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Module 3 Innovation and Value Proposition.pptx
- 1. Innovation and ValueProposition Module 3
- 2. The effective useof technological innovation is a pre-requisite for small business survival (Peckham, 2002)
- 4. “Where a newinvention promises to be useful, it ought to be tried” -Thomas Jefferson (1762-1826)
- 5. Inputs and Outputsof Inventive Work INVENTIVE WORK Inventive Inputs from: •Orders from entrepreneurs •Inventive work development Other Inputs •Outputs of research Inventive Outputs •New technological problems •Unexplained successes and failures of research Other Outputs •Patents •Non-patentable inventions
- 6. Distinction Between Inventionand Innovation INVENTION • An idea, a sketch, or a model for a new improved device, product, process, or system • Often patented but not necessarily lead to technical innovations INNOVATION • The decisive commercialization of an invention • Strengthened by R&D • Coupling of technical and market possibilities
- 7. Interrelationship between invention,innovation, and entrepreneurship (Thomas and Gornall, 2002) Activity Level Invention Innovation Entrepreneur ship Micro Individual/lon e inventor Innovator Entrepreneur Small and medium sized enterprise Company inventor Innovation champions Entrepreneur /Intrapreneur Large company or organization Institutional/ Corporate Inventor Project champions Intrapreneur
- 8. Types of entrepreneurship Small-mediumenterprise Local, won’t become global. Grows linearly then saturates. For example, dry cleaning business, many restaurants. Innovation-driven enterprise Looks to be superregional or global. Innovation that is unique to address broad market. More risk, initial losses, but greater upside time cash flow small-medium innovation-driven
- 9. What is innovation? •Innovation: changes the way people do things, makes people happier • “Innovation= invention * commercialization” (multiply, not add – need both otherwise zero) • Can innovate without inventing - Apple didn’t invent mouse/windows/iPod– but commercialized - TV, radio didn’t have an impact before advertising model Innovation ≠ Invention
- 10. Types of innovation •Product – better product or service Computer mouse • Process – better way to produce or deliver product/service Amazon – same goods but order online rather than store • Business model TV didn’t have an impact before advertising model Google with advertising
- 11. Outline of course Customers -needs - targets - markets Product/Service - benefits - competitive advantage - intellectual property Business Model - execution plan - financial analysis - raising capital Value Proposition
- 12. Benefits "People don't wantto buy a quarter-inch drill. They want a quarter-inch hole!" • Benefits – what customers receive by using product/service. Subjective, perceived by customer • Features – built into the product. tangible and objective
- 13. Needs-Benefits How your approachwill provide benefits to meet a need? • What is the need (articulate specifically), customer “Pain Point” • Describe the ‘as-is’ state, why other approaches not good enough. • How does your product provide a benefit to meet that need • Show specific evidence (eg, anecdotes) how benefits meet need “Use Case”, a specific example showing • Need, acquisition and benefits of product • Why customer would get it • Barriers to adoption • Interface points
- 14. Value • Value =benefits/price • Increase value by increasing benefits or decreasing price • Only the customer defines your value • Customer satisfaction is the ratio (Value)/(Expected Value)
- 15. Value Proposition Statement Aclear, crisp, compelling statement that describes the value of your offering. Should include NABC: Needs Approach Benefits per cost Competition Example: I understand you are hungry (Need), so let’s go to the X Restaurant (Approach) instead of McDonalds (Competition) because it has better food and it is closer (Benefits/cost)
- 19. Assignment 2: ValueProposition • give top three priorities of target customer • describe “as-is state”, customer pain points, opportunities • potential solution – given in general terms • describe anticipated Use Case with solution • identify key metric measuring how solution meets the need • give a clear, compelling Value Proposition statement
- 20. Ideas can havetwo origins Organization driven, “tech push” • Have a solution, looking for market. • Have competitive advantage • Downside: might be no real need for your product Market driven, “market pull” • Know the need, and have an idea to satisfy the need • Downside: don’t have competitive advantage (example: falafel truck)
- 21. Elevator pitches • Have~60 s with boss/investor to pitch idea • Goal is to set up lengthier discussion at later time • Don’t need to give all information, but entice them Components a. Start with a hook b. Address “NABC”: Needs Approach Benefits per cost Competition (why you’re better than them) c. Conclude with the “ask”
- 22. Assignment 3: Idea’sElevator Pitch Individual project: Come up with an idea for a product/service, and develop a 60 second elevator pitch • what is the problem your product or service is going to solve, and how critical is the problem? • what types of people or companies suffer from this problem, and how widespread is it? • what is the innovation behind your approach, and its advantage over competitors?
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