Class 2 Berkeley/Columbia Lean Launchpad Xmba 296t

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  • -
  • So why are we going to spend a valuable two hours talking about what type of market we are in? What possible relevance can it have to how we set up our company and bring our product to market? - Anyone?
  • In looking at how companies succeed and fail, their success tends to be organized around groupings of customers and markets. More importantly it is how these groupings of customers view their needs and how your new product satisfies those needs
  • Each “type of market” is radically different Different ways to size the market opportunity Different sales costs Different demand creation costs Different time to liquidity Very different capital requirements And as we’ll see market type choices radically effect the Customer Development process.
  • Class 2 Berkeley/Columbia Lean Launchpad Xmba 296t

    1. The Lean LaunchPad Session 2: Customers, Customers, Customers & Value Proposition Professors Steve Blank,Jon Feiber, Jim Hornthal, Oren Jacob https://sites.google.com/site/xmba296t / XMBA296T
    2. Agenda <ul><li>Team Bus Model Presentations </li></ul><ul><li>Customer Segment </li></ul><ul><ul><li>Business model = b-to-b, b-to-c, b-to-b-to-c </li></ul></ul><ul><ul><li>Ecosystem= payers, users, saboteurs, advocates </li></ul></ul><ul><li>Value Proposition </li></ul><ul><ul><li>Product </li></ul></ul><ul><ul><li>Service </li></ul></ul><ul><ul><li>Ecosystem </li></ul></ul>
    3. VALUE PROPOSITIONS images by JAM what are you offering them? what is that getting done for them? do they care?
    4. Value Proposition <ul><li>Product(s)? </li></ul><ul><li>Service(s)? </li></ul><ul><li>Ecosystem? </li></ul><ul><li>Is it a company or product? </li></ul>
    5. Value Proposition - Discovery <ul><li>Product </li></ul><ul><ul><li>Long term vision </li></ul></ul><ul><ul><li>features </li></ul></ul><ul><ul><li>Benefits </li></ul></ul><ul><ul><li>Minimum Viable Product spec </li></ul></ul><ul><li>For a web/mobile app </li></ul><ul><ul><li>Low fidelity MVP live and running </li></ul></ul><ul><li>Understand Customer Problem and Solution </li></ul><ul><li>Test Market Type </li></ul>
    6. Product <ul><li>Problem Statement: What is the problem? </li></ul><ul><li>Technology / Market Insight: Why is the problem so hard to solve? </li></ul><ul><li>Market Size: How big is this problem? </li></ul><ul><li>Competition: What do customers do today? </li></ul><ul><li>Product: How do you do it? </li></ul>
    7. Minimum Viable Product – Physical <ul><li>First, test your understanding of the problem </li></ul><ul><li>Next tests your understanding of the solution </li></ul><ul><ul><li>Proves that it solves a core problem for customers </li></ul></ul><ul><ul><li>The minimum set of features needed to learn from earlyvangelists </li></ul></ul><ul><li>Interviews, demos, prototypes, etc </li></ul><ul><li>Lots of eyeball contact </li></ul>
    8. Minimum Viable Product – Web/Mobile <ul><li>NOW “low fidelity” web/app for customer feedback </li></ul><ul><ul><li>First, tests your understanding of the problem </li></ul></ul><ul><li>LATER, “high fidelity” web/app tests your understanding of the solution </li></ul><ul><ul><li>Proves that it solves a core problem for customers </li></ul></ul><ul><ul><li>The minimum set of features needed to learn from earlyvangelists </li></ul></ul><ul><li>Avoid building products nobody wants </li></ul><ul><li>Maximize the learning per time spent </li></ul>
    9. Testing the Minimum Viable Product – Web/Mobile <ul><li>Smoke testing with landing pages using AdWords </li></ul><ul><li>In-product split-testing </li></ul><ul><li>Prototypes (particularly for hardware) </li></ul><ul><li>Removing features </li></ul><ul><li>Continued customer discovery and validation </li></ul><ul><li>Surveys </li></ul><ul><li>Interviews </li></ul>
