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Discovery Driven Planning - Coggle Diagram
Discovery Driven Planning
Assumption
Startups are built on assumptions
Startups rely on a set of conditions or circumstances that must exist for the business idea to thrive
Ex: The assumptions could be a market need for the product/service, or the willingness of customers to pay for it.
Assumptions play the role of the unseen support system, impacting strategy, execution plans, and decision-making.
If entrepreneurs fail to recognize and validate their assumptions, it can result in significant setbacks or missed opportunities => test them and adjusst as quickly as possible.
Surface assumptions
Customer value
Customer needs: Determine the specific customer needs the product or service addresses and whether you are targeting particular customer segments.
Competition: Differentiate offering from competitors, consider how to maintain advantages, protect intellectual property
Pricing: Determine the pricing strategy for the product or service and identify the target customers who will pay for it.
Partners: Identify potential partners critical to the success and devise strategies to convince them to make a collaboration
Technology & Operations
Planning and Operations: Define the tasks required for your product to work effectively and establish a structure that allows for learning and adaptation. Identify cost drivers.
Staffing and Hiring: Determine who will be responsible for executing tasks and assess. Develop plans to acquire additional talent if needed.
Technology: Consider how to develop and maintain the underlying technologies necessary for your product or service.
Building for the Long Term: Plan for building a startup that can operate independently of specific individuals.
Sales & Marketing
Channels: Determine the channels used to bring the product or service to the market. Develop strategies to onboard these channels.
Customer Acquisition: Identify methods for acquiring new customers and calculate the cost of acquiring a customer
Optimization: Establish mechanisms to measure the effectiveness of your marketing and sales efforts and determine how success will be measured.
Financials & Profit
Projections: Develop and justify your financial projections. How have you estimated revenues, expenses, and growth rates? What benchmarks or models are you using?
Investment: Determine how much capital you will need to reach key milestones. How will you attract this investment? Think strategically about how to sequence investments to maximize both value and learning.
DDP
Start from the goal
DDP is an approach that involves starting the planning process by clearly defining the goal or desired outcome of the enterprise.
The goal serves as a guiding principle throughout the planning process and helps ensure that all subsequent actions and decisions are in line with the desired outcome.
Map the operations steps
Identify and define all the operational steps or activities that business needs to undertake to reach that point
Lay out all the activities required to produce, sell, and deliver the new product or service to customers.
Build a reverse income statement
Instead of starting with estimates of revenues and working down the income statement to derive profits => start with required profits
Work the way up the profit and loss to determine how much revenue it will take to deliver the level of profits required and how much cost can be allowed.
=> Required profits equal necessary revenues minus allowable costs.
Benchmark assumptions
Identify and analyze the key assumptions underlying business plan
These assumptions can be related to market conditions, customer behavior, costs, pricing, competition, and other relevant factors.
It is important to benchmark these assumptions against industry data, market research, expert opinions, or historical trends to ensure they are realistic and well-informed.
Match milestones to assumptions
Milestones allows startups to validate and test the assumption
Milestones can take various forms, such as customer interviews, prototype development, or the start of production.
Every assumption must be associated with a corresponding milestone in order to test and validate it => Ensure that assumptions are not accepted without being subjected to real-world validation
Milestones may help find ways to minimize investments and commitments before critical assumptions have been tested and validated
Continually refer back to your Milestone Chart to assess the validity of planning, identify any risks, &make necessary adjustments.