BeOn: Connecting Community To Improve Security – with Gustavo Caleffi [Ep#19]

To feel safe is a basic need of human beings. Unfortunately, in today’s world security issues are present in everyone’s lives. But, how can we prevent something from threatening our security?

Gustavo Caleffi believes the answer relies on bonding community connections and making people aware of the dangers, so they can avoid being harmed. And this is the basis of BeOn.

In the 19th episode of The Traction Stage Podcast, Gustavo will tell us about BeOn story and what was important to start generating traction for the platform.

SHOW NOTES

BEING AWARE

What exactly the problem that you are solving is? And what is the solution that BeOn is offering to its users?

First of all, we need to integrate the community to exchange information about security in the same place. A big problem that we have when we talk about security is that nobody knows what’s happening around their houses and offices.

We want to integrate information on everything that’s happening about security, health, environment, traffic and fire problems, so people can see what is happening around their places and also to help public staffs.

With this integration, we provide a lot of good timing to all these staffs to work with security and this problem in any place.

BETTER THAN RADIO

How did the idea come to your mind?

We worked for a long time with security—almost 20 years. Here in Brazil, the security problems were growing and we had a lot of places that we wanted to work together to have more safety in their neighbourhoods.

First, we worked with radio communication—one condominium talked with another condominium by radio. But it has costs.

So, we started thinking about how we could make these people exchange information with no costs. We thought about an app, and this app is BeOn. We’ve been working in this solution since 2016.

BeOn screenshot 1.

GETTING AN EXPERT

What were the first steps you took after having the idea?

First of all, we made a big project with everything that we could develop in this platform—the best ways and the best platform we could have.

For sure, we didn’t have enough money to put everything working. So, we looked for someone that is an expert in technology, and we started working together with this expert. After that, we made a project to develop the MVP.

And how did you contact him and how did you make him to jump on board?

We looked around all Brazil to find somebody to develop with us this project. And we found that guy very near us. He lives in São Leopoldo—a city very near Porto Alegre. Actually, it’s a company called Mura. This company looked at our project and wanted to be inside the project with us. So, we paid them some money and they came to be our partners in the project.

BeOn screenshot 2.

MONEY TO START

Were these “friends and family” funds or did you have to raise the money from someone else?

No, only friends and family. And after two days we launched the platform in the market, a friend—CEO of a bank—wanted to put money in the business.

FIRST VERSION

You’ve mentioned about the beginning of the idea in 2016. How long did it take for you to release the MVP?

Well, we worked hard. We draw all the features that we needed in almost four months. We talked too much and we planned too much the features that we needed in BeOn in the first MVP. After that, we had almost six months developing the app until we could put it in the market.

How was this first version like? What features did it have?

The features were almost the same that we have today. We’ve just changed the way they appear. We are from the market and we know what people need. This is the difference to have one MVP that you’re really giving people need. Because of that, we didn’t make big changes.

BeOn screenshot 3.

SECURITY MATTERS

What were the best strategies or marketing strategies that you use to get users coming to your platform?

Well, everybody needs our app. We were talking with Google, two weeks ago, about Waze. People that use Waze are people that need to go in their own cars. BeOn is used by everyone—an old woman or a child. They need to have information about security. So, it is very important for people.

And when we put BeOn in the market, all the newspapers and TV programs, wanted to use BeOn to explain that people can use technology to have more security. So, we had 32 exposures in Brazilian newspapers and TV programs. It helped us a lot to show people what BeOn is.

We also had a lot of influencers that helped us—on the radio, on the newspapers and on social— to explain people about BeOn.

All these things together helped us to explain people what BeOn is and make them download it.

SECURING DATA

How do you deal with users’ data security?

This is a very good question for us, because we don’t have any data about the user. The only information that we have is the number of the telephone; Nothing else. You can put your name or not, but we don’t show the name—and we don’t know if the name is real or not. For us, it doesn’t make a difference.

However, if somebody starts to put information that is not true, we can show the phone number for justice or for the police, and they can start to make an investigation. But we don’t show this information on the platform.

