For each sub-hypothesis, a deep dive on pager is then created, featuring four content blocks:
- Status quo – A rational summary of collected insights
- Assessment – The interpretation of status quo by Excubate, structured by “the good, the bad, the ugly”
- Recommended action – A collection of tangible action items to be taken to solve identified roadblocks
- Sources – All sources used to create the deep dive
Within the audit, up to 25 interviews with relevant internal (e.g., product (HW and SW), legal, sales, marketing) and external (e.g., distributors, customers, product partners) stakeholders will be conducted and a large variety of materials will be screened. Besides interviews with internal key stakeholders, the feedback of well selected experts is crucial, to enable both, an inside in and outside in view. These experts should be selected specifically for the respective business model in scope and must bring deep expertise especially in areas of identified challenges.
Examples for experts involved in past Excubate audits are former software corporation top executives, IoT startup CEOs, senior sales managers from successful IoT companies, software integration experts (e.g., of Microsoft or SAP) or senior software developers & code experts. Suggested actions to address identified roadblocks are then based on the vast project experience of Excubate and on researched market best-practices. Here the focus lies on pragmatic and quickly implementable actions, that can heal roadblocks short-term and ensure a smooth scaling long-term.
Here are some examples to make the hypothesis-based methodology more tangible:
In this case, the digital business model was an AI-based temperature sensor than enables production efficiency gains in high-temperature production environments. The main hypothesis is defined in a short and concise way. In our example, the main hypothesis states, that the client company offers a scalable, effective digital solution to generate significant value for their customers and for their company. For this to be true there are many other sub-hypotheses that must be validated.
First branch: “Customers buy and scale solution because it solves critical use cases along their value chain.”
To validate the overlying hypothesis of the first branch, it must be ensured that the solution creates enough customer value to create demand which would then be a sub-hypothesis of the first branch’s hypothesis.
- To confirm this sub-hypothesis interviews with pilot customers and sales personnel need to be conducted, and the answers must be documented and assessed. In this example, interviews, and previous studies showed that customers understand and cherish the solution, and interviews with the sales force concluded that there were no problems so with the customers’ ability to understand the value proposition of the solution.
- Based on this information the assessment of Excubate was positive, based on a high confidence.
- There was no need for suggested action, since this area of the business model was under control and well aligned
Third branch: “The operating model is well integrated in our company core business, efficient and effective.”
For this hypothesis to be true, sufficiently many salespeople must be activated and enabled to sell the service solution.
- Interviews with sales force and with the digital solution team were conducted. The identified bottom line was, that the sales team does not feel comfortable yet with the switch from selling traditional hardware products to selling IoT SaaS solutions.
- This often seem challenge is a make-or-break factor in the scaling of digital business models. The hypothesis was directionally falsified, with a high level of confidence.
- Excubate’s suggestion towards the client consisted of a variety of tangible action items. These ranged from a suggested new trainings approach and alignment with the sales force, to a rework of the overall sales process, to the creation of an end-to-end customer success approach. All action items were described on a detail level, that enabled a short-term execution.
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