To turn your idea into a business you need to iterate between designing and testing business models and value propositions until you find what will work. This is called “the search”. Read on to learn what you need to pay attention to during this phase to avoid failure. We highlight some simple rules to follow to shape your idea into a business more rapidly.
Every idea can have different value propositions and business models. One of the most difficult tasks as an innovator, entrepreneur or entrepreneur is to identify and validate the right value proposition and business model that will make your idea succeed. This is called “the search” and consists of designing and testing business models in rapid iterations. It’s only when you concluded your search that you move to implementation.
The ‘Search’ begins with Design. In this phase you shape your idea into Business Model Canvases and Value Proposition Canvases. In other words you prototype how you think your idea could be turned into a business. These Canvases provide you with the hypotheses you need to validate in the real world in the Test phase. During this second part of "the search" you aim to produce evidence that shows that customers want your value proposition and that you have found a business model that can scale and be profitable.
During search you look for three things around which Design and Test evolve (cf. Survival of the Fittest)
The “Search” is not a linear undertaking that smoothly moves from Design to Test. Rather, it's a constant back and forth between Designing and Testing. You start with a rough design then immediately test. You’ll come out of testing with crucial insights and return to design to improve your prototypes based on your learnings. Then you iterate between Design and Test until you find a value proposition that customers want, embedded in a scalable and profitable business model that will work.
If you skip the search phase or don’t pay enough attention to it (cf. How a Great Business Plan Will Maximize Your Risk of Failure), you risk scaling prematurely. You risk implementing a value proposition that nobody cares about embedded in a flawed business model. Here’s a list of simple rules to follow to turn your idea into a promising business opportunity when you ‘Design’ and ‘Test’.
Goal: Shape your idea into value proposition and business model prototypes that create value for your customer (i.e. the value proposition) and capture value for your business (i.e. the business model).
In the ‘Design’ phase, you should:
Goal: Produce evidence that validates or invalidates the assumptions underlying your value proposition and business model prototypes. Produce insights and learnings that help you feed Design and improve your value proposition and business model prototypes.
In the ’Test’ phase, you should:
Iterate between Design and Test until you find the right value proposition and business model that will help your idea succeed. Excel at the ‘Search’ phase for the right business model and value proposition to minimize risk and increase your chances of success. In our experience corporations and startups that under-perform in Search risk a) wasting a lot of people’s time and money with unproven ideas, b) executing inferior business models and value propositions, or, c) failing entirely because they scale unproven ideas prematurely.
How do you ‘Search’ for the right Business Models and Value Propositions? What have you found most difficult?
Access Free Business Model & Value Proposition Testing Tools
The tools and resources mentioned in this post are available for FREE in our resource library. Get access to 30+ other tools and resources to help you design a business that your customers will love. Simply create an account for access.