BeOn screenshot 4.

ADVICE

A piece of advice you would give to startup entrepreneurs…

To start a project is not an adventure; It’s hard work. People really need to know very deeply what they are doing.

Sometimes, you have an idea and you think your idea is the best thing in the world; And you start working. But you really need to know about the market.

An idea can be good, but the difference is how you work on your idea, put that idea in a project and how you work to somebody see value in your idea.

For me, it’s important to have a lot of knowledge about what you are doing and about what people need, to have success in your project.

Hey, did you like this episode? Check other startup stories here.


MORE ABOUT THE FOUNDER

Gustavo CaleffiGustavo Caleffi (LinkedIn) – Fundador e Sócio diretor da Squadra Gestão de Riscos; Fundador e CEO APP Be On Segurança Colaborativa; Administrador de empresas, com MBA em Direccion de Seguridad en Empresas pela Universidade de Comillas (Espanha); Certificado pela Universidade Israelense ICT (International Institute for Counter Terrorism) em “Segurança Global e Certificado pela empresa israelense ISDS em “ Advanced VIP Protection Course; Especialista em Gestão de Riscos Estratégicos e Segurança; Autor do livro “Caos Social A Violenta Realidade Brasileira”; Atua no segmento de segurança há mais de 20 anos; Inúmeros artigos publicados em diversos veículos de comunicação; Instrutor de lutas há mais de 20 anos; Palestrante em eventos nacionais e internacionais sobre o tema Prevenção em Segurança, Gestão de Riscos Corporativos e Gestão de Segurança de Grandes Eventos; Responsável técnico por projetos em inúmeras empresas multinacionais e nacionais e também em grandes eventos como Ultimate Fighting Championship (UFC), Lolapalooza, Paul McCartney, Rolling Stones, Planeta Atlântida, Circuito Banco do Brasil de Música; Reconhecido pela Brigada Militar do RS com as medalhas “Brigada Militar”, Serviços Distintos” e “Serviços Relevantes a Ordem Pública” e medalha “Tiradentes” pela Polícia Civil do RS.

MORE ABOUT BEON

BeOn logoBeOn (Website; Facebook; Instagram; Youtube) is the solution that have the purpouse to save the world, from a free Community Security APP that communicate and integrate community, public staff (police, fire department, transit department), public managers and private security staff. The APP treats security, fire, traffic, health and environment emergency communication.

Gains For security:  Prevent information about suspects acts and suspect people; Help to reduce the response time of state and county security mechanisms.

Gains For Fire Fighting:  Rapid community communication, promoting greater agility in a first fire fighting, minimizing the risk of major fire; Easy way and agility for fire Fighters identify the geolocation of emergency call.

Gains For Health: Enables professionals in the area (doctors, nurses, firefighters) to assist the victim until the ambulance arrives; Anticipation of situation reporting to emergency call centers, including photo, streamlining understanding of state agents’ need; Preservation of lives by the possibility of first aid care before the arrival of ambulance.

Gains For traffic: Roadblocking information for community rerouting in the region; 911 call location geolocation facility; Anticipation of the situation report for emergency call centers, including a photo, speeding up the understanding of the need by state agents, especially speeding up cases in which firefighters’ support is needed for cutting tools

Gains For Environment: Community information in case of lost child or animal, facilitating and speeding up the identification of those responsible; Natural Disaster Communication Agility in Micro Regions; Form of utility reports for the entire user base, such as road flood closure, landslide

Anzu.io: A Startup That Brings Real-World Ads To In-Game Experience – with Itamar Benedy [Ep#18]

Do you think games and businesses are part of two separate worlds? Do you consider every ad boring and invasive? It’s time to update your brain with the story of Anzu.

In our 18th episode, you’ll know the story of Anzu.io, a startup that connects game studios to advertisers, by providing them a platform to include real-world ads in any game object.

But, how did Anzu’s founders go from an idea to the traction stage? What kind of challenges did they face in the way? How did they overcome it? Our guest, Itamar Benedy, co-founder of Anzu, answers these and other questions in the 18th episode.

