HOW TO CREATE PRODUCTS THATCUSTOMERS REALLY WANT TO BUY!© Copyright 2012 to 2013, The Lûcrum Group, IncTom EvansThe Lûcrum...
High New Product Failure Rate• Robert G Cooper: One out of fourdevelopment projects succeeds commercially.(i.e., 75% failu...
High New Product Failure Rate• Robert G Cooper: One out of fourdevelopment projects succeeds commercially.(i.e., 75% failu...
Why Do So Many Products Suck?1. Idea to Product© Copyright 2012 to 2013, The Lûcrum Group, Inc
Why Do So Many Products Fail?1. Idea to Product2. Not enough people have the problem.3. May have problem, but don’t like t...
Keys to Products That Don’t Suck• Compelling Market Opportunity– Big painful issues– That many in your target market– Are ...
Model for DiscoveryFour Key Steps of DiscoveryValidateHypothesisValidateOpportunityValidate Solution Validate MarketFourKe...
Four Key Pillars• Market Problem – if you’re not solving aproblem, there is no need for a product!• Product – How do you s...
Model for DiscoveryFour Key Steps of DiscoveryValidateHypothesisValidateOpportunityValidate Solution Validate MarketFourKe...
Market Evidence (of Market Problem)• Sources of Market Evidence– Customers– Non-customers– Market trends/shifts– Unexpecte...
Market Evidence (of Market Problem)• Sources of Market Evidence– Customers– Non-customers– Market trends/shifts– Unexpecte...
Market Evidence (of Market Problem)• Sources of Market Evidence– Customers– Non-customers– Market trends/shifts– Unexpecte...
Start With Hypothesis– Buyer/User ‘W’– In Market Segment “X”– Has problem “Y”– That happens when “Z” occurs– We can solve ...
Exercise 1• Create a Hypothesis for a New Opportunity– Buyer/User– Market Segment– Market Problem© Copyright 2012 to 2013,...
Validate the Hypothesis (1)• Market problem and market segment(s)• Speaking to potential customers (buyers & users)– Most ...
Henry Ford’s Quote“If I had asked people what they wanted,they would have said faster horses.”© Copyright 2012 to 2013, Th...
What Do They Need (To Do)?“People dont wantto buy a quarter-inch drill. They wanta quarter-inchhole!”–Theodore Levitt© Cop...
What We Want to Identify• Problems, Goals, Needs– What do they want to do that they can’t do?– What do they want to improv...
Validate Hypothesis (2)• Create product & business model concept– Low cost way of presenting product concept– Mockup, prot...
Exercise 2• How are we going to get someone to talk tous?
Validate Opportunity• Define & discover at greater depth• Competitive research (strategy, position,strength)• Validate the...
Validate Solution• Define Minimum Viable Product (MVP)– Just enough functionality to solve the mostimportant market proble...
Validate Market• Sell your first customers• Based upon market validation work• Targeted Market Development Plan– Well defi...
Model for DiscoveryFour Key Steps of DiscoveryValidateHypothesisValidateOpportunityValidate Solution Validate MarketFourKe...
Key Principles• Hypothesis – Discovery – Validate• Continuous engagement with targetmarket–Validate important decisions• P...
Thank You!Tom EvansThe Lûcrum Grouptevans@napkintorevenue.com@napkintorevenuewww.napkintorevenue.com+1.512.961.5267© Copyr...
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People Fund Innovation Week 2013 - How to Create Products that Customers Really Want to Buy - May 20 2013

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Many entrepreneurs and companies begin with what they think is a brilliant idea and they immediately jump to developing a product before they discover if anyone else thinks it’s a good idea, and most often, these products fail. Successful products are based upon solving a significant Market Problem with a Product that creates a competitive advantage and a Market Strategy that motivates buyers to purchases your product. In this session, you’ll learn a discovery process that leads to products that customer will buy.

