Welcome back, before we get into this session, let's do a recap on what we've done so far. Early on in the course we described a target population and identified, or substantiated a proposed solution, or a series of solutions. We have considered what performance criteria might be appropriate. We've defined and segmented a target population. We've used the beneficiary experience chain to map out the customer journey, should they go through the solution we have in mind. And remember, customer and beneficiary are sometimes used interchangeably, if appropriate. We've analyzed the most competitive alternatives to the one which we have in mind. We've considered the realities of operating, or the operations realities. And we've develop a Concept Statement. In this session, we're going to talk about concept prototyping, or put differently, how to adaptively experiment. Such that, we develop prototypes and allow their reality of the successful and deployable solution to emerge from the test. You can think about this as adaptive experimentation. We're going to apply the concept to the Zambia Feeds example, and this is laid out in the book. And then we're going to have you think about a problem solution and how you might test it quickly and cost effectively, or as cheaply as possible. So you've completed your problem statement and your solution statement. What you can do now, is as you engineer, or conceive, of a way to test this before launching the entire venture, is run the experiment by your advisory board. As you did earlier with other work, such as the beneficiary experience table. And have them respond to the test itself prior to actually launching it in the field. So, here's where you can use creatively. Here's where you can get innovative. Here's where you want to deploy an entrepreneurial mindset. What you want to do is design a quick and cost effective test of the concept on the ground, before you actually launch the venture. And this will allow you to do the reiteration after experimentation as the learnings unfold, the realities of operating on the ground unfold. So let's use Zambia feeds as an example, the venture started in 2001. It was started as an intrapreneurial initiative. In other words, it was started inside an existing firm, rather than as an external independent entrepreneurial firm. This decision was taken because the bigger firm had offered to help, and therefore, the entrepreneur believed that she could test the concept cheaper and faster using the bigger firm as the host. The entrepreneur started with six part-time workers with shovels. In other words she didn't go out and purchase fancy high end, sophisticated equipment to do it, she literally did it by hand using part-time workers. She had a cellphone and a little bit of working capital for the raw materials to start. When she engaged with us we said look, to do this and get as strong an affirmation from your beneficiaries as possible, what you should do is pick new customers. In other words, customers that are not customers of existing firms. Don't sell for credit, sell for cash, and don't buy fixed assets until such time as you're confident that your new customers have succeeded and will participate with you going forward. She agreed to this, and then went out to find the first five customers, so to speak. So what she did was she said, I'll find five participants who are interested in chicken rearing. I will provide them with the necessary resources to rear chickens. In other words, the feed, the chicks, the vaccinations, the knowledge, etc. And I'll help them take care of them, and then, once they're fully grown, help them get them to market after figuring out how many to sell versus how many to keep for consumption. She helped with transportation to the market, she helped with price negotiation at the market. And then helped them calculate, quite accurately, how much income they'd actually generated after all expenses in this exercise. And in that way, they could be very clear on the value, the economic value, as well as, the nutrition value that this experiment had provided for them as lead steer customers. If you look at the chart, there are two columns. We have a framework for thinking about the design and deployment of a test and then we have the application of it to Zambia feeds. So looking at the framework, she has to inform selected beneficiaries, or the selected beneficiary segment about the venture. Then design an innovative low cost test of the concept. She then has to identify specific testees, if you will, or participants who will test the concept, then provide resources and assistance to the beneficiaries so that she can help them succeed. Or so that they have the highest chance of success possible. All the while, she's checking assumptions of costs of operating requirements for the beneficiaries and herself, her own venture. And also, when she gets to market, the selling price of the reared chickens, or the grown chickens at market. This will allow her to calculate the beneficiary customer profitability or income from the test and answer the question, does this work for the beneficiary and does this work for the enterprises I haven't conceived. So that's a framework for thinking about this. If we look at the Zambia Feeds example, To inform selected beneficiaries what she did was organize education seminars at local trade stores and villages about the type of chicks, chicken feeds. The procedures for rearing chickens and the management of diseases, such that the chicken were read as healthy grown chickens that would be attractive at market. She use these seminars and feedback from attendees at the seminars to identify five village participants, who were interested in actually going through with the experiment. She then provided then with assistance in the rearing of the first batch of chickens. So she helped with the transportation of the chicks, she helped with the transportation of the feed. She helped with the vaccination, she helped with expertise, she had a team of people with her help the beneficiaries, or the first test customers, put together the appropriate environment for the chicks. And all the while was explaining to them what was being done, why, and how it would impact the outcome of the venture? At the end of the experiment, it was about eight weeks, after selling the chickens at the market what she was able to do then, and remember now the beneficiaries have actual income, they have cash in hand. She was able to sit them down and say, okay, look at what you got as remuneration for each of your reared chickens at the market. Now let's go back and have at a look at all the inputs. The checks, the vaccinations, the feed, etc., the transportation and basically let's do the basic math on the economics of poultry rearing. And once she'd gone through these exercises with the beneficiaries, they were then confident that they could do it themselves with some assistance in the first few production series, if you will. But the economical logic was sound. In other words, if they could replicate what they had done with her, they now had a viable solution to income deficiency, and protein deficiency, for them, their families, and others in the village, were they to make it bigger. Let's look at a counter example I about 100 kilometers, or 60 miles, from this particular, village, and the town where feed is located. Another entity, a big non-profit decided to do a similar exercise. What they didn't do was test the model they had in mind. They figured that it was similar enough to feeds and that they could just use that learning, or use it as a proxy. They went ahead with a full scale launch and subsequently learnt, that there were some factors in that particular context, that were sufficiently debilitating that their entire project collapsed. And in fact, there was a catastrophic failure, it cost them a significant piece of their budget over a two year period. So remember, as you start out, there are possible multiple pathways to developing and deploying a solution. You can even test more than one of them at the same time, provided you can do them relatively quickly and at low cost, or cost effectively enough that you can do multiple. What you want to do them is figure out which one has the highest possibility of success in the least amount of time possible, so that get that early traction. Remember always that redirection and iteration toward a solution, a viable solution, is more likely than not in uncertain environments. So plan for it and use it as a way of adapting to success, rather than specifying what success is before you even get to the ground. So let's think about the key takeaways of this session. Before doing the concept test, we have done the beneficiary experience table. We've done the cost table. We've done the competitive analysis. All of those are required so that we understand, as richly as possible, the context of these beneficiaries. What we're looking for is insight about what they will and they won't do, what they will accept, what they won't accept, go back to Max's session on segmentation. Now we do is, we design a quick low-cost way to test the concept with the beneficiaries that we have in mind. It's very important that you assign a time frame as well as a budget, when testing. Absolutely critical, so that you don't get scope creep or test creep and budget creep. As we consider going into unfamiliar or uncertain territories, iterative testing and adapting of the venture is crucial for success. As important as testing, is what we do after the test. After each test, go back to the deliverables table, go back to the cost tables, go back to the key data points or key assumptions. For example, local market pricing in this case, and update the performance statements, the tables with the data that you've got from the test. In this way, you can keep track of the implications of the learning on the venture itself, the solution, that you have in mind and on our testing on the ground. What this will allow you to do, is to update the expectations of venture success. And share this with, not only your beneficiaries, but also your key stakeholders and your advisory group to keep them abreast of what's going on. So with that, we conclude decision, hopefully this is enough for you to go out and do it on your own venture, or to do it with an example of your choosing. With that, thank you.
