Our new Stanford Lean LaunchPad class was an experiment in a new model of teaching startup entrepreneurship. This post is part two. Part one is here. The class syllabus is here.
We asked each of the student teams to:
Write down their initial hypotheses for the 9 components of their company’s business model (Who are the customers? What’s the product? What’s the value proposition, distribution channel? etc.)
Come up with ways to test each of the 9 business model hypotheses
Decide what constitutes a pass/fail signal for the test. (At what point would you say that your hypothesis wasn’t even close to correct?)
Consider if the business is worth pursuing? (Give us an estimate of market size)
Start the team’s blog/wiki/journal to record their progress during for the class
Autonomow’s business was a robot lawn mower. Off to a running start, they not only wrote down their initial business model hypotheses but they immediately got out of the building and began interviewing prospective customers to test the three most critical assumptions in any business: Value Proposition, Customer Segment and Channel. Their hypotheses when they first left the campus were:
Value Proposition: Labor costs in mowing and weeding applications are significant, and autonomous implementation would solve the problem.
Customer Segment: Owners/administrators of large green spaces (golf courses, universities, etc.) would buy an autonomous mower. Organic farmers would buy if the Return On Investment (ROI) is less than 1 year.
Channel: Mowing and agricultural equipment dealers
In one week talking to customers, Autonomow’s first hypotheses started to shift: “For mowing applications, we talked to the Stanford Ground Maintenance, Stanford Golf Course supervisor for grass maintenance, a Toro distributor, and an early adopter of an autonomous lawn mower. For weeding applications, we spoke with both small and large farms from 40 to 8,000+ acres.”
“We got some very interesting feedback, and overall interest in both systems,” reported the team. “Both hypotheses (mowing and weeding) passed, but with some reservations (especially from those whose jobs they would replace!) We also got good feedback from Toro with respect to another hypothesis: selling through distributor vs. selling direct to the consumer.”
Class feedback: be careful they didn’t make this a robotics science project and instead make sure they spent more time outside the building.
To see the slide deck, click here.
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