- Sins of Blockchain Business
- Myopia Is The Killer Trap
- Comprehensive Value Propositions
- Product Planning Framework
- Modern Business Models
Sins of Blockchain Business
The blockchain startup scene is committing the same business sins as established industries…
- Building unproven products with high development costs — then praying for product-market fit.
- Not having a revenue model tied to current market trends.
- Failing to involve customers early enough when planning the product roadmap.
- Expecting early adopters to become brand champions rather than honest critics.
- Falling in love with a technology rather than a customer problem.
- Focusing on features rather than people or process.
But what can we learn today from the crazy crypto sector — no matter what kind of business, product or service you’re aiming to launch or scale?
Myopia Is The Killer Trap
Many entrepreneurs believe so strongly in the simple vision of their ‘product’, that they neglect the common sense due-diligence of proper customer and market validation.
That doesn’t mean they’ll fail completely. But it does mean a whirlwind of struggle through lost time and mismanaged resource.
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…And why? Because the product wasn’t good? The advertising didn’t go well? The company didn’t have enough cash flow or personnel to launch properly? Competition was too strong? Or bad market timing?
I believe ‘myopia’ is the culprit we should all agree on. That is: Short sightedness. Taking action with a lack of actionable intelligence. Jumping the gun. Diving in before checking the temperature. Cutting before you’ve measured.
In fact, jumping to conclusions based on what we see before us is a habit of our nature.
As a counterbalance, there are many smart-ass tips for success, such as ‘measure twice… cut once’, ‘look before you leap’, or ‘sharpen the axe before chopping at the tree’.
The dilemma though, is judging how sharp is sharp enough — to get the job done efficiently before competitors close market opportunities.
In other words, how much customer, market or business model validation is necessary to progress full speed ahead with product development and market launch — within acceptable risk parameters?
Fortunately… systems, processes and frameworks are becoming more and more reliable. The Lean Startup movement continues to popularise complex approaches such as lean manufacturing, systems thinking, iterative development, and customer discovery.
Bottom line: Myopia gives way to actionable intelligence when startups harness the essence of ‘value’.
Comprehensive Value Propositions
Use the following multi-part question as a formula to improve your customer value proposition:
What is the essential ‘Job To Be Done’ from the customers confirmed perspective… that brings sufficient customer gain… to warrant a certain price point… at a high enough sales volume… to satisfy the business earnings requirement… with sufficient probability of success within current market conditions?
This type of integrated value equation reduces risk and accelerates success. Yet it’s not something most startups (or even large enterprise) are good at controlling. Consider the following case in point.
Have you ever seen a ‘Chrysler Dart?’
Probably not… yet Chrysler put the full force of their enormous resources, designers, and engineers to the business critical task of launching the Dart to help save the company from declining market share.
Launched in 2012, production ceased in 2016. Chrysler President Sergio Marchionne said: “I can tell you right now that both the Chrysler 200 and the Dodge Dart, as great products as they were [yeh, right], were the least financially rewarding enterprises that we’ve carried out inside FCA in the last eight years,” adding “I don’t know one investment that was as bad as these two were.”
In that very sentence (and as brilliant as I’m sure he is) Sergio clearly exemplifies the myopic fallacy of product planning: it’s NOT a ‘great product’ if no one is buying it!!!
Only real-world market traction validates the truth of whether a product is ‘good’ or not. That’s the essence of today’s popular idea of ‘product-market fit’. Building market traction begins way before launch phase…
Porsche had a similar goal to Chrysler. Urgently bring a new car to market to support declining market share of the iconic Porsche 911.
Both companies had enough resources. Both had super-smart people on the team. Both had a proven track record of manufacturing process.
Chrysler Dart: FAIL
Porsche Cayenne: Hand me those keys!
The difference in the approach taken by those two giants of industry involve the same lessons that hi-tech software companies (including crypto and blockchain) urgently need to apply today.
In a nutshell: the Dart team did not ask the market what it wanted. The Cayenne team verified and explored every possible aspect of its design with the feedback and input of its intended customer group. They got the customer involved early in the planning process.
As simple as it seems: ‘understanding customers’ is the foundation of creating meaningful customer value.
Yes, both the Dart and Cayenne are ‘cars’, including much of the same ‘technology’. But technology does not equal a product. A product is a packaged experience that fulfils specific Jobs To Be Done, entirely judged by the customers own opinion — not the company’s opinion. Think ‘customer satisfaction survey’ and ‘net promoter score’. Start doing such things before making the product, not a year after launch.
Note: ‘Marketing’ in its truest sense begins way before ‘product development’: Product Planning begins by understanding the market. So-called ‘marketing’ done after product development is not strategic marketing. It’s advertising. This fallacy (‘1st do product development, 2nd do marketing’) came from the industrial-era separation of ‘product’ and ‘marketing’ into ‘teams’, centrally controlled via a hierarchy of management, rather than blending them together as a holistic function of rapid innovation. Cutting-edge product planning joins those functions back together.
Product Planning Framework
Traditional Product Management (including Agile Scrum) typically takes a feature-based output approach. That is, ‘how many features can we fit into this [Frankenstein] product’. No matter how efficiently the sprint cycle runs, optimising for output is not authentic efficiency. Why? Because it misses the point of customer value.
Today’s trend towards unifying market strategy with lean efficiency is creating a revitalized approach to product planning. It involves all elements of outcome-based customer value propositions, extending deep into business model design.
The framework I recommend includes 3 broad categories with a number of very specific details:
- Customer Value — what are the customers jobs to be done (JTBD’s), and what is their willingness to pay (WTP)?
- Business Value — what revenue model is required and realistic in today’s market to achieve sufficient sales volume, given the company cost structure, to achieve business earnings goals?
- Interaction Management— how do we deploy resources, and via what operational processes, to ensure the right market interactions that fulfil both customer and business value?
The pieces of this puzzle are many…
…Especially for new business models in our emerging open, decentralized, smart-contract… IoT… AI… ML… and blockchain enabled futuristic society.
Modern Business Models
Automated Open Platforms are taking over. Otherwise known as DAO’s (decentralized autonomous organizations).
Companies like AirBnb, Uber, Twitter, YouTube, Etsy, TripAdvisor, Apple Store, Amazon, Facebook, and many others, are tapping into the network effects of a multi-sided marketplace: Where consumers have become both service providers and content creators.
Beyond what a platform can provide itself, Open API access allows developers to add layers of value through niche apps for network interactions, infrastructure development, and data utility.
The race is on for platforms to deliver the most personalised, filterable, tailored, and customised experience to micro-communities of creators, consumers, co-creators — and creato-sumers.
A global ecosystem of Experience Designers for finance, leisure, travel, lifestyle, health, and so on… using drag-and-drop rapid application development… building distributed apps connected to open access platforms… that interact with our daily-life devices… including financial incentives shared amongst participants and promoters… via micro-payments accrued through blockchain-based smart-contracts… that manage digital identities for privacy, security, and personal preference.
This is the hidden genius of emerging distributed platforms like Ripple, Elixxir, Komodo, TokenPay, Veritaseum, OmiseGo, and many others — all thanks to the original torchbearers of Bitcoin (decentralized currency) and Ethereum (decentralized smart-contracts).
The future is upon us.
Revamp your product planning framework to get ahead.
Remember: Measure twice. Cut once. Repeat.
Or… Learn, Test, Build, Test, Learn.