Lead To Win Bootcamp - Day 1

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Lead To Win and Lead To Win for Women is a free business bootcamp to help entrepreneurs start and grow businesses in the Ottawa, Gatineau area.

Lead To Win and Lead To Win for Women is a free business bootcamp to help entrepreneurs start and grow businesses in the Ottawa, Gatineau area.

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  • 1. Welcome to Lead to WinOctober 25, 2011 Lead to Win
  • 2. Day 1 Janice Singer & Deborah Dexter Welcome (IRAP) Tony Bailetti Program overview, portfolio (Carleton) snapshot & blueprint to growth Tom Duxbury Running on a shoestring (Wesley Clover) Corien Kershey Segment & target market (Magnitude Partners) segments Tony Bailetti Day 3 opportunity reviews (Carleton) Day 1 takeaway messagesSlide 2 Lead to Win
  • 3. Welcome LTW for Women to: • Increase number and success of women owned business in National Capital Region (NCR) • Make the NCR the premier location for women to start businesses • Create an ecosystem of growth oriented women entrepreneurs in the NCR • http://ltw-women.ca/homeSlide 3 Lead to Win
  • 4. Program Overview October 25, 2011 Tony BailettiSlide 4 Lead to Win
  • 5. Highlights of LTW • Become largest source of technology and knowledge jobs in Canada’s Capital Region • Community driven • First phase selects right people and opportunities to which we can add value • Second phase is six day Opportunity Development Program, cuts in Day 3 and 6 • Each business in Phase III to generate a minimum of 6 knowledge/technology jobs in next three years • Fourth phase for businesses with more than 6+ jobs and wish to lead a target market globallySlide 5 Lead to Win
  • 6. Lead to Win Company founders get: Region gets: • Stronger business • 6+ good paying jobs per opportunity quickly company over 3 years • Knowledge to establish and • Healthy ecosystem to launch grow successful business and grow successful • Confidence, encouragement businesses and motivation • Access to large and diverse business network • Foundation to sell to first customers, raise funds and attract talent Free to foundersSlide 6 Lead to Win
  • 7. Ottawa-Gatineau experience Jun Aug Nov Mar Jun Nov Nov Total 09 09 09 10 10 10 11 Applicants 82 66 98 69 41 49 52 457 123 Day 1 accepts 62 46 55 49 35 29 41 317 4 wks 456 Day 4 accepts 51 35 44 37 22 18 207 Admitted to Phase 3 (passed Day 6) Opportunity development Founders 39 27 34 26 14 13 153 Deal development New startups 30 19 21 18 11 11 110 75 start-ups active as of October 15, 2011Slide 7 Lead to Win
  • 8. Ottawa-Gatineau start-up groupings 1. Content 2. Hardware & systems 3. Health services & technology 4. Hosted services 5. Mobile applications 6. Services, consulting & applied technology 7. Software applications 8. Social & collaboration 9. Intellectual property 10. Specialty (do not fit in any group above)Slide 8 Lead to Win
  • 9. Strategic AssociatesSlide 9 Lead to Win
  • 10. Criteria to enter Phase III 1. Offer solves significant problem or pain to identifiable target customers 2. Offer delivers more value to target customers when compared to alternatives 3. Company provides good value to channels and go- to-market partners 4. Can generate 6 knowledge jobs in region 5. Sound financial plan for company and founders 6. Develops options for growth in region 7. Core team has what it takes to deliver objectivesSlide 10 Lead to Win
  • 11. Points of difference that add value to participants • Experienced entrepreneurs and risk-sharing service providers deliver Phase II • Expert and diverse reviewers provide substantive feedback on business opportunity multiple times • Focused on reducing time to cash from first customers • Uses ecosystem approach to launch and grow companies • Immediate application to ventureSlide 11 Lead to Win
  • 12. Points of difference that add value to Canada’s Capital Region • Success = number of local knowledge jobs created + amount of capital attracted • Large number and high diversity of volunteers • Stakeholders set strategy • Content is freely available for use by others • Platform on which to grow other initiativesSlide 12 Lead to Win
  • 13. Blueprint to growth October 25, 2011 Tony BailettiSlide 17 Lead to Win
  • 14. Agenda • Two distinct functions of entrepreneurs • Four key skills • Blueprint to grow revenue • Growth formulaSlide 18 Lead to Win
  • 15. Distinct functions of entrepreneurs 1. Responds to existing or future profit opportunities, all of which consists of price differentials P1 P2 Sales of: Resources & Decisions to Expects P2 > P1 processes employ resources & processes 2. Acts to move away or destroy her/his present state – Seeks autonomy – Authors relationships – Makes declarationsSlide 19 Lead to Win
  • 16. Four key skills • Make decisions when future is unknowable • Identify, create, shape, develop and refine opportunity • Acquire and combine resources • Champion customer adoption of your firm’s products, services, solutions, processesSlide 20 Lead to Win
