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ValueValue ChainChain
mark lesliemark leslie
mleslie@leslieventures.commleslie@leslieventures.com
650/561-1228650/561-1228
Sales ModelSales Model
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
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
Value ChainValue Chain
ResellersResellers
Cost of Goods
(Supply Chain)
Profit + SG&A + r&D
End
Conusmer
$
EUDiscounts
Reselle
r
Revenue
List Price
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
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
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
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
Sales ModelSales Model
►WhoWho
►WhatWhat
►WhenWhen
►WhereWhere
►HowHow
►How Much $How Much $
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
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
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
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
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.
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?
Value ChainValue Chain
mark lesliemark leslie
mleslie@leslieventures.commleslie@leslieventures.com
650/561-1228650/561-1228
Sales ModelSales Model
Copyright Mark LeslieCopyright Mark Leslie
One Final Thought…One Final Thought…
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;

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070801 value chain and sales model

  • 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
  • 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;