VisuALS’ Startup Strategy Skeleton
This is the first story in a series explaining the Startup Strategic Journey.
Ash Srinivas’ friend Weyton received the heartbreaking diagnosis. He had Amyotrophic Lateral Sclerosis (ALS) also known as Lou Gehrig’s disease. As a doctor, Weyton knew the prognosis. ALS is a fatal disease that slowly takes away your ability to function as the brain loses the ability to communicate with different parts of the body. Early in the disease’s progression, Weyton lost lower body strength, then the use of his arms and hands, and finally the ability to speak clearly and audibly. There was no longer a way for him to easily communicate with those he loved.
Thankfully, scientists and engineers have created technology to enable patients like Weyton to communicate by “typing” messages by looking at the letter keys on an on-screen keyboard (eye gaze) and then having the computer speak what has been “typed” (text-to-speech). The device that Weyton received was priced at nearly $20,000 but he had good insurance coverage which would cover most of the cost.
In addition to being Weyton’s friend, Ash was also a mobile technology developer. He knew that there was no reason for the device that Weyton used to cost $20,000. His friend could afford it, but Ash knew that many others couldn’t and therefore would be “locked in” — cut off from the world around them. Ash was also a student in the Master of Science in Engineering program at Oklahoma Christian University (OC). He approached Steve Maher, chair of the graduate engineering program at OC to see if there might be an opportunity for students to explore creating a lower cost alternative.
Steve also teaches in the undergraduate program at OC and is one of the advisors for electrical and computer engineering student capstone projects — a three-semester systems-level engineering program that each undergraduate engineering student must complete before graduating. Over the years, Steve and his wife have also been involved in helping those with special needs. The problem, or rather opportunity, that Ash presented was one that touched Steve’s heart and he knew that it would touch those of some of the students at OC. He was able to quickly get a student team assigned to explore the potential of meeting this need.
Students Allison Chilton, Daniel Griffin, and Drew Harris began work on a concept that would lead to a startup called VisuALS Technology Solutions, LLC.
Startup Strategy Skeleton
New ventures exist to apply a new solution to a known problem. Documenting this as the most basic strategy for the startup is the first step in the Startup Strategy Journey.
There are three critical elements that make up the Startup Strategy Skeleton:
- Problem: What problem are you trying to solve? Who has this problem?
- Solution: What is the new solution that you are bringing to solve the problem?
- Money: Where does the money come from? For a business, how will it make money? For a non-profit, what are the sources of funding?
Although it is essential to identify these three elements of the startup strategy, new ventures often change at least one of these elements before successfully launching.
In Value Proposition Design¹, Alex Osterwalder and his co-authors suggested using a “mad lib” approach to identifying the problem and solution. They specifically recommended filling in the blanks to complete this sentence:
Our [products and services] help(s) [customer segment] who want to [jobs to be done] by [verb] and [verb] (unlike [other existing solution]).
A simple sentence in this form captures the Problem and Solution elements of the Startup Strategy Skeleton.
The third element is an identification of who will see value in the solution and be willing to pay for it. Sometimes, this is clear. If opening a restaurant, it is reasonable to expect that diners will pay for the food they eat. But for many startups, there may be much learning before the revenue model is finalized.
When thinking about the revenue model, there are three dimensions worth considering:
- What is the nature of the value (product, service, information/content, financial)?
- How will people pay (one time, flat rate recurring, usage based, value based)?
- Who will pay you (end customers/retail, middle men/wholesale, third parties/2-sided²)?
Many businesses may combine multiple revenue models in their business. For example, an auto repair shop will sell parts (products) for a fixed fee, services on a usage based model (per hour), may sell an extended warranty (a form of information), and may even get paid a marketing fee by Quaker State for promoting their brand of oil (third party/2-sided).
Many non-profits also have multiple revenue models, including being paid some directly by those they serve, selling products or services in fundraiser events, and receiving donations from third-parties. However, at this stage in strategy development, it’s best to keep your revenue model as simple as possible.
VisuALS’ Startup Strategy Skeleton
The concept that would become VisuALS started with a pretty straightforward idea. Their Startup Strategy Skeleton can be summarized as:
- Problem: Existing eye gaze-based augmentative/alternative communications (AAC) solutions are too expensive.
- Solution: Combine available off-the-shelf hardware components with new student-developed proprietary software to design, build, and sell a more affordable solution.
- Money: Families of ALS patients will purchase these systems.
Over the coming days we will hear more of the story of how this initial concept walked through the startup strategy journey to launch a product and a business still restoring independence, dignity, and hope for families across America today.
End Notes:
¹Osterwalder, Alexander, Yves Pigneur, Gregory Bernarda, and Alan Smith. Value Proposition Design. Hoboken, NJ: Wiley, 2014.
²A two-sided business model is one where the company’s value comes from connecting two (or more) distinct sets of customers. For example, eBay connects buyers and sellers, Google connects searchers and advertisers, and Uber connects riders and drivers. In some cases (e.g. Uber) the company is paid directly by the end customer (the rider). In other cases (e.g. eBay) the company collects a transaction fee out of the payment made by the end customer. In other cases (e.g. Google) the end customer (the searcher) makes no direct payment and the company is paid by a third-party (the advertiser).
