Idea2Product2Market

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Idea 2 Product 2 Market
By: Sohan Babu Khatri
CEO
Three H Management

Sohan Babu Khatri
CEO, Three H Management
Good Morning
Sohan Khatri

Credit goes to….
• Steve Blank
• Eric Ries
• Ash Maurya
• Alexander Osterwalder
• Yves Pigneur
• Gred Bernarda
• Alan Smith
• Bill Gross
• Knut Haanaes
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And to all the entrepreneurs I’ve
met, researched on, interacted
with and received inspiration
from
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Activity 1: Lets hear your IDEA
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Business Idea and Concept
What and How ?

Business Idea

Mother of IDEA ?
OPPORTUNITY

Describe the Opportunity
• What problem ?
• What issue ?
• What GAP ?
• What fear ?
• What enthusiasm ?
• What limitation ?
• What Challenge ?
• What chaos ?
• What confusion ?
• What inconsistency ?
• What uncertainty ?
• What appeal ?
Sohan Khatri

While talking about opportunity…
• Talk about the intensity and flux of ……..
– problem ?
– issue ?
– GAP ?
– fear ?
– enthusiasm ?
– limitation ?
– challenge ?
– chaos ?
– confusion ?
– inconsistency ?
– uncertainty ?
– appeal ?
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The Window of Opportunity
I was seldom able
to see an opportunity
until it ceased to be
one.
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• Intense the issue related to opportunity,
better the pitching…
– How closely is it related to life of people ?
– How current is it ?
– How persistent is it ?
– How wide is it ?
– How high does it lie in priority in society ?
– How much is it affecting life of people ?
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And Think About…SCALABILITY
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Business Idea
• How are you going to engage in harnessing
that opportunity ?
• How are you going to solve it ?
• How are you going to devote yourself with it ?
• How is so good about it ?
• What is so effective about it ?
• What is so different about it ?
• What is so unique about it ?
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When you’re talking about it, you’re
talking about
Business IDEA

Innovation
What is
possible
with
Technology
?
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Innovation
What is
possible
with
Technology
?
What is
viable in the
marketplace
?
What is
desirable to
users ?
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Right
business
model
What I love
to do
What will
provide me
sustainable
profitability
What is
desirable to
users
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On Ideas
If a man makes a better mousetrap
than his neighbor, though he builds
his house in the woods, the world
will make a beaten path to his door.
Ralph Waldo Emerson
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Two Problems
1. He never said it.
2. The research doesn’t support it.
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• The basic mousetrap (1897)
• How much innovation (better mousetraps)
in mousetraps since then?
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Mousetrap Innovations
• Since USPTO’s founding in 1828, how
many mousetrap patents in U.S.?
– 4,400 patents (Hargadon, 2010)
• How many new mousetrap patent
applications each year currently?
– 400 as of the mid-1990s (Hope, 1996)
– 40 of these are granted
• How many out of these have made
money?
– 20 out of the 4,400
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Why don’t every innovation
succeed ?
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And then somebody said
this….
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Business Concept
The manufacturer who waits for the
world to beat a path to his door is a
great optimist. But the
manufacturer who shows this
“mousetrap” (and its value) to the
world, keeps the smoke coming out
his chimney.
O.B. Winters
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Mind the Difference ….
Do you like my
product ?
Would you pay
for my product ?
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Mind the Difference ….
Are you eligible
to get married ?
Are you ready
to get married?
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What is the basic principle behind
the business?
Business
model
Explain
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Since we are talking about
business idea and not an idea
just to fancy about it
personally…… it has to make
some market sense
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A Good Place to Start
Business ModelingSohan Khatri

1.
GETTING FROM BUSINESS IDEA
TO BUSINESS MODEL
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In order to succeed, any GREAT
IDEA needs a GREAT BUSINESS
MODEL
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IDEA is personal
BUSINESS is public !!!
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Even if customers love your
value proposition, your business
is going to fail, if its not scalable
and if its not operationally /
financially not sustainable
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Business Model Canvas

