CUSTOMER BENEFITS Lower Cost Higher capacity factor Remove tower and yaw system components Smaller rotor Permitting Less noise Less visual impact Lower environmental & animal impact Simpler O&M Smaller footprint Rapid deployment in rough terrain Easier logistics and maintenance access
The first biological symptoms of disease appear 2-4 days before cattle look visibly ill. We believe that Meater will allow faster quarantine of sick animals. Based on our forecasts, detecting disease two days earlier can reduce the percentage of cattle that get sick from 20 of a herd to 15%. Faster detection also lets feedlot operators treat sick cattle earlier. There is not as much research about this, but we think faster treatment can reduce the percentage of ill cattle that die from 25% to 17%. All told, this is a savings of about $27 per cow. Intially, we’re looking at selling Meater for about $7 per cow, and you can reuse it four times.
As you can see, FreeFrom exists as a core creative technology with many avenues of evaluation and production output. Whether your goal is ideation, design or animation FreeForm is the most powerful and easiest method for direct modeling available. Please feel free to sign up for our interactive quickStart sessions so that you can experience firsthand and appreciate what direct modeling and 3DTouch is all about. A workflow pod is located at the other side of the booth where we can answer questions, show you more examples and ideas, as well as introduce you to some of our technology partners. In addition there are several other pods located around the booth touching on (ouch!) different features within our FreeForm software. Enjoy your visit to our booth and thank you for your time!
Efficiency&quot; on the x-axis, which encompasses actual energy efficiency (liters produced per energy input) but also that this leads to reduced cost by reducing the required # of solar panels and also increases mobility because you dont have to pack up so many. On the Y-axis, he had &quot;reliability.&quot; Mainly capturing the lack of battery.
Testing Assumptions – a/k/a “experimenting” can be lots of fun – let me give you the example of a student team that had a new idea that they were very excited about – but most of the rest of us thought was crazy. “Inspired” was the team’s name – the concept was a new type of food truck – actually coffee truck to be more precise that played on people’s emotions as well as producing high quality coffee. <blank> makes me smile. As you can seed (or maybe your can’t) “Seeing a kid hold a door for an elderly women,” “”coffee,” “kites,” “people truly having fun,” “nothing right now ,” “puppies,” “name of person,” “puppies,” “her smiling,” “Lion King,” “Harry Potter,” etc. The tried again to confirm with Field Test 2 of ”Before I die … <>” same results
Your Solution Explain your solution (“pencil sell”) (What) Quantified Value Proposition (How Much) Unique Selling Proposition (Why You) Product technology section! What does LiveDoc do? How does it work (screen mock up) What is the net result?
Bill Aulet, Senior Lecturer and Managing Director Trust Center for MIT Entrepreneurship Monday January 25, 2011, 2:00 – 3:30 pm One Amherst Street, Room E40-160 Cambridge, MA 02142-1352 USA phone: +1-617-253-8653 fax: +1-617-253-8633 e-mail: firstname.lastname@example.org http://entrepreneurship.mit.edu A Systematic Approach to Building the Foundation for a Great Company Entrepreneurial Product Marketing Implementation Fundamentals
Module Summary Systematic Approach to Building the Foundation for a Great Company or “24 steps to help you dramatically increase the odds that you will build a product that the market wants and will be highly profitable to you as well”
All of the following analysis must be done by deeply engaging with potential real customers with an open mind (not selling to them) and carefully listening to what they say and what is really meant. Getting strong relationships with potential customers and really understanding their needs and the value you can bring them is the real gold in this process. Of course you need strong analytic skills and a fast clock speed to get this done but usually it is the last of on going honest customer dialogue that undermines the value of this process.
Systematically identify and evaluate the top market opportunities . This generally is a long process but it is important to not let it go on indefinitely. There will likely be many paths to success and it is important that you choose one but not necessarily the perfect one. There likely is no perfect one. It is better to try a market and find out if it will work out and learn that it will not rather than be a state of “analysis paralysis”. Set a reasonable time frame and aggressively explore multiple markets in an exploratory fashion (not a sales manner) with primary open mind market research techniques.
After a sufficient period of evaluation, choose one opportunities and pursue it with great focus. It does not have to be the biggest opportunity or clearly the best opportunity, but it does have to be a beach head application with sufficient size, profitability and significance that when you win it, it will produce positive cash flow for the venture and position the company well for the future.
Develop a well defined Target Customer profile . This describes in the market segment you have chosen to attack and can be more general. It can include important demographic information that will help you develop the market sizing calculation in the next step.
