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Welcome back

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In the previous session, 
we have done in consumer discovery

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Then now, we will go to consumer validation process

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Consumer validation

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Consumer validation is also a very important step

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for your entrepreneurship

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Are you ready? Let's go

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Before we go into the main topic 
of the consumer validation,

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I want to introduce very interesting startup case

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Look at these two guys

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They are working at the Google

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And they met together over there

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Then in 2017,

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they came up with great idea

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And then they look at the problem of the Bodega

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Have you heard about the Bodega?

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Bodega is a kind of a small grocery store

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Located in urban area,

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which is New York City

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Urban area

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And also, they especially located in a neighborhood

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with a large Hispanic population

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In the Spanish term, the Bodega means

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kind of a storerooms or a wine cabinet

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Basically, this is kind of a small grocery stores

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that sell some kind of essentials or snacks

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or eggs or sandwiches to the neighbors

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This is a concept of the Bodega

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And then, what's wrong?

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What's wrong with the Bodega?

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And then they thought that Bodega is not structured

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Because it's a mom and pop store

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And also, it's not operating 24 hours

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So if the people who live in urban area,

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they need some essentials at night

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And there's no way, nowhere, no way to purchase

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those kind of essentials, such as

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the laundry detergents or sodas or snacks

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And also, going outside to purchase those items,

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it's kind of dangerous

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So think about New York City, a little bit dangerous

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And they came up with a solution based on those problems

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What if we place,

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we place kind of innovative vending machines?

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Innovative vending machine

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And then place those vending machines inside the building

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like this. This is a Bodega

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Wow, it looks very fancy

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Inside the building and the tenant like her,

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she can use the Bodega at night

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So she doesn't have to worry about kind of safeties

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because it's kind of an indoor vending machine

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And she doesn't need the cashier or credit card, why?

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Because if she has a mobile phone,

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then she can use the mobile phone easily,

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to unlock the Bodega and just

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simply pick up the items from the Bodega

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Then just touch the mobile phone and lock the door

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Then the Bodega

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will just check out your item,

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like Amazon Go concept

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So inside this vending machine,

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there is advanced technology, which is AI,

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there is a camera technology, something like that

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And it attaches to your mobile phone

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It's a revolutionized item,

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revolutionized vending machine

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What do you think?

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Wow, their solution is great

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So that's why they successfully 
raised outside funding,

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In 2017

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Then what happened?

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They got the right consumer's problem

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They got the right consumer's problem

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What is that?

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Busy urban resident

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Busy urban resident who lived in apartment

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want ultra convenient access to essentials,

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like snacks, drink, or toilet tissues

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without going outside

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And this vending machine

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provide 24 hours, seven days convenience,

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and also very close to their rooms

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Because it is inside vending machines

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And also, you don't have to 
meet the consumer, the peoples

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People, because there is 
no human interaction needed

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Which is pretty convenient

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What about their solution?

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Their solution was AI vending machine

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Think about this

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Having right consumer problems

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doesn't necessarily mean that you should provide

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AI-based solution, you know what I mean?

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And also, consumers perceive your product

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a little bit different way

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Think about it

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The Bodega, and so AI vending machines generate,

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The cultural criticism immediately

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The consumers out there perceive the Bodega,

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AI vending machine, like kind of terrible,

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terrible businesses

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that replace traditional mom-and-pop store

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with ugly technology

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Look at this Bodega

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Bodega is a small grocery store located in urban area,

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but Bodega is not just a simple store for them

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Bodega is a kind of a place

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that they interact together

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It's a kind of a symbol of the communities

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The traditional Bodegas are not just stores,

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and they are a place 
where the community can interact together

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And also, the Bodega was run by the immigrants,

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Such as Hispanic or Asian immigrants,

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The Bodega is not just a store,

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it's a kind of a mean of

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livelihood for the immigrant

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It's a very important place for them

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But this startup

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established by two young entrepreneur