Three Foundations of Successful
Venture
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…. Answering these three
questions
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The BUSINESS MODEL is the
logic by which you answer these
three questions
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• A business model describes the rationale of how
an organization creates, delivers and captures
value
– simple
– relevant
– intuitively understandable
• Recipe for how the company intends to make
money
• Needs to cover four main areas of business:
offer, customers, infrastructure, financial
viability
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• Fundamentally, I find it delivers three things:
1. Focus: Stripping away the 40+ pages of ‘stuff’ in a
traditional business plan, I’ve seen users of the
BMC improve their clarify and focus on what’s
driving the business (and what’s non-core and
getting in the way).
2. Flexibility: It’s alot easier to tweak the model and
try things (from a planning perspective) with
something that’s sitting on a single page.
3. Transparency: Your team will have a much easier
time understanding your business model and be
much more likely to buy in to your vision when it’s
laid out on a single page.
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2.
VISUALIZING YOUR BUSINESS
MODEL
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1. Customer segments – An organization serves one or several
customer segments
2. Value propositions – Solving customer problems or satisfying
needs
3. Channels – Delivery of value to customers through
communication, distribution and sales
4. Customer relationships – How organization maintains
relationships with customers
5. Revenue streams – Value proposition successfully delivered to
customers
6. Key resources – Assets required to offer all the above
mentioned elements
7. Key activities – Activities performed to implement all these
elements
8. Key partnerships – External/outsourced resources that these
activities require
9. Cost structure – How much all the above costs
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For whom are we creating value?
Who are our most important customers?
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Customer Segmentation
• Demography
• Geography
• Psychograph
• Behavior
• User type
• Usage
• Benefits sought
• Price sensitivity
• Competitor
• Application
• Brand loyalty
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Segmentation
and Market-
Driven
Strategy
Segments
Value
Opportunities
Capabilities/
Segment Match
Targets
Positioning
Strategy
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Illustrative Segmentation Variables
Characteristics
of people/
organizations
Consumer
Markets
Industrial/
Organizational
Markets
Age, gender, income,
family size, lifecycle
stage, geographic
location, lifestyle
Type of industry , size,
geographic location, corporate
culture, stage of
development, producer/
intermediary
Use situation
Occasion, importance of
purchase, prior experience
with
product, user status
Application, Purchasing
procedure
(new task, modified
rebuy, straight rebuy
Buyers’ needs/
preferences
Brand loyalty status, brand
preference, benefits sought,
quality, proneness to make a
deal
Performance requirements,
brand preferences, desired
features, service requirements
Purchase
behavior
Size of purchase,
frequency of purchase
Volume, frequency
of purchase
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Segmentation
Requirements
Custom
er
Segmen
t
Identifiabl
e
Actionabl
e
Favorable
Stability
over time
Response
Differenc
es
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Are you serving……… ??
• Mass market
– one large group of customers with broadly similar needs and problems.
• Niche market
– Business models targeting niche markets cater to specific, specialized Customer
Segments.
• Multi- Segmented
– Market segments with slightly different needs and problems
– Segments have similar but varying needs and problems.
• Diversified (unrelated)
– Two unrelated Customer Segments with very different needs and problems. For
example, in 2006 Amazon.com decided to diversify its retail business by selling “cloud
computing” services: online storage space and on-demand server usage.
– Thus it started catering to a totally different Customer Segment—Web companies—
with a totally different Value Proposition
• Multi-sided platforms (or multi-sided markets)
– Two or more interdependent Customer Segments. A credit card company, for example,
needs a large base of credit card holders and a large base of merchants who accept
those credit cards.
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What value do we deliver to the customer?
Which one of our customer’s problems are we helping to solve? Which customer
needs are we satisfying?
What bundles of products and services are we offering to each Customer Segment?
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Value Propositions
• The Value Proposition is the reason why
customers turn to one company over
another.
• It solves a customer problem or satisfies a
customer need.
• Value Proposition is an aggregation, or
bundle, of benefits that a company offers
customers.
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A Value Proposition creates value for a Customer
Segment through a distinct mix of elements
catering to that segment’s needs.
Values may be quantitative
(e.g. price, speed of service) or qualitative
(e.g. design, customer experience).
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Some possible elements of value
• Newness / Novelty
• Performance
• Customization
• Getting the Job Done
• Design
• Brand / Status
• Price
• Cost Reduction
• Risk Reduction
• Accessibility
• Convenience /
Usability
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Selling Benefits
Feature
Advantage
Benefit
Specific characteristic inbuilt in
the product
What the feature does /
The function of the feature
What the feature can do for the
customer
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Wrinkle-free
Attached water
bottle holder
3X Zoom
Feature Advantage Benefit
Can hold a water
bottle
No need for
ironing
Saves time, energy
and electricity
Don’t have to stop for
drinking water, hence
time saved
Better and more close-
up pictures, fond
memories
Can capture images from a
distance
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Designing VALUE PROPOSITION
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Through which Channels do our Customer Segments want to be reached?
