Lean Launchpad Tucson - Value Proposition


Published on

Published in: Education, Business, Technology
  • Be the first to comment

  • Be the first to like this

No Downloads
Total views
On SlideShare
From Embeds
Number of Embeds
Embeds 0
No embeds

No notes for slide
  • 5
  • 25
  • Lean Launchpad Tucson - Value Proposition

    1. 1. Aaron EdenCreated by Steve Blank
    2. 2. » 5/12 – What to Expect» 5/19 – First Pitches» 5/26 – Experiment Day» 6/2 –Value Propositions» 6/9 – Customers, Users, Payers (Andrew)» 6/16 – Distribution Channels (Justin)» 6/23 – Customer Relationships» 6/30 – Revenue Models» 7/7 – Partners» 7/14 – Key Resources & Costs» 7/21 – Lessons Learned Presentations
    3. 3. » Homework Review» Team Business Model Presentations» Value Propositions ˃ Product ˃ Service ˃ Ecosystem
    4. 4. » Business Model Generation ˃ Visual Thinking ˃ BMC Prototyping ˃ Environment» Startup Owners Manual ˃ Customer Problem (Need or Passion) ˃ Customer Types ˃ Customer Archetypes ˃ A Day In The Life ˃ Influence Maps
    5. 5. » How many customers did you talk to?» What were your value proposition hypotheses?» What do customers think about your value proposition hypotheses?» Post updates in the Google group (lessons learned, canvas changes)http://www.youtube.com/watch?v=VZ5rgVgn5qk
    6. 6. VALUE PROPOSITIONSwhat are you offering them? what is that getting done for them? do they care? images by JAM
    7. 7. » Product(s)?» Service(s)?» Ecosystem?» Is it a company or product?
    8. 8. » Is it just a feature of someone else’s product?» Is it a “nice to have” product?» Is it a “got to have” product?» Can it scale to a company?
    9. 9. » Product ˃ Long term vision ˃ Features ˃ Benefits ˃ Minimum Viable Product spec» For a web/mobile app ˃ Low fidelity MVP live and running» Understand Customer Problem and Solution» Test Market Type
    10. 10. » Problem Statement: What is the problem?» Technology / Market Insight: Why is the problem so hard to solve?» Market Size: How big is this problem?» Competition: What do customers do today?» Product: How do you do it?
    11. 11. » NOW “low fidelity” web/app for customer feedback ˃ First, tests your understanding of the problem» LATER, “high fidelity” web/app tests your understanding of the solution ˃ Proves that it solves a core problem for customers ˃ The minimum set of features needed to learn from earlyvangelists- Avoid building products nobody wants- Maximize the learning per time spent
    12. 12. » Smoke testing with landing pages using AdWords» In-product split-testing» Prototypes (particularly for hardware)» Removing features» Continued customer discovery and validation» Interviews» Surveys
    13. 13. » Interview customers ˃ make sure they have a matching core problem» Set up web site landing page to test for conversion ˃ What offers are required to get customers to use the product (e.g. prizes, payment) ˃ 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» Drive traffic to site using Google search and see how deep into a registration process customers are willing to go through
    14. 14. Talked 75 Customers in 8 Weeks
    15. 15. WeedingVisited two farms in Salinas Valley to better understand problemInterviewed:• Bolthouse Farms, Large Agri-Industry in Bakersfield• White Farms, Large Peanut farmer in Georgia• REFCO Farms, large grower in Salinas Valley• Rincon Farms, large grower in Salinas Valley• Small Organic Corn/Soy grower in Nebraska• Heirloom Organics, small owner/operator, Santa Cruz Mts• Two small organic farmers at farmers market• Ag Services of Salinas, Fertilizer applicatorMowingInterviewed:• Golf: Stanford Golf course• Parks: Stanford Grounds Supervisor, head of maintenance and lead operator (has crew of 6)• Toro dealer (large mower manufacturer)• User of back-yard mowing system• Maintenance Services for City of Los Altos• Colony Landscaping (Mowing service for stadiums)
    16. 16. - Innovation Dealers sell, installs Mowing- Dealers (Mowing - Customer We reduce operating and supports - Owners of publicand Ag) Education cost customer or commercially- Vehicle OEMs - Dealer training - Labor reduction used green spaces(John - Better utilization of Co. trains (e.g. golf courses)Deere, Toro, Jacob assets (mow or dealers, supports - Landscapingsen, etc) weed at nights) dealers service provider - Improved performance (less Weeding- Research labs Engineers on rework, food safety) - Mowing Dealers - Farmers with Autonomous - Ag Dealers manual weeding vehicles, GPS, operations path-planningDealer discount Asset saleCOGS seek a 50-60% Gross Margin Our revenue stream derives from selling the equipmentHeavy R&D investment
    17. 17. Crews of 100s-1000Back-breaking task(legal) labor harder to get1-5 weedings per year/field$250-3,500 per acre andincreasingFood contamination risk
    18. 18. - Innovation Dealers - Low density- Ag Dealers - Customer We reduce sell, installs and vegetable- Ag Service Education operating cost supports growersproviders - Dealer training - Labor reduction customer - High density (100 to 1) vegetable- Research labs - Reduced risk of Co. trains growers contamination dealers, supports - Thinning - Mitigate labor dealers operations Engineers on availability - Ag Dealers - Conventional Machine Vision concerns - Ag Service vegetables Two problems: providers - Identification - EliminationDealer discount Asset saleCOGS seek a 50-60% Gross Margin Our revenue stream derives from selling theHeavy R&D investment equipment
    19. 19. 1 Week – 1 CarrotBot Confidential