  • 17. Blueprint to grow revenue • Raise bar Get house in • Divest what adds no value • Get legal, cash, IP & order personal affairs right • Act based on results/facts Revenue Secure Close deals for 6+ jobs commitment • Implement growth formula • Increase # & diversity of • Create mind share around players that make money when offers & “why” company you sell Overcome does what it does • Develop differentiators for consumption • Lever talent, technology & which customers pay resources worldwide • Keep pace delivering value to barriers • Lower cost of customer customers & players • Skills acquisition & go to market • Select right competitors •$ • Embrace customers’ changes • Access/reach • TimeSlide 21 Lead to Win
  • 18. Overcome four barriers that constrain consumption of your market offer Skills • Make offer easy to consume • Provide simple rules for non-experts to solve problems themselves using your offers $ • Reduce price & cost structure • Help customers & partners make money Access/reach • Make offer available in locations & contexts where customers want to consume them Time • Reduce time to consumption • Reduce latency & delays Good structure to order benefits from consumption of your offerSlide 22 Lead to Win
  • 19. Define & implement growth formula Growth formula Benefits • A guide to replicate & • Makes it easier to make guide behaviour that decisions that deliver makes a company growth money • Provides strategic clarity • Ties & aligns work of • Reduces complexity people • Learn through repeatability • Lodged in company’s • New employees become experience productive fasterSlide 23 Lead to Win
  • 20. Inventory of growth formulas for small companies 1. Help strong customers grow 2. Bring innovation to market as complementary offer to strong players’ offers 3. Apply good technology developed by others to different markets 4. Sell services to niche first & then develop & sell product 5. Demonstrate offer works, sell to first customers, & identify profitable business model at the price first customers are willing to pay 6. Demonstrate that offers provides value to users & economic benefits to customers & can be delivered at a profitSlide 24 Lead to Win
  • 21. Inventory of growth formulas (continued) 7. Make competition irrelevant by concurrently delivering 2X the value at half the cost 8. Sell to narrow niche, cross-sell, then fill higher order needs 9. Sell to customers in mature markets abandoned by incumbents 10. Fill gaps that occur when migrating from an old to new system 11. Resell services in geographies that are too expensive for other service providersSlide 25 Lead to Win
  • 22. Lead to Win Running on a Shoestring October 25, 2011 Tom Duxbury Entrepreneur in Residence, Wesley Clover tduxbury@wesleyclovertech.comSlide 26 Lead to Win
  • 23. Running on a Shoestring • Upon completion, you will know about • The Zen of a cash-conserving mindset • What needs to be done to get up and running from Day 1 • What can wait • Common pitfallsSlide 27 Lead to Win
  • 24. Agenda • Getting Operational – The Basics – Philosophies – The Nuts and BoltsSlide 28 Lead to Win
  • 25. The Basic Flow Early prototypes, customer interest Team works together Customers, for ‘sweat equity’ & Team works revenue future considerations together for minimal pay, Team fully attracts others operational, starts to look - Your Cash+Friends, normal Family - IRAP, etc -Angels+other seed cash - IRAP, etc First major financingSlide 29 Lead to Win
  • 26. Philosophy of Lean for Startups • Conserve cash – Cost avoidance or deferral • Work smarter – Minimize wasted time+effort • Focus on what matters now – Customers+funding = prototypes, engagements, referralsSlide 30 Lead to Win
  • 27. 10 Bootstrapping Startup-Life-Hacks From Ben, Craig, Adam via MaRSSlide 31 Lead to Win
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  • 38. It’s all about runway • The more you have, the easier to get off the ground • Cash is not just King – it’s the lifeblood • Cash/Burn rate = Time to Live – You need more cash , or lower burn rate, or ideally bothSlide 42 Lead to Win
  • 39. Basic Shoestring Principles • Value creation with the lowest possible cash outlay – Buy (new) only as a last resort- be creative and open – E.g. team members provide own laptops, cellphones, etc. initially • Negotiate everything against the ‘day when you get big’ • Don’t be afraid to ask for what you want or help you need – A little humbleness goes a long way – Your infectious enthusiasm will win over converts – Network Network NetworkSlide 43 Lead to Win
  • 40. Negotiating Basics • Treat everything as an asking price – E.g. Leases, salaries, software licences, payment terms • Understand the BATNA for both sides – Best Alternative To a Negotiated Agreement – Startups have surprising leverage – Do not go too far: the outcome has to work for all parties • Many vendors offer considerable concessions to new companies – Cost of customer acquisition high – Pay forward: once established, a vendor tends to stay in • “If you can’t find the fool in a deal, it’s probably you”Slide 44 Lead to Win
  • 41. Getting Running: The To-Do List 1. Mobilize a team and method for work 2. Basic incorporation 3. Assemble basic corporate tools 4. Build a corporate presence 5. Focus on the next milestoneSlide 45 Lead to Win
  • 42. Mobilizing the Team • Work together when possible – Home offices work surprisingly well – Borrowed/shared office space – Many companies are coffee shop based initially- that’s OK • Ensure co-workers have attitude and commitment – People may hold other jobs; set expectations – Shared enthusiasm for the mission is key • Seek out diverse expertise – Someone just like you is probably one too many – Looking for creative sparksSlide 46 Lead to Win
