When you start something new—whether it be a nonprofit, a social venture, an initiative or a business—you face very few knowns and a sea of unknowns. Will stakeholders really value your service? What feedback will you receive once you launch? Can your idea be financially sustainable? In this webinar, I introduce three concepts from the strategy literature that can help leaders of new ventures be intentional and strategic about the steps they take, even when so much about even the immediate future is unknown: 1) The Theory of Jobs-To-Be-Done, which can help you understand what value creation really means from a customer or beneficiary point of view. 2) The Capabilities Driven Strategy perspective, which can help you understand your value proposition and build confidence in your “right to win,” or as I describe it in the nonprofit context: your “right to scale.” 3) Lean Startup principles, which describe the mechanics of how to systematically turn unknowns into knowns, so you can move forward with confidence.

1. © 2019 Arpeggio Advisors
Strategic Confidence in New Ventures
NAVIGATING THE FOG OF ENTREPRENEURSHIP
NICK TAKAMINE, ARPEGGIO ADVISORS
APRIL 2019
1
https://www.arpeggiostrategy.com
https://www.linkedin.com/in/ntakamine/
@ntakamine
View Webinar Recording: https://www.arpeggiostrategy.com/nonprofit-strategy-articles/2019/4/15/starting-something-new-heres-how-to-be-strategic-in-the-face-of-uncertainty

2. © 2019 Arpeggio Advisors 2
Key concepts
1 2 3
There are no answers inside the
building
Play where you have a “right to win”Customers don’t buy milkshakes

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Customers don’t buy milkshakes
1 “Customers rarely buy
what the company thinks
its selling them.”

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Customers don’t buy milkshakes
1
Senior nonprofit leaders
Upgrading organization’s
management sophistication to
handle growth or accelerate impact
Lead strategic change with
confidence
• Product: Crash courses, “ah-
ha” moments
• Marketing: Education
Customer
Circumstance
Goal
Working individuals
Long and boring commute to
work
Avoid boredom and stay full
until lunch
• Product: Caffeinated? Grab-
and-go?
• Marketing: Radio? Billboards?
AnatomyofaJob-To-Be-
Done

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Customers don’t buy milkshakes
1
Ask Yourself
What job are my customers trying to get done?
Does my product “nail” the job-to-be-done?

6. © 2019 Arpeggio Advisors 6
Play where you have a “right to
win”
2
Right
to Win
Value Proposition
Capabilities System Product Portfolio
Strategic Identity

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Value Proposition
Capabilities System
Product Portfolio
Helps its customers remain at the
cutting edge of fashion trends, at
everyday low prices
Read the fashion pulse of the world
Bring new products to market
within three weeks
Deliver shipments direct to stores
every two weeks
Fast-fashion brand including:
Zara, Zara Home, Bershka,
Massimo Dutti, Pull & Bear,
Uterique, Stradivarius, Oysho
Gives customers a go-to option for
dependable, easygoing and not-too-
flashy apparel basics
Design fresh, yet “safe” apparel
Source apparel at low cost
Drive customer traffic (foot traffic
and online)
Traditional casual brands
including:
GAP, Banana Republic, Old Navy,
Athletica, Intermix, Hill City
Play where you have a “right to
win”
2
OrganizationalIdentity

8. © 2019 Arpeggio Advisors 8
Value Proposition Capabilities System Product Portfolio
Help nonprofit leaders upgrade
their organization’s strategic
management capabilities
Solve ambiguous, unstructured
problems
Make concepts from the private
sector relevant and practical for
leaders in the social sector
Build clients’ intuition for the
concepts we employ
Consulting in strategy,
business model innovation,
and organizational
transformation
Play where you have a “right to
win”
2

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Ask Yourself
What are my value proposition, capabilities system,
and product portfolio?
Do my choices give me a right to win?
Play where you have a “right to
win”
2

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“There are no facts
inside the building, so
get the heck outside.”
There are no answers inside the
building
3

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Idea
You can describe needs + solution but have
little direct customer feedback.
Concept Validation
Targeted customers affirm your needs
description and solution concept.
Prototype
You have tested your business model
hypotheses with prototypes.
Minimum Viable Product
You have tested hypotheses through customers’
real-world use of a functioning product.
Problem/Solution Fit
You have generated full-price sales with new target
customers through a sustainable sales funnel.
Market Traction
You have growing sales under normal conditions
and have visibility into unit economics.
Product/Market Fit
You can show revenue scales with investment
in customer acquisition.
There are no answers inside the
building
3

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Idea Resume
Target Customer(s)
Job-to-be-Done
Current Barriers to
Getting Job Done
Idea Overview
Source of Strategic
Confidence
Critical
Uncertainties
Financial
Potential
Basic Business
Model
Product / Service Idea
1. Am I targeting a
major problem?
2. Does my solution
solve the problem?
3. Can it be financially
sustainable?
There are no answers inside the
building
3

13. © 2019 Arpeggio Advisors 13
There are no answers inside the
building
3
Experiments to Get You Going
Tap an Expert Get outside perspective on the problem or solution.
Conduct a Thought Exercise Ask yourself, “What would have to be true?”
Test Reactions to a Prototype
Let the customer experience an aspect of your
product or business model.
Run Targeted Market Tests See what the wisdom of the market tells you.
Do Some Research
Look for evidence supporting or invalidating your
assumptions.
Talk to a Customer
Test your understanding of the problem and their
interest in your solution.
Write Your Assumptions Down “My hypothesis is X, based on the assumption that __.”
InternalExternal

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Ask Yourself
Have I articulated my most critical business model hypotheses?
Where do I have the most confidence in my hypotheses?
Where do I have the least confidence and how will I test these hypotheses?
There are no answers inside the
building
3

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Strategic Confidence Worksheet
 Customers will hire my venture to do the following job: ________________
 I choose the following value proposition, capabilities system and product portfolio: ________
 In making these choices, I am trading off: ________________
 I believe my choices will give me a right to win because: ________________
 I’m most confident about the following business model hypotheses: ________________
 These are my current hypotheses because: ________________
 My most important hypotheses to test are: ________________
 I will test these hypotheses by: ________________
1 Customers don’t buy
milkshakes
2
Play where you have a
“right to win”
3
There are no answers inside
the building

16. © 2019 Arpeggio Advisors 16
Further Reading
• The Essential Advantage, Paul Leinwand & Cesare Mainardi (corresponding article)
• Strategy that Works, Paul Leinwand & Cesare Mainardi (corresponding article)
• The First Mile, Scott Anthony (corresponding webinar)
• The Lean Method (video), Steve Blank
• The Startup Owner’s Manual, Steve Blank
• The Lean Startup, Eric Ries
• Competing Against Luck, Clayton Christensen (corresponding article)
• Milkshakes (video), Clayton Christensen
1 Customers don’t buy
milkshakes
2
Play where you have a
“right to win”
3
There are no answers inside
the building

17. © 2019 Arpeggio Advisors 17
Questions?