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Business Model Canvas: The Customer-Driven Approach
Sunny Shahsshah1@nd.edu
September 15-16, 2016 Philadelphia, PA
United States Hispanics Chamber of Commerce
GOALS
Understand Business Model Canvas
Value of the Customer
Few Design Thinking Tools
Few Examples
Application to your Businesses/Chambers
10
MY BACKGROUND11
April 2011PhD
12
MY BACKGROUND
B.S and Ph.D. in Biomedical Engineering from UC Davis
Conducted research on liver tissue engineering and stem cells
Heparin Hydrogel
Hepatocytes
13
May 2011 – CurrentND
14
MY CURRENT ROLE 1 Act as a bridge
Engineering Develop microfluidic systems
for detection of nucleic acids
Biology Detection of target pathogens
in medical, food and environmental markets
Commercialization15
DIAGNOSTICS MARKETS
E.coli, listeria, salmonella, brucella
MedicalE.coli in water
16
INTEGRATED DIAGNOSTIC PLATFORM
Pretreatment unit: Lyse pathogen and extract RNA
Preconcentration unit: Concentrate target RNA molecules
Sensing unit: Specifically detect nucleic acids
17
RESEARCHING AND PROTOTYPING
Inlet
18
Jan 2013 DC NSF I-Corps
“Prepare scientists, researchers andengineers to focus beyond thelaboratory and into the commercialworld”
19
MY CURRENT ROLE 2
Assistant Director & Faculty
Thesis advisor on capstone projects
Teach design thinking, BMC and prototyping
LEARNCourses in business and technical entrepreneurship
APPLYApply knowledge to existing research or IP
COMMERCIALIZEDevelop a commercialization plan
20
BUSINESS MODEL CANVAS21
WHAT DO STARTUPS NEED FOR LAUNCHOR TO SUSTAIN
22
Credit: Steve Blank
23
THE OLD WAY
Credit: Steve Blank
24
WHAT IS MOST IMPORTANT WHEN TRYING TOCOMMERCIALIZE A NEW PRODUCT/SERVICE?
25
LEAN STARTUP
Business Model Canvas
Customer Development
Agile Engineering
26
HOW ARE THEY DOING IT NOW !!
Credit: Steve Blank
27
LETS FORM TEAMS/COMPANIES
28
BUSINESS MODEL CANVAS
29
“Unlike an org chart, which describes how a company executes to deliver known products to known customers, the Business Model Canvas illustrates the search for the unknowns that most new ventures face.”
Credit: Steve Blank
30
BMC EXPLAINED
31
WHAT IS BMC AT THE CORE
Guesses that need to be validated/invalidated
32
BMC PROCESS
Write hypothesis
GET OUT OF THE BUILDING
Validate/Invalidate hypotheses By talking to customers
PIVOT if needed and do it all over again
Goal is to this way before launch33
BUSINESS MODEL CANVAS
34
CUSTOMER SEGMENTATION
What is a customer segment? Defined market:
Industry Geography
Common attributes: Demographic: height, weight, gender, age, color of
hair Psychographic: perspectives, behaviors
35
CUSTOMER SEGMENTATION
• Why would one want to segment a market? To provide clarity and focus
• How does one do it? Quantitative – get out of the building and talk to customers
to gain insights on what is important to them. Qualitative – conduct surveys of a larger number of
customers to validate it represents a market and not just a sample of a market.
36
HOW MANY CUSTOMERS DO YOU TALK TO?
Credit: Steve Blank
37
CUSTOMER SEGMENTS
Start with a GUESS about who your customers are
Go out and validate/invalidate it
38
CUSTOMER SEGMENTS
Who is the buyer/user/influencer/sabetour ??
What does (s)he look like ??
Dig deeper !!
39
CUSTOMER ARCHETYPE/PERSONAS
Credit: Steve Blank
40
MULTIPLE CUSTOMER SEGMENTS
2-Sided Market Users (free) Payers (revenue stream) Each has its own value proposition Each has its own revenue stream One segment cannot exist without the other
41
INTERVIEWING THE ECOSYSTEM
Credit: Steve Blank
42
CUSTOMER TYPES
SaboteursDecision Makers
Economic Buyers
Recommenders
Influencers
End Users43
JOB - MAPPING
Identify the job steps the customer would go through to recognize that outcome. A “Day in the Life”.
