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Ideas to income: An introduction to Marketing (Part 1)

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With the pace of innovation today, ideas have become cheaper than ever. Everybody has them. Your big idea in a crowded market is worth nothing... until you figure out how to competitively differentiate your product and connect with a market that cares.

MaRS Advisor Peter Evans discusses marketing. This session will first focus on the unique marketing challenges faced by early stage technology companies. It will also provides proven and practical principles for visioning new products, breaking into a market and building a sustainable business venture.

In this session you learn:

* Why marketing effectiveness often matters as much today as pure product innovation
* How to identify key market trends and better connect with the real needs of potential customers
* How to use “value innovation” methods to competitively design a product as faster, cheaper and better
* Pragmatic ways to position your product and quickly build market acceptance
* How effective marketing must connect to focused business development and sales channel efforts


Whether you're just starting out or fine tuning your marketing strategy, this session describes how marketing plays a key role in your venture.

Published in: Business, News & Politics
  • This presentation is a real marketing action plan. You can start using it right away and it'll clearly guide you all the way to your goal.
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  • What I love about this presentation is it is basic, practical, but most importantly VALUABLE!! If you really challenge yourself to take on these ideas head-first, I can't see how they won't lead to income.

    I have very little marketing theoretical knowledge; however, Peter Evans slide deck gave me a better idea of things to keep in mind when approaching marketing.

    Thanks Peter for this great presentation!
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Ideas to income: An introduction to Marketing (Part 1)

