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Customer Development/Lean Startup 030910 Class 8
1) The document discusses customer validation, which involves getting ready to sell, selling to early customers, and verifying the business model. 2) It emphasizes the importance of preparing sales collateral, distribution channels, and roadmaps before making initial sales. 3) Customer validation also involves developing company and product positioning based on insights from early sales, and verifying various aspects of the business.
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Customer Development/Lean Startup 030910 Class 8
- 1. Customer Development inthe High Tech Enterprise Customer Validation Part 1 & 2 Steve Blank sblank@kandsranch.com 3/27/10 1
- 2. Agenda Logistics/Questions Review Case: HP Kittyhawk Guest: Hiten Shaw Kissmetrics Customer Validation
- 3. Today: Customer Validation Customer Customer Customer Scale Discovery Validation Creation Company • Develop a repeatable and scalable sales process • Validate your business model • Only earlyvangelists are crazy enough to buy
- 4. Customer Validation: Phase 3 Phase 4 Customer Positioning Business Validation Model Verified From Discovery To Creation Phase 1 Phase 2 Get Sell to Ready EarlyVangelists to Sell
- 5. Customer Validation Get Ready to Sell! Articulate Prelim Sales Prelim Prelim Sales Hire a Align Your a Value & Collateral Distribution Roadmap “Sales Closer” Executives Proposition Materials Channel Plan Formalize Sell to “EarlyVangelists”! Advisory Board Contact Sell to Sell to Refine Refine Sales Visionary Early Channel Channel Roadmap Customers Customers Partners Roadmap Develop Positioning! Product Company Present to Positioning Positioning Analysts & Verify! Influencers Verify the Verify the Verify the Verify the Iterate or Product Sales Channel Business Exit Roadmap Roadmap Model
- 6. Customer Validation Get Ready to Sell! Articulate a Value Proposition Inside the Building! Prelim Sales & Collateral Materials Prelim Distribution Channel Plan Prelim Sales Roadmap Hire a “Sales Closer” Align Your Executives Formalize Sell to “EarlyVangelists”! Advisory Board Contact Sell to Sell to Refine Refine Sales Visionary Early Channel Channel Roadmap Customers Customers Partners Roadmap Outside the Building! Develop Positioning! Product Company Present to Positioning Positioning Analysts & Verify! Influencers Verify the Verify the Verify the Verify the Iterate or Product Sales Channel Business Exit Roadmap Roadmap Model
- 7. Phase 1: Get Ready to Sell Phase 3 Phase 4 Serious preparation Positioning Business before 1st sales Model Verified Another writing exercise Aligning Executives Phase 1 Phase 2 Get Sell to Ready EarlyVangelists to Sell
- 8. Get Ready toSell Value Proposition Sales Collateral Distribution Plan Sales Roadmap Sales Closer Synchronize Execs Advisory Board Articulate Prelim Sales Prelim Prelim Sales Hire a Align Your a Value & Collateral Distribution Roadmap “Sales Closer” Executives Proposition Materials Channel Plan Formalize Advisory Board
- 9. Get Ready toSell: Articulate a Value Proposition Create Value Proposition Is it emotionally compelling? Does it make or reinforce an economic case? Does the it pass the reality test? Varies by Market Type
- 10. Get Ready toSell: Preliminary Sales Collateral Create collateral roadmap What you need and when you need it Supports the sales roadmap Ensure the collateral matches the internal audiences Create all selling materials Presentations Data sheets White Papers How would collateral differ by Market Type?
- 11. Get Ready toSell: Preliminary Channel Road Map Channel Food Chain and responsibility Channel discount and financials Channel Management How would channel plan differ by Market Type?
- 12. Channel Alternatives Pick One OEMs System Integrators Direct Sales Force Value-Added Your Your Resellers (VARs) Customers Company Dealers Distributors Retail/Mass Merchants/Online
- 13. Channel Diagram Book Publishing Company National Publisher Wholesaler Distributor Retailer Determine Merchandise Deliver Books Allocations Titles (from printer) Stock Books Deliver Orders Sell Books -Establish Identity Ship Books -Create Demand Dispose of Acknowledge Returns Returns
- 14. Channel Margins Book Publishing Company Publisher National Customer Distributor Retailer Wholesaler % of 35% 15% 10% 40% Retail $s $7.00 $3.00 $2.00 $8.00 $20.00
- 15. Get Ready toSell: Preliminary Sales Road Map Built around key insights about the selling process Answers Who decides the sale? Influencers, recommender, decision makers Where is the budget? How many sales call to the sale? To who? What is the script for each? Consists of: Organization Map Influence Map Customer Access Map Sales Strategy Implementation Plan
- 16.
- 17. Get Ready toSell: Hire a “Sales Closer” Identify need for a “Sales Closer Founders have experience “closing” business? Do they have a “world-class” set of contacts? Bet the company on their ability to close sales? If not, hire a “Sales Closer” Do NOT hire a VP of Sales Typical background would be a regional manager How does Market Type effect this hire?
