1. Guest Lecture – High Tech Business Venturing
Digital Business Innovation
Sønderborg
28.02.2014
2. Programme
1. Welcome
2. Personal profile
3. Grundfos
4. Why Grundfos Connect?
5. How we innovate and create value
6. Feasibility analysis in the Customer Development Process
7. Some practical examples
8. CDP in high technology projects – key learnings
9. Polypower case: What does MVP mean to you?
10. 5 minute pitches and class discussion
3. Personal Profile
Founded Lonk Design – DIY website builder for
SME’s
2006
2007
2008
2009
2010
2011
2012
2013
2014
Started MSc. Innovation & Business
Founded the Sønderborg Student Foundation
Founded DCore – Decentralized Control Software
Graduated MSc. Innovation & Business
Business Lecturer at MCI
Global Business Graduate with Grundfos
Business Developer within Grundfos Connect
Business Developer in Beijing, China
Business Developer in Silicon Valley, USA
4. Grundfos in brief
• Founded in 1945 by Poul Due Jensen
• Annual production of more than
16 million pump units
• Turnover of DKK 22 billion in 2012
• More than 18,000 employees worldwide
5. Grundfos in brief
• Grundfos primarily manufactures:
• Circulator pumps
• Water booster pumps/systems
• Submersible pumps
• Industrial pumps
• Dosing pumps
• The world’s largest manufacturer of pumps
and pump systems
• Production and sale of electronic motors
• Development, production and sale of
electronics for the control of pumps and
pump systems
6. Grundfos in brief
NORTH AMERICA:
3 sales companies
2 production companies
3 other brands
EUREG:
26 sales companies
12 production companies
7 other brands
ASIA PACIFIC:
11 sales companies
2 production companies
2 other brands
EMERGING MARKETS:
11 sales companies
CHINA:
2 sales companies
2 production companies
7. So….
We are a very stable company. We have always been profitable. Historical growth
rate averages around 10 percent each year.
We have a full product portfolio offering the most efficient, intelligent and durable
pumps to our customers wherever they may be in the world
But is this enough???
Can it be maintained indefinitely???
Increasing competition
Commoditization
Reaching the limits of hardware improvements
8. The Grundfos purpose
Grundfos is a global leader in advanced pump
solutions and a trendsetter in water technology.
We contribute to global sustainability by
pioneering technologies that improve quality of
life for people and care for the planet.
10. So….
What do you think are some of the consequences of investing heavily in TDI and
SDI while not developing strong competencies in CDI?
A very strong ‘we built it ourselves culture’
High investments -> Optimistic projections -> Uncertain / diminishing returns
Projects with a very long time to market
A limited number of concepts is explored, predominantly from a technical feasibility
perspective and at a relatively high cost per concept evaluated
12. Welcome to the connected world
In 2020, an estimated
50 billion things will
be connected in the
Internet of Things.
This presents a unique
business opportunity for
Grundfos.
Industry is moving into
a digital era and
Grundfos will play a
leading role.
13. Think about the reach
Grundfos products have …
We have the potential to make the connected world
a more intelligent and efficient place
16 MILLION
PRODUCTS
800 MILLION
PEOPLE
10% OF THE
WORLD’S
ELECTRICITY
CONSUMPTION
Grundfos produces more than 16 million
products every year
Grundfos pump solutions collect water for 800
million people and distribute it to 600 million
Grundfos has a significant impact on the 10% of the
world’s electricity consumption that is used for pumping
14. Grundfos 4.0
Grundfos’ foundation is manufacturing world-class pumps and Grundfos still is the industry leader in
innovation. To sustain our position Grundfos must accelerate the journey of digitization.
16. The innovation process
IDEAS BUSINESS MODEL SEARCH BUSINESS MODEL EXECUTION
STEP 1 STEP 2 STEP 3 STEP 4
A PROJECT STARTS
WITH BUSINESS IDEAS
FROM:
• Customers
• Grundfos Internally
• Open Innovation
Platforms
• Partnerships /
Ecosystem
These are funnelled into the
Customer Development
Model.
