Competitive Creativity . com

Scientific Method

So what do those scientists do to solve a problem? They're usually pretty good at doing that. The Scientific Method has been around for years, and is well refined. Here 'tis ... we can apply it to most any problem.

Purpose ... what do you want to learn?
Research ... find out as much as you can!
Hypothesis ... try to predict the answer to the problem, an "educated guess" ... "If I (do something), then (this will occur)".
Experiment ... design a test or procedure to confirm of disprove your hypothesis.
Analysis ... record what happened during the experiment ... collect data.
Conclusion ... review the data and check to see if your hypothesis was correct
Iteration ... change what didn't work and test it again.

Attractive Innovations

Well-defined customers
Easily measurable benefits
Short pay-back period
High Benefit/Price ratio
Sustainable competitive advantages
Venture has core competencies
Venture has resources

Potential Business Models

1. Design physical products/merchandise
2. Manufacture physical products/merchandise
3. Sell physical products/merchandise
4. Create information/content/data
5. Aggregate or distribute information/content/data
6. Provide personal or business service
7. Provide expert advice/consultation
8. Provide money/financing
9. Provide labor or human resources
10. Transport products/services
11. Provide infrastructure/telecommunications
12. Provide in-person or online marketplace for others to sell goods or services

Questions That Must be Answered in a Business Model

Who are the target customers for this business venture?
How will this venture create and deliver value for these customers?
What, who, where is the primary competition for this venture?
How is the enterprise different and better than the competition?
What are the primary core competencies of this venture?
What is the scope of products, processes, and activities of this venture?
How is this venture organization structured?
How will this venture capture value for profit?
How will this venture grow, and over what time period?
How will this venture attract and retain talent?

Tips for Writing

Be ruthless when proofreading ... look for what you can cut.
Remember stories have a beginning, a middle, and an end.
Use "talking headings" to convey meaning.
When in doubt, check for rules of grammar and usage with a handbook.
Place the subject and main verb near each other and use strong verb.
Avoid the "to be" verb when a stronger verb carriers a more specific meaning.
Use the passive voice sparingly (It was decided to change the Company name for the sake of enhancing the effect.) vs. (We changed the company name to make it more powerful.)
Make sure the "ing" form is necessary: (We were working on a prototype) vs. (We developed ... ) Note: often a question of verb tense.
Make sure words ending in "'ion" are necessary; are they verbs masquerading as nouns? (The decision to acknowledge receipt of the letter was made.) vs. (We acknowledge receipt of the letter.)
Make certain the prepositional phrase is helpful ... cut wasted prepositional phrases
To tighten: circle the "to be" verbs, the "ing" words, the "ion' words, and prepositions. Then read out loud, and check to see what else you can cut.
Put old information first, new information second (OLD >> NEW)
Put easy-to-understand information first, complicated material second
When building transitions, use repetition of key terms, synonyms for key terms, appropriate pronoun reference, and the appropriate collocation chain
Make sure your pronoun usage is clear to the reader
Choose the best word, but avoid using thoughtless thesaurus words
When quoting, introduce the author, the text, and the concept; then provide the quotation with proper citation format; then provide the reader with your interpretation.
Keep your writing simple ... cut to the chase.
Avoid cliches and trite phrases.
Use strong verbs.
Use consistent verb tenses, and find the single most correct word.
Always look for what you can throwaway and always make it easier on your audience.

[Thank you, Randy Accetta]

The Critical Success Factor

There are multiple factors that directly influence the health and wealth of any given business venture. These factors may be diverse and different depending on the nature of the business. The Critical Success Factor, however, is common to virtually all business ventures.

The Critical Success Factor: Earn a Profit Solving Customer Problems Better than the Competition. It is do, or die. A venture dies for one of three reasons: 1] It didn't earn a profit; 2] It didn't solve its customer's problems; 3] It wasn't better than the competitive alternatives.

