As one of my previous post mentioned, the journey of start-up is all about making hypotheses and assumptions and finding ways to test them. Testing hypotheses at the initial stage and in a small scale provides us some evidence about the feasibiliy of our business plans. Here I outline my testing plan for top 5 hypotheses of my start-up: BetterPartners.
Hypothesis 1: NGO/NPO/social enterprise have the awareness of the benefit from professional services and they are willing to pay for them.
Testing plan: I will use the method of focus group to interview a group of leaders and managers of NGO/NPO/social enterprise in China to understand their past experience with professional services and their willingness to pay. Some priliminary questions are listed below and I aim to measure their experience and willingness by figures like year, ranking and score.
Preliminary questions (examples):
1. Have you worked in a professional service firm such as consulting, accounting, law, advertising & public relation, investment, incubator, etc.? If so, how many years have you worked there before joining the current NGO/NPO/social enterprise?
2. On a scale of 1-5 with 1 as the least willing and 5 as the most willing, how would you rank your willingness to hire a professional service firm to help your organization, without considering the professional service fee you need to pay?
3. On a scale of 1-5 with 1 as the least effective and 5 as the most effective, how would you think the effectiveness of professional service firms in helping your organization solve problems?
Hypothesis 2: our expertise and experience in private sector are transferrable to solve organizational and managerial problems NGO/NPO/social enterprise are facing in China.
Testing plan: In a similar manner, I would like to interview our potential clients to ask them to list & describe their most concerned organizational and managerial problems. After collecting these questions, I would categorize them into different buckets and match them with similar problems in private sector.
Hypothesis 3: our clients have approximately homogeneous price appetite towards professional services fee.
Testing plan: This time, I would talk with "chief financial officer" at these organizations to understand their budget philosophy. I would try to understand by asking questions like
1. What is your annual budget?
2. How would you estimate the growth of annual budget in the next 3-5 years?
3. What is the range (in terms of %) of your annual budget would be used for outside vendors such as professional service firms?
I understand that it is difficult to estimate a number specifically for professional services, but starting from total budget, I would have a better sense about their appetite about vendor service.
Hypothesis 4: we are able to build a growing base of professional talents who are committed to our vision & mission.
Testing plan: in order to test this hypothesis, I would design a questionnaire for our existing members to ask their expectation before joining BetterPartners and their current rating. In this way, we can know what our (potential) members were looking for before joing and how we fulfilled their expectation. This is similar to what we do to understand customer's pain points and unmet needs.
Hypothesis 5: we are able to further diversify our service offering (such as impact investing) in the future in order to better build & serve social impact sector in China.
Testing plan: this assumption is about our future business plan in which we lay out our next step into impact investing sector where we could actually invest in mission-driven ventures and provide advisory and consulting service as well. To test our ability to expand offering and customer's readiness, I would conduct interviews to 3 categories of people: internal management, selected clients, and similar players in the United States. Though I am not sure what exactly I would ask during interviews, I will focus on three aspects,
1. Timing: when the market is ready for such service? any key drivers such as legal infrastructure?
2. KSF: key success factors of players in this field
3. Internal gaps: in which parts do we have the widest gap according to answers of question (2)
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| "Get Tested" |
Hypothesis 1: NGO/NPO/social enterprise have the awareness of the benefit from professional services and they are willing to pay for them.
Testing plan: I will use the method of focus group to interview a group of leaders and managers of NGO/NPO/social enterprise in China to understand their past experience with professional services and their willingness to pay. Some priliminary questions are listed below and I aim to measure their experience and willingness by figures like year, ranking and score.
Preliminary questions (examples):
1. Have you worked in a professional service firm such as consulting, accounting, law, advertising & public relation, investment, incubator, etc.? If so, how many years have you worked there before joining the current NGO/NPO/social enterprise?
2. On a scale of 1-5 with 1 as the least willing and 5 as the most willing, how would you rank your willingness to hire a professional service firm to help your organization, without considering the professional service fee you need to pay?
3. On a scale of 1-5 with 1 as the least effective and 5 as the most effective, how would you think the effectiveness of professional service firms in helping your organization solve problems?
Hypothesis 2: our expertise and experience in private sector are transferrable to solve organizational and managerial problems NGO/NPO/social enterprise are facing in China.
Testing plan: In a similar manner, I would like to interview our potential clients to ask them to list & describe their most concerned organizational and managerial problems. After collecting these questions, I would categorize them into different buckets and match them with similar problems in private sector.
Hypothesis 3: our clients have approximately homogeneous price appetite towards professional services fee.
Testing plan: This time, I would talk with "chief financial officer" at these organizations to understand their budget philosophy. I would try to understand by asking questions like
1. What is your annual budget?
2. How would you estimate the growth of annual budget in the next 3-5 years?
3. What is the range (in terms of %) of your annual budget would be used for outside vendors such as professional service firms?
I understand that it is difficult to estimate a number specifically for professional services, but starting from total budget, I would have a better sense about their appetite about vendor service.
Hypothesis 4: we are able to build a growing base of professional talents who are committed to our vision & mission.
Testing plan: in order to test this hypothesis, I would design a questionnaire for our existing members to ask their expectation before joining BetterPartners and their current rating. In this way, we can know what our (potential) members were looking for before joing and how we fulfilled their expectation. This is similar to what we do to understand customer's pain points and unmet needs.
Hypothesis 5: we are able to further diversify our service offering (such as impact investing) in the future in order to better build & serve social impact sector in China.
Testing plan: this assumption is about our future business plan in which we lay out our next step into impact investing sector where we could actually invest in mission-driven ventures and provide advisory and consulting service as well. To test our ability to expand offering and customer's readiness, I would conduct interviews to 3 categories of people: internal management, selected clients, and similar players in the United States. Though I am not sure what exactly I would ask during interviews, I will focus on three aspects,
1. Timing: when the market is ready for such service? any key drivers such as legal infrastructure?
2. KSF: key success factors of players in this field
3. Internal gaps: in which parts do we have the widest gap according to answers of question (2)
I love the cartoon. Thanks!
ReplyDeleteI appreciate how detailed you are about the hypotheses, the testing plan, and the related questions. I am confident you will learn a tremendous amount by pursuing these interviews / explorations aggressively.
- CBB