the lean launchpad lecture 3: customers/users/payers

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The Lean LaunchPad Lecture 3: Customers/Users/Payers Steve Blank Jon Feiber Jon Burke http://i245.stanford.edu/

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The Lean LaunchPad Lecture 3: Customers/Users/Payers. Steve Blank Jon Feiber Jon Burke http://i245.stanford.edu /. Agenda. Team Bus Model Presentations Customer Segments. CUSTOMER SEGMENTS. which customers and users are you serving? which jobs do they really want to get done?. - PowerPoint PPT Presentation

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Page 1: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

The Lean LaunchPad

Lecture 3: Customers/Users/Payers

Steve BlankJon FeiberJon Burke

http://i245.stanford.edu/

Page 2: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Agenda

• Team Bus Model Presentations• Customer Segments

Page 3: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

CUSTOMER SEGMENTS

images by JAM

which customers and users are you serving? which jobs do they really want to get done?

Page 4: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

CUSTOMER SEGMENTS

images by JAM

which customers and users are you serving? which jobs do they really want to get done?

Page 5: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Corporate? Consumer?

• Business to Business (B to B)– Use or buy inside a company

• Business to Consumer (B to C)– Use or buy for themselves

• Business to Business to Consumer (B to B to C)– Sell a business to get to a consumer– Other Multi-sided Markets with multiple customers

Page 6: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Customer Types

• Saboteurs • Intermediaries (OEM’s and resellers)

Page 7: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Market Type & Ignoring Customers

• Clone Market?• Existing Market? • Resegmenting an Existing Market?

– niche or low cost• New Market?

• When do I ignore customer feedback?

Page 8: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

General Heuristics

• You need to talk to more customers than you ever thought possible – 100’s physically, 1000’s on the web

• “I left a message” or “I sent an email” doesn’t count – it’s confusing motion with action

• Do NOT start at the top. You only get one meeting. You’ll almost certainly look like an idiot– First figure out the order of battle

Page 9: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Corporate Customers

Business to Business (B to B)

Page 10: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

What do they want you to do?

• Increase revenue?• Decrease costs?• Get them new customers?• Keep up with or pass competitors?• How important is it?• Problem or a Need?

Page 11: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Customer Problem

Page 12: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Customer Problem

Page 13: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Customer Problem

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Customer Problem

Page 15: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Customer Problem

Page 16: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Customer Problem

Page 17: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Who’s the Customer in a Company?

• User?• Influencer?• Recommender?• Decision Maker?• Economic Buyer?• Saboteur?• Archetypes for each?

Page 18: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

How Do They Interact to Buy?

• Organization Chart• Influence Map• Sales Road Map

Page 19: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Pass/Fail Signals & Experiments

• How do you test interest?• Where do you test interest?• What kind of experiments can you run?• How many do you test?

Page 20: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

How Do They Hear About You?

• Demand Creation• Network effect• Sales

Page 21: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

If It’s a Multi-sided Market Diagram It!!

Page 22: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

MammOpticsHospital purchasing decision tree

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Page 24: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

MammOpticsPrivate practice purchasing decision tree

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buzzgroup

Page 26: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Consumer Customers

Business to Consumer (B to C)

Page 27: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

What do they want you to do?

• Does it entertain them?• Does it connect them with others?• Does it make their lives easier?• Does it satisfy a basic need?• How important is it?• Can they afford it?

Page 28: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Archetypes

Page 29: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

buzzgroup

Page 30: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Consumer Customers

• Do they buy it by themselves?• Do they need approval of others?• Do they use it alone or with others?

Page 31: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

How Do They Decide to Buy?

• Demand Creation• Viral?• SEO/SEM• Network effect?• AARRR (Dave McClure)

Page 32: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Pass/Fail Signals & Experiments

• How do you test interest?• Where do you test interest?• What kind of experiments can you run?• How many do you test?

Page 33: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

The Consumer Sales Channel

• A product that’s bits can use the web• But getting a physical consumer product into

retail distribution is hard• Is Wal-Mart a customer?• More next week

Page 34: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Multi-Sided Markets

Business to Business to Consumer (B to B to C)

Page 35: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Who’s The Customer?

• Consumer End Users, Corporate Customers Pay

• Multiple Consumers• Etc.

Page 36: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Multiple Customer Segments

• Each has its own Value Proposition• Each has its own Revenue Stream• One segment cannot exist without the other• Which one do you start with?

