ENSC820 Business Practices and Context for Engineering

PowerPoint PresentationNotes originated by: Dr. Peter Walters
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ENSC820
Course Goals • This course focuses on the management and reporting activities of typical
engineering development projects.
• It builds the student's skills at estimating project cost and schedule, keeping a project on track, and handing over the completed project to a customer or another team.
• Emphasizes techniques for writing proposals, and writing and controlling documentation.
• Understanding engineering development/work in the context of the organization, resources available, and business/market success.
• Develops a broader perspective of the factors that define engineering work.
• Develops better awareness that enables overall better results. This is critical to engineering success, whether you are working in a mature large company or new startup.
• Note that ENSC 820 will not count towards the course work requirement of students enrolled in the MASc program.
Steps towards completing a project
Step 1: Explain the project plan to key stakeholders and discuss its key components
Step-2: Define roles and responsibilities.
Step 3: Hold a kickoff meeting
Step 4: Develop a Scope Statement.
Step 5: Develop scope baseline.
Step 6: Develop the schedule and cost baselines.
Step 7: Create baseline management plans.
Step 8: Develop the staffing plan
Step 9: Analyze project quality and risks
Step 10: Communicate!
Project Teams and Details • Teams of 2 or Max 3: - Define a project Leader. • Market research & define project • Project title and get Instructor approval: Due 15 May – in class
• Explore various options towards your goal: Due 22 May - 5% - Upload into Coursys
• Due Dates - Coming Soon
• 1st Draft Report • 2nd Draft Report • Final draft report • Final presentations • Final Report
Market Validation Content & Principles
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1. There is a Framework that can substantially improve the likelihood of success of an opportunity.
2. Within the Framework, 1st determine the Few Things (80/20 rule) that need to be done well to Commercialize the opportunity.
3. Then, for each of the Few Things, identify Best Practices and deliver the models and tools.
4. Then Mentor so that the Best Practices are “live” and become part of the culture, rhythm and discipline of the business.
It then comes down to “You Learning and Doing.”
Market Validation Steps
your Go to Market Strategy and key
Sales Tactics
Positioning Statement
Value Propositions
Market Segmentation
risk and convert your Hypotheses to
Facts
influencers; demographics of
Create a Product Roadmap
Build your MVP with the fewest features needed – learned from your interviews with customers
Step 4 – Define Your Action Plan to
Acquire Early Adopter Customers
Customers paying to use
your product – this confirms
TO
Reliable; Sustainable
Selling Success
Strategy Success
Company Success
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1. Determine if you are addressing a Clone, Existing, Resegmented or New
market – your Competitive Environment
3. Connect your Features to Benefits & Value – your Product Management
strategy
4. Define your ‘Sweet Spot’ in your Target Market – your Segmentation
strategy
“
as fast as possible!”
1 1
as fast as possible!”
“Customer Traction
differentiates you from the competition.
Paul Singh Partner, 500Startups
Five Types of Markets
• Each type of market has very different requirements for success!
• Are you creating value that: • copying business model from another market,
• is entering an existing market,
• wants to resegment an existing market as a low- cost entrant,
• wants to resegment an existing market as a niche player, or
• is creating an entirely new market?
Market Types
• Existing Market • Faster / Better = High end
• Re-segmented – Existing Market • Niche = marketing / branding driven • Cheaper = Low end
•
Clone
Market
Existing
Market
Resegmented
Market
New
Market
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• Example:
Clone
Market
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• Existing Market
• Existing Market
Existing
Market
Clone
Market
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• Existing Market
• Existing Market
• Re-segmented – Existing Market
Existing
Market
Resegmented
Market
Clone
Market
$6995.00
$7900.00
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• Existing Market
Market
Resegmented
Market
Clone
Market
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Clone Market • Baidu – Chinese clone of Google
Existing Market • Internet Explorer – Firefox – Safari – Chrome
Re-segmented – Existing Market a) Niche: Leica camera, Rolex watch b) Cheaper: Photoshop Elements – Photoshop
Open Office – Microsoft Office Silent Witness – Extreme CCTV
Resegmented
Market
Clone
Market
Silent Witness
Inventor of mini-dome security camera format Initial market – schools, prisons – Vandal Resistant requirement Product also sold into other markets which became significant – Architectural
Extreme CCTV
Later entrant into camera market Targeted non Vandal Resistant markets – resulted in lower cost product
Market Types - Examples
• Existing Market • Faster / Better = High end
• Re-segmented – Existing Market a) Niche = marketing / branding driven b) Cheaper = Low end
• New Market • Cheaper / good enough can create a new class of product /
customer • Innovative / never existed before • Beware of the ‘Chasm’
Market Types
Clone Market • Baidu – Chinese clone of Google
Existing Market • Internet Explorer – Firefox – Safari – Chrome
Re-segmented – Existing Market a) Niche: Leica camera, Rolex watch b) Cheaper:Photoshop Elements – Photoshop
Open Office – Microsoft Office New Market • face.com – guess the age (gender & mood) of a person from a photo • Pair – social network for “just the two of you” (trypair.com
couple.me) Existing
Market • Market Size
• Cost of Entry
Clone Market • Does the business model work here?
