5. WeCall Customer Relationships
Demand Creation
• Get, Keep and Grow
• How will customers hear about your product?
• How much will it cost to acquire a customer using these
strategies?
• How does market type impact my demand creation strategy?
23. Grow Customers Funnel - Web/Mobile
Earned and
Paid Media
Grow Customers
product updates
Affiliate Programs
Keep Customers
Contests,
events
Blogs, RS LoyaltyProgra
S, emails ms
Viral
Loop
24. • How many come through the
first step?
• How much does that cost?
• What is the conversion between
each level?
• How much in revenues can you
get out of each acquired
customer?
25. Demand Creation by Market Type
• Create, drive demand into your
Existing sales channel
• Educate the market about what‟s
Resegmented changed
• Drive demand into channel
• Educate the market
New • Identify/drive early adopters into your
sales channels
Clone • Copy a business
26. Market Type
Existing Resegmented New
Customers Known Possibly Known Unknown
Customer Needs Performance Better fit Transformational
improvement
Competitors Many Many if wrong, None
How does market type influence demand
few if right creation?
Risk Lack of branding, Market and Evangelism and
sales and product re- education cycle
distribution definition
ecosystem
Examples Google Southwest Groupon
Market Type determines:
Rate of customer adoption
Sales and Marketing strategies
Cash requirements
27. Team Deliverable by Next Week - Web
Get a working web site and analytics up and running
– Track where your visitors are coming from (marketing campaign, search
engine, etc.) and how their behavior differs
– What were your hypotheses about your web site results?
• Actually engage in “search engine marketing” (SEM)
• Spend $20 as a team to test customer acquisition cost.
• Ask your users to take action, such as signing up for a newsletter.
• Use Google Analytics to measure the success of your campaigning.
• Change messaging on site during the block to get costs lower, team that
gets the lowest delta costs wins.
• If you assume virality
• show viral propagation of your product and the improvement of your viral
coefficient over several experiments
• What is your assumed customer lifetime value?
• Are there any proxy companies that would suggest that
this is a reasonable number?
28. Team Deliverable by Next Week
• For non-web teams:
• Get prototype demo working.
• Build demand creation budget and forecast.
• What is your customer acquisition cost?
• Did anything change about Value Proposition or Customers/Users?
• What is your customer lifetime value? Channel incentives – does your
product or proposition extend or replace existing revenue for the channel?
• What is the “cost” of your channel, and it’s efficiency vs. your selling price?
• Everyone: Update you blog/wiki/journal
• What kind of initial feedback did you receive from your users?
• What are the entry barriers?
• Present and explain your marketing campaign. What worked best and why?
30. implantable drug infusion pumps
with remote physician control
for chronic pain patients at home
“the right dose at the right time and place”
Christian Gutierrez (EL), Ellis Meng (PI), Carol Christopher (IM), Tuan Hoang (FE)
31. Chronic Pain v4 FS Team
Trade shows
Faster relief Training Patients
Formulary Acceptance
KOLs
Clinical data
Efficient patient
FDA
Foundations management and Clinicians
Dosing flexibility Support
CMS (Medicare)
Advocacy Groups
Access to high-value
OEMs therapies and Institutions
IP pharmacoeconomics Hospitals
Wireless
Developers
Proprietary
pharmacoeconomics Pain clinics Payors/ICA
knowledge
Electronic health
record providers Human
Resources
Product Dev Costs Unit sales
Manufacturing Costs Support Services
Marketing Costs FDA/Clinical Trials
Bundled kits Electronic records
32. Getting out
Clinicians Dr. Stan Louie, Drug Formulation Expert (USC Pharmacy)
Dr. Giovanni Cucchiaro, Anesthesiologist (CHLA)
Institutions/patients Dr. Diana Hull, Physician (Group Health in Washington
state, formerly at Kaiser California)
Thomas Hsu, Insurance Specialist (Network Medical
Management; a California ICA)
Two chronic pain patients
Pump user and creator of support forum
User of oral narcotics and patches
Regulatory Dr. Frances Richmond (Director Regulatory Science
Program, USC)
Richard Hull (formerly at company selling Lapband)
Entrepreneurs/
Industry
