Presentation on theme: "E245 Value Proposition Ann Miura-Ko January 2012"— Presentation transcript:
1E245 Value Proposition Ann Miura-Ko January 2012 Give me your elevator pitch – take 2-3 teams (do they describe value proposition or product?) – for whom? Is their view of the ecosystem wide enough?
2Some Announcements Asking for Email Introductions. Send the following: Name of person to whom you want an introWhy you’d like to speak to them (e.g. they lead the IT security team at HP and we believe they might be an early adopter of our technology)What questions you’d like to ask (not the interview guide but topics to cover)Blurb about your company
4Key Questions for Value Prop Problem Statement: What is the problem?Ecosystem: For whom is this relevant?Competition: What do customers do today?Technology / Market Insight: Why is the problem so hard to solve?Market Size: How big is this problem?Product: How do you do it?
5Problem Statement What is the problem? How do you justify your existence?Try it out with a few teams – toy team – what is the problem? What if you were to explain this to your users? What about your customers? What about a education blogger? Decision maker and economic buyer are the sameParkpoint Capital – government, payment processors, who else?Oral light – suppliers, channels (schein), contract manufacturer, etc.Use board to map out these different parts of the ecosystem – we will deep dive in the next 2 slides.WHO IS THE AUDIENCE? Is it an investor? Is it a customer? Is it a user?
6The Ecosystem (“Customers”) Day to day usersMay actually have zero influence in buying processEnd UserInfluencer / RecommenderPreferences and decisions influence or impact buying decisionsEconomic BuyerThe person who controls the purse strings or is in charge of the budgetDecision MakerThe buck stops here
7The Ecosystem (The Rest) SuppliersEntity that provides parts or services needed to manufacture your productChannelsGroup or organization that installs, distributes or sells the product in your placeGovernmentOrganizations responsible for monitoring trading and safety standards related to your productPartnersOther entities that provide products related to delivery of your final product
8Key question to test: Is your map of the ecosystem correct and complete?
9Competition What are customers doing today? Are competitors threatening to offer better price or value?How saturated is our market?What alternative does the customer have right now? How aware are they of the problem?Important context for value proposition – how new is this idea? – Market type
10Market Type Existing Resegmented New Customers Known Possibly Known UnknownCustomer NeedsPerformanceBetter fitTransformational improvementCompetitorsManyMany if wrong, few if rightNoneRiskLack of branding, sales and distribution ecosystemMarket and product re-definitionEvangelism and education cycleMarket Type determines:Rate of customer adoptionSales and Marketing strategiesCash requirements
11Existing Market Characteristics: Customers are always hungry for better performanceIncumbents existUsually technology drivenPositioning driven by product and how much value customers place on its featuresRisks:Incumbents will defend their turfNetwork effects of incumbentContinuing innovation
12Resegmented Market Characteristics Low cost provider or unique niche Eliminates factors on which the industry competesRaises certain factors well above industry standardsRisks:Incumbents will see this as their turfContinuing innovation
13New Market Characteristics: Customers don’t exist today Risks “Life as is” is good enoughSizing the marketAccessing potential customers and getting effective feedbackBased on this, what types of markets are you attacking?
14Key question to test: How aware is your ecosystem of the existence of the problem? But sometimes, awareness isn’t as important as how compelling your market or technical insight might be. This is how entrepreneurs often times create the illusion of “changing reality”.
15Technology and Market Insight Technology InsightMoore’s LawNew scientific discoveriesTypically applies to hardware, clean tech and biotechMarket InsightValue chain disruptionDeregulationChanges in how people work, live and interact and what they expectMarket insight is becoming more and more a requirement
16Examples of Market Insight People want to play more involved games than what is currently offeredFacebook can be the distribution for such gamesMasses of people are more likely to micro-blog than blogThe non-symmetric relationships will allow companies and individuals to self-promote and will impact distributionGenerally impacts some part of your business model diagram (usually NOT the product component)European car sharing sensibilities could be adopted in North AmericaPeople, particularly in urban environments, no longer wanted to own cars but wanted to have flexibility.
17Examples of Technical Insight Topological analysis enables highly dimensional data to be analyzed without predetermining number of feature setsMass produced components can be used to create a miniaturized fluorescence microscopeGenerally a product / value proposition question
18Insight Characteristics WrongRightBiggest Potential WinsNon-ConsensusMindless CompetitionWhat insight to I have that is not yet conventional wisdom?Insight is important because it helps us to identify the type of value that the product will deliver… What type of value do you think Market Insight brings? What about Technical Insight?Consensus
19Types of Product Value Comes from Technical Insight Comes from Market InsightMore EfficientLower costBetter DistributionBetter BundlingSmallerSimplerOthers: Brand/Status, easier to access (distribution); fun; bundling (phone + camera) faster, simpler, smaller, lower cost, more efficientFasterBetter Branding
20Key Question: Is there a reason this idea is uniquely poised to take off today?
21How do I test value proposition hypotheses? First – how would you define product? (go through different teams)
23Minimum Viable Product (MVP) A product that solves a core problem for customersThe minimum set of features needed to learn from earlyvangelistsAvoid building products nobody wantsMaximize the learning per dollar spent
24The Art of the MVP A MVP is not a minimal product “But my customers don’t know what they want!”At what point of “I don’t get it!” will I declare defeat?
25Testing the MVP Smoke testing with landing pages using AdWords In-product split-testingPrototypes (particularly for hardware)Removing featuresContinued customer discovery and validation
26The Value Proposition Pivot Originally: Craigslist for collegesBecame: Textbook rentalsOriginally: Video dating siteBecame: Video uploading siteOriginally: The Point (Collective action site)Became: Mass couponing site