In most cases ideas are
hypotheses to be tested on
the market.
CUSTOMER
DISCOVERY
• Turn hypotheses
into facts
• Test value
proposition
• Verify the
problem,
product and
business model
hypotheses
• Next step,
Iterate or Exit
CUSTOMER
VALIDATION
• Conduct Pilots to gain
Proof of Concept
• Sell to early customers
• Identify scalable and
repeatable business
model
• Next step, Iterate or
Exit
CUSTOMER
CREATION
• Get ready to sell
• Position and
Launch
• Scale in first chosen
market
• Next step, Iterate or
Exit
CUSTOMER
ACCELERATION
• Align departments
for full scale and
fast response
• Manage sales by
market type
• Scale in all chosen
markets
• Manage product life
cycle
PRODUCT/SOLUTION DEVELOPMENT
RELEASE MANAGEMENT
SALES MANAGEMENT
17. Feasibility analysis starts at step 1
IDEAS BUSINESS MODEL SEARCH BUSINESS MODEL EXECUTION
STEP 1 STEP 2 STEP 3 STEP 4
A PROJECT STARTS
WITH BUSINESS IDEAS
FROM:
• Customers
• Grundfos Internally
• Open Innovation
Platforms
• Partnerships /
Ecosystem
These are funneled into the
Customer Development
Model.
In most cases ideas are
hypotheses to be tested on
the market.
CUSTOMER
DISCOVERY
• Turn hypotheses
into facts
• Test value
proposition
• Verify the
problem,
product and
business model
hypotheses
• Next step,
Iterate or Exit
CUSTOMER
VALIDATION
• Conduct Pilots to gain
Proof of Concept
• Sell to early customers
• Identify scalable and
repeatable business
model
• Next step, Iterate or
Exit
CUSTOMER
CREATION
• Get ready to sell
• Position and
Launch
• Scale in first chosen
market
• Next step, Iterate or
Exit
CUSTOMER
ACCELERATION
• Align departments
for full scale and
fast response
• Manage sales by
market type
• Scale in all chosen
markets
• Manage product life
cycle
PRODUCT/SOLUTION DEVELOPMENT
RELEASE MANAGEMENT
SALES MANAGEMENT
18. Some key points
• Don’t waist your time starting out with a 30 page business plan
• Projections are worthless because you have no track record to base them on
• Facts are outside of your building – No business plan survives initial contact with
customers
• Build a Minimum Viable Product (MVP)
• This is not a technical proof of concept
• This is not a working prototype with a full feature-set
• The MVP is:
• A tactic for cutting back on wasted engineering hours
• A strategy for getting the product in the hands of earlyvangilists as soon as possible
• A tool for generating maximum customer learning in the shortest time possible
• The goal of the MVP is to build the smallest possible feature set representing the core
value of your concept and testing this against customers
• Go out and test your MPV and Iterate …. a lot
• Don’t move to the next phase of the process until your hypothesis have become facts
Source: Steve Blank
20. Example: GateSense
The Gatesense project empowers people
to unleash their creativity and create
significant value for society. The first co-
creating IoT platform for a sustainable
world invites you to join our community.
21. Some key learnings
• A pivot is not a failure
• Technical feasibility is still VERY important. Everybody wants to buy an affordable time
machine
• Customer Development is close to useless unless your product development and/or
partners can iterate the product with speed and agility
• Don’t focus on single success cases, you want to build a scalable business – search for a
pattern
• Preserve your cash until you find that pattern
• You know a customer wants to buy your product the moment they paid you for it – don’t
simply take their word on it.
Source: Steve Blank
22. Polypower Case
In your groups:
- Decide on and describe your Minimal Viable Product
- Create your hypotheses on:
- The customers
- Their problem
- The solution you will offer
- The channel you will use
- Create a rough draft of your anticipated business model
- Present your MVP and your plan for going to the customers and testing your hypothesis in
the coming week
