomplished artists.
Our lecture this week covered Value Proposition -- what problem will the customer pay you to solve? What is the product and service you were offering the customer to solve that problem?
To see the slides, click here.
Next week, each team tests their value proposition hypotheses (their product/service) and reports the results of face-to-face customer discovery. Stay tuned.