Let’s go!

Continue reading “Anzu.io: A Startup That Brings Real-World Ads To In-Game Experience – with Itamar Benedy [Ep#18]”

RoadBotics: The Early Days Of An American Startup That Provides Smart Road Assessments – with Mark DeSantis [Ep#17]

We all want our roads in good conditions. Don’t we? But, the definition of a ‘good’ and a ‘bad’ road may vary a lot. This is the challenge that governments and companies run through in the process of road maintenance: assessment subjectivity.

RoadBotics was born to solve this and other problems regarding road inspections. Through the same technology used to make autonomous vehicles to “see” the road, the startup makes computers analyze road conditions.

In this interview, Mark DeSantis, cofounder of RoadBotics tells me about the early days of the startup, since the idea until it started gaining traction.

Continue reading “RoadBotics: The Early Days Of An American Startup That Provides Smart Road Assessments – with Mark DeSantis [Ep#17]”

MPost: The Traction Story of a Kenyan Startup that is solving addressing problem – with Twahir Mohamed [Ep#16]

Receiving correspondences in Kenya might be a real challenge. That’s because addresses (street, number, etc) are not available for every one.

For many years, people have been counting on PO boxes—rented post office lockable boxes—many times shared with other people, in a centralized way.

The problems naturally arise, once your packages might be accessed by unwanted people and there is no warning system to communicate you got a mail.

That’s exactly the problem MPost is tackling with its solution.

Through a unique address code—derived from users’ phone numbers—MPost provides privacy and, at the same time, communication about new packages deliveries.

In the 16th episode of The Traction Stage Podcast, Twahir Mohamed told me how he and his partner developed MPost and how they are impacting the lives of more than 45,000 users.

***Hey, are you trying to take your first steps as an entrepreneur? Click here to see how I can help you.

Continue reading “MPost: The Traction Story of a Kenyan Startup that is solving addressing problem – with Twahir Mohamed [Ep#16]”

Entrepreneurial Negotiation by Samuel Dinnar and Lawrence Susskind

Entrepreneurial Negotiation is a comprehensive guide for you to understand the negotiation process and to improve your negotiation skills.

As a startup founder, you’ll have to negotiate with many parties like co-founders, customers, suppliers, employees and other stakeholders.

What you get from each negotiation will impact directly on your startup’s short and long-term outcomes.

Continue reading “Entrepreneurial Negotiation by Samuel Dinnar and Lawrence Susskind”

5 Methods To Validate Your Startup Solution

After identifying the riskiest assumptions about your startup solution, it’s time to validate it with real people. But, what validation methods can you use?

In this post, I’ll present you 5 well-known validation methods: wireframes, mockups, prototypes, landing pages and MVPs.

WIREFRAMES

Wireframe is a very simple, sketchy representation of your solution. Its main focus is to present your solution flow and check if it resonates with your potential customers’ needs.

Source: https://balsamiq.com

For its simplicity, wireframes are a fast and cheap way of presenting the basic logic behind your solution.

First tangible stage of the UX design process and low-fidelity wireframes in particular are perfect for validating early stage ideas and concepts.

Robert Smith, Validating product design ideas with low-fidelity wireframes

For instance, to understand how a button will play a video in your app, customers don’t need a perfect button nor a real picture of the video. A sketchy button and an image placeholder will be enough for them to give you initial feedback.

On one hand, wireframes are great for gathering insights from your customers sooner. On the other hand, if you need to validate customers feedback on the visual, usage or real value of your solution, wireframes won’t be enough.

Suggested tool: Balsamiq.

MOCKUPS

Mockup is a static visual representation of your solution. It helps you on getting feedback about the visual, as well as on logic of your product flow. In other words, mockups are screens of your app or nice illustrations of your product.

mockup
Source: https://slidebazaar.com

Despite they still don’t allow your customers to interact with your solution, mockups provide a more realistic visual about your product than wireframes. That’s why mockups resonate better when your intention is to gather feedback about your solution visual appeal too.