33. Product flow/Channel
Electronic Partners/
Health Fluid Synchrony
OEMS
Records
Electronic Support Pump + Bundled
Records Services Controller Kits
Hospitals
(Anesthesiologists
Patients Neurosurgeons)
Pain Clinic
(Anesthesiologists
Neurosurgeons)
34. Hospitals
Channels (Direct)
Pain Clinics
• Direct to institutions
• Some formularies involved in purchase
decisions
• Some doctors make purchase decision
directly
• Device company/Doctor relationship is key
• Heavily influenced by :
• Clinical study results
• Regulatory approval
• Reimbursement
35. Patient Care Flow (Now)
Partners/
Fluid Synchrony
OEMS
Support Pump + Bundled
Services Controller Kits
Hospitals
Surgery/Rx/ (Anesthesiologists
Patient
Discharged reprogramming Neurosurgeons)
Pain Clinic
Trial period/ Scheduled (Anesthesiologists
Home setting follow-up Neurosurgeons)
Weeks/months
Key factors: Reimbursement , state regulations
36. Patient Care Flow (Proposed)
Electronic Partners/
Health Fluid Synchrony
OEMS
Records
Electronic Support Pump + Bundled
Records Services Controller Kits
Actionable feedback
to doctors/institutions
E-prescription / closing loop
Hospitals
Surgery/Rx/ (Anesthesiologists
Patient
Discharged reprogramming Neurosurgeons)
Pain Clinic
Trial period/ Scheduled (Anesthesiologists
Home setting follow-up Neurosurgeons)
Weeks/months
Days Key factors: Reimbursement , state regulations
37. Regulatory considerations
PMA 510K
Trial size 100’s of patients 20-100
Costs Up to $100,000 per patient
$10-50 MM $1-10 MM
Time ~ 3-4 yrs + post ~ 2-3 yrs
approval follow-on
• PMA approval with grouping of FDA approved drugs.
• Clinical trials results used to obtain CMS (Medicare)
approval
• 510K restricts technology to predicate devices
• Can be more difficult to market against incumbents
• European CE mark is easier to attain (safety and
performance only)
38. Take-aways
• Channel is direct in this existing market
• Channel for e-health is more complex and evolving
• State-to-state regulations can impact incentives
• Can pose problems as electronic records systems vary
across the country
Next Steps
• Understand costs associated with reaching
doctors/institutions directly
• Understand structure of e-health channel
• Develop regulatory pathway (timelines and cost profile)
39. Chronic Pain v4 FS Team
Trade shows Training
Faster relief Patients
KOLs Formulary Acceptance
Clinical data
Efficient patient
Foundations FDA management and Clinicians
Dosing flexibility Support
Advocacy Groups
Access to high-value
OEMs therapies and Institutions
IP pharmacoeconomics Hospitals
Wireless
Developers
Proprietary
pharmacoeconomics Pain clinics Payors
knowledge
Electronic health
record providers Human
Resources
Product Dev Costs Unit sales
Manufacturing Costs Support Services
Marketing Costs FDA/Clinical Trials
Bundled kits Electronic records
40. “insero” = to plant
”gen” = gene
Manufacturing platform for Lucas Arzola (EL)
rapid, cost-effective, and scalable Karen McDonald (PI)
production of therapeutics in tobacco Vasilis Voudouris (Mentor)
41. What We Know
We have a novel technology platform with numerous market
opportunities
Our working hypothesis – that we can scale up and commercialize our
platform for production of life-saving therapeutics
Jon Feiber – “Since you are a platform technology, it makes sense to
engage in „market discovery‟ and „customer discovery‟ at the same
time during the next weeks”
Challenging this hypothesis by speaking with as many experts and
customers as we can
This week: explored decision making and distribution channels in the
case of a pandemic
42. The Business Model Canvas Target Product – seasonal & pandemic flu vaccines
Tobacco Suppliers R&D Speed Long-Term U.S. Government
Gene Synthesis Manufacturing Cost-Effectiveness Contracts with - CDC
Companies Regulatory Approval Robustness Government and - HHS BARDA
CMOs Licensing Scalability Vaccine - DOD DARPA
- Purification Marketing Safety Manufacturers Foreign Governments
- Fill & Finish Ease of Customization NGOs
- Packaging U.S. Supply Vaccine Manufacturers
- QA/QC -Established and
CROs Emerging Biotech
- Clinical Trials
FDA IP – Patents, Trade
Secret
Manufacturing Facility
Distribution through
Government and
Pharma Companies
Capital Investments Contract Manufacturing
Manufacturing Costs Fully Integrated Manufacturing (Sales)
Licensing Costs Licensing (Royalties)
