Module 4: Testing ideas
4.1 Themes & learning outcomes
Themes
Entrepreneurial idea validation
Empathy and listening skills
Intended learning outcomes
After finishing this module you will be able to
Understand the basic concepts and definitions of empathy and listening
Reflect on your own listening habits
Use the empathy map to analyse the key stakeholders of your project, and understand their pains and gains
Build a value proposition to start a project or venture
Apply listening skills in an interview to validate your ideas
Time required: 5-7 hours
4.2 Introduction
This week, you are going to bring your project ideas to the next level by testing and validating them! Of course, there are several important aspects that you should consider in order to test your ideas successfully. The video below will introduce you to two concepts that are important from an intercultural as well as an entrepreneurial point of view: empathy and listening:
Empathy
Empathy allows us to experience other people’s realities. It is an active attempt to understand another person’s experiences and perspective.
You can develop this empathic skill by practicing some simple habits:
Be observant of others (see Module 3!)
Use active listening and try to understand other people’s deeper motivation behind their statements
Open up and also share your experiences, feelings and opinions
Why should you explicitly work to enhance your ability to empathise with others? Share your thoughts with your teammates and respond to each other.
4.3 Warm-up
So far you have communicated a lot within your team. From time to time, you may have noticed that your message was not understood as you meant it. Understanding why this happens becomes increasingly important in this module as you will not only communicate with you teammates but also with your potential stakeholders. Let’s have a look at different models of communication and ways to improve it.
Basically, every act of communication is a transaction between two or more people: at the simplest level someone sends you a message, you receive it, and send feedback. However, human communication is often more than just sending one message, conversations include a constant exchange of information. As such, human communication is incredibly complex and there is always the possibility of miscommunication.
Watch this video on how miscommunication happens and consider the following questions:
Why is communication like playing toss with a ball of clay?
What are the suggestions in the video to listen more effectively?
As you have seen, listening is essential for any conversation to be successful. Strong listening skills will help you understand other people’s deeper motivation behind their statements. Therefore, in this warm-up you will get to assess how good your listening skills are and think about how to develop them further.
Follow the link below to take the quiz. Then come back to this page.
Ask yourself:
What are you good at?
What do you still need to improve on?
Write down your three key points.
4.4 Advice & “know-how”
Idea validation: Does it create value for stakeholders?
At this stage of the journey, you are about to validate the ideas you came up with/sketched in Module 3. Validating means to prove that your idea is worthwhile for stakeholders, and this value will become the cornerstone upon which your innovative project will be built.
In this section you will learn how to assess two important aspects:
Who are you creating value for?
What value do you deliver to your stakeholders?
These are the first steps in designing the Business Model Canvas (BMC) of an entrepreneurial project. At the end of the NICE course your team will have to complete and deliver the BMC of the project.
Identifying stakeholders
In any project there many potential stakeholders - individuals, groups or institutions that are directly or indirectly affected by, or have any interest in the activities that your project will carry out. To ensure that they support your project, you will have to deal with them and manage them.
Watch the video below about stakeholder management. It is a TEDx video with Edward Freeman, who wrote the most cited book on the subject and developed it into a way of thinking.
To get a comprehensive overview on potential project stakeholders, their expectations and how to manage them, read this text on the subject:
Think about it: Who are the key stakeholders of your project? Write down your thoughts.
Get to know your stakeholders: the Empathy Map
Before you can manage your stakeholders, you have to get to know them first. The Empathy Map is a tool that gives an insight into the underlying motivations of potential stakeholders to uncover why they are functioning the way they are. It allows you to empathise with your potential key stakeholders like customers or users by asking: What are they seeing, saying, doing, hearing, thinking, feeling? It also helps you to identify their pains and gains. Thereby, the tool is a great starting point in creating stakeholder profiles and developing meaningful value propositions.
Read more on how the Empathy Map works here.
Creating value for stakeholders (I): the Value Equation
When you come up with an idea that might become an entrepreneurial project or venture, you have to start thinking about how your idea will create value for your key stakeholders.
When does a project create value for its stakeholders? To understand this, look at the Value Equation:
Value Creation = Perceived Benefits – Perceived Cost
This means that value is created when the perceived benefits exceed the perceived cost. Therefore, if a project wants to create value for their stakeholders (customers or users), they have to think about how their products or services will increase their stakeholders’ benefits and reduce their costs.
How will your project create value for your key stakeholders? Write down your thoughts.
Creating value for stakeholders (II): the Value Proposition
The Value Proposition Canvas is a tool to help you visualise, design, and test the value proposition of your product or service. It shows why your product or service is valuable for your customer or user.
