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Customer Development/Lean Startup 092609 class 7 and 8
 

Customer Development/Lean Startup 092609 class 7 and 8

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    Customer Development/Lean Startup 092609 class 7 and 8 Customer Development/Lean Startup 092609 class 7 and 8 Presentation Transcript

    • Customer Development in the High Tech Enterprise Customer Validation Parts 1 & 2 September 26 2009 Steve Blank sblank@kandsranch.com 9/25/09 1
    • Agenda ! Logistics/Questions ! Review ! Cases: HP Kittyhawk, Wildfire ! Customer Validation Customer Development in the High-Tech Enterprise Fall 2009
    • HP Kittyhawk 3
    • HP Kittyhawk Questions ! How well do they execute product development? ! How competent was the development team? ! What Market Type could they chosen? Which did they choose? ! What revenue curve did that choice result in? ! What revenue curve did they commit to? ! What were the consequences? Customer Development in the High-Tech Enterprise Fall 2009
    • Kittyhawk Case ! Classic “Innovators Dilemma” " New Market innovation in a large corporation " Needs large forecasts to justify development budget " Unrealistic because its unpredictable and always slower growth " May steal resources from mainstream products Customer Development in the High-Tech Enterprise Fall 2009
    • Today: Customer Validation Customer Customer Customer Scale Discovery Validation Creation Company • Develop a repeatable and scalable sales process • Only earlyvangelists are crazy enough to buy Customer Development in the High-Tech Enterprise Fall 2009
    • Customer Validation: Phase 3 Phase 4 Customer Positioning Business Validation Model Verified From Discovery To Creation Phase 1 Phase 2 Get Sell to Ready EarlyVangelists to Sell Customer Development in the High-Tech Enterprise Fall 2009
    • Customer Validation Get Ready to Sell Articulate Prelim Sales Prelim Prelim Sales Hire a Align Your a Value & Collateral Distribution Roadmap “Sales Closer” Executives Proposition Materials Channel Plan Formalize Sell to “EarlyVangelists” Advisory Board Contact Sell to Refine Sales Sell to Refine Visionary Early Roadmap Channel Channel Customers Customers Partners Roadmap Develop Positioning Product Company Present to Positioning Positioning Analysts & Verify Influencers Verify the Verify the Verify the Verify the Iterate or Product Sales Channel Business Exit Roadmap Customer Development in the Roadmap Enterprise High-Tech Model Fall 2009
    • Customer Validation Get Ready to Sell Articulate a Value Proposition Inside the Building Prelim Sales & Collateral Materials Prelim Distribution Channel Plan Prelim Sales Roadmap Hire a “Sales Closer” Align Your Executives Formalize Sell to “EarlyVangelists” Advisory Board Contact Sell to Refine Sales Sell to Refine Visionary Early Roadmap Channel Channel Customers Customers Partners Roadmap Outside the Building Develop Positioning Product Company Present to Positioning Positioning Analysts & Verify Influencers Verify the Verify the Verify the Verify the Iterate or Product Sales Channel Business Exit Roadmap Customer Development in the Roadmap Enterprise High-Tech Model Fall 2009
    • Phase 1: Get Ready to Sell Phase 3 Phase 4 ! Serious preparation Positioning Business before 1st sales Model Verified " Another writing exercise " Aligning Executives Phase 1 Phase 2 Get Sell to Ready EarlyVangelists to Sell Customer Development in the High-Tech Enterprise Fall 2009
    • Get Ready to Sell ! Value Proposition ! Sales Collateral ! Distribution Plan ! Sales Roadmap ! Sales Closer ! Synchronize Execs ! Advisory Board Articulate Prelim Sales Prelim Prelim Sales Hire a Align Your a Value & Collateral Distribution Roadmap “Sales Closer” Executives Proposition Materials Channel Plan Formalize Advisory Customer Development in the High-Tech Enterprise Fall 2009 Board
    • Get Ready to Sell: Articulate a Value Proposition ! Create Value Proposition " Is it emotionally compelling? " Does it make or reinforce an economic case? " Does the it pass the reality test? ! Varies by Market Type Customer Development in the High-Tech Enterprise Fall 2009
    • Get Ready to Sell: Preliminary Sales Collateral ! Create collateral roadmap " What you need and when you need it " Supports the sales roadmap " Ensure the collateral matches the internal audiences ! Create all selling materials " Presentations " Data sheets " White Papers ! How would collateral differ by Market Type? Customer Development in the High-Tech Enterprise Fall 2009
    • Get Ready to Sell: Preliminary Channel Road Map ! Channel Food Chain and responsibility ! Channel discount and financials ! Channel Management ! How would channel plan differ by Market Type? Customer Development in the High-Tech Enterprise Fall 2009
