How to test your initial start-up thinking

If you’re looking to test your initial start-up thinking then look no further. This simple model can help you articulate your business in near totality. As a one pager it will help you communicate your ideas with others and generate conversation within your teams. Like any model or canvas it should be updated continually and not become a static document.

Below is a brief outline of the main building blocks.

1. Customer Challenge

Define the customer challenge you’re trying to solve. Write down the frustrations and annoyances your service will solve. For example, you might be launching a concierge travel app that eradicates travellers need to use multiple apps during their tips.

2. Vision

Define your start-up vision that solves the customer challenge and clearly outlines your business purpose.

3. Customer Target Persona

Describe your primary target customer by creating a persona. You may need to create more than one. Write down the customer’s needs, wants, behaviours and characteristics. You might want to add further colour to your persona by including profile information such as spend propensity, technology fluency etc.

Remember your customer persona will need to be updated over time once your business begins to engage and interact with real users. You may find your persona looks very different in a few months time.

4. Target Market Sizing

Define the size of the market you believe you have the chance to engage and interact with. Be careful to articulate how you’ve got to your figures. There’s plenty of sources online that describe the various methodologies you can use to get this started.

5. Customer Proposition

Once you’ve outlined your challenge, vision and persona you’ll be in a strong position to define your proposition. The proposition should spell out in simple statements why the customer should choose your service, why they will stay and why they would refer you to others without incentive.

6. Experience (Customer Journey)

This is the fun bit. Here you get to draw up the end-to-end experience for the service you are building. This is where you get to illustrate how you’d execute against your vision and proposition.

You can always change the customer journey steps and remember very few customer journeys are as linear as this. Use the headings to think about how you might acquire customers, on-board them and retain them.

Think about adding value and removing waste throughout the experience. Keep things simple and avoid the temptation to over complicate.

7. Channels

List the channels that customers will use in engaging with your service. Define whether the channels change during each part of the experience you’ve outlined in step 6.

8. Data

Like any start-up you’ll need to gather and use data to make your service work. List the data points across the service experience you’ve drawn up. Ask yourself what data you need. Do you need to know a customer’s Twitter handle? Do you need their home address? What data do you need about your users if they reach out for your help?

9. People, Skills, Applications & Tools

List the people, skills, applications and tools you’ll need for running the business. For people, outline the various roles you’ll need to start with. You may need to expand your team to include new engineers, designers, marketers and sales people. For skills think about the various disciplines you need to make your business successful. Do you have someone who can help you navigate the murky world of regulation?

For applications and tools think about those that the customer and internal staff will use. These could be anything from a company Twitter profile to a customer service ticketing tool.

10. Revenue Model

Define how your business will make money. This might be directly from customers or via in-direct methods such as advertising. Think about service pricing and how much customers will pay for your service and the model you might adopt. You may be considering a subscription or a one-off payment model. Think carefully here about how pricing might change over time to maintain customer loyalty.

11. Cost Structure

Consider and plot the costs you are likely to incur in setting up and running the business. Think about capital and operational costs as well as those that are on-off and those that are recurring. If you can, it’s a good idea to outline costs against each stage of the customer journey. This will help you understand how much it could cost to recruit and retain customers. Don’t forget to include staffing costs as these will grow as you begin to scale.

Like any business document there’s still lots missing from here including competitors, threats, risks etc. You can use and amend the template as you see fit depending on your needs and context.

Good luck.