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People Fund Innovation Week 2013 - How to Create Products that Customers Really Want to Buy - May 20 2013

  1. 1. HOW TO CREATE PRODUCTS THATCUSTOMERS REALLY WANT TO BUY!© Copyright 2012 to 2013, The Lûcrum Group, IncTom EvansThe Lûcrum Group@napkintorevenuewww.napkintorevenue.com
  2. 2. High New Product Failure Rate• Robert G Cooper: One out of fourdevelopment projects succeeds commercially.(i.e., 75% failure rate)• Jack Gordon: In the world we live in,somewhere between 80 percent and 95percent of new product introductions fail.© Copyright 2012 to 2013, The Lûcrum Group, Inc
  3. 3. High New Product Failure Rate• Robert G Cooper: One out of fourdevelopment projects succeeds commercially.(i.e., 75% failure rate)• Jack Gordon: In the world we live in,somewhere between 80 percent and 95percent of new product introductions fail.© Copyright 2012 to 2013, The Lûcrum Group, Inc
  4. 4. Why Do So Many Products Suck?1. Idea to Product© Copyright 2012 to 2013, The Lûcrum Group, Inc
  5. 5. Why Do So Many Products Fail?1. Idea to Product2. Not enough people have the problem.3. May have problem, but don’t like thesolution.4. Can’t charge enough for the solution to beprofitable.5. Unable to communicate a clear reason topurchase the solution.5© Copyright 2012 to 2013, The Lûcrum Group, Inc
  6. 6. Keys to Products That Don’t Suck• Compelling Market Opportunity– Big painful issues– That many in your target market– Are willing to pay to solve• Compelling Solution– Differentiated Value Proposition– Profitable business model– Time to market• Compelling Market Strategy– Motivates target market– To solve problem with your solutionDiscovery+Validation© Copyright 2012 to 2013, The Lûcrum Group, Inc
  7. 7. Model for DiscoveryFour Key Steps of DiscoveryValidateHypothesisValidateOpportunityValidate Solution Validate MarketFourKeyPillarsMarket ProblemProductBusiness ModelMarket StrategyValidation Valid HypothesisValid MarketOpportunityReady to Launch Market GrowthFrom Napkin to Revenue™ Discovery Model© Copyright 2012 to 2013, The Lûcrum Group, Inc
  8. 8. Four Key Pillars• Market Problem – if you’re not solving aproblem, there is no need for a product!• Product – How do you solve the market problemin a valuable and differentiated manner?• Business Model – How do you deliver theproduct and profitably capture the value?• Market Strategy – Who is going to buy it andwhy?© Copyright 2012 to 2013, The Lûcrum Group, Inc
  9. 9. Model for DiscoveryFour Key Steps of DiscoveryValidateHypothesisValidateOpportunityValidate Solution Validate MarketFourKeyPillarsMarket ProblemProductBusiness ModelMarket StrategyValidation Valid HypothesisValid MarketOpportunityReady to Launch Market GrowthFrom Napkin to Revenue™ Discovery Model© Copyright 2012 to 2013, The Lûcrum Group, Inc
  10. 10. Market Evidence (of Market Problem)• Sources of Market Evidence– Customers– Non-customers– Market trends/shifts– Unexpected occurrences– New technologies– Competitors– Personal experience– Etc.© Copyright 2012 to 2013, The Lûcrum Group, Inc
  11. 11. Market Evidence (of Market Problem)• Sources of Market Evidence– Customers– Non-customers– Market trends/shifts– Unexpected occurrences– New technologies– Competitors– Personal experience– Etc.© Copyright 2012 to 2013, The Lûcrum Group, Inc
  12. 12. Market Evidence (of Market Problem)• Sources of Market Evidence– Customers– Non-customers– Market trends/shifts– Unexpected occurrences– New technologies– Competitors– Personal experience– Etc.© Copyright 2012 to 2013, The Lûcrum Group, Inc
  13. 13. Start With Hypothesis– Buyer/User ‘W’– In Market Segment “X”– Has problem “Y”– That happens when “Z” occurs– We can solve it by creating/delivering solution “A”E.g.: Owners of small manufacturing operations that usehot water & steam are unable to manage manufacturingcosts due to the volatility of fuel prices.We can solve this by providing a high temperature solarheating system under a lease agreement.© Copyright 2012 to 2013, The Lûcrum Group, Inc