    10. Testing the MVP– Web/Mobile - Tactics <ul><li>Interview customers </li></ul><ul><ul><li>make sure they have a matching core problem </li></ul></ul><ul><li>Set up web site landing page to test for conversion </li></ul><ul><ul><li>What offers are required to get customers to use the product (e.g. prizes, payment) </li></ul></ul><ul><ul><li>Use problem definition as described by customers to identify key word list – plug into Google search traffic estimator - high traffic means there is problem awareness </li></ul></ul><ul><li>Drive traffic to site using Google search and see how deep into a registration process customers are willing to go through </li></ul>
    11. Market Type
    12. Type of Market Changes Everything Existing Market Resegmented Market New Market
    13. Market Type <ul><li>Market Type determines: </li></ul><ul><li>Rate of customer adoption </li></ul><ul><li>Sales and Marketing strategies </li></ul><ul><li>Cash requirements </li></ul>
    14. Definitions: Three Types of Markets <ul><li>Existing Market </li></ul><ul><ul><li>Faster/Better = High end </li></ul></ul><ul><li>Resegmented Market </li></ul><ul><ul><li>Niche = marketing/branding driven </li></ul></ul><ul><ul><li>Cheaper = low end </li></ul></ul><ul><li>New Market </li></ul><ul><ul><li>Cheaper/good enough can create a new class of product/customer </li></ul></ul><ul><ul><li>Innovative/never existed before </li></ul></ul>Existing Market Resegmented Market New Market
    15. Market Type - Existing <ul><li>Incumbents exist, customers can name the mkt </li></ul><ul><li>Customers want/need better performance </li></ul><ul><li>Usually technology driven </li></ul><ul><li>Positioning driven by product and how much value customers place on its features </li></ul><ul><li>Risks: </li></ul><ul><ul><li>Incumbents will defend their turf </li></ul></ul><ul><ul><li>Network effects of incumbent </li></ul></ul><ul><ul><li>Continuing innovation </li></ul></ul>
    16. Market Type – Resementing Existing <ul><li>Low cost provider (Southwest) </li></ul><ul><li>Unique niche via positioning (Whole Foods) </li></ul><ul><li>What factors can: </li></ul><ul><ul><li>you eliminate that your industry has long competed on? </li></ul></ul><ul><ul><li>Be reduced well below the industry’s standard? </li></ul></ul><ul><ul><li>should be raised well above the industry’s standard? </li></ul></ul><ul><ul><li>be created that the industry has never offered? (blue ocean) </li></ul></ul>
    17. Market Type – New <ul><li>Customers don’t exist today </li></ul><ul><li>How will they find out about you? </li></ul><ul><li>How will they become aware of their need? </li></ul><ul><li>How do you know the market size is compelling? </li></ul><ul><li>Which factors should be created that the industry has never offered? (blue ocean) </li></ul>
    18. Type of Market Changes Everything <ul><li>Market </li></ul><ul><ul><li>Market Size </li></ul></ul><ul><ul><li>Cost of Entry </li></ul></ul><ul><ul><li>Launch Type </li></ul></ul><ul><ul><li>Competitive Barriers </li></ul></ul><ul><ul><li>Positioning </li></ul></ul><ul><li>Sales </li></ul><ul><ul><li>Sales Model </li></ul></ul><ul><ul><li>Margins </li></ul></ul><ul><ul><li>Sales Cycle </li></ul></ul><ul><ul><li>Chasm Width </li></ul></ul><ul><li>Finance </li></ul><ul><ul><li>Ongoing Capital </li></ul></ul><ul><ul><li>Time to Profitability </li></ul></ul><ul><li>Customers </li></ul><ul><ul><li>Needs </li></ul></ul><ul><ul><li>Adoption </li></ul></ul><ul><li>Finance </li></ul><ul><ul><li>Ongoing Capital </li></ul></ul><ul><ul><li>Time to Profitability </li></ul></ul><ul><li>Customers </li></ul><ul><ul><li>Needs </li></ul></ul><ul><ul><li>Adoption </li></ul></ul>Existing Market Resegmented Market New Market
    19. Customer Segments Model and Ecosystem
    20. CUSTOMER SEGMENTS images by JAM which customers and users are you serving? which jobs do they really want to get done?
