On Validating Ideas

I have always been drawn to logical thinking and using frameworks to organize my thoughts and approach problems. I have a systematic and organized approach to problem-solving, and I am confident in my ability to find solutions to the issues that arise.

However, logical thinking is not always enough to solve all problems. Having a combination of behavioral and cognitive skills is essential for many reasons. Effective communication, team collaboration, and building positive relationships are crucial characteristics of an entrepreneur. It's not just about having the best idea but also being able to make it a reality.

This was a key topic of discussion during our course, "Entrepreneurial Thinking in Practice" (MBA6262) as part of our MBA program, where we discussed essential qualities for entrepreneurs.

During the course, we also discussed how associational thinking can be a valuable tool for discovering new perspectives and solutions to common problems. By looking for connections and patterns, we can deepen our understanding of the problem and develop more creative and effective solutions.

The Innovator's Dilemma by Clayton Christensen was the key book I selected to read during the course. It was a fundamental part of our class project, where we had to select a business idea, develop it using a Business Model Canvas, and conduct validation efforts to produce different versions of the BMC.

Our idea selection process 

The business idea that we developed during the course was based on the concepts and frameworks we learned in class, as well as the insights I gained from reading The Innovator's Dilemma. Other members of my group read different books, so we had valuable knowledge from multiple sources as we worked on our class project and developed our own business idea.

We decided to position ourselves downstream in the value chain of the Health Industry, targeting the internal process that affects physicians rather than the primary users (Patients). We identified a need for technology that could help physicians with their document processes and make their daily work activities more efficient. By addressing this need, we believe that we can bring value to the industry and our target customers.  

The current companies developing software for the Health Industry often have poor user interfaces, likely because they do not face pressure to update their interfaces once they have secured contracts with large firms. This situation is ripe for disruption, as I learned from The Innovator's Dilemma that big companies may struggle to compete with new technology and lose ground to new entrants. By offering a more user-friendly and innovative solution, we believe that we can disrupt the market and gain a competitive advantage.

The Innovator's Dilemma illustrates that not all big companies can pivot quickly to respond to new innovations. The book discusses the example of Hewlett-Packard, which decided to cannibalize its laser printing department by competing against itself with an ink-based printing product. This decision likely came with significant risks, but it allowed the company to position itself for the future and compete with new entrants. 

These are rare cases, and we believe we have identified a market where complacent competitors may be opening the door for an innovator to disrupt the industry. By offering a more innovative and user-friendly solution, we believe that we can capitalize on this market opportunity and gain a competitive advantage.

Our Business Model V.1.  

In the book, Christensen reveals that disruptive innovations often start by targeting underserved customers with different needs than the mainstream market. We have defined our customer segment as broadly as possible, mainly targeting Physicians and Owners of Clinics. These two groups need to solve a pain point that has been disregarded so far: The cost of using resources to chase small payments from individuals that require sick notes and other documents.  

Our central premise of our BMC V.1 is, thus, doing anything possible to solve this pain point.   

Our first validation efforts yielded exciting results. As someone who tends to approach problems in a logical and systematic way, I learned the value of taking the time to validate the problem before coming up with a solution. Instead of jumping to a solution, I learned to ask open-ended questions to key interviewees and let prospective customers tell me about their pains and willingness to pay for a solution. This process was invaluable for me, as it helped me gain a deeper understanding of the problem and develop a more customer-focused solution.

We had our fair share of struggles. One of the biggest challenges was finding a cost-effective way to reach our target market, which consisted of Physicians and Health Clinic Doctors. These individuals are typically difficult to reach through PPC channels, which can be expensive. We were mandated to validate the idea in the cheapest way possible, so we had to be creative and find alternative ways to reach our target market and gather their feedback. 

After V.1 and conducting our first round of interviews, we were able to confirm the main pain point that our solution would address. This was a significant win, as it validated our assumptions and provided a clear direction for our solution. However, we also learned that there were fewer revenue streams available for our solution than we had initially anticipated. Additionally, we discovered that it would be challenging to comply with laws and regulations around storing patient data, which would require careful planning and consideration.

A better solution was arising with our Business Model V.2.  

Once we validated the idea, we got back to work on creating a BMC V.2. and got to work to validate it again. The first version of our BMC was complicated and challenging, but we started to concentrate on what really matters to our customers: saving time and resources.  

We embarked on the quest of acquiring currency: Reach as many Physicians as possible through a landing page and a simple call to action. Get to obtain as many e-mails as possible.  

After finalizing the validation process for our BMC and creating a few more versions, we developed our V.3. and felt way more confident that the idea is, indeed, good enough to pursue more efforts. 

If we were to develop this idea and launch a product, our next steps would be to establish a minimum viable product and move forward with our extended-term plan. We have confidence in the value and potential for success of our solution, and we believe that it has the potential to make a significant impact in the Health Industry. By focusing on developing a minimum viable product and executing our extended-term plan, we believe that we can bring our solution to market and achieve success.

The central learning after we went through this process: 

• Validate the idea as often as possible until you increase your confidence in its potential for success. 
• Launch as soon as possible and spend as little money as possible. 
• Don't be afraid of competitors, some of the big ones cannot pivot as fast as you can
• Even if the product does not exist, be bold and ask the customers to enroll on a list. Some customers might even want to pre-pay for the product or service!  

In conclusion, I have reinforced the importance of logical thinking, and how combining behavioral and cognitive skills and associational thinking can help to discover different angles and solutions to common problems. 

I have also learned that validating an idea is a practical way to increase confidence in the potential for success. By following these steps and applying the principles learned in class, I am confident that I can become a more effective problem-solver and decision-maker.