True ventures 072011

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True ventures 072011

  1. Welcome to Customer Development<br />Steve Blank<br />Stanford - School of Engineering<br />U.C. Berkeley - Haas School Of Business<br />www.steveblank.com<br />Twitter: sgblank<br />Slides at: slideshare.net/sblank<br />
  2. I Write a Blog <br />www.steveblank.com<br />
  3. I Drew This<br />CustomerDiscovery<br />Company <br /> Building<br />CustomerValidation<br />Customer Creation<br />Pivot<br />
  4. I Called It:Customer Development<br />CustomerDiscovery<br />Company <br /> Building<br />CustomerValidation<br />Customer Creation<br />Pivot<br />
  5. This Talk is Based On<br />Business Model Generation<br />Four Steps to the Epiphany<br />Lean Startup<br />
  6. Scalable<br />Startup<br />Large Company<br /><ul><li>Business Model found
  7. i.e. Product/Market fit</li></ul>- Repeatable sales model<br />- Managers hired<br />What’s A Startup?<br />Search <br />Execute<br />A Startup is a temporary organization used to search for a repeatable and scalable business model <br />
  8. The Memo You Never GetThe Transition – Founders Leave<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Search <br />Build<br />Execute<br /><ul><li>Founders depart
  9. Professional Mgmt
  10. Process
  11. Beginning of scale</li></li></ul><li>Startups Search and Pivot<br />The Search for the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br /> Business Model found by founders<br /><ul><li> customer needs/product features found</li></ul> i.e. Product/Market fit<br /><ul><li> Repeatable sales model</li></ul>- Managers hired<br />
  12. Startups Search, Companies Execute<br />The Execution of the Business Model<br />The Search for the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />- Cash-flow breakeven<br />- Profitable<br />- Rapid scale<br />- New Senior Mgmt<br />~ 150 people<br /><ul><li>Business Model found
  13. Product/Market fit</li></ul>- Repeatable sales model<br />- Managers hired<br />
  14. Metrics Versus Accounting<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large<br />Company<br />Traditional Accounting<br /><ul><li>Balance Sheet
  15. Cash Flow Statement
  16. Income Statement</li></li></ul><li>Metrics Versus Accounting<br />The Search for the Business Model<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large<br />Company<br />Startup Metrics<br /><ul><li> Customer Acquisition Cost
  17. Viral coefficient
  18. Customer Lifetime Value
  19. Average Selling Price/Order Size
  20. Monthly burn rate
  21. etc. </li></ul>Traditional Accounting<br /><ul><li> Balance Sheet
  22. Cash Flow Statement
  23. Income Statement</li></li></ul><li>Customer Validation Versus Sales<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large<br />Company<br />Sales<br /><ul><li>Sales Organization
  24. Scalable
  25. Price List/Data Sheets
  26. Revenue Plan</li></li></ul><li>Customer Validation Versus Sales<br />The Search for the Business Model<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large<br />Company<br />Customer Validation<br /><ul><li> Early Adopters
  27. Pricing/Feature unstable
  28. Not yet repeatable
  29. “One-off’s”</li></ul>Sales<br /><ul><li> Sales Organization
  30. Scalable
  31. Price List/Data Sheets
  32. Revenue Plan</li></li></ul><li>Engineering Versus Agile Development<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Engineering<br /><ul><li> Requirements Docs.
  33. Waterfall Development
  34. QA
  35. Tech Pubs</li></li></ul><li>Engineering Versus Agile Development<br />The Search for the Business Model<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Engineering<br /><ul><li> Requirements Docs.
  36. Waterfall Development
  37. QA
  38. Tech Pubs</li></ul>Agile Development<br /><ul><li> Continuous Deployment
  39. Continuous Learning
  40. Self Organizing Teams
  41. Minimum Feature Set
  42. Pivots</li></li></ul><li>Startups Model, Companies Plan<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br />Business Plan<br /><ul><li> describes “knowns”
  43. features
  44. customers/markets
  45. business model</li></li></ul><li>Startups Model, Companies Plan<br />The Search for the Business Model<br />The Execution of the Business Model<br />Scalable<br />Startup<br />Transition<br />Large Company<br /><ul><li>Business Model
  46. describes “unknowns”
  47. customer needs
  48. feature set
  49. business model
  50. found by iteration
  51. Plan describes “knowns”
  52. Known features for line extensions
  53. Known customers/markets
  54. Known business model</li></li></ul><li>How Do Startups Search For A Business Model?<br /><ul><li>The Search is Customer Development
  55. The Implementation is Agile Development
  56. The Sum is the Lean Startup</li></li></ul><li>Customer Development<br />
  57. I Have a Vision<br />
  58. I Know What Needs to Be Done<br />
  59. Lets Launch a New Product!<br />
  60. Five Ways Founders Fail<br />
  61. #1I Know Who The Customer Is<br />
  62. #2I Know Exactly the Product They Need<br />
  63. #3I Know the Problem They Have<br />
  64. #4We Can Fix It After We Ship It All<br />
  65. #5<br />All I Need to Do is Execute the Plan<br />
  66. Product Introduction Model<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />
  67. Product Introduction Model<br />The Leading Cause of Startup Death<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />
  68. Product Introduction Model:Two Implicit Assumptions<br />Customer Problem: known<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br /> Product Features: known<br />
  69. Tradition – Hire Marketing<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />- Create Demand<br />- Launch Event<br />- “Branding”<br />- Hire PR Agency<br />- Early Buzz<br /><ul><li> Create Marcom </li></ul> Materials<br />- Create Positioning<br />Marketing<br />
  70. Tradition – Hire Sales<br />Concept/Seed Round<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />- Create Demand<br />- Launch Event<br />- “Branding”<br />- Hire PR Agency<br />- Early Buzz<br /><ul><li> Create Marcom </li></ul> Materials<br />- Create Positioning<br />Marketing<br /><ul><li> Build Sales Organization
  71. Hire Sales VP
  72. Hire 1st Sales Staff</li></ul>Sales<br />
  73. Tradition – Hire Bus Development<br />Concept<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />- Create Demand<br />- Launch Event<br />- “Branding”<br />- Hire PR Agency<br />- Early Buzz<br /><ul><li> Create Marcom </li></ul> Materials<br />- Create Positioning<br />Marketing<br /><ul><li> Build Sales Channel / Distribution
  74. Hire Sales VP
  75. Pick distribution Channel</li></ul>Sales<br />Business <br />Development<br /><ul><li> Hire First Bus Dev
  76. Do deals for FCS</li></li></ul><li>Tradition – Hire Engineering<br />Concept<br />Product Dev.<br />Alpha/Beta Test<br />Launch/<br />1st Ship<br />- Create Demand<br />- Launch Event<br />- “Branding”<br />- Hire PR Agency<br />- Early Buzz<br /><ul><li> Create Marcom </li></ul> Materials<br />- Create Positioning<br />Marketing<br /><ul><li> Build Sales Channel / Distribution
  77. Hire Sales VP
  78. Pick distribution Channel</li></ul>Sales<br />Business <br />Development<br /><ul><li> Hire First Bus Dev
  79. Do deals for FCS</li></ul>Engineering<br /><ul><li> Write MRD
  80. Waterfall
  81. Q/A
  82. Tech Pubs</li></li></ul><li>No Business Plan survives first contact with customers<br />
  83. Startups Are Not Smaller Versions of Large Companies<br />
  84. Startups Are Not Smaller Versions of Large Companies<br />Large Companies Execute Known Business Models<br />
  85. Startups Are Not Smaller Versions of Large Companies<br />Startups Search for Unknown Business Models<br />
  86. So Search for a Business Model<br />
  87. The Business Model:<br />Any company can be described in 9 building blocks<br />
  88. CUSTOMER SEGMENTS<br />which customers and users are you serving? <br />which jobs do they really want to get done?<br />
  89. VALUE PROPOSITIONS<br />what are you offering them? what is that <br />getting done for them? do they care?<br />
  90. CHANNELS<br />how does each customer segment want to be reached? through which interaction points?<br />
  91. CUSTOMER RELATIONSHIPS<br />what relationships are you establishing with each segment? personal? automated? acquisitive? retentive?<br />
  92. REVENUE STREAMS<br />what are customers really willing to pay for? how? <br />are you generating transactional or recurring revenues?<br />
  93. KEY RESOURCES<br />which resources underpin your business model? which assets are essential?<br />
  94. KEY ACTIVITIES<br />which activities do you need to perform well in your business model? what is crucial?<br />48<br />
  95. KEY PARTNERS<br />which partners and suppliers leverage your model? <br />who do you need to rely on?<br />
  96. COST STRUCTURE<br />what is the resulting cost structure? <br />which key elements drive your costs?<br />
  97. value proposition<br />customer relationships<br />key activities<br />customer segments<br />key partners<br />cost structure<br />revenue streams<br />key <br />resources<br />channels<br />51<br />images by JAM<br />
  98. sketch out your business model<br />
  99. sketch out your business models<br />
  100. But,Realize They’re Hypotheses<br />