  • 43. Mobilizing on a shoestring (2) • Guerilla recruiting good people… – Twitter/Facebook/LinkedIn – Online web forums, user/discussion groups – Friends & Colleagues (the weaker the ties the better) – Investor references – Networking organizations and events • eg. LTW, TON, OTI, Ottawa Clusters, OCRI • Job sites an option but costly (e.g. Monster, Workopolis) – Professional recruiters rarely appropriate at this stage • Convene an advisory board – They will help for the positive associationSlide 47 Lead to Win
  • 44. Basic Incorporation • Should you incorporate now? – Pros: • Bona fide entity for opening bank accounts, transactions • Can issue shares • Can enter agreements, e.g., NDAs, assignment of IPRs • Limited liability to you • Taxes may be lower • Prestige: easier to raise money, attract customers – Cons: • Some expense and housekeeping • The pros outweigh the cons for all serious startup ventures ( == LTW candidates)Slide 48 Lead to Win
  • 45. Basic Incorporation (2) • Decide on a unique name – Often the hardest part but most fun! – Do your own search: NUANS, Google – Avoid obvious confusion with typos – Check out online synonym, name generators! – Never buy Your_favourite_name.com from someone • No need for complexity– it all can (will) be changed • Costs online – $300-700 • You can do this yourself… or some lawyers will defer the fees in exchange for future businessSlide 49 Lead to Win
  • 46. Basic Incorporation (3) • Keep a minute book – Director’s register – Member’s register – Securities register – All corporate bylaws – Minutes of company meetings – Copies of any forms filed with the government • No obligation for a corporate seal, but nice to own • Request a business number from CRA – You must start charging GST over $30,000 in revenueSlide 50 Lead to Win
  • 47. Shoestring Banking • Open a Corporate Bank account – Shop around for rates – Meet your Business Advisor – a big ally – Bring your Articles of Incorporation – Nominate a treasurer – Consider who has signing authority (2 is safer) – Consider who gets banking cards (full access limited) – You might photocopy the starter cheques instead of buying numbered – Initial deposit will probably be your own! • Open a Paypal account as a payment optionSlide 51 Lead to Win
  • 48. Assemble Basic Tools • Reuse templates for – NDAs – Assignment of IPRs – Offers of employment – Share subscription agreements – Promissory Notes – Get these from your personal network, cyberspace or (deferred payment) lawyerSlide 52 Lead to Win
  • 49. Open Source Seed Documents • http://www.marsdd.com/entrepreneurs- toolkit/Topics/Sample-funding-documents.html – Term sheet – Subscription agreement – Articles of amendment – Shareholder’s agreement – Founder’s agreement – Independent contractor agreementSlide 53 Lead to Win
  • 50. Finance Operations 101 • Keep all receipts! • Customize a standard expense form • Do your own bookkeeping or find someone willing to take it on – Keep a detailed spreadsheet, or buy an accounting package (eg, Simply Accounting, Quickbooks) < $200 • Do not get over focused on this aspect – Maintain records + pay bills on time = good enough • Do not think about hiring a CFO yet – there are many options – Smart bookkeepers – Virtual CFOsSlide 54 Lead to Win
  • 51. Guerrilla Marketing • Gaining mindshare can be virtually free – Online forums, LinkedIn Experts – Speaking engagements – Blogs, online newsletters – Twitter/Facebook fans – Submit print articles, commentary – Community events – Drive traffic to your website every chance – Paint your car, etc • Consider Google Adwords laterSlide 55 Lead to Win
  • 52. The Basic Corporate Presence • Corporate Phone – VoIP - eg. Vonage Entrepreneur plan, OneConnect, Skype Out – Should have a central phone number– not your cell • Email – Google Apps– free for first 50 users – includes calendar, mobility, intranet • Web domain name registration, hosting – Many low cost providers, eg. GoDaddy • Business Cards – moo; uprinting; vistaprint; zazzleSlide 56 Lead to Win
  • 53. Common Pitfalls • What worked before in an established company… needs to be the same now – e.g., private cubicles… instead of open working space – e.g., bias for deep thought… instead of bias for action – e.g., ISO, TQM, Six Sigma, waterfall processes.. instead of lightweight – “There is nothing so useless as doing efficiently that which should not be done at all.” * • Not thinking of cash alternatives – e.g., hiring…instead of contracting for short term needsSlide 57 Lead to Win
  • 54. Common Pitfalls • Focusing too much on the inside semantics… – e.g. Structure, processes, documentation – Your job is to create an adaptable learning machine • And not enough on the outside… – Customers, opportunities, products, relationships – Sales are what makes everything else possible “A business exists to create a customer” * * Peter DruckerSlide 58 Lead to Win
  • 55. Questions Speaker contact: tduxbury@wesleyclovertech.comSlide 59 Lead to Win
  • 56. Select and Target Market Segments Corien Kershey Magnitude Marketing/Magnitude PartnersSlide 60 Lead to Win
  • 57. Topics • Segment the Market • Create Segment Profiles • Identify Critical Flaws • Assess Variables • Select Target SegmentSlide 61 Lead to Win
