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Frame a Value and Growth Hypothesis
Sanjay Vijayakumar
Why?
Reason #1: Customers use your product by paying a price
because of the value that it provides
Reason#2: Once you find initial customers, you will need to an efficient method to find more of them to grow into a
business.
Remember: Every Startup is on a journey/adventure to
become a sustainable business.
Remember: To become a sustainable business, a startup needs to generate
more money (income) than its expenses.
What is Value? What is Price?
Price is what customers pay.Value is what customers get.
Example:Bullet BikeValue : Riding
Pleasure
Example:Bullet Shares
Value : ROI
Facebook User: Price is Free
Value: Networking with friends
Facebook Stock: Price $$
Value:ROI
Food @ Regular Hotelv/s
Food@ 5 Star Hotel
At a 5 Star Hotel - You will get a high quality
AmbienceServiceRestroomsQuality of UtensilsQuality of Food
And this reflects in the price that you pay for the value (better quality ambience, service etc..) you get.
Tip: Technology is not your business. Its only an enabler to your business.
Business starts when
a. you provide value through a product to customers
b. who pays a price for the value andc. you find a way to grow profitably to repeat
a.
To Do#1:
Frame your value hypothesis statements
Hypothesis: We believe Customers will use product <Name of your product>
because/for <fill in the blanks with your value/reasons why customers will use the
product>
Growth Hypothesis is assumption how new users will find your
product.
To Do#2:
Frame your growth hypothesis statements
Statement: We will find our initial customers by..<fill in
the blanks with how you plan to get new customers>
Tip: These value and growth hypothesis are the assumptions that your team would be testing in
the coming six months.
Fundamental difference between college and SV.CO is this crucial step of finding customers.
You can move forward in steps 4-10 only by finding real customers in real world by providing
real value.
Time
Steps
1. Idea2. Prototype
3. Early Customers4. Efficiently adding customers
5. Scaling Business Operations6. Being Operational Break-even
7. Generating Business Profits8. Defending Profits from competition
9. Recovering Business Investments10. Return on Investment for Shareholders
Teams attempt at-least 4 products to find customers
T= 10 yearsT= 6 monthsT= 0
Useful Resource: https://blog.kissmetric
s.com/dropbox-hacked-growth/
Also write down your insight in your timeline entry as to what
you learnt by trying to formulate your value and
growth hypothesis.
Insight = new learning, action items or other todo tasks.
All because you performed this task.
Insight pointers: While choosing an idea from the ideas list, select a market you
understand or think you can learn the best, as it will allow you to go very deep into that domain/market and become and expert to
find the real customer pain.
Solving for this real customer pain will help you find the real value and growth
hypothesis.
Don’t forget to check the Rubric for
pointers.