  101. 9 Guesses<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />Guess<br />
  102. Customer Development<br />The founders<br />^<br />Get Out of the Building<br />
  103. Customer DevelopmentThe Search For the Business Model<br />Company<br />Building<br />CustomerDiscovery<br />CustomerValidation<br />Customer Creation<br />Pivot<br />
  104. Customer Discovery<br />CustomerDiscovery<br />CustomerValidation<br />Company<br />Building<br />CustomerCreation<br />Stop selling, start listening<br />Test your hypotheses<br />Continuous Discovery<br />Done by founders<br />
  105. Test Hypotheses:<br /><ul><li>Product
  106. Market Type
  107. Competition</li></ul>Turning Hypotheses to Facts<br />
  108. Test Hypotheses:<br /><ul><li>Problem
  109. Customer
  110. User
  111. Payer</li></li></ul><li>Test Hypotheses:<br /><ul><li>Channel</li></li></ul><li>Test Hypotheses:<br /><ul><li>Demand Creation</li></ul>Test Hypotheses:<br /><ul><li>Problem
  112. Customer
  113. User
  114. Payer</li></ul>Test Hypotheses:<br /><ul><li>Product
  115. Market Type
  116. Competitive</li></ul>Test Hypotheses:<br /><ul><li>Channel
  117. (Customer)
  118. (Problem)</li></ul>Test Hypotheses:<br /><ul><li>Channel</li></ul>Test Hypotheses:<br /><ul><li>Size of Opportunity/Market
  119. Validate Business Model</li></ul>Test Hypotheses:<br /><ul><li>Pricing Model / Pricing</li></li></ul><li>Test Hypotheses:<br /><ul><li>Demand Creation</li></ul>Test Hypotheses:<br /><ul><li>Problem
  120. Customer
  121. User
  122. Payer</li></ul>Agile Development<br />Test Hypotheses:<br /><ul><li>Product
  123. Market Type
  124. Competitive</li></ul>Test Hypotheses:<br /><ul><li>Channel
  125. (Customer)
  126. (Problem)</li></ul>Customer Development Team<br />Test Hypotheses:<br /><ul><li>Channel</li></ul>Test Hypotheses:<br /><ul><li>Size of Opportunity/Market
  127. Validate Business Model</li></ul>Test Hypotheses:<br /><ul><li>Pricing Model / Pricing</li></li></ul><li>The Minimum Viable Product (MVP)<br /><ul><li> Smallest feature set that gets you the most …</li></ul> - orders, learning, feedback, failure…<br />
  128. The Pivot<br /><ul><li>The heart of Customer Development
  129. Iteration without crisis
  130. Fast, agile and opportunistic</li></li></ul><li>Pivot Cycle Time Matters<br /><ul><li>Speed of cycle minimizes cash needs
  131. Minimum feature set speeds up cycle time
  132. Near instantaneous customer feedback drives feature set</li></li></ul><li>The Pivot<br />A Pivot is the change of one or more Business Model Canvas Components <br />
  133. The Pivot<br />Strong clinical data<br />Training<br />Maintenance<br />Conferences<br />CME courses<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Publishing<br />Doctors:<br />Earlier detection<br />Price<br />Accuracy<br />Patients:<br />Radiation Free<br />Non-Invasive<br />A Pivot is the change of one or more Business Model Canvas Components <br />Leading doctors<br />Key Opinion Leaders<br />3rd party manufacturers<br />Distributors<br />Breast Cancer Foundations<br />ACOGACS<br />OB/GYNs<br />PCPs<br />Direct Sales to hospitals<br />Distributor<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Marketing Costs<br />Capital Equipment Sales and disposable item<br />Per use fees<br />
  134. How Does This Really Work?Stanford Lean LaunchPad Class<br />
  135. How Does This Really Work?Stanford Lean LaunchPad Class<br />8 Weeks From an Idea to a Business<br />
  136. Pivot ExampleRobotic Weeding<br />Talked 75 Customers in 8 Weeks<br />
  137. Our initial plan<br />Confidential<br />
  138. 20 interviews, 6 site visits…We got OUR Boots dirty<br />Weeding<br />Visited two farms in Salinas Valley to better understand problem<br />Interviewed:<br /><ul><li>Bolthouse Farms, Large Agri-Industry in Bakersfield
  139. White Farms, Large Peanut farmer in Georgia
  140. REFCO Farms, large grower in Salinas Valley
  141. Rincon Farms, large grower in Salinas Valley
  142. Small Organic Corn/Soy grower in Nebraska
  143. Heirloom Organics, small owner/operator, Santa Cruz Mts
  144. Two small organic farmers at farmers market
  145. Ag Services of Salinas, Fertilizer applicator</li></ul>Mowing<br />Interviewed:<br /><ul><li>Golf: Stanford Golf course
  146. Parks: Stanford Grounds Supervisor, head of maintenance and lead operator (has crew of 6)
  147. Toro dealer (large mower manufacturer)
  148. User of back-yard mowing system
  149. Maintenance Services for City of Los Altos
  150. Colony Landscaping (Mowing service for stadiums)</li></li></ul><li>Business Plan Autonomous Vehicles for Mowing & Weeding<br />Dealers sell, installs and supports customer<br />Co. trains dealers, supports dealers<br />- Innovation<br />- Customer Education<br />- Dealer training<br />Mowing<br />- Owners of public or commercially used green spaces (e.g. golf courses)<br />- Landscaping service provider<br />Weeding<br />- Farmers with manual weeding operations<br />We reduce operating cost<br />- Labor reduction<br />- Better utilization of assets (eg mow or weed at nights)<br />- Improved performance (less rework, food safety)<br />- Dealers (Mowing and Ag)<br />- Vehicle OEMs (John Deere, Toro, Jacobsen, etc)<br />- Research labs<br />- Mowing Dealers<br />- Ag Dealers<br />Engineers on Autonomous vehicles, GPS, path-planning<br />Asset sale<br />Our revenue stream derives from selling the equipment<br />Dealer discount <br />COGS seek a 50-60% Gross Margin<br />Heavy R&D investment <br />
  151. Found weeding in organic crops is HUGE problem; 50 - 75% of costs<br />Crews of 100s-1000<br />Back-breaking task<br />(Ilegal) labor harder to get <br />1-5 weedings per year/field<br />$250-3,500 per acre and increasing<br />Food contamination risk<br />
  152. Decision to make – mowing vs weeding<br />
  153. Autonomous vehiclesWEEDING<br />Dealers sell, installs and supports customer<br />Co. trains dealers, supports dealers<br />- Innovation<br />- Customer Education<br />- Dealer training<br />- Low density vegetable growers<br />- High density vegetable growers<br />- Thinning operations<br />- Conventional vegetables<br />We reduce operating cost<br />- Labor reduction (100 to 1)<br />- Reduced risk of contamination<br />- Mitigate labor availability concerns<br />- Ag Dealers<br />- Ag Service providers<br />- Research labs<br />- Ag Dealers<br />- Ag Service providers<br />Engineers on Machine Vision<br />Two problems:<br />- Identification<br />- Elimination<br />Asset sale<br />Our revenue stream derives from selling the equipment<br />Dealer discount <br />COGS seek a 50-60% Gross Margin<br />Heavy R&D investment <br />
  154. 1 Week – 1 CarrotBot<br />Confidential<br />
  155. CarrotBot<br />Machine Vision data collection platform<br />Monochrome & Color Cameras<br />Laser-line sweep (depth measurement)<br />Encoders (position/velocity)<br />Onboard data acquisition & power<br />CarrotBot 1.0<br />
  156. The Business Plan Canvas Updated<br /><ul><li>Farming conventions.
  157. Demo, demo, and demo!!
  158. Proximity is paramount
  159. Technology Design
  160. Marketing
  161. Demo and customer feedback
  162. Organic Farmers
  163. Weeding Service Providers
  164. Conventional Farmers
  165. Cost Reduction
  166. Remove labor force pains
  167. Eliminate bio-waste hazards
  168. Research Labs
  169. Equipment Manufacturers
  170. Distribution Network
  171. Service Providers
  172. IP – Patents
  173. Video Classifier Files
  174. Robust Technology
  175. Dealers
  176. Direct Service
  177. Indirect Service
  178. … then Dealers
  179. Asset Sale
  180. Direct Service with equipment rental
  181. … then Asset Sale</li></ul>Value-Driven<br />
  182. Visit Highlights<br />Above: Organic Carrots, 7wks. <br />Top right: Conventional carrots<br />Bottom Right: Very weedy. Will require multiple passes of hand weeding<br />
  183. Visit Highlights<br />Carrot vs. Weeds<br />Due to small root systems, carrots have no chance against weeds <br />
  184. Visit Highlights<br />Organic Broccoli, closely cultivated. Weeds close to plants are hand-picked<br />
  185. Visit Highlights<br />State of the Art in Weeding Technology for Organic Crops<br />
  186. Customer Hypothesis<br />Pre-Test<br />Hypothesis Confirmed<br /><ul><li> Growers interested in own equipment
  187. Industrial (10,000s of acres)
  188. Large (1,000s of acres)
  189. Willing to pay $100k for one unit
  190. Smaller growers (100s of acres) usually subcontract the labor services or rent equipment
  191. All purchases through local dealers
  192. Customer service is essential</li></ul>Post-Test<br />
  193. Customer Map #1 – Industrial Growers<br />Example: Bolthouse Farms – Large Industrial Carrot Producer – 8K acres/yr<br /><ul><li> Equipment Operator
  194. Local Farm Mgr
  195. Cliff Kirkpatrick, visited
  196. Director, Ag Technology
  197. Justin Grove, interviewed</li></ul>Equipment Operator<br /><ul><li> VP, Growing Operations
  198. CFO, CEO (Jeff Dunn)</li></ul>Cliff, Farm Mgr<br />
  199. Customer Map #2 – Service Providers<br />Example: Ag Services – Service Provider, Salinas Valley<br /><ul><li> Equipment Operator
  200. Grower
  201. Service Mgr</li></ul>Me (left), Marty (middle, Service Mgr), Doug (right, Grower)<br /><ul><li> ?? (service mgr’s boss)</li></li></ul><li>The Business Plan Canvas Updated<br /><ul><li>Farming conventions.