Identify the desired outcome of each step
Assess each step on how the customer would like to change it by creating a job statement Minimize certain attributes (pain)
Maximize certain attributes (gain)
For each directional change consider how one might impact Time
Cost
Effective (rework or scrap)
Quality
44
BUSINESS MODEL CANVAS
45
VALUE PROPOSITION
Its not about the idea, it’s the pain you are trying to solve Pupil dilation
Customers don’t care about your technology, they care about solving a problem or a need
46
“For most new products, the definition of value is unknown”
“Any activity that does not focus on learning to identify true value for the customer is wasteful.”
47
WHAT IS A HYPOTHESIS?
48
Credit: Steve Blank
49
VALUE PROPOSITION
Credit: Steve Blank
50
Credit: Steve Blank
51
As you start to craft your customer segments and your value propositions, force yourself to put it in these terms to ensure that you understand all aspects of the hypothesis 52
ASSESSING VALUE PROPOSITION Does it hold together within the business model? Does it focus on the most important jobs, extreme pains,
essential gains? Does it focus on unsatisfied jobs, unresolved pains and
unrealized gains? Does it FOCUS on only a few pain relievers and gain creators? Does it FOCUS on functional, emotional and social jobs? Does it align with how customers define success? Does it FOCUS on jobs, pains, or gains that a large number of
customers have, or, for which a small number are willing to pay a lot of money?
Does it differentiate from competition? How sustainable is it? Does it outperform competition substantially on at least one
dimension? Is it difficult to copy?
53
ONCE YOU HAVE YOUR VP HYPOTHESIS, GETOUT OF THE BUILDING AND TEST IT
54
INTERVIEWS
Open-ended
Get them to talk about their pains/gains
Consider functional, social and emotional jobs
NOT questionnaire but a conversation
DO NOT talk about your product/service in the early phases
Record emotions about pains/gains
Take down their info so you can possibly test a prototype with them in the future
55
INTERVIEW GUIDE
A straightforward guide to prepare for an interview Guide the interview into focusing on the assumptions that need
to be tested to better understand the value a new venture can offer
Create 5 “starter questions” for each interview: All must start with “Tell me about a time…” Use these questions as entry points into the interview Follow queues to ask follow-ups Look for things that are: Interesting, Surprising, Confusing,
Emotional
Credit: Erik Jensen
56
BUSINESS MODEL CANVAS
57
CUSTOMER RELATIONSHIPS
What relationships are you establishing with each segment? Personal? Automated? Acquisitive? Retentive?
Credit: Steve Blank
58
CUSTOMER RELATIONSHIPS
Credit: Steve Blank
59
● What type of relationship does the CS want?
● We want to know◦ What do they buy?◦ How do they buy?◦ How do they look for new products?
CUSTOMER RELATIONSHIPS
60
GET: IN THE FUNNEL
Aw
aren
ess
Con
side
ratio
n
Inte
rest
Purc
hase
By Demand Creation
Credit: Steve Blank
61
● Publications● Free Press● Social Media● Word of Mouth
● Usually FREE
EARNED DEMAND
62
● Public Relations● Advertising● Trade Shows● SEO/SEM● Buy Mailing Lists
● Example: A new drug◦ Advertise in magazines, create website, email docs, SEM
in Google
● Paid Demand = $$$$
PAID DEMAND
63
● Cost of Customer Acquisition Amount of $ spent to acquire 1 customer
● Lifetime Value Net $ received from that 1 customer over the lifetime
COCA AND LTV
64
COCA AND LTV
Cost of Customer Acquisition Recover in less than 12 months
Lifetime Value (LTV) = (Revenue per sale) x (gross margin %) x (# of repeats)
LTV > 3*COCA
Churn Rate = 1/Avg. Customer Duration
65
● Freemium - $0-10
● Self-service - $50-200
● High touch - $3K-8K