Source: ComScore Media Metrix Source: Juniper Research, “Demographic Profile of Young Affluents”
Target Customer Profile Example Customer profile Ride Sharing Gender Male, female Age 17-40 y.o. Region Moscow (during initial growth stage) Occupation Student, young professional, internal migrant, middle management Social level Medium, high Characteristics Has a smartphone User category Early adapters, technologically advanced Other Active users of social networks, outgoing personalities
Make a first pass TAM (Total Addressable Market) calculation on this first market. This is how much annual revenue there is available to you for your product if you achieved 100% market share. This is only for your first “beach head” market which you should be able to do with some clarity. The strong preference is for a bottoms up type of analysis where you can show from your primary market research how many of the potential customer you have identified and then extrapolate this to the broader market. Complementary to this but much less compelling on its own, is a tops down analysis where you are working with market analysis reports and extrapolating without direct interaction and validation. Often, very important subtleties are missed in tops down analysis.
TAM Sizing Example Anywhere, Anytime, Anyway 2.5 Million Joonmedia, Bada, Dabdate Name: Amy Hyemin Moon Age: 28 Nationality: Korea Residency: USA Hobby: Watches ave. 2 hrs per day Korean drama through illegal websites Note: Not satisfied with the illegal websites’ services and its quality of contents 0.7 mil. 1.0 mil. 3.4 mil. 4.5 mil. 1 mil. 1 mil. 0.7 mil.
In the US, there are 2 Million women like Michelle
Women in the US 157 M Pregnant Annually 6 M First Time Moms 2 M Photo: visualphotos.com Share via social media Technology Savvy Want convenience Connect with family and friends Extend her excitement Share monthly pregnancy photos Intuitive Comfortable to wear Update her care network Capture pregnancy experience Use mobile “apps” to track health Indications Low maintenance Real-time feedback Easy to use Connecting mommies with their babies in T ouch
Build a Persona that very clearly and viscerally visualizes the target customer decision maker/end user to all involved. The Persona should not just be a factual description of the buyer but also social and emotional factors such as what incents them, their priorities, what they fear, what industry groups they belong to and other systemic factors that will influence the purchase and adoption of your product. Your persona should be a real person but also representative of the broader market so that if you meet the persona’s need, the others will be equally pleased.
Persona Example: Good enough? 18-40 years old Urban (Europe, Russia) Middle manager Single Brand conscious Outgoing Weekend traveler Open minded University degree Adventurous Budget Boutique Accommodation anotel
Persona Example: eGallary 33 years old Male Lives on Kutuzovskiy Prospect in Moscow Recently moved into his new flat with his girlfriend Works at VTB Investment Banking Current salary is USD 10.000/ month Loves Strelka and Ginza Projects In winter he loves skiing in Austria or France In summer he travels around the whole world Loves esquire,Forbes, afisha, pop, GQ “ I am Vlad” Vlad needs some paintings for his new apartment. Little time He likes to try out new things and talk about it He wants to be unique Timeless art. Less time, more art.
Develop and step through in detail an illustrative and pretty standard Use Case for the need, acquisition and benefits of your offering. It is extremely important to go all the way through a use case with your target customer of first how your product/service will work for the target customer. How exactly does it fit into the value chain? What are the key interface points? Why exactly would they acquire it? What barriers to adoption might arise? It is also important to extend your use case to not just how the target customer would use your product but then to the wider acquisition and post installation support process.
Make a first pass high level Product/Service specification . This does not have to have details and it should be focused on the customer perspective. A good method to achieve this goal is to make a product brochure that will show the customer what you are offering which highlights the features which translate into function and then most importantly benefits. Always translate what you are doing into benefits for the customer in the brochure and then validate them on an ongoing basis. It should be very visual and clear as to what the offering is but pricing should not be included at this point. This specification will obvious change over time and be refined but this will be a good starting point. If the product is software or a web site, first draft screen storyboards should be made showing how it would work. If it is hardware, then pictures or diagrams can be used. The key here is that you have something concrete for common understanding to test and refine as you continue through the process. The more iterations you can do within your target customer, the better.
High Level Product Spec Example MWFS® filter tanks Automated control system Inflow piping (from main water circuit) Pump Outflow piping (back to main water circuit) 1 City water for backwash 2 2 5 3 4
Build, illustrate and validate with multiple target customers a Quantified Value Proposition for your offering. This is done by determining the highest priority for the customer and then show the current state, the possible state with your product and then the difference between the two which will be your value proposition. You have to be sure that there is no decrease in the other key priorities for the customer that will offset the benefits that you create.
