NEWMARKETCREATIONKristian Luoma22.11.2012
DISRUPTIVE INNOVATION = MARKET CREATION
INCREMENTAL INNOVATION = INCUMBENTS RULE HERE
MARKET CREATION= BEST CHANCE FOR A STARTUP                 Act of making something that is                 more useful, af...
3 PARTS:1 IDEOLOGY2 TOOLS3 WORKSHOP
1 IDEOLOGY
STARTUP DEFINITION“STARTUP IS ANEXPERIMENT FOR CREATINGA SUSTAINABLE BUSINESS”
STARTUP REDEFINED“STARTUP IS A SERIES OFEXPERIMENTS FOR CREATINGA SUSTAINABLE BUSINESS”
OPERATIVE CAPABILITY   STARTUP SCORECARD - RECORD OF PROGRESS                       MARKET EVOLUTION
STARTUP SCORECARD - RECORD OF PROGRESS                                                                      WHY?          ...
PRODUCT WITH A MARKET - DEFINITIONPRODUCT THAT SOLVES APROBLEM FOR CUSTOMERS THATARE WILLING TO PAY FOR IT
PRODUCT WITH A MARKET - DEFINITION           Complete,
 right
 features                                                                                                                 ...
 moneyRelevant                                                                           Unique
right
 features,                                                                                                                ...
 easy
 to
 hire
 for
 a
 job                                                                                                    IS RELEVANT       ...
 I
 buy                                                                                                                      ...
 point,
 channel,
 value
 proposition
PROBLEMS WE TRY TO SOLVE 1/3Scarce resources needs to bemanaged.
PROBLEMS WE TRY TO SOLVE 2/3Products are created too soon.
PROBLEMS WE TRY TO SOLVE 3/3Products are created too late.
MOTIVATION EXAMPLE #1Want-button for Wantlet vs.Pinterest Pin-it-button
MOTIVATION EXAMPLE #2Ubi Oulu
GOALMake every experiment count,when it counts.
2 TOOLS
MISSIONFind a Systematic Approach forMarket Creation
LEAN MOVEMENT by ERIC RIES
“SCIENTIFIC METHOD”         OBSERVE              QUESTION                      HYPOTHESIZE                            EXPE...
STARTUP EVOLUTION:MARKET CREATION PERSPECTIVEPROBLEM /                    PRODUCT /SOLUTION                         SCALE ...
STARTUP EVOLUTION:MARKET CREATION PERSPECTIVEPROBLEM /                         PRODUCT /SOLUTION                          ...
 decisions
PERFECT EXPERIMENTFast, Recoverable and Explicit
STARTUP SCORECARD: RECORD OF PROOF                         PROBLEM /                                            PRODUCT / ...
TOOLS#1 Lean Canvas#2 Progressive Learning BoardProduct Hacker Extras: “Jobs to be done”
#1: LEAN CANVAS by ASH MAURYA“FROM BUSINESS PLAN TO BUSINESS MODEL”
#3: LEAN CANVASPROBLEMS:    SOLUTION:   UNIQUE VALUE        UNFAIR ADVANTAGE: CUSTOMER                         PROPOSITION...
#3: LEAN CANVASPROBLEMS:                   SOLUTION:            UNIQUE VALUE              UNFAIR ADVANTAGE: CUSTOMER      ...
#3: LEAN CANVAS (EXAMPLE: FACEBOOK)PROBLEMS:                SOLUTION:                UNIQUE VALUE              UNFAIR ADVA...
#3: LEAN CANVAS (FILL ORDER)PROBLEMS:    SOLUTION:   UNIQUE VALUE        UNFAIR ADVANTAGE: CUSTOMER                       ...
#2: PROGRESSIVE LEARNING BOARD“DE-RISKING PRODUCT CREATION”
4 KINDS OF RISK IN MARKET EVOLUTION(NOT SOLVED LINEARLY, BUT KIND OF APPEAR CHRONOLOGICALLY) PRODUCT                MARKET...
(applied from Mark      Suster)                                                            COMPETITIVENESS                ...
PRODUCT RISKHow important is the problem for the customer?Will your solution solve the problem? Can youbuild it?Does your ...
MARKET RISKWho has the pain?How do they solve problems today?Will they pay for the problem? If not, who will?
