hypothesis_validation

I hope you would have played around with the business model canvas highlighted in the last week’s edition.

This week I shall talk about the state of our hypotheses and also present a personal point of view.

Before I begin I would like to highlight a very good point of view from Eric Reis in his book about “Startup Leadership” about validation of hypothesis.

He says

“We measure customer behavior and make a decision to act based on what we have learned. The fact that we are looking at honest-to-goodness customer behavior is what separates Lean startup from traditional market research. We’re not interested in what customers say they will do, but in how they actually behave.”

The last line is of paramount importance.

“How they actually behave” ?

Keeping this in mind, let me highlight what we found out in our discovery process.

To reiterate, these were some of our main hypotheses

  1. The transporter will be willing to host the entire system and would like to have a skin in the game.
  2. The content providers will be willing to provide the content on a revenue share basis
  3. The customer will be willing to pay a nominal amount for viewing the hosted content
  4. The advertisers will be willing to host their advertisements in this medium
  5. There could be curated content creation ecosystem that shall allow users to participate in what they wanted to share

Transporter (Hypothesis 1)

The transporter was willing, but  they did not want to have any skin in the game. Their point was clear. They had a role in moving customer from point A to point B in the fastest possible time and they did not want to get into this additional frills. However they were willing to let us host the system, run any kind of trials and wished to share the spoils if any.

Also they did not want to touch their eco system like billing, incentivizing drivers and cleaners or anything.

The message was “Do anything you have to on your own, but do not interfere in what we do. You give us money for providing you space after three months”

The transport operator in this case was notable large sized private bus operators.

Content Providers (Hypothesis 2)

The content providers who had shown initial enthusiasm came up with a condition that we could never meet. They said they apart from sharing the spoils, they would need an initial minimum guarantee which as bootstrapped we could never expect to bear. Our argument of they were providing their existing inventory to a very large distribution went into deaf years.

Customer (Hypothesis 3)

There were couple of findings here. Over a period of trials we did and our frank discussion with competition (this is something I shall talk about separately) we found the actual number of paying users were abysmal, even when content was priced at ten rupees. The top reasons

  • Most of the deployed buses were running in the night and people were sleeping 45 minutes after their journey started
  • The content spread was not impressive. The depth and breadth of the content was not exciting enough to engage the customer.
  • No contextual and regional specific content spread was made available.
  • Discovery about the offering was not done effectively.
  • There was no seamless continuity for the consumer beyond the travel.
  • There were no means to engage the consumer beyond the travel. It was a one-off affair

Advertisers (Hypothesis 4)

There were people willing to host advertisements, but the cost of sourcing these at a stage where we were proved to be counterproductive and to crack this eco system was not a priority for us at this stage. However the learning was when we started to navigate this set of people, we figured this works very differently and we were ill-equipped for this.

Curated Content Creation Ecosystem (Hypothesis 5)

Frankly, we did not attempt to validate this.

We had enough learning’s from the first four hypothesis.

Our initial reaction was ‘Houston, we have a problem’.

Market was telling us something very loud, very clear and we had to act.

We did act.

I am not sure what we did was right. However, before I conclude this series, I will share the following in the coming week.

What we did ?

What we could have done better ?

What is my personal point of view on this currently ?

Also, watch out for the word called ‘Pivot’. I shall introduce you to that , but on a completely detached note, I would call ‘Pivot’ as an euphemism for not knowing what you are up-to in the first place !

Enjoy Maadi (Have Fun)

Zunder

Advertisements