Algorithm that correlates data to positive response
in T ouch At the moment, Michelle can use… Photos: gadgetrivia.com mothering.com sheknows.com parents.com allvoices.com Heart-rate monitors Intuition Professional Ultrasound Consult “Dr. Google” With , Michelle may… read to her baby, then receive feedback. in T ouch in T ouch Connecting mommies with their babies in T ouch Facilitating intimacy and providing reassurance.
Quantified Value Proposition Example VALUE PROPOSITION
SIX times longer duration
FIVE times higher effectiveness
At least THREE times lower quantity applied.
Quantified Value Proposition Example Current process Process w/ Meater Loss to disease: $63K Loss to disease: $36K $27 per calf
Quantified Value Proposition Example Tech Package Design Ideation Phase Looks like Works like Commercialization Development Times 4 Weeks 4-14 Days Model Types: 2D Drawings 3D CAD Models 3D Hand Models 2 Weeks Engineering Manufacturing Rework 2 - 3 Months Tool cavity development - analog CNC Software CNC Milling 4 Weeks** Could be lower with FreeForm 4 Days Model Types: FreeForm Native File 3 Days Engineering Manufacturing Rework 3 Weeks Digital tool cavity via STL CNC FreeForm Files CNC Milling 16 Weeks Total Development Time 8 Weeks** Total Development Time Today’s Process FreeForm Process 50% Reduction in Time FreeForm 70% Reduction in Time 70% Reduction in Time US Design Firms Asian Tool Suppliers
Now that you understand your customers well and you have a use case and value proposition, make a list of the Top 10 Target Customers that will benefit from your product after you sell it to the first one from the persona you described above. Hopefully you have already spoken to these customers and you have some level of commitment from them to acquire, test or pilot your product once it is available.
First 10 Target Customer Example Carolina Froberg 20 Sweden Leo Cohen 23 London Chiara-Livia Gerer Brazil/Portugal 21 Naomi-Chaya Tsion 25 Israel Andrea Wahlgren 20 USA Chan Ny Sih 26 UK Ronnit Wilmersdoerffer 22 Germany Oli Moran 25 UK
First 10 Target Customer List Example Project Owner – Location Total MW Installed Name/Contact Info (withheld) Contacted 1 Waste Management – City Name, State 9.8 Site owner Y 2 Casella Waste Systems – Morrisonville, Clinton County, NY 4.8 Site owner Y 3 Innovative Energy Systems, Inc. Waterloo, NY 18.4 3 rd Party Oper. N 4 Waste Management – City Name, State 16.8 Site owner Y 5 Waste Management – City Name, State 16.5 Site owner Y 6 Innovative Energy Systems, Inc. City Name, State 12 3 rd Party Oper. N 7 Waste Management – City Name, State 9.8 Site owner Y 8 Waste Management, City Name, State 7.9 Site owner Y 9 Fortistar Methane Group, City Name, State 7.34 3 rd Party Oper. Y 10 Fortistar & Waste Management, City Name, State 6.9 3 rd Party Oper./Site Owner Y
Determine what you “Core” is – that being what is it that will give you sustainable competitive advantage and you will protect at all costs. Your core is what you invest your resources into to do better than anyone else and it is what will give you your unique selling proposition over time if not from day 1. It can be IP, special capability, market share, access to key resources (e.g., vendors, buyers, markets, partners), brand, costs, or other. This is what will give your company a high valuation as well.
Define the DMU (Decision Making Unit) for the target customer which is the people who will be involved when your product or service is acquired. Carefully define each party and the nature of power in the acquisition process (e.g., economic buyer, influencer, veto power, user, primary, secondary). See example provided.
DMU Example Customer Money Veto Influencer CUSTOMER: Facilities Manager
Technical decision maker
Makes it happen
May try to substitute for cheaper solution
Asks for competitors’ bids
Designs and recommends
Powerful prescriber in new facility with uneducated customer
Technical knowledge but not in water
Facilities manager IT orga-nization Business lines Other Internal Corp. Engineering
Define the DMP (Decision Making Process) for your product in this market. Map out the various steps with the different players and note the roles and various approval/authority levels for each person. Be sure to understand and be realistic about the time frame involved for each step and give a reasonable (80% certainty) range. Be sure to account for the budgeting process if your product/service requires this. What does this analysis tell you?