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who was working at Google,

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tried to replace, tried to destroy the place,

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destroy the very important place for the community

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Oh my God, it's a terrible idea for them

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Look at the opinion of the consumers

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Some consumers said that Bodega,

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the very bad startup that want to 
kill the mom and pop store

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Other people said that

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it is not pantry box, it is gentrification box,

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which is very interesting

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So, the Bodega identified

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the consumer's problem very well

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But their solution was perceived by the consumers

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very ugly

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And another thing is,

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there's no economic benefits for the paying consumers

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Basically, Bodega target two different types of consumers

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They were end users, of course,

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of course, urban tenant like us

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It's a kind of a real users

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This is end users

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But Bodega target to the another users,

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another paying consumers

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Who are they?

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Yes, of course, the building owners

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Building owners who agree to adopt

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this Bodega vending machine inside their building

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Or property managers

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Property manager who are responsible for

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the filling up all the necessary items inside the Bodega

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Think about if there is no item left,

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then no item left at night, then what should we do?

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And property manager should fill them up

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But they should sleep

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They should sleep. So that's why

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there is a not consistent quality of the product

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or services

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So the machines were expensive also

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and also required restocking, restocking

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And also the building owners

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do not expect any high profit margin

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And also, it's very difficult

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to manage these vending machines

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So the Bodega did not satisfy end users' needs

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and also did not satisfy

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with kind of paying consumers' needs as well

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So the Bodega was in trouble right now,

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So best takeaway of this case, Bodega Case, is that

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identifying consumer problem is not enough

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Once you finish identifying consumer problem,

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then you should go through

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validating your service and product

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In other words, you should test

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whether your solution is a good solution or not

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So you should go through 
the consumer validation process

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Consumer validation process refers to

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the process of testing whether your solution

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actually solved the identified problem or not

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This is the definition

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The purpose of the consumer validation

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is to confirm whether your solution,

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your solution addressed the validated problems

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Although you identified great consumer problem,

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your solution was not

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And you need to test your pricing,

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you need to test the sales channels,

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and you need to test the willingness 
to pay from the consumers

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Basically, you should ask yourself,

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does my solution solve the problem or not?

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Does my solution solve the problem?

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Problem's ready, but my solution are not ready

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because my solution is kind of wrong solutions

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And then what are we gonna do?

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We need to find out kind of alternative solution

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or the other solutions,

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To solve the problem properly

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How to?

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You need to test your solution 
with your real consumers,

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not hypothetical consumers

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You get the feedback from your real consumers

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You generate actionable feedback 
from your real consumers,

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And very similar to the consumer discovery,

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validation is also cyclical process

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Again, you go through back and forth

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There are three major methods 
for the consumer validation

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First one, MVP

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Second one, landing page test

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Third one, your beta release

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Let's look at MVP

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MVP is a very famous concept,

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which is a minimum viable product

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Minimum viable product is 
the simplest version of your product

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This is a core concept of the Lean Startup

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that we already discussed about 
in the other sessions

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So the MVP deliver core value to the early adopter

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or early evangelist

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MVP test the core assumption about your solutions

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with the minimum resources and minimum effort

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If your solutions was proved as wrong solution,

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easily change your solution, easily fix your MVP

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and easily provide another MVP

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So the best example of the MVP is CarrotBot

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Do you remember the CarrotBot?

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CarrotBot is the MVP of the Blue River Technologies

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Again, the Blue River Technology was founded

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by two people in Stanford University

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One guy is the MBA student,

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one guy is the computer science PhD student

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Anyway, they target to the lawn market

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But they thought

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the farming area has a real problem

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So that's why they quickly revised their solutions

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and they prepared kind of a simple MVP

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to test their solution

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In this kind of a humble

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and very simple vehicle,

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on the top of this vehicle, there is two cameras

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and two lasers and one radar

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You know that, okay?

