Lean for Sharing Ventures: Four Times Harder, Four Times More Rewarding, Ted Ladd, Hult...

Ted Ladd PhDProfessor of Entrepreneurship San Francisco | Boston | New York | Ashridge | London | Dubai | Shanghai

Leveraging Leanin the Sharing

Economy

Sharing venture:1. an online platform 2. between two sides of a

transaction 3. that reduces coordination

costs 4. to provide access without

ownership.

ChallengeSharing ventures are 4x harder to design1. Business Model for Suppliers2. Business Model for Demanders3. Same Place4. Same Time• Why?

Network Effect• Value for each user ≈ # of users• Bigger = Better• Economies of scale of demand

Problem: Theory is incomplete• # of users ≠ value for each user• Value = volume x diversity• Example: Smartwatch apps• Where to look?

Sales Cycle

Diversity

Volume

1: Diversify acquisition channels• Keep old Canvases• Evaluate sub-optimal channels– For non-overlapping appeal

• Rotate channels for diversity of value

• Example: Hooves.dk• When?

First Mover Advantage• Typically, a myth – Second Mover Advantage, Fast Followers

• Network Effect Winner Takes All– Explosive growth after tipping point– First Mover is real!

• Renewed attention on Early Adopters– To drive indirect network effect

Adoption Cycle

Area under curve = installed baseMoore, G. (2002) Crossing the chasm: Marketing and selling disruptive products to mainstream customers

Venture maturity

# of

cus

tom

ers

(Poor) Options for Early Adopters

• Spend on marketing– Increases early costs

• Lower prices– Reduces early revenue

• Arrive with deep pockets– Expensive capital

• Build Measure Learn (Experiment)– Shows biz model to competitors– Jeopardizes early reputation

2: Formalize Customer Discovery• Data for Hypothesis Testing• Conversations as Warm Sales

Leads• Track, revisit, encourage,

persuade• Explore and exploit for

ambidexterity

Leverage Lean for Sharing• Network effect promotes Early

Adopters1. Rotate channels for diversity of

demand2. Dual use for Customer

DiscoveryTed.Ladd@Hult.edu

Related Research from Ted Ladd• Limits of Lean

– Harvard Business Review (2016)• Customer Interaction and Experimentation

– Academy of Management conference (2015)• Social Venture Canvas

– Stanford Social Innovation Review (Spring 2015)– International Journal of Entrepreneurship & Innovation

(Feb 2017)• Customer Development and Effectuation

– Management Teaching Review (March 2016)• Impact of Lean on Risk Aversion

– Drafting