Contact CIO to get approval and gain access to internal company specialist
Contact internal company specialist / green czar / Corporate Facilities Manager to influence Engineer
Contact design engineer to work together in definition of water system, give specifications, and have them prescribe MWFS
Contact general contractor and Purchasing to ensure purchase and proper installation
Contact Facilities Manager and help him sell to Data Center Manager
If necessary, contact CIO to get approval and gain access to Data Center Manager and internal company specialists
Contact Facilities Manager / Data Center Manager/ Purchases to ensure purchase of our product and proper installation
Retrofit project Lead generation Access to influencers Access to design engineers Design phase Construction phase: actual sale to contractor Installation 1-2 months 2-4 months 2-4 months 6-12 months 12-15 months 1 month Lead generation Access to facility manager Access to influencers Negotiation with Purchases and Budget Owners Installation 1-2 months 4-6 months 2-4 months 2-3 months 1 month
Refine the TAM for the initial market and develop a broader TAM that includes the follow on markets. The TAM for the follow on markets does not have to be as certain and specific as the first market. It should also be noted again (as was in the introduction) that at any time as more information becomes available, the entrepreneur should go back when it is material and update other sections and not be constrained by this simple linear framework.
Broader TAM Sizing Example MARKET EXPANSION STRATEGY Sunscreen for Extreme Athletes Sunscreen for daily use Skin Rash Anti-wrinkle Heat Burns Long-lasting cosmetics Hair loss
Prove that the “Dogs Will Eat the Dog Food” at some price – that is prove that this is not just something you think is a good idea but also prove that the target user will procure (at some price) and will happily adopt your product/service and tell others about it creating WOM (Word of Mouth). This is not only to prove that the users will use your product but also that they will pay for your product. Beta test their wallet as well as Dharmesh Shah says.
Proof Dogs Will Eat Dog Food Example Anywhere, Anytime, Anyway Source: BetaStatCounter.com Private Beta Phase Public Beta Phase
Returning Visitor : 86.38%
New Visitor : 13.62%
Period: Nov. 1 – Dec. 7
Source: ODK Google Analytics
“ This is awesome! Many thanks for your service” by Jun Kim, California
It is good at this point to revisit your Uniqueness . What is it that makes you unique compare to the alternatives? Always consider that one of the most compelling alternatives is to “do nothing” and how will you overcome this? Considering the alternatives including competition, why is yours the best from their vantage point (not yours)? Hopefully, this relates back to your Core.
Determine the appropriate Business Model to capture value for the value you have created. Make sure you look at this decision through the customer’s eyes as well as your perspective. Will it be one time charge, subscription, freemium model, advertising, usage, transaction fees from third parties, consumables, etc. This is an important decision to make before you make your pricing decision. Think it through and as a new player, you have more options but once you start, your options will decrease. If there might be any question on your business model, then develop a flow of funds map.
Now that you have a business model, it is time for initial Pricing decisions. Again, always look at this from the customer’s perspective as well and not just yours. Consider competition as well when determining your pricing strategy.
The pricing strategy for the thin-film introductory product line is set at $100 per unit. This pricing is weighted against typical window tinting costs per vehicle that the DMU may be more familiar with. It will be difficult to initially convince the DMU that they should pay substantially more than the cost of tinting which is what he will associate the product with (even though it functionally is very different). Initial adoption will prove to be the hardest for our company. Therefore, our sales team will be empowered to provide some discounts to pilot customers. This will be critical to achieving a successful pilot launch and the follow-on WOM marketing effects, discussed above. A pricing strategy of $100/unit (nominally) would lead to sales of ~$17K per sale using the MBTA as our pilot case and assuming they purchase about 20% of the fleet turnover at a time. There would be multiple sales per customer expected per year.
Step #18: Life Time Value Of An Acquired Customer (LTVOAC)
Determine now the LTVOAC (Life Time Value of an Acquire Customer) by making assumptions and doing a calculation armed with your business model and pricing decisions. While these might change, it is important to see a potential path to success and doing this calculation will be important to getting you into this mindset. You will monitor this number over time and it is very important. This will be your first calculation of this number.
The long-term value of an acquired customer is estimated to be about $435K per municipal fleet. This is driven by the fact that once a fleet adopts the Helios technology, there is a continuing revenue stream to update the new fleet vehicles. As the technology has already been proven successful, follow-up sales take minimal effort. We estimate that the initial sales will generate about 5 years of follow-on sales to the municipal fleet.
Map out your Sales Process including channels. It is very important to understand your short, medium and long term sales strategy and vet this with experienced professionals in the industry. This is often overlooked and will have a huge impact on Cost of Customer Acquisition calculation in the next step.
