Hello again and welcome to How to Start Your Business. We're in Module 3, validating the business model based on the lean start-up philosophy and today I'd like to talk to you about customer validation. Let's begin. Once we have our minimum viable product, we need to identify who our customer really is. Often we can think or we've imagined that a customer will be a certain person and once we go in we realise that our customer might be another. To do this we need to decide if we should persist with our idea with this customer or if we need to pivot. Once we're seeing sufficient progress with our business model, we need to ask ourselves the question. Is this progress sufficient to believe that our initial hypothesis is correct? Or do we have to make an important change? Making a big change implies pivoting, something we've talked about before. Based on customer validation, we've made some hypotheses on who might be our customer. We've thought that this customer will be the one to make purchases with us, why they'll purchase with us, what price they'll pay... These are hypotheses to be validated. Once we've discovered who our customer is, we'll have to validate them with a series of validation tests such as A/B tests via the internet, validating against different website models, to see what might be the model that fits best, carrying out a set of experiments, and holding interviews with these customers to ask them questions that will help us validate our customer. There are two types of validation: qualitative and quantitative. When we carry out qualitative validation we need to ask a whole set of questions. Based on the product and our value proposition, we need to ask ourselves: Is our proposition better? Is it really better than what exists on the market? Or, the opposite, do we not have an proposition that improves on what already exists? On the other hand, based on customers and channels, we'll need to think about how our customers will find us. Once we know our proposition is good, we need to ensure that our customers can find us, otherwise there's no point. Lastly, and based on the market and return, we need to see if our customers are paying us for this solution. Are we sure they're willing to pay so that our business model may be profitable? That's something we'll need to validate through quantitative validation. Through metrics, we'll need to know how many people are interested in our product, through which channels are we going to reach our customers and, above all, through a series of costs, which will affect us due to our product our service, identify if our business model is profitable, if we're really capable of selling our product or service ensuring our company can remain profitable and sustainable across time. In case that's not possible, we'll have to pivot. Talking about pivoting, I'd like to show you a couple of examples of well-known businesses that had to pivot. Airbnb, which went from an event organising company to an apartment marketplace. Or Twitter, which used to be a podcast appendix and became a social network for micromessaging which today is known around the world. They all had to pivot, they identified that their customer was different to what they thought or they identified that what the customer wanted was another type of value proposition and they pivoted until they found a business model and value proposition that fit with their customers. Lastly, the successful start-ups are those that manage to pivot enough times before decreasing their resources to zero. This is from Eric Ries, creator of the lean start-up methodology, he shares it often and I fully agree with it. Thanks and until next time.
