The Lean LaunchPadLecture 2: Value Proposition           Steve Blank            Jon Feiber            Jon Burke           ...
VALUE PROPOSITIONS  what are you offering them?   what is that getting done    for them? do they care?                    ...
Value                                                Customer                                                Proposition  ...
Value                                                 Customer                                                Proposition ...
Get, Keep                                                                            and Grow                             ...
Get, Keep                                                                            and Grow                             ...
Technical AssistanceNuclear Medicine and   SOPs for precursors                                                            ...
Technical AssistanceNuclear Medicine and   SOPs for precursors                                                            ...
Where we are…
Key Questions for Value Prop• Problem Statement: What is the problem?• Ecosystem: For whom is this relevant?• Competition:...
Step 1. Spec. the Value Proposition• Product(s)?• Service(s)?• Ecosystem?• Is it a company or just a product?
Problem Statement• What is the problem?• How do you justify your existence?
Value Proposition – Common Mistake•   Is it just a feature of someone else’s product•   Is it a “nice to have” product•   ...
Value Proposition - Discovery• Product  – Long term vision  – features  – Benefits  – Minimum Viable Product spec• For a w...
Product• Problem Statement: What is the problem?• Technology / Market Insight: Why is the problem so hard to  solve?• Mark...
Step 2: What’s the Minimum Viable Product –                   Physical • First, test your understanding of the problem • N...
Step 2: What’s the Minimum Viable Product –                 Web/Mobile • NOW “low fidelity” web/app for customer feedback ...
Key Questions for Value Prop• Problem Statement: What is the problem?• Ecosystem: For whom is this relevant?• Competition:...
Market Type
Type of Market Changes Everything    Existing   Resegmented    New     Clone    Market        Market     Market   Market
Type of Market             Changes Everything      Existing      Resegmented       New             Clone      Market      ...
Definitions: Four Types of Markets         Existing     Resegmented         New        Clone         Market          Marke...
Market Type                 Existing       Resegmented           New           CloneCustomers     Known           Possibly...
Market Type - Existing• Incumbents exist, customers can name the mkt• Customers want/need better performance• Usually tech...
Market Type – Resementing Existing• Low cost provider (Southwest)• Unique niche via positioning (Whole Foods)• What factor...
Market Type – New•   Customers don’t exist today•   How will they find out about you?•   How will they become aware of the...
Market Type – Clone• Takes foreign business model and adapts it to local conditions   –   Language   –   Culture   –   Imp...
Competition• What are customers doing today?• Are competitors threatening to offer  better price or value?• How saturated ...
Technology and Market Insight     Technology Insight         Market Insight•   Moore’s Law             Value chain disrup...
Examples of Market Insight          • People want to play more involved            games than what is currently offered   ...
Examples of Technical Insight               • Topological analysis enables                 highly dimensional data to be  ...
Types of Product Value   Comes from Technical Insight           Comes from Market Insight          More Efficient         ...
How do I test value proposition         hypotheses?
Define Product•   Hardware•   Service•   Knowledge•   Resources•   Networks•   Data
Minimum Viable Product (MVP)          • A product that solves a core            problem for customers          • The minim...
The Art of the MVP• A MVP is not a minimal product• “But my customers don’t know what they want!”• At what point of “I don...
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Lecture 2 NSF I-Corps March 2012 value prop

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  • Try it out with a few teams – toy team – what is the problem? What if you were to explain this to your users? What about your customers? What about a education blogger? Decision maker and economic buyer are the sameParkpoint Capital – government, payment processors, who else?Oral light – suppliers, channels (schein), contract manufacturer, etc.Use board to map out these different parts of the ecosystem – we will deep dive in the next 2 slides.WHO IS THE AUDIENCE? Is it an investor? Is it a customer? Is it a user?