● Field Sales - $ 75-200K
GENERAL COCA
66
KEEP CUSTOMERS: PHYSICAL
Earned andPaid Media
Keep Customers
Customer check-in calls
Customer satisfaction survey
product updates
Loyalty Programs
Credit: Steve Blank
67
KEEP CUSTOMERS: WEB/MOBILE
Contests,eventsBlogs,
RSS, emails
Product updates Affiliate Programs
“Get Customers”
AcquireActivate
Viral Loop
Earned andPaid Media
Loyalty Programs
Keep Customers
Credit: Steve Blank
68
● 1/Average Customer Duration
● Churn rate of 1% means customer will stay for 100 months
● SaaS acceptable Churn: 1-2.5%
CHURN RATE
Credit: Steve Blank
69
● LTV = (Revenue per sale) x (gross margin %) x (# of repeats)
● LTV = ARPM x Gross Margin %Churn
◦ Average Recurring Revenue per month
LIFETIME VALUE (LTV)
70
GROW CUSTOMERS
Keep Customers
Contests,events
Blogs, RSS,
emails
product updates Affiliate Programs
Grow Customers
Ref
erra
ls
Cro
ss-s
ell
LoyaltyPrograms
Viral Loop
Earned andPaid Media
Credit: Steve Blank
71
PIRATEMETRICS
72
BUSINESS MODEL CANVAS
73
CHANNELS
How do you want to sell the product
How does the customer want to buy the product
74
CHANNEL OPTIONS
Owned Channels Control Potential for higher margins Can be costly to put in place and operate Direct
Sales force Web Sales
75
CHANNEL OPTIONS
Partner Channels Lower margins Expanded reach Benefit from Partner’s strength Indirect
Partner Stores Wholesalers Retailers
76
CHANNEL OPTIONS EVOLUTION
Channel
Bit/Virtual Physical
Prod
uct Bit/
Virtu
alP
hysi
cal
StocksBondsInsuranceEnterprise SoftwareShrink-wrap Software
FoodHousehold GoodsAutos
ZapposAmazonConsumer ElectronicsNetflix
FacebookGoogleTwitter
77
VIRTUAL CHANNELS
● Dedicated e-commerce, i.e., Website● App Store Platform ● Through other party that has web presence● Flash Sale, e.g., Groupon, Living Social
78
PHYSICAL CHANNELS
● Original Equipment Manufacturer (OEM)● System integrator● Value Added Reseller● Direct Sales Force● Web/Online● Distributors◦ Dealers◦ Retailers
79
CHANNEL RESPONSIBILITY
Manufacturer
Builds Product
Wholesaler
Stocks Product
Ships Product
Distributor
Determine Allocations
Deliver Orders
Dispose of Returns
Retails
Merchandise Product
Articulate Value
Process Returns
80
CHANNEL ECONOMICS- DIRECT SALES
• % of Retail• $s
Profitability
• 42%• $42
Manufacturer
• Cost of goods -$5
• R&D - $3• Marketing and
Sales - $30• G & A - $20
Consumer Pays
• 100%• $100
81
BUSINESS MODEL CANVAS
82
Credit: Steve Blank
83
DIFFERENT REVENUE STREAMS
Asset sales Usage Fee Subscription Fee Renting Licensing Intermediation Fee Advertising Recurring Revenue
84
Credit: Steve Blank
85
Credit: Steve Blank
86
CUSTOMER DISCOVERY WILL PROVIDEVALUABLE INFORMATION TOWARDS PRICING
Find out what the Archetype would be willing to pay for the service or product.
87
Credit: Steve Blank
88
MVP: MINIMUM VIABLE PRODUCT
Find Product – Market Fit and build MVP
Its MINIMUM
NOT all the features included
Test it and get feedback
89
Design Thinking
WHAT IS IT?
● Silver Bullet
● Sticky Notes
● Chaos
● In conflict with good business fundamentals
WHAT IT’S NOT
HOW ARE WE GOING TO APPROACH IT?
THREE RULES
Start with Empathy
Assume, then Test
Build to Learn, not to Sell
95
96
97
98
INNOVATING USING DESIGN THINKING
From Tom Kelly, The Art of Innovation Understand the market, the technology, current constraints
Observe real people in real life situations to find out what makes them tick
Visualize new concepts and prototypes
Evaluate and refine the concepts in a series of quick iterations
Implement the new concept for commercialization
99
ANOTHER BIG WORD...ETHNOGRAPHY
100
QUESTIONS TO BUILD EMPATHY
How do you…? What is the first thing you do…? Can you show me how you __________? What are the best places for __________? Would you tell me a story about ______? What was your best experience with _____?