  202. Demo, demo, and demo!!
  203. Proximity is paramount
  204. Technology Design
  205. Marketing
  206. Demo and customer feedback
  207. Mid/Large Organic Farmers
  208. Agricultural corporations
  209. Weeding Service Providers
  210. Mid/Large Conventional Farmers
  211. Cost Reduction
  212. Remove labor force pains
  213. Eliminate bio-waste hazards
  214. Research Labs
  215. Equipment Manufacturers
  216. Distribution Network
  217. Service Providers
  218. IP – Patents
  219. Video Classifier Files
  220. Robust Technology
  221. Direct Service
  222. Indirect Service
  223. … then Dealers
  224. Direct Service with equipment rental
  225. ($1,500/d; 120d/yr )
  226. Low density: $1,500/d
  227. High density: $6,000/d</li></ul>Value-Driven<br />
  228. World Ag Expo interviews:the need is real and wide spread<br />10+ interviews at show<br />Everyone confirmed the need<br />Robocrop, UK based, crude competitor sells for $171 K<br />Revenue Stream<br />Mid to small growers prefer a service<br />Large growers prefer to buy, but OK with service until technology is proven<br />Charging for labor cost saved is OK, as we provide other benefits (food safety, labor availability)<br />Confidential<br />
  229. The Business Plan Canvas Updated<br /><ul><li>Farming conventions.
  230. Demo, demo, and demo!!
  231. Proximity is paramount
  232. Technology Design
  233. Marketing
  234. Demo and customer feedback
  235. Mid/Large Organic Farmers
  236. Agricultural corporations
  237. Weeding Service Providers
  238. Mid/Large Conventional Farmers
  239. Research Labs
  240. Equipment Manufacturer
  241. Distribution Network
  242. Service Providers
  243. 2 or 3 Key Farms
  244. Cost Reduction
  245. Remove labor force pains
  246. Eliminate bio-waste hazards
  247. IP – Patents
  248. Video Classifier Files
  249. Robust Technology
  250. Direct Service
  251. Indirect Service
  252. … then Dealers
  253. Direct Service with equipment rental
  254. Low density: $1,500/d
  255. High density: $6,000/d</li></ul>Value-Driven<br /><ul><li> R&D
  256. Bill of Materials
  257. Training & Service
  258. Sales</li></li></ul><li>Autonomous weeding - Final<br />Direct<br />- Provide high quality service at competitive price<br />- Innovation<br />- Customer Education<br />- Dealer training<br />- Low density vegetable growers<br />- High density vegetable growers<br />- Thinning operations<br />- Conventional vegetables<br />We reduce operating cost<br />- Labor reduction (100 to 1)<br />- Reduced risk of contamination<br />- Mitigate labor availability concerns<br />- Ag Service providers<br />- Research Institutes (eg UC Davis, Laser Zentrum Hannover)<br />- 3-4 key farms<br />Direct <br />- Alliance with service providers<br />- Eventually sell through dealers<br />Engineers on Machine Vision<br />Two problems:<br />- Identification<br />- Elimination<br />Service provision<br />- Charge by the acre with modifier according to weed density <br />- Eventually move to asset sale<br />Costs for service provision<br />COGS seek a 50-60% Gross Margin<br />Heavy R&D investment <br />
  259. MammOptics<br />Final project presentation for E 245 Winter 2011<br />
  260. Project Overview<br />Initial industry guesses and customer hypothesis<br />
  261. MammOptics<br />Initial Idea<br />Breast cancer<br />Mammography<br />Leading cause of cancer in women<br />190,000 diagnosis every year US<br />41,000 deaths every year US<br />Increasing diagnosis rates<br />15%-25% false negatives rate<br />25% false positives rate<br />Requires X-ray radiation<br />Low resolution<br />MammOptics<br />Novel technology based on RF-modulated optical spectroscopy<br /><ul><li> Earlier detection
  262. Non-radiative
  263. Non-invasive</li></li></ul><li>MammOptics<br />Technology Comparison<br />I.I.T.Y.I.W.H.T.K.Y<br />
  264. MammOptics<br />Business Model Canvas 1 of 4<br />Strong clinical data<br />Training<br />Maintenance<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Hospitals<br />Leading doctors<br />3rd party manufacturers<br />Distributors<br />Pioneering radiologists in<br />hospitals<br />Radiation-free<br />Earlier detection<br />Non-invasive<br />IP <br />Leading doctors<br />Technical Expertise<br />Direct sales to hospitals<br />Product Development<br />Clinical trials<br />Operating Costs<br />Capital equipment sales and disposable item<br />
  265. MammOptics<br />MammOptics<br />Business Model Canvas 1 of 4<br />Business Model Canvas 1 of 4<br />Strong clinical data<br />Training<br />Maintenance<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Initial guess<br />Initial guess<br />Hospitals<br />Leading doctors<br />3rd party manufacturers<br />Distributors<br />Pioneering radiologists in<br />hospitals<br />Radiation-free<br />Earlier detection<br />Non-invasive<br />Test:<br /> Customer segment<br /> Value proposition<br />Initial guess<br />IP <br />Leading doctors<br />Technical Expertise<br />Direct sales to hospitals<br />Product Development<br />Clinical trials<br />Operating Costs<br />Initial guess<br />Capital equipment sales and disposable item<br />
  266. Finding the right customer<br />From radiologists to gynecologists<br />
  267. MammOptics<br />Excursions into hospitals<br />Debra Ikeda<br />Jason Davies<br />Jafi Alissa Lipson<br />Sunita Pal<br />Leading doctors<br />6 women >40 <br />8 women <40<br />Patients<br />Alicia X-ray mammography<br />Technicians<br />Hospital Managers<br />Paul Billings<br />Holly V. Gautier<br />
  268. MammOptics<br />Hospital purchasing decision tree<br />
  269. MammOptics<br />Hospital purchasing decision tree<br />Hospitals<br />Complex purchasing decision tree. Several saboteours<br />
  270. MammOptics<br />Private practice purchasing decision tree<br />
  271. MammOptics<br />Private practice purchasing decision tree<br />Private practice<br />Faster adoption rate<br />Attractive value proposition<br />✔<br />
  272. MammOptics<br />Business Model Canvas 2 of 4<br />Strong clinical data<br />Training<br />Maintenance<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Doctors:<br />Earlier detection<br />Price<br />Accuracy<br />Patients:<br />Radiation Free<br />Non-Invasive<br />Hospitals (Capital Spending Committee)<br />Leading doctors<br />3rd party manufacturers<br />Distributors<br />Research Hospitals<br />Pioneering Doctors<br />Hospitals<br />OB/GYNs<br />PCPs<br />Direct Sales to doctors<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Capital Equipment Sales and disposable item<br />
  273. MammOptics<br />Business Model Canvas 2 of 4<br />Strong clinical data<br />Training<br />Maintenance<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Doctors:<br />Earlier detection<br />Price<br />Accuracy<br />Patients:<br />Radiation Free<br />Non-Invasive<br />Hospitals (Capital Spending Committee)<br />Leading doctors<br />3rd party manufacturers<br />Distributors<br />Research Hospitals<br />Pioneering Doctors<br />Hospitals<br />OB/GYNs<br />PCPs<br />How do we get to our customer?<br />Need sensitivity and specificity<br />Direct Sales to doctors<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Capital Equipment Sales and disposable item<br />
  274. Getting to our customer<br />The world of direct sales and medical marketing<br />
  275. MammOptics<br />Interviews<br />Breast Cancer Advocacy Groups<br />Be Bright Pink<br />Jennifer Glover<br />Dr. Cindy Woo<br />Dr. Jags Powers<br />Dr. Aaron Shuvkan<br />OB/GYNs<br />Katrina Bell<br />Tanay Dudhela<br />Jed Hwang<br />Medical Sales<br />FDA/Clinical Trials<br />Phyllis Whitely<br />Carl Simpson<br />
  276. MammOptics<br />Marketing<br />
  277. MammOptics<br />Marketing<br />Strong influence on doctors via ACOG Standard of Care<br />Strongly influenced by KOLs<br />Access to ACOG by former member<br />
  278. MammOptics<br />Marketing<br />Researchers with strong peer recommendations<br />Researchers conducting important clinical trials<br />Outsourced survey research<br />Researchers with numerous publications<br />
  279. MammOptics<br />Marketing<br />Focus on prominent journals <br />Need two big publications<br />Choose KOL as Principal Investigators (PI)<br />
  280. MammOptics<br />Marketing<br />Effective method for educating doctors<br />Workshop must be approved by ACOG<br />Doctors required to attend workshops<br />Taught by objective medical experts<br />
  281. MammOptics<br />Marketing<br />ACOG Annual Clinical Meeting <br />Opportunity for feedback from doctors<br />Miami Breast Cancer Conference <br />
  282. MammOptics<br />Marketing<br />Trusted information source for patients<br />Access to media outlets<br />Critical opinion leader for technology adoption<br />
  283. MammOptics<br />Channel Strategies and Costs<br />Individual<br />Doctors<br />High value medical products<br />(e.g. cardiovascular stents)<br />Direct Sales<br /><ul><li>Doctor education
  284. Direct feedback from doctors