  • 58. Segmentation Divides Markets into Addressable Chunks • Segmentation separates potential customers into groups according to different buying criteria – Mobile Knowledge does not address all possible uses of GPS • They focus on managing taxicab resources – Spartan does not address all possible uses of on- demand DNA testing • They focus on genetic testing for metabolizing Plavix – Corel tried to address everybody when they bought WordPerfect • They failed.Slide 62 Lead to Win
  • 59. Target Segment is The Chunk That You Can Dominate • A startup has a much better chance of success if it focuses on a single, unserved or underserved segment that they can dominate fast • The target segment is the one that gives you the best chance to dominate – Shopify is building success by focusing on small companies or individuals looking for easy, low-cost e-commerce solutions – Lululemon built success at first by focusing on wealthy urban women who invested in yoga and gym memberships – DELL built early success by selling computers to the price- sensitive and convenience-sensitive home/home business market • These were unserved or underserved segments before • Of all the possible segments that were available, these came out on top after analysis of qualifying criteriaSlide 63 Lead to Win
  • 60. Choosing a Target Segment is Critical to Success • In general, studies show that between 70% and 90% of all startups will fail in the first two years • Most startups fail as a result of poor segmentation and targeting practices Good Knowledge of the Market and Single- Minded Focus are the Number One Reasons for Startup SuccessSlide 64 Lead to Win
  • 61. Model Illustrates Startup Challenge Applies to product categories, NOT to companies Refine Compete A mature product in a Growth of mature sales as the product Educate product starts to gain Introduction acceptance by of the the larger product and market early buyersSlide 65 Lead to Win
  • 62. The Challenge Is to Avoid THE GAP – the Graveyard of Startups Refine Compete A mature product in a Growth of mature sales as the product Educate product starts to gain Introduction acceptance by of the the larger product and market early buyersSlide 66 Lead to Win
  • 63. Let’s Look At This Another Way Most unwary startups look at their entire addressable market and then take pot shots in the hope of hitting something goodSlide 67 Lead to Win
  • 64. Ready, Fire, Aim Doesn’t Work • Most common start-up error is to attack a number of segments to see which will work best – Often no “whole product” is ever delivered to one market – Resources are distributed among too many segments and sales, marketing, development is done poorly – No segment can be dominated fast – Defenses are weak and competitors can breach the segment walls easily – The people who buy your product first because it’s either cool or they have a red-hot issue do NOTSlide 68 reflect the majority of your market Lead to Win
  • 65. Beachheads Provide Defendable Points of Attack on the Addressable Market Segment 4 Segment 3 Segment 2 Segment 1Slide 69 Lead to Win
  • 66. To Mix Our Metaphors: A Beachhead Builds the Bridge Across THE GAP • Focus limited resources to establish leadership in a single segment • Gives strategic sales direction even in the very early market • Leadership in a single segment helps build credibility with – Analysts and media – Investors – The pragmatic majority market – Employees – Board • Everyone, from consumers to high-tech companies, prefer to buy from segment leaders • Reduces the risk of failure – go find another beach • Much better chance of being first in the “mind”Slide 70 Lead to Win
  • 67. Seven Steps to Successful Segmentation for Startups • Step 1: Determine where you really, honestly are within the startup life cycle • Step 2: Regardless of Step 1, create as broad a definition of an addressable market as possible and then break it down in to all possible sub-segments. Even if your idea is based on a target segment, it’s probably still too big • Step 3: Create customers profiles for all remaining sub- segments • Step 4: Assess profiles again critical flaws criteria and eliminate those that fail • Step 5: Assess remaining profiles against selection variables continuously until top segment remains • Step 6: Test target segment against SWOT and performance goals • Step 7: If no segment apparent, repeat processSlide 71 Lead to Win
  • 68. Stage 1: How to Know You’re Really Selling to Friends – The Very Early Stage • New company or technology with first product still in development or at early release stage • Angel, seed or small first round financial situation • No customers or small set distributed widely across different vertical or horizontal markets who are often friends, acquaintances, people you’ve done business with before • Sales are growing but VERY slowly • In the case of tech startups, buyers are technology people within customer organizations • Product “story” revolves around the “coolness” or innovation factor – much market educating to do • Sales-led with little marketing communications effortSlide 72 Lead to Win