  • What alternative does the customer have right now? How aware are they of the problem?Important context for value proposition – how new is this idea? – Market type
  • Market insight is becoming more and more a requirement
  • Generally impacts some part of your business model diagram (usually NOT the product component)
  • Generally a product / value proposition question
  • Others: Brand/Status, easier to access (distribution); fun; bundling (phone + camera) faster, simpler, smaller, lower cost, more efficient
  • First – how would you define product? (go through different teams)
  • Lecture 2 NSF I-Corps March 2012 value prop

    1. The Lean LaunchPadLecture 2: Value Proposition Steve Blank Jon Feiber Jon Burke Jerry Engel #leanlaunchpad
    2. VALUE PROPOSITIONS what are you offering them? what is that getting done for them? do they care? images by JAM
    3. Value Customer Proposition Segments Technical AssistanceNuclear Medicine and SOPs for precursors (Image Atlas)Radiology and drugs Radiopharmacies Accessibility (RCY) FDA regulatory supportdepartments Recruit clinical sites In vivo animal studies Purity Equipment producers Develop regulatory Speed plan for pre IND PET/SPECT Prescribing physicianscGMP manufacturers Multiplatform Technical assistanceRadiopharmacies meeting ID cGMP CRO Sensitivity (nca) Radiologist who Fund-raising Specific compounds perform studies General Pharmaceutical IP methodology for Direct sales of precursor development PoP data adding fluorine to Drug developers companies lead compounds of Sales of packaged IP interest precursor in cassettes PoP data Radiologists Regulatory plan Cassette manufacturers Understanding of the regulatory process Sales of intermediates Contract cGMP precursor manufacture Salary, Rents Technology license Clinical trials Product license (royalty)
    4. Value Customer Proposition Segments Technical AssistanceNuclear Medicine and SOPs for precursors (Image Atlas)Radiology and drugs Radiopharmacies Accessibility (RCY) FDA regulatory supportdepartments Recruit clinical sites In vivo animal studies Purity Equipment producers Develop regulatory Speed plan for pre IND PET/SPECT Prescribing physicianscGMP manufacturersRadiopharmacies meeting ID cGMP CRO Product/Market Fit Multiplatform Sensitivity (nca) Specific compounds Technical assistance Radiologist who Fund-raising perform studies General Pharmaceutical IP methodology for Direct sales of precursor development PoP data adding fluorine to Drug developers companies lead compounds of Sales of packaged IP interest precursor in cassettes PoP data Radiologists Regulatory plan Cassette manufacturers Understanding of the regulatory process Sales of intermediates Contract cGMP precursor manufacture Salary, Rents Technology license Clinical trials Product license (royalty)
    5. Get, Keep and Grow Technical AssistanceNuclear Medicine and SOPs for precursors (Image Atlas)Radiology and drugs Radiopharmacies Accessibility (RCY) FDA regulatory supportdepartments Recruit clinical sites In vivo animal studies Purity Equipment producers Develop regulatory Speed PET/SPECTcGMP manufacturersRadiopharmacies plan for pre IND meeting Multiplatform Technical assistance Customer Prescribing physicians ID cGMP CRO Sensitivity (nca) Radiologist who Fund-raising Specific compounds Segments perform studies General Channel Pharmaceutical IP methodology for Direct sales of precursor development PoP data adding fluorine to Drug developers companies lead compounds of Sales of packaged IP interest precursor in cassettes PoP data Radiologists Regulatory plan Understanding of Cassette manufacturers the regulatory process Sales of intermediates Contract cGMP precursor manufacture Salary, Rents Technology license Clinical trials Product license (royalty)
    6. Get, Keep and Grow Technical AssistanceNuclear Medicine and SOPs for precursors (Image Atlas)Radiology and drugs Radiopharmacies Accessibility (RCY) FDA regulatory supportdepartments Recruit clinical sites In vivo animal studies Purity Equipment producers Develop regulatory Speed PET/SPECT Who Are Our Customers?cGMP manufacturersRadiopharmacies plan for pre IND meeting Multiplatform Technical assistance Customer Prescribing physicians ID cGMP CRO Sensitivity (nca) Radiologist who Fund-raising Specific compounds Segments perform studies How Do We Reach Them? Channel General Pharmaceutical IP methodology for Direct sales of precursor development PoP data adding fluorine to Drug developers companies lead compounds of Sales of packaged IP interest precursor in cassettes PoP data Radiologists Regulatory plan Understanding of Cassette manufacturers the regulatory process Sales of intermediates Contract cGMP precursor manufacture Salary, Rents Technology license Clinical trials Product license (royalty)
    7. Technical AssistanceNuclear Medicine and SOPs for precursors (Image Atlas)Radiology and drugs Radiopharmacies Accessibility (RCY) FDA regulatory supportdepartments Recruit clinical sites In vivo animal studies Purity Equipment producers Develop regulatory Speed plan for pre IND PET/SPECT Prescribing physicianscGMP manufacturers Multiplatform Technical assistanceRadiopharmacies meeting ID cGMP CRO Sensitivity (nca) Radiologist who Fund-raising Specific compounds perform studies General Pharmaceutical IP methodology for Direct sales of precursor development PoP data adding fluorine to Drug developers companies lead compounds of Sales of packaged IP interest precursor in cassettes PoP data Radiologists Regulatory plan Understanding of Cassette manufacturers the regulatory process Contract cGMP precursor manufacture Costs Sales of intermediates Revenue Salary, Rents Technology license Clinical trials Product license (royalty)
    8. Technical AssistanceNuclear Medicine and SOPs for precursors (Image Atlas)Radiology and drugs Radiopharmacies Accessibility (RCY) FDA regulatory supportdepartments Recruit clinical sites In vivo animal studies Purity Equipment producers Develop regulatory Speed plan for pre IND PET/SPECT Prescribing physicianscGMP manufacturers Multiplatform Technical assistanceRadiopharmacies meeting ID cGMP CRO Sensitivity (nca) Radiologist who Fund-raising Specific compounds perform studies General Pharmaceutical IP methodology for Direct sales of precursor development PoP data adding fluorine to Drug developers companies lead compounds of How Do We Make Money? IP PoP data interest Sales of packaged precursor in cassettes Radiologists Regulatory plan Understanding of Cassette manufacturers the regulatory process Contract cGMP precursor manufacture Costs Sales of intermediates Revenue Salary, Rents Technology license Clinical trials Product license (royalty)
    9. Where we are…
    10. Key Questions for Value Prop• Problem Statement: What is the problem?• Ecosystem: For whom is this relevant?• Competition: What do customers do today?• Technology / Market Insight: Why is the problem so hard to solve?• Market Size: How big is this problem?• Product: How do you do it?
