1. The Lean LaunchPadLecture 3: Customers/Users/Payers Steve Blank Jon Feiber Jon Burke http://i245.stanford.edu/
2. Agenda• Team Bus Model Presentations• Customer Segments
3. CUSTOMER SEGMENTSwhich customers and users are you serving? which jobs do they really want to get done? images by JAM
4. CUSTOMER SEGMENTSwhich customers and users are you serving? which jobs do they really want to get done? images by JAM
5. Corporate? Consumer?• Business to Business (B to B) – Use or buy inside a company• Business to Consumer (B to C) – Use or buy for themselves• Business to Business to Consumer (B to B to C) – Sell a business to get to a consumer – Other Multi-sided Markets with multiple customers
6. Customer Types• Saboteurs• Intermediaries (OEM’s and resellers)
7. Market Type & Ignoring Customers• Clone Market?• Existing Market?• Resegmenting an Existing Market? – niche or low cost• New Market?• When do I ignore customer feedback?
8. General Heuristics• You need to talk to more customers than you ever thought possible – 100’s physically, 1000’s on the web• “I left a message” or “I sent an email” doesn’t count – it’s confusing motion with action• Do NOT start at the top. You only get one meeting. You’ll almost certainly look like an idiot – First figure out the order of battle
9. Corporate CustomersBusiness to Business (B to B)
10. What do they want you to do?• Increase revenue?• Decrease costs?• Get them new customers?• Keep up with or pass competitors?• How important is it?• Problem or a Need?
11. Customer Problem
12. Customer Problem
13. Customer Problem
14. Customer Problem
15. Customer Problem
16. Customer Problem
17. Who’s the Customer in a Company?• User?• Influencer?• Recommender?• Decision Maker?• Economic Buyer?• Saboteur?• Archetypes for each?
18. How Do They Interact to Buy?• Organization Chart• Influence Map• Sales Road Map
19. Pass/Fail Signals & Experiments• How do you test interest?• Where do you test interest?• What kind of experiments can you run?• How many do you test?
20. How Do They Hear About You?• Demand Creation• Network effect• Sales
21. If It’s a Multi-sided Market Diagram It!!
23. Consumer CustomersBusiness to Consumer (B to C)
24. What do they want you to do?• Does it entertain them?• Does it connect them with others?• Does it make their lives easier?• Does it satisfy a basic need?• How important is it?• Can they afford it?
27. Consumer Customers• Do they buy it by themselves?• Do they need approval of others?• Do they use it alone or with others?
28. How Do They Decide to Buy?• Demand Creation• Viral?• SEO/SEM• Network effect?• AARRR (Dave McClure)
29. Pass/Fail Signals & Experiments• How do you test interest?• Where do you test interest?• What kind of experiments can you run?• How many do you test?
30. The Consumer Sales Channel• A product that’s bits can use the web• But getting a physical consumer product into retail distribution is hard• Is Wal-Mart a customer?• More next week
31. Multi-Sided MarketsBusiness to Business to Consumer (B to B to C)
32. Who’s The Customer?• Consumer End Users, Corporate Customers Pay• Multiple Consumers• Etc.
33. Multiple Customer Segments• Each has its own Value Proposition• Each has its own Revenue Stream• One segment cannot exist without the other• Which one do you start with?