How are we reaching them now?
How are our Channels integrated? Which ones work best?
Which ones are most cost-efficient? How are we integrating them with customer
routines?
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…….
• Finding the right mix of Channels to satisfy how
customers want to be reached is crucial in bringing a
Value Proposition to market.
• Own Channels, through partner Channels, or through
a mix of both.
• Partner Channels lead to lower margins, but they
allow an organization to expand its reach and benefit
from partner strengths.
• Owned Channels and particularly direct ones have
higher margins, but can be costly to put in place and
to operate.
• The trick is to find the right balance between the
different types of Channels, to integrate them in a way
to create a great customer experience, and to
maximize revenues.
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What type of relationship does each of our Customer
Segments expect us to establish and maintain with them?
Which ones have we established? How costly are they?
How are they integrated with the rest of our business model?
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Can be driven by following
motivations
• Customer acquisition
• Customer retention
• Boosting sales (upselling)
• In the early days, for example, mobile network
operator Customer Relationships were driven
by aggressive acquisition strategies involving
free mobile phones. When the market became
saturated, operators switched to focusing on
customer retention and increasing average
revenue per customer.
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The Target ….. To Enhance Overall
Customer Experience
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Types / Categories/ Ways/
Strategies
• Personal Assistance
• Dedicated Personal Assistance
• Self – Service
• Automated Services
• Communities
• Co-creation
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• For what value are our
customers really willing to
pay?
• For what do they currently
pay? How are they currently
paying?
• How would they prefer to pay?
• How much does each
Revenue Stream contribute to
overall revenues?
If
customers
comprise
the heart
of a
business
model,
Revenue
Streams
are its
arteries.
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A business model can involve two
different types of Revenue Streams:
1. Transaction revenues resulting from one-
time customer payments
2. Recurring revenues resulting from
ongoing payments to either deliver a
Value Proposition to customers or
provide post-purchase customer support
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Pricing Mechanisms
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Set Pricing Objectives ….
1.Survival
2.Customer Acquisition
3.Impacting Customer Perception of Value
4.Maximum Current Profit
5.Maximum Market Share
6.Maximum Market Skimming
7.Product-Quality Leadership
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Pricing Strategies
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What Key Resources do our Value
Propositions require?
Our Distribution Channels? Customer
Relationships?
Revenue Streams?
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Questions to Ask
• What Key Resources do our
Value Proposition require ?
• What resources do our
distribution channel require
?
customer relationship
require ?
revenue streams requrie ?
Categories of Resources
• Physical assets (eg.
facilities, machineries etc)
• Intellectual Resources
(eg, Brands, copyrights,
patents etc.)
• Human Resources
• Financial Resources
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Categories
• Physical
• Financial
• Intellectual
• Human
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What Key Activities do our Value Propositions
require?
Our Distribution Channels? Customer
Relationships?
Revenue streams?
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7S of a Business Model / Management
Shared
Values
Systems
Structure
Strategy
Staffs
Skills
Style
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Who are our Key Partners? Who are our key
suppliers?
Which Key Resources are we acquiring from
partners?
Which Key Activities do partners perform?
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Modes of Partnerships
1. Strategic alliances between non-
competitors
2. Coopetition: strategic partnerships
between competitors
3. Joint ventures to develop new businesses
4. Buyer-supplier relationships to assure
reliable supplies
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Motivations for Partnerships
• Optimization and economy of scale
– usually formed to reduce costs, and often involve outsourcing or sharing
infrastructure..
• Reduction of risk and uncertainty
– Blu-ray, for example, is an optical disc format jointly developed by a group of
the world’s leading consumer electronics, personal computer, and media
manufacturers. The group cooperated to bring Blu-ray technology to market,
yet individual members compete in selling their own Blu-ray products.
• Acquisition of particular resources and activities
– Some extend their own capabilities by relying on other firms to furnish
particular resources or perform certain activities. Such partnerships can be
motivated by needs to acquire knowledge, licenses, or access to customers.
A mobile phone manufacturer, for example, may license an operating system
for its handsets rather than developing one in-house. An insurer may choose
to rely on independent brokers to sell its policies rather than develop its own
sales force.
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• What are the most important costs
inherent in our business model?
• Which Key Resources are most
expensive?
• Which Key Activities are most
expensive?
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Two Models
Naturally enough, costs should be
minimized in every business model. But
low Cost Structures are more important
to some business models than to others.
Therefore it can be useful to distinguish
between two broad classes of business
model Cost Structures: cost-driven and
value-driven (many business models fall
in between these two extremes)
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Cost Driven Business Model
• Cost-driven business models focus on
minimizing costs wherever possible.
• This approach aims at creating and
maintaining the leanest possible Cost
Structure, using low price Value
Propositions, maximum automation, and
extensive outsourcing.
Sohan Khatri

