The evolution of business idea

Posted on November 12th, 2014

The evolution of business ideaBy day, Warren Gray, is a mechanical engineer, running his own sustainable design consulting firm. By night, or more accurately, weekends, Gray was also one of the first batch of entrepreneurs to participate in the first Johannesburg Lean Startup Machine 3 day workshop event. Gray’s Bill Scanner App idea won best idea, beating out several ideas including education platforms, online domestic service app and an idea for locally made flip flops. The app according to its founder was something of a “back of napkin” idea.

He came about the concept, after having to navigate the intricate after dinner dance of figure out who owes how much, one too many times. He was invited to the Lean Startup Machine by friend Igor Rodionov, and asked another friend, Thusho Mokgoto to join him at the event. The three of them came together to give a enthusiastic, if not somewhat chaotic product pitch, which ultimately received the most votes from the audience

Originally started in New York in 2010 by Trevor Owens and Susan Ng, the Startup Machine is a three-day workshop that trains entrepreneurs and innovators to start their own companies using Lean Startup hands-on methodologies. The workshop is based on the framework and principles drawn from The Lean Startup book, the bestseller by Eric Reis.

Over the next  two days the Johannesburg participants went through classic Lean Startup Machine processes which includes the creation of an MVP, or “Minimum Viable Product.” The goal of the MVP test is to test the idea with real customers and to find out if they would pay for the product. For their customer development interviews, the Bill Scanner App team took their idea to the Neighbourgoods market, the thriving food market scene, and Stanley Avenue in downtown Johannesburg.

They interviewed individuals trying to find out if there was a big enough market of people who not only faced a similar problem,but would also use the app to solve it. According to Warren, they were somewhat surprised by the results of the customer development interviews, which revealed that the target market and demographic for the app wasn’t as they originally thought.

It was the students and others money conscious individuals who expressed a bigger interest in the app. “People did have this problem, but it was a different group of people” he says. The next step was to return to the original potential customers who had said they would use the app and find out if they would be wiling pay for the app.

All they needed for this process was a detailed sketch of the app and a basic explanation. “You need a lot less product than you think” says Gray. The team found out that while this money conscious target market loved their app idea, they just wouldn’t pay for it, which threw out the monetising aspect. However a crucial part of the Lean Startup Machine methodology is the process of continuously validating and invalidating assumptions.

Teams are forced to continually shift their solution (and even problem) according to customer needs. It was Mokgoto who came up with the idea of using the app as a business intelligence platform. All the data collected by the app, including average spend per person, popular wines and dishes.

This was the kind of information that business in the tourism sector like restaurants, banks etc would be willing to pay for. One final day the team pitched this new solutions and its experience using the process. Again, the Bill Scanner App team came ahead.

As winners, the trio walk away with startup capital, as well as six months incubation to help develop their idea, which Gray says they will be taking advantage of.