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How to create products that don't suck RISE 2013

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RISE Austin 2013 Session at Tech Ranch Austin, May 13, 2013 ...

RISE Austin 2013 Session at Tech Ranch Austin, May 13, 2013
Most start-up companies begin with what they think is a brilliant idea and they immediately jump to building the product, and many of these products suck. Creating innovative products that result in market breakthrough requires a process of multiple iterations of discovery that drive you deeper into understanding the market problems and how to solve them with a differentiated solution. Breakthrough products are based upon solving a significant Market Problem with a Product and Business Model that create a competitive advantage, and a Market Strategy that motivates buyers to purchase your product. In this session, learn this iterative discovery process that leads to breakthrough products and how to apply it to your own products.

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How to create products that don't suck RISE 2013 Presentation Transcript

  • 1. Welcome toRISE WEEK 2013How to Create Products That Don’t SuckHosted byTom EvansThe Lûcrum Group@napkintorevenuewww.napkintorevenue.com
  • 2. High New Product Failure Rate• Robert G Cooper: One out of fourdevelopment projects succeeds commercially.(i.e., 75% failure rate)• Jack Gordon: In the world we live in,somewhere between 80 percent and 95percent of new product introductions fail.Copyright 2012 - LÛCRUM
  • 3. Why Do So Many Products Suck?1. Idea to Product© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 4. Why Do So Many Products Suck?1. Idea to Product2. One point of market evidence to idea toproduct© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 5. Why Do So Many Products Suck?1. Idea to Product2. One point of market evidence to idea to product3. Market evidence & validation to product© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 6. Why Do So Many Products Suck?1. Idea to Product2. One point of market evidence to idea to product3. Market evidence & validation to product4. Market evidence & validation, productvalidation, no clear market strategy© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 7. Why Do So Many Products Suck?1. Idea to Product2. One point of market evidence to idea to product3. Market evidence & validation to product4. Market evidence & validation, product validation, no clear marketstrategy5. Market evidence & validation, productvalidation, no profitable business model© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 8. Keys to Products That Don’t Suck• Compelling Market Opportunity– Big painful issues– That many in your target market– Are willing to pay to solve• Compelling Solution– Differentiated Value Proposition– Profitable business model– Time to market• Compelling Market Strategy– Motivates target market– To solve problem with your solutionDiscovery+Validation
  • 9. Model for DiscoveryFour Key Steps of DiscoveryValidateHypothesisValidateOpportunityValidate Solution Validate MarketFourKeyPillarsMarket ProblemProductBusiness ModelMarket StrategyValidation Valid HypothesisValid MarketOpportunityReady to Launch Market GrowthFrom Napkin to Revenue™ Discovery Model© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 10. Four Key Pillars• Market Problem – if you’re not solving aproblem, there is no need for a product!• Product – How do you solve the market problemin a valuable and differentiated manner?• Business Model – How do you deliver theproduct and profitably capture the value?• Market Strategy – Who is going to buy it andwhy?© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 11. Model for DiscoveryFour Key Steps of DiscoveryValidateHypothesisValidateOpportunityValidate Solution Validate MarketFourKeyPillarsMarket ProblemProductBusiness ModelMarket StrategyValidation Valid HypothesisValid MarketOpportunityReady to Launch Market GrowthFrom Napkin to Revenue™ Discovery Model© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 12. Market Evidence (of Market Problem)• Sources of Market Evidence– Customers– Non-customers– Market trends/shifts– Unexpected occurrences– New technologies– Competitors– Personal experience– Etc.© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 13. Market Evidence (of Market Problem)• Sources of Market Evidence– Customers– Non-customers– Market trends/shifts– Unexpected occurrences– New technologies– Competitors– Personal experience– Etc.© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 14. Market Evidence (of Market Problem)• Sources of Market Evidence– Customers– Non-customers– Market trends/shifts– Unexpected occurrences– New technologies– Competitors– Personal experience– Etc.© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 15. Start With Hypothesis– Buyer/User ‘W’– In Market Segment “X”– Has problem “Y”– That happens when “Z” occurs– We can solve it by creating/delivering solution “A”E.g.: Owners of small manufacturing operations that usehot water & steam are unable to manage manufacturingcosts due to the volatility of fuel prices.We can solve this by providing a high temperature solarheating system under a lease agreement.© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 16. Exercise 1• Create a Hypothesis for a New Opportunity– Buyer/User– Market Segment– Market Problem
