Monday, March 21, 2011

Welcome to my World: Back to business

So far 3 ideas: An online platform for social action and localization and, an educational program to turn passions into businesses, both within a financial organization that aims at redistributing existing official currency and fostering the establishment of local currencies....complicated. How to organize an idea into something tangible?, how to present that idea? how to put a team together and engage them? Kind of very late I realized that an entrepreneurial focus would give me quite a few ideas. I knew that talking about a new financial institution was an entrepreneurial idea and I did suggest to generate a business model for it, but little did I know about the implications of it and the amount of reading and confusion I would have to go through. So, I've been reading quite a bit about, yes, business.

I mentioned that the online platform and the educational component could be products of the organization. I have been reading Business Model Generation: A Handbook for Visionaries, Game Changers, and Challengers, which asked me, among many other things: what is your value proposition?? For someone who is involved in business this question may be more than obvious, but for many of us who are trying to make a dream come true, this may be unfamiliar. You might have a very good idea, but if it is of no help to anyone, then it is only good in your head. Someone needs to find value on what you are proposing, it sounds obvious but I had never seen it that way. Not that your idea is not good or has no value by itself, but it needs to find someone who likes it in order to be good in practice. I found that this is the core idea behind business: To create value for a community (they call it market). Nothing to do with money. It is about creating something that we really need. I am convinced now that the intention of business is noble.

Normally, when I read a book, I try to search online for the websites that it provides and I find interesting. In that process, I found Steve Blank, author of The Four Steps to the Epiphany. He is delivering a lecture on entrepreneurship using Business Model Generation concepts + the concepts he developed in his book (which I haven't read yet), which basically say that the reason for failure in most start ups is that they develop a business plan but lack the actual customers, which happens because we develop products that we think people need, but we don't go out and validate with them whether they actually need them or would buy them as they are. I think this is how we ended up manipulating needs and making use of advertising, planned obsolescence and so on. If we create something we guess is a good thing to make money, without asking our potential customers if they need it or not, we end up doing whatever we can to make them buy (in).

From what I understand, Customer validation and Customer discovery (Steve Blank's concepts) are about developing your business model and 'getting out of the building' to test all the hypothesis you are making. The business model is just a set of guesses, is what you think would work. So you go out and test it on field, ask your potential customers if they would buy, and ask what they would change about it. Then you come back to the building and adapt the business model according to the feedback.  This is an iterative process, that is, a process that you do repeatedly and the outcomes retrofit the business model. It allows you to develop both a product and a business model that adapts to real needs while at the same time you are gathering your customers, letting them know that you are there working on something that they want, they will buy when you launch because you made it for them.  

But all this vocabulary...customers, is kind of dry and it doesn't really mean much to me in the deep sense. I then need to get back to 'who am I doing this for in the first place and, do they need it, really?'. This whole effort started because a need of my own. I want a world where we don't struggle for money anymore and I need a space where I can get together in action with others who, in the same or other ways, can contribute to that in anyway we feel like it. So the motivation is not the plain 'to make money', but to make of money a tool of abundance and a catalyst of social action, rather than the obstacle and promoter of scarcity that it currently is. 

Who has been in my mind all this time that I've been trying to develop these ideas? From general to specific: The entire world, 'developing' countries, Colombia, and because I don't live in Colombia anymore, the transition movement and LETS in Brisbane. I guess some would have said that Transition Brisbane and Brislets are my market segment. I think they are my communities. Other members are not my potential customers, they will be users and will have access. So when Steve Blank talks about customer discovery and validation, to me that really comes down to/means community trust building and co-creation. And the product(s) are not for them to buy, but for us to use.  From the old-school business way of thinking, it sounds like an outsider (corporation/industry/business and maybe entrepreneurs as well) comes and tells me that something seems wrong with us and they're trying to find out what it is so that they can make money and we can solve the problem they think we have. From my perspective, I am part of the community that I am trying to solve an issue for. I don't want you to buy, I want us to overcome our barriers and limitations to do what we are really passionate about. Whatever it is that we come up with to do that, will create value to our community. Then, we will have created a product and in the long run, we will be a business, or even a corporation if you wish, in very different terms to the current ones.

So back to step one pretty much, I have to structure my business model, which is, my needs as a member of Transition Brisbane and BrisLets, and my hypothesis/guesses of what can be done to create value, that is, what can be done to meet those needs. Once I have that structure, I'll 'get out of the building' and look for other members' needs and their hypothesis. I am not sure if the pool of needs and hypothesis will be too diverse, but I guess the pattern would be to group those who are in a similar path to mine, maybe posing question would reduce the risk of 'too much diversity=stagnation'. And from then, knowing that we have real needs, we would proceed to develop a product for our own use. Agreeing on how we can develop that product will be interesting but, the whole idea of this post is to indicate that  the business model generation + customer development approach, seems very helpful to tackle this issue. Can Transition Brisbane and BrisLets use a business approach as the method to bring ideas into actions to meet the needs of the community??

This is the process to design a business model that I'll follow and, as you will see, I am in the early part of stage 1 (Click 'menu' on the left hand side and select full screen so that you can read properly):

Also, this business model generation, suggests to use a MODEL CANVAS, which is a tool to use common language.  So that you become more familiar with my business world, here is a very easy to follow presentation, very visual and succinct about it all, and it includes the Canvas thing:

Creating Start-Up Success
View more presentations from Alexander Osterwalder.

It looks like I have the right material to work on a presentation and workshop to explore these needs/hypothesis and product development. Let's see how this keeps unfolding. 

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