    11. Step 1. Spec. the Value Proposition• Product(s)?• Service(s)?• Ecosystem?• Is it a company or just a product?
    12. Problem Statement• What is the problem?• How do you justify your existence?
    13. Value Proposition – Common Mistake• 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?
    14. Value Proposition - Discovery• 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
    15. Product• 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?
    16. Step 2: What’s the Minimum Viable Product – Physical • First, test your understanding of the problem • Next test your understanding of the solution – Proves that it solves a core problem for customers – The minimum set of features needed to learn from earlyvangelists - Interviews, demos, prototypes, etc - Lots of eyeball contact
    17. Step 2: What’s the Minimum Viable Product – Web/Mobile • 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
    18. Key Questions for Value Prop• Problem Statement: What is the problem?• Ecosystem: For whom is this relevant?• Competition: What do customers do today?• Technology / Market Insight: Why is the problem so hard to solve?• Market Size: How big is this problem?• Product: How do you do it?
    19. Market Type
    20. Type of Market Changes Everything Existing Resegmented New Clone Market Market Market Market
    21. Type of Market Changes Everything Existing Resegmented New Clone Market Market Market Market• Market • Sales •Customers – Market Size – Sales Model •Customers • Needs – Cost of Entry • Needs – Margins • Adoption – Launch Type – Sales Cycle • Adoption – Competitive – Chasm Width •Finance Barriers •Finance Capital • Ongoing – Positioning • Ongoing Capital • Time to Profitability • Time to Profitability
    22. Definitions: Four Types of Markets Existing Resegmented New Clone Market Market Market Market• Existing Market – Faster/Better = High end• Resegmented Market – Niche = marketing/branding driven – Cheaper = low end• New Market – Cheaper/good enough can create a new class of product/customer – Innovative/never existed before• Clone Market • Local adapatation
    23. Market Type Existing Resegmented New CloneCustomers Known Possibly Known Unknown Possibly KnownCustomer Performance Better fit Transform- Local versionNeeds ational improvementCompetitors Many Many if wrong, None None few if rightRisk Lack of Market and Evangelism Misjudge branding, sales product re- and education local needs and definition cycle distribution ecosystemExamples Google Southwest Market Type determines: Groupon Baidu  Rate of customer adoption  Sales and Marketing strategies  Cash requirements
    24. 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
    25. 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)
    26. 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)
    27. Market Type – Clone• Takes foreign business model and adapts it to local conditions – Language – Culture – Import restrictions – Local control/ownership• Need market large enough >100 million
    28. Competition• What are customers doing today?• Are competitors threatening to offer better price or value?• How saturated is our market?
    29. Technology and Market Insight Technology Insight Market Insight• Moore’s Law  Value chain disruption• New scientific  Deregulation discoveries  Changes in how• Typically applies to people work, live and hardware, clean interact and what they techand biotech expect
    30. Examples of Market Insight • People want to play more involved games than what is currently offered • Facebook can be the distribution for such games  Masses of people are more likely to micro- blog than blog  The non-symmetric relationships will allow companies and individuals to self-promote and will impact distribution  European car sharing sensibilities could be adopted in North America  People, particularly in urban environments, no longer wanted to own cars but wanted to have flexibility.
    31. Examples of Technical Insight • Topological analysis enables highly dimensional data to be analyzed without predetermining number of feature sets  Mass produced components can be used to create a miniaturized fluorescence microscope
    32. Types of Product Value Comes from Technical Insight Comes from Market Insight More Efficient Lower Better cost BetterSmaller Distribution Bundling Simpler Faster Better Branding
    33. How do I test value proposition hypotheses?
    34. Define Product• Hardware• Service• Knowledge• Resources• Networks• Data
    35. Minimum Viable Product (MVP) • A product that 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 dollar spent
    36. The Art of the MVP• A MVP is not a minimal product• “But my customers don’t know what they want!”• At what point of “I don’t get it!” will I declare defeat?

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