The document discusses value chains and sales models. A value chain outlines how independent entities work together to deliver a product to end users, with each entity adding value and receiving compensation. A sales model defines who buys the product, what steps are involved in the sales process, when and where sales occur, and how much revenue is generated at each step. The document provides examples of different types of value chains and sales approaches a company could take, from direct sales to licensing intellectual property.

1. ValueValue ChainChain
mark lesliemark leslie
mleslie@leslieventures.commleslie@leslieventures.com
650/561-1228650/561-1228
Sales ModelSales Model

2. Value ChainValue Chain
► What is a value chainWhat is a value chain
 All the independent entities required to bring the productAll the independent entities required to bring the product
to the end userto the end user
 Each independent entity adds value and receivesEach independent entity adds value and receives
compensation for that valuecompensation for that value
► End user price is the price that final end user paysEnd user price is the price that final end user pays
for the product or servicefor the product or service
► Revenue to your company is the amount ofRevenue to your company is the amount of
revenue you receive ONLY for your segment ofrevenue you receive ONLY for your segment of
the value chainthe value chain

3. Value ChainValue Chain
Direct to End UserDirect to End User
Cost of Goods
(Supply Chain)
Profit + SG&A + r&D
End
Conusmer
$
EUDiscounts
Notice the little
r and the big
D !
RevenueList Price

4. Value ChainValue Chain
ResellersResellers
Cost of Goods
(Supply Chain)
Profit + SG&A + r&D
End
Conusmer
$
EUDiscounts
Reselle
r
Revenue
List Price

5. Value ChainValue Chain
Distributors / ResellersDistributors / Resellers
Cost of Goods
(Supply Chain)
Profit + SG&A + r&D
End
Conusmer
$
EUDiscounts
Reselle
r
Distributor
Revenue
List Price

6. Value ChainValue Chain
International DistributorsInternational Distributors
Cost of Goods
(Supply Chain)
Profit + SG&A +
r&D
End
Conusmer
$
EUDiscounts
Reselle
r
Distributor
MasterDisti
Revenue
List Price

7. Your Product
Becomes your
Customer’s COGs
Value ChainValue Chain
OEM or IP LicensingOEM or IP Licensing
Cost of
Goods
(Supply
Chain)
Profit + SG&A +
r&D
End
Conusmer
$
EUDiscounts
Reselle
r
Distributor
MasterDisti
Cost of Goods
(Supply Chain)
Profit + SG&A + r&D
Reselle
r
List Price
Revenue

8. Value ChainValue Chain
Your Acquired OEM Product or Licensed IPYour Acquired OEM Product or Licensed IP
Cost of Goods
(Supply
Chain)
Profit + SG&A +
r&D
End
Conusmer
$
EUDiscounts
Reselle
r
Distributor
MasterDisti
Cost of Goods
(Supply Chain)
Profit + SG&A + r&D
Reselle
r
Cost of
Goods
(Supply
Chain)
Profit + SG&A + r&D
Reseller
List Price
Revenue

9. Sales ModelSales Model
►WhoWho
►WhatWhat
►WhenWhen
►WhereWhere
►HowHow
►How Much $How Much $

10. Who BuysWho Buys
► Who is the business / economic buyerWho is the business / economic buyer
 Looking for ROILooking for ROI
► Who are the actual end users in the organizationWho are the actual end users in the organization
► Who is the technical buyerWho is the technical buyer
 ImplementerImplementer
 Will compare competitive alternativesWill compare competitive alternatives
► Who is the recommenderWho is the recommender
 Who actually does the evaluationWho actually does the evaluation
► Who actually signsWho actually signs
 What are the typical signature levels required for this productWhat are the typical signature levels required for this product
► Department headDepartment head
► Department VPDepartment VP
► CFOCFO
► CEOCEO
► Board of DirectorsBoard of Directors

11. What are the StepsWhat are the Steps
► LeadLead
► ProspectProspect
► Introductory presentationIntroductory presentation
► Demonstration (proof of concept)Demonstration (proof of concept)
► Technical presentationTechnical presentation
► PilotPilot
► Final presentationFinal presentation
► Best and Final OfferBest and Final Offer
► Negotiate contractNegotiate contract
► Receive POReceive PO

12. WhenWhen
►How long, on average from lead to dealHow long, on average from lead to deal
►What is the range of timeWhat is the range of time
►Does the range of time vary by deal sizeDoes the range of time vary by deal size

13. WhereWhere
►Where are the customers?Where are the customers?
►Domestic vs. InternationalDomestic vs. International
 Feet on the ground required?Feet on the ground required?
►VerticalVertical
►Major Accounts / National Accounts / GlobalMajor Accounts / National Accounts / Global
AccountsAccounts

14. HowHow
► Direct SellingDirect Selling
 Technical support to sellingTechnical support to selling
 Inside salesInside sales
 TelemarketingTelemarketing
 Lead generationLead generation
► Channel SellingChannel Selling
 All of the aboveAll of the above
 Channel reps and channel managementChannel reps and channel management
► Manufacturers RepsManufacturers Reps
► RetailRetail
 DistributionDistribution
 Shelf space and stockingShelf space and stocking
► OEMOEM
► IP LicensingIP Licensing
► Multi-tier DistributionMulti-tier Distribution
► Etc.Etc.

15. How Much $How Much $
►How much does this model cost?How much does this model cost?
►Is it consistent with product price andIs it consistent with product price and
transaction size?transaction size?

16. Value ChainValue Chain
mark lesliemark leslie
mleslie@leslieventures.commleslie@leslieventures.com
650/561-1228650/561-1228
Sales ModelSales Model

17. Copyright Mark LeslieCopyright Mark Leslie
One Final Thought…One Final Thought…

18. Copyright Mark LeslieCopyright Mark Leslie
it is regret for the things we didit is regret for the things we did
not do that is inconsolablenot do that is inconsolable..
Sidney J. Harris (1917–86)Sidney J. Harris (1917–86)
Regret for the things we did can
be tempered by time;