lean launchpad tucson - distribution channels

Download Lean Launchpad Tucson - Distribution Channels

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  1. 1. Aaron EdenCreated by Steve Blank
  2. 2. 5/12 What to Expect 5/19 First Pitches 5/26 Experiment Day 6/2 Value Propositions 6/9 Customers, Users, Payers 6/16 Distribution Channels (Justin) 6/23 Customer Relationships 6/30 Revenue Models 7/7 Partners 7/14 Key Resources & Costs 7/21 Lessons Learned Presentations
  3. 3. Team Presentations Distribution Channels Mentoring
  4. 4. What were your hypotheses about users andcustomers? Did you learn anything different? Did anything change about Value Proposition? What do customers say their problems are? Howdo they solve this problem(s) today? Does yourvalue proposition solve it? How? What was it about your product that madecustomers interested? excited? If B-B, whos: decision maker, size of budget, whatare they spending it on today, how will this buyingdecision be made?
  5. 5. Channels 10
  6. 6. Test Hypotheses: Channels11
  7. 7. Two Critical Channel Questions How do you want to sell your product? Is subtle, but more important than the first: How does your customer want to buy your product? 12
  8. 8. How Do You Want Your Product To GetTo Your Customer?YourselfSomeone elseRetailWholesaleBundled with other goods or services 13
  9. 9. How Does Your Customer Want to Buy Your Product From Your Channel? Same DayDelivered and installedDownloadedBundled with other productsAs a service 14
  10. 10. Web Channels 15
  11. 11. Physical Channels16
  12. 12. Types of ChannelsDirectIndirect Licensing OEM VAR Reseller Distributor 17
  13. 13. The Channel as a Customer Some products are embedded in others(OEM) Some products are resold by others(VARs) Some products are distributed by others Whos the customer?18
  14. 14. Distribution ComplexityGlobal Systems Systems Integrators WANsEvangelists MainframesDirect SalesMarketing ComplexityMinis LANs VARsPC Servers Desktop PCs Retail Printers Keyboards Service Web, TelesalesTechnicians Toner 19 Solution Complexity
  15. 15. How Are Channels Compensated? Commission Percentage of sales price Discounted pre-purchase20
  16. 16. How Are Channels Motivated or Incented? Money! What makes them the most? Training Marketing to the channel SPIF21
  17. 17. Channel Economics: Direct Sales ListRevenue Price End Consumer Discounts Cost of GoodsEUProfit + SG&A + R&D (Supply Chain)22Source: Mark Leslie, Stanford GSB
  18. 18. Channel Economics: ResellersListRevenuePriceEnd ConsumerDiscountsCost of Goods EUProfit + SG&A + R&D Reseller(Supply Chain) 23Source: Mark Leslie, Stanford GSB
  19. 19. Channel Economics: Distributors/ResellersList Revenue PriceEnd ConsumerDistributorDiscountsCost of Goods Profit + SG&A + EUReseller(Supply Chain)R&D 24Source: Mark Leslie, Stanford GSB
  20. 20. Channel Economics: OEM or IP LicensingListYour Revenue Price Cost ofDistributorDistributorDiscountsMasterGoods Profit + SG&A + EUReseller (SupplyR&DChain) Cost of GoodsProfit + SG&AReseller(Supply+ R&D Chain)Your Product Becomes Your Customers Cost of Goods25Source: Mark Leslie, Stanford GSB
  21. 21. Example: Book Publishing NationalPublisher Printer Wholesaler Retailer CustomerDistributor 26
  22. 22. Book PublishingNationalPublisher Distributor Retailer Customer WholesalerPercent of Retail 35% 15%10% 40%$7.00$3.00$2.00$8.00$20.00 You get- 35% of retail- the distributor gets 10%- the wholesaler gets 15%- the retailer gets 40%- less any discount they offer the customer27
  23. 23. Book Publishing Economics NationalPublisher WholesalerRetailerCustomerDistributor AllowancesWholesale costsBills Markup Credit guarantees PaymentguaranteesPayment guarantees Return rightsCredits 28 Payments
  24. 24. Book Publishing DeliveryNational Publisher Printer Wholesaler Retailer DistributorPrepare film Receive (content) Schedules Print Determine Merchandise orders allocationstitles Bundle counts Film DeliverSell orders magazines Establish Prepare Print andidentitygalleys ship Createmagazinesdemand Acknowledge 29 returns
  25. 25. Nature of Products Impact Channel: Physical or Virtual? Access to customers changesdramatically Logistics related to product complexity People as products30
  26. 26. Bits vs. Atoms ChannelWebPhysicalBitsProductPhysical31
  27. 27. Product and Channel Are BitsChannelWeb Physical Rapid Agile and Customer Development Fastest to acquire earlyBits customers and scaleProductPhysical 32
  28. 28. Web 2.0 Product/Channel Are BitsChannelWeb Physical Google Twitter FacebookBits Zynga Cloud ServicesProductPhysical 33
  29. 29. Product Is Bits, but Channel Is PeopleChannelWeb Physical Rapid Agile and Rapid Agile and Customer Development Customer development Fastest to acquire early Traditional sales channelBits customers and scale May require installationProductPhysical34
