Blog : MVP

Learnings on Key Activities for modelH
imagine.GO

Learnings on Key Activities for modelH

We just wrapped up our 11th business building block sprint on Key Activities. In summary, the sprint for Project 1.11 on Key Activities completed 2 objectives:

  • Questions to ask on the canvas for the Key Activities
  • Explanation regarding how to define and stick to only the necessary Key Activities

modelH Key Activities

1. Questions to Ask on the Canvas for the Key Activities Block

We defined the questions that should be added to our business model canvas for helping practitioners define their Key Activities.

  1. What Key Activities do our Value Propositions require?
  2. What Key Activities do our Channels require?
  3. What Key Activities do our Customer Relationships require?
  4. What Key Activities do our Revenue streams require?

modelH Canvas 11 Key Activities Highlight

2. Do Only the Right Key Activities

The first part of this sprint is about defining the work tasks you need to do to deliver your Value Proposition. However, there are a lot of ways you can waste time doing the wrong things as your work scope begins to creep. So how do you go about keeping to only the right actions that you defined in the Key Activities block? I advocate that you apply the rigors and methods of the Lean Startup to your healthcare business model – including all technology, process, and business functions.

By definition, Minimum Viable Product (MVP) is the version of a product that is made through one cycle of a ‘build-measure-learn’ loop, done as quickly as possible. Accordingly, the work tasks (Key Activities) that are required for a build must include only those that meet the minimum viable product. Although this methodology was first applied to the world of software engineering, I recommend using it across the board for all work tasks.

The term Minimum Viable Product gives some people pause. Many default to the adage that to deliver value, we must give our customers the maximum product, not the minimum. Sometimes our attempt to provide maximum value results in bloated or inconvenient products loaded with useless features that diminish, rather than enhance, the value of the product. Think of a product in its two basic value points: form and function. Stylistically speaking, function is what a product does and form is how it does it. We discussed the need to build an “expected” form, or what we call Experience, in our building block on Experience. This expected form also implies Key Activities on your part. Be prepared to collect necessary information and build it into the Key Activities in your business model.

But at the same time, when it comes to function we advocate that you only need to do the work to build the minimum viable version. This reasoning examines your Customer Relationship, built on the premise that you have a Value Proposition that will solve your customers’ Job-to-be-done (JTBD). Your Value Proposition should do that and no more than that, otherwise you are throwing energy and resources after an unknown. If you agree with this logic, then you must apply this rigor to what work tasks, or Key Activities, you set out to do as part of the functional delivery of this Value Proposition. Focus on function rather than form. The basis of your trust relationship with the customer is a two-way exchange of value. If your product is all style and no substance, then you will lose your customers. If your substance far exceeds your customers’ needs, then you are similarly doing more harm than good, as the extra value is unrealized.  An even worse case is that customers end up confused drop it altogether.  Ultimately, only do what is necessary to build your MVP.

modelH - Consumer Behavior when Purchasing

Do not forget that you are running a business and that there are laws around compliance, fillings, and finance that you must follow. These are part of your Key Activities. If you do not list the work on these core operational fronts, you have an incomplete picture of the workload and resources required, which will inhibit you from determining the Key Resources and Key Partners you will need for a concise delivery. Therefore, as is often the case, you will find out too late, and it will either shut your business down or cost you an exponential amount to resolve.

In Summary

In conclusion, we advocate that you identify your Key Activities by identifying your MVP, and adding in the other required business tasks you needs to remain compliant with laws and financial transactions. By only building what is deemed most valuable to the customer, and progressing through iterative builds, you ensure speed to market and successful releases. When you are wrong, you fail fast (and cheap). MVP assumes that you iterate until you find the ideal solution. Start small and gradually add on, based on your customers’ needs.

Take time to incorporate these approaches into the Key Activities block in your business model canvas. Regardless if your business model aims at Patients, Providers, Payers, and or Purveyors, defining the Key Activities will keep you focused on doing what is relevant to your Customer Segment’s Jobs-to-be-done and your Value Proposition. Anything else is a distraction and will lead to straying from your business model.

What is Next?

I will be publishing the findings from 1.12 Key Resources and 1.13 Key Partners over the next few weeks. Next up on the modelH Co-Creation Forum, we are going to do a short two-week sprint on Costs and Revenue.

Interested in what we are doing?

Step up to the plate and become involved. We have just a few key modules left to discuss in the proposed modelH canvas. Please join us, make your contribution, and be recognized for helping to develop a sustainable future for the US healthcare system.