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Anyway, so with those technology,

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this MVP tried to test their solution

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on the real farming field

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So the farmers were very impressed with this MVP

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So later on, they revised this machine again and again,

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then they became very successful

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Thanks to the MVP about consumer validation

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Let's move to another method for the consumer validation

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This is a landing page test, landing page

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You know what landing page is

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If we have a website and you have a landing page,

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this is a landing page

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A landing page is a one-page website

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designed to present your product idea

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and measure consumers' behavior

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So your purpose of the landing page is twofold

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First, you introduce your product service to the consumer

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Second, you gather the data, how consumers react

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How consumers react

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So usually, you gather the data

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through the consumer's call-to-actions

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Call-to-action means there are several types of call-to-action

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For example, you provide some kind of the waiting list

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and the consumers join the waiting list

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Or you provide a kind of a sign-up page

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and consumers sign up for your product or services

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Then you count how many people sign up right now

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And pre-order now, and you just provide a pre-order link

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Then you can measure how many people click the pre-order

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Or request the demo link,

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and you just provide the request the demo link

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for the consumers

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And consumers watch your,

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or read your explanation about your service or solutions

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Then if they need it,

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they just click the request the demo button

275
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Then you count how many people 
click the request the demo button

276
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This is all about your data

277
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in order to validate your solutions

278
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If you have tons of data, tons of clicks,

279
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then it means your solution is a good solution

280
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If there is no click, no activities, no call-to-actions,

281
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then you think your solution 
currently is not a good solution

282
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It's pretty simple

283
00:15:35.000 --> 00:15:39.699
The best example of a landing page test 
was done by Dropbox

284
00:15:40.899 --> 00:15:45.909
So basically, Dropbox filmed 
just a three-minute explanation

285
00:15:45.909 --> 00:15:50.709
about how we can use Dropbox, 
or how Dropbox works

286
00:15:51.859 --> 00:15:55.279
They just make a pretty simple animated video

287
00:15:55.679 --> 00:15:59.869
Then just post this video on several websites,

288
00:15:59.869 --> 00:16:02.830
and also they prepare for their landing page

289
00:16:04.230 --> 00:16:08.399
The three-minute video at Hacker News in 2007,

290
00:16:08.599 --> 00:16:11.829
to see if there is a market demand or not

291
00:16:11.929 --> 00:16:13.129
about their concept

292
00:16:13.879 --> 00:16:16.629
Then the Dropbox gathered

293
00:16:16.629 --> 00:16:18.870
a lot of members, a lot of consumers,

294
00:16:19.189 --> 00:16:21.689
and a lot of consumers waited for a long line

295
00:16:21.689 --> 00:16:23.040
to use this Dropbox

296
00:16:23.209 --> 00:16:24.870
They request the demo

297
00:16:25.770 --> 00:16:29.310
So the Dropbox members increased from 5,000

298
00:16:29.510 --> 00:16:33.790
to 75,000 people within a second

299
00:16:33.790 --> 00:16:35.640
It's a pretty short period of time

300
00:16:35.640 --> 00:16:37.339
So that's why later what happened,

301
00:16:37.480 --> 00:16:39.830
Dropbox founder became 
one of the youngest billionaire

302
00:16:39.830 --> 00:16:42.209
in the world

303
00:16:43.320 --> 00:16:44.610
This is a landing page

304
00:16:45.210 --> 00:16:47.859
Again, do not underestimate the importance

305
00:16:47.859 --> 00:16:51.190
of the validation process, validation method

306
00:16:51.840 --> 00:16:56.640
The last method of the validation 
is your beta release

307
00:16:57.679 --> 00:16:58.819
What is beta?