    20. 20. » Machine Vision data collection platform ˃ Monochrome & Color Cameras ˃ Laser-line sweep (depth measurement) ˃ Encoders (position/velocity) ˃ Onboard data acquisition & power CarrotBot 1.0
    21. 21. •Technology •Farming Design conventions. •Marketing •Demo, demo, a •Demo and nd demo!! customer •Cost Reduction •Proximity is •Organic Farmers•Research Labs feedback paramount •Weeding Service •Remove labor•Equipment Providers force painsManufacturers •Conventional •Eliminate bio-•Distribution Farmers waste hazardsNetwork•Service •IP – PatentsProviders •Video Classifier •Dealers Files •Direct Service •Robust •Indirect Service Technology • … then Dealers •Asset Sale Value-Driven •Direct Service with equipment rental •… then Asset Sale
    22. 22. Above: Organic Carrots, 7wks.Top right: Conventional carrotsBottom Right: Very weedy. Will requiremultiple passes of hand weeding
    23. 23. Carrot vs. WeedsDue to small root systems, carrots have no chance against weeds
    24. 24. Organic Broccoli, closely cultivated. Weedsclose to plants are hand-picked
    25. 25. State of the Art in Weeding Technology for Organic Crops
    26. 26. Pre-Test Large Growers Us Dealer Industrial Growers Hypothesis Confirmed • Growers interested in own Industrial equipment Growers • Industrial (10,000s of acres) • Large (1,000s of acres) Post-Test • Willing to pay $100k for one Large unit Growers Us Dealer • Smaller growers (100s of acres) Service usually subcontract the labor services Providers or rent equipment Equipment • All purchases through local dealers Rental • Customer service is essential
    27. 27. Example: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr End User • Equipment Operator Influencer • Local Farm Mgr • Cliff Kirkpatrick, visited Recommender • Director, Ag Equipment Operator Technology • Justin Grove, interviewed Decision Maker • VP, Growing Operations Approver • CFO, CEO (Jeff Dunn) Cliff, Farm Mgr
    28. 28. Example: Ag Services – Service Provider, Salinas Valley End User • Equipment Operator Influencer • GrowerRecommender • Service Mgr Me (left), Marty (middle, Service Mgr), Doug (right, Grower)Decision Maker • ?? (service mgr’s boss) & Approver
    29. 29. •Technology •Farming Design conventions. •Marketing •Demo, demo, a •Mid/Large •Demo and nd demo!! Organic Farmers customer •Cost Reduction •Proximity is •Agricultural•Research Labs feedback paramount •Remove labor corporations•EquipmentManufacturers force pains •Weeding Service •Eliminate bio- Providers•Distribution waste hazardsNetwork•Service •IP – Patents •Mid/LargeProviders •Video Classifier •Direct Service Conventional Files •Indirect Service Farmers •Robust • … then Dealers Technology •Direct Service with equipment rental Value-Driven •($1,500/d; 120d/yr ) •Low density: $1,500/d •High density: $6,000/d
    30. 30. » 10+ interviews at show ˃ Everyone confirmed the need ˃ Robocrop, UK based, crude competitor sells for $171 K» Revenue Stream ˃ Mid to small growers prefer a service ˃ Large growers prefer to buy, but OK with service until technology is proven ˃ Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability)
    31. 31. •Technology •Farming Design conventions. •Marketing •Demo, demo, a •Mid/Large•Research Labs •Demo and nd demo!! Organic Farmers•Equipment customer •Cost •Proximity is •AgriculturalManufacturer feedback Reduction paramount corporations•Distribution •Remove labor •Weeding ServiceNetwork force pains Providers•Service •Eliminate bio-Providers •IP – Patents waste hazards •Mid/Large• 2 or 3 Key •Video •Direct Service ConventionalFarms Classifier Files •Indirect Service Farmers •Robust • … then Dealers Technology Value-Driven •Direct Service with • R&D equipment rental • Bill of Materials •Low density: $1,500/d • Training & Service •High density: $6,000/d • Sales
    32. 32. - Innovation Direct - Low density- Ag Service - Customer We reduce - Provide high vegetable growersproviders Education operating cost quality service at - High density - Dealer training - Labor reduction competitive price vegetable growers- Research (100 to 1) - ThinningInstitutes (eg UC - Reduced risk of operationsDavis, Laser contamination - ConventionalZentrum - Mitigate labor vegetablesHannover) availability Engineers on concerns Direct- 3-4 key farms Machine Vision - Alliance with Two problems: service providers - Identification - Eventually sell - Elimination through dealersCosts for service provision Service provisionCOGS seek a 50-60% Gross Margin - Charge by the acre with modifier according to weedHeavy R&D investment density - Eventually move to asset sale
    33. 33. 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
    34. 34. Existing Resegmented NewCustomers Known Possibly Known UnknownCustomer Performance Better fit TransformationalNeeds improvementCompetitors Many Many if wrong, None few if rightRisk Lack of branding, sales Market and Evangelism and and distribution product re- education cycle ecosystem definitionExamples Google Southwest Groupon Market Type determines:  Rate of customer adoption  Sales and Marketing strategies  Cash requirements
    35. 35. » 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
    36. 36. » 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)
    37. 37. » 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)
    38. 38. » What were your value proposition hypotheses?» What did potential customers think about your value proposition hypotheses? ˃ Get out of the building and begin to talk to more customers ˃ Talk to 10-15 customers more ˃ Follow-up with Survey Monkey (or similar service) to get more data» Submit interview notes, present results in class.» Update Google Group with progress customers and value prop