Wk5-01 Animated Video, Proving It
[MUSIC] All right. You've got your model, you made your best guess. It's time to fail. I know it's hard to hear, but even your most promising prototype is pretty certain to fail. Many of your hypotheses are bound to be wrong. Luckily, the canvas makes it easy to adapt as long as your mistakes are cheap and you act quickly to fix them. See the only judge of a business model is your future customer. What you've created so far is just hypotheses, guesses that need to be true for your business model to succeed. You have to test these hypotheses, fail or succeed, learn, then adjust. This process is known as customer development and lean startup. Begin by explicitly stating the most important hypotheses underlying your business model. Okay. You believe that boomers crave custom travel experiences that are tailored to their needs, and that a great a brand can overcome a dominant competitor's advantage. Great. Now get out into the world and see if you're right. You can conduct low cost experiments to test your most important hypotheses. Talk to your distributors, potential partners, and industry experts. But most importantly, talk to your prospective customers. They're likely to have questions and concerns that never crossed your mind. The idea of overseas travel might be stressful for your customers, money could be a concern, or there might just be a general lack of interest. Yes, learning that overseas travel is not attractive to many of your customers can feel like a major setback. But what you learn in the field can also lead you to unexpected opportunities, like the fact that retirement is cheaper overseas, and this might lead you to modify your original idea in favor of something new. [MUSIC] As you gain confidence with your model you should intensify testing. [MUSIC] You'll succeed in some ways, but you'll fail in others, because there will always be factors that you can't foresee from your office. If you adapt rapidly and cheaply, you can account for these factors. Solutions like quality assurance for high standards might be easier to implement through retirement village franchises. [SOUND] The more you test, the more you learn, the more your model matures. [MUSIC] It's time to start thinking about business models in a revolutionary new way. The era of the fixed business plan is over. To compete today you need an evolving business model, and if you document your evolution you can play back your canvases like a flip book, a valuable documentation of your increasingly viable business model. Now your business model is not just a bunch of guesses. You've tested, adapted, and your business model is now likely to succeed. You're ready for the next step. It's time to pitch your model.