Value Driven Business Model
• Some companies are less concerned with
the cost implications of a particular
business model design, and instead focus
on value creation.
• Premium Value Propositions and a high
degree of personalized service usually
characterize value-driven business
models.
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Right Mix of 9 Building Blocks
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www.canvanizer.com
www.businessmodelgeneration.c
om
www.strategyzer.com
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Key Business Model Questions
1. How do you acquire customers?
2. After you have landed a new customer, how do you plan to relate to that
customer and manage the relationship (if at all)?
3. How do you charge your customers? What is your revenue model?
4. How much do you charge your customers? Can you calculate your
revenues for the next month, quarter and year?
5. What assets are available to you or under your control?
6. Who are your key partners?
7. What key activities do you need to engage in to deliver your value
proposition?
8. What are your fixed costs?
9. What are your variable costs? Can you calculate your total cost for the
next month, quarter and year?
10.Does your revenue forecast demonstrate increased profitability towards
the end of the forecast period?
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Activity 2: Create your BMC
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2.
DESIGNING RIGHT VALUE
PROPOSITION
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Value Proposition

The Value Triad – Be Clear
Customer
Product Application
Value
Proposition
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Technology
Functional
Capabilities
Benefits
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Customer’s Side
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Value Proposition Side
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Value Proposition Design
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Activity 3: Create your VPC
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3.
THINKING OVER – REVISING -
ITERATING
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Think of your business model as a
story – a story of how your
business model will create, deliver
and capture value in the market
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Difference between Start-Up
and New-Business ?
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Making your Business Model
Work