Existing Market • How will I win against existing competitors?
Re-segmented – Existing Market • Where will my customers come from / who will I
take them from?
New Market • How will I convince early adopters to believe in my
vision? Existing
The Key Implication is Risk
Risk increases the less you know about the market. With new markets, you know very little. It is the riskiest type of market.
Risk
get to
We are
who will buy. I had never thought of it before.
The
image
cannot
be
displaye
Market Type Differences in characteristics
Differentiating between Existing & New Market
• Have customers heard about this market? Can I compare it to existing products by some method and win due to differentiation?
• Do customers understand how they would use / need this product?
• Does the product have to be “pushed” into the market via education and evangelism? Or will customers ‘get it’ and they will “pull” the product from me if I position it next to existing choices?
• Characteristics of a Resegmented Market
• Low cost resegmentation there are customers at the low-end of an existing market who will buy “good enough” performance if it’s available at a low price
• Niche resegmentation there are enough customers who will buy a new product because some characteristic is “radical enough” to change the shape and rules of an existing market
Existing Market
New Market
Cheaper | Niche
Resegmented Market
• What is the nature of the innovation?
– Are you changing the way the market operates?
– Bringing a new or repurposed technology to a solve a problem?
• What is your unfair advantage?
Innovation Source
Innovation – Market,
Technology, Both?
Market Innovation
Innovation – Market,
Technology, Both?
Market Innovation
Technology Innovation
lower your chance of success!
Market Innovation
Technology Innovation
High level of innovation may increase your chance of success. It also means Risks which convert into time and money to solve!
Hi
Lo
best solves YOUR CUSTOMER’S
NEEDS
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Positioning
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The Positioning Statement Process
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• Create a Hypothesis for what you believe is a winning Product Offering and Go To Market Strategy.
• Leverage all the Intellectual Capital you can access so that you improve your Hypotheses.
• Transition your Hypothesis further by talking to potential customers in your Target Market.
• Your Product Offering and Go To Market Strategy is Fact only from actual customer experiences when they are ‘live’ with your Product
Key Concepts of Positioning Statement
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PAIN – What a motivated Buyer must have in order for
the buying process to start
VALUE – What you must have as a Seller to cause the
Buyer to consider you
DIFFERENTIATION – What you must have as a Seller to Win the
Buyer’s business
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A series of activities, which combined, define a business process
– e.g., the series of activities from manufacturers to the retail stores.
Example
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Purchaser pain
• Tired & thirsty
• Integrator pain – GE – more efficient imaging system
• Purchaser pain – VGH – lower operating costs; more throughput
• End user pain – Patient – faster diagnosis; less radiation
Core Technology
• Card maker pain – labour intensive cardstock
• Clothing designer pain – hard to cut materials
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Elements of a Positioning Statement
1- For Specific Customer you could sell to in a key segment?
2- Who need What Problem is being solved or new opportunity addressed?
3- Product X is The product category is?
4- That provides Key Benefit that addresses the compelling reason to buy?
5- Unlike competition A, B, C
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6- Our product Key competitive differentiation?
7- Company also provides What else is needed for a Whole Product?
For
FOCUS
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5- Unlike competition A, B, C Competitor product categories & leaders?
7- Company also provides What else is needed for a Whole Product? Partners provide?
1 For
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Specific Customer you could sell to in a key segment? Your sandbox? Target customer is?
Needs/Pains/Hurts! Compelling reason to buy!
What Problem is being solved or new opportunity addressed?
Who Need
2 Who need
7- Company also provides
What else is needed for a Whole Product? Partners provide?