    • Channel Alternatives Pick One OEMs System Integrators Direct Sales Force Value-Added Your Your Customers Resellers (VARs) Company Dealers Distributors Retail/Mass Merchants/Online Customer Development in the High-Tech Enterprise Fall 2009
    • Channel Diagram Book Publishing Company National Publisher Wholesaler Distributor Retailer Determine Merchandise Deliver Books Allocations Titles (from printer) Stock Books Deliver Orders Sell Books -Establish Identity Ship Books -Create Demand Dispose of Acknowledge Returns Returns Customer Development in the High-Tech Enterprise Fall 2009
    • Channel Margins Book Publishing Company Publisher National Customer Distributor Retailer Wholesaler % of 35% 15% 10% 40% Retail $s $7.00 $3.00 $2.00 $8.00 $20.00 Customer Development in the High-Tech Enterprise Fall 2009
    • Get Ready to Sell: Preliminary Sales Road Map ! Built around key insights about the selling process ! Answers " Who decides the sale? " Influencers, recommender, decision makers Where is the budget? How many sales call to the sale? To who? What is the script for each? ! Consists of: " Organization Map " Influence Map " Customer Access Map " Sales Strategy " Implementation Plan Customer Development in the High-Tech Enterprise Fall 2009
    • Early Sales EarlyVangelist Has / Or can Acquire a Budget Has Put Together a Solution out of Piece Parts Has Been Actively Looking For a Solution Know They Have a Problem Has A Problem Customer Development in the High-Tech Enterprise Fall 2009
    • Get Ready to Sell: Hire a “Sales Closer” ! Identify need for a “Sales Closer " Founders have experience “closing” business? " Do they have a “world-class” set of contacts? " Bet the company on their ability to close sales? ! If not, hire a “Sales Closer” " Do NOT hire a VP of Sales " Typical background would be a regional manager ! How does Market Type effect this hire? Customer Development in the High-Tech Enterprise Fall 2009
    • Get Ready to Sell: Synchronize Your Execs ! Product Development " Schedule " Deliverables " “Good-enough” Philosophy ! Engineering’s role in sales, installation, post-sales support ! Sales Collateral review Customer Development in the High-Tech Enterprise Fall 2009
    • Get Ready to Sell: Formalize Advisory Boards ! Advisory boards are critical in nascent stages of a startup ! To sell to industry specific customers requires an industry advisory board ! Multiple Advisory Boards " Use at different times " Different purposes Customer Development in the High-Tech Enterprise Fall 2009
    • Phase 2: Sell Phase 3 Phase 4 ! First sales Business Positioning Model ! First channel sales Verified ! Scalable and Repeatable Phase 1 Phase 2 Get Sell to Ready EarlyVangelists to Sell Customer Development in the High-Tech Enterprise Fall 2009
    • Sell to EarlyVangelists ! Contact Visionaries ! Sell ! Refine Sales Roadmap ! Sell to Channel Partners ! Refine Channel Roadmap Contact Sell to Refine Sales Sell to Refine Visionary Early Roadmap Channel Channel Customers Customers Partners Roadmap Customer Development in the High-Tech Enterprise Fall 2009
    • Sell: Contact Visionaries ! Looking for people with problems ! They are few are far between ! They need to become your cheerleaders… while paying you to do so Customer Development in the High-Tech Enterprise Fall 2009
    • Sell: Turn Visionaries into EarlyVangelists ! Very few are early customers ! Visionaries will emerge to buy an unfinished product if it truly solves a painful problem ! A lack of these early purchasers is a red-flag ! Market Type effects ease of execution Customer Development in the High-Tech Enterprise Fall 2009
    • Build the Organization Map Dave Jones CEO Karen Rogers VP Marketing Neil Garrett Suzanne Kellogg VP Database VP Merchandizing Marketing Our Potential Customer Customer Development in the High-Tech Enterprise Fall 2009
    • One Step at A Time Dave Jones CEO Ben White Karen Rogers VP Sales VP Marketing Joe Black Neil Garrett Suzanne Kellogg Dir. Sales Operations VP Database VP Merchandizing Marketing Leslie Elders Financial Modeling Our Potential Customer = in house competition Customer Development in the High-Tech Enterprise Fall 2009
    • Organization Map Dave Jones CEO Ben White Karen Rogers Roger Smith VP Sales VP Marketing CIO Joe Black Neil Garrett Suzanne Kellogg Phil Whitry Dir. Sales Operations VP Database VP Merchandizing Director IT Marketing Leslie Elders Geoff Smith Financial Modeling Financial Tools Development Our Potential Customer = issues to be addressed before a sale = in house competition Customer Development in the High-Tech Enterprise Fall 2009
    • The Influence Map Functional Technical High Executive 1 Low Customer Development in the High-Tech Enterprise Fall 2009
