Startup are high-pressure boilers.
Perfect for taking decision-making to the next level.

Startups, especially those in accelerators, get hundreds of new opportunities per week, from mentors, investors and the accelerator's network.

Time scales are massively compressed. Teams must take their idea to market traction, to product, to investable company – all in 90 days. Often the first 2-3 weeks involve 200+ mentor conversations, covering over a thousand strategic possibilities.

We developed Option Cards working with a dozen accerators, equipping startups to:

record their options easily and thoroughly,
articulate and test their assumptions, and
make informed decisions about which options to pursue.

Option Cards are a lightweight tool for startups to balance focus and opportunities.

And all you need are blank cards, a pen, and a basic understanding of the Business Model Canvas!

Big Picture Perspective

Option Cards use the Business Model Canvas to give you a big picture perspective. It puts your ideas, hypotheses and options into the context of your business model.

Watch the video to cover the basics, and then we'll move beyond and explain dynamics.

Moving beyond business model basics

Let’s assume you reached a stage where you already went through the process of creating various business model prototypes for a business idea. Now, you've achieved the most basic level of business model generation. You've visualised your model by filling-out the building blocks of the canvas.

- Marcel Muench, an Option Cards user.

Most people start by filling in the blanks, and coming up with lots of ideas in each block. At this stage, your canvas probably looks something like this:

This basic level is great for asking important questions, but doesn't highlight the most crucial dynamics.

A key concept in business model design is moving beyond using the 9 building blocks as a checklist, and starting to spot the key dynamics that operate between them.

The real juice of business modelling is about discovering the dynamics of the models and the inter-relation between the building blocks. The ‘master level‘ of business modelling, as Yves Pigneurs calls it, is to highlight the story behind a business model, to realise the patterns within the model.

- Marcel Muench

Here, you can visually see how the key, make-or-break dynamics are being highlighted. This is the story, the main patterns, the signal rising from the noise.

A canvas full of post-its is rarely focused on the true business opportunity, or the make-or-break dynamics which need to be validated. How do we identify those?

Solving a problem is not viability.

Just because you can solve a problem for a customer doesn't mean you have a business.

You still don't know how they'll find you, how they'll pay you, if you can deliver in a way that keeps them, if you can grow profitably, etc. Spotting these critical assumptions comes from understanding business model dynamics.

Let's look at some examples. (Click the right arrow!)

Are dropped calls a big deal?

Have you ever considered why you get so upset if your mobile phone provider drops a call, but not `on Skype?

There's an important dynamic between value proposition, channel and relationship. Being online changes our expectation of reliability.

Do people make buying decisions logically?

Do you know why sunlight-readable laptop screens aren't mainstream? Because they look duller next to regular laptop screens in artificial light.

Most laptops are bought in stores with only artificial light, so people choose the brighter screen. There's a dynamic between value proposition and sales channel. The place and time of our buying decisions deeply affect how we gauge value.

When's the right time to ask?

Do you know why the highest revenue-generating iPhone apps are free?

Because people are more likely to buy in-app, at the moment they need the paid feature. There's a dynamic between value proposition, channel and revenue.

What activity do we pick to grow consistently?

Buffer is a tech startup with a very non-technical growth engine. They blog regularly, particularly guest posting to raise awareness of their service. The dynamic here is their key activity, blogging, creates a powerful awareness channel through partnering with other blogs.

Now, we're starting to understand business model dynamics.

These dynamics are the basic unit of Option Cards. They make every idea or hypothesis relevant to our overall business, giving us a quick way to find relevant ideas, and know exactly what to test.

Let's move ahead to the example below.

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Nanofilter ™ Water Filter

Dr. Askwar Hilonga developed a new type of drip filtration using nanotechnology that can provide clean water anywhere. He started his business from the university where he teaches, in the city of Arusha, Tanzania.

There are big questions with the viability of this idea.

Let's look at them, one at a time, using the meaningful space of the Business Model Canvas. Option Cards is a master-level business model tool, so to use it, you need to know the position of the 9 building blocks by heart.

Who exactly is ready to pay for clean water?

How will they be reached?

Why don't they have clean water now? Do they care?

In what way do we need to charge for water that works with how water is consumed?

Notice that each dynamic has 2 to 3 relevant blocks highlighted. Each of these questions actually represents a core dynamic of the business model, connecting muliple parts.

Looking at the keywords in each question, and the highlighted parts of the canvas, the relevance of each question is clearer. This clarity helps us see how each question can build up our business model, so we can decide which question to focus on next.

If we target homes with rooftop water tanks, can we sell filters?

Who will trust our filter works?