Earn a Profit Solving Customer Problems Better than the Competition ... The Critical Success Factor for all business ventures.

Critical ... having the potential to become disastrous
Success ... attains prosperity
Factor ... a circumstance that contributes to an outcome

* Earn ... Teamwork! A business employs a team of people working together to continually and profitably solve customer problems better than competing alternatives. Healthy, growing ventures follow a clear business model. An educated, experienced, collaborative, communicative team with key core competencies is paramount to success.

* Profit ... The monetary value captured by a business is appropriately called earnings. After all expenses are accounted, earnings become profit. Profit is a reward for doing a good job solving customer problems. A key source of growth funding for a business venture is earned profit. While the profit reward is "financial", the reward can and should have other elements, too. In a healthy venture culture it can actually be "fun" going to work and being part of the team, and their may well be some "fame" that results from delivering valued solutions to customers.

* Solving ... Solutions to customer problems are typically combinations of products, services, process, and methods. However, the world keeps changing as do customers and competitors. Solving customer problems, new and old, is a continuing process for sustaining a healthy venture.

* Customer ... Customers are the primary source of revenue for a business venture. Some business ventures may have only a few key customers, others may have many. A group of customers that share similar traits comprise a market segment. Many business ventures may serve multiple and varied market segments. A business venture exists to serve its customers.

* Problems ... Customer needs, wants, desires, and situations that can be adequately addressed and resolved in a reasonable time and expense are good opportunities for a business venture.

* Better ... Continually improving value is critical to sustaining a competitive advantage. Scientists and engineers often think about innovative solutions in terms of the fit, form, function, features, and performance. The entrepreneur thinks in terms of the benefits customers will receive. Value is measured by comparing the benefits to the price. Value can be increased by delivering better benefits to customers, by lowering the price, or both. Customers decide what offers the better value. In the long run, the products, services, processes, and methods that deliver a better value win the business. In short: Value = Benefits / Price

* Competition ... There are (almost) always competing solutions and ventures from other sources that are directly comparable to our solution. This competition includes indirect alternatives, substitutes, and replacements that could serve customer requirements. Best to assume we have competition, even if we don't yet know who or what. Competition is not always a bad thing ... competitors can help validate and build new markets, and sometimes competitors can become collaborative partners.

Operations Planning Checklist

Key operational objectives and strategies
Location and facilities
Equipment and technology
Labor requirements
Inventory management
Supply channels
Distribution channels
Research and development
Legal Requirements
Order fulfillment and customer service
Capacity utilization
Critical processes
Quality control
Safety, health, and environmental concerns
Management information systems
Other operational concerns
Start-up budget
Operating budget

Seven Habits of Highly Effective People

Habit 1: Be Proactive ... Change starts from within, and highly effective people make the decision to improve their lives through the things that they can influence rather than by simply reacting to external forces.
Habit 2: Begin with the End in Mind ... Develop a principle-centered personal mission statement. Extend the mission statement into long-term goals based on personal principles.
Habit 3: Put First Things First ... Spend time doing what fits into your personal mission, observing the proper balance between production and building production capacity. Identify the key roles that you take on in life, and make time for each of them.
Habit 4: Think Win/Win ... Seek agreements and relationships that are mutually beneficial. In cases where a "win/win" deal cannot be achieved, accept the fact that agreeing to make "no deal" may be the best alternative. In developing an organizational culture, be sure to reward win/win behavior among employees and avoid inadvertantly rewarding win/lose behavior.
Habit 5: Seek First to Understand, Then to Be Understood ... First seek to understand the other person, and only then try to be understood. Stephen Covey presents this habit as the most important principle of interpersonal relations. Effective listening is not simply echoing what the other person has said through the lens of one's own experience. Rather, it is putting oneself in the perspective of the other person, listening empathically for both feeling and meaning.
Habit 6: Synergize ... Through trustful communication, find ways to leverage individual differences to create a whole that is greater than the sum of the parts. Through mutual trust and understanding, one often can solve conflicts and find a better solution than would have been obtained through either person's own solution.
Habit 7: Sharpen the Saw ... Take time out from production to build production capacity through personal renewal of the physical, mental, social/emotional, and spiritual dimensions. Maintain a balance among these dimensions.