  285. Very expensive</li></ul>Individual Doctors<br />Purchasing Administrators<br />Purchasing Administrators<br />Commodity medical products<br />(e.g. latex gloves)<br />Distributors<br /><ul><li>No doctor education
  286. No customer feedback
  287. Inexpensive</li></li></ul><li>MammOptics<br />Channel Strategies and Costs<br />Sales strategy 1<br />Sales strategy 2<br />5 dedicated sales people<br />$150,000 each/year<br />Hire nurses or technicians<br />with established<br />relationships<br />Early adopter feedback<br />Continue with core group of sales people<br />Use women’s healthcare equipment distributor<br />Already established network of customers<br />
  288. MammOptics<br />Pricing Strategy<br />Equipment <br />Lease model<br />Per-use model<br />Consumable<br />Cost of the device<br />$50,000<br />$5,000<br />$5,000<br />$25,000<br />Service per year<br />$3,000<br />$10,000<br />0<br />0<br />Per-use fee<br />0<br />0<br />$50<br />0<br />Consumable<br />0<br />0<br />0<br />$20<br />
  289. MammOptics<br />Pricing Strategy<br />Approved by customers and investors<br />Equipment <br />Lease model<br />Per-use model<br />Consumable<br />Cost of the device<br />$50,000<br />$5,000<br />$5,000<br />$25,000<br />Service per year<br />$3,000<br />$10,000<br />0<br />0<br />Per-use fee<br />0<br />0<br />$50<br />0<br />Consumable<br />0<br />0<br />0<br />$20<br />
  290. MammOptics<br />Customer Workflow<br />Current market<br />Insurance<br />Mammography<br />Radiologist<br />Hospital Administration<br />Technician<br />ACOG<br />ACS<br />Doctor specialty committee <br />
  291. MammOptics<br />Customer Workflow<br />Current market<br />But what would happen if we replace mammography?<br />Insurance<br />Mammography<br />Radiologist<br />Hospital Administration<br />Technician<br />ACOG<br />ACS<br />Doctor specialty committee <br />
  292. MammOptics<br />Customer Workflow<br />Insurance<br />Mammography<br />Radiologist<br />Breast Radiologists<br />Hospitals<br />Technicians<br />Loss of jobs<br />Eliminates loss leader<br />Puts emphasis on biopsies<br />Loss of jobs<br />Hospital Administration<br />Technician<br />ACOG<br />ACS<br />Doctor specialty committee <br />
  293. MammOptics<br />Customer Workflow<br />Insurance<br />Mammography<br />Radiologist<br />Hospital Administration<br />Technician<br />ACOG<br />ACS<br />Doctor specialty committee <br />
  294. MammOptics<br />Customer Workflow<br />Insurance<br />Mammography<br />Radiologist<br />Insurance<br />ACOG/ACS<br />Same cost as mammography ($140)<br />Reduced number of biopsies ($1000)<br />Improved healthcare<br />(mammography weak technique)<br />Hospital Administration<br />Technician<br />ACOG<br />ACS<br />Doctor specialty committee <br />
  295. MammOptics<br />Customer Workflow<br />Insurance<br />Mammography<br />Radiologist<br />Hospital Administration<br />Technician<br />ACOG<br />ACS<br />Doctor specialty committee <br />
  296. MammOptics<br />Customer Workflow<br />Insurance<br />PCP<br />OB/GYN<br />Mammography<br />Patient<br />Radiologist<br />Hospital Administration<br />Technician<br />MammOptics<br />Doctor specialty committee <br />ACOG<br />ACS<br />
  297. MammOptics<br />Customer Workflow<br />Insurance<br />PCP<br />OB/GYN<br />PCP<br />OB/GYN<br />Mammography<br />Mammography<br />Patient<br />Patient<br />Radiologist<br />Radiologist<br />PCP OB/GYNs<br />Patient<br />MammOptics<br />Increased revenue<br />More complete patient care<br />Improved healthcare<br />Comfort<br />Revenue<br />Hospital Administration<br />Technician<br />Hospital Administration<br />Technician<br />MammOptics<br />MammOptics<br />Doctor specialty committee <br />ACOG<br />ACS<br />
  298. MammOptics<br />Customer Workflow<br />Insurance<br />PCP<br />OB/GYN<br />Mammography<br />Patient<br />Radiologist<br />Hospital Administration<br />Technician<br />MammOptics<br />ACOG<br />ACS<br />Doctor specialty committee <br />
  299. MammOptics<br />Business Model Canvas 3 of 4<br />Strong clinical data<br />Training<br />Maintenance<br />Conferences<br />CME courses<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Publishing<br />Doctors:<br />Earlier detection<br />Price<br />Accuracy<br />Patients:<br />Radiation Free<br />Non-Invasive<br />Leading doctors<br />Key Opinion Leaders<br />3rd party manufacturers<br />Distributors<br />Breast Cancer Foundations<br />ACOGACS<br />OB/GYNs<br />PCPs<br />Direct Sales to hospitals<br />Distributor<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Marketing Costs<br />Capital Equipment Sales and disposable item<br />Per use fees<br />
  300. MammOptics<br />Business Model Canvas 3 of 4<br />Strong clinical data<br />Training<br />Maintenance<br />Conferences<br />CME courses<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />ReimbursementPublishing<br />Doctors:<br />Earlier detection<br />Price<br />Accuracy<br />Patients:<br />Radiation Free<br />Non-Invasive<br />Leading doctors<br />Key Opinion Leaders<br />3rd party manufacturers<br />Distributors<br />Breast Cancer Foundations<br />ACOGACS<br />OB/GYNs<br />PCPs<br />Learned how to reach the customer<br />How do we build a company based on this?<br />Direct Sales to hospitals<br />Distributor<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Marketing Costs<br />Capital Equipment Sales and disposable item<br />Per use fees<br />
  301. Building the company<br />The backstage of a medical device company<br />
  302. MammOptics<br />Interviews<br />Stanford StatisticsSteve Axelrod<br />Marga Ortigas-Wedekind<br />FDA Clinical Trials<br />Nick Mourlas<br />Don Archambault<br />Manufacturing<br />Shannon Bergstedt<br />Ali Habib<br />Reimbursement<br />Venture Capitalists<br />Dana Mead<br />Bill Starling<br />Doctors/Sales<br />Dr. Aron Shuftan<br />Jed Hwang<br />Michael J. Nohr<br />
  303. MammOptics<br />Partners<br />Manufacturing<br />Choose manufacturing facility close to home<br />
  304. DSP<br />RFIC<br />Photo probe<br />Disposable head<br />MammOptics<br />Manufacturing Partner<br />I.I.T.Y.I.W.H.T.K.Y<br /> 9 Inches<br />~5 lbs<br />75% gross margin<br />Discounts for Revenue Model<br />COGS<br />$4-5k per unit<br />
  305. MammOptics<br />Technology<br />I.I.T.Y.I.W.H.T.K.Y<br />
  306. MammOptics<br />MammOptics<br />Partners<br />Partners<br />Manufacturing<br />Reimbursement<br />Manufacturing<br />Difficult to get coverage for new product. <br />
  307. MammOptics<br />Reimbursement Partners<br />Insurances<br />CPT Codes<br />$75-$150<br />
  308. MammOptics<br />Partners<br />Manufacturing<br />Reimbursement<br />510K vs. PMA<br />Largest cost<br />Biggest financial risk<br />FDA Clinical Trials<br />
  309. MammOptics<br />Clinical Trials<br />Stage 1<br />Pilot trials<br />Feasibility<br />Comparison with mammography<br />50 patients<br />$600K<br />6 months<br />12/4/2009<br />
  310. MammOptics<br />Clinical Trials<br />Stage 2<br />Interim trials<br />Prove superior safety-efficacy & sensitivity<br />Stage 1<br />Pilot trials<br />500 patients<br />$7.2M<br />6 months<br />15 months<br />12/4/2009<br />
  311. MammOptics<br />Clinical Trials<br />Stage 2<br />Interim trials<br />Stage 3<br />FDA pivotal trials<br />Stage 1<br />Pilot trials<br />FDA class II, 510(K) w/ trials<br />Focus on superiority & economic end-points<br />1500 patients<br />$20.5M<br />6 months<br />15 months<br />24 months<br />12/4/2009<br />
  312. MammOptics<br />Clinical Trials<br />Stage 4<br />Post-market studies<br />Stage 2<br />Interim trials<br />2000 patients<br />$26.8M<br />Stage 3<br />FDA pivotal trials<br />Stage 1<br />Pilot trials<br />Specific Cat III CPT/ACP Codes<br />Market traction<br />6 months<br />15 months<br />24 months<br />24 months<br />12/4/2009<br />
  313. MammOptics<br />Clinical Trials<br />Stage 4<br />Post-market studies<br />Stage 2<br />Interim trials<br />$26.8M<br />Stage 3<br />FDA pivotal trials<br />Stage 1<br />Pilot trials<br />$7.2M<br />$600K<br />$20.5M<br />6 months<br />15 months<br />24 months<br />24 months<br />12/4/2009<br />
  314. MammOptics<br />Clinical Trials<br />12/4/2009<br />
  315. MammOptics<br />MammOptics<br />Partners<br />Partners<br />Manufacturing<br />Reimbursement<br />Financial timeline <br />Funding<br />FDA Clinical Trials<br />
