James's profile

Hello there :)

Thank you for the post. It's good to see ERS hard at work and making progress.

There are just some points of clarification that I would like to hear answers for in regards to some of the suggestions and statements in the above post. These are as follows.

1) Perhaps I can be corrected, but I'm struggling to see how this Black Label post demonstrates a properly validated Customer Segment. It's one thing to be able to understand 'Market Potential', but that doesn't mean that all of the above types of customers can be classified as part of your Customer Segment. I feel that validating a Customer Segment is about truly understanding whether or not your assumed customers genuinely have a problem for which they're willing to pay for your specific service in order to solve.

Perhaps I have knowledge gaps, that I'm willing to be corrected on, but it appears to be that you are assuming that they are part of your Customer Segment based off unsubstantiated hypotheses and assumptions. These are hypotheses and assumptions regarding the potential problem that you think customers might be experiencing, and the assumption that they're willing to pay for your specific solution in order to solve this hypothesised pain point of theirs. It's the reason that the 'Problem' and 'Customer Segment' boxes in the Lean Canvas are both labelled as '1', as the validation of these boxes need to be done in direct conjunction with each other in order to be adequate validations.

2) In the post, you stated that your desire to establish distinctions between the various hotel sizes is "based on the assumption that different sized hotels would have varying priorities and perceptions of waste management in Timor-Leste." Feel free to provide clarification on what I'm about to say, but personally at least, I struggle to correlate how hotel size is an influencing factor in differentiating between how hotels perceive waste management differently. Perhaps there is more context that I need or knowledge gaps that I have, so feel free to talk about any further reasoning that you may have had that I'm not aware of.

3) This feeds into my last point, but I am finding it difficult to perceive how the pricing of the rooms can act as a primary indication of hotel size. As an analogy, I could go to The Quay restaurant and pay $80 for 1 scoop of some fancy French/Italian ice cream, or I could go to Hog's Breath Cafe and pay $20 for 'all you can eat' and consume 20 plates of chicken nuggets, 10 double choc sundaes and 5 cheese stuffed supreme pizzas in 1 night. While what The Quay offers is notably more expensive for what one gets, Hog's Breath Cafe is a larger business overall, which is a result of a plethora of other factors outside of price points.

Don't get me wrong, I have no doubt that you have considered all of this reasoning, and the analogy is primarily there for the purpose of humour. I would be interested to see what clarification you could have on what I've said here, as perhaps there is 'on-the-ground' knowledge that would fill potential knowledge gaps that I have.

4) Regarding the 'Schools' segment, I would perhaps consider properly testing the amount of paper and cardboard that they produce, and their willingness to pay for a collection service for it. However, in my opinion, that's a really cool customer segment that is definitely worth looking into.

Awesome stuff Rose, Matt and team! Venture On and Lead Always!!

7 months ago
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[JAN 19] [REPURPOSE] Project Direction - ERS Repurpose Timor-Leste

Hmmm, sounds like an interesting situation that you have going on here.

From my perspective at least, it's difficult to determine an appropriate path of action from here. Obviously ERS needs to correctly fulfil the 'Solution' component of the Lean Canvas in order to have a service that they can sell. Quite a few of the above points appear to be alternative solution options or execution strategies for a solution. As you would know, there have been big problems with the previous collection system 'Solution', particularly when it comes to sustaining customers. How have you gone so far at the Offer Testing experiment in terms of trying to re-establish the Value Proposition of ERS? Regardless of how well that's going, perhaps try and consider investigating some more reasons about how both the service and the customers receiving it may have had deeper issues that could have led to customers pulling out. This could help you to re-evaluate what ERS could look like into the future.

I like the idea of finding companies to outsource your collected materials to. As you stated, that could contain a number of blocks, but it's definitely still worth persisting on. Also, it's good to see that you're thinking about the associated costs of exports. You could easily assess the potential for domestic outsourcing options in Timor as well, instead of just international options. I'm not sure how many domestic waste exporting companies exist in Timor-Leste, but in my opinion, it'd definitely be worth investigating.

Just keep in mind that these big exporting companies like to sell/transport in bulk in order to maximise return on investment and not suffer from diseconomies of scale. They typically deal with a lot of organisations that can fill freight containers worth of stuff, so unless you can collect enough to justify them exporting materials collected by ERS, then it could prove near impossible to find an exporter. By all means, don't give up, but also be realistic.

Upcycling is a good idea in theory, but in practice it can be a rather difficult one to implement. You would need to find a way to collect and distribute the products that you want to upcycle, and then find a way to maintain a strong LTV on the selling of Upcycled items. After all, there are only limited customers and limited physical products that you could upscale, making it a difficult pathway to sustain. Likewise, as you stated it's a difficult idea to scale. I'm not entirely sure on what alternatives there could be in trying to do this, but I'm very willing to think this out, and I welcome all on the ERS team to do so as well.

