here are from the US alt is that correct
can I hear you yeah so for those of you
from the soft sciences that’s about 70%
for those of you from the exact sciences
stay calm 70% is a good enough
estimation for the remaining 25% from
the hill wall the people that work and
pay taxes still bear with me while I get
these beautiful young students on board
on the topic of this evening with two
questions first question assume I tell
you that is the degree you can take it’s
gonna take a few years it’s hard work
and by the time you have the degree no
one would like to hire you who would
take that degree
I’ve seen a few hesitating hands we need
to talk during the break the rest of you
that’s a very smart choice in the real
world people walk for a few years very
hard to make products and services that
no one wants to buy ok question number
two as you might tell you you can get
info hand the questions for the exam the
only thing you have to do is walk up to
the professor and say D professor I
really would appreciate to have the
questions for the exam so I can study
really really hard to give you good
answers to those questions and I’m being
fair I’m not asking for the answers I’m
just asking for the questions and you
would say yes who would dare to do that
let me see some hands that’s that’s a
very smart now I have good news and bad
news the bad news this was purely
hypothetical this is not going to happen
in your student life that’s the bad news
the good news in the real life you can
do that and let me explain myself in the
real life when you walk a few years very
hard to make a product or service the
only one that would judge you and score
you is the customer
either a really likes your product and
is so excited is prepared to buy it or
he doesn’t and in real life in real
world you can actually visit that
customer info hand and discover his
problems you know did customer what are
you struggling with what problems would
you like me to solve you can come with
IDs and showing those IDs at all you
know what do you think about that idea
is it good is this the product you think
you would like to buy would you like me
to change it
can you afford it you can ask all these
questions in for rent so that by the
time you have your product after a few
years of hard work the customers would
actually like it and buy it because you
tested it with a min forehand and this
is the principle of lean innovation now
there are a few basic concepts that I
want to explain on lean innovation which
will be part of the rest of the
presentation they are not difficult
first concept problem solution feet do I
have a problem that’s important enough
and I have enough people that actually
would be prepared to pay for a solution
for the problem question number one
question number two product market fit
the product I have in mind is that the
product that the market would like to
buy is it a fit for the market is does
it have the functionality they need is
it within a price range that they can
afford and need to have obviously a yes
on both questions that’s the first
principle second principle customer
discovery a customer validation customer
discovery is basically going to your
customer and understanding his world
understanding his pains his gains and
the job that he’s trying to get done
right customer validation is going to
the customer and validating specific
concept that customer for example
product IDs and see how he likes them
the feedback he has and further develop
your ID and a methodology to do that is
called a validated learning loop right
and basically with the validated
learning loop you have three steps you
build you measure a new land you build a
prototype or prototype you take it to
the customer you measure the reaction
you learn from the B reaction you adapt
your prototype you take it again learn
mechelen you do that until you get to a
product that is good enough fitting
enough for what the customer needs and
that you can bring it to the market now
I know it all sounds logical but
actually you will see in the hill world
when you when you argue to go out and
learn from your customer there’s always
going to be someone that will speak
about the quote from mr. fold and what
did mr. Ford said mr. Ford said if I
would have asked the market what they
wanted they would have said faster
horses you heard it before right now who
was I to argue against mr. Ford and to
make things worse Steve Jobs said the
same thing yeah so for years I was
frustrated by this because I couldn’t
debate against it and you know I
followed therapy that didn’t help I did
some soul-searching I found other
interesting stuff but that didn’t really
help and then I did some google
searching and I founded an article by
Eric Morris and basically that article
was an epiphany because then it all came
together and this is what I want to
share with you in the rest of this talk
what I’m gonna do is I’m gonna prove
that the market was asking to replace
the hosts they were begging to replace
the horse I would debate and show you
that Henry Ford was struggling to get a
product market fit right yeah and
actually was using limited ology and
Vala lettre so let’s go back to about
the year 1900 follow me 1899 what
happened is that in the 30 years before
that between 1870 and 1900 the horse
population tripled and in those 30 years
and there were about twenty two million
horses in North America alone just
imagine the streets you know with the
traffic jam of horse and carriage that
was the situation and the Flies and the
field and the fatalities because you
know the horses they were they were
nervous officers also don’t like to be
in traffic jams
they do an unpredictable thing and
actually people died and they calculated
that we’re actually going towards an
ecological disaster because at this pace
of growth of the host population New
York would have been submersed under 3
meters 9 feet of host menu ok so that
was a true calculation based on the
reality on the ground so we were working
towards an ecological disaster so the
market was asking for a replacement of
the horse they were not asking for
faster horses they would be stuck in
traffic anyhow right and mr. Ford
understood that and basically he had a
beautiful business case that he could
take to his investors now in those days
you couldn’t be a venture capitalist
because that term didn’t exist you can
only be investor so he went to a few
investors and said you know there is
this population of you know 22 million
horses and they will have to be replaced
by the automobile and he could show them
the report you know if you don’t do that
we’re gonna be under so many metres of
of horse manure and the automotive
market at that time was non-existent it
was zero point zero seven percent of the
market of about three thousand Castle
per year so he said you know let’s let’s
make a truck company and replace the
horses with the truck not to me it
sounded a great idea who would invest in
that company I would have can I see
other hands who would have invested
Convergys young people and it’s a good
business case to invest it and you know
what happened is within two years they
went bust within two years they went
bust because the trucks they built were
not good enough for the market and they
were unreliable they were difficult to
repair and they were expensive even
though they could prove they had a total
cost of ownership calculation that it
was cheaper to buy a car than hold a
horse he did not hold so what did mr.
