[MVB] Founder Guide, a framework for startup strategy & planning
#1 Problem Statement
Q-1: <What is the core problem you are trying to solve?>
Q-2: <Who are the different beneficiaries that shall benefit if this problem were to be solved? Describe the problem as faced by each beneficiary.>
Q-3: <What are the expectations of the beneficiaries?In terms of pains to be relieved and gains to be created;
Q-4: <Why is solving this problem so important for each of the beneficiaries? What goal can they each achieve by solving this problem?>
#2 (First) Target Customer
Q-1: <Which among the different beneficiaries (or customer types) shall be most interested or shall benefit the most from solving this problem? This beneficiary is referred to as your First Target Customer;>
Q-2: <Which specific group/type or sub-group/sub-type of customers within this broad definition of First Target Customer base are most disappointed with the current solution? How would we know this? What behaviour should we look for? This group/type or sub-group/sub-type is referred to as Customer Persona;>
Q-3: <How would you profile/describe this Customer Persona? What specific attributes for this Customer Persona should we look for if we have to find and target these real-world customers?>
Q-4:<Are any or all of the following attributes TRUE of your First Target Customer?
- Acutely aware of the problem and of the potential gains in solving it;
- Serious attempt taken up in one or more ways to solve the problem;
- Unhappy with the current ‘commercial’ solution available in the organised market/sector because it is unsuitable, complex, or too expensive;
- Not considered the core/primary target for the best commercial solutions currently available in the market, and usually ignored by the respective solution providers (brands);
#3 Product (Solution)
Q-1: <How are you solving the problem for your target customer? What do you offer (product or service) to your target customer?>
Q-2: <How do you make your solution useful (features), usable (easy & convenient) and affordable to your target customer?>
Q-3: <Is your product having the maximum Highest Common Factor (HCF) in terms of features, spec, value-added services etc. across all customers in your First Target Customer Segment?
Q-4: <Is there a (MVP) 100% HCF version of your product that can deliver a compelling value proposition that your target customer is willing to pay for? Have you considered launching with that product?>
<your answer>
#4 Value Proposition
Refer to my blog on understanding Value Proposition
Q-1: <Why will your customer buy and use your solution? Does your product help your target customer make or save money?>
Q-2: <Does this solution address the specific gaps the target customer is facing with alternative solutions? How is this solution better than any other alternative that this customer is already using or is available in the market?> Q-3:<What extra benefits does your target customer realise/gain by solving the problem with your solution?>
Q-4:<How does your solution make it easy for your target customer to experience the benefits and also measure the outcomes?>
Q-5:<How does your solution help your target customer overcome any usage/deployment constraints* that will hinder adoption?>
*Constraints are usually referred to as Adoption Barriers such as,
- TCO [Total Cost of Ownership or Lifetime Cost of Buying & Using a Product]
- Maintenance/Service
- Skills/Expertise
- Installation/Integration
- Resources/materials
- Time consumption
- Physical/personal risk
- Product training
- Changes to habits/process
- Accessibility
- Inability to assess quality of the product/service [Risk Perception]
- Monitoring the usage/deployment
#5 Price & Revenue Model
Q-1: <Who pays for your offering? Is your customer (user) also the buyer of your product? If not, then who is the buyer? How much is your solution worth to your target customer? How much is your target customer willing to pay for your solution?>
Q-2: <How much is the Direct Cost (Marginal Costs) to Unit Revenue?>
Q-3: <What additional sources of revenue can be monetized from the Target Customer? Which among the other beneficiaries (other than the target customer) are likely to pay you for the value your solution might be offering?>
Q-4: <Is it likely to generate additional revenue streams at a lower Direct Cost (Marginal Costs) to Unit Revenue ratio?>
Q-5: <What is the lifetime revenue potential you have estimated for your primary target customer?>
#6 Target Market
Q-1: <What is the biggest market that you can potentially target after first building a strong base in the first/early customer segments you are looking at now?>
Q-2: <How would you select and sequence these target segments in such a way that you are able to achieve segment leadership with the same product, distribution/sales, and business operations?>
Q-3: <If you are entering an existing market, have you identified a big enough niche segment in which you can rapidly become the leader?>
#7 Customer Acquisition & Sales
Q-1: <How will you create awareness and generate leads for your product?>
Q-2: <How do you increase the conversion from leads to trials, and from trials to sales?>
Q-3: <Where would your customers actually buy your product from? What is the channel for distribution and delivery of your product to the customer?>
Q-4: <How much is the Customer Acquisition Cost (CAC) to revenue per customer ratio? How can you lower this ratio?>
Q-5: <Are there go-to-market partners that can help you target other adjacent markets with the standard product?>
#8 Competitive Advantages
Q-1: <Who are your most important present and future competitors?>
Q-2:<What other offerings in the market does your first target customer compare your solution with now or is likely to do so in the future?>
Q-3:<What serious tech, operating resources, commercial or market advantages do you enjoy over your current or future competitors? What advantages do you hope to create in the future?>
Q-4: <Are there entry-barriers you can potentially create to protect the advantages you already possess or plan to create?>
Q-5: <How do you safeguard against customer churn out?>
#9 Operating Profitability
Q-1: <At what level of monthly/quarterly revenue will you achieve operating break-even? (in other words, at this level of revenue per time-period (month or quarter) is the aggregate profit or aggregate gross margins equal to the operating costs in that time-period?>
Q-2: <What is the fastest time-frame, in terms of number of time-periods (month or quarter) do you estimate to achieve this revenue run-rate milestone?>
Q-3: <Is your First Target Customer segment big enough to achieve this Revenue run-rate milestone?>
Q-4: <What risks do you foresee in achieving this Revenue run-rate at the point of operating break-even? How do you plan to mitigate those risks?>
* In planning or estimating the Revenue run-rate at the point of operating break-even, it is important to factor in appropriate growth in operating costs too;
#10 Growth Factors
Q-1: <How do you plan to achieve a higher revenue growth with lower cost of revenue (CAC, Discounts, Commissions etc.)?>
Q-2: <Is there a possibility of generating additional revenues (up-sell or cross-sell or referrals) from the acquired base of customers? Can these revenues be generated at relatively higher gross margins?>
Q-3: <What additional revenues can be generated from other sources after building a strong base of buyers/users?>
Q-4: <What other adjacent market/product opportunities can you expand into in the future?>