I hope your first business
model is ready
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All that you filled up your BMC
with, are your hypothesis … and
you’d better test them… ASAP
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Don’t expect breakthrough in the
first BMC…. They rarely give you
competitive advantage
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Don’t fall in love with your first
IDEA and BMC
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To compete in the ruthless market,
you need to think harder – iterate
and revise
Think about alternatives on every
building blocks of BMC
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Create Prototype BMCs … who
knows, you might end up
exploring disruptive business
model which might change the
entire industry
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Do your research on innovative
and successful business models
that exists across the industries –
you might find GREAT idea to
work on in around your business
model
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Three Rules:
1. Focus on the business model – not just
your idea, product, technology or service
2. Don’t fall in love with your first BM – best
models are build on clever, unexpected
elements and that comes from creating
many less obvious versions
3. Iterate rapidly and test your models early
– in the real world
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Interconnection between Building
Blocks of your BMC

CS VP CH CR RS KA KR KP CStr
CS
VP
CH
CR
RS
KA
KR
KP
CStr
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CS VP CH CR RS KA KR KP CStr
CS
VP
CH
CR
RS
KA
KR
KP
CStr
See the fit and
mis-fit between
each pair….
Rethink on the
new possibilities
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4.
NAVIGATING YOUR
ENVIRONMENT
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World out there is full of threats,
constraints and opportunities
beyond your control.
They create the environment in
which your business model will try
surviving and growing everyday
Account them in your model
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Map
MARKET
FORCES
here
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• Everything related to the
customer segments
you’ve selected
• Which other segments
are there ?
• Which ones are most
lucrative ?
• Which segments are
growing ?
• What they want most ?
• Why might they resist ?
• What problems would
they have to adopt your
new methodology/
technology ?
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Map KEY TRENDS
here
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• Political Trends
• Economic Trends
• Social/Cultural Trends
• Technological Trends
• Environmental/ Ecological Trends
• Legal/ Regulatory Trends
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Map
INDUSTRY
FORCES
here
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• Who are your main
competitors ?
• What advantages do
their business model
provide ?
• Could they crush you ?
• Is there dominant
competitor already ?
• What are their
strengths ? CAs?
• What are their
weaknesses ? CDAs?
• Can you Disrupt them
?
• What might happen if
partners and suppliers
evolve ?
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Map MACRO
ECONOMIC
Forces here
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• Market Uncertainties
• Capital and Funding Availability and Constraints
• Infrastructure and its state in your market
• Economic Aspects
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OPPORTUNITIES
THREATS
THREATS
OPPORTUNITIES THREATS
OPPORTUNITIES
OPPORTUNITIES
THREATS
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• Does your model
has a competitive
edge today ?
• Tomorrow ?
• What should be the
source of your CA
?
• How can you make
it sustainable ?
• Can you create TA
as the sources of
CA moves along
with the industry
evolution ?
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• Is your model prepared for emerging trends ?
• Counter-Trends ?
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• Is your model in
line with evolving
customer needs ?
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• How will your model adjust to macro-economic shifts ?
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Activity 4: Revise your BMC or
Create Alternative BMCs
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Asking these questions over and
over again, trying to find out way
out – solution by revising your
BMC will make your model better
likely to succeed, given the
external factors affecting it and
environment where it operates
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NOW YOU’RE READY TO TEST
YOUR MODEL IN THE MARKET
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Business Model Pitfalls

“Thrashing is Essential … The
Question is When to Thrash”
– Seth Godin, Linchpin
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All products go through some
level of thrashing – successful
products do all their thrashing at
the beginning.
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You can’t reason your way to a
plan that works – YOU HAVE TO
GET OUTSIDE YOUR BUILDING
TO EMPIRICAL TESTING YOUR
PLAN
GENICHI GENBUTSU
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You’ve got your model, you’ve
made your best guess… NOW…
its time to FAIL
Its hard to even hear, but even
your most promising prototype is
pretty certain to fail
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Many of your hypothesis are
bound to be wrong.
Luckily, the canvas makes it easier
to adapt…. As long as your
mistakes are cheap and you act
quickly to fix them
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The only judge of your Business
Model is your future customer
You’ve to test these hypotheses …
fail or succeed, learn and then
adjust
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This process is known as
CUSTOMER DEVELOPMENT and
LEAN START UP
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Begin by stating the most
important hypothesis underlying
your business model
Get out into the world and see if
you’re right hypothesizing this ?
Sohan Khatri