  316. MammOptics<br />MammOptics<br />Financial / Operations Timeline<br />2016<br />2012<br />2013<br />2014<br />2015<br />2017<br />2018<br />M&A / IPO $50 MM<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q1<br />Q2<br />Q3<br />Q4<br />Q3<br />Series D $35 MM<br />$40M<br />Series C $30.5 MM<br />$30M<br />$20M<br />Cash Reserve<br />Series B $9 MM<br />$15M<br />Series A $3.5 MM<br />$10M<br />$5M<br />Financial timeline <br />System<br />Initialize<br />Launch <br />Regulatory / Clinical<br />Marketable Product<br />Proof of Concept<br />Second Release<br />Beta Prototype<br />Design Milestones<br />1st Release Test<br />2nd Release Test<br />Beta-Version Testing<br />Laboratory Prototype<br />Publication<br />Publication<br />Clinical Results<br />Post-Market Clinical Studies<br />Pilot Studies<br />US Pivotal Clinical Trials<br />Clinical Milestones<br />US Interim Trials<br />Non-Specific Codes <br />Provisional Patent<br />IRB / IDE<br />Specific Codes <br />(Cat. I CPT / APC)<br />Cat III CPT<br />FDA – Class II – 510 (k) with Clinical Trials<br />Regulatory/ IP Milestones<br />Application and System Patents<br />Initial Product Launch<br />IC and Processing Patents<br />Technology Licensing<br />145<br />12/4/2009<br />
  317. MammOptics<br />MammOptics<br />Financial / Operations Timeline<br />2016<br />2012<br />2013<br />2014<br />2015<br />2017<br />2018<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q1<br />Q2<br />Q3<br />Q4<br />Q3<br />$40M<br />$30M<br />$20M<br />Cash Reserve<br />$15M<br />$10M<br />$5M<br />Initialize<br />Proof of Concept<br />Design Milestones<br />Clinical Milestones<br />Provisional Patent<br />Regulatory/ IP Milestones<br />Technology Licensing<br />146<br />12/4/2009<br />
  318. MammOptics<br />MammOptics<br />Financial / Operations Timeline<br />2016<br />2012<br />2013<br />2014<br />2015<br />2017<br />2018<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q1<br />Q2<br />Q3<br />Q4<br />Q3<br />$40M<br />$30M<br />$20M<br />Cash Reserve<br />$15M<br />Series A $3.5 MM<br />$10M<br />$5M<br />System<br />Initialize<br />Proof of Concept<br />Beta Prototype<br />Design Milestones<br />Beta-Version Testing<br />Laboratory Prototype<br />Pilot Studies<br />Clinical Milestones<br />Provisional Patent<br />Regulatory/ IP Milestones<br />Technology Licensing<br />147<br />12/4/2009<br />
  319. MammOptics<br />MammOptics<br />Financial / Operations Timeline<br />2016<br />2012<br />2013<br />2014<br />2015<br />2017<br />2018<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q1<br />Q2<br />Q3<br />Q4<br />Q3<br />$40M<br />$30M<br />$20M<br />Cash Reserve<br />Series B $9 MM<br />$15M<br />Series A $3.5 MM<br />$10M<br />$5M<br />System<br />Regulatory / Clinical<br />Marketable Product<br />Beta Prototype<br />Design Milestones<br />Beta-Version Testing<br />Laboratory Prototype<br />Pilot Studies<br />Clinical Milestones<br />IRB / IDE<br />Regulatory/ IP Milestones<br />Application and System Patents<br />IC and Processing Patents<br />148<br />12/4/2009<br />
  320. MammOptics<br />MammOptics<br />Financial / Operations Timeline<br />2016<br />2012<br />2013<br />2014<br />2015<br />2017<br />2018<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q1<br />Q2<br />Q3<br />Q4<br />Q3<br />$40M<br />Series C $30.5 MM<br />$30M<br />$20M<br />Cash Reserve<br />Series B $9 MM<br />$15M<br />$10M<br />$5M<br />System<br />Regulatory / Clinical<br />Second Release<br />Design Milestones<br />1st Release Test<br />Publication<br />Pilot Studies<br />US Pivotal Clinical Trials<br />Clinical Milestones<br />US Interim Trials<br />IRB / IDE<br />Cat III CPT<br />Regulatory/ IP Milestones<br />Application and System Patents<br />IC and Processing Patents<br />149<br />
  321. MammOptics<br />MammOptics<br />Financial / Operations Timeline<br />2016<br />2012<br />2013<br />2014<br />2015<br />2017<br />2018<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q1<br />Q2<br />Q3<br />Q4<br />Q3<br />Series D $35 MM<br />$40M<br />Series C $30.5 MM<br />$30M<br />$20M<br />Cash Reserve<br />$15M<br />$10M<br />$5M<br />Launch <br />Regulatory / Clinical<br />Second Release<br />Design Milestones<br />2nd Release Test<br />Publication<br />Publication<br />Clinical Results<br />US Pivotal Clinical Trials<br />Clinical Milestones<br />US Interim Trials<br />Non-Specific Codes <br />FDA – Class II – 510 (k) with Clinical Trials<br />Regulatory/ IP Milestones<br />Initial Product Launch<br />150<br />12/4/2009<br />
  322. MammOptics<br />MammOptics<br />Financial / Operations Timeline<br />2016<br />2012<br />2013<br />2014<br />2015<br />2017<br />2018<br />M&A / IPO $50 MM<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q1<br />Q2<br />Q3<br />Q4<br />Q3<br />Series D $35 MM<br />$40M<br />$30M<br />$20M<br />Cash Reserve<br />$15M<br />$10M<br />$5M<br />Launch <br />Regulatory / Clinical<br />Design Milestones<br />Publication<br />Post-Market Clinical Studies<br />Clinical Results<br />Clinical Milestones<br />Non-Specific Codes <br />Specific Codes <br />(Cat. I CPT / APC)<br />FDA – Class II – 510 (k) with Clinical Trials<br />Regulatory/ IP Milestones<br />Initial Product Launch<br />12/4/2009<br />
  323. MammOptics<br />MammOptics<br />Financial / Operations Timeline<br />2016<br />2012<br />2013<br />2014<br />2015<br />2017<br />2018<br />M&A / IPO $50 MM<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q3<br />Q4<br />Q1<br />Q2<br />Q1<br />Q2<br />Q3<br />Q4<br />Q3<br />Series D $35 MM<br />$40M<br />Series C $30.5 MM<br />$30M<br />$20M<br />Cash Reserve<br />Series B $9 MM<br />$15M<br />Series A $3.5 MM<br />$10M<br />$5M<br />System<br />Initialize<br />Launch <br />Regulatory / Clinical<br />Marketable Product<br />Proof of Concept<br />Second Release<br />Beta Prototype<br />Design Milestones<br />1st Release Test<br />Beta-Version Testing<br />2nd Release Test<br />Laboratory Prototype<br />Publication<br />Publication<br />Post-Market Clinical Studies<br />Clinical Results<br />Pilot Studies<br />US Pivotal Clinical Trials<br />Clinical Milestones<br />US Interim Trials<br />Non-Specific Codes <br />Provisional Patent<br />IRB / IDE<br />Specific Codes <br />(Cat. I CPT / APC)<br />Cat III CPT<br />FDA – Class II – 510 (k) with Clinical Trials<br />Regulatory/ IP Milestones<br />Application and System Patents<br />Initial Product Launch<br />IC and Processing Patents<br />Technology Licensing<br />152<br />12/4/2009<br />
  324. MammOptics<br />Business Model Canvas 4 of 4<br />Strong clinical data<br />Training<br />Maintenance<br />Conferences<br />CME courses<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Reimbursement Publishing<br />Doctors:<br />Earlier detection<br />Price<br />Accuracy<br />Immediate Results<br />Patients:<br />Radiation Free<br />Non-Invasive<br />KOLs<br />3rd party manufacturers<br />Distributors<br />Breast Cancer Foundations<br />ACOGACS<br />Clinical trial designer<br />OB/GYNs<br />PCPs<br />Direct Sales to hospitals<br />Distributor<br />Online<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Marketing Costs<br />Per use fees<br />
  325. MammOptics<br />Business Model Canvas 4 of 4<br />Strong clinical data<br />Training<br />Maintenance<br />Conferences<br />CME courses<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Reimbursement Publishing<br />KOLs<br />3rd party manufacturers<br />Breast Cancer Foundations<br />ACOGACS<br />Clinical trial designer<br />Earlier detection<br />Non invasive<br />Price<br />Accuracy<br />Immediate Results<br />OB/GYNs<br />PCPs<br />Final iteration of our business model<br />But… need to think about the big picture…<br />Direct Sales to hospitals<br />Distributor<br />Online<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Marketing Costs<br />Per use fees<br />
  326. MammOptics<br />Business Model Canvas 1<br />Strong clinical data<br />Training<br />Maintenance<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Hospitals<br />Leading doctors<br />3rd party manufacturers<br />Distributors<br />Radiation-free<br />Earlier detection<br />Non invasive<br />Pioneering Doctors<br />Hospitals<br />Direct Sales to hospitals<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Capital Equipment Sales and disposable item<br />
  327. MammOptics<br />Business Model Canvas 2<br />Strong clinical data<br />Training<br />Maintenance<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Hospitals<br />Leading doctors<br />3rd party manufacturers<br />Distributors<br />Research Hospitals<br />Radiation-free<br />Earlier detection<br />Non invasive<br />Pioneering Doctors<br />Hospitals<br />Direct Sales to hospitals<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Capital Equipment Sales and disposable item<br />
  328. MammOptics<br />Business Model Canvas 3<br />Strong clinical data<br />Training<br />Maintenance<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Doctors:<br />Earlier detection<br />Price<br />Accuracy<br />Patients:<br />Radiation Free<br />Non-Invasive<br />Hospitals (Capital Spending Committee)<br />Leading doctors<br />3rd party manufacturers<br />Distributors<br />Research Hospitals<br />Pioneering Doctors<br />Hospitals<br />Direct Sales to hospitals<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Capital Equipment Sales and disposable item<br />
