mit-chief training session 1: know your market and customers
TRANSCRIPT
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DISCIPLINED ENTREPRENEURSHIP
TRAINING SERIES
Know your Market and Customers
April 2016
Elaine Chen
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What we are going to do in this session
0. Talk amongst yourselves
1. Disciplined Entrepreneurship Overview
2. Who is your customer
3. Primary market research (PMR)
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0. Talk amongst yourselves
• Pair up 1x1 with someone you don’t know
• Ask each other these 3 q’s (5 minutes)– Name, affiliation, and what you are looking to get
out of this program
– Sector interest (e.g. Consumer electronics, Wearables, Healthcare, Education, Food, Arts, Industrial automation, Machine Learning, AR/VR applications, Social networks… whatever you are interested in)
– One embarrassing thing about yourself
• Do it again with someone new (5 minutes)
• Do it one more time with a third person (5 minutes)
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Sharing!
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1. Disciplined Entrepreneurship
Overview
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Being an entrepreneuris the new “cool” thing.
As a result,
demand for
entrepreneurship
is blowing up!
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But is there sufficient understanding of the topic?
Hmmm….
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Spirit + Skills
Successful Entrepreneurship
Successful entrepreneurshiprequires people willing to
work hard and work smart.
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DISCIPLINED ENTREPRENEURSHIP
• Framework • Highly iterative • Toolbox
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Provides a common language:
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Six themes / 24 steps
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Planningto launch a startup
Who said
disciplined entrepreneurship
was easy?
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Planningto launch a startup
Effort and resourcesneeded to launch a
successful new venture
Who said
disciplined entrepreneurship
was easy?
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You could just build the product in secret
then unveil it with a BIG BANG!
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This cost over $100M R&D over 10 years.
Don’t make this mistake!
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This is what we want to help you do.
A little thinking up front can save years and millions of $$
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2. Who is your customer
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Example team: ProForm Fitness
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Step 1: Segmentation
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Chain Gyms (Discount/Mains
tream)
Chain Gyms (High end) Varsity Athletic Weight Rooms
(College)
ProfessionalWeight Rooms
Home Gyms Rehab Facilities Apartment/Hotel/ Offices
OlympicTraining Facilities
High End Non Chain
Gyms
Examples • YMCA, Gold’s Gym, Anytime Fitness, Planet Fitness, etc
• Equinox, LA Fitness, David Barton, New York Sports Club
• School Facilities • Team Facilities• Home Gyms• Private Training
Facilities
• Home Gym • Joint Ventures (etc), Brigham Young Women’s Hospital (etc)
• Finance/Consulting Offices
• High end apartments/hotels
• Training complex in CO,NC, etc
• Velocity sportsperformance, etc
Pros • Market size• Expand to
other locations
• Prioritize top of the line
• Expand to other locations
• More money
• Care about athleteimprovement, health, and safety
• Easier to expand to follow on markets
• Care about athleteimprovement, health, and safety
• Easier to expand to follow on markets
• Prioritize safety• Wealthy• Large market
• Expand to other locations
• Prioritize safety and patient improvement
• Progress tracking is huge
• Some not supervised –safety is important
• Expand to other locations
• Care about athlete improvement,health, and safety
• Easier to expand to other markets
• Care about athlete improvement, health and safety.
