Lessons Learned - Week 9

This week of classes was all about tackling the left side of the business model canvas. We spoke in detail about pricing decisions and we evaluated further on which activities, resources, and partners will be crucial for our business model.

Regarding pricing it became clear that various psychological influence factors need to be considered when defining the final price for a product or services. To provide an example: humans favor prices that end with a .99 or a .95 – a mechanism called charm pricing. Based upon our survey analysis in which we asked participants about their willingness to pay (mean=4.2; median=3) we decided on a price of 2.95$ per month for the subscription of fload. This price is utilizing the charm price mechanism (.95) but is also considering that for non-emotional products prices of .99 distract customers from their rational buying decision. Moreover, we capture more than 50% of the potential customers with this price as the price is below the median. Check out an overview on pricing in the following:

Regarding the key activities of fload we filled in a value chain to track what activities are crucial for value creation at fload. The value chain can be found in the following:

For one of these key activity fields we defined a concrete process to exemplify how process based work could look like at fload. Defining clear processes is especially important as it enables us as founders to not get entangled in operational project tasks but to delegate tasks and drive the strategic vision of fload. Check out our product optimization process in the following:

Moreover, we identified key partners for fload. These are, among others, third party service providers that can be partnered with to gain referral fees when contracts are changed in the process of contract comparisons through fload or companies distributing their mail through fload to end customers that can be charged a fee as well as they do not have to take care of mail distribution themselves anymore. Check out an overview on important partners of fload in the following:

Additionally, we scrutinized what resources will be needed to realize fload. Based on the key activities identified earlier we created an organizational chart that defines different potential business units and responsibilities at fload. Moreover, we defined position descriptions for the top three positions at fload. These charts enable us to analyze what resources will be needed for fload and to reflect upon whether we can provide these resources ourselves or will need to acquire them. Based on our analysis we realized that technological knowledge is the key factor to success of the fload project. This resource will be crucial and cannot be provided by the current project team. We will need to get a team member with technical knowledge, especially coding experience, onto our project team. This will be one of the key challenges for fload in the future – however, challenges exist to be overcome and we are determined to do so. Stay tuned!

Check out our organizational chart and the position descriptions in the following:

Apart from classwork we had two further learnings:

PREPARATION FOR CLASSWORK HELPED TO KEEP TRACK DURING CLASS

This week of classes we were provided with the class slides earlier to work through the slides before class. This procedure helped us very much to keep track of the class topics. The weeks prior to this one felt a little rushed – especially when it came to completing tasks in class. This week, due to the new procedure, we had more time to work on tasks and were actually able to complete tasks within the time provided.

APPROACHING THE END OF THE TERM WE NEED TO BECOME MORE EFFICIENT

We are approaching the end of the term. Only 3 out of 12 classes are left before the course Lean Entrepreneurship Project will be completed. Naturally, approaching the end of our project, more and more tasks pile up. This and limited time of team members as exams are coming closer makes things difficult. In a group meeting we realized and agreed upon that we will need to become more efficient in task delegation and in working on tasks to keep up with the workload and to achieve our desired high quality of results.