  329. MammOptics<br />Business Model Canvas 4 <br />Strong clinical data<br />Training<br />Maintenance<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Doctors:<br />Earlier detection<br />Price<br />Accuracy<br />Immediate Results<br />Patients:<br />Radiation Free<br />Non-Invasive<br />Hospitals (Capital Spending Committee)<br />Leading doctors<br />3rd party manufacturers<br />Distributors<br />Research Hospitals<br />Breast Cancer Foundations<br />Pioneering Doctors<br />Hospitals<br />OB/GYNs<br />PCPs<br />Direct Sales to hospitals<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Capital Equipment Sales and disposable item<br />
  330. MammOptics<br />Business Model Canvas 5<br />Strong clinical data<br />Training<br />Maintenance<br />Conferences<br />CME courses<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />ReimbursementPublishing<br />Doctors:<br />Earlier detection<br />Price<br />Accuracy<br />Patients:<br />Radiation Free<br />Non-Invasive<br />Leading doctors<br />Key Opinion Leaders<br />3rd party manufacturers<br />Distributors<br />Breast Cancer Foundations<br />ACOGACS<br />OB/GYNs<br />PCPs<br />Direct Sales to hospitals<br />Distributor<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Marketing Costs<br />Capital Equipment Sales and disposable item<br />
  331. MammOptics<br />Business Model Canvas 6<br />Strong clinical data<br />Training<br />Maintenance<br />Conferences<br />CME courses<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Reimbursement Publishing<br />Doctors:<br />Earlier detection<br />Price<br />Accuracy<br />Immediate Results<br />Patients:<br />Radiation Free<br />Non-Invasive<br />KOLs<br />3rd party manufacturers<br />Distributors<br />Breast Cancer Foundations<br />ACOGACS<br />OB/GYNs<br />PCPs<br />Direct Sales to hospitals<br />Distributor<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Marketing Costs<br />Capital Equipment Sales and disposable item<br />Per use fees<br />
  332. MammOptics<br />Business Model Canvas 7<br />Strong clinical data<br />Training<br />Maintenance<br />Conferences<br />CME courses<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Reimbursement Publishing<br />Doctors:<br />Earlier detection<br />Price<br />Accuracy<br />Immediate Results<br />Patients:<br />Radiation Free<br />Non-Invasive<br />KOLs<br />3rd party manufacturers<br />Distributors<br />Breast Cancer Foundations<br />ACOGACS<br />Clinical trial designer<br />OB/GYNs<br />PCPs<br />Direct Sales to hospitals<br />Distributor<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Marketing Costs<br />Per use fees<br />
  333. MammOptics<br />Business Model Canvas 8<br />Strong clinical data<br />Training<br />Maintenance<br />Conferences<br />CME courses<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Reimbursement Publishing<br />Doctors:<br />Earlier detection<br />Price<br />Accuracy<br />Immediate Results<br />Patients:<br />Radiation Free<br />Non-Invasive<br />KOLs<br />3rd party manufacturers<br />(local)<br />Breast Cancer Foundations<br />ACOGACS<br />Clinical trial designer<br />OB/GYNs<br />PCPs<br />Direct Sales to hospitals<br />Distributor<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Marketing Costs<br />Per use fees<br />
  334. MammOptics<br />Business Model Canvas 9<br />Strong clinical data<br />Training<br />Maintenance<br />Conferences<br />CME courses<br />Product Development<br />IP<br />Clinical trials<br />FDA<br />Reimbursement Publishing<br />Doctors:<br />Earlier detection<br />Price<br />Accuracy<br />Immediate Results<br />Patients:<br />Radiation Free<br />Non-Invasive<br />KOLs<br />3rd party manufacturers<br />(local)<br />Breast Cancer Foundations<br />ACOGACS<br />Clinical trial designer<br />OB/GYNs<br />PCPs<br />Direct Sales to hospitals<br />Distributor<br />IP <br />Leading doctors<br />Technical Expertise<br />Product Development<br />Clinical trials<br />Operating Costs<br />Marketing Costs<br />Per use fees<br />
  335. Personal Libraries<br />
  336. Insight: No more bookshelves<br />eBooks+150% YoY ‘10<br />Printed Books <br />-20% YoY ‘10<br />
  337. Version 1.0: Personal Libraries<br />
  338. Original Idea: Personal Digital Libraries<br />Import, organize and share thousands of digital papers<br />
  339. something-something-something.com<br />Original idea<br />Invincible Business Model: Version 1.0<br />SHORT TERMResearchers<br />Lawyers<br />Scientists <br />LONG TERMAvid book readers<br />Professionals <br />Import, organize and share thousands of papers<br />FB/TW posts from users you know<br />Company blog, FB, TW, support forums<br />Targeted marketing<br />Product development<br />Constant iteration & testing<br />Libraries, Universities, Research Centers<br />Bloggers and media targeting customer segment<br />Academic Database providers<br />Affiliate program<br />SEO/SEM/SM<br />IE/FF/Chrome App Stores<br />Developers<br />Marketers<br />AWS Infrastructure<br />SEM<br />Eng & Marketing OpEx<br />Affiliate program fees<br />Licensing<br />Subscription fees<br />Ad revenue<br />
  340. Here’s What We Did<br />Version 1.0: Personal Libraries<br />
  341. Got out of the building<br />
  342. Got out of the building<br /><ul><li>100+ Interviews</li></ul>Professors, Litigators, IP lawyers, Post-docs, PhD researchers, Engineering Students, Law Students…<br />
  343. Got out of the building<br /><ul><li>100+ Interviews
  344. Extensive Surveys</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  345. Extensive Surveys
  346. 33,000+ Adwords</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  347. Extensive Surveys
  348. 33,000+ Adwords
  349. Compete Review</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  350. Extensive Surveys
  351. 33,000+ Adwords
  352. Compete Review
  353. Market Sizing</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  354. Extensive Surveys
  355. 33,000+ Adwords
  356. Compete Review
  357. Market Sizing
  358. 50 bloggers</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  359. Extensive Surveys
  360. 33,000+ Adwords
  361. Compete Review
  362. Market Sizing
  363. 50 bloggers
  364. 6 Social Networks</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  365. Extensive Surveys
  366. 33,000+ Adwords
  367. Compete Review
  368. Market Sizing
  369. 50 bloggers
  370. 6 Social Networks
  371. Usability Tests</li></li></ul><li>Got out of the building<br /><ul><li>100+ Interviews
  372. Extensive Surveys
  373. 33,000+ Adwords
  374. Compete Review
  375. Market Sizing
  376. 50 bloggers
  377. 6 Social Networks
  378. Usability Tests
  379. Rapid Iteration</li></li></ul><li>Here’s What We Found<br />Version 1.0: Personal Libraries<br />
  380. Here's what we found: Version 1.0<br />A great business if we had more users…<br />GOOD<br /><ul><li>Subscriptions Rock</li></li></ul><li>Here's what we found: Version 1.0<br />Shorter pages raise conversions 80%<br />GOOD<br /><ul><li>Subscriptions Rock
  381. Pipelines Optimize</li></li></ul><li>Here's what we found: Version 1.0<br />Sites will feature your service<br />GOOD<br /><ul><li>Subscriptions Rock
  382. Pipelines Optimize
  383. The Web Listens</li></li></ul><li>Here's what we found: Version 1.0<br />GOOD<br /><ul><li>Subscriptions Rock
  384. Pipelines Optimize
  385. The Web Listens</li></ul>BAD<br /><ul><li>Academics = Cheap</li></ul>Teaching team saw pattern in our data<br />
  386. Run away from this customer as fast as possible. <br />
  387. Run away from this customer as fast as possible. <br />They don’t want to spend money and will incur infinite support and infinite cost.<br />
  388. Here's what we found: Version 1.0<br />Working for peanuts, and hitting wild product success leads to economic failure<br />GOOD<br /><ul><li>Subscriptions Rock
  389. Pipelines Optimize
  390. The Web Listens</li></ul>BAD<br /><ul><li>Academics = Cheap
  391. Negative Margins</li></li></ul><li>Here's what we found: Version 1.0<br />GOOD<br /><ul><li>Subscriptions Rock
  392. Pipelines Optimize
  393. The Web Listens</li></ul>BAD<br /><ul><li>Academics = Cheap
  394. Negative Margins
  395. ECM = Boring</li></ul>No adjacent pivots worked for the team<br />
  396. Version 2.0: Trusted Advice<br />
  397. something-something-something.com<br />Original idea<br />Invincible Business Model: Version 2.0<br />Upwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)<br />Developing trusted advice and advisors<br />Web marketing <br />Affiliate partnerships<br />Constant iteration & testing<br />FB/TW posts from users you know<br />Company blog, FB, TW accounts<br />Discover online goods recommended by friends at the lowest possible price from trusted vendors<br />Bloggers and Media targeting customer segment<br />Retail marketing partners<br />IE/FF/Chrome teams<br />Affiliate Program Providers<br />Affiliate program<br />SEO/SEM/SM<br />IE/FF/Chrome App Stores<br />Developers<br />Marketers<br />Content Library<br />Install base<br />Readership base<br />AWS Infrastructure<br />SEM<br />Eng & Marketing OpEx<br />Affiliate program fees<br />Licensing<br />Subscription fees<br />Ad revenue<br />