101
BUILD EMPATHY AS YOUINTERVIEW
102
DT TOOLS: EXPLORATION
Innovation Mapping Research a given industry Look for recent innovations in that
industry and categorize them into the elements on the x-axis
Decide the level of innovation activity being done in each category in the aggregate
Look for insights and opportunities based on the areas of high and low activities: What is driving the areas of
frequent activity? What is driving the areas of
minimal activity? Where could a new venture position
itself?
Credit: 101 Design Methods - Vijay Kumar
DT TOOLS: EXPLORATION
Trends Matrix Create a list of the key aspects
of a customer problem or experience.
Research: Current state of those
aspects (both interviews and secondary sources)
Trends of those aspects (both interviews and secondary sources)
Imagine where the trends could take the current state into a future state
Where could a new venture position itself?
Credit: 101 Design Methods - Vijay Kumar
DT TOOLS: EXPLORATION
2x2 Matrix Identify two key dimensions of
the industry, customer problem, or customer experience
Map out where current industry players and/or offerings lie on the matrix, paying attention to the relative positioning of them
Look for the opportunity spaces between the current actors
Where could a new venture position itself?
Credit: 101 Design Methods - Vijay Kumar
DT TOOLS: SYNTHESIS
Empathy Map Use your interviews to map
out what your interviewee: Does Says Thinks Feels
Credit: 101 Design Methods - Vijay Kumar
DT TOOLS: SYNTHESIS
Needs/Wants Matrix Map out the scale of “Needs”
to “Wants” Create a second axis that
has influence on what makes (or prevents) these possible i.e., cost, technology,
availability, user experience, etc.
DT TOOLS: SYNTHESIS
Persona Create an aggregate persona
of your ideal customer What are their:
Experiences Interests Activities Needs/Wants
Use quotes from your interviews to understand how they think and feel
Credit: 101 Design Methods - Vijay Kumar
DT TOOLS: SYNTHESIS
Value Proposition Hypothesis As you start to craft your
customer segments and your value propositions, force yourself to put it in these terms to ensure that you understand all aspects of the hypothesis
DT TOOLS: SYNTHESIS
Conjunction Bank A great way to go from
interviews to insights is to combine things that are related in some way
This may be within one interview, or across interviews
Ex.: “Jonny says X, but does Y” Parents love going to the
movies with their children because family outings are seen as adventures by children.
Credit: Dustin Mix & Maria Gibbs
DT TOOLS: SYNTHESIS
Customer Journey Using your interviews and your
observations, map out the current customer journey: How do they hear about a
product/service? How do they find it? How do they purchase it? How do they receive it? How do they interact post-
purchase? You can do this both for the current
offerings and also as a way to prototype and show how your new value proposition is different
Credit: 101 Design Methods - Vijay Kumar
THINGS TO REMEMBER
deeply understand users it’s dangerous to think you know what they will value.
collaborate, involve many people sharing and shaping ideas makes better solutions.
create (many) tangible models people respond better to something visual and tangible. revise often.
just start doing it don’t worry about what you call it
112
PAPER AIRPLANE
113
BUILDING A MVP
114
rules prompts
methods selection
brainstorming
rulesrules
brainstorming
defer judgement
encourage wild ideas
build on ideas of others
focus on the topic
one conversation
be visual
quantity > quality
rulesprompts
brainstorming
HOW MIGHT WE…[create and deliver the value proposition to the
customer segment]?
Credit: stanford d.school
rulesprompts
brainstorming
HOW MIGHT WE…improve the airport waiting experience for mothers
traveling with young children?
amp up the good! HMW use the kid’s energy to entertain fellow passengers?
remove the bad! HMW separate kids from fellow passengers?
explore the opposite! HMW make the wait the most exciting part of a trip?
question an assumption! HMW entirely remove the wait time at an airport?
use adjectives! HMW make the rush refreshing instead of harrying?