  1. 1. Ideas to Income
 An Introduction to Marketing (Lecture 1)
 MaRS Entrepreneurship 101 January 13, 2010 Peter Evans
 Advisor, MaRS Venture Group
 pevans@marsdd.com HP Garage, Silicon Valley
  2. 2. What We’ll Cover Learning objectives for this session   What is Marketing?   Why it Matters   Technology is Just One Aspect of how Goals
 the Game is Played   Learn some key marketing and strategy concepts   The Innovators Paradox: Ideas are   Be able to apply them to an your first problem invention or idea   Have an appreciation for   Connecting Ideas to Income (Levels) marketing as a discipline that builds value for customers   Best Practices to Build into your plan   Have Fun © 2010 Peter M. Evans Slide 1
  3. 3. why matters HP Garage, Silicon Valley © 2010 Peter M. Evans Slide 2
  4. 4. What is Marketing? A general definition American Marketing Association “ The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives.” Prof. Phil Kotler (Northwestern U.) “Activities directed at satisfying needs and wants [in a market].” © 2010 Peter M. Evans Slide 3
  5. 5. Benefits of Marketing What’s in it for start-ups? Customers ✔   Establishes your relevance/credibility with the right first customers
 Product ✔   Clearly identifies problems and critical transition points and guides the development of the right prototype and product
 Markets ✔   Creates a more predictable and scalable go-to-market process and alignment with the right segments
 Investors ✔   Provide a common framework for understanding key areas of the business that affect success. Shows how a company can grow and make money on a sustainable basis © 2010 Peter M. Evans Slide 4
  6. 6. How Marketing Fits
 The 50,000 View of How your Product & Market Fit Together CUSTOMERS COMPETITORS Who BUYS What, Where, Who OFFERS What, Where, When, How and Why When, How and Why Determine Basis of Market Determine Basis of Segmentation/Relevance Product Differentiation COMPANY Given your objectives and resources...what can you do, for whom, where and when? ASSESS MARKET- ASSESS COMPANY FIT Define Quality PRODUCT-COMPANY FIT and Identify Segments You Evaluate Relative Quality and Can Serve Identify Competitors You Can Beat DEVELOP PRODUCT-MARKET FIT Does a market exist for your intended price/quality level? © 2010 Peter M. Evans Slide 5 KW-057
  7. 7. 4 How we will •  How can we get there? Get There •  How will we move the plan to action? •  How will we know what we have achieved? Drafting the Executing Maintaining •  How will we create an Plan the Plan Momentum environment that rewards performance? 3 Our Desired State Planning Execution •  How do we optimize our current business? Optimizing Reconstructing •  Can we reshape our business Market Market along key dimensions of Position Boundaries customer value? 2 Our Business Potential •  What do current/potential customers value? •  How competitive are we? •  What forces have the potential to change Markets Customers Competitors Partners & our business? Suppliers •  How well are we synchronized with partners across the supply/distribution chain? 1 Our Organization Today •  Why do we exist? •  What do we want to be? Definition Corporate Industry •  How do we operate? & Direction Assessment Assessment •  What state is our business in today? •  What is the state of our industry? © 2010 Peter M. Evans Slide 6
  8. 8. A Simpler View Superior Marketing Focuses on the Top Quadrant Who _____ Cares? High Degree of Market Relevance Why Low You? Degree of Competitive Differentiation © 2010 Peter M. Evans Slide 7
  9. 9. Why Marketing Matters Its in the numbers… More than If there are 14 Slides in an Investor Pitch Deck 50% are marketing related © 2010 Peter M. Evans Slide 8
  10. 10. How an Investor Sees Marketing Investor Presentation: Table of Contents 1.  Company Overview & Vision 8.  Competitive Advantage/ Intellectual Property 2.  Management & Advisors 9.  Category Map - 3.  Customer Problem Where our Solution Fits 10.  Competitive Advantage 4.  Market Opportunity/Size (Value Matrix/Value Curve) 5.  Solution 11.  Business Model 6.  Benefits/Value Proposition 12.  Marketing & Sales (Customer Acquisition/Sales Cycle) 7.  Success to Date (Customers/ 13.  Financial Projections (3-5 Yr.) Partners/Patents) 14.  Financing Requirements © 2010 Peter M. Evans Slide 9
  11. 11. How an Investor Sees Marketing Marketing is threaded across the venture 1.  Company Overview & Vision 8.  Competitive Advantage/ Intellectual Property 2.  Management & Advisors 9.  Category Map 3.  Customer Problem Where our Solution Fits 10.  Competitive Advantage 4.  Market Opportunity/Size (Value Matrix/Value Curve) 5.  Solution 11.  Business Model 6.  Benefits/Value Proposition 12.  Marketing & Sales (Customer Acquisition/Sales Cycle) 7.  Success to Date 
 13.  Financial Projections (3-5 Yr.) (Customers/Partners/Patents) 14.  Financing Requirements © 2010 Peter M. Evans Slide 10
  12. 12. the paradox
  13. 13. Ideas Don’t Have Market Context Even Webster is pessimistic idea (n.) i·de·a*  a form, look or appearance of a thing as opposed to its reality.  a conception existing in the mind  a thought, a mental image, a notion  an opinion, view, or belief  a groundless supposition; a fantasy  a hazy perception  a vague impression, fanciful notion, inkling Source: Random House Webster's Unabridged Dictionary © 2010 Peter M. Evans Slide 12
  14. 14. The Innovator’s Paradox Not all technologies can spark the creation of a business Technology Product Company Business Source: Neoset Ventures
  15. 15. The Market is Not your Customer People or organizations with needs and budgets are… Market Problem Buyer Budget Source: Neoset Ventures
  16. 16. Connecting Ideas to Income Aligning Capability with Opportunity Capability Technology Product Company Business 1 Opportunity 2 Value 3 Proposition Distribution 4 Strategy Financial Model Market Problem Buyer Budget Opportunity Source: Neoset Ventures
