All right. Now, what I want to do is to show you how a
problem statement, not specifically defined, propagates across the business plan. I've
already gave you illusions to the fact that, hey, a problem statement that's poorly defined
will show itself later in the business plan. But now, let me walk you through
a few more examples of how that happens. Okay. This is the team that I call, Team Travel
and their goal is to connect travelers with local guides. Let me read out the problem statement.
Too many people travel to locations around the world only to find places that are overcrowded,
geared toward tourist commerce. I'm sure we've all experienced that. You go
to the Great Wall of China and you expect to find serene locations for you to look at the horizons
from the wall and in fact, you find a very crowded place. Not fun. Reasonable start. Then the
proposed solution I'm taking just excerpts from the business plan. There's certainly more there.
The idea is that there will be local guides who are on this platform and they would fill out
a profile based on their location and a basic itinerary of their best day at the location.
You will have local people suggesting local tours and that's how you're going to experience
world locations from now on. [inaudible] The more I thought about this problem statement,
the question that pops up is does an ideal travel experience exist? The problem statement here
suggests that it does, but that needs evidence, which wasn't provided. I mean, yes, there are many
places to visit in the world, but we do live in a world where there are certain landmarks recognized
by humanity and they're on the list of places to see before you die. So, people want to go there.
Are you going to change that? If you do not change that, well, how do we change the problem of going
to a tourist destination that's popular, but not crowded, right? So, if you're solving a problem,
you should start with the premise that a better solution exists and then defend that premise.
The team here, then select... It's Beachhead Market. I'm copying pasting almost exactly
the entire discussion of how the beachhead market was selected. Our beachhead market is the travel
addict. These users are heavy travelers, are seeking to find meaningful local experiences,
are very active on social media, which will make it easier to market to them and they're
influencers. Many of them have influential social media presence.
Okay. So far so good, but what we're not seeing here in the description of the Beachhead Market is
markets that were deselected and a discussion of why. Let me present you with the end user profile
provided by the team for that Beachhead Market. They describe it as travel addict demographics,
and the travel addict is a digital nomad. The person in question here is aged 25
to 50 and right away, I see that that age gap is quite vast. Now,
ask yourself how many 25 year olds talk to people who are 50 year olds, unless that's your dad
or uncle. Not many. So, the very premise that this is a tight community that is
connected to each other on social media and therefore will generate word of mouth
just by the sheer description of the end user profile, that just doesn't seem to be true.
Then it suggested the income level of... Let me just check my additional slides here.
Okay. One second. I want to make sure that
I dissected to you in the... Okay. No. I will discuss it that later in the process.
It suggests that the income level here is one of $70,000, $75,000 U.S. per year.
In the business plan, the team suggests that the person travels five times a year, and
one questions here, "Well, can you really be a travel addict for a salary of this nature?"
It just doesn't seem to stack up and further more, the person indicates
that the end user here is a single or married with young kids, and I'm married with young kids.
I just know how difficult that is to be able to travel so much with little children. So,
I'm beginning to observe the inconsistencies in the business plan, unexplained inconsistencies. My
contention to here is that it really starts with the problem statement. The problem statement that
was so diffused, that it made the business plan so open-ended that it's difficult to give it rigor.
Now, let me continue. [inaudible] having the previous one
is what kind of travel, right? Because there's a very, very different to go to Indonesia than to go
to Washington. Exactly.
Is it local travel? What kind of travel? So, it feels like maybe very relevant.
In the business plan, it's not [inaudible 00:06:40]. I think the basic binary distinction
in travel is between pleasure, travel and work travel. Right?
Yeah. I did not see that distinction clearly explained
in the business plan, right? It is assumed. It is assumed that this is travel for pleasure because
you're going and seeing tourist landmarks, but that is not clearly stated in the business plan.
Let me reiterate here. I really don't mean to rag on the business plan here. Clearly, the people
behind the business plan here are passionate about travel. I think that's fantastic. I think it's
fantastic to want to connect the world through experiences that are authentic. My only goal here
is to make proper use of the value of your time by being candid so we can grow together. So that
ultimately, some of us can use the service. Now,
the team presented here is the following $70 million and the numbers here are
30, 43% of the U.S. workforce that works remotely.
Of those who do, 31% work exclusively remotely, most of their time. Then of
that group, 11% spent more than 50% of their time traveling. So, that's a lot of time on the road.
The question I'm asking here is like fine, they're going to charge $30 for subscription,
but the question is the data that went into the plan, is data that is only demographic, but you
are describing a very specific end user. Someone who is a travel addict. Someone who is a travel
addict. I would bet not everyone described here is a travel addict, right? Presumably. Presumably,
most of the people described here are actually people who travel for work. They have to travel.