    21. CUSTOMER SEGMENTS images by JAM which customers and users are you serving? which jobs do they really want to get done?
    22. Corporate? Consumer? <ul><li>Business to Business (B to B) </li></ul><ul><ul><li>Use or buy inside a company </li></ul></ul><ul><li>Business to Consumer (B to C) </li></ul><ul><ul><li>Use or buy for themselves </li></ul></ul><ul><li>Business to Business to Consumer (B to B to C) </li></ul><ul><ul><li>Sell a business to get to a consumer </li></ul></ul><ul><ul><li>Other Multi-sided Markets with multiple customers </li></ul></ul>
    23. Corporate Customers Business to Business (B to B)
    24. What do they want you to do? <ul><li>Increase revenue? </li></ul><ul><li>Decrease costs? </li></ul><ul><li>Get them new customers? </li></ul><ul><li>Keep up with or pass competitors? </li></ul><ul><li>How important is it? </li></ul>
    25. Market Type & Ignoring Customers <ul><li>Existing Market? </li></ul><ul><li>Resegmenting an Existing Market? </li></ul><ul><ul><li>niche or low cost </li></ul></ul><ul><li>New Market? </li></ul><ul><li>When do I ignore customer feedback? </li></ul>
    26. Consumer Customers Business to Consumer (B to C)
    27. What do they want you to do? <ul><li>Does it entertain them? </li></ul><ul><li>Does it connect them with others? </li></ul><ul><li>Does it make their lives easier? </li></ul><ul><li>Does it satisfy a basic need? </li></ul><ul><li>How important is it? </li></ul><ul><li>Can they afford it? </li></ul>
    28. Market Type & Ignoring Customers <ul><li>Existing Market? </li></ul><ul><li>Resegmenting an Existing Market? </li></ul><ul><ul><li>niche or low cost </li></ul></ul><ul><li>New Market? </li></ul><ul><li>When do I ignore customer feedback? </li></ul>
    29. Consumer Customers <ul><li>Do they buy it by themselves? </li></ul><ul><li>Do they need approval of others? </li></ul><ul><li>Do they use it alone or with others? </li></ul>
    30. How Do They Decide to Buy? <ul><li>Demand Creation </li></ul><ul><li>Viral? </li></ul><ul><li>SEO/SEM </li></ul><ul><li>Network effect? </li></ul><ul><li>AARRR (Dave McClure) </li></ul>
    31. Pass/Fail Signals & Experiments <ul><li>How do you test interest? </li></ul><ul><li>Where do you test interest? </li></ul><ul><li>What kind of experiments can you run? </li></ul><ul><li>How many do you test? </li></ul>
    32. The Consumer Sales Channel <ul><li>A product that’s bits can use the web </li></ul><ul><li>But getting a physical consumer product into retail distribution is hard </li></ul><ul><li>Is Wal-Mart a customer? </li></ul><ul><li>More next week </li></ul>
    33. Multi-Sided Markets Business to Business to Consumer (B to B to C)
    34. Who’s The Customer? <ul><li>Consumer End Users, Corporate Customers Pay </li></ul><ul><li>Multiple Consumers </li></ul><ul><li>Etc. </li></ul>
    35. Multiple Customer Segments <ul><li>Each has its own Value Proposition </li></ul><ul><li>Each has its own Revenue Stream </li></ul><ul><li>One segment cannot exist without the other </li></ul><ul><li>Which one do you start with? </li></ul>
    36. The Customer Ecosystem
    37. Who’s the Customer in a Company? <ul><li>User? </li></ul><ul><li>Influencer? </li></ul><ul><li>Recommender? </li></ul><ul><li>Decision Maker? </li></ul><ul><li>Economic Buyer? </li></ul><ul><li>Saboteur? </li></ul><ul><li>Archetypes for each? </li></ul>
    38. How Do They Interact to Buy? <ul><li>Organization Chart </li></ul><ul><li>Influence Map </li></ul><ul><li>Sales Road Map </li></ul>