Marketing
43. Getting Out of the Lab!
Cast a broad net by talking to many different experts and customers:
(1) Executives from large companies
Name Title Institution
Michael Girard Sustainability Manager Aerojet
Michael Jacobson Director of Corporate Responsibility Intel
Joseph Kieren Director of Corporate Real Estate AT&T
(2) Entrepreneurs and angel investors from Sacramento
Name Title Institution
Andrew Hargadon Professor of Management UC Davis
WilAgatstein Professor of Management UC Davis
LarryPalley Former General Manager Intel
John Selep Operations Manager HP
ThomasAlberts Consultant SBDC
Cary Adams Head of MedStart Program SARTA
44. Getting Out of the Lab!
(3) Experts in the commercialization of biotech platform technologies
Name Title Institution
Greg McParland Consultant DSM Ventures
Fernando Garcia Senior Director Amyris
(4) Experts in vaccine manufacturing
Name Title Institution
Ann Arvin PCAST Vaccinology Working Group Stanford
(Key Opinion Leader on Vaccines)
Misa Sugui Associate Scientist MedImmune
Floro Cataniag Laboratory Manager MedImmune
45. Channels and Distribution
Conversation with Dr. Ann Arvin – Key Opinion Leader on vaccines
In the case of a pandemic:
Vaccine manufacturers have to be producing vaccines for seasonal flu –
regulatory approval, QA, and validation need to be in place
When a pandemic occurs, the government (BARDA) negotiates a manufacturing
contract with vaccine companies – number of doses, formulation, price, and time
are agreed upon
CDC provides the elucidated strain to the manufacturer
FDA considers the pandemic flu vaccine to be a variation of the seasonal flu
vaccine – new regulatory approval is not necessary
Vaccine manufacturers work with the new strain to ramp up production as
quickly as they can – takes 4-6 months
Sterility and quality testing is performed for the produced vaccines – some tests
are done in-house and some are done by outside laboratories
Vaccine is released
46. Channels and Distribution
Getting the vaccines to the patients
Vaccine manufacturers have contracts with wholesalers (i.e. McKesson Corp.)
to distribute the vaccines – distribution is not a cost for the manufacturers, they
hand over the product
In the case of a pandemic, vaccines are also distributed through local contracts
with the state health departments
Theydistribute the vaccines to hospitals and clinics, where they can be
administered to the patients
47. Organizational Strategy
Conversation with Greg McParland – Former CEO of biotech
platform company: the virtual biotechnology company model
“Starting out and for as long as you can, you should be a virtual
company. You can have contracts to outsource the downstream part of the
process (purification, fill and finish, packaging, etc.) ”
“Keep your core technology and focus on using your manufacturing platform
for protein production”.
Common practice in biotechnology – almost every company has contracts with
CROs, CMOs, marketing and distribution arrangements, etc.