  • 69. How to Know You’ve Run Out of Friends and You’re on the Edge of The Gap • Sales growth has slowed • Starting to see some competition perhaps that seem to be doing better than you are • You have to product changes every time to close a deal • Prospective customers fail to understand the product’s “technology” story or don’t understand why it’s different or better • Buyers are not coalescing around any particular vertical or horizontal market • Getting more investment in proving very difficult • Often many partners and resellers signed up but little or no results • Struggling to identify product roadmap and technology roadmapSlide 73 Lead to Win
  • 70. Step 2: Define the Total Addressable Market and Then Narrow Down • Brainstorm the possible broad applications for your technology OR brainstorm the possible sub-segments within the segment you have defined • Build hierarchies for each one until you have multiple “application trees” – Vertical waterfalls – Cross-horizontal segments – vertical cuts on horizontal technologies – Suppliers and channels – Think in terms of the buyer, NOT the organization • Layer reasonably but go at least four deep if possible • Some startup ideas will have many applications or uses: others will have a more limited application scopeSlide 74 Lead to Win
  • 71. Use Variables/Qualities to Determine Segments – Business Marketing Factors Environmental influences: Organizationalinfluences: • Level of primary demand • Company objectives – profit • Economic outlook for the maximization, budget constraints industry and the company • Policies and procedures • Cost of money – interest rates governing purchasing and cost of borrowing • Supply conditions – scarcity and • Organizational structure – reliability of supply impact on buying centre • Rate of technological change dynamics • Political and regulatory • Systems – evaluative criteria for developments purchase decisions • Competitive environmentSlide 75 Lead to Win
  • 72. Use Variables/Qualities to Determine Segments – Business Marketing Factors Interpersonal influences: Individual influences: • Authority to make the buying • Age decision • Education • Status – impact of the purchase on buyer’s status in the organization • Job position • Empathy – seller’s relationship with • Personality buyer • Risk factors – fear of making a • Persuasiveness poor decision or choice and the consequences of that choiceSlide 76 Lead to Win
  • 73. Good Segmentation Narrows the Focus and Leverages Resources GPS Segmentation Example Anyone Who Needs to Locate Anything that Moves and that is Big Enough to Carry a Receiver and That is Outside for Any Length of Time Vehicles People Animals Cargo Icebergs Trailers Cars Rail Cars Earth Movers Ships Planes Container Reefers Dry Cargo Tankers PressTank Livestock Freezer Refridge High Perish Low Perish Flowers Produce Meat Indies Carriers CorporatesSlide 77 Lead to Win
  • 74. Topics • Segment the Market • Create Segment Profiles • Identify Critical Flaws • Assess Variables • Select Target SegmentSlide 78 Lead to Win
  • 75. Create Segment Profiles • Upon completion – You will know about • Using customer profiles to understand segments – You will know how • To create a profile of a typical customer in a segment • To determine the customer’s pain point • To create a before/after picture of the customer’s pain after adopting your solution • To focus on the customer as an individual rather than as a company • To determine the potential value of your solution to the customer and the segment • To group segments into related segmentsSlide 79 Lead to Win
  • 76. You Can’t Really Know What the Beach Looks Like Till You Get There • Beachheads have no ‘hard data’ • Company has little or no experience with the beachhead target segment • No similar products are serving that segment • No credibility with which to gain information directly from pragmatists in segment • Very early buyers are different from the more pragmatic, sceptical majority market and cannot be used as models • High-level market size projections are generally untrustworthy and erroneousSlide 80 Lead to Win
  • 77. Step 3: Create Multiple Target Customer Profiles • In most startups, the product is looking for a target segment – Usually begun with a technology bias – Were this not true, far fewer startups would fail – Even when the idea is based on a target segment, the segment is initially too big to be an effective beach head • With little useful and specific market data available, turn to building a profile of the potential customer – “informed intuition” rather than “analytical reason” • Be wide and ranging in your approach – Current early customers, lost deals, profiles in related categories, your own experience, ask friends and family for ideas, brainstorm, look at related companies and their history, read analyst reportsSlide 81 Lead to Win
  • 78. Define the Prospect’s Current Problem with These Questions • What problem causes the pain or frustration? Sketch a scenario in which the customer attempts a task and feels pain as a result. • How does the customer try to cope with the problem now? • What is causing the problem? What is interfering with a speedy solution? What goes wrong and why? • How much money is the customer losing, either in additional costs or lost revenue? Quantify the pain. • Who is the individual who feels the pain first and how does it “waterfall” up or down? • Who else feels the pain? The customer’s customers? Suppliers? Partners? Investors?Slide 82 Lead to Win