I really hope that Precious Plastics can help you out. At this stage, it would be really good to see if we could on-board them as a potential solution. They would not only be a good way to sustain the ERS business model, but also a great way to potentially scale it. I'm super keen to see how investigation into that pathway goes. Perhaps they could also help you find a more affordable way of crushing glass as well. Who knows.

On a side note, have you looked at providing glass/plastic for the sustainable construction of roads? This is becoming a bit of trend across the world, and with all the Chinese government infrastructural investment throughout Timor-Leste and SE Asia, perhaps this is something that you could be on board with? Just a thought, but perhaps worth pursuing.

7 months ago
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[JAN 19] Functionality and User Experience (Solution) - Fiji FarmEd I

This is a really well developed UX testing experiment that is quantifiable and impartial in its data gathering process. That's really good to see.

My only feedback is regarding how the FUES aligns with the assumption that you're trying to test. While there are obviously questions in there that are aligned with understanding how good the user's experience with the app was, other questions are more geared towards how much they would suggest the app or if there are features in the app that they would like.

While these things are really useful to have in a UX test, how do these questions particularly align with testing the above assumption of whether or not "farmers can easily access the app." Perhaps you could re-design your test to assess this more specifically, or maybe re-word your assumption.

7 months ago
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[JAN 19] Content Satisfaction (Solution) - Fiji FarmEd I

I would just be careful on having anecdotal, subjective and non-tangible means of assessing the user experience of the app for the farmers. The standard 1-5 measurement is fine if you can have an objective and tangible means of assessing what number on the scale the user experience should be associated with as per the UX testing. If you're kind of just taking a guess, it makes the data gathering process inaccurate and therefore the conclusions not particularly clear.

7 months ago
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[JAN 19] User Experience Testing (Solution) - Fiji FarmEd I

I can see what Fi's saying. I think that FarmEd Fiji is focussing on doing 3 concurrent user experience testing experiments when I don't particularly see the point. They all seem to achieve the similar things.

I think this experiment would most likely be best implemented after you've found out how well the farmers have been able to use the app and its associated features. The reason is that their inability to use certain functions of the app could be a variable that influences how often and how effectively they implement the information that they receive from the app.

Likewise, the app isn't fully complete yet, so perhaps it would be difficult to understand if its lack of completeness is influencing their ability to implement the information that they're provided.

7 months ago
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[JAN 19 Timor] Sensor Currency Test (Solution)

I agree with Brodie. I think that you need to start considering what price point you're trying to pin the sensors at, and then figure out if that's a price point that the farmers are willing to pay. In July we sold the sensors at a $6.00 price point, and that got 6 farmers to put a down payment of $6.00. This was with the knowledge that they would get paid that money back later, but it still validated that people were willing to put money down on a a sensor.

This is something that you need to consider.

7 months ago
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[Proposed Experiment]: Solution - User Experience - FarmEd Fiji January 2019

This is a well-designed and in-depth UX testing experiment. It's good to see that you've got very tangible and quantifiable goals and benchmarks that assess the ability for an individual to use the application in an autonomous fashion.

How many farmers do you intend on doing this with? That'll be a key determinant in determining the accuracy of this UX testing, as the bigger the testing pool the better.

7 months ago
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[Proposed Experiment]: Solution - User Experience - FarmEd Fiji January 2019

I can definitely see your points. I think that this experiment would be better focussed if it were to focus more on the CF side of things rather than the OCER side of things. It could get too elongated and unfocussed if you try and split the focus of things too much between the OCER and CF side of things.

7 months ago
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[JAN 19] Content Satisfaction (Solution) - Fiji FarmEd I

I agree with most of these points @jess riley. However, just be careful when it comes to logging data into a Google Forms document. From my experience with FarmEd in July, we stuffed up our Google Forms document so much, as we didn't have the means through which to record our data accurately in a long term, consistent manner. As long as the people recording and logging the data are very careful to make sure they know how to accurately record data in a standardised, long term manner, then they should be good.

7 months ago
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[Adopted Experiment]: Fuel Timor - Cost Analysis of Solutions January 2019

Hi Alex,

Really impressed to see how you're considering all of this already. It's definitely a trap that certain Ventures fall into, in that they fail to see things in the long term and therefore don't have short term goals that are geared towards achieving a long term solution that is economically viable and scalable. Good stuff.

I guess the next question is where to get people to produce the goods, and how to arrange this in relation to pricing and the supply chain. Figuring out the "who" is really important, as that sets the precedent for how you can negotiate pricing and scalability in relation to what they can offer.

Likewise, figuring out the "who" of your supply chain distribution measures is also really crucial.

Have you brainstormed some ideas of who you think might be able to produce and distribute the goods associated with this Venture?

Venture on,

James

7 months ago
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[JAN 19] [COLLECTION] offer testing to [Large hotels(a), locally owned restaurants/hotels (BagPay customer segment)(b), schools(c), Organisations with subsidiaries (govt, supermarkets, stores)(d)]

Thanks for the reply :)

Based on that reply, here are some points of consideration. I've split it up into a "point" and "considerations" format, where I first quote one of your points above and then state considerations for those points.

