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Startup University - 4. Growth

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How to Start and Grow your Startup …

How to Start and Grow your Startup
4. Growth
-Diffusion of Innovations
-Market Development Strategy

Published in Technology , Business
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  • 1. Growth Diffusion of Innovations Market Development Strategy
  • 2. Growth The Technology Adoption Life Cycle: Adapt strategy according to the stage in the life cycle Source: Geoffrey Moore
  • 3. Diffusion of Innovations • The Technology Adoption Lifecycle • Selling to mainstream customers
  • 4. Diffusion of Innovations • The Technology Adoption Lifecycle – The Diffusion of Innovations is a social process Source: Carnegie Mellon University
  • 5. Diffusion of Innovations • The Technology Adoption Lifecycle – The Diffusion of Innovations is a social process Source: Carnegie Mellon University
  • 6. Diffusion of Innovations • The Technology Adoption Lifecycle – The Diffusion of Innovations is a social process Source: Carnegie Mellon University
  • 7. Diffusion of Innovations • The Technology Adoption Lifecycle – The Diffusion of Innovations is a social process Source: Carnegie Mellon University
  • 8. Diffusion of Innovations • The Technology Adoption Lifecycle – The Diffusion of Innovations is a social process Source: Carnegie Mellon University
  • 9. Diffusion of Innovations • The Technology Adoption Lifecycle – Technology Adoption profiles Technology Visionaries Pragmatists Conservatives Skeptics Enthusiasts (Early (Early (Late majority) (Laggards) (Innovators) Adopters) majority) Source: Geoffrey Moore
  • 10. Diffusion of Innovations • The Technology Adoption Lifecycle – Technology Adoption responses Stick with the Hold on! herd! Get ahead of No way! the herd! Try it! Technology Visionaries Pragmatists Conservatives Skeptics Enthusiasts (Early (Early (Late majority) (Laggards) (Innovators) Adopters) majority) Source: Geoffrey Moore
  • 11. Diffusion of Innovations • Selling to mainstream customers – The Chasm Chasm Source: Geoffrey Moore
  • 12. Diffusion of Innovations • Selling to mainstream customers – Crossing the Chasm: Establish a beachhead segment Source: Geoffrey Moore
  • 13. Diffusion of Innovations • Selling to mainstream customers – How Markets Develop Tornado Main Street Chasm Early Market Bowling Alley Source: Geoffrey Moore
  • 14. Diffusion of Innovations • Selling to mainstream customers – Implications for Sales & Marketing Chasm Customer goal: Competitive Advantage Solve problem Adopt the obvious Extend paradigm Customer need: Potential of technology Complete solution Make safe choice Better value Vendor goal: Validate technology Segment share Market share Profitability Source: Strategy: Demo the technology Show ROI Set standards Segment focus The Chasm Skills: Technology proficiency Customer Intimacy Closing deals Relationship mgmt. Institute
  • 15. Diffusion of Innovations • Learn more – Everett Rogers, “Diffusion of Innovations” – Geoffrey Moore, “Crossing the Chasm: Marketing and Selling High- Tech Products to Mainstream Customers” – Geoffrey Moore, “Dealing with Darwin: How Great Companies Innovate at Every Phase of their Evolution” – The Chasm Institute, “Chasm Methodology”
  • 16. Market Development Strategy • Market Development Strategy • Market creation variables • Market attractiveness variables • Market penetration variables
  • 17. Market Development Strategy • Market Development Strategy – The Market Development Strategy checklist & stage in the TALC Source of money 1. Target customer 2. Compelling Reason to Buy Source of demand To fulfill the compelling 3. Whole Product reason to buy 4. Partners & Allies Needed for whole product Function of whole product 5. Distribution integration complexity 6. Pricing Function of all other factors For the customer’s money 7. Competition 8. Positioning Relative to competition Next move 9. Next Target Source: The Chasm Companion
  • 18. Market Development Strategy • Market creation variables – Target customer • Identified economic buyer, accessible to the sales channel, and sufficiently well-funded to pay the price for the whole product – Compelling reason to buy • Economic consequences sufficient to mandate any reasonable economic buyer to fix the problem – Whole product • Ability (with the help of partners and allies) to provide a complete solution to the customer’s compelling reason to buy Source: The Chasm Companion
  • 19. Market Development Strategy • Market attractiveness variables – Partners & allies • Relationships with the other companies needed to fulfill the whole product – Distribution • Sales channel in place that can call on the target customer and fulfill the whole product requirements put on distribution – Pricing • Price of the whole product consistent with the target customer’s budget and with the value gained by fixing the broken process Source: The Chasm Companion
  • 20. Market Development Strategy • Market penetration variables – Competition • Target a space that has not been occupied by another company – Positioning • Establish credibility as a provider of products and services to the target niche – Next target customer • Potential to facilitate entry into adjacent niches Source: The Chasm Companion
  • 21. Market Development Strategy • Market Development Strategy Target Customer: Visionary functional Pragmatist dept. Pragmatist End-users executive manager technical buyer Compelling Dramatic competitive Fix a broken Adopt new Better value with no Reason to Buy: advantage business process infrastructure risk Whole Product: Differentiated Standardized Standardized Differentiated application application product product Partners & Allies: BPR/SI service Recruited for Rationalize to Minimum required, providers specific product reduce friction ideally none Distribution: Direct sales Direct sales/VARs Higher-volume, Low-cost, high- lower-touch touch Pricing: Value-based, gain Value-based, pain Competition-based, Competition-based, motivated motivated pain motivated pain motivated Competition: Category vs. category Application vs. Company vs. Product vs. product application company Positioning: Technology-based Niche market Market share- Better experience for leadership leadership based leadership end users Next Target: Another visionary in a Adjacent niche New platforms, Next micro-niche different industry market channels, geographies Source: The Chasm Companion
  • 22. Market Development Strategy • Learn more – Geoffrey Moore, “Crossing the Chasm: Marketing and Selling High- Tech Products to Mainstream Customers” – Geoffrey Moore, “Inside the Tornado: Strategies for Developing, Leveraging, and Surviving Hypergrowth Markets” – Paul Wiefels, “The Chasm Companion: A Field Guide to Crossing the Chasm and Inside the Tornado ” – The Chasm Institute, “Chasm Methodology”