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E245 Value Proposition. Ann Miura-Ko January 2012. Some Announcements. Asking for Email Introductions . Send the following: Name of person to whom you want an intro - PowerPoint PPT Presentation
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E245 Value Proposition
Ann Miura-KoJanuary 2012
Some Announcements
• Asking for Email Introductions. Send the following:- Name of person to whom you want an intro- Why 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
Where we are…
Key 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?
Problem Statement
• What is the problem?
• How do you justify your existence?
The Ecosystem (“Customers”)
End User Day to day users May actually have zero influence in buying process
Preferences and decisions influence or impact buying decisions
The person who controls the purse strings or is in charge of the budget
The buck stops here
Influencer / Recommender
Economic Buyer
Decision Maker
The Ecosystem (The Rest)
• Group or organization that installs, distributes or sells the product in your place
Suppliers
Channels
Government
Partners
Entity that provides parts or services needed to manufacture your product
Organizations responsible for monitoring trading and safety standards related to your product
Other entities that provide products related to delivery of your final product
Key question to test:
Is your map of the ecosystem correct and complete?
Competition
• What are customers doing today?• Are competitors threatening to offer
better price or value?• How saturated is our market?
Market TypeExisting Resegmented New
Customers Known Possibly Known Unknown
Customer Needs Performance Better fit Transformational improvement
Competitors Many Many if wrong, few if right
None
Risk Lack of branding, sales and distribution ecosystem
Market and product re-definition
Evangelism and education cycle
Market Type determines: Rate of customer adoption
Sales and Marketing strategies Cash requirements
Existing MarketCharacteristics:• Customers are always hungry
for better performance• Incumbents exist• Usually technology driven• Positioning driven by product
and how much value customers place on its features
Risks:• Incumbents will defend their
turf• Network effects of incumbent• Continuing innovation
Resegmented Market Characteristics• Low cost provider or
unique niche• Eliminates factors on which
the industry competes• Raises certain factors well
above industry standards
Risks:• Incumbents will see this as
their turf• Continuing innovation
New MarketCharacteristics:• Customers don’t exist
todayRisks• “Life as is” is good
enough• Sizing the market• Accessing potential
customers and getting effective feedback
Key question to test:
How aware is your ecosystem of the existence of the problem?
Technology and Market Insight
Technology Insight• Moore’s Law• New scientific
discoveries• Typically applies to
hardware, clean tech and biotech
Market InsightValue chain disruptionDeregulationChanges in how
people work, live and interact and what they expect
Examples of Market Insight• People want to play more involved
games than what is currently offered• Facebook can be the distribution for
such games
Masses of people are more likely to micro-blog than blog
The non-symmetric relationships will allow companies and individuals to self-promote and will impact distribution
European car sharing sensibilities could be adopted in North America
People, particularly in urban environments, no longer wanted to own cars but wanted to have flexibility.
Examples of Technical Insight• Topological analysis enables
highly dimensional data to be analyzed without predetermining number of feature sets
Mass produced components can be used to create a miniaturized fluorescence microscope
Insight Characteristics
Non-Consensus
Consensus
Wrong Right
Biggest Potential Wins
Mindless Competition
Types of Product Value
Comes from Technical Insight Comes from Market Insight
Smaller
More Efficient
Faster Simpler
Lower cost Better
Bundling
Better Branding
Better Distribution
Key Question:
Is there a reason this idea is uniquely poised to take off today?
How do I test value proposition hypotheses?
Define Product
• Hardware• Service• Knowledge• Resources• Networks• Data
Minimum Viable Product (MVP)
• A product that solves a core problem for customers
• The minimum set of features needed to learn from earlyvangelists- Avoid building products nobody wants- Maximize the learning per dollar spent
The 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?
Testing the MVP
• Smoke testing with landing pages using AdWords
• In-product split-testing• Prototypes (particularly for hardware)• Removing features• Continued customer discovery and validation
The Value Proposition Pivot
Originally: Craigslist for colleges Became: Textbook rentals
Originally: Video dating site Became: Video uploading site
Originally: The Point (Collective action site) Became: Mass couponing site