However, better visuals for your screens will demand you more time to develop mockups of your product than wireframes (that don’t require a visually awesome interface at all).

A real case on the use of mockups for validation comes from my interview with Ned Phillips, co-founder of Bambu.

Below, you see 3 real mockups used by Bambu to validate its solution with its customers:

They look a real app, don’t they?

But, let’s see what Ned explained to me:

We created about six static screens of what a digital saving app would look like and we put on a PowerPoint. We’ve paid a few thousand dollars to do that. We mocked it up as a digital savings journey, you know: “How old are you?”, “What are your savings goals?”, “When do you want to retire?” Put some nice pretty colors around it. Put it in six slides and that was that. No coding, no tech, no stack, no nothing. Just a six-page PowerPoint.

Ned Phillips, Bambu CEO – Episode 7

Suggested tools: Mockups can be easily presented in PowerPoint, Google Slides or Keynote. To build your screens images, there are also some services like InVision and Photoshop. You also can find some easy-to-use templates (free or paid) to have your screens ready to be presented (like this one).

LANDING PAGES

A landing page is a website page that allows your potential customers to take some actions, so you can measure their interest about your solution.

Landing pages are great to reassess customers’ interest about the problem as well as their understanding and excitement about your solution.

The main objective behind a landing page is validating if your startup’s value proposition fits to your customer’s problem. Hence, the decision of what elements to include will depend on how well you can communicate your product’s value for your customers (e.g.: some landing pages don’t have screenshots, others do).

On one hand, a big plus of using a landing page is to capture potential customers emails. That’s why you must include an appealing Call-To-Action (CTA) button.

On the other hand, a big challenge is to get people coming for your website. Differently from wireframes and mockups, you’ll not be able to interact directly with most of the people who visit your landing page. So, it’s important to start defining how to get potential customers coming for your landing page.

Their low cost and no need to have a finished product make them awesome to test if customers would are interested in buying from you.

You can learn more about landing pages here:

Suggested tools:

PROTOTYPES

Prototype is an interactive representation of your solution. It means that you’ll not only show it to your customers, but they’ll actually
“use” it (like they were using your solution).

https://www.invisionapp.com/

The benefits of getting a prototype in the hands of your customers are huge. Through a prototype, you’ll understand how they interact with your product and what difficulties or doubts do they have while using it.

Despite your prototype would work like the solution, you still won’t deliver any real value to your customers yet. It’s not your product, but a vehicle to capture customers feedback on your products usage.

It’s important to notice that your prototype is an interactive tool, but it doesn’t mean you need everything coded or automatic yet. Actually, your mission is to simulate customers’ interactions with your product, without building the product for that.

Abolore Salami, founder of Riby told me how he used a prototype to validate the solution:

[…] we tried to get people to use it and see the kind of difficulty they had, see if it worked or not, and things like that, that was kind of research. […] It [the prototype] was always coded and you could interact with it. It allowed you to do two major things. Number one is to set a goal and number two is to save towards that goal. All what we were doing was monitoring how you were doing at your goal. You couldn’t process money for people as it was.

Abolore Salami, founder of Riby – Episode #8

Suggested tool: InVision.

MINIMUM VIABLE PRODUCT (MVP)

Minimum Viable Product is a validation method that demand you to build something capable of delivering the essence of your value proposition to customers. Let’s see Steve Blank’s definition for it:

It’s a concise summary of the smallest possible group of features that will work as a stand-alone product while still solving at least the “core” problem and demonstrating the product’s value.

Steve Blank, Bob Dorf – The Startup Owner’s Manual

In other words, MVP is the minimum set of features needed to deliver your core value for your customers to solve their problem as well as to allow you to test your most important assumptions.

I’ve produced this other post specifically about MVP.

How complex and expensive does your MVP need to be? It depends on what you define as “minimum”. And this is definitely the most challenging part of building an MVP.

After all, since the beginning, you were mentally visualizing what would be your ideal product (with a lot of features).

But, to build an MVP, you should consider it part as a product and part as a vehicle to validate your assumptions in a fast and cheap way.