  17. 17. the startup HP Garage, Silicon Valley
  18. 18. Maslow’s Hierarchy of Needs Self- Actualization Esteem Love/Belonging Safety Physiological
  19. 19. Maslow’s Hierarchy of Needs morality, creativity, spontaneity, problem solving, lack of prejudice, Self-Actualization acceptance of facts self-esteem, confidence, achievement, respect of others, Esteem respect by others friendship, family, sexual intimacy Love/Belonging security of body, of employment, of resources, of morality, of the family, of health, of property Safety breathing, food, water, sex, sleep, homeostasis, excretion Physiological
  20. 20. The Startup Hierarchy of Needs
 What’s required for market success? Sustainable Engaged Synchronized Differentiated Relevant On-Trend © 2010 Peter M. Evans Slide 19
  21. 21. The Startup Hierarchy of Needs
 What’s required for market success? Sustainable Engaged Synchronized Differentiated Relevant Market: “On-Trend” © 2010 Peter M. Evans Slide 20
  22. 22. TREND IS YOUR FRIEND WHEN YOU LOOK AT THE MARKET IS THERE A WIND AT YOUR BACK ? BE CAREFUL…EVEN TURKEYS CAN FLY IN A TORNADO… © 2009 PETER EVANS
  23. 23. CES
 Digital eReaders © 2010 Peter M. Evans Slide 22
  24. 24. © 2010 Peter M. Evans Slide 23
  25. 25. CES Picture
 Digital Health © 2010 Peter M. Evans Slide 24
  26. 26. © 2010 Peter M. Evans Slide 25
  27. 27. © 2010 Peter M. Evans Slide 26
  28. 28. CES Picture
 3D TV © 2010 Peter M. Evans Slide 27
  29. 29. © 2010 Peter M. Evans Slide 28
  30. 30. © 2010 Peter M. Evans Slide 29
  31. 31. © 2010 Peter M. Evans Slide 30
  32. 32. CES
 Cut the Clutter © 2010 Peter M. Evans Slide 31
  33. 33. © 2010 Peter M. Evans Slide 32
  34. 34. $1,000,000,000 $100,000,000 10x reduction every 7.5 years $10,000,000 $1,000,000 $100,000 10x reduction every Dollars per MIP $10,000 4.25 years $1,000 $100 $10.00 $1.00 $0.10 $0.01 1959 1969 1979 1989 1999 2009 Source: Hans P. Moravec 1998-2003]
  35. 35. Social
  36. 36. Enviornmental
  37. 37. LEGAL   LEGAL   PATENTS
  38. 38. Total economic value created by VCs. Total amount of money raised by VCs. SOURCE: NVCA / Thompson Reuters Exit Poll SOURCE: NVCA / Thompson Reuters VC Fundraising Q3
  39. 39. Trendspotting Techniques
 P-E-S-T-L-E-C 1.  Political: Identify key developments including areas such as tax policy, employment laws, environmental regulations, trade restrictions and reform, tariffs and political stability. 2.  Economic: Economic growth/ decline; interest rates; exchange rates and inflation rates; wage rates; minimum wage; working hours; unemployment (local and national); credit availability; cost of living. 3.  Sociological: Cultural norms and expectations; health consciousness; population growth rate; age distribution; career attitudes; attitudes and habits regarding family, career, entertainment; emphasis on safety and global warming. 4.  Technological: What new technologies affecting the rate of change in your market and also impact changes to barriers to entry in given markets, and changes to buyers financial decisions. 5.  Legal: What is happening with respect to cases being settled in the courts and the overall business climate in the context of how companies are interacting? Do these developments have a bearing on areas such as intellectual property rights? 6.  Environmental: What is happening with respect to ecological and environmental aspects? Many of these factors will be economic or social in nature. 7.  Capital: Attitude and actions of investors (Venture Capitalists, Angels) and their propensity to invest in certain sectors (as measured by deals done) © 2010 Peter M. Evans Slide 40
  40. 40. ✔ Political Economic ✔ Sociological ✔ Technology Legal Capital © 2010 Peter M. Evans Slide 41
  41. 41. Political Economic ✔ Sociological ✔ Technology Legal ✔ Capital © 2010 Peter M. Evans Slide 42
  42. 42. Technological Still
  43. 43. Framing the
  44. 44. Size Can the market category support another entrant? The Advertising Industry (U.S.) Source: Universal/McCann © 2010 Peter M. Evans Slide 45
  45. 45. Landscape Example: Who’s who in cleantech Source: Greentech Media (2007) © 2010 Peter M. Evans Slide 46
  46. 46. Landscape Example: Who’s who in personal digital health Personal Health Innovations (Care Enhancement Coordination) Physiological Pedometer/ Measurement BodyBugg/ Calorie Intake/ Nike+iPod Vital-Sign & Tracking Weight Control Monitor Wellness/ Fitness Club/ Worksite Personal Senior Fitness Fitness Exercise/ Programs Trainer Coaching Education Online Health Risk Nurse Engagement Assessment Coaching Web Care Corporate Chronic Care Wellness Management © 2010 Peter M. Evans Slide 47
  47. 47. Interactions Do you know how key sub-categories interact within the market? Source: IBM Institute for Business Value © 2010 Peter M. Evans Slide 48
  48. 48. Scope
 How do competitors service the category? Apache Alyeska Lyondell Koch Union Pacific GATX Common carriers Tosco QuickTrip Integrated major Petroleum Industry Value Chain Source: Booze Allen Hamilton © 2010 Peter M. Evans Slide 49
  49. 49. Share
 Is there a payoff associated with the area you serve? UPSTREAM DOWNSTREAM TAXES 1965 32.5¢ 56.6¢ 45,2¢ Exploration
 Refining & Marketing Development 
 & Production 3.0¢ 1.8¢ 2.0¢ 1995 11.0¢ 10.8¢ 13.0¢ 6.2¢ 13.0¢ 18.3¢ 40.4¢ Petroleum Industry Value Chain Source: Booze Allen Hamilton © 2010 Peter M. Evans Slide 50
  50. 50. What we Can Learn from Hollywood The power of convergent categories Emerging Technology Emerging Category Who Cares? Visual Recognition Digital Signage Systems GPS Location-Based Pay as You Drive Services Technologies Insurance Social media (blogger) Reputation Management performance monitoring) for UGC Mobile Smart Phone Personalized Digital Applications Health Programs Gesture Based 