The reason they work remotely is, hey, the job was such, for example, they are salespeople and they
are outside salespeople, so they have to be on the road all the time. That's why they work remotely.
They're really not traveling to see tourist locations. They are traveling to earn a paycheck.
These behavioral factors are not included in the plan. The problem with that is, the market that
you're potential addressing is potentially much smaller than the one described here,
right? You're presenting a market that's 70 million a year. Great. If you can dominate this
market, fantastic. You'll build a company that will generate some dynastic roles for you. Your
children, grandchildren, great grandchildren were very happy with your performance.
But, in reality, the market is significant for smaller. Significantly smaller.
Other people in that group who are travel addicts, that are,
as those that you described, there're probably a few. Can you build a business? Not clear.
Ingrid. I heard some sound. Do I need to pause for a question?
No. I was just standing up because I've been sitting since 9:00 A.M.
Okay. That's great. Me too. Okay. So, then the team presents the persona and the persona
is Adam and he's the primary influencer and has veto power, lives in Kansas city, and
by the way, Kansas city is not in Kansas. It's in Missouri. All right?
Here's another thing that sort of makes it somewhat suspect that Kansas city is set to
be in Kansas, not in Missouri. Now, Adam is married, has been there for 15 months,
currently no kids. Right there, I see a major inconsistency in the description of the persona.
Now, let me describe what I mean. So Adam, as the team suggests, has veto power.
Can you imagine a person who's been married just 15 months and has a veto power in the family?
No chance, and yeah, some of them exist out there, but it's just
not reasonable to assume that there are a lot of people like that.
You live with who has veto power? When you're a newlywed and you're making decisions together.
Sometimes, there are changes over the course of the marriage and that can be unfortunate, but in
the beginning, right, that's the premise you have together. You make decisions together. How common
Adam is a persona in society? Not common. Then Adam makes $80,000 a year. Let's
do back of the envelope, run of the numbers here. If you're making $80,000 a year in America,
$40,000 of those go to the U.S. Government, right? So, your disposable income at the end is a
$40,000. Now you probably have to pay rent or you own a house and maybe your mortgage is, what...
Kansas city is not that expensive. Maybe your mortgage is $1,500 a month and so that's $19,000
a year, right? So right there, all we have left from your disposable income is $21,000.
How much do you spend for food? You probably spend, a couple of two would spend $1,000
a month for food. Maybe a little less, but people who are just married perhaps want to splurge and
enjoy good food. So, that's another $1,000. So, that's another $12,000.
So, 19 minus four, that's $7,000. So, you only have $7,000 left
from the money you earn. I mean, that only covered the food and rent.
So, you're telling me you can travel five times a year
on $7,000; then it has to mean that you're traveling for work and so your work pays for
your travel. But, if you travel for work, which many of you do, do you ever get chances to see
tourists locations? No. You just see conference rooms and a conference room in Tokyo is the same
one as in Riyadh, the same one as in Dubai is the same one as in London. They all look the same.
Or they could be camping, doing different kinds of traveling. That why I ask. Like you said,
it's different to travel abroad than to just go camping around the area. [crosstalk].
Yeah. It's possible. It's possible. But, if you're camping, who are the people who camp?
You're mostly people who travel to camp locations by car and not by airplane, right? You know that
you cannot travel by airplane, if you're traveling by yourself five times a year, internationally for
$7,000, right? So, then you have to estimate your car transportation, your car rental costs. It's
just not a lot of money left to enjoy the travel. Well, maybe Adam is independently wealthy. Well,
okay, fine. People like that exist. But, how many of those
people are out there and are there enough for you to build a good business? That's not clear.
Let me keep going here. Those are the questions that I did ask. Then let me make the final
comment on this team. Again, Team Travel, I apologize to you. I don't mean to single you out.
I appreciate working with you and I learned a lot from every student here in the class.
But, let me present the full lifecycle of this case here and that is, if you look at it,
you say, "All right, how does Adam find out about travel options? Are there travelers,
fellow travelers, blogs, social media, online search engine, friends and family?"
Almost all of this seems kind of basic from one cell to another.
We did not see specifics. That really, to me, is a sign that the
end user and the customer are not well understood. But, this stage in the business, you should be
indicating specific websites, specific blogs, specific social media channels,
where such knowledge is a thing. Unfortunately, that's not presented.
My argument to you students is that, that really stems from the problem statement, right?
The work begin with a problem statement that's diffused. Time run away. You had to submit many
other assignments, the full up back to the problem statement didn't occur and so you're generating
work that is unspecific, right? Now is your opportunity to go back and do a better job. I want
to thank Team Travel for presenting themselves as an opportunity for everyone in the class to learn.