» Team Presentations» Customer Relationships» Mentoring
» What were your hypotheses about who/what your channel would be? Did you learn anything different?» Did anything change about Value Proposition?» Update your Google Group with Business Model Canvas» Draw your channel diagram
CUSTOMER RELATIONSHIPSWhat relationships are you establishing with each segment? personal? automated? acquisitive? Retentive??
We Call Customer Relationships Demand Creation• Get, Keep and Grow• How will customers hear about your product?• How much will it cost to acquire a customer using these strategies?• How does market type impact my demand creation strategy?
• How many come through the first step?• How much does that cost?• What is the conversion between each level?• How much in revenues can you get out of each acquired customer?
Demand Creation by Market Type • Create, drive demand into your sales Existing channel • Educate the market about what’s Resegmented changed • Drive demand into channel • Educate the market New • Identify/drive early adopters into your sales channels Clone • Copy a business
Market Type Existing Resegmented NewCustomers Known Possibly Known UnknownCustomer Needs Performance Better fit Transformational improvementCompetitors Many Many if wrong, None How does market type influence demand creation? few if rightRisk Lack of branding, Market and Evangelism and sales and product re- education cycle distribution definition ecosystemExamples Google Southwest Groupon Market Type determines: Rate of customer adoption Sales and Marketing strategies Cash requirements
Homework - Web• Get a working web site and analytics up and running + Track where your visitors are coming from (marketing campaign, search engine, etc.) and how their behavior differs + What were your hypotheses about your web site results?• Actually engage in “search engine marketing” (SEM)• Spend $20 as a team to test customer acquisition cost. • Ask your users to take action, such as signing up for a newsletter. • Use Google Analytics to measure the success of your campaigning. • Change messaging on site during the block to get costs lower, team that gets the lowest delta costs wins.• If you assume virality • Show viral propagation of your product and the improvement of your viral coefficient over several experiments• What is your assumed customer lifetime value? • Are there any proxy companies that would suggest that this is a reasonable number?
Homework – Non-Web• For non-web teams: • Get prototype demo working. • Build demand creation budget and forecast. • What is your customer acquisition cost? • Did anything change about Value Proposition or Customers/Users? • What is your customer lifetime value? Channel incentives – does your product or proposition extend or replace existing revenue for the channel? • What is the “cost” of your channel, and it’s efficiency vs. your selling price?• Everyone: Update Google Group • What kind of initial feedback did you receive from your users? • What are the entry barriers? • Present and explain your marketing campaign. What worked best and why?• Read: • The Startup Owners Manual, pages 277-331 • Watch: Mark Pincus, “Quick and Frequent Product Testing and Assessment”, http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2313
“insero” = to plant ”gen” = gene Manufacturing platform for Lucas Arzola (EL) rapid, cost-effective, and scalable Karen McDonald (PI)production of therapeutics in tobacco Vasilis Voudouris (Mentor)
What We Know» We have a novel technology platform with numerous market opportunities» Our working hypothesis – that we can scale up and commercialize our platform for production of life-saving therapeutics» Jon Feiber – “Since you are a platform technology, it makes sense to engage in ‘market discovery’ and ‘customer discovery’ at the same time during the next weeks”» Challenging this hypothesis by speaking with as many experts and customers as we can» This week: explored decision making and distribution channels in the case of a pandemic
The Business Model Canvas Target Product – seasonal & pandemic flu vaccinesTobacco Suppliers R&D Speed Long-Term Contracts U.S. GovernmentGene Synthesis Manufacturing Cost-Effectiveness with Government and - CDCCompanies Regulatory Approval Robustness Vaccine - HHS BARDACMOs Licensing Scalability Manufacturers - DOD DARPA- Purification Marketing Safety Foreign Governments- Fill & Finish Ease of Customization NGOs- Packaging U.S. Supply Vaccine Manufacturers- QA/QC -Established andCROs Emerging Biotech- Clinical TrialsFDA IP – Patents, Trade Secret Manufacturing Facility Distribution through Government and Pharma Companies Capital Investments Contract Manufacturing Manufacturing Costs Fully Integrated Manufacturing (Sales) Licensing Costs Licensing (Royalties) Marketing
Getting Out of the Lab!Cast a broad net by talking to many different experts and customers:(1) Executives from large companies Name Title Institution Michael Girard Sustainability Manager Aerojet Michael Jacobson Director of Corporate Responsibility Intel Joseph Kieren Director of Corporate Real Estate AT&T(2) Entrepreneurs and angel investors from Sacramento Name Title Institution Andrew Hargadon Professor of Management UC Davis Wil Agatstein Professor of Management UC Davis Larry Palley Former General Manager Intel John Selep Operations Manager HP Thomas Alberts Consultant SBDC Cary Adams Head of MedStart Program SARTA