Map of Sales Process Example Short Term Long Term Medium Term
Direct Sales (100%)
All end customers w/ focus on strategic accounts in target market This would continue until Word of Mouth becomes significant and product is matured and proven. Then as move from demand creation to demand fulfillment …
Direct Sales (50%)
Selected Regional Exclusive VARS (50%)
Medium and small accounts in target market This would eventually evolve to more of an online commerce as the product becomes the standard and the product line expands & new markets are tested – estimated in year 3
Direct Sales (25%)
Top 50 accounts & new market
Selected Regional Exclusive VARS (40%)
Accounts below Top 50 & non-core markets
Thru Web Site & Direct Telemarketing (35%)
All customers in core market (with commission to VARS & Direct Sales)
Very importantly now, you will do your first COCA (Cost of Customer Acquisition) calculation to determine all the sales and marketing costs it takes to get a new customer. This does not include fixed costs or costs of goods sold. It is simply all the sales and marketing costs (including those customers who you unsuccessfully try to sell to) to gain a new customer. Don’t worry if you have it completely correct on the first pass – you will refine it over time – but make your best guess and understand what you believe are the key drivers. Also note how it will evolve over time, hopefully coming down, and what are the drivers of this important expense reduction.
We expect that the cost of customer acquisition (COCA) will be heavily dependent on the in-house sales force cost. The estimated fully burdened cost of a salesperson is expected to be approximately $150K per year. The COCA is estimated at $13K per fleet. This is based on an assumption of 47 weeks per year of selling, 2 customer visits per day, and an average of 8 visits to demo product prior to any sale.
Identify customers through active deal and mobile advertisers.
Leverage inside sales reps with freemium trials.
Target 3 deals per month/rep growing over time.
SEO, trial and freemium model yields lower COGS than Yodel, Reach Local, Groupon and other sucessful local ventures.
SEO Discovery via Local Listings Database and Business Information Page Free Online Assessment via Email Registration Inside Sales Free Offer to Registered Email and Active Groupon/LS campaigns Free Offer requires credit card registration. Converts to SAS subscription if only if success criteria is hit. Upselling to Advanced Local Marketing Services Collaborative Marketing for Local Business COCA/Volume LTV
What key assumptions are you making at each stage? List these and discuss them with your team – the big ones. Because this is a new business, you will be making certain assumptions that are logical to you but you haven’t yet prove they are true. The assumptions should be unpacked so each can be identified separately and tested as such. This is an application of the scientific method to your startup.
How can you quickly, efficiently and effectively test these big and important assumptions ? Once you have identified these key assumptions, then the next action item is to test them and validate, refine or invalidate them in small experiments before you spend a lot of your precious time and resource to implement them. With today’s digital tools and good primary market research techniques, this is more possible now than ever.
“ There is a much better way to do polling today than they are currently doing that will be much more accurate at a fraction of the cost”
Results from Test Final Polling Percentage New Hampshire October 24 After interviewing pollster, realized real gold was recruiting online hyper-targeted panels; CEO of polling firm called this the “Holy Grail”. An exciting pivot was in order. 18-29 18-29 Ind 30-49 30-49 Ind 50+ 50+ Ind Total Model 8 4 23 12 37 15 Romney 0.044 0.019 0.018 0.047 0.206 0.094 Cain 0.031 0.022 0.055 0.04 0.13 0.08 Perry 0.023 0.017 0.05 0.032 0.029 0.044 Romney2 3.591837 1.310345 3.365854 4.739496 20.88219 6.46789 40.35761 Cain2 2.530612 1.517241 10.28455 4.033613 13.17808 5.504587 37.04869 Perry2 1.877551 1.172414 9.349593 3.226891 2.939726 3.027523 21.5937 Second Generation Advertisement New title to more explicitly demonstrate support
Example of Testing Key Assumptions Field Test Field Test II 12:00 PM 8:00 AM 8:00 AM 12:00 PM
Build the specifications for your MVP (Minimum Viable Product) to get started. In line with the previous item of testing as quickly and as cost effectively as possible in a scientific methodology mind set, keep things very simple to start with increase your odds of success even if it is not as exciting to you or your stakeholders to start with. Get something in the market that is concrete so you can start the product feedback and iteration learning cycle with your target customers.
MVP Example: LiveDoc We answer this question for $7.99 . Video chat Upload supporting images Text chat LIVEDOC reassurance when you want it
Develop a longer term Product Plan to evolve your product/service and markets over time so that the MVP is the first step on a plan for much broader success. This plan is subject to change as new information comes in so don’t sweat the details too much or spend too much time on it but do have at least a general vision of how you will make this a great company.
Mapping the Market Segments Polys NURBs Rapid Proto Sculptural Regular Stylized Form Types Used Downstream Connection D.C.C. Industrial Design Early Market V1/V2 V3 V4 V5?