Positioning Statement: Neoteric
WHO NEED: to lower costs by reducing blood wastage &
transfusion labour
NEOTERIC IS:
THAT PROVIDES:
UNLIKE COMPETITORS:
OUR PRODUCT:
1 For Specific Customer you could sell to in a key segment?
Your sandbox? Target customer is?
2 Who need
Needs/Pains/Hurts! Compelling reason to buy! What Problem is being solved or new opportunity addressed?
3 Product X is The product category is?
4 That provides Key Benefit that addresses the compelling reason to buy?
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2 Who need
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2 Who need
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best solves ALL Buyer NEEDS
That provides
Your RESCUE for the HURT/PAIN of the CUSTOMER
The Quantity, Quality and Timing of the VALUE Gained by the Target Market/Customer from YOU
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• Immediacy - now; faster and better
Relationships & Connections
• Creative learning increase
• Increase Image / Reputation
2 Who need
3Product X is The product category is?
4That provides Key Benefit that addresses the compelling reason to buy?
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FOR: blood bank departments in hospitals
WHO NEED: to lower costs by reducing blood wastage & transfusion labour
NEOTERIC IS: a blood transfusion management hardware and software solution
THAT PROVIDES: controlled access storage so that unused blood allocated to operations can be returned to the central storage, eliminating wastage
UNLIKE COMPETITORS:
OUR PRODUCT:
1 For
2 Who need
3- Product X is
Key Benefit that addresses the compelling reason to buy?
1- FOR Specific Customer you could sell to in a key segment?
2- WHO NEED
3- PRODUCT X IS The product category is?
4- THAT PROVIDES Key Benefit that addresses the compelling reason to buy?
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best solves Your customer’s Needs
Solution
YOU
To win, your Differentiator has to be better than your competitors’
Differentiator
Choices
> >
2- Who need
Positioning Statement: Neoteric
NEOTERIC IS: a blood transfusion management hardware and software
solution
THAT PROVIDES: controlled access blood storage so that unused blood
allocated to operations can be returned to the central storage,
eliminating wastage
UNLIKE COMPETITORS: such as paper based systems and manual methods
OUR PRODUCT: eliminates deaths from blood mismatching using barcode confirmation
1- For
2- Who need
1- FOR Specific Customer you could sell to in a key segment? Your sandbox? Target customer is?
2- WHO NEED Needs/Pains/Hurts! Compelling reason to buy!
3- PRODUCT X IS The product category is?
4- THAT PROVIDES Key Benefit that addresses the compelling reason to buy?
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Perspectives
• Staff – involved, empowered & aligned • Investors – confidence & focused – value, not features
• Customers – involved; they want your product to be the best • Risk Mitigation – ‘think 1st, then do’
convert Hypotheses to Facts
You have…
• looked at all the choices and selected the ‘best’ to WIN • confidence & focus about doing the right things, right
• a communications tool – your 17 second pitch
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Usability Value
Technical Buyer(s)
Can say No but not Yes to your product. They give you the “OK” to proceed. Compliance
Economic Buyer(s)
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• “makes their job better”
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• productivity
• engagement
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Technical Buyer(s)
People who can say No but not Yes to your product. They give you the “OK” to proceed.
• IT Department – meets specifications & standards, e.g. data base
• Finance – meets specifications & standards, e.g. reporting
• Purchasing – meets specifications & standards, e.g. legal
• Regulators – Boards who set policy and regulate markets
• Mom & Dad – privacy, security, ethics, maternalism/paternalism
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Economic Buyer(s)
People who can write the cheque or cause it to be wriqen
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• You
– they have the “big picture” view
– they hold the Budget
• Board of Directors, Councils
• Mom & Dad – credit card
Go To Market Approach
Identifies why you will WIN Buyer “Yes” Votes
Each target market
How to obtain a YES Vote from a Key Buyer
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that Your Differentiated Value
TARGETED VALUE PROPOSITIONS
Achieve this for each What is In It for Me (WIIFM) statement
We believe that (target company)
Should be able to (positive impact on critical business issue(s) addressed)
By (specific measurement or KPI, #, $, %)
Through the ability to (specific action you enable)
As a result of (your unique, differentiated capabilities)
For an investment of approximately
(average deal $$ estimate)
Line 1 of the Positioning Statement - For:
Line 2 of the Positioning Statement - Who Need:
ROI/Business Case or The Nerve You Hit!