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Market creation

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Stuff I've learned about Creating Markets. Talk on 22th of November, 2012.

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Market creation

  1. 1. NEWMARKETCREATIONKristian Luoma22.11.2012
  2. 2. DISRUPTIVE INNOVATION = MARKET CREATION
  3. 3. INCREMENTAL INNOVATION = INCUMBENTS RULE HERE
  4. 4. MARKET CREATION= BEST CHANCE FOR A STARTUP Act of making something that is more useful, affordable or better for someone - than existing alternatives
  5. 5. 3 PARTS:1 IDEOLOGY2 TOOLS3 WORKSHOP
  6. 6. 1 IDEOLOGY
  7. 7. STARTUP DEFINITION“STARTUP IS ANEXPERIMENT FOR CREATINGA SUSTAINABLE BUSINESS”
  8. 8. STARTUP REDEFINED“STARTUP IS A SERIES OFEXPERIMENTS FOR CREATINGA SUSTAINABLE BUSINESS”
  9. 9. OPERATIVE CAPABILITY STARTUP SCORECARD - RECORD OF PROGRESS MARKET EVOLUTION
  10. 10. STARTUP SCORECARD - RECORD OF PROGRESS WHY? Grand Vision HOW?Resources,culture and skills OPERATIVE CAPABILITY WHAT? Scalable business model & Product- MARKET EVOLUTION market fit
  11. 11. PRODUCT WITH A MARKET - DEFINITIONPRODUCT THAT SOLVES APROBLEM FOR CUSTOMERS THATARE WILLING TO PAY FOR IT
  12. 12. PRODUCT WITH A MARKET - DEFINITION Complete,
  13. 13.  right
  14. 14.  features Targeted PRODUCT THAT SOLVES A PROBLEM FOR CUSTOMERS THAT ARE WILLING TO PAY FOR IT Makes
  15. 15.  moneyRelevant Unique
  16. 16. right
  17. 17.  features, packaging,
  18. 18.  easy
  19. 19.  to
  20. 20.  hire
  21. 21.  for
  22. 22.  a
  23. 23.  job IS RELEVANT Stuff
  24. 24.  I
  25. 25.  buy IS UNIQUEprice
  26. 26.  point,
  27. 27.  channel,
  28. 28.  value
  29. 29.  proposition
  30. 30. PROBLEMS WE TRY TO SOLVE 1/3Scarce resources needs to bemanaged.
  31. 31. PROBLEMS WE TRY TO SOLVE 2/3Products are created too soon.
  32. 32. PROBLEMS WE TRY TO SOLVE 3/3Products are created too late.
  33. 33. MOTIVATION EXAMPLE #1Want-button for Wantlet vs.Pinterest Pin-it-button
  34. 34. MOTIVATION EXAMPLE #2Ubi Oulu
  35. 35. GOALMake every experiment count,when it counts.
  36. 36. 2 TOOLS
  37. 37. MISSIONFind a Systematic Approach forMarket Creation
  38. 38. LEAN MOVEMENT by ERIC RIES
  39. 39. “SCIENTIFIC METHOD” OBSERVE QUESTION HYPOTHESIZE EXPERIMENT CONCLUDE
  40. 40. STARTUP EVOLUTION:MARKET CREATION PERSPECTIVEPROBLEM / PRODUCT /SOLUTION SCALE MARKET FIT FIT
  41. 41. STARTUP EVOLUTION:MARKET CREATION PERSPECTIVEPROBLEM / PRODUCT /SOLUTION SCALE MARKET FIT FIT VALIDATED LEARNING GROWTH via OPTIMIZE via PIVOTS Experiment-driven
  42. 42.  decisions
  43. 43. PERFECT EXPERIMENTFast, Recoverable and Explicit
  44. 44. STARTUP SCORECARD: RECORD OF PROOF PROBLEM / PRODUCT / SOLUTION SCALEOPERATIVE CAPABILITY MARKET FIT FIT VALIDATED LEARNING GROWTH via OPTIMIZE via PIVOTS MARKET EVOLUTION
  45. 45. TOOLS#1 Lean Canvas#2 Progressive Learning BoardProduct Hacker Extras: “Jobs to be done”
