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Alba, Egle, Alfie and Lynn. A mixed bunch of enthusiastic, creative and strategic thinkers, ready to create a Start Up that we can all be proud of!

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Filtering out ideas

Over January, we meet up a few times per week to get to know each other and brainstorm initial ideas. The result was 25 different ideas!

Looking into the factors like trends in the market, the possibility to make the product, and, of course, our passion about future star-up idea we narrowed it down to 4: Charity greeting cards, food protector from seagulls, non-alcoholic drinks, and cocktails for dogs.

We delved deeper into secondary research. With each product, we found new and trends. The ones that stood out the most were:

·      The charitability of millennials. 4 in 5 millennials donated to charities during the lockdown. As well as the rise of socially conscious consumerism amongst younger people.

·      The increase of popularity in non-alcoholic drink market. Over the lockdown consumers (mainly younger generations) started looking after themselves more. Around 66% of millennials are trying to reduce alcohol intake. Which leads to people looking for tasty substitutes.

With this information in mind, our team had to decide which idea to choose. Weighing pros and cons, and considering other factors, we have picked the path of sobriety drinks.

In the upcoming week, we are going to conduct primary and secondary research regarding our target audience. And find out what do people want and need from a perfect non-alcoholic drink.

Bibliography:

https://www-lsnglobal-com.ezproxy.falmouth.ac.uk/micro-trends/article/25238/social-elixirs

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RADAR Individual Reflections

The RADAR activity was a great starting point to sorting out a plan for effective teamwork. It also allowed us to look at each other’s weaknesses and strengths, which in turn allowed us to collectively set up a teamwork plan that would play on each of our strengths.

Alfie:

While going through the RADAR activity I learned that I am more of a strategic thinker, which I feel will benefit most in product development. Additionally, strategic thinking can help with sales/marketing. However, I found that my weakness would be having no experience in operations and finance but as I am quite organized and resourceful, and have a strength in math’s - I am willing to take up the challenge.

Alba:

Before the RADAR activity I wasn’t sure exactly which tasks I would take up. However, when looking at the profile of each section I found out that I quite enjoyed managing the business process, which lends itself well to operations. I also knew I was quite good at handling money and have a lot of experience with excel but it wasn’t something I was particularly interested in taking care of.

Lynn:

Before starting the RADAR activity, I knew my strengths were in Art and design. I enjoy exploring different creative ideas in order to achieve a collective goal. However, the RADAR activity helped me find other areas which I could help with. I can be helpful if our team needs procuring resources, anything shopped from China, I’m confident with my Chinese way of dealing things/people.

Egle:

I find producing ideas (even the most outrageous and ridiculous ones) highly enjoyable. Even though I lack the drawing skills, I am very handy with most of the editing software. The RADAR exercise showed me that operations is something that I am good at. I am a hands-on person, and I pick up new skills quite easily. So, if anything needs making – I am your girl!

Sales and marketing are where things get a bit tricky. I do not mind getting the message out there. But facing people and landing contracts is not my cup of tea.

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It is clear from our RADAR activity that we have competences that overlap. Lynn Egle and Alfie all have the same passion for product development. Egle and Alba also have a high level of interest for operations. And all of us have a low interest and passion for finances. This is a potential source of conflict, as all aspects of the business will have to be dealt with equally. In order to try and avoid any conflict we created business roles.

Business Roles

In order to have a smooth sailing business we choose to create a manager system which will help with the delegation of tasks – having a Head of department (Manager) allows for better accountability and delegation. So here is how we will divide the work up:

Head of Sales/Marketing/Customer Relationships

Alfie with assistance from Alba

Head of Operations

Egle with assistance from Lynn.

Head of Finance (CFO)

Alba (for UK Bank reasons registered as Alfie) with assistance from Alfie.

Head of Product Development

Lynn with assistance from Egle

Our Effective Working Plan:

1.     Understanding each other's skills, we have divided up different roles of the business to work more effectively.

2.     We will maintain regular weekly meetings to discuss ideas, problems and anything relevant to the business.

3.     Each person will be in charge of a certain part of the business and will be accountable for getting the work done reliably and to a high standard.

4.     We will make sure that when a problem occurs that everyone collaborates to work out a solution by holding drop-in meetings to just talk through where we are with our tasks.

