Lessons Learned
Here, you can read about what we learn throughout this course of Lean Entrepreneurship by setting up our Business Model, working on the validation of hypotheses and talking to potential users.
Lessons Learned 4.0 - Analyzing our back-office structure: app development, cost structure and competitors
During the last class, we received feedback from a new perspective since our professor had brought a young entrepreneur to class. It was very valuable to have a new person with an objective view on our idea give us feedback and see how she perceived our business. The woman advised us to neatly analyze our competitors in order to gain a detailed understanding of their value propositions and thereby determining how we can differentiate our service from them. This analysis was conducted during the week, looking at public transport, taxis, private drivers as well as Uber, a driving service that was forbidden in Portugal in the last days, but we expect them to reenter the market sooner or later.
Additionally, the woman recommended us to analyze the price structure of different means of transport for our drivers since we should focus on the primary service offered (driving people home in their own car) and combine this with the most cost-advantageous back-office structure in terms of transport for the drivers (which could be scooters, but other options like public transport, car sharing etc. have to be analyzed).
The PickUsUp service can be requested through an app. During this week, we realized our initial ideas of the app-set up and used the online service MarvelApp to develop a prototype in order to give customers an idea of how our requesting our service through the app works. Therefore, we had to analyze the process of requesting a driver, consider possible challenges, develop verification structures and also think about the possibility of getting feedback from our customers through the app. We combined these approaches with considerations relating to high user experience and an easy-to-use user interface of the app. Eventually, we came up with an app for which you can sign up via gmail or facebook. When requesting a service, your current location will be determined via GPS but in a future version, the user will be able to change his location in order to request a PickUsUp driver to some other meeting point. After determining the location, an active driver can be selected and the time needed to get to the customer’s location will be calculated. If the user accepts the time needed, the driver will be dispatched and a verification code will be displayed to secure the identity of the driver and enhance the credibility of our service. After the usage of PickUsUp, the customer has the opportunity to rate our service and we suggest him/her to like our page on Facebook or follow us on Twitter.
During the conversation with the young woman who attended our last class of Lean Entrepreneurship, the topic of our cost structure came up. Our cost structure is mainly determined by the means of transport that our drivers will use to get to the customer’s location and drive back from the customer’s home to our base/ the next requested service. Initially, we were very sure about the usage of an electric, foldable scooter. However, the woman advised us to analyze different transport options. This analysis should furthermore be conducted since we realized in our previously conducted attribute survey, that the customers do not value the “experience” of using our service very highly. Therefore, it is of lower relevance for them, what type of vehicle the drivers are using. Additionally, we might be able to safe money if the scooters are very expensive to purchase or rent or cause high maintenance costs. However, after the analysis of various transport options, we concluded that the usage of the scooters would be the cheapest solution while at the same time guaranteeing maximum mobility of the drivers.
During this week, our team had to analyze more closely the resource structure of the company with special focus on the human resources. We developed position descriptions for each of us, containing the main goal, strategic as well as tactical tasks of each individual plus guides that can be used for a successful execution of the tasks. These descriptions are on the one hand helpful for the people who currently execute each job in order to determine that they fulfill all of the tasks they are expected to do. On the other hand, the descriptions are also helpful when team members leave the start-up and have to be substituted by new colleagues. These colleagues can get a good overview of their tasks by closely reading the descriptions. In addition, writing the various descriptions helped us to get an idea of the variety of tasks that have to be performed within a company. We realized that in a start-up, tasks from different “departments” like finance or marketing may sometimes be combined within one single position due to constraints of human resources. At the same time, this means that employees of start-ups have the opportunity to perform more diverse tasks than when working for a large corporation.
During the first interviews, some of our team members realized a distinctive difference in the willingness to pay of our two target segments, the young segment and the older segment. This can probably be linked to the difference in the available income of the two groups. Therefore, we should consider the option of applying a price-discrimination strategy and offering the service for different prices to our two segments. However, this approach has to be thoroughly analyzed in order to ensure a successful execution of this approach and guarantee that no segment will be hurt by the price discrimination. We will be working on this topic in the future. It was interesting to see that pricing is a challenging topic of utmost importance!
Lessons Learned 3.0 - Understanding how to reach our customers and extract money from them
Alongside with the development of the project, we have been facing an increasing complexity of the business idea. Therefore, our ideas start to diverge in some aspects. On the one hand this is a good development since we can analyze the business from many perspectives, on the other hand, it sometimes gets challenging to reach a consensus. The main take-away is linked with the following: we cannot limit ourselves to our own ideas, it is very important and more productive to listen to the views and also to feedback from others. The output of the entire group will be improved and consequently our project will be more successful.
During this week, we also tried to understand what the most important and relevant attributes of our business are. During class we brainstormed and gathered ideas from all of the group members to come up with a Value Curve, which is directly linked with to our Value Proposition. Interestingly enough, in class, many of us thought about the same attributes to characterize PickUsUp. However, we were aware that the customer perception could be different, so we decided to create a survey in which we asked for people to consider 15 different attributes and to rate them based on their importance for the service offered by PickUsUp. As a result, the majority of the surveys pointed out most of the attributes that we had already chosen for the Value Curve during class. We just needed to make some adjustments and replace two attributes by the ones more preferred by the customers.
During this week, many interviews were conducted for both segments in order to test almost all the prioritized hypotheses. It was interesting to understand the customer behavior and preferences through direct contact and exchange. We realized that it is also possible to extract additional information from the communication style. Furthermore, one of the group members was able to gather a group of friends to talk about PickUsUp. It was important to get further insights and to discuss several problems that we might face. It was also very useful to get suggestions from that group on how to overcome such problems.