    • The Influence Map Functional Technical High Executive 1 2 CIO or Division IT executive Low Customer Development in the High-Tech Enterprise Fall 2009
    • The Influence Map Functional Technical High Executive 1 2 CIO or Division IT executive Low End Users 3 Customer Development in the High-Tech Enterprise Fall 2009
    • The Influence Map Functional Technical High Executive 1 2 CIO or Division IT executive Low End Users 3 4 Corp. IT staff or Division IT Customer Development in the High-Tech Enterprise Fall 2009
    • The Sales Roadmap: Starts with Influence Map Educate & Present Solution Operational Technical High Execs CIO End IT Users Low Staff Customer Development in the High-Tech Enterprise Fall 2009
    • The Sales RoadMap: Adds Access, Assessment & Strategy Access Assess Strategy Educate & Present Needs Solution Finance Product Operational Technical Mgmt High Execs CIO Sales Intro Account Meetings Strategy Corp. End IT Mktg Users Low Staff Support IT Customer Development in the High-Tech Enterprise Fall 2009
    • The Sales RoadMap Access Assess Strategy Educate & Present Sell, Sell, Sell, Sell Needs Solution Finance Product Operational Technical Mgmt High Execs CIO Sales Implement Intro Account Proposal Meetings Strategy Plan Corp. End IT Mktg Users Low Staff Support IT Customer Development in the High-Tech Enterprise Fall 2009
    • RoadMap becomes The Sales Pipeline 4. Understand 1. Prepare 2. Initial Meeting Existing Situation • Hoovers, One • Ask tough questions a) Technology Source, Web • Do Buy- In Demo 3. Qualify? b) Organization c) Competition 5. Custom Pitch • Prepare! 6. Win Over IT 7. Define Problem 8. ROI Pitch • Get NDA signed • Tech deep dive • Develop Action Plan • Prove the Value! 9. Exec Session • Set expectations for this meeting early on. 10. Solution 11. Formal Pricing 12. Negotiate Session Proposal • Sales • Detailed Tech discovery • 13. Close! • No surprises! • Finance • Support Customer Development in the High-Tech Enterprise Fall 2009
    • Sell: Sell/Refine Channel Roadmap ! Early channel partners need to be “Visionaries” ! Indirect channels/integrators have $ minimum ! Indirect channels/integrators just fulfill ! Market Type affects channel adoption Customer Development in the High-Tech Enterprise Fall 2009
    • Phase 3: Company & Product Positioning Phase 3 Phase 4 ! Market Type driven Business Positioning Model ! Company & Product Verified ! Based on real-world facts Phase 1 Phase 2 Get Sell to Ready EarlyVangelists to Sell Customer Development in the High-Tech Enterprise Fall 2009
    • Develop Positioning ! Product Positioning ! Company Positioning ! Present to Analysts & Influencers ! Builds briefs for demand creation activities Product Company Present to Positioning Positioning Analysts & Influencers Customer Development in the High-Tech Enterprise Fall 2009
    • Positioning: Product Positioning ! Market Type affects positioning Existing Market New Market Resegmented Market Product Compare your It’s too earlier fo r Compare your product to Positioning product to your customers to your competitors Describe Statements competitors. understand what your how some feature o r Describe how products features will attribute of the product some feature or do for them. Instead, solves the problem your attribute of the describe the problem customer has in a way product is your product will solve comparable products do better, faster, and the benefits that not. Describe the benefits cheaper, the customers will get that the customers will get easier. from solving it. from solving their problem this new way. Customer Development in the High-Tech Enterprise Fall 2009
    • Positioning: Company Positioning ! Market Type affects positioning Existing Market New Market Resegmented Market Company Compare your It’s too earlier for Company positioning for Positioning company to your customers to understand this type of market Statements competitors. Describe how different your communicates the value how your company is company is, since in a of the market segment both different and new market there are no you’ve chosen and the credible. other companies to innovation your compare it to. Therefore, company brings to it. company posi tioning is What is it that customers about communicating a value and want and vision and passion of what need now. could be. Customer Development in the High-Tech Enterprise Fall 2009
    • Phase 4: Verify, Iterate or Exit Phase 3 Phase 4 ! Market Type driven Business Positioning Model ! Company & Product Verified Phase 1 Phase 2 Get Sell to Ready EarlyVangelists to Sell Customer Development in the High-Tech Enterprise Fall 2009
    • Verify ! Product ! Sales Roadmap ! Channel Roadmap ! Business Model Verify the Verify the Verify the Verify the Iterate or Product Sales Channel Business Exit Roadmap Roadmap Model Customer Development in the High-Tech Enterprise Fall 2009