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Problem: Lack of options for non-drinkers.

Hypothesis: We believe that people who don’t want to drink alcohol will consume sobriety drinks and expand their drink options.

After hours of racking our brains, multiple typos, and loads of second-guessing, we came up with eight questions that passed the test:

• Why don’t you drink alcohol anymore?

• Is there anything that you miss about drinking alcohol?

• What do you usually drink on special occasions?

• What do you drink when you go out on the weekend?

• What do you enjoy about the said drink?

• How much did you spend the last time you went out?

• Where and how do you buy non-alco drinks?

• Tell me about non-alcoholic options when you went out last time?

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The first round of research was a good starting point. Workshopping the questions really allowed us to gain unbiased insights. Our 4 main interview insights will dictate the direction of our first MVP. In terms of business viability, this first round of primary market research showed us that the business is too broad at the moment and would not be viable. However, these insights offered a variety of potential segments we could tap into rather than just the broader non-alcoholic market. The outcome of the first round of research was:

·      Our age range is too broad now. We will get more information and narrow it down. We will do so after we conduct the interviews and review our insights.

·      We need to investigate people who don’t drink or are trying to cut down alcohol consumption. They still go out, socialise and have fun. Sometimes, they might feel peer pressure to drink.

·      People who don’t drink see themselves in specific ways. They might be sporty or might have underlying health conditions. Or maybe they are just responsible individuals who take care of their friends and are designated drivers.

In the next few days, we will each undertake secondary research as well as an interview. We will investigate:

Sobriety groups on social media

Non-alcoholic drink reviews on Amazon/other retailers

Finally, find more articles and research papers relating to the consumption of non-alcoholic drinks.

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Insight: Budget for non-alco drinks (around £20 per week)

Rating: ★★★

Insight: People want strong, exotic flavors not the generic ones found in soda form.

Rating: ★★

Insight: Options lack consideration for dietary restrictions. Such as sugar free, vegan and gluten free.

Rating: ★★

Insight: There is a lack of options for special drinks like J20s in Supermarkets, specifically drinks that are not targeted for a younger audience.

Rating: ★★★

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The biggest area of improvement would be the number of interviewees. With such a small pool, the insights can not entirely be depend on. To counteract this we choose to gain more secondary research such as looking statistics for drinking trends and sobriety drinks.

In the future we will make sure to enlarge our pool of candidates to ensure more reliable and accurate date, which would also lead to more insights.

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MVP’s are a crucial part of the lean startup methodology. It fits right under the build area of the build measure learn loop and its purpose is to get real feedback from real customers as soon as possible in the business development process.

Minimum viable products are the leanest version of your product, in other words your product with the least number of frills and embellishments. Put simply it is the skeleton of your product, with sufficient information for someone to understand and be able to credibly give feedback on. This can take different forms, from landing pages to tangible mockups as long as it is the simplest version of your product.

There is a variety of insights that can come out of an MVP, often these are classified as a low/high fidelity version. MVP’s that generate validation for your customer problem are considered to be low fidelity, these are also launched earlier on. High fidelity MVP’s are often more complex and are launched further into the business, these are used to assert how valid your solution is.

During the lean startup process, you will do multiple MVPs to test your ‘assumptions’ (a bit like a trial-and-error process), which will in aim give (see figure 1) a more accurate final result that actually solves the initial problem.

An example of an MVP would be creating a Landing Page for your product and seeing how many people, click on the product to buy it (put in the basket) – of course, as you don’t have the full product ready yet, a message ‘Hello, you caught us before we were ready, can we take your email?’ will allow to create validated learning on whether people are actually interested.

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Managing Operations - ALFIE'S REFLECTION

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Managing Operations - ALFIE'S REFLECTION

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Question - Can we actually make this mocktail physically?

Due to COVID restrictions it became apparent that for us to physically make the mocktail, only one of the team would be able to do it (Egle - Head of Operations), which we as a team felt would be pretty unfair on her end. So, we came up with the solution of using white labeled high quality drinks supplier 'Lovely Drinks' to supply us with the product for us to reposition as a mocktail. We decided  to change a few roles around, with Alfie now heading up Operations (Organising supply from Lovely Drinks) and Egle now heading up the Communications (Sales/Marketing/Customer Relationships).