Want to see an awesome example of that?

Bookme is a Pakistani online platform through which you can buy tickets for Cinema, Bus and Events. Today, the reservation and payment processes are automatic. But, Faizan (Bookme founder) was able to build a much leaner MVP:

It was merely a form where you could simply put in your request that you want to see a movie at ‘XYZ’ cinema or you want to book a seat from this city to that city. It was all manual, there was no integration of stuff at the back end and there was no option to select a real-time seat. It was like: tell us your preference, which seat you want and we will try to make it as close as possible.

Faizan Aslam, founder of Bookme (Ep#13)

CHOOSING A VALIDATION METHOD

First, it’s important to mention that these are not the only methods to validate your solution (although they are really important ones).

Second, you don’t need to use one OR another. You can start with a simpler method and move to a more detailed method later in the validation process.

To define the best alternative in your case, I suggest you to compare them in terms of: resources, methods effectiveness and access to customers.

RESOURCES

Each method will demand more or less of your startup’s resources. That’s why you should start by estimating how much money, time and effort each method will require to be executed.

Together with “Resources Needed” you’ll assess the resources you have. Do you have someone who can build a prototype? Great! Do you have someone who could build a landing page in one day? Awesome! Will you have to hire people to do any of those alternatives? Okay, take that into account too.

METHODS EFFECTIVENESS

The selected method must resonate with the next assumptions to be tested (the riskiest ones). For example, if you need to test how much customers are willing to pay for your solution, wireframes wouldn’t be recommended (because customers won’t have a perfect sense of how exactly your solution brings them value.

Similarly, if you want to test market demand and gather users contact, landing page would be better than just presenting a few people the prototype.

ACCESS TO CUSTOMERS

A last factor you must consider is how easy and formal is your connection with those you want to test your solution with.

In other words, if you have close friends that are related to your solution’s topic, it wouldn’t be a problem to present them a wireframe.

However, if you’re presenting your solution for a potential customer who you need to trust you (like a big corporation), then you need something more polished (like mockups or a prototype).

VALIDATION PROCESS

No matter what validation method you choose, keep in mind these four elements of the validation process:

  • Assumptions: What assumptions do you want to validate now?
  • Method/assumptions fit: Is the validation method covering those assumptions?
  • Results: How will you measure validation? What metrics will tell you your assumptions are valid or not?
  • Action: One or more assumptions were not validated? Why? How should you restate them? Were they validated? Great! Go to the next set of assumptions or start planning scale.

What Is Your Business Model Hypothesis?

It’s time to translate your business idea into a business model hypothesis, which will help you on better:

  1. Visualize the idea: it will consolidate the problem and the solution under the “Value Proposition”, which—with other 8 components—will bring you a clearer picture of what you’re aiming to build.
  2. Communicate the idea: once it’s easier to visualize it, it will be easier to communicate your idea to other stakeholders as: employees, co-founders, and investors.
  3. Iterate the idea: With a structured framework, it will also be easier to analyze and define which assumptions should be tested first and how could you iterate your business model hypothesis in order to achieve success.

To make the most of this learning, I’m providing to you a FREE Excel template, so you may fill it in with your business model components: 


HOW TO STRUCTURE A BUSINESS MODEL HYPOTHESIS?

There is a widely-used framework that will help you with that, called The Business Model Canvas (BMC). It was developed by Alexander Osterwalder and presented in his book: “The Business Model Generation“.

business model canvas

Source: https://strategyzer.com

Through its 9 components, BMC supports you in structuring the basis of your business model hypothesis.

What is your value proposition? What customer segments are you going to serve? How are you going to make money? What are your core activities?

These are some of the questions you’ll be able to answer with the BMC.

Now, let’s understand the meaning and the importance of each BMC component.


CUSTOMER SEGMENTS

Who are your customers?

For more info on Customer Segments, check this other post too.

If you want to be successful in developing your business, start by being an expert in your customers’ lives.

The better you know your customers, the easier it will be for you to generate powerful insights that will guide you on the development of your business model hypothesis.