  30. 30. Traditional Enterprise Software Channel WebPhysical Google Microsoft Twitter SAP Facebook Oracle Bits Zynga Cloud ServicesProduct Physical 35
  31. 31. Physical Products Sold Over the Web Channel Web Physical Rapid Agile and Rapid Agile and Customer Customer developmentdevelopmentBits Fastest to acquire early Traditional sales customers and scalechannel May require installationProduct Rapid Customer development Logistics, shipping andPhysical manufacturing critical Customer service 36
  32. 32. Killing Traditional StorefrontsChannelWebPhysicalGoogle MicrosoftTwitter SAPFacebook Oracle BitsZyngaCloud ServicesProduct Zappos Amazon CafepressPhysical Netflix Consumer electronics37
  33. 33. The Factories May Be in ChinaChannelWebPhysical Rapid Agile and Rapid Agile andCustomer development Customer development Fastest to acquire early Traditional sales channel Bits customers and scale May require installationProduct Rapid Customer Longer customerdevelopmentfeedback cycle Logistics, shipping and May require large capital Physical manufacturing critical requirements for scale Customer service 38
  34. 34. We Still Make Things that Need SalespeopleChannelWeb PhysicalGoogle MicrosoftTwitter SAPFacebook Oracle BitsZyngaCloud ServicesProduct Zappos Cars Amazon Solar panels Cafepress Wind turbinesPhysical Netflix Bookstores Consumer electronics Consumer electronics 39
  35. 35. Homework Talk to 10-15 potential channel partners+ (Salesmen, OEMs distributors, etc.) What were your hypotheses about who/what your channel wouldbe? Did you learn anything different? Did anything change about Value Proposition? Update your Google Group with Business Model Canvas Draw your channel diagramSummarized in a 5 Minute PresentationReadStartup Owners Manual pages :227-256, 332-34240
  36. 36. Appendix 41
  37. 37. implantable drug infusion pumps with remote physician control for chronic pain patients at homethe right dose at the right time and place 42Christian Gutierrez (EL), Ellis Meng (PI), Carol Christopher (IM), Tuan Hoang (FE)
  38. 38. Chronic Pain v3 FS TeamTrainingPatientsFaster reliefKOLs Trade shows Formulary AcceptanceClinical data Efficient patientFoundationsmanagement and Clinicians FDA Dosing flexibility SupportAdvocacy Groups Access to high-valueInstitutionsOEMs therapies and pharmacoeconomicsHospitals IPPayorsWireless ProprietaryDevelopers Reduce length of Pain clinics knowledge hospital stays and Human Resources pharmacoeconomicsProduct Dev CostsUnit salesManufacturing CostsSupport ServicesMarketing CostsFDA/Clinical Trials 43
  39. 39. Chronic Pain v4 FS Team Trade showsTrainingFaster relief PatientsKOLs Formulary AcceptanceClinical data FDA Efficient patientFoundationsmanagement and Clinicians CMS (Medicare)Dosing flexibility SupportAdvocacy Groups Access to high-valueInstitutionsOEMs therapies and pharmacoeconomicsHospitals IPWirelessPayorsDevelopers Proprietary pharmacoeconomicsPain clinics knowledgeElectronic healthHuman Resourcesrecord providersProduct Dev CostsUnit salesManufacturing CostsSupport ServicesMarketing CostsFDA/Clinical TrialsBundled kitsElectronic records 44
  40. 40. Getting OutClinicians Dr. Stan Louie, Drug Formulation Expert (USC Pharmacy) Dr. Giovanni Cucchiaro, Anesthesiologist (CHLA)Institutions/patients Dr. Diana Hull, Physician (Group Health in Washingtonstate, formerly at Kaiser California) Thomas Hsu, Insurance Specialist (Network MedicalManagement; a California ICA) Two chronic pain patients Pump user and creator of support forum User of oral narcotics and patchesRegulatory Dr. Frances Richmond (Director Regulatory ScienceProgram, USC)Entrepreneurs/ Richard Hull (formerly at company selling Lapband)45Industry
  41. 41. Product Flow/ChannelElectronicPartners/Health Fluid Synchrony OEMS Records Electronic Support Pump +BundledRecords Services Controller KitsHospitals(AnesthesiologistsPatients Neurosurgeons) Pain Clinic(Anesthesiologists Neurosurgeons)46
  42. 42. Channels (Direct)Hospitals Direct to institutions Some formularies involved in purchase decisionsPain Clinics Some doctors make purchase decision directly Device company/Doctor relationship is key Heavily influenced by : Clinical study results Regulatory approval Reimbursement47
  43. 43. Patient Care Flow (Now) Partners/ Fluid SynchronyOEMSSupport Pump +BundledServices Controller KitsHospitalsSurgery/Rx/ (Anesthesiologists Patient Discharged reprogrammingNeurosurgeons)Pain ClinicTrial period/Scheduled (AnesthesiologistsHome setting follow-upNeurosurgeons) 48 Weeks/monthsKey factors: Reimbursement , state regulations
  44. 44. Patient Care Flow (Proposed)Electronic Partners/HealthFluid SynchronyOEMS RecordsElectronic Support Pump +Bundled Records Services Controller Kits Actionable feedback to doctors/institutions E-prescription / closing loop HospitalsSurgery/Rx/(Anesthesiologists Patient Discharged reprogramming Neurosurgeons)Pain Clinic