  398. New Hypotheses<br />
  399. Here’s What We Did<br />Version 2.0: Trusted Advice<br />
  400. Got out of the building, again<br /><ul><li>40+ Interviews</li></li></ul><li>Got out of the building, again<br /><ul><li>40+ Interviews
  401. Extensive Surveys</li></li></ul><li>Got out of the building, again<br /><ul><li>40+ Interviews
  402. Extensive Surveys
  403. Landing Page Tests</li></ul>Landing pages tested on affluent, career aged professionals, approximately 70/30 male/female, N=800+<br />
  404. Got out of the building, again<br /><ul><li>40+ Interviews
  405. Extensive Surveys
  406. Landing Page Tests
  407. Market Research</li></li></ul><li>Got out of the building, again<br /><ul><li>40+ Interviews
  408. Extensive Surveys
  409. Landing Page Tests
  410. Market Research
  411. Compete Research</li></li></ul><li>Got out of the building, again<br /><ul><li>40+ Interviews
  412. Extensive Surveys
  413. Landing Page Tests
  414. Market Research
  415. Compete Research
  416. Revenue Analysis</li></li></ul><li>Got out of the building, again<br /><ul><li>40+ Interviews
  417. Extensive Surveys
  418. Landing Page Tests
  419. Market Research
  420. Compete Research
  421. Revenue Analysis
  422. Two Prototypes</li></ul>Insidely.com<br />wantio.com<br />
  423. Got out of the building, again<br /><ul><li>40+ Interviews
  424. Extensive Surveys
  425. Landing Page Tests
  426. Market Research
  427. Compete Research
  428. Revenue Analysis
  429. Two Prototypes
  430. Refined Personas</li></li></ul><li>Customer Segment: Professional-class consumers shopping frequently online<br /> Pat the Professional<br />Upwardly mobile professional (some Grad Students)<br />Salary: $40,000 – 150,000/year<br />Finance, Consulting, PR, Marketing<br />Follows fashion/technology trends<br />Spends $1-15K on discretionary items online<br />Purchased online in last 30 days<br />Demographics<br /><ul><li>Male/female, aged 18-35
  431. Minimum bachelors from expensive school</li></ul>Traits:<br /><ul><li>Ideas from blogs & shopping websites
  432. Values celebrity trends & friends’ opinions
  433. Wants high ticket items at lowest price
  434. Event-driven shopper—new release or sale</li></ul>Motivation<br /><ul><li>Craves new products
  435. Hates tedious work
  436. Identifies as influencer among friends
  437. Fears being cheated online</li></ul>Behavior<br /><ul><li>Spends 5 hour+ monthly hearing about products
  438. Shares online and in person about products he loves</li></ul>Budget<br /><ul><li>$2-10K+/year in discretionary online purchases</li></ul>“The XXX is awesome, I really want one. I know I just bought the YYY, but it’s probably time to upgrade.” <br />~5.9M “Pat the Professionals” in US<br />Drawn from top 1/3 of 17.8M frequent online shoppers<br />17.8M based on 40.2M Professionals (2008 Census) * 0.762 US Internet Penetration (Nielsen 2010Q1) * 0.58 consumers shopping online in last month (Nielsen 2010Q1) <br />Online Recommendation Market Opportunity (conservative strawman #s)<br />Assuming 10% share, 5% affiliate fees<br />Top Shoppers (~$7B/year spend): ~ $35M/year <br />Professional-class frequent shoppers (~$1.8B/year): ~ $9M/year<br />Other Professional-class shoppers ($0.7B/year): ~3.5M/year <br />Source: US Bureau of Labor Statistics<br />
  439. Version 2.0: Trusted Advice<br />Top ~6M US Influentials (~$9B/year)<br />
  440. something-something-something.com<br />Original idea<br />Invincible Business Model: Version 2.0<br />Upwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)<br />Developing trusted advice and advisors<br />Web marketing <br />Affiliate partnerships<br />Constant iteration & testing<br />FB/TW posts from users you know<br />Company blog, FB, TW accounts<br />Discover online goods recommended by friends at the lowest possible price from trusted vendors<br />Bloggers and Media targeting customer segment<br />Retail marketing partners<br />IE/FF/Chrome teams<br />Affiliate Program Providers<br />Affiliate program<br />SEO/SEM/SM<br />IE/FF/Chrome App Stores<br />Developers<br />Marketers<br />Content Library<br />Install base<br />Readership base<br />AWS Infrastructure<br />SEM<br />Eng & Marketing OpEx<br />Affiliate program fees<br />Licensing<br />Subscription fees<br />Ad revenue<br />
  441. Here’s What We Found<br />Version 2: Trusted Advice<br />
  442. Findings on "Trusted Advice"<br />GOOD<br /><ul><li>Fast Interest</li></ul>Insidely.com<br />Trusted advice site for <br />Silicon Valley/Stanford MBAs<br />Launched 2/15<br />425 visitors by 2/28<br />
  443. Findings on "Trusted Advice"<br />Ranked #6 by Google for “Stanford Admissions Books”<br />GOOD<br /><ul><li>Fast Interest</li></li></ul><li>Findings on "Trusted Advice"<br />GOOD<br /><ul><li>Fast Interest
  444. High Conversion</li></ul>43% clickthrough<br />on Top Admissions Books for Stanford MBAs article<br />Compare to 0.5% clickthrough on ads<br />~100x difference<br />
  445. Findings on "Trusted Advice"<br />Positive results on “Trusted Advice” Shopping Add-in testing<br />GOOD<br /><ul><li>Fast Interest
  446. High Conversion
  447. Needs Addressed </li></ul>See videos at http://factnote.com/c/e245<br />
  448. Findings on "Trusted Advice"<br />Positive results on “Trusted Advice” Shopping Add-in testing<br />GOOD<br /><ul><li>Fast Interest
  449. High Conversion
  450. Needs Addressed </li></ul>Super easy to install and use.<br />I really did enjoy it! <br />Great idea! I will keep the extension installed because I do think this is practical!<br />I could see myself using this regularly<br />
  451. Findings on "Trusted Advice"<br />Some negative results on “Trusted Advice” Shopping Add-in testing<br />GOOD<br /><ul><li>Fast Interest
  452. High Conversion
  453. Needs Addressed </li></ul>BAD<br /><ul><li>Missing Features</li></ul>See videos at http://factnote.com/c/e245<br />
  454. Findings on "Trusted Advice"<br />Some negative results on “Trusted Advice” Shopping Add-in testing<br />GOOD<br /><ul><li>Fast Interest
  455. High Conversion
  456. Needs Addressed </li></ul>BAD<br /><ul><li>Missing Features</li></ul>I was a little frustrated when it didn’t find the item I was looking for<br />I can find more thorough price comparisons elsewhere…<br />I usually don’t shop in Chrome, so that’s an inconvenience.<br />
  457. Findings on "Trusted Advice"<br />MBA Exchange spams us out of Google<br />GOOD<br /><ul><li>Fast Interest
  458. High Conversion
  459. Needs Addressed </li></ul>BAD<br /><ul><li>Missing Features
  460. SEO Battle</li></li></ul><li>Here’s Where We Ended Up <br />Version 2.1: Trusted Advice<br />
  461. The adventure continuesTrusted Advice 2.0<br />Protection against SEO-spammers<br />Next Experiments: <br /><ul><li>Trusted Lead Gen
  462. Trusted Advice website powered by Shopping Add-in</li></li></ul><li>something-something-something.com<br />Original idea<br />Invincible Business Model: Version 3.0<br />PAT THE PROFESSIONALUpwardly mobile young professionals making $2-10K of discretionary online purchases a year (excluding travel)<br />Developing trusted advice and advisors<br />Web marketing <br />Affiliate partnerships<br />Constant iteration & testing<br />FB/TW posts from users you know<br />Company blog, FB, TW accounts<br />Bloggers and Media targeting customer segment<br />Retail marketing partners<br />IE/FF/Chrome teams<br />Affiliate Program Providers<br />TRUSTED ADVICE Discover online goods recommended by friends at the lowest possible price from trusted vendors<br />Foil advertorial spammers polluting the Interweb with toxic pseudo-content<br />Affiliate program<br />SEO/SEM/SM<br />IE/FF/Chrome App Stores<br />Developers<br />Marketers<br />Content Library<br />Install base<br />Readership base<br />AWS Infrastructure<br />SEM<br />Eng & Marketing OpEx<br />Affiliate program fees<br />Licensing<br />Subscription fees<br />Ad revenue<br />
  463. What We Learned<br /><ul><li>Potential for disruption abounds</li></li></ul><li>What We Learned<br /><ul><li>Potential for disruption abounds
  464. Life is short, focus on big markets</li></li></ul><li>What We Learned<br /><ul><li>Potential for disruption abounds
  465. Life is short, focus on big markets
  466. All we need is to be relentless</li></li></ul><li>Blog Your Progress<br />
  467. How?<br />Customer Development<br />The Process<br />Narrative<br />Interviews<br />Surveys<br />Videos<br />Prototypes<br />Business Model Canvas<br />Scorekeeping<br />Real-time Feedback<br />Physical Reality Checks<br />Skype<br />Face-to-face<br />
  468. We Made Students Blog Their Progress<br />It Changed Everything<br />
  469. Interview<br />
  470. Photos<br />Videos<br />
  471. Surveys<br />
  472. Interview<br />& Photos<br />
  473. Competitive Analysis<br />
  474. Key Findings<br />
  475. A/B Test Results<br />
  476. Key Question<br />
  477. Strategy<br />
  478. Business Model Canvas as the Scorecard<br />
