2015-09-22 Class on Entrepreneurship

1. Photo by Axion23 via Flickr (CC BY 2.0)

2. Conclusions
If you want to have a business you need a paying
customer.
But we nee multiple paying customers.
We have to focus

4. Goals
Understand “Market segmentation”.
What is a beachhead market.
Why it's important to focus on one market.
You'll learn the model that will guide you through
selecting your beachhead market.

5. Step 1: Market Segmentation
Photo by Danilo via flickr
https://www.flickr.com/photos/yota/57167397
(CC BY-NC 2.0)

6. Target customer
Group of potential customers who share many
characteristics and who would all have similar
reasons to buy a particular product/service.

7. Common pitfalls
Selling to everyone.
China Syndrome
(or fun with Excel).
By Elliot Brown via flickr (CC BY 2.0)

8. What is market segmentation?
Systematic categorization of
potential markets for your idea.
Photo by Danilo via flickr (CC BY-NC 2.0)

9. 1.Brainstorm
Identify potential industries.
Subdivide each industry into markets and market
segments.
List people who might benefit from your idea.

10. Industry/Segment
End user
Application
Benefits
Lead Customers
Market Features
Partners/players
Market size
Competition
Needs

11. 2. Narrow
1. Well funded?
2. Accessible?
3. Compelling reason to buy?
4. Can you deliver?
5. Competition?
6. Can you leverage it?
7. Consistent with your values and goals?

12. 3. Primary market research
Go out of the building and talk to potential
customers.
Goal: To learn from them.
“Customers don’t care about your solution.
They care about their problems.”
– Dave McClure , 500 Startups
By Instituto Siglo XXI via flickr (CC BY-SA 2,0)

13. Why? To understand your customer
… I am the target customer
But:
You are a data point of one.
Confirmation bias

14. Some guidance
Don’t introduce the product.
Understand the customer first.

15. Step 2: Select a Beachhead Market
By The US Army via flickr (CC BY 2.0)

16. Beachhead market
The first market you
will choose to pursue.
By The US Army via flickr (CC BY 2.0)

17. One, only one, market
Focus.
More markets, at this stage, reduces the odds of
success.

18. How to choose?
1. Well funded?
2. Accesible?
3. Compelling reason to buy?
4. Can you deliver?
5. Competition?
6. Can you leverage it?
7. Consistent with your values and goals?
By viZZZual.com via flickr (cc BY 2.0)

19. Further segmentation is required until
1. Customers buy similar products.
2. Similar sales cycle, look for similar benefits.
3. “Word of mouth” between customers.

20. Useful tools
www.detoolbox.com
www.edvdesign.com

21. What to do next
It's now time for you to:
• Open your mind. Empathy is needed.
• Interview prospective customers/end users for your idea (Try
to interview at least 10).
• Segment your market (list potential segments).
• Narrow down your market opportunities
• Research in-depth.
• Choose a beachhead market.
• Segment beachhead market.