Information you should search for: Everything that relates to your customers’ lives, like their:

  • Demographics (age, gender, income);
  • Psychographics (attitudes, behaviors, values, beliefs);
  • Geographics (home location, work location, etc);
  • Networks (social groups they’re part of and the roles they play),
  • Daily journeys (goals, difficulties, hobbies, activities, etc)

Looking for the info: There are several techniques that may bring you the information you are looking for such as: Interviews, Observations, Empathy exercises (putting yourself in your customers’ shoes) and Data Analysis.

Generating insights: To generate insights from this data you may use some great methodologies such as: Personas, Storytelling, Storyboarding and Customer Journey.

Of course, people are very different from each other. However, you may find some important characteristics that are common to the majority of your customers.

You may define at least two customer segments for your product. That’s up to you, as long as you’re aware that customers differ significantly, hence, demand different approaches.

VALUE PROPOSITION

What is the value you are offering to your customers?

For more info on Value Proposition, check this post.

The value proposition refers to the products and services you’ll offer to your customers as well as how they will improve people’s lives.

When defining your value proposition, include the following elements:

  • A general description of the product you’re offering
  • A brief description of its features
  • All the benefits your customers will have when using your product
  • A long-term vision showing how your product will change the world, after massive adoption

Don’t think solely about the features of your product. Also, think about the benefits your product brings to your customers. What will they get that they are not able to get today from current alternatives?

After describing your value proposition, it should be clear for you and for anyone else how your product adds value to your customers.

CHANNELS

How do you communicate, sell and deliver value to your customers?

For more info on Channels, check this post.

To define your startup channels considering the whole buying experience, have in mind that, in order to do business with you, customers must be able to know:

  1. They have a PROBLEM
  2. Your SOLUTION exists
  3. Your solution is the BEST ALTERNATIVE for solving their problem
  4. Where and how to BUY your product
  5. Where and how to GET your product
  6. Where and how to get SUPPORT for your product after the purchase

Now, you should define which are the most efficient and effective channels to address each one of these points.

CUSTOMER RELATIONSHIP

How will you get, keep and grow businesses with your customers?

For more info on Customer Relationship, check this post.

While Channels relate to the experience of the customer when buying from you, Customer Relationship refers to the strategies to get, keep and grow businesses with your customers.

This BMC component aims to generate the traction needed for your business to thrive. The questions to be answered:

  • GET: How will you acquire (and activate) more customers? What strategies will you design to find customers and start a “conversation” with them about their problems and their solutions?
  • KEEP: How will you ensure your customers will continue buying from you after the first purchase? What kind of incentives will they receive to make the next purchases?
  • GROW: How will you expand businesses with each customer? How will you make them buy more frequently or spend more on high-value products?

When designing your customer relationship strategies, have in mind the customers segment profile you’re aiming to reach. Some strategies will work much better than others depending on the segment. For example, if you’re dealing with big corporate customers, it’s likely that a dedicated sales team will work better to GET customers than Facebook ads.

REVENUE STREAMS

How will you make money with your business?

For more info on Revenue Streams, check this post.

The revenue streams are the ways your startup will monetize the value it delivers to customers.

Of course, there are several alternatives to come up with good options. To start thinking about them, I suggest you consider:

  • Everyone who might benefit or is related to some degree with your business: Of course, the most obvious answer is your customer. Nonetheless, you may be surprised by how many different stakeholders might be benefited from some aspect of your business.
  • How will you generate benefits for them: after considering everyone who could have some connection with your business scope, you may start wondering how you would produce the benefits for them. What is feasible and aligned with your business model?
  • How much to charge for each alternative: now, you need to set a price range for each alternative considering the cost of producing it, the value it brings to your customers and the costs of alternatives they currently find in the market.

The items above are just suggestions and you may find other ways of coming up with ideas for monetizing your business. What is important to consider is that there are several ways of earning money from your business. Don’t get stuck with only the most obvious alternatives.

KEY RESOURCES

What are the key assets that your startup’s value proposition demands?

For more info on Key Resources, check this post.