You can conduct low cost smart
experiments to test your
hypothesis
Talk to industry experts, potential
partners, potential distributors
But most importantly, talk to your
prospective customers
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They are likely to have questions
and concerns that never crossed
your mind
What you learn in the field can
have unexpected opportunities
too
This might lead you to modify
your original idea in favor of
something newSohan Khatri

As you gain confidence in your
model, you should accelerate and
intensify your testing
Then you succeed in some ways,
but you fail in another – because
there will always be facts that you
can’t see from your office
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Adapt Rapidly and Cheaply
The more you test, the more you
learn and the more your BMC
matures
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The era of the fixed business
plan is OVER
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Document the evolution of
your business model
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After sometime, you’ll find that
your BM is no more just guesses
and hypothesis – you’ve tested,
adapted and your business now, is
more likely to succeed
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You’re ready to pitch your
Business Model now.. With some
traction gained, with some
pivoting and persevering and with
more confidence
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TOP 10 BUSINESS
MODEL PITFALLS
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10. Not clearly defining metrics
that measures Success
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• Lukewarm success ? Product customers do seem to
like….. Mastering short term runway to keep your
company go out of business is not enough
• Not having clear vision of what success really looks
like
• Why you want to grow ?
• To what you want to grow into ?
• What do you want to achieve ? At different points of
time ?
Sohan Khatri

• Success is different for different companies in
different timelines
• Whatever be the success you define, you should
take time to answer
– Why you want to build this company ?
– What the finish story benefit would be to you ?
– How will you recognize success when you see it ?
– Set time-box to realize your finish story benefit
– Try focus on your overall WHY and WHEN of your
business
Sohan Khatri

“Begin with the END in the
mind” – Steven Covey
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Ask whether your current
business model can scale, at least
on paper, to meet that success
metric… if not, rethink your
business model now vs. waiting to
see what happens six months to 2
years from now
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9. Marketing to Everyone
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When you start by building a
product for everyone, you end up
building a product for no one
Even Facebook didn’t start by opening their network to everyone
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Find your Early Adopters
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Your Early Adopters define
your business model
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Early Adopters behave differently
than mainstream customers and
there’s this CHASM between them
that may be hard to cross later
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You cant cross this CHASM by
leapfrogging the Early Adopters,
but rather by riding the curve and
using the Early Adopters to build
enough momentum to then leap
over the CHASM
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Hone in on Early Adopters
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8. Ending up on a Local
Maximum
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There is a real danger of getting
too narrow too soon and falling
into the local maximum trap.
At the earlier stage, your job is not
executing, but find the plan that
works.
Sohan Khatri

Mathematical Optimization
Solution – called ‘Hill Climbing’
Attempting to find better solutions
by incrementally changing a
single element of the solution
Sohan Khatri

If you narrow down too quickly and focus your attention in
optimizing it, you may Successfully achieve your local
maximum, but miss out on a much bigger opportunity.Sohan Khatri

Test Multiple Models in Parallel
Ask yourself questions related to
alternatives of your BMC
hypothesis
Sohan Khatri

Quickly Sketch Few Variations
and shortlist 3 for testing
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7. Problems are not specific
enough
Sohan Khatri

Secret to getting customer’s
attention is Nailing their Problem
Don’t define problem in very
generic way… go as specific as
you can
Sohan Khatri

Use your earlier definition of Early
Adopters, try go define problems
more specifically
Use 5 Why’s Technique
Ask questions related to specific
use cases and workflows of
customers
Sohan Khatri

6. No Unfair Advantage Story
Sohan Khatri

Most Start-Ups don’t have an
unfair advantage on Day 1
Sohan Khatri

Unlike other boxes, this is not
hypothesis you want to test…..
If and when you start getting some
traction, your competition and
copycats will do what you are
doing … If you don’t have an
unfair advantage by then, you may
be easily displaced
Sohan Khatri