34. Market Type
35. Definitions: Four Types of Markets Clone Market Existing Market Resegmented New Market Market• Clone Market – Copy of a U.S. business model• Existing Market – Faster/Better = High end• Resegmented Market – Niche = marketing/branding driven – Cheaper = low end• New Market – Cheaper/good enough, creates a new class of product/customer – Innovative/never existed before
36. Market Type Existing Resegmented NewCustomers Known Possibly Known UnknownCustomer Performance Better fit TransformationalNeeds improvementCompetitor Many Many if wrong, Nones few if rightRisk Lack of branding, Market and Evangelism and sales and distribution product re- education cycle ecosystem definitionExamples Google Southwest Groupon Market Type determines: Rate of customer adoption Sales and Marketing strategies Cash requirements
37. Market Type - Existing• Incumbents exist, customers can name the mkt• Customers want/need better performance• Usually technology driven• Positioning driven by product and how much value customers place on its features• Risks: – Incumbents will defend their turf – Network effects of incumbent – Continuing innovation
38. Market Type – Resementing Existing• Low cost provider (Southwest)• Unique niche via positioning (Whole Foods)• What factors can: – you eliminate that your industry has long competed on? – Be reduced well below the industry’s standard? – should be raised well above the industry’s standard? – be created that the industry has never offered? (blue ocean)
39. Market Type – New• Customers don’t exist today• How will they find out about you?• How will they become aware of their need?• How do you know the market size is compelling?• Which factors should be created that the industry has never offered? (blue ocean)
40. For Oct 18th Presentation• Talk to 10-15 customers face-to-face• What were your hypotheses about users and customers? Did you learn anything different?• Did anything change about Value Proposition?• What do customers say their problems are? How do they solve this problem(s) today? Does your value proposition solve it? How?• What was it about your product that made customers interested? excited?• If B-B, who’s: decision maker, size of budget, what are they spending it on today, how will this buying decision be made?• Update your blog/wiki/journal
42. Landmine Clearance NSF / ICORP Program Ying Wang (Lead) Yu Lei (PI)Mike Wisniewski (Mentor)
43. Technology Application Surveying, mapping and marking of hazardous areasSensingMaterials Removal of landmines and Unexploded Ordnance (UXO)
44. Contacting…• Flir (Fido). Action: Sent email and made calls (703-678-2118). Feedback: No answer on the phone. Waiting for email reply.• CEIA (metal detector company in Italy). Action: Sent email. Feedback: Waiting for email reply.• United Nations (UN). Action: Sent email (email@example.com) and called (212-963-3344) to Mr. Justin Brady, Acting Director, United Nations Mine Action Service (UNMAS). Feedback: Waiting for reply.• Smith Detections. Action: Sent email and called (973 496 9280) to Reno DeBono, Director of Chemistry and Applications. Feedback: Waiting for reply.
46. Landmine Clearance Customer Customer Customer Discovery Validation Creation PivotSpeed: Government entities too slow for this process/programMinimum feature set: Included too many variables (environmental, deployment) PivotObtain Near instantaneous customer feedbackBe: Fast, agile and opportunistic and formulated a dramatically new model
47. Landmine Clearance Explosive Detection for Transportation Hubs Customer Customer Customer Discovery Validation Creation PivotSpeed: Government entities too slow for this process/programMinimum feature set: Included too many variables(environmental, deployment) PivotObtain Near instantaneous customer feedbackBe: Fast, agile and opportunistic and formulated a dramatically new model
48. The Business Model Canvas 1 1.US Army1. Manufacture of 1. Production 1. Dedicate Personal 2. Other Gov. Entitiesmachine 2. Distribution 1. Reliable Assistance 3. UN 2. Cheap 2. Demo 3. Easy to use 3. Training 4. Rapid 5. Large scale 1. IP 2. Chemicals Direct sales. 3. Facilities 1 Machine sales Distribution Production Sensing materials
49. The Business Model Canvas 2 1.US Army1. Manufacture of 1. Production 1. Dedicate Personal 2. Other Gov. Entitiesmachine 2. Distribution 1. Reliable Assistance 3. UN2. Existing 2. Cheap 2. Democompanies: Smiths 3. Easy to use 3. TrainingDetection. 4. Rapid Airports 5. Large scale 4. Wider spectrum 1. IP 2. Chemicals Direct sales. 3. Facilities Partner’s distribution channels 1 Machine sales Distribution Production Sensing materials
50. Target Market • Who am I going to sell to? • Airports • How large is the market be (in $’s)? Total Served Target • $100 MAvailable Available Market Market Market • How many units would that be? $4.8 B $1 B $100 M • 200 M units
51. From Canvas version 1 to version 2• What we thought: Government entities get to need landmine clearance techniques.• What we did: contacted with the major demining organizations and the UN.• What we found: Government entities too slow for landmine clearance program.• What we have done: modified our business model.• Here’s what are going to do: Contact with airports and Smith Detection.