ID new resources! HMW leverage free time of fellow passengers to share the load?
use an analogy! HMW make the airport more like a playground?
p.o.v. against the challenge! HMW make the airport a kids want to go to?
change status quo! HMW make playful, loud kids less annoying?
break it up! HMW entertain kids? HMW slow a mom down? Credit: stanford d.school
brainstorming
practice: hmw question
write a hmw question that prompts ideas that would provide the value proposition for your customer
segment
rulesmethods
brainstorming
only draw it!brainstorm without words
idea sprint60 ideas in 60 seconds
yes! and...start with one idea and
pass it around the group, always starting with “yes!
and…”
break it down with analogiesbreak your HMW into single
topic questions and brainstorm all the ways that thing is done
warm-up: categoriesname a category and everyone takes turns
naming something in the category until only one person remains
rulesselection
brainstormingvoting works
use voting to identify ideas that should be pursued -- multiple votes are not always a bad
thing
the rational ideawhat idea seems most rational?
the long shotmaybe it’s the craziest, but if it
worked...
the darlingwhat idea does the team
just love?
the delightwhat idea would delight your
user?
assumptions form
build
prototyping
rulesassumptions
prototypingbuild to learn, not to sell
a prototype is used as a feedback tool -- it is meant to start a conversation, not pursue
agreement
what are we testing?what’s your hypothesis and what
are you trying to learn?
rulesforms
prototyping
build the right prototype build the prototype that best allows your user to
experience the concept
mock-upproducts
storyboards role play
rulesbuild
prototyping
free fast now
IDEO
methods iterate
mvp
feedback & iteration
rulesmethods
feedback & iteration
answer a question with a question“how do i order?”
how would you like to order?
ask whyprinciple of the five whys
feedback = interview v2.0your goal is to learn, just like in your
initial interviews
let them do the talkingtry to get the customer interacting with the
prototype in a way that gets them talking as if it were real
rulesiterate
feedback & iterationback to square one
once you have feedback in hand, we are returning to the beginning of the customer
validation process
what are the needs?
brainstorm & prototype solutions
get feedback
rulesmvp
feedback & iteration
minimum viable productwhat is the simplest product or service you can
sell to provide the CS with the core VP?
once we have validated the value proposition, the customer segment, and the solution, we
are looking to build the simplest version of our product or service
to release quickly
once it has been released, we use the same BMC attitude --
assume, test, iterate to drive the build out of our solution into its
full vision
LEFT SIDE OF THE CANVAS131
BUSINESS MODEL CANVAS: LEFT-SIDE
132
LEFT SIDE OF CANVAS
o Key Activities to support right side
o What Resources are needed
o Need for Key Partnerso How much is it going to cost
133
KEY ACTIVITIES
o For fulfilling VP
o For enabling distribution channels
o For enabling customer relations
o For enabling revenue streams
134
KEY ACTIVITIES
o Activities you need to do to make the right side of canvas work
o Production Activitieso Life sciences◦ Regulatory approval◦ Clinical Trials◦ Drug design and development
o SaaS◦ Software development
135
KEY RESOURCES
Four of them◦ Physical
◦ Financial
◦ Human
◦ Intellectual
136
PHYSICAL RESOURCES
Company Infrastructure◦ Office space◦ Location◦ Rent◦ Servers/equipment/lab supplies
Products and Services◦ Supply of materials
Keep in mind: Physical Goods = $$$$
http://www.nbc.com/the-office
FINANCIAL RESOURCES
Friends
Family
Fools
Bootstrapping
Crowdfunding◦ Indiegogo – E2E
Kickstarter
SBIR/STTR◦ NIH◦ NSF◦ DoD◦ DoE◦ DoA◦ DoC◦ DoEducation◦ DoHealth
Services◦ DoT◦ NASA◦ EPA
VCs◦ Seed funding◦ Series A
Bank Loan
Sharktank.com
Angel Investors
Corporate Partners
Bank Lease lines to buy equipment
HUMAN RESOURCES
Qualified Employees◦ With specific skills◦ Can juggle multiple hats◦ Fit into a team/culture
Mentors and AdvisorsDealersynergy.com
INTELLECTUAL PROPERTY RESOURCES
Trademarks
Copyright
Trade Secrets
Contract, NDA