Point: "The current stats from December are 7 customers, 5 of which are ‘on call’ which essentially means they call us when they need a collection. From my experience remotely managing ERS for 11 months, this has only effectively worked for one ‘on call’ customer we have signed with the rest never eventuating to a collection. This clearly indicates we are not delivering on their value prop."

Considerations: I would be careful about the 'on call' model of things. It appears to be a business practice that instigates a lack of consistency in the use of the service by your customers. This makes cash flow disjointed and unpredictable, making it a weak pillar of the business. Despite this, it currently forms 5/7 customers for ERS.

Likewise, it currently appears to be an invalidated assumption that "we are not delivering on their value prop." I understand that the above experiment seeks to test this, but be open minded about considering that multivariate reasons why businesses mightn't be continuing their involvement with ERS. They may understand all of the problems associated with poor waste management, but that doesn't necessarily mean that they're looking for a solution and even if they are, it doesn't necessarily mean that they're willing to pay for it, and even if they want to pay for it, they mightn't like your prices. Even if they like your prices, maybe they find the collection to be irregular, the service not up to scratch or maybe they had shortcomings in their business inflows that meant that they needed to cut back on their outflows. There are so many variables that need to be tested in order to understand why businesses mightn't engage with the service.

Even if you could validate all of that and fix the business model to keep your customers on board, how can you expand the LTV of the relevant businesses? Having cashflow inconsistency and insecurity due to unreliable LTV seems to be a flaw that the ERS business model has been victim to in the period between July and December. Just be aware of that when re-establishing customers or establishing new ones.

Point: "The strategy for doing this offer test is to understand how they view their problem and seeing how we can deliver on their UVP. I am open to the fact this is not likely to look like the service we are currently offering, and ultimately the outcome would be improving the conversion rate."

Considerations: Once again, as per my point above, I would be cautious about assuming that trying to change the way in which they see their problem is the means through which to re-establish customers. The customers that you're looking for as early adopters can't just perceive that there is a problem, but have to also be actively looking for a solution, and they must have the desire to pay for that solution in a way that is conducive with good ROI for ERS. I understand that you'll be doing currency testing if the offer testing is successful, but just understand that finding a customer with all the right characteristics will filter down your potential customers to quite a small segment.

Point: "From our market research (internal and external) we gave found 182 restaurants, over 90 hotels and over 140 schools (market segments black label post coming). For example, out of the restaurants, ERS has only contacted 36 EVER. This is a HUGE market opportunity if we can effectively understand their problems and deliver them value."

Considerations: This is actually a really good point that I didn't realise and if you can manage to connect with these business types, then you'll place yourself in a good position. However, the question is a matter of economies of scale. From looking at the financial projections document, ERS is running at a loss that increases quite notably each month. That projection was based on how the business was going in July, when you were collecting aluminium and glass as well, and when your warehouse wasn't almost full. If you were to expand out to all these businesses, then you'd have to increase financial outflows associated with collection. This would indicate that you would need to figure out the equilibrium between having a certain amount of businesses signed on and investment into expanding collection/storage services. You would have to hope that the businesses that you connect with deliver enough waste to you in a consistent, secure manner in order to have consistently have positive ROI and therefore profit in a relatively predictable manner.

I'm not sure if this is correct, but from what I understand ERS gets paid based on the amount of material they receive from businesses, instead of a flat, standard rate (please correct me if I'm wrong). If this is the case, but you still invest the same amount of money into expanding collection services regardless of how much waste a business gives you, then it would be a business model set up to suffer from diseconomies of scale.

The other thing is that the numbers of businesses that you listed above, while great, are kind of a block in the long term. This is as you can't really go anywhere beyond Dili businesses given the current timeframes/places in which PEV operates. In the absolute best case scenario where you sign on 100's of restaurants/businesses, where to from there? This is thinking really long term admittedly, but I still think it's a worthwhile consideration.

All of the above being said, if you can find some way to address these issues then perhaps ERS could do super well.

Point: "The 15% green light is based on the fact that we are looking at using relatively large sample sizes and the general percentage of early adopters being 13.5%."

Considerations: I still feel as though this is too low, given that typically speaking the green light for Early Adopters is 60%+ of validation for those that you did offer/currency testing on (as we were taught at BDT). Don't forget that there are 3 things Early Adopter's need to demonstrate. These are:

1. They have a problem
2. They know they have it
3. Are actively looking for a solution that they are willing to pay for.

The above offer testing only tests the first 2 of these points, yet you're Green Light is 15%. In reality, you should aim for 60%+ of those that you do Offer/Currency Testing on to provide you with validation on all 3 of the above points before attempting to re-establishing market penetration with your customer segments.

7 months ago
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James Balzer

Sydney, Australia

Joined this community on Dec 7, 2017

University or Company
MQ

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Arts

Country you Trekked/are Trekking in
Timor-Lesté

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