Think about SCA…. Think about
UfA and where it’ll come from…
and how will you create it
May be even start taking initial
steps towards building it
Sohan Khatri

5. A Weak Value Proposition
Sohan Khatri

Biggest Challenge – Getting
noticed by customers because of
the uniqueness in your value
proposition
It needs to be different and it need
to matter
Sohan Khatri

It is on this basis, you stand to make competition irrelevant
Sohan Khatri

You are going to do lots of testing
around this and this is ….. Don’t
stretch too much over this but
make sure you give special
attention to this
Sohan Khatri

4. Not Having Enough Runway
Sohan Khatri

Running out of resources is one of
the main reason products
eventually fail.
One of your main jobs initially
should be establishing enough
runway until your next significant
learning milestone
Sohan Khatri

Three Stages of these
milestones
Problem-
Solution Fit
Product-
Market Fit
Scale
Sohan Khatri

milestones
Problem-Solution Fit
Do I have a
problem worth
solving ?
Initial discussion
with customers,
after which you
define your MVP
Product-Market Fit
Scale
Sohan Khatri

milestones
Do I have a
problem worth
solving ?
Initial discussion
with customers,
after which you
define your MVP
Product-Market Fit
Have I built
something
people want ?
Test MVP whether
it works in small
scale
Scale
Sohan Khatri

milestones
Do I have a
problem worth
solving ?
Initial discussion
with customers,
after which you
define your MVP
Product-Market Fit
Have I built
something
people want ?
Test MVP
whether it works
in small scale
Scale
How do I
accelerate
growth ?
Sohan Khatri

• Can you reduce scope of your solution , your MVP ? So
that you shorten your validation cycle
• Can you reduce your cost ?
• If you are raising funding, identify how much traction or
customer engagement you need to achieve for that
conversation with investorSohan Khatri

If you are bootstrapping, identify
your BEP and put some time
constraints around it
Sohan Khatri

3. No Significant Path to
Customers
Sohan Khatri

Early Adopters do not make your
market.
Ability to build a scalable channel
ultimately determines your
product fate.
Sohan Khatri

While its ok to start with any
channels to begin with….
Identify where scalable channel
will come from and start investing
and building and testing them
right now – from day one
Sohan Khatri

2. No Monetizable Pain
Sohan Khatri

The difference between a Hobby
and a Business is that the later
gets you paid
What do customers pay today to
solve this “must solve” problem ?
And what will you charge for your
solution ?
Sohan Khatri

1. Falling in love with the
Solution
Sohan Khatri

Sometimes that ‘Awesome’ is truly
awesome for lot of people but
often than not, its not
Sohan Khatri

As much as possible, defer
thinking about your final solution
at least for now , just don’t do it –
instead challenge yourself to think
in terms of MVP where the primary
directive is delivering value to
customers in fastest manner
possible
Sohan Khatri

Your true MVP will be revealed as
you get outside the building and
start having real conversation with
customers
Sohan Khatri

So, there you have it, work your
canvas through each of these
pitfalls, and you’ll find yourself at
a must stronger starting point.
Sohan Khatri

Activity 5: Create your Lean
Canvas… and in multiples
Sohan Khatri

Activity 6: What is your plan to
run Lean Start Up Loop ?
Sohan Khatri

Two Reasons Companies Fail:
Credit: Two reasons companies fail -- and how to avoid them | Knut Haanaes
https://www.youtube.com/watch?v=XVXmYD0UPRQ
Is it possible to run a company and reinvent it at the same time? For business
strategist Knut Haanaes, the ability to innovate after becoming successful is the
mark of a great organization. He shares insights on how to strike a balance between
perfecting what we already know and exploring totally new ideas — and lays out
how to avoid two major strategy traps.
Sohan Khatri

1. Only doing more of “the
same”
Sohan Khatri

2. Only doing “what’s new”
Sohan Khatri

Real Solution to Quality
Growth
Sohan Khatri

Figuring out the balance between
two activities:
EXPLORATION
&
EXPLOITATION
Sohan Khatri

