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Researching your Market Prepared for KCL 4 th December 2013 © Jeff Skinner 2013.

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Presentation on theme: "Researching your Market Prepared for KCL 4 th December 2013 © Jeff Skinner 2013."— Presentation transcript:

1 Researching your Market Prepared for KCL 4 th December 2013 © Jeff Skinner 2013

2 Why do it? Predicting whether customers will buy your product Anticipating blockages in value chain Figuring out the optimal product design or business model Identifying likely heavy & lead users Common theme – look/learn before you leap © Jeff Skinner 2013

3 Advice to Henry & Alexis: Mortgage the house and go for it?

4 An Entrepreneur is… Someone who jumps off a cliff hoping to assemble a parachute on the way down. © Jeff Skinner 2013

5 Assumptions, leaps of faith? Any ways of testing?

6 © Jeff Skinner 2013

7 Most babies are born ugly You do not have a product You have a hypothesis, hunch Success depends on a number of Leaps of Faith & assumptions on customers (pain and/or your solution) Identify these & design experiments to test. Outcome: – LoF confirmed or falsified – go/no go. – Lots of learning (if you listen) and: Better product/service Better business model (who, what, how) Cheaper & faster than launching. © Jeff Skinner 2013

8 Process Who needs to do what for my business to succeed? What assumptions am I making about needs, behaviour, motivations, of each (leaps of faith) Design experiment or research to test, inform, learn, iterate, pivot. Venture evolves as you go, insight by insight. © Jeff Skinner 2013

9 Secondary & Primary evidence Can learn a load from secondary sources: – Blunt (usually high level, macro) – Cheap, fast, insightful – Boring, not very entrepreneurial. Some evidence can only come from primary research, experimentation: – Specific to your product (or pain its solving) – Expensive in time and resources – Gets you the hell out of the building – Builds relationship, reputation. © Jeff Skinner 2013

10 Secondary research Market size, growth, trends (why & why now)? How big a pain is it really Competition (live and deadpool) Existing market segmentation – tribes Likely heavy-users - (X% of y better than x% of Y) Industry segmentation – value chain Regulation, insurance What else they buy, where do they aggregate? Opinion leaders, experts, commentators Analogy (UK lags US by 3yr, AirB&B for hitchikers) Industry standards – cpm, margins, conversion rate … © Jeff Skinner 2013

11 Then…. Primary Research Informed by Secondary Research Potential targets include users, influencers, distributors, investors, suppliers … Ask question, who needs to do what for my product to be a success. Identify main assumptions about their behaviour, needs, motivations Design research (to test those assumptions) Figure out tools needed… © Jeff Skinner 2013

12 Then Primary Research - Prerequisite Need something to test Better precisely wrong that vaguely right. So - define the product (best guess): – The thing itself & revenue model – User/customer characteristics – Supply/distribution channel (value chain) Product can be: – Existing tech to solve unmet need – New tech to do something better/cheaper © Jeff Skinner 2013

13 Tools Pitch: – Not to sell but to communicate, prime. – Focus on Benefits if testing pain (or opportunity) – Focus on Product if testing solution. Prototype, demonstrator, veneer product, Minimum Viable Product (MVP) if: – Thing hard to explain, visualise – Seeing, playing, touching need to believe – Cheap to do (within affordable loss) © Jeff Skinner 2013

14 People cant visualise their way into deciding whether youve got an interesting offering Mark Suster in 4C1B13DBDCA5C41?mid= C1B13DBDCA5C41?mid=2520 (but a good MVP may be is expensive – outside your affordable loss) © Jeff Skinner 2013

15 Research Methodologies (without product) Methodologies – Structured conversations (SPIN Selling – Rackman) – Surveys, questionnaires (Guerrilla Market Research Ch2 – Kaplan) – Focus Groups – Observation (how they current solve) Talk to: – Users, decision makers, suppliers – Influencers, those who know DMP* – Those who know customer behaviour – distributors, consultants, opinion leaders For traditional methodologies see for example: *Decision Making Process © Jeff Skinner 2013

16 Research Methodologies (with MVP) Market stall, exhibition, pop-up, demonstrate Limited trial (with feedback, observation, split test) Smoke test – promote - then source if demand Crowdfunding platform – believers invest. Shallow front end: – Landing page (with adwords?) – Source product elsewhere to begin with. Consultancy, concierge service Video & observe, question ( minimal-viable-product) minimal-viable-product © Jeff Skinner 2013

17 Tips Remember, to test (not confirm) hypothesis So be objective, unbiased Split test - offer choices, not perfection Actively seek out the disquieting evidence: – surely x would be a problem? – why wouldnt you buy this? Mix personal with third person: – what would this have to do before youd buy one – why wouldnt HR managers… Seek nice places to fail © Jeff Skinner 2013

18 Yes Minister

19 All proxies poor substitutes, but Every venture is a lot of ifs in a row Gold standard is to launch (but expensive, slow) Market research can test some assumptions: – Gap between what customers say and what they do. – Minimise by asking right questions in right way. Research also enables you to gather insights that move (pivot) you to plan B: – learn fast, learn cheap – as well as fail fast fail cheap. © Jeff Skinner 2013

20 Ever learning Comes a point where a few, imponderable, leaps of faith remain Only way to find out is to launch But best companies continue to experiment, listen, refine, adapt well after launch Market research (listening to customer) continues forever. But they often dont know what I want! © Jeff Skinner 2013

21 If Id asked customers what they wanted, they would have said, a faster horse. Henry Ford © Jeff Skinner 2013


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