308
00:16:59.069 --> 00:17:00.919
Beta release, beta is,

309
00:17:00.919 --> 00:17:04.239
beta version of your service is pre-launch version,

310
00:17:04.239 --> 00:17:07.900
pre-launch version of your product or services

311
00:17:09.640 --> 00:17:12.639
The purpose of the beta release is to collect data,

312
00:17:12.689 --> 00:17:15.159
collect feedback from your real consumers

313
00:17:15.159 --> 00:17:17.290
And also you want to validate your performance

314
00:17:17.290 --> 00:17:20.120
of your solutions, your product

315
00:17:22.020 --> 00:17:27.360
And then you can receive the feedback or comment,

316
00:17:27.439 --> 00:17:29.439
then with this feedback comment,

317
00:17:29.439 --> 00:17:33.129
you just improve your quality 
of the product or services

318
00:17:35.119 --> 00:17:38.459
I want to give you example of the beta release

319
00:17:38.959 --> 00:17:40.079
Look at him

320
00:17:40.079 --> 00:17:42.629
He's a founder of the Slack

321
00:17:43.029 --> 00:17:45.000
We already mentioned about the Slack

322
00:17:45.150 --> 00:17:47.880
Slack is a team communication tool

323
00:17:47.930 --> 00:17:51.889
And these days, so many companies 
use communication tool

324
00:17:52.680 --> 00:17:54.040
Even in Hanyang University

325
00:17:54.240 --> 00:17:56.399
we have many department, so many department

326
00:17:56.399 --> 00:17:57.719
already adopted the Slack

327
00:17:57.769 --> 00:18:01.320
And we pay the subscription to the Slack

328
00:18:01.420 --> 00:18:03.119
Even in Hanyang University

329
00:18:03.860 --> 00:18:06.550
So his name was Stuart Butterfield

330
00:18:07.239 --> 00:18:08.960
He's a serial entrepreneur,

331
00:18:09.010 --> 00:18:13.230
and he started Tiny Speck as a company in 2009

332
00:18:13.230 --> 00:18:14.620
He came from Canada, anyway

333
00:18:15.270 --> 00:18:18.040
Then what is the main product of Tiny Speck?

334
00:18:18.140 --> 00:18:22.380
Tiny Speck main product was 
not team communication tool

335
00:18:23.119 --> 00:18:24.319
Rather than

336
00:18:24.969 --> 00:18:28.130
its main product was online game

337
00:18:29.419 --> 00:18:33.190
So the Stuart want to make 
a new types of the online game

338
00:18:33.360 --> 00:18:35.580
Mobile game, which is a glitch

339
00:18:36.569 --> 00:18:38.320
The online game is a glitch

340
00:18:39.020 --> 00:18:42.130
But sadly, the glitch was not popular,

341
00:18:42.380 --> 00:18:44.760
and the glitch was shut down in 2012

342
00:18:46.650 --> 00:18:48.169
So everything messed up

343
00:18:48.519 --> 00:18:49.560
Then what happened?

344
00:18:49.860 --> 00:18:53.469
So the Stuart and founding team get together,

345
00:18:53.469 --> 00:18:55.010
and they discussed long

346
00:18:55.310 --> 00:18:57.299
they discussed long, what to do

347
00:18:57.349 --> 00:19:00.950
Then later they decided to pivot their services

348
00:19:02.610 --> 00:19:05.739
Because they already developed 
some kind of very unique

349
00:19:05.889 --> 00:19:08.510
team communication tool, which is Slack

350
00:19:08.560 --> 00:19:10.260
They didn't have any name at that time

351
00:19:11.360 --> 00:19:12.920
But guys, we have developed it,

352
00:19:13.120 --> 00:19:14.430
kind of a new types of

353
00:19:14.580 --> 00:19:18.079
team communication tool

354
00:19:18.229 --> 00:19:21.149
I think this function of this tool,

355
00:19:21.249 --> 00:19:23.930
the function of this tool is way better than email,

356
00:19:24.030 --> 00:19:26.719
way better than the other communication tool

357
00:19:26.919 --> 00:19:29.399
Why don't we make this communication tool

358
00:19:29.449 --> 00:19:32.040
stand alone product?