Line 4 of the Positioning Statement - That Provides:
Feature that powers Line 6 of PS - Our Product:
Your Price
NEOTERIC IS: a blood transfusion management hardware and software solution
THAT PROVIDES: controlled access blood storage so that unused blood
allocated to operations can be returned to the central storage,
eliminating wastage
UNLIKE COMPETITORS: such as paper based systems and manual methods
OUR PRODUCT: eliminates deaths from blood mismatching using barcode
confirmation
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Should be able to reduce transfusion labour
By 75%
transfusion process
As a result of Implementing barcode cross-checking at the bedside
For an investment
of approximately $200,000
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Should be able to reduce blood bank labour
By 30% while maintaining existing service levels
Through the ability
to allocate blood just in time rather than in advance
As a result of implementing on demand blood issuing
For an investment
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We believe that hospital CFOs
Should be able to reduce the overall cost of blood transfusions
By 10%
inventory levels
As a result of introducing blood tracking and on-demand blood issuing
For an investment
Value Proposition Summary
Create the Value Propositions for your Target Market Customer Buyer(s):
• Your Economic Buyer(s)
• We believe that - PS Line 1
• Should be able to - PS line 2
• By – best guess; ROI calculation if available
• Through the ability to - PS line 4
• As a result of - PS line 6; your unique technology
• For an investment of - approximate $$
The Buyer
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• Early adopters are looking for a solution that solves a core problem
• A minimum viable product has just those features (and no more) that allows you to ship a product that resonates with early adopters; some of whom will pay you money or give you feedback
• You can get away with this because early adopters are most forgiving of incomplete products
MVPs – mechanisms to create meaning
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• MVPs are mechanisms to create meaning where little or none currently exists. – What is a meaningful set of features for
customers?
– How do we produce meaningful lessons learned from what we put in front of customers?
– What does this concept mean for how we go about defining a product strategy?
Meaning as vision, learning and method
Vision
• An MVP is a down payment on a larger vision. This larger vision gives meaning to what your customers are buying now.
Learning
• First, you declare your assumptions, & express them as testable hypothesis.
• Then, you write your test – what signal will you get back from the market that will let you know if your hypothesis is true?
• Finally, you ask the question, “what’s the smallest thing I can do or make to test this hypothesis?” The answer to this question is your MVP.
Method
• It’s about a disciplined ability to know what we need to know right now and devise ways to end the confusion and uncertainty about a particular issue – “LEARNING as the measurable unit”.
10 0
Every Feature drives a Benefit for the Customer
Hypothesis #1 What is the test? What is minimum features needed to testHypothesis #2 What is the test? What is minimum features needed to testHypothesis #n What is the test? What is minimum features needed to test?
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Solves
Gets Buyer ‘Yes’ Vote
Line 4 That Provides – Solution to PAIN & VALUE
Line 6 Our Product – DIFFERENTIATOR & VALUE
Value Proposition(s) – Economic & User Buyers
Line 2 Should be able to – Positive impact on the PAIN & specific VALUE provided
Line 4 Through the ability to – Specific Customer ‘action’ enabled to derive VALUE
Line 6 As a result of – Features/Functions capability that enables the Customer –DIFFERENTIATOR
Minimum Viable Product (MVP) Key FEATURES/FUNCTIONS – MVP Version 1.0
Your MVP
MVP
Segmentation – Your Market ‘Sweet Spot’
Go to where the results are likely to be the quickest, highest return and least risky
Positioning Statement – Your Strategy
Strategy – the market you will Target, the solution and its Value you
will provide and your differentiator that will cause you to Win
Value Propositions – Your WIIFM for each Buyer Type to get their Yes Vote
Create a specific offer for each Buyer Type (Economic; Value & User; Use)
that is unique and better than all other choices
Minimum Viable Product – Your Product / Solution for the Buyer Types
Build your Product with the fewest features necessary to close the deal. Then let the market tell you what it wants based on its direct experience
These are your HYPOTHESES that you need to transition to FACTS!
Summary
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9.YourGoals
Your Market Type – Clone, Existing, Re-segmented, New
Your Source of your Innovation. Market or Technology or Both
1. Business Hypotheses 2. PositioningStatement
Version 1.0
Version 2.0
Version 3.0
3. ValuePropositions
Economic Buyer
User Buyer(s)
4.Segmentation
Feature set list; Benefits
10. Notes
Your Prospect List
Guess vs. Fact
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ENSC820 Business Practices and Context for Engineering