Startup Labs - Lab 2 - Modeling the Business

Term: Fall 2023

Date: September 19th, 2023

Time: 12:00pm -1:00pm

Location: Online Only

Instructor: Mark Mondry

Presented By: Office of the Vice President for Research and Innovation (OVPRI)

Description:

Course will meet on the above date, but will remain open for two weeks after for information and the recorded session.

Welcome to our second session of LAUNCH Startup labs.

This session covers one of the most important topics in the Startup Labs series: building business models.

In your research, you understand the power of modeling. Modeling helps us understand relationships in complex systems. In entrepreneurship, we use tools associated with the Lean Startup approach to create an early model of the business. We can use a lightweight version of hypothesis testing on key assumptions we build into in our model. 

These assumptions can be very high level, such as the assumption that there is a big enough market opportunity for the product/service we intend to offer, or the assumption that our technology serves a real and addressable problem or need of our target customers. The Lean Startup methodology helps us identify and test assumptions in our model using an approach similar to the scientific method. If you have not already done so, you should review the Harvard Business Review (HBR) article from Module 1 titled Why the Lean Startup Changes Everything.  This explains how and why the lean startup methodology emerged.

The Lean Startup approach emphasizes the value of getting out of our own heads, and out of the building, to engage with our "target customers" to better understand the customer and their world.  This makes sense. You may think your idea / discovery is so wonderful that everyone will want to buy it, but that is only an n=1.  Your friends and colleagues may act like they agree with your view, but most likely because they do not want to offend you. We make assumptions that other people will find our discovery as exciting as we do, only to learn too late that our assumption is dead wrong from a commercialization perspective. 

People and organizations buy products or services because they find they value greater than the cost.  Products and services that solve customer problems, needs wants or desires provide value.  You need to gather strong evidence that your proposed product / service provides value to a large enough customer segment to make this all work. Why? You will need to persuade others (including investors) that your opportunity is sound. The smart ones will want evidence