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As a team we decided to shift our product from handmade mock-tails to re-branded white label mock-tails.

This move allows us to carry out the orders in good conscience, as the production of a fresh and safe product, during COVID would not have been achieved. However, as we are still handling drinks, we need comply with the producer’s health and safety guidance. This includes:

Storing the product away from the sun and in a dry environment.

Selling the product within a year of production.

Keeping products sealed.

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For our second MVP, we chose to create a landing page for our product. This low fidelity MVP will be used to investigate whether lack of special occasion mock-tails is actually a problem worth solving.

At the moment the riskiest assumption we have is that people would buy special occasion mock-tails. In order to avoid this pitfall, we will be creating an MVP that can validate interest for our product and value proposition.

In terms of a timeline, we will run this MVP in a two-week period. The website itself will be created using WIX, which allows us to use pre-made templates therefore, the time and effort needed to create the landing page will be minimal. However, the two-week duration of the MVP will allow us to appropriately promote our website through our Instagram and other paid marketing channels.

For this MVP we will not be paying for a domain or website, instead we will use WIX’s free option. However, we will spend 7 pounds on targeted Instagram ads, which will funnel attention back to the website.

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We believe this MVP was quite successful. The website landing page worked really well, with a total of 127 website visits. It was clear that the Instagram ads worked, however we found that they were very limited in reach. Therefore, we were only able to aim ads at 18–35-year old’s living around Cornwall. However, the reach was very wide, and it allowed us to reach people that were quite removed from our friendship circles.

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Name

The name is inspired by a Chinese saying “千杯不倒” (qiān bēi bù dǎo) which means to not fall down (get drunk) after thousands of cups of alcohol. I tried to translate it to English to see if there were any interesting words that could be used for the name. I found that people translated it into “hollow leg” which means an ability or inclination to drink large quantities of alcoholic beverages, especially without evident drunkenness.

Branding & design

We created few Mood boards based on the target audience’s pen portraits to see which would fit our brand best. (Mood boards) After few group discussions we decided to go for the colourful, funky and a bit rebellious tone of voice. (Mood board1 and 3 below)

Packaging

Hollow legs branding is focused on colour along with a funky tone of voice. When it comes to the packaging and printing the design it became a bit tricky because our logo consists of two colours, yellow and blue. We tried to use a different colour for different elements of the packaging design, but it seemed a bit inconsistent. Each drink has a unique colour, and we believe the customer can tell the difference in flavour by the colour. Therefore, we decided to stick with the logo’s colour scheme, and put different design elements for different flavours.

Packaging Personal preference
I prefer the label to not fully cover the bottle, so that I can see how much I drank and how much is left. That’s why the label for hollow leg will not fully warp around by the bottle, for customers like me to look at the drink.

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From this week’s activity it is clear that as the operations is still small the initial investment of 300 works well to cover our costs of production and makes this business viable in the short term. Were we to expand and grow the need for warehouse/salaries etc. would render the business unviable because selling close to 2,500 units per month would be near impossible.

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Marketing and online presence - EGLE'S REFLECTION

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Marketing and online presence - EGLE'S REFLECTION

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Before entering the land of marketing and online presence it seemed like it would be one of the easiest parts of our project. Well, we were wrong. The Communication & Creative department ran into quite a few challenges and learned some valuable lessons.

The first thing we had to consider was branding. For our MVP we had to quickly come up with the name, visuals, tone of voice, and the message we wanted to convey to our target audience. However, it was difficult to create content for a product that we didn’t yet have. There was a lot of Photoshop and Illustrator involved. In the end, we managed to create a convincing-looking MVP. With the success of our first sales, we kept most of the branding the same as it resonated with our target audience.

To run a successful business, we did some research on the best social media platforms. Our MVP targeted younger people therefore we mainly operated on Instagram. We also set up a Facebook page but at the moment it’s empty. It might come in handy with our next MVP. The biggest challenge when managing communication channels is keeping an eye on everything. It takes a lot of effort, creativity, organisation skills, and planning. No wonder some people specialise in social media managing!

