Corporate Explorer Fieldbook

CHAPTER 8Business Model Maturity: Using Customer Evidence to Validate New Ventures

Michael Nichols and Uwe Kirschner

CUSTOMER FIRST

“Customer first” is a phrase every corporate executive utters, but what does it really mean? Much like the phrase “digital transformation,” it depends on the context. The context of the core business is fundamentally different from a new venture. Corporate management is well schooled in how to efficiently extract more cash out of the core business, but the tried‐and‐true principles of managing the core are, at best, counterproductive and, at worst, value‐destroying when applied to the exploratory business ventures. As a result, many new business ventures are asked to scale to revenue before they are fully mature. There is a technology or product solution, but no clarity on how to create a repeatable business model from solving a customer problem.

This “maturity gap” can be closed by adopting customer first practices of customer discovery, customer validation, and maturity assessment. In this chapter, we describe these practices and their application. We then provide an example of how Bosch, the German technology company, has developed a repeatable methodology for customer validation through its Bosch Accelerator Program.

MATURITY GAP

The inside‐out model of innovation is dominant in many technology‐ and engineering‐focused businesses. As described in Figure 8.1, it starts with a technology or product‐driven insight into what the market needs. ...