359
00:19:33.000 --> 00:19:36.479
Let's turn this internal chatting tool,

360
00:19:37.279 --> 00:19:39.310
for the team communication

361
00:19:39.660 --> 00:19:41.869
into a standalone product

362
00:19:42.920 --> 00:19:47.000
Then later, they decided to launch this Slack,

363
00:19:47.100 --> 00:19:50.420
this communication tool as a standalone product

364
00:19:51.359 --> 00:19:54.260
Then, the Stuart met their friends,

365
00:19:54.260 --> 00:19:55.979
his friends

366
00:19:56.079 --> 00:19:58.469
and his friends are all entrepreneurs

367
00:19:58.469 --> 00:20:02.910
So he met 10 of them and asked them to use Slack

368
00:20:03.110 --> 00:20:07.589
as an internal communication tool in your company

369
00:20:08.479 --> 00:20:11.499
Just use this Slack, this internal

370
00:20:11.549 --> 00:20:14.079
team communication tool in your company

371
00:20:14.179 --> 00:20:16.290
You have five departments, five teams

372
00:20:16.880 --> 00:20:19.479
Just ask them to use our product

373
00:20:20.169 --> 00:20:21.490
This is kind of a demo version

374
00:20:22.129 --> 00:20:26.319
And then he tested the service and product

375
00:20:26.519 --> 00:20:27.519
Then later,

376
00:20:28.169 --> 00:20:31.869
he decided to conduct a beta release

377
00:20:32.069 --> 00:20:34.080
He decided to release a pre-order,

378
00:20:34.180 --> 00:20:37.059
pre-launch product as a beta product

379
00:20:37.800 --> 00:20:39.670
So he waited for the users,

380
00:20:39.670 --> 00:20:42.880
and then he found that 8,000 users

381
00:20:42.880 --> 00:20:46.949
were interested in pre-version of Slack,

382
00:20:46.949 --> 00:20:47.959
and they need it

383
00:20:48.159 --> 00:20:51.920
So the 8,000 users already signed up for the preview,

384
00:20:51.920 --> 00:20:54.010
Pre-order the Slack,

385
00:20:54.110 --> 00:20:57.289
which is demo version or beta version

386
00:20:57.589 --> 00:21:01.000
So, Stuart and his team realized that,

387
00:21:01.000 --> 00:21:03.119
yes, we will be successful

388
00:21:03.719 --> 00:21:05.809
Then what is the outcome? What is the result?

389
00:21:06.179 --> 00:21:08.430
Yes, of course, it is successful

390
00:21:08.880 --> 00:21:10.669
Beta release success,

391
00:21:10.669 --> 00:21:13.729
and this success drew a huge word of mouth

392
00:21:13.729 --> 00:21:14.640
Then what happened?

393
00:21:14.790 --> 00:21:17.109
Slack grew from 8,000 users

394
00:21:17.109 --> 00:21:21.819
to 1 million daily active users within 18 months

395
00:21:21.919 --> 00:21:24.479
Then Slack went to IPO successfully

396
00:21:24.679 --> 00:21:27.880
Then later Salesforce, the big company,

397
00:21:28.030 --> 00:21:32.680
Salesforce acquired Slack for $27.7 billion

398
00:21:32.830 --> 00:21:33.830
in 2007

399
00:21:34.760 --> 00:21:37.269
That is not just a simple success

400
00:21:37.269 --> 00:21:39.479
That is a huge success

401
00:21:41.439 --> 00:21:45.540
This is all because of consumer validation

402
00:21:47.640 --> 00:21:49.020
Please keep that in your mind

403
00:21:49.520 --> 00:21:51.219
Before you launch your businesses,

404
00:21:51.219 --> 00:21:54.910
you should go through consumer discovery stage,

405
00:21:54.910 --> 00:21:56.460
and also you should go through

406
00:21:56.460 --> 00:21:57.989
consumer validation stage

407
00:21:58.439 --> 00:22:02.050
Then it will be much safer for you

408
00:22:02.850 --> 00:22:04.169
Thank you for listening