1. 3-20-07Adhva Finding Customers and Forecasting Markets for New and Disruptive Technologies James F. Fee, Adhva Adhva.com

2. 3-20-07Adhva Basic Concepts Where do products come from? What do I mean by competition? How groups of customers become markets Finding parallel universes Modeling markets that don’t exist Disruptive vs. new products/markets

3. 3-20-07Adhva Where do products come from? Knock-off – copy an existing product or service – sell at a lower price to existing customers Incrementally improve an existing product – this is what engineers are hired to do Develop a product to address your own need – how many of you are there? Develop or utilize a new material, compound or service that has unique characteristics – find a market & develop a product

4. 3-20-07Adhva New Corp Customers Competitors New Product or Service (A) Existing Product or Service (B) Money The World of your New Product

5. 3-20-07Adhva Comparing A with B A and B could be equivalent –LaptopDell or HP A and B are different but with same function –Transportation to workCar or Bicycle A and B could be totally different – Entertainment Trip to Europe or Home Theater However money is money –Competition is not for the product – it’s for the money

6. 3-20-07Adhva Key Takeaway Your product and it’s benefits may be unique but there is always competition for the money Please never say that there is no competition

7. 3-20-07Adhva New Corp Customers Competitors Product or Service A Product or Service B Money The World of your New Product Market

8. 3-20-07Adhva Customers and markets Customers purchase products and services Markets are collections of customers that have similar purchasing patterns The same product may serve several very different markets

9. 3-20-07Adhva Markets are societies / cultures Made up of companies and individuals –There are leaders, followers and experts –They have their own dress and jargon –Annual gathering rituals Detroit Auto Show – NY Toy Fair American Heart Association – CES @ Las Vegas –Distribution channels –Business practices (typical business models) –Trade associations

10. 3-20-07Adhva Simple example As part of a project for a local company they wanted to know how big was the commercial market for their SNO PRO product Main customers were new car dealerships

11. 3-20-07Adhva National Auto Dealers Association

12. 3-20-07Adhva Modeling the market Days supply of vehicles- 60 Average time to clean a vehicle* 5 to 6 / hr Average time to clean all of the vehicles* 3hr * My guess

13. 3-20-07Adhva What do we need to know How many SNO PROs customers? How many are in snow areas? How many SNO PROs per customer? –How many cars are on the lot –How long does it take to clean a car –How quick are all of the cars cleaned

14. 3-20-07Adhva NOAA Snowfall Map

15. 3-20-07Adhva Most important step TEST your Model I went to several dealerships Talked to sales people –Who cleans the cars – they do –How long does it take them to do it –Estimate cars on the lot -etc. Refine the model Random data points improve your model

16. 3-20-07Adhva Conclusion Model was reasonably close to the actual sales data. Current channels were reaching the available market

17. 3-20-07Adhva Find the best fit customer / market / product A business idea is like a jigsaw puzzle You don’t know what you have until you put all of the pieces together –Customers –Markets –Competition

18. 3-20-07Adhva Where do products come from? Knock-off – copy an existing product or service – sell at a lower price to existing customers Incrementally improve an existing product – this is what engineers are hired to do Develop a product to address your own need – how many of you are there? Develop or utilize a new material, compound or service that has unique characteristics – find a market & develop a product

19. 3-20-07Adhva Do Your Homework Learn about your –Customer –Market –Competition Google is important but you must talk to people The hardest part is not to sell but to listen

20. 3-20-07Adhva Which comes first? The customer or the market You need both If you have customers talk to them –Ask them what related products do the buy? –From whom? –What publications, trade shows etc.? If you don’t have customers then learn about the market Create a customer profile

21. 3-20-07Adhva Creating a customer profile for your new product Who needs it? Why do they need it? Who purchases it? What does it take to close the sale? Where do customers buy it?

22. 3-20-07Adhva Who needs it? Everybody is not an answer Bottoms up profile –You need to know your target customers better than your best friend. –Where do they live, how do they spend their money, what do they like and not like Top down demographic info –X, Y generation –Dr., Lawyer, Banker – what kind of Dr.

23. 3-20-07Adhva What does it take to close the first sale? A laptop, cell phone and internet connection Or $1M for product development and a $100K to launch a commercial product Or $10M for product development, $10M for inventory and $10M national media launch of a consumer product

24. 3-20-07Adhva Another Takeaway Ideas are cheap and easy The secret is to develop a mental screening process to quickly sort through ideas to find the good ones The danger is that once you become emotionally involved in an idea, it is very hard to be rational

25. 3-20-07Adhva Disruptive vs. new markets Mainframe Computers $100Ks 60% margins Direct sales Mini Computers $10K - $20K 40% margins OEM PCs $1K-$5K 20% margins Retail CRTs $100-$500 Computer Channel LCD Displays $200-$1000 Computer Channel

26. 3-20-07Adhva Let’s talk about some of your ideas

27. 3-20-07Adhva Finding Customers and Forecasting Markets for New and Disruptive Technologies James F. Fee, Adhva Adhva.com