If we target rural villages, can we sell clean water in buckets?

Can we find distribution, like local agents ?

Dr. Hilonga's water filter company started with small homes in rural villages. They went to the place with the greatest need, and looked for the wealthier homes that could afford a filter. This gave them a good sense of the overall viability of the business idea. If nobody could afford clean water, that would be a telling sign.

Will homeowners in villages without water tanks be ready to buy a filter for their home?

He went to local villages near Arusha, and met with homeowners who could afford a filter.

He did his best to sell the filter. At first, he used his university credentials to convince them the filter worked.

But what really changed their mind was when the university professor, in his nice suit, went over to the water hole in front of the house. He scooped up the brown water, with insects and garbage floating in it, and put it through the filter. It came out clear and he drank it himself.

But only a few households could afford the filter, and most of the village people remained skeptical. And it wasn't realistic to hire university professors as sales people to grow this business.

The list of challenges was growing...

Can you see why each block in the canvas is highlighted?

What kind of agent will be able to build trust with village people?

Is it better to rent or sell filters to agents?

Which are the best villages to target with agents?

There were many more questions. As Dr. Hilonga progressed, that always lead to more and more questions that needed answering.

Who needs this the most, and where are they?

This was a matter of driving around and talking to people. It soon became clear that some people with regular incomes still suffered from chronic typhoid fever.

As we grow, how can we produce water filters at a larger scale?

This broke down into more specific options, which mattered at different stages.

Can the university invest in production facilities to produce more of the nanotech filters?

Which metal workers are the most reliable and affordable?

To learn and progress quickly, he kept trying different things, and different things at the same time:

Selling water in villages from small kiosks.

Selling water filters through agents

A retail outlet in the centre of Arusha.

The right answer for Nanofilter was constantly shifting, and almost always was a combination of the options. But the right answer was only visible after trying a range of them - to quickly assess them individually.

We can see something important in the Nanofilter story - learning was fast. It was fast because they could stay focused on their learning goals, validating one specific business model dynamic at a time.

Using Option Cards

2 - 4 dots per card.

Highlight the dynamics between the blocks, the links between them. If you have more than 4 dots, ask yourself if you can split up the dynamics onto separate cards. Your goal is to highlight one dynamic or one key question per card. Use more cards if you need to.

Select 1 or 2 cards at a time.

With a clear learning goal, you can learn quickly, and course-correct frequently based on informed decisions. Keep laser-focused on your current learning goal, but if new learning goals or hypotheses come up along the way, add them to your deck and pick them up when you're done.

Your deck is your business model future.

Throw ideas, hypotheses and suggestions into your deck. Every time you've completed a learning goal, it's waiting to flag up the most relevant next step. Scan your deck to find the most relevant option to validate next.

Start your Option Cards deck now.

Take 1 minute per question, and answer it with as many option cards as you can. Highlight the business model dynamic on each card.

Who will my next 10 customers be? What are they looking for? Where are they looking?

What needs do my customers have? How do they solve them now?

I will make money by __________.

How would my business change if I had to cut my prices by 95%?

How would my business change if I couldn't have a website or mobile app?

Where do my customers seek help and advice when they're stuck?

Which of my customers have different expectations about services levels or relationship?

How do my customers make buying decisions differently when buying in different channels?

Who are the people in our network that can fast-track our business? How?

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Designing MVPs

A key concept behind the definition of Minimum Viable Product (MVP) is that it starts with a clear learning goal. The MVP is then designed around the question, what's the minimum thing we have to build to learn this?

This clarity of purpose defines the "Minimum" part of MVP. The build work can be reduced to a minimum based on around the learning goal.

Without this clarity, it's common to add to or change the learning goal as you go, delaying the learning. It's quite common in IT projects, and startups are no exception. For example, most landing page tests start out with the question:

Is this value proposition strong enough that people will buy this online?

But somewhere along the way, the founder sees there's value in collecting email addresses. So the landing page gets optimised for collecting email addresses of anyone even vaguely interested, not people who have shown strong commercial interest.

The initial goal, to learn if people will click the buy button, gets lost. The landing page test ends up building a different business model dynamic.

Is this value proposition strong enough that people will buy this online?

Email list of possibly interested customers.

Using Option Cards, you can see these are clearly different. What started off as validating the dynamic between revenue, value proposition and channel - will people buy this here? - ended up building a marketing resource for a different channel, email.

Use Option Cards to keep your MVP focused on the most valuable learning.

THE PRINCIPLES BEHIND OPTION CARDS

Option Cards is a tool designed around various sets of principles we see instilled in founders, but sometimes hard to apply.