More flexibility – move quickly from failed avenues of research to more
promising projects
Startups partner with big pharma companies to complete clinical trials and take
product to market
“If you build it, they will come” – but only build the essential core
that lets you control your technology platform
48. More Feedback
Conversation with Dr. Ann Arvin – Key Opinion Leader on vaccines
Pain point: Reliability issues with traditional egg platform - willingness to move
away to a different manufacturing platform
Pain point: Current platforms are not fast enough, cannot have an impact in case
of a pandemic - sense of urgency in finding a manufacturing platform that can
produce vaccines faster and at a large scale
Given this landscape, we still believe our technology can solve a significant
problem in the vaccine market
Conversation with Dr. Misa Sugui & Dr. Floro Cataniag – MedImmune
Pain point: attenuated virus platform is harder to work with, safety measures are
more stringent – would prefer recombinant subunit vaccines
Wish: a faster process for vaccine production (our technology can help with this)
Wish: a faster process for clinical trials and for approval of new drugs (this we
can’t do anything about)
MedImmune is a possible partner - always looking for new vaccine production
technologies and new products to incorporate in their pipeline
49. More Feedback
Conversation with Fernando Garcia – Amyris
Biotech platform technology company
First target product: drug for malaria, partnered with Sanofi to commercialize
Change in strategy: they have transitioned into making biofuels
Why have they made this transition? We will follow up with one of the founders
of the company to find out
50. Next Steps
We believe we have a good feel for our value proposition
We need to better understand how we can sell to customers and
how to establish these relationships, how partners’ decisions
are made – meeting with Sanofi Head of External R&D
Keep searching for a business model that will allow us to
commercialize our technology – looking for meetings with
companies that distribute/sell flu vaccine antigens for
research and diagnostic use, trying to determine market
size
We need to talk to many more experts and customers…
52. Interviews
Action Motion
Customer Interaction Meetings: Planned Customer Interaction
1. Director of R&D of C/A partner Meetings:
2. NETL Methane Hydrate RG 1. Jeff Farbacher, CEO Accutran
3. Ed Faust, Global Marketing, Siemens 2. Ed Faust, Global Marketing,
4. Former GE Employee Siemens
5. Berkeley sensors group 3. Charles Noll, Marcellus Shale
6. Tim Fogarty, Director of IW Energy Coalition
Hypothesis Testing: Planned Hypothesis Testing:
1. Ed Faust, Global Marketing, Siemens 1. Dr. GiladKusne, NIST
2. Ann Truschel, Corporate Insurance
Broker
3. Tim Fogarty, Director of IW Energy
53. Chemical,
Physical,
Thermal
….
Chemical
- Every significant market segment has
specific marketing agencies directed
towards selling them goods
Direct Marketing
Possible
Not Possible
[Too expensive]
54. Chemical,
Physical,
Thermal
….
Chemical
- Every significant market segment has
specific marketing agencies directed
towards selling them goods
Direct Marketing
Possible
Not Possible
[Too expensive]
55. Direct sales to plants typically is a very hard wayChemical,
to generate
Physical,
scalable business in the sensors market.Thermal
….
Typically much better to bundle product into offerings from larger
Chemical
sensors businesses
- Every significant market segment has
specific marketing agencies directed
towards selling them goods
Agrees with current approach to this first market!
Direct Marketing
Possible
Not Possible
[Too expensive]
56. Org. Chart – Current C/A Partner
CEO, CTO, CFO, etc. etc. etc.
Global Director of R&D
CEO,
Director of R&D Director of R&D
Director of Marketing
Director of Product
Service
Engineers, etc. etc.
etc.