  14. 14. Exercise 1• Create a Hypothesis for a New Opportunity– Buyer/User– Market Segment– Market Problem© Copyright 2012 to 2013, The Lûcrum Group, Inc
  15. 15. Validate the Hypothesis (1)• Market problem and market segment(s)• Speaking to potential customers (buyers & users)– Most companies don’t and won’t do this• Significant time investment– Requires many conversations (cold calling)• Minimum: 20 conversations• May take over 100 conversations• Iterate until validated or rejected© Copyright 2012 to 2013, The Lûcrum Group, Inc
  16. 16. Henry Ford’s Quote“If I had asked people what they wanted,they would have said faster horses.”© Copyright 2012 to 2013, The Lûcrum Group, Inc
  17. 17. What Do They Need (To Do)?“People dont wantto buy a quarter-inch drill. They wanta quarter-inchhole!”–Theodore Levitt© Copyright 2012 to 2013, The Lûcrum Group, Inc
  18. 18. What We Want to Identify• Problems, Goals, Needs– What do they want to do that they can’t do?– What do they want to improve (decrease/increase)?• Why is this important?• When does this happen (usage scenarios)• How do you currently do this?• What is your current satisfaction?• What is the impact?© Copyright 2012 to 2013, The Lûcrum Group, Inc
  19. 19. Validate Hypothesis (2)• Create product & business model concept– Low cost way of presenting product concept– Mockup, prototype, wire frame, story board, presentation,product description• Validate product & business model concept– Present concept and receive feedback• Does the problem still resonate?• Does the approach solve the problem?• What is the Minimum Viable Product (MVP)• Iterate until validated or rejected© Copyright 2012 to 2013, The Lûcrum Group, Inc
  20. 20. Exercise 2• How are we going to get someone to talk tous?
  21. 21. Validate Opportunity• Define & discover at greater depth• Competitive research (strategy, position,strength)• Validate the market opportunity– Business Case - Can it be profitable?• Detailed design of product & business model– Market requirements, product requirements, userstories, etc.– Pricing model, delivery mechanism, costs to deliver,etc.• Iterate until validated or rejected© Copyright 2012 to 2013, The Lûcrum Group, Inc
  22. 22. Validate Solution• Define Minimum Viable Product (MVP)– Just enough functionality to solve the mostimportant market problems– For small segment of market (early adopters, etc.)– Willing to pay for this functionality– Fast to market– Learning• Continue to discover, validate, refine!© Copyright 2012 to 2013, The Lûcrum Group, Inc
  23. 23. Validate Market• Sell your first customers• Based upon market validation work• Targeted Market Development Plan– Well defined target market– Clear understanding of buyer roles and theirchallenges/goals/needs– Compelling reason to buy from you• Value Proposition – what we do for you• Positioning & Differentiation – why buy our solution• Continue to discover, validate, refine!© Copyright 2012 to 2013, The Lûcrum Group, Inc
  24. 24. Model for DiscoveryFour Key Steps of DiscoveryValidateHypothesisValidateOpportunityValidate Solution Validate MarketFourKeyPillarsMarket ProblemProductBusiness ModelMarket StrategyValidation Valid HypothesisValid MarketOpportunityReady to Launch Market GrowthFrom Napkin to Revenue™ Discovery Model© Copyright 2012 to 2013, The Lûcrum Group, Inc
  25. 25. Key Principles• Hypothesis – Discovery – Validate• Continuous engagement with targetmarket–Validate important decisions• Planning is good, but learning is better• Fail fast – discover fast!© Copyright 2012 to 2013, The Lûcrum Group, Inc
  26. 26. Thank You!Tom EvansThe Lûcrum Grouptevans@napkintorevenue.com@napkintorevenuewww.napkintorevenue.com+1.512.961.5267© Copyright 2012 to 2013, The Lûcrum Group, Inc

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