Setting up selling channels was quite tedious and technical. We created an MVP website that would be our main way to sell mock-tails. We were also planning on distributing our products on Instagram stores. That is where we ran into one of the biggest problems. We couldn’t sell our product via Instagram stores as we didn’t have a big enough presence and followers. As a team, we considered buying some following however it would have compromised the legitimacy of our business (as most of the followers would be bots). Therefore, we decided to grow our following organically or through promotions. Dropping the idea of Instagram selling for the time being.

To summarise, here are the main takeaways:
•         At the moment, our social media channel looks a bit more like an illustration account. We need more content that involves the product. Which is on the way as we finally got the mock-tails!
•         We need to branch out into other social media. This will come into play with our next MVPs as we need to redefine our value proposition and target audience.
•         The biggest inconvenience was Instagram stores. We will continue to grow our audience and presence. Selling on Instagram could be a great opportunity as it is a lot more appealing and convenient than going on a separate webpage.
•         Managing every bit of social media and selling channels is hard. It takes a lot more effort than we expected. With the future MVPs, we are going to plan everything out more. This was an extremely valuable lesson.

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WEEK 7 - Front/Back Stage Business Model

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WEEK 7 - Front/Back Stage Business Model

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The current front stage of our business model provides a value proposition of ‘special occasion mocktails’ to our customers aged 18-35, looking sober drinks. The relationship with said customer segment is primarily through our social media advertisements and self-service website, which includes customer support. The channels include our home-delivery service, postage for non-local purchases, website and social media channels. Currently we are keeping our business online which means we have minimal in-person relationship/channels.

The current backstage of our business model is primarily driven by our key partner, Lovely Drinks, which is the supplier of our base product. This is supported by our key activities of customer service, effective website management, marketing, distribution, labelling and packaging of the base product. In order to fulfil these activities our business needs to have a consistent supply of unlabelled lovely drink bottles, printing, labelling and packaging services as well as a strong brand.

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WEEK 7 - Cost Structure and Revenue Streams

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WEEK 7 - Cost Structure and Revenue Streams

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When it comes to our current cost structure, we have four main costs. The first would be marketing/advertising and website maintenance cost, as all our business is concentrated within those channels it is imperative for it to be consistent. The second cost would be operational costs, including the sourcing and delivery of our base product from Lovely Drinks. Along the same line our third cost would be the delivery of our products to customers, depending on where they live this cost could become quite high.

Finally, the cost of packaging and labelling is imperative to running the business, this will include the labor of our staff and the large-scale professional label printing.

Finally, our revenue streams will be from single bottle retail and bulk selling. The single bottle will have a fixed price of 2.95 while the price of bulk selling will depend on the quantity purchased.

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For our pivoted Business Model Canvas, we choose to change the customer relationship and channels segments. The primary focus of this pivot would be to switch our distribution channel from online to in-person retailing. Consequently, the type of customer relationship would also pivot to personal selling. With this pivot we are looking into possibly partnering Hollow Drinks with local established food business, in exchange for a percentage cut of the profits. Another possible option would be to acquire a peddler certificate and sell our product straight to the customers with a wheelbarrow. The rest of the business model segments would stay the same.

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During our business development, one of the key challenges that we faced was trying to define a customer segment. Up until this point, we have been able to test various MVPs using a broad customer persona, as seen in week 3, which was primarily based on secondary research and a round of interviews. However, it only gave us a surface understanding of our customer. With this limited amount of information, we were able to develop a product and put it on sale. However, as our MVP’s took place on our website it was hard to get real insights and more qualitative validated learning from customers.

Nevertheless, we were been able to sell some actual product in week 8, it allows us to perform some more in-depth customer research. The goal of the research will be to understand further what the drink is used for and in what circumstances. We will try and reach out to our two-existing customer, either by phone or an email exchange, depending on what they feel more comfortable with. I believe this approach to defining a more concise customer segment, is a very good one. Considering we will be using the mom test, when creating the interview questions, the interview will be accurate and unbiased. In the future if we face a similar challenge, we will use a similar solution, directly approaching customers to gain the most insightful persona of who they are.

