February 24, 2012
How often do you test your business model hypothesis?
Before you go and do the most expensive work, which is development, you should be talking to customers, validating the riskiest assumptions about your business model, because more often than not, it turns out that your first idea is wrong.
Last May Ben started working on building LeanLaunchLab after getting an idea from Steve Blank and a check from an investor. Last weekend they came out of beta. LeanLaunchLab is a tool for entrepreneurs and innovators to define and test their business model hypothesis.
Once you register you are prompted to fill out a 9 block diagram canvas. Each block is vital to your business model, and they are: customer segments, value propositions, channels, customer relationships, revenue streams, key resources, key activities, key partners, and cost structure. Each of the items is automatically converted into a hypothesis, which is then logged into the Plan. The Plan is a three-column table with “to do,” “in progress” and “done” sections that help you track the hypothesis and add experiments and key metrics that you want to measure and tasks that you want to complete.
You can also add members of your team so they can participate in every step of this process.
According to Ben, there are currently about 1,500 startups using this platform. LeanLaunchLab also found its way into entrepreneurship classes in universities and accelerator programs.
What is next for LeanLaunchLab?
Going forward we are creating better tools and workflow for investors and advisors of startups and managers and executive sponsors of large corporations to oversee a portfolio of projects that are being worked on and make it easy for them to monitor and provide feedback.
In the conclusion of our interview, Ben pointed out that innovation is one thing that all companies struggle with, not just startups, but large companies as well. So, if you are an established company, a startup or a student group, try out LeanLaunchLab and let us know what you think. For teams of two, LeanLaunchLabis free to use.
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