This week we also had to come up with strategies for Marketing and Sales Channels, as well as think about Customers Relationships (get, keep and grow). Regarding the Marketing Channels, we defined which ones are more suitable for our business model in the short and long-term, thereby mostly considering the free channels as being used at the moment. Concerning the Sales Channel, we realized that the options mentioned in class are less appropriate for our service. The service will be sold through our app, therefore it is very important to fully exploit all of the marketing channels mentioned above in order to gain maximum awareness from our target segments and lead them to the usage of our service. Finally, regarding Customer Relationships, we used the funnel framework provided in class in which we include several actions through the sub-phases of the three main points (Get, Keep and Grow). Some actions probably are more relevant in some steps than others, however, we decided to include all options to make ourselves as well as other interested individuals aware of the possibilities.
The Facebook page of PickUsUp was launched during this week. The reaction of the public was surprisingly quick and positive. People were interested in getting to know our idea and making it popular. We were able to reach more than 200 Likes until now. We also put effort in trying to make the page as appealing as possible, by posting some information or news daily. The goal is to continue to post everyday something related to our work developments. We are also aware that it is important to establish “active posts” in which we ask followers to give their opinion or answer to something, so that we are able to engage them more and more.
Two weeks ago, when we set up the hypotheses to test, we came up with two hypotheses for the Revenue Streams. One of them (RS01, willingness to pay) is already being tested in the interviews, but for the other one (RS02, pricing model) we had to come up with an innovative idea to test it. Firstly, we defined which options for the revenue model we have: Zone Model and Distance & Time Model. After discussing ideas to go deeper on each of the models, we decided to post two pictures with a short explanation of the model on Facebook. The picture with the highest number of likes would be the chosen one for our service.
Lessons Learned 2.0 - Getting deeper knowledge of our target segments
During this week’s class, we got feedback for the first time regarding our blogs. It was very important to be aware of both the positive and negative aspects that were included in the feedback for our own blog and those of the other groups.
In our opinion, the discussion of the blogs helped us to optimize the content and design that we use. Since the majority of the feedback was positive, it helped to incentivize us to keep up the work and promote our desire to perform even better.
During our class as well as during this week we were exposed to several tools that would help us better understand our target segments in terms of their feelings, opinions and behaviors. Based on Empathy Maps, we would develop Consumer Personas. Such a persona is a fictional character representing our target customer, including their attitudes, behaviours and their history. The persona is a mean that can help us to understand how we should position our products regarding the specific behaviours of our target segment and how we can best satisfy the needs of them. Creativity was the keyword for this task, since we had to build a fictional character. After individual brainstorming, we had to align our ideas and determine what is important. This knowledge about our potential customers will help us to improve our targeting and how we can approach our target segments.
In addition to these instruments we started working with various online resources (like mural.ly and piktochart) in order to create visually pleasing content for our blog.
Since we also received feedback concerning our hypotheses, we were able to understand which of them should be the focus for our further research. The most important hypotheses were included in the interview scripts that we developed throughout this week. We had to determine the right questions that we will ask in order to obtain meaningful responses for the validation of the hypotheses. It was also of importance to determine whether we will have to develop significantly different interview scripts for our two target segments or whether they will be very similar.
Based on the theoretical frameworks that we encountered in class, we created Empathy Maps, Consumer Personas and A Day in a Life for our two target segments. Fernando represents the older segment, while Pedro represents the younger segment. The output of our brainstorming and group work session can be seen in our blog. We had to realize that it was difficult in the beginning to actually put ourselves in the mind of our target segment if it is very different from ourselves. However, as a group we could collaborate and brainstorm together and determine valuable insights about each segment as well as the differences between the segments. Since time during our classes was limited, we were only able to develop one Empathy Map during class and continued with the rest of our work during the week.
Since one of our group members is living with a roommate that is leveraging startups, she was told that in Portugal, when you create a business, you directly think globally. Portugal is quite a small country, and its population seems aware of that. Hence, innovators always think of their business at a worldwide level, allowing them to duplicate the model in other countries. Interestingly enough, PickUsUp is a solution that exists in a similar way in other countries, such as Canada (tolerance0, pointzero8), but has not yet been developed in European countries. Therefore, since we are aware of it, we can use it to our own benefit and learn both from their strengths and weaknesses. In fact, the ideal scenario is to use Portugal as a trial country that can be used as an example to develop our model in France, Italy, Germany, among other European countries in the future.
Lessons Learned 1.0 - Group Work Experience
Group Work can be very time-consuming, but also very productive if the group is truly collaborating and everybody is contributing.
Our first meeting, with the main goal of analyzing the initial business canvas and determining hypotheses to be tested, was very successful and we got many things done, while at the same time enjoying the time spent together.
We believe that open communication and a comfortable atmosphere in our group helped us to be creative and ready to contribute ideas, also if they might seem weird initially. An environment that gives everybody the opportunity to openly speak up will, definitely, help us to be more successful.
Additionally, when discussing possible key partners for PickUsUp, we realized that it will be hard to gain support from the government. Also, finding the right company to support us as a partner for the scooters might be challenging since we have to find a scooter that is not too expensive or a company that is willing to collaborate with us, also from a financial perspective.
We thought our first Business Model was already complete, however as the professor mentioned in class, building a Business Model is a dynamic process and we were able to experience this, since we already improved the Business Model once, and this was only the first week.
Regarding the discussion of our ideas, we decided to analyze the Business Model individually as a first step and then discuss it in our group. This way, we ended up making some changes in all parts of the Business Model. Still, it is important to highlight that, in the Customer Segments area, we were able to determine other target segments and delete the previous ones, since it is one of the key parts of our business.
By the end of the meeting, clear task distribution was needed. We believe it helped us to quickly set up a homepage, generate input (for instance, the logo, the texts for our page, among others) and make a good presentation.