[Thank you, Stephen R. Covey and QuickMBA.com]

Skills for Success

Although every business requires a specific skill set and related domain knowledge, there are some general qualities which you must develop if you want to get going in any business. I say 'develop' and not 'have' because I don't think these skills are rocket science and if you've got the willingness, you can easily develop them and carry on your business in a better manner.

Be A Visionary ... Yeah, I know what you are thinking. Here comes the first cliche; I'll agree. But when I say be a visionary, I don't mean you should have grand visions right from the start. There should be a definite goal in your mind and you should work towards achieving that goal. You could always start with small goals initially and every time you achieve them, set yourself new challenges. And soon you'll find that you've got a vision, a vision which you never thought you could achieve and now, it suddenly seems possible.
Be Adaptable ... Now here's the thing - you develop a strategy and start working towards your goal. But the world's changing everyday and soon you realize that the strategy isn't working. In this case, you should immediately adapt to the changes and adopt new methods of working while keeping your vision intact.
Mix Passion With Planning ... If you aren't passionate enough, chances of your succeeding in your business are slim. But if you get carried away by passion, that's equally harmful for your work. Hence the idea is to mix passion and enthusiasm with planning and execution.
Communicate Like A Pro ... It's not only about talking to the other person or to your client. It's about every form of communication, be it on phone, through email, through a letter or any other way of sending your thoughts across. Effective communication is one of the must have leadership skills and if you think you aren't very good at this, prepare to learn how to communicate in the most effective manner, convince others and get more business.
Network Like A Pro ... Another essential ingredient for success in business. Identify the right people and establish relationships which are long lasting. Apart from helping you in your business, these relationships can also help in your personal life.
Be Aggressive ... Being aggressive doesn't mean you are always pumped up and blindly grab every opportunity that comes in your way. It means you are ready to take risks, sometimes calculated and sometimes out of your gut-feeling. It means you aren't satisfied with an achievement and are hungry for more. It means you are available 24X7 for your work. And yes, it also means you are ready to make sacrifices when required.
Be Persistent ... Without a doubt, persistence is a must-have trait for anyone who hopes to make it big in his business. So what exactly is persistence? Here's how Seth Godin defines it: "Persistence isn't using the same tactics over and over. That's just annoying. Persistence is having the same goal over and over."
Do Things Differently ... That's what winners do, isn't it ? Apply new techniques and tricks to an already existing business model instead of trying to search for that new idea. You'll save time.
Learn Everyday ... Really, the learning never stops when you are self employed. And you should never let it stop either. No matter how big your business grows, you should keep learning everyday and apply new techniques to make your business better.
Never Be Complacent ... If organizations like Enron and WorldCom can bite the dust then anything can happen. No business, absolutely no business can be considered fool-proof. One mistake and the empire could crumble. Complacency is usually the first step towards this destruction. So better not be complacent.

[Thank you, Abhijeet Mukherjee]

Lean Startup Terminology

minimum viable product (mvp)

A minimum viable product (mvp) is the "version of a new product which allows a team to collect the maximum amount of validated learning about customers with the least effort" (similar to a pilot experiment). The goal of an MVP is to test fundamental business hypotheses (or leap-of-faith assumptions) and to help entrepreneurs begin the learning process as quickly as possible.

As an example, Ries notes that Zappos founder Nick Swinmurn wanted to test the hypothesis that customers were ready and willing to buy shoes online. Instead of building a website and a large database of footwear, Swinmurn approached local shoe stores, took pictures of their inventory, posted the pictures online, bought the shoes from the stores at full price, and sold them directly to customers if they purchased the shoe through his website.Swinmurn deduced that customer demand was present, and Zappos would eventually grow into a billion dollar business based on the model of selling shoes online.