  46. 46. #1: LEAN CANVAS by ASH MAURYA“FROM BUSINESS PLAN TO BUSINESS MODEL”
  47. 47. #3: LEAN CANVASPROBLEMS: SOLUTION: UNIQUE VALUE UNFAIR ADVANTAGE: CUSTOMER PROPOSITION: SEGMENTS:CURRENTSOLUTIONS: METRICS: CHANNELS: EARLY ADOPTERSCOSTS: REVENUE:
  48. 48. #3: LEAN CANVASPROBLEMS: SOLUTION: UNIQUE VALUE UNFAIR ADVANTAGE: CUSTOMER PROPOSITION: SEGMENTS:Top 3 Problems Top 3 Solutions Can’t be easily bought Single, clear, compelling or copied Target customers message that states way you are different and worth buyingCURRENT SOLUTIONS:Competitive solutions forsolving the problem METRICS: CHANNELS: EARLY ADOPTERS: Key activities you Path to customers Who’s the first to adapt to your solution? measureCOSTS: REVENUE:Customer acquisition costs Revenue modelDistribution costs Life time valueHosting RevenuePeople, etc. Gross margin
  49. 49. #3: LEAN CANVAS (EXAMPLE: FACEBOOK)PROBLEMS: SOLUTION: UNIQUE VALUE UNFAIR ADVANTAGE: CUSTOMER PROPOSITION: SEGMENTS:Hard to reach specific Targeted adspeople with specific Targeted advertising 1 Billion users Marketersdemographics Share, Like, Newsfeed, Knows everything1. Hard to stay in friends and profiles Connect to friends and Consumers at largetouch with all friends familyat once2. How do I share my METRICS: CHANNELS:baby pictures? EARLY ADOPTERS CPC/CPM avg. bid Media agenciesCURRENT pricing Facebook merchantSOLUTIONS: High schools # Served ads advertising programOnline ads e.g. # of conversionsGoogle Friend invitations (c2c,Postcards, Calls, .. DAU virality) Facebook like-partnersCOSTS: REVENUE:Development Highly targeted - CPC/CPM advertising (“e.g. pay to displayHosting an ad to 25 yo old men, that like World of Warcraft in Oulu”)Lobbying Free for consumers
  50. 50. #3: LEAN CANVAS (FILL ORDER)PROBLEMS: SOLUTION: UNIQUE VALUE UNFAIR ADVANTAGE: CUSTOMER PROPOSITION: SEGMENTS: 2 3 9 1CURRENTSOLUTIONS: METRICS: 4 CHANNELS: EARLY ADOPTERS: 8 5COSTS: REVENUE: 7 6
  51. 51. #2: PROGRESSIVE LEARNING BOARD“DE-RISKING PRODUCT CREATION”
  52. 52. 4 KINDS OF RISK IN MARKET EVOLUTION(NOT SOLVED LINEARLY, BUT KIND OF APPEAR CHRONOLOGICALLY) PRODUCT MARKET GROWTH / COMPETITIVENESS RISK RISK SCALE RISK AND PROFIT RISK
  53. 53. (applied from Mark Suster) COMPETITIVENESS AND PROFIT RISK GROWTH /Valuation SCALE RISK MARKET RISK PRODUCT RISK Time
  54. 54. PRODUCT RISKHow important is the problem for the customer?Will your solution solve the problem? Can youbuild it?Does your solution deliver a unique valueproposition?
  55. 55. MARKET RISKWho has the pain?How do they solve problems today?Will they pay for the problem? If not, who will?
  56. 56. GROWTH AND SCALE RISKHow will you find customers?How will customers find you (at scale)?How will your growth engine operate (viral, paid,sticky, ..?)How will you scale to demand?
  57. 57. COMPETITIVENESS AND PROFIT RISKAre you getting paid?Do you have a viable business (LTV!)?Do you have a way to build unfair advantage?