EXPLORATION
• What’s new
• Search
• Discovery
• New products
• New innovation
• All our hero’s were explorers
• Its risky
Sohan Khatri

EXPLOITATION
• Taking the knowledge we have and making it
better
• Making ‘good’ – ‘better’
• Making ‘good’ products faster, cheaper,
accessible, ‘must have’
• In short term, its not risky
• But if we only exploit, in long term its very risky
• Imagine singing the same song every time –
though with small interesting variations
(obsolete, boring, pathetic)
Sohan Khatri

• Long Term Perspective
–Explore
• Short Term Perspective
–Exploit
Sohan Khatri

• In long term, we all are dead !!!
• There is not long term without short term
• Businesses should not die even in long
term
Sohan Khatri

• As a child, we explored more
– We were inquisitive
– We wanted to know the form, content,
phenomena of the things, actions and world
around us
• As we grow older, we gather more
knowledge to be able to exploit than explore
– Need to explore dies
– Exploitation ensures our survival at present
• SAME GOES WITH COMPANY
Sohan Khatri

• Companies become, by normal nature, less
innovative, as they become more competent
• Questions CEOs ask
– How can I both, effectively run and re-invent my
company ?
– How can I transform, before we have to ?
• Doing one is difficult
• Doing both takes an art
Sohan Khatri

Examples – both balanced
• Nestle – espresso
• Toyota – hybrid cars
• Lego – animation movies
• Unilever – sustainable distribution
Sohan Khatri

Why is balancing so difficult ?
• Because there are so many traps which keep
us where we are
• Two of them
Sohan Khatri

1. Perpetual Search Trap
• We create something but we don’t have
patience and persistence to make it work
• Instead of staying with it, we create
something new
• Analysis paralysis
• Coming up with ideas and getting frustrated
– vicious circle
Sohan Khatri

2. The Success Trap
• They literally held the future in their hand but
they couldn’t see it.
• They were simply so good at making what
they love doing – that they don’t change
• When we know something well, its difficult to
change
• Success is lousy teacher. It seduces us into
thinking ‘we cannot fail’ – Bill Gates.
Sohan Khatri

Some Lessons

1. Get ahead of the crisis
• Innovation is Insurance
• ‘I’ll win the next innovation cycle, whatever
it takes’
Sohan Khatri

2. Think in multiple time scales
• X axis – time scale of perspectives
Sohan Khatri

3. Invite Challenge
• Allow challenging within company
• Be open to challenge
• Board plays major role – good parenting
• Be frugal and bootstrap
Sohan Khatri

4. Be skeptical of success
• Suspect it
• Learn from the reasons of it
• Don’t rest
Sohan Khatri

Ask Two Questions
• In which areas do you see that the company
is at the risk of falling into success trap – of
just going on Auto Pilot and what can you do
to challenge ?
• When did I explore something new last time
and what kind of effect did it have in me and
is that something I should do more often ?
Sohan Khatri

• Whether you’re an explorer by nature or whether you tend to
exploit whatever you already know, the real beauty is in
balance.
Exploration Exploitation
Sohan Khatri

Reasons Start-Up Succeed

What factors matter most for start-
up success ?
The single biggest reason why startups succeed | Bill Gross
https://www.youtube.com/watch?v=bNpx7gpSqbY
Bill Gross has founded a lot of startups, and incubated many others — and he got
curious about why some succeeded and others failed. So he gathered data from
hundreds of companies, his own and other people's, and ranked each company on
five key factors. He found one factor that stands out from the others — and surprised
even him. Sohan Khatri

Ideas Team Business
Model
Funding Timing
Sohan Khatri

Look for …
• Whether consumers are really ready for
what you have to offer to them
• Be honest about it
Sohan Khatri

THE END
All the best
By: Sohan Babu Khatri

Idea2Product2Market

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