Getting Out of the Lab!(3) Experts in the commercialization of biotech platform technologies Name Title Institution Greg McParland Consultant DSM Ventures Fernando Garcia Senior Director Amyris(4) Experts in vaccine manufacturing Name Title Institution Ann Arvin PCAST Vaccinology Working Group Stanford (Key Opinion Leader on Vaccines) Misa Sugui Associate Scientist MedImmune Floro Cataniag Laboratory Manager MedImmune
Channels and DistributionConversation with Dr. Ann Arvin – Key Opinion Leader on vaccinesIn the case of a pandemic: Vaccine manufacturers have to be producing vaccines for seasonal flu – regulatory approval, QA, and validation need to be in place When a pandemic occurs, the government (BARDA) negotiates a manufacturing contract with vaccine companies – number of doses, formulation, price, and time are agreed upon CDC provides the elucidated strain to the manufacturer FDA considers the pandemic flu vaccine to be a variation of the seasonal flu vaccine – new regulatory approval is not necessary Vaccine manufacturers work with the new strain to ramp up production as quickly as they can – takes 4-6 months Sterility and quality testing is performed for the produced vaccines – some tests are done in-house and some are done by outside laboratories Vaccine is released
Channels and DistributionGetting the vaccines to the patients Vaccine manufacturers have contracts with wholesalers (i.e. McKesson Corp.) to distribute the vaccines – distribution is not a cost for the manufacturers, they hand over the product In the case of a pandemic, vaccines are also distributed through local contracts with the state health departments They distribute the vaccines to hospitals and clinics, where they can be administered to the patients
Organizational StrategyConversation with Greg McParland – Former CEO of biotech platform company: the virtual biotechnology company model» “Starting out and for as long as you can, you should be a virtual company. You can have contracts to outsource the downstream part of the process (purification, fill and finish, packaging, etc.) ”» “Keep your core technology and focus on using your manufacturing platform for protein production”.» Common practice in biotechnology – almost every company has contracts with CROs, CMOs, marketing and distribution arrangements, etc.» More flexibility – move quickly from failed avenues of research to more promising projects» Startups partner with big pharma companies to complete clinical trials and take product to market“If you build it, they will come” – but only build the essential core that lets you control your technology platform
More FeedbackConversation with Dr. Ann Arvin – Key Opinion Leader on vaccines Pain point: Reliability issues with traditional egg platform - willingness to move away to a different manufacturing platform Pain point: Current platforms are not fast enough, cannot have an impact in case of a pandemic - sense of urgency in finding a manufacturing platform that can produce vaccines faster and at a large scale Given this landscape, we still believe our technology can solve a significant problem in the vaccine marketConversation with Dr. Misa Sugui & Dr. Floro Cataniag – MedImmune Pain point: attenuated virus platform is harder to work with, safety measures are more stringent – would prefer recombinant subunit vaccines Wish: a faster process for vaccine production (our technology can help with this) Wish: a faster process for clinical trials and for approval of new drugs (this we can’t do anything about) MedImmune is a possible partner - always looking for new vaccine production technologies and new products to incorporate in their pipeline
More FeedbackConversation with Fernando Garcia – Amyris Biotech platform technology company First target product: drug for malaria, partnered with Sanofi to commercialize Change in strategy: they have transitioned into making biofuels Why have they made this transition? We will follow up with one of the founders of the company to find out
Next Steps We believe we have a good feel for our value proposition We need to better understand how we can sell to customers and how to establish these relationships, how partners’ decisions are made – meeting with Sanofi Head of External R&D Keep searching for a business model that will allow us to commercialize our technology – looking for meetings with companies that distribute/sell flu vaccine antigens for research and diagnostic use, trying to determine market size We need to talk to many more experts and customers…
Interviews Action MotionCustomer Interaction Meetings: Planned Customer Interaction Meetings:1. Director of R&D of C/A partner 1. Jeff Farbacher, CEO Accutran2. NETL Methane Hydrate RG 2. Ed Faust, Global Marketing, Siemens3. Ed Faust, Global Marketing, Siemens 3. Charles Noll, Marcellus Shale Coalition4. Former GE Employee5. Berkeley sensors group6. Tim Fogarty, Director of IW EnergyHypothesis Testing: Planned Hypothesis Testing:1. Ed Faust, Global Marketing, Siemens 1. Dr. Gilad Kusne, NIST 2. Ann Truschel, Corporate Insurance Broker 3. Tim Fogarty, Director of IW Energy
Direct sales to plants typically is a very hard wayChemical, to generate Physical, scalable business in the sensors market.Thermal ….Typically much better to bundle product into offerings from larger Chemical sensors businesses - Every significant market segment has specific marketing agencies directed towards selling them goods Agrees with current approach to this first market! Direct MarketingPossible Not Possible [Too expensive]