To your health,

The Team at imagine.GO

 

Learn from Your Competition
imagine.GO

Learn from Your Competition

What Can You Learn from Your Competition?

I will be giving the keynote at the Pre-Event Kickoff for Jacksonville Startup Weekend today and I am going to speak on a simple, but valuable concept – learning from your competitors. Last year at the Startup Weekend for North East Florida I was honored to give the keynote. I am proud to say that I am slated to give it again this year at the 2013 Startup Weekend on January 25th.

2013 Startup Weekend

Understanding of the Consumer’s Need of Your Product

This is obviously of the utmost importance. If you cannot clearly and simply identify your consumer, you do not have a product. I speak in great depth about this in other BLOG posts so I will not go into detail on it here. But I will refer you to the following blog posts for reference:

Understanding the Market’s Need of Your Product

At Last Year’s Startup Weekend I focused on how start-ups need to consider the larger market ecosystem surrounding their product. At the time, I was the Chief Innovation Officer for GuideWell and we were making plans to build our own start-up accelerator. We also had an active pipeline of ideas that we were watching the market for with the intent that we would make an informed build, buy, or ally decision on how to proceed.

During the discussion at Startup Weekend, I attempted to elevate the attendees thinking about their product so that they considered how it fit inside the prioritized needs of the existing marketplace. This is especially true in the healthcare space, where market entry is difficult and reliance on the existing infrastructure is of utmost importance. I asked them to consider if the product had viability to a large insurer like the one I worked for, and if so, would the best path forward be as a vendor or to outright sell it. I cautioned them that being a product vendor of a multi-billion dollar, highly-regulated company is high on the impossible side for a start-up, and could ultimately bankrupt them trying to get up to compliance with a long list of requirements and regulations. While this can be viewed as very unfortunate, it is nonetheless true.

Instead, I planted a seed for them to consider approaching large companies with the intent to sell their product and its IP in its current state. This form of exit strategy, I believe, will become more viable over the next several years. It allows the entrepreneur to acquire cash and most probably a retained contract to further develop it for the legacy company. Of course, that too comes with its’ own set of difficulties.

Understanding Your Competitors Position Against Your Product

Henry Ford
Henry Ford

I wanted to make some additional points on the need to have a greater understanding of the market and your product’s place in it. Today we will look at what we can learn from our competition. Here again, I advocate that if you cannot clearly and simply identify your competitors, you do not have a product. Even product category inventors like Ford and Apple have competitors.

Henry Ford, the inventor of the automobile, was once quoted as saying “If I had asked people what they wanted, they would have said faster horses.” While this may contradict the points I make around properly identifying your minimum viable product, at least it points to the fact that there is always some form of competition. I add to that the notion that you can learn a great deal from them.

My absolute favorite writing on this subject is from the blog of Marc Hedlund, the founder and CEO of the failed start-up Wesabe. His cautionary tale is entitled “Why Wesabe Lost to Mint .” Both Wesabe and Mint were/are online financial tools that puts the users’ bank accounts into one place, sets a budget, tracks their goals, etc. In 2009, Mint was acquired by Intuit (the makers of Quicken) for $170 million – not bad. Even with a year head start, users, press, and revenue – Wesabe lost to Mint and closed its doors forever. Why?

Mint

In his post, Hedlund bravely looks at the mistakes he made that led to being beat by Mint. In essence, he boils it down to Mint’s superior efforts in creating a simpler and more automated tool for consumers. Wesabe’s product features went deeper but required more user input and manipulation. Mint’s product features started at a much higher level but gave the appearance to the user of full automation. Hence, Mint was easier to use – so more people used it. By the way, since 2007 Mint has added all of those “deeper” features, and so much more. The lesson here is (in my opinion), it is better to win today with less, and add more tomorrow. This is the heart of the minimum viable concept model.

Hedlund and the team at Wesabe were mistaken in their interpretation of what their consumer’s minimum viable product actually was. They learned it by watching their competitor, but they learned it too late. Today’s start-ups must be nimble enough to quickly recognize market needs and pivot to ensure they always serve the customer best.

Final Words

So I ask all you entrepreneurs out there, particularly in the healthcare space, to take heed of my words and think extensively not only about who are your customers, but who your competitors are and what you can learn from them. You can see the deck I presented with here.

To your health,
The Team at imagine.GO