Learning launch

Challenge  As Head of Sales&Marketing of a construction materials Company, I developed the  perception that we could create an offer around waste collection from our customers’  jobsites. This was based on conversations with Sales Reps and some customers in Region A,  who claimed that, since we were delivering materials to jobsites, we could seize backhaul  opportunities and transport demolition waste from jobsites to landfill sites (located next to  our production sites).  At the same time, a lot of uncertainties remained: technical feasibility (avoiding overloading  for instance), regulatory compliance (making sure we have a proper Goods Delivery Note),  level of investment required (mobile weighbridge?), customer willingness to pay, scalability,  and probably other challenges we were not thinking about.    Selection  My team and I knew that we had to be very concrete and avoid making assumptions or  multiplying guesses. Our new business project involved measuring customer appetite and  identifying operational constraints, so only field observations would help us.  This is why we opted for a learning launch: we knew it would allow for different experiments  that would help us confirm or disconfirm our intuitions.    Application  In order to perform our learning launch, we started by stating our hypothesis, which was the  following : our company can help our construction customers who don’t have their own fleet  to get rid of their demolition waste in a more effective way (cheaper, faster) than with their  other alternatives.  Then we selected the 5 largest customers in Region A that satisfied our criteria, and  approached them to offer the opportunity to take care of their demolition waste on their  next jobsite. We presented it as a new service that we were developing and made it clear  that the service would be all the best suited to their needs if they could share as much  information as they could on their current practices and painpoints.  Internally, we briefed our teams (sales reps, supply chain group) and our subcontracted  haulers on the initiative, stating that we needed as much feedback and observations from  their side as possible.  Also, to make the experiment as insightful as possible, we opted to price our offer at a level  we thought fair and potentially sufficiently value-creating.    We probably did a good job envisioning the different topics we wanted to learn on. However  we lacked effectiveness in the way we formalized the assumptions and how each contributor  to the experiment would feed data to support or disprove our assumptions. The feedback  collection process was therefore somewhat painful and not always as accurate as it could  have been.     Insight  Our first area of insights was around customer perception. Spending time on jobsites  focusing on demolition waste elimination, taking time for in-depth conversations with

customers, and testing our idea of new service was worth the effort : we learned that half of  the jobsites were reusing demolition waste on the spot (therefore not needing our service),  that on a case by case basis the demolition waste could be reused on a jobsite nearby, that  the way we had designed our price made sense, and that waste evacuation, under certain  circumstances (space available, time constraints) could be a burning issue.  In a nutshell: there was a potential, but the addressable market was much smaller than what  we had thought (probably 20% of our initial assumption).  Out of the 5 customers tested, only 1 decided to entrust us with waste evacuation for his  next job. This allowed us to learn a lot on the operational reality: long waiting time, difficulty  for loading, need to create new documents to comply with the regulation, and some safety  issues. Taking this into consideration, we realized that we needed to increase our price by  15% in order to create some value for us as well.    As a result of this learning launch, we decided to go for a different route, because the  market was much smaller than expected, both in volume and value, and this was adding a  lot of constraints to our main business. Yet, because we had learned that it was at times a  burning issue for our customers, and we wanted to support them in that respect, we  approached a demolition waste trading company and entered in a partnership with them.     The approach we took for this new business evaluation, derived from a design thinking  methodology, was somewhat new in our company. Traditionally, we tended to go for  customer surveys, educated guesses, business plans. We surely saved a lot of time and  money by deciding to do a learning launch.    Approach  As mentioned earlier, one area of improvement is around the way we formalized our  assumptions and organized feedback collection.   Another space to do things differently next time is how we communicated with the top  management of our Company: while we were in a test and learn mode, our management  was taking success for granted and had already committed to additional revenue to the  Group we were part of. Takeaway: a learning launch must be approached in a very open- minded way by all parties involved. It may result in our hypothesis to be confirmed, or it may  result in the opposite. The good news is that we should know pretty quickly and with limited  costs what the outcome looks like.