Patents
TRADEMARKS
Protecting your marks and logos
Lasts as long as you see the trademark symbol (™)
More you use, stronger it protects
Registration is optional, advantages include:◦ Public notice of your claim of ownership of the mark◦ Bring legal action to court◦ The right to use the federal registration symbol ®
TRADEMARK FAILS
Examples from Business Insider
COPYRIGHT
Protect authorship
Expression of ideas but not the underlying ideas
Songs, books, photos etc…
Protection lasts forever
Registration is optional, BUT◦ Need it to sue for infringement◦ http://www.copyright.gov/
TRADE SECRETS
It’s a secret
TRADE SECRETS
Pros◦ No-term limit◦ Never disclosed to competitors◦ No patent/lawyer fees
Cons◦ Reverse engineering◦ Takes effort to keep a secret◦ If shared by any means, status lost
CONTRACT / NDAS
Protection agreed by a contract
No registration
Terms/Conditions/Expiration defined by contract
Signed between parties
PATENTSGovernment is giving you monopoly
New, Novel & Non-obvious
Register with USPTO◦ Within one year of public disclosure (provisional patent)◦ Protection for 20 years from date of filing
Expensive: $20K to 60K◦ Initial money raised by startups◦ Future maintenance fees by USPTO
(http://www.uspto.gov/web/offices/ac/qs/ope/fee010114.htm)◦ Processing time: 1-4 years
RESOURCES FOR YOUR PROJECTS
© 2012 Steve Blank
KEY PARTNERS
REASONS FOR PARTNERING
Shared economicsMutual success / failure – Two-way streetCo-development/inventionCommon customerMoney/ResourceAccess to Marketing
Remember – you are a small startupYou are sometimes not a peer to a partner (Asymmetrical)
RESOURCES PARTNERS BRING
● Faster time to market
● Broader product offering
● More efficient use of capital
● Unique customer knowledge or expertise
● Access to new markets (channel partners)
PARTNERS – STRATEGIC ALLIANCES
• Reduce the list of things your startup needs
• Complement your core product with other products or services.
• Use partners to build the “whole product” • using 3rd parties to provide a customer with a complete solution
• complement your core product with other products or services
• Training, installation, service, etc
Example: In 1996, Starbucks partnered with Pepsico to bottle, distribute and sell the popular coffee-based drink, Frappacino
PARTNERS – JOINT BUSINESS DEVELOPMENT
• Joint promotion of complementary products• Share advertising, marketing, and sales programs
• One may be the dominant player
Example: Intel offered advertising fees to PC Vendors
PARTNERS – COOPETITION
• Joint promotion of competitive products
• Competitors might join together in programs to grow awareness of their industry• Trade shows
• Industry Associations
Example: Automotive Suppliers form the Automotive Industry Action Group (AIAG) - 900 members
PARTNERS – KEY SUPPLIERS
• Outsource suppliers• Backoffice, supply chain,
manufacturing• Direct suppliers
• Components, raw materials, etc.
• More than a financial transaction• Building a relationshipExample: Apple builds the iPhone from multiple suppliers including Foxconn
TRAFFIC PARTNERS – VIRTUAL CHANNELS
• Agreements with other companies • deliver long-term, predictable levels of customers • “Cross referral” or swapping basis• Paid on a per-referral basis• Partners drive traffic using text-links, with onsite
promotions, and with ads on the referring site• Partners sometimes exchange email lists
RISKS
Cultural differencesScheduling differences – Priorities for the larger companyNo clear ownership of customerDifferent underlying objectives in relationshipChurn in partners strategy or personnelIP issues Difficult to unwind or end
PARTNERSHIP DISASTER: BOEING
Collaboration looked great on paper.
Worst business decision of the 21st
centuryhttp://www.newairplane.com/787/
For more info:Reuters Special ReportPaper published by Boeing
COST STRUCTURE
o Related to your Activities and Resources
o Fixed Costs◦ Salaries, Rent, other bills, tooling
o Variable Costs◦ Dependent on sales
o Cost Metrics to consider◦ Patent expenses (Example of recent startup)◦ Supplies◦ Get, Keep, Grow metrics◦ Channel costs◦ Operating costs
159
BUSINESS MODEL CANVAS
160
Aware Evaluate Purchase Deliver Support
What is your BMC storyboard?