- 18. Get Ready toSell: Synchronize Your Execs Product Development Schedule Deliverables “Good-enough” Philosophy Engineering’s role in sales, installation, post-sales support Sales Collateral review
- 19. Get Ready toSell: Formalize Advisory Boards Advisory boards are critical in nascent stages of a startup To sell to industry specific customers requires an industry advisory board Multiple Advisory Boards Use at different times Different purposes
- 20. Phase 2: Sell Phase 3 Phase 4 First sales Business Positioning Model First channel sales Verified Scalable and Repeatable Phase 1 Phase 2 Get Sell to Ready EarlyVangelists to Sell
- 21. Sell to EarlyVangelists Contact Visionaries Sell Refine Sales Roadmap Sell to Channel Partners Refine Channel Roadmap Contact Sell to Sell to Refine Refine Sales Visionary Early Channel Channel Roadmap Customers Customers Partners Roadmap
- 22. Sell: Contact Visionaries Looking for people with problems They are few are far between They need to become your cheerleaders… while paying you to do so
- 23. Sell: Turn Visionariesinto EarlyVangelists Very few are early customers Visionaries will emerge to buy an unfinished product if it truly solves a painful problem A lack of these early purchasers is a red-flag Market Type effects ease of execution
- 24. Build the OrganizationMap Dave Jones CEO Karen Rogers VP Marketing Neil Garrett Suzanne Kellogg VP Database VP Merchandizing Marketing Our Potential Customer = in house competition = issues to be addressed before a sale
- 25. One Step atA Time Dave Jones CEO Ben White Karen Rogers VP Sales VP Marketing Joe Black Neil Garrett Suzanne Kellogg Dir. Sales Operations VP Database VP Merchandizing Marketing Leslie Elders Financial Modeling Our Potential Customer = in house competition = issues to be addressed before a sale
- 26. Organization Map Dave Jones CEO Ben White Karen Rogers Roger Smith VP Sales VP Marketing CIO Joe Black Neil Garrett Suzanne Kellogg Phil Whitry Dir. Sales Operations VP Database VP Merchandizing Director IT Marketing Leslie Elders Geoff Smith Financial Modeling Financial Tools Development Our Potential Customer = in house competition = issues to be addressed before a sale
- 27. The Influence Map Functional Technical High Executive 1 Low
- 28. The Influence Map Functional Technical High Executive 1 2 CIO or Division IT executive Low
- 29. The Influence Map Functional Technical High Executive 1 2 CIO or Division IT executive Low End Users 3
- 30. The Influence Map Functional Technical High Executive 1 2 CIO or Division IT executive Low End Users 3 4 Corp. IT staff or Division IT
- 31. The Sales Roadmap: Startswith Influence Map Educate & Present Solution Operational Technical High Execs CIO End IT Users Low Staff
- 32. The Sales RoadMap: Adds Access, Assessment & Strategy Access Assess Strategy Educate & Present Needs Solution Finance Product Operational Technical Mgmt High Execs CIO Sales Intro Account Meetings Strategy Corp. End IT Mktg Users Low Staff Support IT
- 33. The Sales RoadMap Access Assess Strategy Educate & Present Sell, Sell, Sell, Sell Needs Solution Finance Product Operational Technical Mgmt High Execs CIO Sales Implement Intro Account Proposal Meetings Strategy Plan Corp. End IT Mktg Users Low Staff Support IT
- 34. RoadMap becomes TheSales Pipeline 4. Understand 1. Prepare 2. Initial Meeting Existing Situation • Hoovers, One • Ask tough questions a) Technology Source, Web • Do Buy- In Demo 3. Qualify? b) Organization c) Competition T h e i m 5. Custom Pitch • Prepare! 6. Win Over IT 7. Define Problem 8. ROI Pitch • Get NDA signed • Tech deep dive • Develop Action Plan • Prove the Value! 9. Exec Session • Set expectations for this meeting early on. 10. Solution 11. Formal Pricing 12. Negotiate Session Proposal • Sales • Detailed Tech discovery • 13. Close! • No surprises! • Finance • Support
- 35. Sell: Sell/Refine ChannelRoadmap Early channel partners need to be “Visionaries” Indirect channels/integrators have $ minimum Indirect channels/integrators just fulfill Market Type affects channel adoption
- 36. Phase 3: Company & Product Positioning Phase 3 Phase 4 Market Type driven Business Positioning Model Company & Product Verified Based on real-world facts Phase 1 Phase 2 Get Sell to Ready EarlyVangelists to Sell
- 37. Develop Positioning Product Positioning Company Positioning Present to Analysts & Influencers Builds briefs for demand creation activities Product Company Present to Positioning Positioning Analysts & Influencers
- 38. Positioning: Product Positioning Market Type affects positioning
- 39. Positioning: Company Positioning Market Type affects positioning Existing Market New Market Resegmented Market Company Compare your It’s too earlier for Company positioning for Positioning company to your customers to understand this type of market Statements competitors. Describe how different your communicates the value how your company is company is, since in a of the market segment both different and new market there are no you’ve chosen and the credible. other companies to innovation your compare it to. Therefore, company brings to it. company posi tioning is What is it that customers about communicating a value and want and vision and passion of what need now. could be.
- 40. Phase 4: Verify, Iterate or Exit Phase 3 Phase 4 Market Type driven Business Positioning Model Company & Product Verified Phase 1 Phase 2 Get Sell to Ready EarlyVangelists to Sell
- 41. Verify Product Sales Roadmap Channel Roadmap Business Model Verify the Verify the Verify the Verify the Iterate or Product Sales Channel Business Exit Roadmap Roadmap Model