Editor's Notes
1. One person at a timeFocus groups are a group-think, distraction-filled mess. Avoid them and only talk to one person at a time. If desired, you can bring someone with you to take notes — some UX designers like this approach. Personally, I tend to do one-on-one interviews because I think people loosen up and thus open up a bit more.2. Know your goals and questions ahead of timeHave your assumptions and thus learning goals prioritized ahead of time. Decide who you want to talk to (age, gender, location, profession/industry, affluence, etc), and target interviewees accordingly. Prep your basic flow and list of questions. You might veer off the plan to follow your nose, which is great, but go in prepared.3. Separate behavior and feedback in discussionDecide up front if your focus is going to be on learning a user’s behavior and mindset, and/or getting direct feedback or usability insights on a product or mockup. Do not mix the two in the discussion flow or things will get distorted.Put “behavior and mindset” first in your discussion flow. During this part, don’t let the interviewee go too deep in terms of suggesting features (some people can’t help it), but keep them focused on if they have a problem, how they think about the problem space, and if and how they have tried to solve it in past. Getting people to discuss their actual actions, not just opinions, is very useful.4. Get psyched to hear things you don’t want to hearIf you don’t do this, you might find yourself selling or convincing, or even hearing what you want to hear. Remember, the goal in this early stage is learning and validation/invalidation, not a sale.Unless, of course, you have set a sale or LOI as a goal. You might want to shoot for a commitment from the interviewee as a way to measure true demand. If so, keep it entirely out of the behavior/mindset portion of the discussion.5. Disarm “politeness” trainingPeople are trained not to call your baby ugly. You need to make them feel safe to do this. My approach was to explain that the worst thing that could happen to me was building something people didn’t care about, so the best way they could help me was absolute, brutal honesty.6. Ask open ended questionsDo not ask too many yes/no questions. For example, minimize such questions as “do you like Groupon?” Instead ask “what kinds of deals do you look for, if any?” “What motivates you to hunt for deals?” “How do you discover deals?” “Do you get frustrated with the deal sites out there?”7. Listen, don’t talkTry to shut up as much as possible, and try to keep your questions short and unbiased (i.e. don’t embed the answer you want to hear into the question). Don’t rush to fill the “space” when the customer pauses, because they might be thinking or have more to say.Make sure you are learning, not selling! (at least not until that part of the conversation, if relevant)8. Encourage but don’t influenceIf you stay *too* quiet, some folks might start getting uncomfortable, thinking that they are boring you or you are judging them. You can keep things rolling with little motions of encouragement, such as nods, “I see”, “interesting”, etc. But do not say things that might steer or influence the interviewee.9. Follow your nose and drill downAnytime something tweaks your antenna, drill down with follow up questions. Don’t be afraid to ask for clarifications and the “why” behind the “what”. You can even try drilling into multiple layers of “why” (see “Five Whys”), as long as the interviewee doesn’t start getting annoyed.10. Parrot back or misrepresent to confirmFor important topics, try repeating back what the person said. You can occasionally get one of two interesting results through this. In the first, they correct you because you’ve misinterpreted what they said. In the second, by hearing their own thoughts, they’ll actually realize that their true opinion is slightly different, and they will give you a second, more sophisticated answer.Another approach is to purposefully misrepresent what they just said when you parrot it back, and then see if they correct you. But use this technique sparingly, if at all.11. Ask for introductionsAt the end of every interview, see if you can get leads to another 1 to 3 people to talk to.12. Write up your notes as quickly as possibleThe details behind a conversation fade fast, so if you haven’t recorded the session, write up your notes and color commentary as soon as you can. I brain-dump into a shared Google Doc so the rest of the team can see it. (Note: I typically have not recorded sessions for fear of making interviewees more self-conscious or careful, but other entrepreneurs have said to me that, while it takes some rapport-building at the start, pretty soon people forget about a recorder.)Afterwards: Look for patterns and apply judgementCustomer development interviews will not give you statistically significant data, but they will give you insights based on patterns. They can be very tricky to interpret, because what people say is not always what they do.You need to use your judgement to read between the lines, to read body language, to try to understand context and agendas, and to filter out biases based on the types of people in your pool of interviewees. But it is exactly the ability to use human judgement based on human connections that make interviews so much more useful than surveys.Ultimately, you are better off moving fast and making decisions from credible patterns than dithering about in analysis paralysis.