Tell the story of how you deliver the VP to the CS.
FEW EXAMPLES163
ESTEEM CAPSTONE THESIS AND BMCSUMMER COURSE
164
OWN RESEARCH EXAMPLES
165
CHANNELS
CUSTOMER RELATIONSHIPS
CUSTOMER SEGMENTS
REVENUE STREAMSCOST STRUCTURES
KEYPARTNERS
KEYRESOURCES
KEYACTIVITIES
RAPISENSE: CLUELESS BUSINESS MODEL CANVASVALUE PROPOSITIONS
Molecular diagnostic with a low cost disposable test
Compact design that could be used on site
Low capital cost for field use
Quick turnaround test time
Meat-processing industry
Small poultry plants
Direct sales
Global sales
Government agencies
Trade shows
Instrument sales
Consumables sales
Strong technical customer support
Academic support from inventor
Corporate friendly licensing
High Specificity
High Sensitivity
Maintaining low cost
Device manufacturing
R&D personnel
Univ. Tech Transfer office
Regulatory agencies
World health organizations
Large diagnostic companies
Must be cost-driven and value driven Licensing
RoyaltiesScaling manufacturing: Capital equipment
166
OUR FIRST INTERVIEWSIN DC
Nathan
George167
ADDING MORE CS AND VPS
168
Nathan
George
Thanks for getting our hopes up guys! 169
QUANTIFIED VALUE PROPOSITIONS
Slower test results leads to more storage time and revenue loss for food processing companies. Current test time: 2-5 days
Annual savings of $600,000 by cutting test time by one day Freezer costs $35 per
1000 lbs per day + transportation. Daily production: 100K lbs
7 /lb spent on testing and storage
Client of a food testing lab spends $0.75 million a year for every day of product holding
100,000 lbs of food tied up everyday waiting for results Have to pay fixed costs
but no payment from consumers – negative cash flow
STARTING TO HEAR ABOUT THE INDUSTRY NORM
“ Frankly Sunny, I am happy sending my samples out to DonLevy Labs”
“ I have done business with Bill for years at RF Labs and like them a lot”
- Mike Jedlicka
- Kim Brown
“ Have you talked to Peter in Alliance Analytical Lab, he is the best you’ll find in the state of Michigan”
- Dave Pease
Yeah, we did
171
RAPISENSE: INVALIDATION OF CS AND VP
Onsite Testing facilities are cumbersome to build and maintain
Cannot have “Certificate of Analysis” from the same company selling product: conflict of interest172
PRICE EXPERIMENTS
10-15% savings in cost
Cost reduction from $25-$20
90% of clients would gladly take $1 reduction in test cost
To switch to a comparable new technology: cost cut in half
Cost of disposables has to be less than $5
Reduction of cost per test for disposables down to $6-8. Current test price is $9-11
Minimum decrease cost of $2-5
A cost cut from $15 to $10 would be huge for their business
“A 10% reduction in cost would be fantastic and we will share with cleints”
Our cost per test Guess
$5
173
CUSTOMER PAIN WAS VERY CLEAR
Need a cheaper test to attract the market
FASTER
CHEAPER
BETTER
Need to improve sample enrichment
Our technology can certainly match and try to improve on PCR (Key Activities)
What would it take for you to adopt a new technology?
174
175
• Next steps– New canvas, new VP, new CS Validate– Currently being pursued in medical diagnostics
STOPNO-GO
After 2 years of research6 weeks of validation87 interviews without talking about our tech
176
ADDITIONAL RESOURCES177
178
https://steveblank.com/2012/11/27/open-source-entrepreneurship/
Check out ideo.com & ideo.org Co-founder Dennis Boyle is ND alum
http://dschool.stanford.edu/dgift/ Design Thinking
https://www.udacity.com/course/ep245 Steve Blank videos for BMC
https://www.launchpadcentral.com/ Populate BMC and customer interviews
TOOLS TO LEARN MORE
179
DISCIPLINEDENTREPRENEURSHIP
180
RECENT NEWS
https://steveblank.com/2016/09/10/entrepreneurs-are-everywhere-show-no-42-sunny-shah-and-curt-haselton/
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