Key Terms and Context, or What is She Talking About Again?

I’ll be leaning a lot – a whole helluva lot – on things that I found/discovered/created before I started this “demonstration project” throughout this experience, and it’s going to get repetitive and not a little bit artificial if I keep spelling out the full title of things and recapping them every time I start a new post. Plus, let’s be honest: if this process takes (which is, of course, the plan), I’m almost guaranteed to forget I need to explain concepts more and more frequently. So rather than spell out each term the first time I use it blah blah in each post, I’m just going to link it to this page, and if you want to check it or follow up for more info, the choice will then be in your very capable hands rather than mine.

Also, because this page is long and I don’t know (yet) how to link to specific sections of it, here’s a list of the concepts (and their abbreviation, if any) on this page in the order they appear:

  1. Your Commercial Foundations (YCF)
  2. Conversational Commerce
  3. the Business Model Canvas (the Canvas)
  4. the Startup Owners Manual (SOM) which includes Customer Development
  5. Lean Startup
  6. the YCF Startup Methodology

 1.  Your Commercial Foundations (YCF)

final Commercial Foundations Logo‘Your Commercial Foundations’ is the name of the business I established in 2013 as a vehicle to teach Conversational Commerce. It’s also the working name of the startup at the heart of this experiment. For the course of the experiment, the YCF website – www.ycf.net.au – will primarily be the home of the on-line experiments for this project, as well as hosting general information about Conversational Commerce. It will, however, err on the side of too little information – sorry about that – because part of this process is to figure out what the product needs to be and do to meet my vision, and not the other way around. Which, if I define either YCF or Conversational Commerce in too much detail at the outset, is sort of what I would be doing.

2.  Conversational Commerce

french translation: do you speak commerce

At the heart of YCF is the idea that, while Australian innovators have great technical and theoretical skills, they lack the commercial foundations they need to reach their full potential. Whether their career goal is running their own project, their own team, or their own company, they need to embrace the truth that their work ultimately takes place in a commercial world. A world that is all about return on investment – of time, effort and resources, and a world that has different language, customs and rules, to the one they are used to. And in the same way a traveller to Paris might do a quick conversational French course to make sure they can order their coffee the way they like and not get too lost, so an innovator can learn the practical skills and knowledge they need to navigate this new world on their terms, their way, and at their pace.  For more information, visit www.ycf.net.au

(PS The picture asks “Do you Speak Commerce?” If you were wondering. I would.)

3.   The Business Model Canvas (“the Canvas”)

Business_Model_Canvas

Do not try and copy the picture: there’s no need. Parts of the book that first brought the Canvas to the masses, Business Model Generation, as well as the tool itself and plenty of other great toys are available from the commercial site of Alexander Osterwalder, one of the co-authors of the 2010 text and the gentleman whose PhD thesis conceived the canvas – the other author is Yves Pigneur, who was his supervisor. To quote the authors, “The starting point for any good discussion… on business model innovation should be a shared understanding of what a business model actually is. We need a business model concept that everybody understands… the challenge is to that the concept must be simple, relevant, and intuitively understandable, while not oversimplifying the complexities of how enterprises function.” (2010, p15)

VPDThe Business Model Canvas is a one-page depiction of the business effectively in motion, emphasising the connections and relationships between its 9 core aspects, so one can not only innovate, but at least in my case the first time I used it, make sure one has actually thought about all of them. The 9 aspects – in no particular order – are Key Partners, Key Activities, Key Resources, Value Proposition, Customer Relationships, Channels, Customer Segments, Cost Structure and Revenue Streams. From the canvas, one can experiment with each aspect and thus the model itself, using the BMG methodology and a whole lot of sticky notes to see what-would-happen-if rather than bricks or mortar or a seriously complex spreadsheet, and in the process really test one’s options. 2014’s Value Proposition Design is a sequel of sorts, diving deeply into the front-of-house Canvas aspects of the Value Proposition and Customer Segments to not only embed resilience into the overall model but to provide the footings of a growth path forward, plus some great case studies. FWIW, if you are only going to buy one book, I’d buy the latter.

4.   The Start Up Owner’s Manual (SOM)

SOMI came to SOM through the Canvas – in following up on a recommendation about Alex Osterwalder and his Youtube canvas presentations, I found one where he shared the stage with Steve Blank and suddenly, the lightbulbs that had been going off as I learned about the canvas morphed into klieg lights. This 2012 book and the Customer Development process it discusses showed me a pathway to take through what til then had felt like stumbling blindfolded through a Scottish bog. In the rain. Barefoot. Not because it promises you success, cos it doesn’t – actually it promises you quite a lot of failure, but failure on a small scale and for an informative purpose: finding out where the solid ground is, and building on that. As Steve Blank and Bob Dorf say in the opening How-To, “This book is a step-by-step how-to guide that details a process for building a successful, profitable, scalable startup.” It doesn’t pretend to have all the answers, but it does show you the right questions to ask, and where to ask them – outside your own four walls. Both Steve and Bob have active presence on the web, and I hope the latter forgives me for my tendency to only use Steve’s name when referencing their work, as the former never would.

5.  Lean Startup 

Lean Startup

While Osterwalder and Blank met after developing their respective fundamental concepts, and seized on the synergies between them to serve a greater purpose – us – Steve Blank was part of Eric Ries‘s story from very early in the evolution of what is now a global movement. And, for that matter, Eric’s Lean Startup ideas had a significant impact of the evolution of Customer Development as it expressed in SOM. In mid 2004, Steve was a successful entrepreneur and investor in tech startups, and Eric was looking for finance for his new tech venture. Steve became one of the first investors and board members in that ultimately hugely successful venture – IMVU – and Eric and his co-founder Will Harvey sat in on Steve’s Customer Development class at University of California, Berkeley. What they learned, integrated with agile engineering and the secrets of Japanese manufacture, the world now knows as Lean Startup.

One of the key insights at the core of both Lean Startup and SOM, is that startups aren’t like other companies. They are defined by their lack of certainty – literally: Ries defines a startup as

an organisation dedicated to creating something new under conditions of extreme uncertainty

This means a lot of things we traditionally do and measure in an established company aren’t going to be relevant in a startup because, frankly, they don’t really tell you what you need to know. What Lean – and SOM, and the Canvas – do is embrace that uncertainty and make it work for, rather than against the startup. Not ceasing to measure, but measuring different things; not fearing to fail, but embracing it as tests and learning, to the point that one’s goal is accelerating the feedback loop of Build-Measure-Learn to turn ideas into products.

6.   The YCF Startup Methodology

This experience – which I am calling a Demonstration Project – is going to apply the series of steps and activities set out in the Startup Owners Manual (the SOM Methodology) to the Conversational Commerce concept.  Because the SOM Methodology incorporates both the Canvas and Lean Startup, I’ll be referring to them throughout, not in contrast to the SOM but because there’s is only so much SOM can include in each of its four phases and still be considered a portable book. Plus the SOM process, while technically written as a series of steps, is really more of a framework – I wouldn’t call it “high-level” because there is plenty of detail, but each startup’s experience will be customised to reflect their needs and circumstances beyond SOM’s additional material for web-based start-ups.

I haven’t set a definite end date for each or any of the steps in the methodology, because I don’t know what I’m going to find, or how many times I’m going to need to pivot. And as Mr Ries says

how well executing if not going right place

Most startups have burn rate/ runway run out of cash. My deadline, for reasons I don’t care to go into right now, is 20 December: it stops here.