  • 79. Profile Example – Pain Scenario Characteristic Their Pain Your Solution Fleet mgrs misplace 5% of loaded produce reefers due to admin and Frustration Point driver problems Avg. value of lost or spoiled Costs cargo is $250K -- $12 million total for avg carrier + high ins. rate Insurance pays 75% of value Current Solution and rest is written off as tax loss. Some use cell to check on drivers. Produce distributors; supermarket Stakeholders owners; truck drivers; insurance company; carriers Many trailers being managed at once: Inadequate admin techniques; Cause careless reporting by drivers; late loadsSlide 83 Lead to Win
  • 80. Align Your Product to Their Problems With These Questions • Define the customer’s changed situation – How does the customer approach the task differently? – Is the pain removed or is it lessened. For whom? – Are new problems introduced as a result of your solution? – Is your solution better than any other way the customer had of solving the problem? Why? – How does your solution remove the pain? – How much money will the customer gain as result of your solution, either as cost savings or increased revenues? – Can you determine a time frame for payback?Slide 84 Lead to Win
  • 81. Profile Example – Solution Scenario Characteristic Their Pain Your Solution Fleet mgrs misplace 5% of loaded By using GPS, fleet mgrs produce reefers due to admin and can locate trailers before cargo Frustration point driver problems every year spoils Avg. value of lost or spoiled Cost for avg carrier including services is Costs cargo is $250K -- $12 million total for $3 million, providing customer payback avg carrier + high ins. rate in one quarter and savings of $10.5 M/yr Insurance pays 75% of value Current solution and rest is written off as tax loss. Problem is solved easily Some use cell to check on drivers Produce distributors; supermarket Distributors incented to use GPS-able Stakeholders owners; truck drivers; insurance carriers; driver morale improves; insurance company; carriers easier and cheaper to get; insurance push? Many trailers being managed at once: Root causes difficult to eradicate cause Inadequate admin techniques; based on human error: GPS-enabling Cause careless reporting by drivers; late loads solves problem faster and cheaper than changing behavioursSlide 85 Lead to Win
  • 82. Create Groups According to Similarities • Be creative and open in building profiles BUT • Unless you have unlimited time and money, rationalize all the profiles into segment groups – Out of 50 or so profiles, about 10 segments will likely coalesce – Look for key similarities • Vertical markets • Common problems and pain points • Similar economic impacts • Similar groups of usersSlide 86 Lead to Win
  • 83. Topics • Segment the Market • Create Segment Profiles • Identify Critical Flaws • Assess Variables • Select Target SegmentSlide 87 Lead to Win
  • 84. Identify Critical Flaws • Upon completion – You will know about • What the binary criteria are for success in a segment – You will know how • To assess segment customer profiles against each criteria • To eliminate immediately segments in which you stand little chance of successSlide 88 Lead to Win
  • 85. Step 4: Assess Profiles Against Critical Flaws • Assess each profile against 4 key criteria that can “make or break” your chance of succeeding in that segment • Ask and answer a series of questions and rate the answers on a binary scale of yes or no. Include a sentence or two on why. • Eliminate any that fail and set aside all related segmentsSlide 89 Lead to Win
  • 86. Do They Have a Reason to Buy? • You may think it’s great, but will the customer? • Is the financial impact of the problem severe enough to drive the need of a solution – There are lots of problems that pragmatists will live with rather than take a risk that could have worse consequences • Of all possible ways of solving the problem, is yours the obvious choice from the point of view of – Total cost – including “whole product,” installation, services, training and adoption costs – Speed to implement – Ease of use and adoption – Maintenance and support – Stability of technology and companySlide 90 Lead to Win
  • 87. What Do They Actually Need to Buy to Solve the Problem? • Is it practical to deliver the “whole product”? • Do you have the right partners to deliver the “whole” product? • How well established are those partnerships? • Can you establish the right partners and be productive with them in the time frame needed to enter and dominate that segment early and fast? • Who do you need to partner with and is it reasonable to assume that they will come on board with you?Slide 91 Lead to Win
  • 88. Who Else Can They Buy From? • Has someone else beat you to the beachhead? – If yes, reconsider or develop a second-entry strategy • Are there barriers to entry that protect you in that segment for sufficient time? • Are there players in related product categories that can move into your space quickly? • Is there potential confusion among categories within similar segments? • Is the segment characterized by a “single vendor” approach?Slide 92 Lead to Win
  • 89. Can They Buy? • Does the segment have a ‘target customer’ who has buying power? – Is there a single person who feels the most pain? – Is that pain tied to revenue loss or additional costs? – Does the buyer have a budget for the “whole” product? • Is the financial pain felt by someone with buying authority? • Trying to fix bad segmentation with smart selling doesn’t work – Lots of effort spent identifying and winning sponsors and champions – Endlessly long sales cycle – Uncommitted budgets – Uncommitted management ready to cut projects on a whimSlide 93 Lead to Win