Cons • Value Proposition• Limited funds
• Value Proposition• Limited funds
• Contacts• Difficult to expand
to other colleges
• Contacts• Difficult to
expand to other facilities
• Want things for free
• Difficult to expand • Funds may be limited
• Patients do not typically lift heavy weights
• Not a main part of business
• More serious athletes do not frequent these locations
• Contacts• Market size
• Difficult to expand to other locations
• Trainersusually there to spot and track
Motivations (for economicbuyer)
• Money – bringing in new customers,retaining old ones
• Money – bringing in new customers, retaining old ones
• Image
• Athlete Improvement
• Recruiting athletes
• Athlete Improvement
• Safety• Athlete Improvement• Money
• Athlete improvement
• Less time spent monitoring and tracking patients
• Money –Attractingcustomers or employees
• Happiness/well being of employees
• Athlete Improvement
• Money –Attracting new customers
• AthleteImprovement
Regulatory Climate
• Regulated • Regulated • Regulated • Regulated • Regulated • Regulated • Regulated • Regulated • Regulated
Competitive Environment
• Highly Competitive
• Highly Competitive • Highly Competitive • Highly Competitive
• Highly Competitive • Less competitive • Highly Competitive
• Highly Competitive
• HighlyCompetitive
Early Adopters • No • Yes • Yes • Yes • Varies • No • No • Yes • Yes
BHM
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Step 2: Beachhead Market
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• High End Chain Gyms
– Pros
• Less concerned with equipment price
• More concerned with image
• Easier to expand into other locations
• Easier to expand into follow on markets
• Large Market Size
– Cons
• Current lack of contacts
• Equipment will have to be extremely good quality/high end
• Value proposition – improving athletes isn’t their main motivation
• Other Potential Markets
– Varsity Athletics Programs/Professional Programs
– Home Gyms
– Mainstream/Budget Gyms
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Step 3: End user profile: Chris
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• Full-Time Structural Engineer
• 25 Years Old
• Previous High School Athlete
• Lifts at least 4 times per week
• Brings notepad to gym
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Step 4: TAM
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Step 5: Primary Market Research / Persona
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Be careful who you interview and
what personas you build
• For B2C, the economic buyer is often the same as the end user – 1 set of interviews can yield tremendous data
• For B2B, you often have to interview multiple personas before you can get a clear picture of the needs and wants for the company and for each persona. Embrace complexity.
• Either way: Recruit carefully! Qualitative research requires laser-focused targeting.
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3. PMR / Interviews
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versus
Qualitative Quantitative
Primary Market Research:
A Bird’s Eye View
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4 go-to PMR techniques
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Detailed Interviews Observation
Immersion Digital Experimentation
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Sausage making: The actual interview
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Technique cheat sheet
• Establish rapport before you
begin
• Ask short, open ended
questions
• Let the subject lead
• Use active listening techniques
• Talk less – listen well
• Pay attention to non-verbal
cues
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Remember: The
goal is to listen and
observe – not to
sell!
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Simulation: Bluesmart PMR
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Imagine this is your idea. Your mom says she likes it. You made some progress, and now you have to decide whether to quit your day job and raise $ to start this company.
And these are some possible engineering features. Questions:• Is there a market need for this product?• Who might buy this product?• Are these good features?• Which features are “more equal” than others?
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Simulation
• Goal of the interview: To validate market interest in a smart rollerboard for frequent business travelers.
– Figure out what are the biggest pain points experienced by your interview partner
– See if any of your proposed solutions solve those pain points
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• Rules of engagement: Stick to these words.
– “Tell me about the last time you…”
– “Tell me about how you…”
– “You said xxx. Tell me more?”
– “Why?”
– “Why not?”
– Beware confirmation bias!
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Sharing!
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PMR, Procter and Gamble style
• Expensive (hundreds of thousands of $ and up)
• Long (3-9 months)
• Often done in conjunction with an agency
=> High quality insights at a high price
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PMR, startup style
• Cheap
• Fast
• DIY. NOT rocket science. You can do it.
=> Scrappy, but helps you iterate in real time!
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Step by step guide to startup style PMR
• Articulate 3-5 hypotheses to be tested
• Define characteristics of research subjects
• Make a list of 10 people to call
• Ask for 10-15 minutes of their time
• Face to face if possible, video chat/phone if not
• Interpret results, adjust hypotheses
• Rinse and repeat
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Summary
• Not rocket science
• Practice makes perfect
• Do it!
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Handouts
• “Talking to Humans” E-book - Giff Constable
• PMR Primer - Elaine Chen
• Templates and samples – Elaine Chen– Research protocol template
– Sample discussion guide
– Sample recruitment questionnaire
– Sample photo release form
– Interview notes template
– Persona template
– Example persona project – “The Science of Clean” (15.S16, 2H 2012)
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End
Questions?
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