  479. Carpe Diem<br />www.steveblank.com<br />
  480. Customer DevelopmentTesting Your Hypotheses<br />Steve Blank<br />Stanford - School of Engineering<br />U.C. Berkeley - Haas School Of Business<br />www.steveblank.com<br />Twitter: sgblank<br />
  481. I Write a Blog <br />www.steveblank.com<br />
  482. This Talk is Based On<br />Business Model Generation<br />Four Steps to the Epiphany<br />Lean Startup<br />
  483. Customer Discovery Phase 1 - Hypotheses<br />
  484. Customer Discovery<br />CustomerDiscovery<br />CustomerValidation<br />Company<br />Building<br />CustomerCreation<br />Stop selling, start listening<br />Test your hypotheses <br />Two are fundamental: problem and product concept<br />
  485. Customer Discovery<br />Phase 3<br />TestSolutionHypothesis<br />Phase 4Verify, Iterate & <br />Expand<br />CustomerDiscovery<br />To Validation<br />Phase 1Author<br />Hypothesis<br />Phase 2Test ProblemHypothesis<br />
  486. Customer Discovery <br />
  487. Customer Discovery <br />Inside the Building<br />Outside the Building<br />
  488. Value Prop 1<br />Product/MVP<br />Customers<br />Who/Problem<br />Channels<br />Physical/Virtual<br />Value Prop 2<br />Market Type<br />Revenue Streams<br />Pricing<br />Customer Relationships<br />Get/Keep/Grow<br />Partners<br />Key Resources<br />Customer Discovery Phase 1 - Hypotheses<br />
  489. Value Prop 1<br />Product/MVP<br />Customers<br />Who/Problem<br />Channels<br />Physical/Virtual<br />Value Prop 2<br />Market Type<br />Long-Term Vision/ Mkt Size<br />Revenue Streams<br />Pricing<br />Customer Relationships<br />Get/Keep/Grow<br />Partners<br />Key Resources<br />Customer Discovery Value Proposition – Product/MVP<br />Product Features/Benefits<br />MVP<br />
  490. VALUE PROPOSITIONS<br />what are you offering them? what is that <br />getting done for them? do they care?<br />
  491. Testing the MVP<br />Smoke testing with landing pages using AdWords<br />In-product split-testing<br />Prototypes (particularly for hardware)<br />Removing features<br />Continued customer discovery and validation<br />Surveys<br />Interviews<br />
  492. Testing the MVP (Web Example)<br />Can you get customers to pay for a product that doesn’t yet exist (or barely does)?<br />Do customers say they have a matching core problem?<br />Landing page test for conversion<br />What’s required to get customers to activate? (prizes, payment)<br />Use customer problem to identify key word list<br /> plug into Google search traffic estimator - high traffic means there is problem awareness<br />Drive traffic to site using Google search and see how deep into a registration process customers are willing to go through<br />
  493. Testing the MVP (Non-Web)<br />Can you get customers to pay for a product that doesn’t yet exist (or barely does)?<br />Interview customers to make sure they have a matching core problem<br />Set up web site landing page to test for conversion<br />Set up a Lighthouse Customer Program where potential customers pay to get early access to product prototypes<br />
  494. Customers<br />Who/Problem<br />Value Prop 1<br />Product/MVP<br />Channels<br />Physical/Virtual<br />Value Prop 2<br />Market Type<br />Revenue Streams<br />Pricing<br />Customer Relationships<br />Get/Keep/Grow<br />Partners<br />Key Resources<br />Customer Discovery Customer Segments<br />
  495. CUSTOMER SEGMENTS<br />which customers and users are you serving? <br />which jobs do they really want to get done?<br />
  496. Who’s The Customer?<br />Consumer End Users, Corporate Customers Pay<br />Multiple Consumers<br />Etc.<br />
  497. Market/Opportunity Analysis<br />How Big is It?: Market/Opportunity Analysis<br />Identify a Customer and Market Need<br />Size the Market<br />Competitors<br />Growth Potential<br />
  498. How Big is the Pie?Total Available Market<br />Total Available Market<br /><ul><li>How manypeople would want/needthe product?
  499. How large is the market be (in $’s) if they all bought?
  500. How many units would that be?</li></ul>How Do I Find Out?<br /><ul><li>Industry Analysts – Gartner, Forrester
  501. Wall Street Analysts – Goldman, Morgan</li></li></ul><li>How Big is My Slice?Served Available Market<br /><ul><li>How many people need/can use product?
  502. How many people have the money to buy the product
  503. How large would the market be (in $’s) if they all bought?
  504. How many units would that be?</li></ul>How Do I Find Out?<br /><ul><li>Talk to potential customers</li></ul>Served Available Market<br />TotalAvailableMarket<br />
  505. How Much Can I Eat?Target Market<br /><ul><li>Who am I going to sell to in year 1, 2 & 3?
  506. How many customers is that?
  507. How largeis the market be (in $’s) if they all bought?
  508. How many units would that be?</li></ul>How Do I Find Out?<br /><ul><li>Talk to potential customers
  509. Identify and talk to channel partners
  510. Identify and talk to competitors</li></ul>TotalAvailableMarket<br />ServedAvailableMarket<br />Target Market<br />
  511. SegmentationIdentification of groups most likely to buy<br />TotalAvailableMarket<br /><ul><li>Geographic
  512. Demographic
  513. Psychographic variables
  514. Behavioral variables
  515. Channel
  516. etc…</li></ul>ServedAvailableMarket<br />Target Market<br />254<br />
  517. Market Size: Summary<br />Market Size Questions:<br />How big can this market be? <br />How much of it can we get?<br />Market growth rate<br />Market structure (Mature or in flux?)<br />Most important: Talk to Customers and Sales Channel<br />Next important: Market size by competitive approximation<br />Wall Street analyst reports are great<br />And : Market research firms Like Forester, Gartner<br />
  518. Corporate? Consumer?<br />Business to Business (B to B)<br />Use or buy inside a company<br />Business to Consumer (B to C)<br />Use or buy for themselves<br />Business to Business to Consumer (B to B to C)<br />Sell a business to get to a consumer<br />Other Multi-sided Markets with multiple customers<br />
  519. What do they want you to do?Corporate<br />Increase revenue?<br />Decrease costs?<br />Get them new customers?<br />Keep up with or pass competitors?<br />How important is it?<br />
  520. What do they want you to do?Consumers<br />Does it entertain them?<br />Does it connect them with others?<br />Does it make their lives easier?<br />Does it satisfy a basic need?<br />How important is it?<br />Can they afford it?<br />
  521. Market Type & Ignoring Customers<br />Existing Market? <br />Resegmenting an Existing Market?<br />niche or low cost<br />New Market?<br />When do I ignore customer feedback?<br />
  522. Who’s the Customer in a Company?<br />User?<br />Influencer?<br />Recommender?<br />Decision Maker?<br />Economic Buyer?<br />Saboteur?<br />Archetypes for each?<br />
  523. MammOptics<br />Hospital purchasing decision tree<br />Hospitals<br />Complex purchasing decision tree. Several saboteours<br />
  524. MammOptics<br />Private practice purchasing decision tree<br />✔<br />Private practice<br />Faster adoption rate<br />Good value proposition<br />
  525. MammOptics<br />Customer Workflow<br />Insurance<br />Radiologist<br />PCP<br />OB/GYN<br />Mammography<br />Patient<br />Technician<br />Hospital Administration<br />Sales representatives<br />Demand Creation<br />Doctor specialty committee <br />ACOG<br />ACS<br />MammOptics<br />
  526. How Do Corporate Customers Interact to Buy?<br />Organization Chart<br />Influence Map<br />Sales Road Map<br />
  527. Consumer Customer Interactions<br />Do they buy it by themselves?<br />Do they need approval of others?<br />Do they use it alone or with others?<br />
  528. Pass/Fail Signals & Experiments<br />How do you test interest?<br />Where do you test interest?<br />What kind of experiments can you run?<br />How many do you test?<br />
  529. How Do They Hear About You?<br />Demand Creation<br />Network effect<br />Sales<br />
  530. Channels<br />Physical/Virtual<br />Value Prop 1<br />Product/MVP<br />Customers<br />Who/Problem<br />Value Prop 2<br />Market Type<br />Revenue Streams<br />Pricing<br />Customer Relationships<br />Get/Keep/Grow<br />Partners<br />Key Resources<br />Customer Discovery Channels<br />
  531. Multiple Customer Segments<br />Each has its own Value Proposition<br />Each has its own Revenue Stream<br />One segment cannot exist without the other<br />Which one do you start with?<br />
  532. CHANNELS<br />how does each customer segment want to be reached? through which interaction points?<br />
  533. OEM<br />System Integrators<br />Direct Sales Force<br />Our Customers<br />Value-Added Resellers (VAR’s)<br />Our Company<br />Dealers<br />Distributors<br />Retail/Mass Merchants<br />Web/Online<br />OEM<br />System Integrators<br />Direct Sales Force<br />Value-Added Reseller<br />Dealers<br />Distributors<br />Retailers/Mass Merchants<br />

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