  • 90. Binary Answers to Critical Flaw Criteria Segment: Produce Reefer Location for Carrier Companies Criteria Yes No Reason 5% of trailers misplaced, 3% stolen Compelling reason to buy √ Carrier liable for both, loss per avg. $275K/yr; customers punish carriers with high loss Deliver whole product √ Make entire receiver; partnership with mounting and antenn partners; have installation partners Buyer with economic Risk managers and CFO feel greatest financial power √ pain; drivers docked for misplacement Cell-based communications services provide No competition √ location within acceptable margin of error where service availableSlide 94 Lead to Win
  • 91. Topics • Segment the Market • Create Segment Profiles • Identify Critical Flaws • Assess Variables • Select Target SegmentSlide 95 Lead to Win
  • 92. Assess Variables • Upon completion, – You will know about • What assessment variables are important to selecting a target segment beachhead • How each of those variables can affect your success – You will know how • To rate each customer segment profile against the assessment variables • To determine your ability to overcome shortcomings or change your ability to satisfy the requirementSlide 96 Lead to Win
  • 93. At What Price Will They Buy At? • Can you deliver the “whole product” at a price that is consistent with the segment’s budgets? • Is the price commensurate with the customer’s financial loss? • Is there enough margin in the price to ensure all levels in the channel are adequately compensated? • Can you deliver the “whole product” at a price that will win share rapidly without going under?Slide 97 Lead to Win
  • 94. How Are They Going to Buy? • Do you have the right sales channel to reach that segment? • If not, can you establish timely relationships with the right channel partners/ • Do you have any expertise with the segment or the dominant vertical in the segment? • Do you have or can you obtain someone with the right rolodex to take you into the segment quickly? • Can you compensate everyone in the channel sufficiently to keep their interest and loyalty?Slide 98 Lead to Win
  • 95. Why Should They Buy From You? • Is the segment reachable? – Is there a set of communication vehicles that can reach them? – Do you have the resources to market adequately? – Will the channel participate in tactical marketing? • Do you have any credibility with this segment? – Can you deliver a “whole product” and can you commit to it? – Can you build credibility fast enough to hold back bigger players in associated product categories? • Can you talk their talk?Slide 99 Lead to Win
  • 96. Is the Segment Small Enough? • Large segments are usually heavy with competition • Choose a segment that is small enough for you to penetrate to a critical mass and dominate – This means capturing 50% of market share measured as dollars and units – Can you capture 50% with the resources available to you? – Can you service 50% without burning out? • Choose a segment that is large enough to meet your revenue projections – If 50% of the segment won’t meet forecast, dump itSlide 100 Lead to Win
  • 97. Will the Segment Survive? • Is the segment at risk for its own survival? • Are there signals that the segment is failing in terms of – Product category adoption rates growing or failing – Financial stability – Competitive saturation • Can you estimate the remaining lifespan of the segment? • Does the segment exhibit innovation characteristics or is it know for technological conservatism?Slide 101 Lead to Win
  • 98. Can You Identify Lead Customers? • Does the segment have identified buyers who have a history of innovation and early adoption? • Have they deployed their early buys or kept them in the lab? • Do they have the support of their organizations? • Have they a history of championing early technologies publicly? • Is there one or two organizations that feel the pain more acutely? • Will they participate in the design, development, test process? • Are they open to an over-time payment model? • Do they have credibility among potential investors?Slide 102 Lead to Win
  • 99. Are There Adjacent Segments That You Can Jump To? • Beachhead segment is the “head pin” in the bowling alley • What close segments are a natural segue? Refer back to the application trees. • Are they likely to still be available? • At what point can you begin to attack the next segment? • Are there enough close segments to achieve breakeven and profitability over time?Slide 103 Lead to Win
  • 100. Step 5: Rate Remaining Segments According to Variables • Rank each variable on a scale of one to five • Rank all segments and eliminate weakest 50% – Use totals as an overall indication – Weight variables according to your flexibility or ability to change your situation • e.g. software has much more flexibility on pricing • e.g. no existing channels but ability to establish the right partnerships • e.g. offered technology will increase segment stability • Repeat ranking exercise until top one or two segments revealedSlide 104 Lead to Win