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When we started, we choose to decide the work based on our RADAR activity. This model allowed us to create areas in which we would each specialise in and lead. What we came to quickly understand is that when starting a business, you can prepare and plan for every part, but tasks will always come up unannounced and someone will have to tend to it. These unforeseen tasks quickly started piling up, whether it was writing a blog post, working on emails, creating a website or researching suppliers. The roles we had assigned ourselves, in the beginning, did not account for all the extra work needed. Our initial strategy for teamwork relied heavily on tasks fitting in one specific radar component, therefore one person would manage it but as the weeks went by and the workload from other modules increased this became unmanageable.

This started becoming an apparent problem in week 3-4, as quite a lot of work had been left behind. That’s when we decided to come together as a team to draft out a new strategy for teamwork. We realised that it was better to focus one week at a time. Each meeting we would finish off writing a to do list, and each of us would state what we would be working on. This allowed us to have a level of accountability as well as diversifying the type of work we were doing. As the weeks progressed, we had quite a clear idea of who would be working on what without having to touch based together every other day. We started working homogeneously Alfie would deal with supplier and keep track of finances, Egle and Lynn would work on building the website while maintaining the social media platforms, and I would be in charge of blog tasks PowerPoint presentations and assisting anyone that needed a hand. This system gave each of us peace of mind that everything was taken care of without having to specifically designate anyone to do it.

It is entirely possible that we could find our team in the state that we did in week 3, however we learnt from this experience. The reason it got to such a dire state was due to a lack of open communication, some people were taking on more tasks than they should have as it was technically under their role title. If any such situation were to rise up again, I believe we would rearrange the workload even if it means taking on tasks that are not in our specific expertise. Having a weekly outlook also helps with this as task are dealt with immediately.

The biggest takeaway from our teamwork was realising how unpredictable starting a business is. There is always something coming up that was not anticipated. Having a strong team is crucial to go over these bumps, especially in moments of disagreements.

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The lean startup model is all about continuous learning. Although it sounds counterintuitive, as a startup you don’t actually know what your business is or what it is selling. The lean startup helps you gather all the pieces of the puzzle to create a successful business.

Each piece goes through a process of hypothesis, testing and learning. The end result is a piece of the puzzle that will help you learn more about your business, from who your customer is, to how to sell your product and its price etc...  The end result is a clear picture made up of all the pieces gathered, creating a startup completely based on validated learning. This will ensure the startup will not fail when it is officially launched.

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WEEK 10 - Most useful and tricky parts of the Lean Startup

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WEEK 10 - Most useful and tricky parts of the Lean Startup

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Our biggest challenge was fighting the urge to fully develop the visual identity of the product and send it out as is. This meant we launched the hollow leg drink without actually having the product in hand but purely speculatively. With a bit of photoshop and some educated guess we launched our Instagram and website.

However, testing our assumption brought us some of the richest insights that really allowed us to pivot/understand more about our product. For example, we found out the actual end use of our product was different than our value proposition, which meant the value of the product was different than we had been marketing it as. This insight really helped us pivot but most importantly it allowed us to understand more about our customer and how they interact with the product. The process of reaching out customers is very daunting, but we found that people are generally very open to help out.

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Our big purchase for our business was the stock of white labeled Lovely Drinks. This cost us 170.10 pounds and was the most expensive part of our product. Following close behind is the cost it takes to run a website, for our initial MVP’s we choose to use the free WIX website feature as we were still learning about our customers. However, as we got some validated learning on customer channels and revenue streams, we choose to pay for a monthly WIX subscription.

It was vital for us to purchase this stock of drinks, as it was at the center of our business. It specifically helped develop our product as the labeling and packaging was left up to us. This blank sheet allowed us to effectively pivot without having to fully repurchase a new batch. Furthermore, as our business model is taking a ready-made product in one drink sector, sodas, and repositioning it to another, mocktails, having unlabeled stock at our disposition was imperative.

Reflecting back on our expenses, there are definitely areas in which we did not use our money effectively.  Specifically, we purchased 21.98 pounds worth of labels and sticker, of which Egle and Lynn cut out individually. The labels ended up not being used, as our product pivoted and thus our labels and brand. Looking back on it, we could have made half a batch of labels, and kept the other sticker paper for other MVP’s, instead of wasting money on labels for bottles that were not sold.

Finally, we believe that we could have probably spent more as we had around 30 pounds left. This money could have been used to launch a fifth MVP, however in order to keep all variables equal and gain more reliable learning on price.