UNIT-4

1. Identifying Early Adopters, Value Proposition, and High-level Concept

Identifying Early Adopters:

Early adopters are the first group of users who are willing to try a new product or service even before
it’s fully developed. They are essential because:

• They provide initial feedback and help refine the product.

• They are more forgiving of flaws and bugs.

• They often spread the word, acting as brand ambassadors.

How to identify early adopters:

• Look for users who are already trying to solve the problem on their own.

• They might be using complicated or costly workarounds.

• These users are usually very passionate and willing to experiment.

Example: If you’re creating a new diet-tracking app, early adopters could be fitness freaks who are
already tracking their diet using spreadsheets.

Value Proposition:

A value proposition is the promise of value that your product or service delivers. It answers the key
question:
"Why should a customer choose your product?"

It includes:

• The problem you are solving.

• The solution you are offering.

• The benefits the user will receive.

Example format:

"We help [target customer] who are [struggling with this problem], by providing [solution] that
delivers [benefit]."

Strong value propositions are:

• Clear and specific.

• Focused on solving real pain points.

• Unique or different from competitors.

High-Level Concept:

A high-level concept is a one-line summary that communicates your idea in a relatable way, often
using analogies.
Formula:

"It’s like [famous company] for [your market]."

Examples:

• "Airbnb for pet lovers" – a platform for pet-sitting services.

• "Uber for laundry" – an on-demand laundry service.

2. Awareness of Other Resources (Canvases)

Problem-framing Canvas:

Helps clearly define the problem you are solving. It includes:

• The user’s context.

• The pain points.

• The need for a solution.

Users’ Bulls-Eye Canvas:

Used to prioritize users or customer segments.

• Center (bulls-eye): Primary target users.

• Middle circle: Secondary users.

• Outer circle: Potential or future users.

Helps in deciding whom to focus on first and how to expand gradually.

Opportunity Canvas:

It helps in analyzing opportunities behind new product ideas.

• The problem to be solved.

• Existing alternatives.

• Success metrics.

• Possible solutions.

Used to validate whether a product idea is worth pursuing.

Value Proposition Canvas:

This tool helps ensure your product matches your customers' needs.

Two parts:

1. Customer Profile – Gains, Pains, and Jobs to be done.

When the value map aligns with the customer profile, it’s called Product-Market Fit.

Ethics Canvas:

A tool to help entrepreneurs reflect on the ethical aspects of their product or business.

It includes:

• Potential negative impacts.

• Stakeholders affected.

• Measures to prevent harm.

Helps ensure your product is not only innovative but socially responsible.

Data Ethics Canvas:

Used especially in tech or data-driven businesses.

• How data is collected and used.

• Consent and privacy.

• Bias and fairness.

Useful for ensuring ethical handling of user data.

3. Market Research and Analysis — TAM, SAM, SOM

TAM: Total Available Market

This is the largest market size if everyone who could possibly use your product actually used it.

Example:
If you're selling a fitness app, TAM could be the global fitness market worth billions.

SAM: Serviceable Available Market

This is the portion of the TAM that your product/service can actually serve based on its features and
geography.

Example:
For the fitness app, SAM might be English-speaking fitness enthusiasts with smartphones.

SOM: Serviceable Obtainable Market

This is the realistic slice of the SAM you can capture given your current resources and strategy.

Example:
You might only be able to target urban college students in India, making them your SOM.

These figures help in making realistic sales projections and attracting investors.
4. Three Learning Milestones of Innovation

1. Problem/Solution Fit:

o Do people care about the problem you're solving?

o Have you identified a real, painful problem?

o Focus is on customer discovery.

2. Product/Market Fit:

o Does your product actually solve the problem?

o Are users adopting it and getting value?

o Focus is on validation and feedback.

3. Business Model Fit:

o Can you acquire customers at a profit?

o Is the business scalable and sustainable?

o Focus is on growth and revenue generation.

Each milestone helps reduce risk before moving to the next stage.

5. Pivot or Persevere

When you reach a learning milestone, you must decide whether to:

• Pivot: Change direction based on feedback because something isn't working.

• Persevere: Continue on the same path because data shows positive signs.

Types of Pivot:

• Zoom-in Pivot: Focus on one feature that customers love.

• Customer Segment Pivot: Target a different type of customer.

• Channel Pivot: Change how you reach customers.

• Technology Pivot: Switch to a better or cheaper technology.

Example:
Instagram started as a check-in app like Foursquare but pivoted to photo-sharing after noticing that
was the most used feature.

6. The Engines of Growth

Describes how startups grow their user base and revenue over time.

Sticky Engine:
 • Focus: Customer retention.

• Users stick with the product.

• Growth comes from low churn rate.

• Used in subscription models like Netflix.

Viral Engine:

• Focus: User invites.

• Existing users bring in new users for free.

• Growth depends on viral coefficient > 1.

• Example: WhatsApp, Zoom, Dropbox.

Paid Engine:

• Focus: Spending money on ads or marketing to gain users.

• Must ensure that Customer Lifetime Value (CLV) is greater than Customer Acquisition Cost
(CAC).

• Common in e-commerce.

7. Root Cause Analysis (RCA) through 5 Whys

A technique to dig deep into why a problem is happening by asking “Why?” five times.

Example:

1. Why did the product fail? – Customers didn’t use it.

2. Why didn’t they use it? – It was too hard to navigate.

3. Why was it hard? – The design was confusing.

4. Why was the design confusing? – No usability testing was done.

5. Why no testing? – No budget was set for testing.

Root cause: No budget for testing.

This helps fix the real problem, not just symptoms.

8. Value and Waste

Value:

• Any activity that directly contributes to solving the customer’s problem.

• Creates benefit or satisfaction.

• Examples: Writing useful code, making sales calls, packing orders.

• Activities that consume time or resources but don’t add value to the customer.

• Examples: Unused features, delays, excessive meetings.

Goal: Maximize value and eliminate waste to become lean and efficient.

Lean Startup philosophy focuses on:

• Building only what is needed.

• Testing ideas quickly.

• Learning and iterating fast.