[Note: Compare a minimum viable product (mvp) to a Maximum Value Product (MVP) which typically results from mvp iterations over time.]

Continuous deployment (only for software development)

Continuous deployment, similar to continuous delivery, is a process "whereby all code that is written for an application is immediately deployed into production," which results in a reduction of cycle times. Ries states that some of the companies he's worked with deploy new code into production as often as 50 times a day. The phrase was coined by Timothy Fitz, one of Ries's colleagues and an early engineer at IMVU.

Split testing

A split or A/B test is an experiment in which "different versions of a product are offered to customers at the same time." The goal of a split test is to observe differences in behavior between the two groups and to measure the impact of each version on an actionable metric.

A/B testing can also be performed in serial fashion where a group of users one week may see one version of the product while the next week users see another. This can be criticized in circumstances where external events may influence user behavior one time period but not the other. For example a split test of two ice cream flavors performed in serial during the summer and winter would see a marked decrease in demand during the winter where that decrease is mostly related to the weather and not to the flavor offer.

Actionable metrics

Actionable metrics can lead to informed business decisions and subsequent action.[1][24] These are in contrast to vanity metrics—measurements that give "the rosiest picture possible" but do not accurately reflect the key drivers of a business.

Vanity metrics for one company may be actionable metrics for another. For example, a company specializing in creating web based dashboards for financial markets might view the number of web page views[20] per person as a vanity metric as their revenue is not based on number of page views. However, an online magazine with advertising would view web page views as a key metric as page views are directly correlated to revenue.

A typical example of a vanity metric is 'the number of new users gained per day'. While a high number of users gained per day seems beneficial to any company, if the cost of acquiring each user through expensive advertising campaigns is significantly higher than the revenue gained per user, then gaining more users could quickly lead to bankruptcy.

Pivot

A pivot is a "structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth."[1] A notable example of a company employing the pivot is Groupon; when the company first started, it was an online activism platform called The Point.[3] After receiving almost no traction, the founders opened a WordPress blog and launched their first coupon promotion for a pizzeria located in their building lobby.[3] Although they only received 20 redemptions, the founders realized that their idea was significant, and had successfully empowered people to coordinate group action.[3] Three years later, Groupon would grow into a billion dollar business.

Steve Blank defines a pivot as "changing (or even firing) the plan instead of the executive (the sales exec, marketing or even the CEO)."

Innovation accounting

This topic focuses on how entrepreneurs can maintain accountability and maximize outcomes by measuring progress, planning milestones, and prioritizing.

Build–Measure–Learn

The Build–Measure–Learn loop emphasizes speed as a critical ingredient to product development. A team or company's effectiveness is determined by its ability to ideate, quickly build a minimum viable product of that idea, measure its effectiveness in the market, and learn from that experiment. In other words, it's a learning cycle of turning ideas into products, measuring customers' reactions and behaviors against built products, and then deciding whether to persevere or pivot the idea; this process repeats as many times as necessary. The phases of the loop are: Ideas –> Build –> Product –> Measure –> Data –> Learn.

This rapid iteration allows teams to discover a feasible path towards product/market fit, and to continue optimizing and refining the business model after reaching product/market fit.

Business Model Canvas

The Business Model Canvas is a strategic management template invented by Alexander Osterwalder and Yves Pigneur for developing new business models or documenting existing ones. It is a visual chart with elements describing a firm's value proposition, infrastructure, customers, and finances. It assists firms in aligning their activities by illustrating potential trade-offs.[30]

Lean Canvas

The Lean Canvas is a version of the Business Model Canvas adapted by Ash Maurya specifically for startups.[28] The Lean Canvas focuses on addressing broad customer problems and solutions and delivering them to customer segments through a unique value proposition.

[Attribution: Wikipedia]

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