  58. 58. LEARNING/DE-RISKING ON LEAN CANVASPROBLEMS: SOLUTION: UNIQUE VALUE UNFAIR ADVANTAGE: CUSTOMER PROPOSITION: SEGMENTS: 2 PRODUCT RISK: 3 PRODUCT RISK: 2 9 COMPETITIVE PROFIT RISK: 3 MARKET RISK: 1 1CURRENT 1SOLUTIONS: METRICS: 4 PRODUCT RISK: 3 CHANNELS: GROWTH EARLY ADOPTERS: GROWTH 8 5 RISK: RISK: GROWTH 2 1 RISK: MARKET RISK: 3 2COSTS: REVENUE: MARKET RISK: 7 COMPETITIVE PROFIT RISK: 2 3 6COMPETITIVE PROFIT RISK: 1
  59. 59. EXAMPLE: LEARNING IN LEAN IN PRACTICE
  60. 60. PROGRESSIVE LEARNING BOARD Before each experiment: Define Choose the fastest your hypothesis and ways you way to test as an validate learning experiment Lean Canvas Experiment 1: Experiment 2: Experiment 3: Experiment 5: e.g. Experiment 4: e.g. MVP Module e.g. “Problem Interviews” e.g. Interviews e.g. Prototype v1.0Problem/Solution Fit - Product RiskThere is a customer segment with the problem CUSTOMERProblem is important to the customer PROBLEMsegmentProduct delivers UVP (is unique and relevant to UVPcustomer)Product/Market Fit - Market RiskThere is a way to build the product to solve the SOLUTIONproblemThere is a way to connect with early-adopters CUSTOMERCustomers are willing to pay for the solution to REVENUEthe problemGrowth / Scale RiskWe are able find customers CHANNELCustomers are able to find us CHANNELEngine of growth is operative (viral, sticky or CHANNEL / REVENUEpaid)We are able to scale on demand SOLUTION / COST / METRICMarket / Monetization RiskWe are getting paid REVENUEWe are able to generate revenue from each REVENUE / COSTcustomerWe have an unfair advantage UNFAIR ADVANTAGE
  61. 61. PRODUCT HACKER EXTRAS:JOBS-TO-BE-DONEby CLAYTON CHRISTENSEN
  62. 62. STORY ABOUT A MILKSHAKE:WHAT JOB DO YOUHIRE A MILKSHAKE FOR?
  63. 63. JOBS TO BE DONEEXPERIENCES COMPLEMENTINGINTEGRATED SERVICES OFFERING
  64. 64. RECOMMENDATIONS:READ-WORTHY LITERATURE
  65. 65. 3 WORKSHOP
  66. 66. #3: LEAN CANVAS (FILL ORDER)PROBLEMS: SOLUTION: UNIQUE VALUE UNFAIR ADVANTAGE: CUSTOMER PROPOSITION: SEGMENTS: 2 3 9 1CURRENTSOLUTIONS: METRICS: 4 CHANNELS: EARLY ADOPTERS: 8 5COSTS: REVENUE: 7 6
  67. 67. CURRENT HYPOTHESIS PLAN TO EXPERIMENTBUSINESS MODEL AREA PRIORITY CURRENT HYPOTHESIS PLANNED EXPERIMENT
  68. 68. PROGRESSIVE LEARNING BOARD Before each experiment: Define Choose the fastest your hypothesis and ways you way to test as an validate learning experiment Lean Canvas Experiment 1: Experiment 2: Experiment 3: Experiment 5: e.g. Experiment 4: e.g. MVP Module e.g. “Problem Interviews” e.g. Interviews e.g. Prototype v1.0Problem/Solution Fit - Product RiskThere is a customer segment with the problem CUSTOMERProblem is important to the customer PROBLEMsegmentProduct delivers UVP (is unique and relevant to UVPcustomer)Product/Market Fit - Market RiskThere is a way to build the product to solve the SOLUTIONproblemThere is a way to connect with early-adopters CUSTOMERCustomers are willing to pay for the solution to REVENUEthe problemGrowth / Scale RiskWe are able find customers CHANNELCustomers are able to find us CHANNELEngine of growth is operative (viral, sticky or CHANNEL / REVENUEpaid)We are able to scale on demand SOLUTION / COST / METRICMarket / Monetization RiskWe are getting paid REVENUEWe are able to generate revenue from each REVENUE / COSTcustomerWe have an unfair advantage UNFAIR ADVANTAGE
  69. 69. MISTAKES ARE PROOF THAT YOU’RE TRYING.THANKS!kristian.luoma@gmail.com@kluoma

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