Effectuation

Effectuation is based on an academic study of how successful entrepreneurs think. It discovered a major difference between leading managers and entrepreneurs - while managers seek to understand before acting, causal logic, entrepreneurs understand that they can change world by acting, effectual logic.

Effectuation highlighted a few principles that you might find natural, but haven't considered explicitly:

Bird in Hand Principle - Start with your means. Don't wait for the perfect opportunity. Start taking action, based on what you have readily available: who you are, what you know, and who you know.

Affordable Loss Principle - Set affordable loss Evaluate opportunities based on whether the downside is acceptable, rather than on the attractiveness of the predicted upside.

Lemonade Principle - Leverage contingencies Embrace surprises that arise from uncertain situations, remaining flexible rather than tethered to existing goals.

Crazy-Quilt Principle - Form partnerships Form partnerships with people and organizations willing to make a real commitment to jointly creating the future--product, firm, market--with you. Don't worry so much about competitive analyses and strategic planning.

You can learn more at Effectuation.org.

Advanced uses of Option Cards

In this section: Decision-making, Scaling, Business Model Environment, Visual Indexes

Physical cards as a decision-making tool

I'm the founder of Leancamp, a startup event for information sharing. Leancamp is scaling up now, and the experience is suffering from too many online tools cobbled together. Leancamp participants have to log in to 3 or 4 separate websites to get the most out of the event. I carved out a week consolidate and replace all of our external tools with a single Wordpress site, but was unsuccessful at the complicated implementation.

I was spinning my wheels on what I thought was technical problems.

When we're working hard but not making progress, it's a good idea to step back to see if we have a business model problem.

By mapping out how each feature impacted a core Leancamp business model dynamic, I was able to spot a ton a features that didn't move the needle because they weren't affecting the core Leancamp model meaningfully.

I could then ask clear questions about how each would improve the Leancamp business model, and turns out most features had better, simpler, non-technical alternatives.

The remaining features were simpler to build from scratch, allowing me to drop the complications Wordpress entails. The answer was a paper-based prototype I would run at the next Leancamp event, which once successful, would be built quickly using a modern tech stack.

Option Cards for scaling

Option Cards were designed to rapidly scaffold a working business model for time-strapped, early-stage startups - but I've learned they're useful when scaling too. Option Cards was picked up by BackupAgent, who had just raised $2M.

They explained that with this level of investment behind them, a ton of new options are presenting themselves. Where before they had to hustle hard to make connections, all the big players are offering partnerships with them . They're under considerable pressure to manage these options, and choose the best among them, which is where Option Cards helps.

Our preprinted option cards have arrived #leanstartup ( cc @leancamp ) instagram.com/p/ZzlZ5OO08M/
— Robbert van Geldrop (@rvangeldrop) May 27, 2013

Robbert van Geldrop, founder of BackupAgent.

The Business Model Environment

In business model design, it's important to clearly differentiate between what's within your control and what isn't.

Failing to do so can lead to errors in observation, and design decisions that fail in spite of the appearance of evidence to support them.

Business Model Generation includes an often-overlooked aspect beyond the canvas, the Business Model Environment. This helps keep different types of assumption and tests clear, and with Option Cards, gives you a way of flagging up options that will only be relevant if your assumptions about trends, competitors or customer behaviour changes actually come to pass.

The business model environment also has particular relevance to investors, who are concerned with the growth of your target market, lock-in factors, competition and adoption trends.

Learn more about the business model environment from Alex Osterwalder.

Market forces
(including lock-in factors)

Industry forces
(including competition)

Trends

Macroeconomic forces
(including investment/bootstrap options)

Other visual indexes

The core function of Option Cards is the visual index. This allows you to quickly find the options that are relevant to you when you need them.

It's important to use an index that is easy to mark down, grows with your business, and is compatible with other tools so Option Cards can work seamlessly with them.

Rather than overcomplicating things or imposing process, Option Cards plays nicely with other approaches. I occasionally use my Customer Development symbols for example, jotting down hypotheses that have to do with jobs-to-be-done, goals, decisions or emotional triggers. These lead nicely into tools like the Value Proposition Canvas, or approaches like the Customer Decision Journey and Disruptive Innovation, when they're useful.

The symbols flag what we'll need to retrieve later.

When building our marketing channels, we'll need to review what customer interest and decision triggers we've encountered, and what customers currently try so we can align with their frame-of-mind. When we find we need to better communicate what we do, or what to zoom-in our product on specific needs, having a reference of customers' jobs-to-be-done is valuable.

Startup are high-pressure boilers. Perfect for taking decision-making to the next level.