 “Edutainment Software” User Interfaces © 2010 Peter M. Evans Slide 51
  51. 51. Sustainable Credible Engaged Synchronized Differentiated Customers: “Relevant” On-Trend © 2010 Peter M. Evans Slide 52
  52. 52. LESS COWBELL IT’S TIME TO STOP ADDING “UNRECOVERABLE COSTS” TO MAKE PRODUCT PERFORMANCE IMPROVEMENTS THAT CUSTOMERS WON’T PAY FOR… © 2009 PETER EVANS
  53. 53. Innovation: Thinking Strategically
 10 ways to break from the herd Finance Process. Offering Delivery Business Networking Enabling Core Product Product Service Channel Brand Customer model process process performance system experience Core competence planning: A lot of the competition at the center Offering & process Innovation planning: Many big breakthroughs found at the edges Business Customer model experience Source: Doblin Analysis (Division of Monitor Group)
  54. 54. Innovation Payoff A herd of companies clustered in the centre Finance Process. Offering Delivery Business Networking Enabling Core Product Product Service Channel Brand Customer model process process performance system experience Hi Volume of innovation efforts Last 10 years Lo Source: Doblin Analysis (Division of Monitor Group)
  55. 55. Innovation Payoff Value Creation opportunities are found at the edges Finance Process. Offering Delivery Business Networking Enabling Core Product Product Service Channel Brand Customer model process process performance system experience Relative Value Created last 10 years Hi Less than 2% of projects produce More than 90% of value… There is a fundamental shift in value creation as a result of innovation at the edges Lo Source: Doblin Analysis (Division of Monitor Group)
  56. 56. 10 Types of Innovation
 Examples Mapped to the Doblin Framework 1. Business model 5. Product performance how the enterprise makes money basic features, performance and functionality 2. Networking 6. Product system enterprise’s structure/ extended system that surrounds an offering value chain 7. Service how you service your customers Finance Process. Offering Delivery Business Networking Enabling Core Product Product Service Channel Brand Customer model process process performance system experience 8. Channel how you connect your offerings 3. Enabling process to your customers assembled capabilities 9. Brand how you express your offering’s 4. Core process benefit to customers proprietary processes that add value 10. Customer experience how you create an overall experience for customers © 2010 Peter M. Evans Slide 57
  57. 57. Developing a Value Driven Strategy The Most Important Equation You Should Remember © 2010 Peter M. Evans Slide 58
  58. 58. Minding your P’s & Q’s What’s YOUR Strategy for Adding Value for Customers? Higher Average Value Inferior Customer Value for (Over-priced or Over-specified) Quality Buyers Relative Average Value - Superior Value Parity Price “Stuck in the via Middle” Higher Quality Average Value Superior Value Maximum Lower for via Buyer Price Buyers Lower Prices Value Lower Parity Higher Relative Quality © 2010 Peter M. Evans Slide 59
  59. 59. Creating Buyer Utility Stages & Utility Levers Stages of the Buyer Experience Cycle (1) (2) (3) (4) (5) (6) (7) Eval./Trial/Reco.* Purchase Delivery Use Supplements Maintenance Disposal Customer Productivity Simplicity Utility Levers Convenience Safety/Risk Fun and Image Environmental Friendliness Social Responsibility* Source: Blue Ocean Strategy – Kim & Maubourgne * Indicates revision to model © 2010 Peter M. Evans Slide 60
  60. 60. The Buyer Experience Step by Step
 Are We Creating Barriers for Customers? (1) Eval/Trial/ Reco * (2) Purchase (3) Delivery (4) Use (5) Supplements (6) Maintenance (7) Disposal Can you How long does How long does Does the product Do you need Does the Does use of the experience the it take to find it take to get require training or other products product product create product/service the product the product expert assistance? and services require waste items? before you need? delivered? to make this external purchase? product work? maintenance? How easy is it to Is the product easy Is the place of How difficult is to store when not in dispose of the What are the purchase it to unpack use? If so, how How easy is it product? perceived risks attractive and and install the costly are to maintain associated with accessible? new product? they? and upgrade Are there legal How effective are purchase? the product? or environmental the product’s How secure is Do buyers features and How much issues in Are the the transaction have to functions? time do they How costly is disposing of the evaluation environment? arrange take? maintenance? product safely? criteria clearly delivery Does the product or understood by How rapidly themselves? If service deliver far How much How costly is buyers? can you make yes, how costly more power or pain do they disposal? a purchase? and difficult is options than cause? this? required by the average user? Is it How easy are overcharged with they to obtain? bells and whistles? Source: Blue Ocean Strategy – Kim & Maubourgne * Indicates revision to model © 2010 Peter M. Evans Slide 61
  61. 61. Creating Buyer Utility
 Stages & Utility Levers Stages of the Buyer Experience Cycle (1) (2) (3) (4) (5) (6) (7) Eval./Trial/Reco. Purchase Delivery Use Supplements Maintenance Disposal * Customer Productivity Simplicity Utility Levers Convenience Safety/Risk Enterprise Server Fun and Image Environmental Friendliness Social* Responsibility Source: Blue Ocean Strategy – Kim & Maubourgne * Indicates revision to model © 2010 Peter M. Evans Slide 62
  62. 62. Homework Assignment
  63. 63. Thank You Peter Evans, Advisor, MaRS Venture Group Email: pevans@marsdd.com Twitter: @TechMarketer

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