Business Model Canvas Customer Segments Key ActivitiesValue Proposition Customer Relationships Key Partners Key ResourcesChannels Cost StructureRevenue Streams from businessmodelgeneration.com/canvas
Identify Who are your target users? What value do you deliver to your customer? What activities are necessary to delivery your value prop? What key resources does your value prop require? Who are your key partners? Customer Segments Key ActivitiesValue Proposition Customer Relationships Key Partners Key ResourcesChannels Cost StructureRevenue Streams
Identify What type of relationship is required to deliver your value to your customer? What channels will be used to deliver your solution? What costs will be incurred to deliver your value prop? What value are your customers willing to pay for? Customer Segments Key ActivitiesValue Proposition Customer Relationships Key Partners Key ResourcesChannels Cost StructureRevenue Streams
B2B ‒ Complex Systems Model Target user: enterprise customers Channel: direct sales force Product includes: enterprise software + professional services consulting Product integrates into a larger system Must accommodate existing legacy systems Examples Financial systems Enterprise HR application Manufacturing requirements planning applications
B2C ‒ Volume Operations Model Target user: end user, consumer Channel: website, mobile phone, etc. Product complexity: simple & easy-to-use No integration, no legacy: offer works by itself Examples Online movie ticket purchasing Game console Mobile game Web hosting
Scaling These Two Business Models B2B Problem is painful & complex Solutions are expensive & valuable Customers pay a premium Barriers to exit high 1000 customers spending $1M/year = $1B business B2C Usage is at discretion of end user Popularity establishes the premium Often a convenience Barriers to exit are low 10M customers spending $8/mo = $1B business
Growth Strategies (based on your Business Model) New Product Existing Product Existing Market New Market
Growth Strategies New Product Existing Product Existing Market New Market
Example: Novell New Product Existing Product Existing Market New Market NOVELL Product: Server OS + networking (NetWare) Channel: network resellers + ISVs OEM & system integrator channel
Example: Novell Acquisition New Product Existing Product Existing Market New Market NOVELL Product: Server OS + networking (NetWare) Channel: network resellers + ISVs + OEMs SuSE LINUX Product: open source server & desktop OS Channel: system integrators
Example: Novell Acquisition New Product Existing Product Existing Market New Market NOVELL Product: Server OS + networking (NetWare) Channel: network resellers + ISVs + OEMs WORDPERFECT Product: desktop word processing app Channel: computer retail stores
Example: Oculus Rift Acquisition New Product Existing Product Existing Market New Market
Getting Mass Market Adoption Build a better mousetrap and the world will beat a path to your door. “You may find an audience with innovators and early adopters, but the mainstream market, where the profit resides, will reject your product unless marketed correctly.” —Geoffrey Moore
Crossing the Chasm Product-Centric Fastest product Easiest to use Elegant architecture Product price Unique functionality Market-Centric Largest installed base Most third party supporters Defacto standard Cost of ownership Quality of support The Innovators and Early Adopters love this stuff… but mass market adoption ONLY comes here!
Positioning Is a noun – an attribute associated with your company or product Is the single largest influencer on the buying decision Exists in people’s heads Is about making products easier to buy, not easier to sell “best buy for this situation”
Positioning Format For target customer who statement of need or opportunity, our product is a product category. Unlike primary competitive alternative, our product is statement of primary differentiation.
Positioning Format For home owners who want an easier way to manage their home temperature, NEST is a learning thermostat. Unlike timed thermostats, NEST helps you save money by programming itself based on your schedule.
YOUR OBJECTIVE The goal of a product manager is to create products that sell themselves Great products (Resonators) don’t need lots of advertising nor an expensive sales force
Be Tuned In Identify your target user Listen to the target user Learn everything you can about the user Create personas and “day in the life of” stories Suzy Socialite Nate NetGen Adam Athlete Returning Rhonda Isha Int’l Paul Postgrad Tom Technology
Be Tuned In Provide solutions to the users’ major pain points “Nice to have” generally won’t sell Is the problem urgent? Is it pervasive? Are buyers willing to pay for it? Urgent Pervasive Urgent Not Pervasive Not Urgent Pervasive Not Urgent Not Pervasive Problem Matrix
Be Tuned In Define markets in terms of customer value What value will the customer derive from your solution? How can you offer more value? Identify alternative perspectives for delivering value
Be Tuned In Develop solutions in the context of the total customer experience Buying experience Packaging Using the product Receiving customer service Availability of other required resources Generic Product Buying Experience Packaging Using the Product Customer Service
LESSONS LEARNED Business model drives strategy Marketing strategy is as important as the product Be incredibly tuned in to your market