Watch this video to find out more about the Value Proposition Canvas:
The Value Proposition Canvas (printable PDF) (editable PPTX) has two elements:
Customer profile
Value map
Let’s take a closer look at the customer profile. First you describe your customer/user’s major jobs-to-be-done which should help with profiling your target group of people (also called segmentation). Then you list their pains and gains in regard to these jobs. In some cases your customer is not the same as your user. If so, you need to create one profile for each of those stakeholders!
Pains describe anything that annoy customers/users before, during, and after trying to get a job done, or things that prevent them from getting something done. Pains also describe risks, or potential bad outcomes, related to getting a job done badly or not at all.
9 trigger questions to help you think of different potential customer pains
Gains describe the outcomes and benefits that your customers/users want. Some gains are required, expected, or desired by customers, and some may surprise them. Gains include functional utility, social gains, positive emotions, and cost savings.
9 other trigger questions to help you think of potential customer gains
While the customer profile visualises your customer’s pains and gains, the value map makes explicit how your offering relieves pains and creates gains for your customers and/or users. With the value proposition canvas you can assess if both elements fit. Thus, you can see if your product/service is creating value for your customer/user and is something they really want. A great value proposition helps you appeal to them with meaningful answers as to why they should choose you and not others.
Read more on 10 characteristics of great value propositions.
4.5 Resources
Optima Training (UK) Limited (2015), "Customer empathy map". Video.
Osterwalder, A., Pigneur, Y., Bernarda, G., Smith, A., "Value Proposition Design Glossary". Strategyzer. PDF.
Treasure, J. "Five Ways to Listen Better." TED. Video.
Ting-Toomey, S. (2015), "Cultivating Intercultural Competence: A Mindful Inquiry Practice". In: Janet M. Bennett (Ed.), The SAGE Encyclopdia of Intercultural Competence. Sage Publications (620-626). Link.
Ury, W. (2015), "The Power of Listening". TEDx. Video.
4.6 Challenge
Now is the time to test your potential solutions that you have thought of in the previous module. This task guides you to assess if your ideas have worth. In this way, you take your first steps in designing the Business Model Canvas (BMC) of your project.
First, complete steps 1 to 3 on your own. Then, have a look at your teammates’ results.
Finally, meet up with your team, discuss your results and create a common version.
Step 1: Definition
Define two of your ideas by answering the following questions:
What do you offer?
Who is the key stakeholder?
Take notes.
Step 2: Empathy Map
Design an Empathy Map for each of your ideas.
What does your key stakeholder think and feel, see, say and do, hear?
What are your key stakeholder’s pains and gains?
Try to put yourself into their shoes and brainstorm their characteristics. For this, also think back to your observations from the previous module – they might help you.
You can download a form version of the Empathy Map here.
Don't forget to save your results!
Step 3: Value Proposition
Design a Value Proposition for each of your ideas.
What does your key stakeholder’s profile look like?
How does your offering reduce pains and create gains?
You can download the Value Proposition Canvas here (printable PDF) (editable PPTX).
Discuss the value proposition of your ideas for your key stakeholder. Based on your understanding, how does your offering contribute to enhancing their gains and/or relieving their pains? In other words, what is your answer as to why they should choose you?
Share your results with your teammates.
Step 4: Share and discuss
Set up a meeting with your team. In the meantime, have a look at your teammates' results.
As a team, discuss your results and create a common version.
4.7 Team assignment
After you have validated your ideas in your head, you should now also test them in the real world. After all, your stakeholders are going to be real people, not imaginary. So this task asks you to get real, hands-on feedback on your value propositions. This feedback will then help you make better decisions on what idea your team will go on with.
Step 1: Preparation
Come together with your team and discuss:
Who could you talk to for you first idea? Who could give feedback for the second idea? Is it maybe the same person?
Who will do the interview(s)?
How will you conduct the interview(s)? Face-to-face or online?
What needs to be considered in terms of communication and listening?
Don't forget to take notes!
Step 2: Interviews
Talk your interview partners through your value propositions and get their feedback. What is their take on your offering?
Write down your results.
Step 3: Results
Share your results with your team. Discuss: Is there anything to adjust on your value propositions to make them fit better?
Make the changes.
Step 4: Choose one idea
Based on the feedback and your discussion, make an informed choice on what idea you will take forward for the remainder of the programme.
Once you’ve made the decision, refine the idea using the following statement: "Our team will go forward with the idea [...] because [...]."
Finally, think of a name for your entrepreneurial project.
4.8 Reflection
At the end of this module, it it now time to reflect:
What was the most surprising experience this week?
What did you learn about your team members?
What did you learn about yourself?
What did you learn about your idea?
Write down your thoughts.