Well, you’ll need some assets to create the value you’re promising to deliver to your customers. For example, if your startup produces an innovative shoe, it may need machines and a building to do that.

To help you in defining your startup assets, consider the categories below and which assets are essential in your business model hypothesis:

  • Physical: machines, buildings, etc.
  • Intelectual: trademark, brands, know-how, etc.
  • Human: key people to support core business activities
  • Financial: working capital, commitment lines, guarantees, etc.

Understanding which are the key resources of your business model hypothesis is crucial to be realistic about the structure your startup needs to be functional.

KEY ACTIVITIES

What activities are at the core of your startup?

For more info on Key Activities, check this post.

Depending on the business model hypothesis you’ve designed, there will be some activities that your startup should pay more attention to. These activities account for a big part of your product’s value creation and underperforming on those activities, might negatively impact your customers’ perceptions.

A good way to think about which are the key activities of your startup is to think about the other BMC components. Which of these components demand the most important activities? Is it Value Proposition production? Is it Channels management? Is it managing and developing Partnerships?

KEY PARTNERS

What are the essential partners to make your business model work?

For more info on Key Partners, check this post.

Setting the right partnerships may leverage your startup’s results by enhancing your capabilities where you may not be so good at, as well as giving some protection to your business by making it more difficult to copy.

Partners might help you to get more clients, more revenues, enhance your value proposition, improve your key activities and reduce your cost structure.

In the business world, we may find an infinite number of synergies between two or more companies. Always search and develop partnerships that are beneficial for all partners (not just for yourself).

COST STRUCTURE

Which are the main costs of your startup and what factors influence them?

For more info on Cost Structure, check this post.

Finally, you’ll have to face a crucial part of your business model hypothesis which is to consider the structure of your business’s costs.

It’s worth noticing that all the other BMC components will affect your cost structure to some degree.

For instance, if you decide (in your Channel component) to build a sales team, instead of selling just through your website, you’ll significantly impact your cost structure (obviously, in this case, the sales made by a dedicated team might easily offset its costs).

However, while your startup is still not generating revenues enough to offset its overall costs, be extremely careful about the burden of your cost structure, by estimating your Cash Burn Rate and Cash Runway.


The Questions Behind BMC

As you might have noticed, BMC is a powerful framework to help in structuring your business model hypothesis in an objective way.

However, more than just a sum of 9 separate boxes, BMC is better understood when the connections between the components are taken into account.

The word behind these connections is VALUE. Keep in mind that to be sustainable your business must be able to create, deliver and capture value.

Hence, let’s consider the BMC components as the answers to these four questions:

  • How do you CREATE value? Customer Segments, Value Proposition, Key Partners, Key Activities, Key Resources.
  • How do you DELIVER value? Channels, Customer Segments.
  • How do you CAPTURE value? Customer Relationship, Cost Structure, and Revenue Streams.

Now, what?

After completing BMC boxes, your first business model hypothesis should be very clear for you and for your team.

This is the beginning of your journey and the words “first” and “hypothesis” in the previous sentence illustrate quite well the mindset you should adopt from now on.

In the next months, your mission will be to validate your hypothesis in the market, which means you must be prepared to be wrong as much as you’re to be right.

“Learn” and “adaptation” will follow you in every step of this journey. So, be open to learning (and accepting) when many of your assumptions fail and to quickly redesign (adapt) them considering what you’ve learned.


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Who Are Your Startup’s Customers?

At this point, you’ve already done several interviews about the problem with your potential customers. Based on these interviews, you have a clearer picture about who your customers are.

However, you need more than just a blurry picture of them. To move on with confidence, you must present a better answer than just “women, in their 30s, with no kids.”

This is a good start. But, to properly answer to the question, you’ll have try hard to see all the pixels in that picture.

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What Is Your Startup’s Value Proposition?

When a customer is considering buying a product, she will start (consciously or unconsciously) relating its features to a possible benefit for her life.

Everything that can make her life better, she’ll consider as a value.

Well, your value proposition is all the value (in your customers perspective) you are delivering through your product or service.

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