  • 17. Validate the Hypothesis (1)• Market problem and market segment(s)• Speaking to potential customers (buyers & users)– Most companies don’t and won’t do this• Significant time investment– Requires many conversations (cold calling)• Minimum: 20 conversations• May take over 100 conversations• Iterate until validated or rejected© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 18. Henry Ford’s Quote“If I had asked people what they wanted,they would have said faster horses.”Copyright 2011 - LÛCRUM
  • 19. What Do They Need (To Do)?“People dont want tobuy aquarter-inch drill. Theywant a quarter-inchhole!”–Theodore LevittCopyright 2011 - LÛCRUM
  • 20. What We Want to Identify• Problems, Goals, Needs– What do they want to do that they can’t do?– What do they want to improve (decrease/increase)?• Why is this important?• When does this happen (usage scenarios)• How do you currently do this?• What is your current satisfaction?• What is the impact?Copyright 2011 - LÛCRUM
  • 21. Validate Hypothesis (2)• Create product & business model concept– Low cost way of presenting product concept– Mockup, prototype, wire frame, story board, presentation,product description• Validate product & business model concept– Present concept and receive feedback• Does the problem still resonate?• Does the approach solve the problem?• What is the Minimum Viable Product (MVP)• Iterate until validated or rejected© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 22. Exercise 2• How are we going to get someone to talk tous?
  • 23. Validate Opportunity• Define & discover at greater depth• Competitive research (strategy, position,strength)• Validate the market opportunity– Business Case - Can it be profitable?• Detailed design of product & business model– Market requirements, product requirements, userstories, etc.– Pricing model, delivery mechanism, costs to deliver,etc.• Iterate until validated or rejected© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 24. Validate Solution• Define Minimum Viable Product (MVP)– Just enough functionality to solve the mostimportant market problems– For small segment of market (early adopters, etc.)– Willing to pay for this functionality– Fast to market– Learning• Continue to discover, validate, refine!© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 25. Validate Market• Sell your first customers• Based upon market validation work• Targeted Market Development Plan– Well defined target market– Clear understanding of buyer roles and theirchallenges/goals/needs– Compelling reason to buy from you• Value Proposition – what we do for you• Positioning & Differentiation – why buy our solution• Continue to discover, validate, refine!© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 26. Model for DiscoveryFour Key Steps of DiscoveryValidateHypothesisValidateOpportunityValidate Solution Validate MarketFourKeyPillarsMarket ProblemProductBusiness ModelMarket StrategyValidation Valid HypothesisValid MarketOpportunityReady to Launch Market GrowthFrom Napkin to Revenue™ Discovery Model© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 27. Key Principles• Hypothesis – Discovery – Validate• Continuous engagement with targetmarket–Validate important decisions• Planning is good, but learning is better• Fail fast – discover fast!© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 28. Thank You!Tom EvansThe Lûcrum Grouptevans@napkintorevenue.com@napkintorevenuewww.napkintorevenue.com+1.512.961.5267© Copyright 2012 to 2013, The Lûcrum Group, Inc
  • 29. COMMUNITY SUPPORTDid you enjoy this session?Please support local entrepreneurs and help us to keep this conference free.RISE is a non-profit, and your contributions help us continue delivering thevalue of a high-dollar conference with an unbeatable price tag.Please donate at www.riseglobal.org/donateBe sure to check out our other sessions and special eventsduring RISE Week 2013 at www.riseglobal.org/austin!The mission of RISE is to inspire and empower entrepreneurs at all stages.