The document provides guidance on developing an effective value proposition and adoption model to bring an innovation to market. It discusses segmenting the market between pain killers that address existing problems and vitamins that provide new benefits. For each, it emphasizes the importance of demonstrating how the solution creates value by reducing costs or improving outcomes. It also stresses facilitating adoption through compatibility, ease of use, and addressing perceived costs like integration and risks of new technologies. The overall goal is to motivate customers to see that the benefits of the solution dramatically outweigh any costs and risks of changing behaviors.

1. TechConnect
Moving from Idea to Invoice

2. TechConnect afternoon agenda
Thinking about your customer:
• Offering pain killers or vitamins
• Creating the value proposition:
• Motivating your customer to change their behavior
Demonstrate your value proposition
Stimulating adoption
• Making the customers’ decision easier
Thinking like a social scientist

3. Importance of innovation science
• Technologists believe that offering a better
technology leads directly to market success
• Commercial success requires adoption:
• How will customers become aware of solution?
• How will they know it works?
• What will motivate them to purchase?
• How can you identify the early adopters?
• How do you overcome innovation inertia?
• How will you leverage early adoption to stimulate growth?
• Who has biggest pain, and is most motivated to adopt?
• Who has most to gain, and will easily see benefits?

4. Segmenting market by solution
• Take away a pain
• Offer a pain killer that addresses a real problem that
the customer is already aware of
• Provide a gain
• Offer a vitamin that will help the customer address
an issue that you have an anticipated

5. If you have a pain killer
• How big is customers’ pain: what does it cost?
• Are they motivated to look for pain relief?
• How do alternate solutions compare?
• Can you demonstrate your pain killer works?
• What features offer competitive advantage?
• Typical pain points:
– High cost,
– Low quality,
– Poor service,
– High risk

6. If you have a vitamin
• How would you build awareness of benefits?
• How can you motivate interest?
• How can you show it works?
• How can you demonstrate/measure benefits?
• How will customer measure outcomes?
• Typical gains: Enhanced competitiveness, improved
performance, new levels of service, enhanced well
being, reduced environmental/social impact

7. Customer segmentation

8. The Value Proposition exercise
Based on job mapping exercise
• Identify distinct markets: solution is pain killer
• Identify distinct markets: solution is vitamins
• Identify two or more distinct market segments
• Discuss the attractiveness of each
• For two or three of market opportunities – develop
compelling value proposition
• Find ways to increase perceived benefits for each
• Choose the top one (or two)

9. Develop the value proposition
to describe perceived benefits
• Explain what job the technology does
• Explain how this creates value (pain killer or
vitamin) for a specific user
• Identify how the customer will measure benefits
• Demonstrate your solution is better than
alternates (including doing nothing)

10. Value is what people are
willing to pay for it.
Customer Pain
How do you
address:
· High cost
· Low quality
· Poor service
· High risk
Pain
Killer
Increase
Utility
How do you value:
· Cost reduction
· Quality improvement
· Increase in service
· Reduction in risk
Adoption Model
How do you facilitate by:
· Increasing compatibility
· Reducing complexity
· Allowing trials
· Reducing initial cost
· Using customer relationships
· Establishing channels
· Encouraging endorsement
Customer Gain
How do you
address:
· Enhanced
competitiveness
· Improved
functionality
· New levels of
service or quality
· Enhanced well
being
· Reduce negative
impact
Vitamin Increase
Utility
How do you value:
· Enhanced
competitiveness
· Improved performance
· Increase in service
levels/quality
· Improvement in well
being
Adoption Model
How do you facilitate adoption by:
· Reducing compatibility issues
· Reducing complexity of solution
· Allowing trial solutions
· Sharing adoption success stories
· Reducing initial cost
· Developing customer
relationships
· Establishing market channels
· Encouraging endorsement

11. Three laws of innovation inertia
11
1. There is a natural tendency for organizations to keep doing
what they’re doing and resist changes. In the absence of a
force, they will continue to do what they’ve always done.
2. Larger organizations require more force to change what
they are doing than smaller organizations.
1. For every force there is a reaction force that is equal in
size, but opposite in direction. When someone exerts a
force on an organization, he or she gets pushed back in
the opposite direction equally hard.

12. Innovation adoption
Don’t worry about people stealing your ideas. If your
ideas are any good, you’ll have to ram them down
people’s throats.”
Howard Aiken
2

13. Aspects of perceived costs
• Cost to integrate with existing products/behaviours
• Costs to train, install, verify
• Costs to try
• Costs to evaluate/measure outcomes
• Costs to address performance risks

14. Crossing the chasm:
Identifying first customers
Moore, G (1991)
Crossing the chasm.

15. The adoption exercise
• We now have a value proposition for a:
• Specific customer segment
• For a specific application
• Challenge is to reduce the perceived costs to:
• Make the perceived benefits dramatically exceed the
perceived costs (and risks) of adoption
• Provide the motivation for adoption

16. Business model approaches
to facilitate adoption
Social science questions:
• How will you make your solution compatible?
• How will you reduce complexity?
• Can you enable trials?
• Can you reduce costs, either short or long term?
• Can you develop strong customer relationships?
• Can you develop appropriate channel partners?

17. Alternate revenue models
to facilitate adoption
• Offer for free (trial) before you have to purchase
• Turn a capital purchase into a service agreement
• Charge per use
• Steeped charges for increasing use
• Offer basic service for free, with premium options
• Offer for free and have others pay for data access
• Share use of underutilized resources

18. Licensing or new
venture creation?
• When to create a new venture:
• Technology is sold as a complete solution
• Market for technology is growing, lacks
standards and is not dominated by major player
• Technology + business dev. costs not excessive
• Technology likely to disrupt the market
• Required expertise and resources available
locally and not controlled by competitors
• Inventor wishes to play critical role

19. 5 forces influencing new venture creation
(characteristic in brackets favour new venture creation)
Market
dynamics
Input factors
Demand
conditions
Barriers to
entry
Disruptive
potential
Market dynamics
Market trends (growing, segmenting)
Product life-cycle (short)
Market concentration (low)
Cost relative to total cost (discrete)
Competitor diversity (high)
Disruptive potential
Underserved customers (high)
Changes in price/performance (high)
Alternate revenue/business models (high)
Defendable patent (high)
Demand conditions
Customer/buyer characteristics
(incentives)
Performance measures (high)
Perceived need (high)
Price sensitivity (high)
Switching costs (low)
Government legislation (low)
Input factors
Supplier concentration (low)
Distributor concentration (low)
Capital requirements (low)
Economies of scale (low)
Barriers to entry
Dominant technology (low)
Level of vertical integration (low)
Brand loyalty (low)
Established relationships (low)
Freedom to operate (high)