Ford do you know he picked himself up
dusted himself off and looked for new
investors now I don’t think that what he
said there is you know this bar
yup see actually that’s a good thing I’m
failing forward they they didn’t know
that at that time the concept of failing
forward well probably what he said was
you know I really believed that we can
come up with a car that that people
would like to buy and that I could
afford to buy and he got a second chance
and une opened the the Ford Company in
1903 and in between 1903 and 1908 the
year that the Model T came out
introduced nine different models to the
market and in each model it was testing
the market he was seeing the reaction of
the market he was playing with the
pricing it was playing with the
technology and every time I listened to
it now you need to be aware that nine
models in such a short period of such an
innovative technology he’s really really
fast right and he only sold you know I
did a few hundreds or a few thousand so
it was a very very small volume of
product but every time testing with a
market what was the reaction of the
market so he learned that eventually for
a car a car to be successful it had to
be cheaper than certainly a thousand
dollars around 750 dollars it had to
have a high ground clearance because
there were no holes there were mainly
muddy roads so you wanted to be able to
drive to the roads they had to be simple
to drive it was a new thing automobile
so people have to learn had to learn how
to drive the car and it had to be easy
and cheap to repair if you wanted to
sell a lot of them and he really made
that concept down with a Model T now the
other thing they had to do is they had
to further lower the price of the Model
T and they had to find a way to produce
enough gas to meet the demand and this
is where four took the mass production
line concept and really find you did
yeah and he didn’t invent the mass
production line that was done by others
but if he find it and they use it
because it was the only way they could
produce so many cars so cheap so they
were solving two problems at the same
time producing a lot of cars on doing it
cheap and this is another lesson you
need to remember innovation is not a
goal by itself
innovation and forces itself where you
cannot solve a problem with the existing
way of working with the existing
methodology that’s why the mass
production line had to be invented and
refined and then you can see on the
table how the sales continue to grow as
the price was going down eventually to
less than $300 and by 1924 they sold
more than two million cars per year one
into four cars the one in two cars in
the world that were sold then was a
Model T car so it was a huge success so
what does he tell us he tells us that
the way to interpret the quote is not
don’t go out there and listen to the
market you should go out and listen to
the market what it’s telling us is that
you should go there and ask the right
questions you don’t go to your customer
and ask them what should I make
that’s your job to figure that out but
you go to the customer to listen to the
problems to understand what they are
struggling with in their everyday life
and now you can find a way to resolve
that and then you can go back and again
and again to just fine-tune your
solution until you get to a good product
market fit that’s the way you should we
should interpret that quote by by mister
fault now for sure in your future life
and your you know once if you get in
your working life and you speak about
listening to the voice of the customer
and going out there there’s gonna be
someone that will bring up the quote by
mr. Ford so I would leave you with one
cartoon from for my book and I suggest
you handle it in the following way you
let them say what I have to say about
the quote and then you say oh now
you don’t say too loud you just say it
loud enough that they can hear it and it
comes the important part you need to
observe them make sure they understand
what you said you know did he say ho
yet he said oh
but not too long you need to wait before
they feel in some told insulted or that
they burst out on you so the right
moment you say hoo
it was the problem that mr. Ford was
solving and then you guys can tell this
story thank you very much [Applause]