  • 101. Ranking Example Segment: Produce Reefer Location for Carrier Companies Criteria Rank Weight Final Reason No established price, dev is capitalized, Price 5 5 25 direct sales, 90% software margin, 1 year runway Preferred direct model, upfront cost Channels 4 4 16 high, greater risk, no proliferation, total control Segment size large to achieve 50% Segment Size 5 1 5 penetration and domination; no ability to change; potential to narrow segment Trucking industry conservative; satellite Innovators 5 2 10 technology accepted; 2 known innovative risk managers Totals 56Slide 105 Lead to Win
  • 102. Topics • Segment the Market • Create Segment Profiles • Identify Critical Flaws • Assess Variables • Select Target SegmentSlide 106 Lead to Win
  • 103. Select a Target Segment • Upon completion, – You will know about • The final tests before selecting a beachhead • The importance of a SWOT analysis • The importance of a financial goal • The importance of performance goals • The importance of assessing risk of failure – You will know how • To apply a SWOT analysis to the target segment • To establish performance goalsSlide 107 Lead to Win
  • 104. Step 6: Rate Final Segment Against Final Criteria – Can You Win It? • Undergo a SWOT exercise in relation to segment – Involve all internal stakeholders and decision makers – Rate chances of success against corporate weaknesses and strengths – Assess segment honestly against core competencies • Technology bias • Marketing ability • R&D ability • Build one and two year financial models to assess revenue potential, profitability, share, growth • Can you live with the risk of failure – What is the cost of failure? – Can the company survive?Slide 108 Lead to Win
  • 105. Establish Performance Goals • Set in quantifiable measures – Define the performance dimension e.g. absolute share, increase in share, revenue – Define the index – units, dollars, percentage – Target – 50% share, $1 million in revenue, breakeven – Time – within a year, a quarter, a month • Ensure that goals are compatible and not mutually exclusive – High share goals do not live with high profitability – High revenue goals do not live with short time frames – Taking competitor’s share does not live with increased penetrationSlide 109 Lead to Win
  • 106. And the Winner Is!! • Critical that everyone buys in • Deal with subversion early and quickly • Promote a “disagree and commit” philosophy • Establish short-term tactical goals to ensure meeting overall product performance and corporate goals • Begin planning for the next segment as you attack the beachhead – Understand sooner rather than later your next steps should you win – And should you lose • Speed is critical to keep competition at bay and win mindshare and real shareSlide 110 Lead to Win
  • 107. Day 3 opportunity reviews Day 1 takeaways October 25, 2011 Tony BailettiSlide 111 Lead to Win
  • 108. Day 3 opportunity reviews • Criteria and process to assess opportunities set by representatives of nine LTW Strategic Associates – Part A - scoring 1. CUSTOMER VALUE 2. COMPETITIVE 3. PARTNER VALUE – Part B - opportunity’s readiness for Day 4: Operations – Part C - substantive feedback to opportunity proponents • Scoring of 1/2/3 – Green: OK – Yellow: OK with a specific action – Red: Considerable work still required • Reds are not invited to join Days 4-6Slide 112 Lead to Win
  • 109. Reviewers 1. Consumer products 3. Internet services A • Line Brabant (LINE • Hanan Anis (uOttawa) International) • Mark Antaya (Investors) • Chris Cope (City of Ottawa) • Rob Collins (YearOne Labs) • Dan Istead (Fed Government) • Llynne Plante (IRAP) • Christine McCrady (RBC) • Jonathan Wells (Carleton) 2. HW & SW products 4. Internet services B • Peter Carbone (PJCI) • Elizabeth Gilhooly (Nuvance) • John Fielding (OCE) • Claude Haw (VentureCoaches) • Farzi Khazai (Tech Gemini) • Harriet Waterman (IRAP) • Raina Sharma (BDC) • Michael Weiss (Carleton) • Stoyan Tanev (U Southern Denmark)Slide 113 Lead to Win
  • 110. Reviewers 5. Services 6. Special • David Hudson (Carleton) • Diane Isabelle (National • Saad Bashir (City of Ottawa) Research Council) Fiona Gilligan • Karen Letain (ETIS • (Fiona Gilligan) Technologies) • Sophia Leong (Industry • Steven Muegge (Carleton) Canada) • Ian Scott (City of Ottawa)Slide 114 Lead to Win
  • 111. Process • Presentations are made only to panel of reviewers • 20 minutes is allocated to each opportunity. 20 minutes is a hard limit. • Lead reviewer is responsible for: – Distributing / collecting Opportunity Assessment Forms – Assigning ID codes to reviewers to guarantee reviewer anonymity – Keeping time and smooth running of the reviews – Ensuring forms are properly completed – Dealing with issues – Improving the opportunity assessment process • Each reviewer rates each opportunity independently before the next group/individual is allowed into the room • If reviewers and opportunity proponents wish to exchange cards, arrange follow ups, etc.; they should do so during lunch or the social and not take time away from the assessment processSlide 115 Lead to Win
  • 112. Suggested time allocation • Up to Review Panel • We suggest – Set up time and niceties: 2 minutes – Presentation: 10 minutes – Q & A: 5 minutes – Day 3 Opportunity Assessment form completion: 3 minutesSlide 116 Lead to Win
  • 113. Day 1 takeawaysSlide 117 Lead to Win