    39. Pass/Fail Signals & Experiments <ul><li>How do you test interest? </li></ul><ul><li>Where do you test interest? </li></ul><ul><li>What kind of experiments can you run? </li></ul><ul><li>How many do you test? </li></ul>
    40. How Do They Hear About You? <ul><li>Demand Creation </li></ul><ul><li>Network effect </li></ul><ul><li>Sales </li></ul>
    41. Finding the right customer From radiologists to gynecologists
    42. MammOptics Excursions into hospitals Leading doctors Patients Hospital Managers Technicians Debra Ikeda Jason Davies Jafi Alissa Lipson Sunita Pal 6 women >40 8 women <40 Alicia X-ray mammography Paul Billings Holly V. Gautier
    43. MammOptics Hospital purchasing decision tree
    44. MammOptics Hospital purchasing decision tree Hospitals Complex purchasing decision tree. Several saboteours
    45. MammOptics Private practice purchasing decision tree
    46. MammOptics Private practice purchasing decision tree Private practice Faster adoption rate Attractive value proposition ✔
    47. ACOG ACS Doctor specialty committee Hospital Administration Technician Radiologist Mammography MammOptics Customer Workflow Current market Insurance
    48. ACOG ACS Doctor specialty committee Hospital Administration Technician Radiologist Mammography MammOptics Customer Workflow Current market But what would happen if we replace mammography? Insurance
    49. ACOG ACS Doctor specialty committee Hospital Administration Technician Radiologist Mammography MammOptics Customer Workflow Breast Radiologists Technicians Hospitals Loss of jobs Loss of jobs Eliminates loss leader Puts emphasis on biopsies Insurance
    50. ACOG ACS Doctor specialty committee Hospital Administration Technician Radiologist Mammography MammOptics Customer Workflow Insurance
    51. ACOG ACS Doctor specialty committee Hospital Administration Technician Radiologist Mammography MammOptics Customer Workflow Insurance Same cost as mammography ($140) Reduced number of biopsies ($1000) ACOG/ACS Improved healthcare (mammography weak technique) Insurance
    52. ACOG ACS Doctor specialty committee Hospital Administration Technician Insurance Radiologist Mammography MammOptics Customer Workflow
    53. Insurance Doctor specialty committee Hospital Administration Technician Radiologist Mammography MammOptics Customer Workflow ACOG ACS MammOptics Patient PCP OB/GYN
    54. Insurance Doctor specialty committee Hospital Administration Technician Radiologist Mammography MammOptics Customer Workflow ACOG ACS MammOptics Patient PCP OB/GYN Hospital Administration Technician Radiologist Mammography MammOptics Patient PCP OB/GYN PCP OB/GYNs Increased revenue More complete patient care Patient Improved healthcare Comfort MammOptics Revenue
    55. ACOG ACS Doctor specialty committee Hospital Administration Technician Insurance Radiologist Mammography MammOptics Customer Workflow MammOptics Patient PCP OB/GYN
    56. Reimbursement Partners MammOptics Insurances CPT Codes $75-$150
    57. Team Exercise
    58. Deliverables for Next Week <ul><li>User / customer hypotheses?   </li></ul><ul><li>Did you learn anything different?       </li></ul><ul><li>Did your Value Proposition change? </li></ul><ul><li>What are your customer acquisition cost hypotheses? </li></ul><ul><li>What are the benefits (economic  or  other)?     </li></ul><ul><li>If part of a company, who’s the decision maker, how large is the   budget and how will the buying decision be made?   </li></ul><ul><li>Web/mobile startups: Site is Up </li></ul>

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