Page 37: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Market Type

Page 38: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Definitions: Four Types of Markets

• Clone Market– Copy of a U.S. business model

• Existing Market– Faster/Better = High end

• Resegmented Market– Niche = marketing/branding driven– Cheaper = low end

• New Market– Cheaper/good enough, creates a new class of product/customer– Innovative/never existed before

Clone Market

Existing Market Resegmented Market

New Market

Page 39: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Market Type determines: Rate of customer adoption

Sales and Marketing strategies Cash requirements

Market Type

Existing 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

Examples Google Southwest Groupon

Page 40: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Market Type - Existing

• Incumbents exist, customers can name the mkt• Customers want/need better performance• 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

Page 41: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Market Type – Resementing Existing

• Low cost provider (Southwest)• Unique niche via positioning (Whole Foods)

• What factors can:– you eliminate that your industry has long competed on?– Be reduced well below the industry’s standard?– should be raised well above the industry’s standard?– be created that the industry has never offered? (blue ocean)

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Market Type – New

• Customers don’t exist today• How will they find out about you?• How will they become aware of their need?• How do you know the market size is compelling?

• Which factors should be created that the industry has never offered? (blue ocean)

Page 43: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

For Oct 18th Presentation

• Talk to 10-15 customers face-to-face• What were your hypotheses about users and

customers? Did you learn anything different? • Did anything change about Value Proposition? • What do customers say their problems are? How do they

solve this problem(s) today? Does your value proposition solve it? How?

• What was it about your product that made customers interested? excited?

• If B-B, who’s: decision maker, size of budget, what are they spending it on today, how will this buying decision be made?

• Update your blog/wiki/journal

Page 44: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Examples

Page 45: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Ying Wang (Lead)Yu Lei (PI)

Mike Wisniewski (Mentor)

Landmine Clearance

NSF / ICORP Program

Page 46: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Technology Application

Sensing Materials

Surveying, mapping and marking of hazardous areas

Removal of landmines and Unexploded Ordnance (UXO)

Page 47: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Contacting…

• Flir (Fido).

• CEIA (metal detector company in Italy).

• United Nations (UN).

• Smith Detections.

Action: Sent email and made calls (703-678-2118). Feedback: No answer on the phone. Waiting for email reply.

Action: Sent email. Feedback: Waiting for email reply.

Action: Sent email ([email protected]) and called (212-963-3344) to Mr. Justin Brady, Acting Director, United Nations Mine Action Service (UNMAS). Feedback: Waiting for reply.

Action: Sent email and called (973 496 9280) to Reno DeBono, Director of Chemistry and Applications. Feedback: Waiting for reply.

Page 48: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Landmine Clearance

Customer Discovery

Customer Validation

Pivot

Customer Creation

Page 49: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Landmine Clearance

Speed: Government entities too slow for this process/program

Minimum feature set: Included too many variables (environmental, deployment)

Pivot

Obtain Near instantaneous customer feedback

Be: Fast, agile and opportunistic and formulated a dramatically new model

Customer Discovery

Customer Validation

Pivot

Customer Creation

Page 50: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Explosive Detection for Transportation HubsLandmine Clearance

Speed: Government entities too slow for this process/program

Minimum feature set: Included too many variables (environmental, deployment)

Pivot

Obtain Near instantaneous customer feedback

Be: Fast, agile and opportunistic and formulated a dramatically new model

Customer Discovery

Customer Validation

Pivot

Customer Creation

Page 51: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

The Business Model Canvas 1

1.US Army2. Other Gov. Entities3. UN1. Reliable

2. Cheap3. Easy to use4. Rapid5. Large scale

1. Dedicate Personal Assistance2. Demo3. Training

1. IP2. Chemicals3. Facilities

1. Production2. Distribution

1. Manufacture of machine

Production Sensing materials

Direct sales.

Distribution

1 Machine sales

Page 52: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

The Business Model Canvas 2

1.US Army2. Other Gov. Entities3. UN

Airports

1. Reliable2. Cheap3. Easy to use4. Rapid5. Large scale

1. Dedicate Personal Assistance2. Demo3. Training

Partner’s distribution channels

1. IP2. Chemicals3. Facilities

1. Manufacture of machine2. Existing companies: Smiths Detection.

Production Sensing materials

4. Wider spectrum

Direct sales.

Distribution

1 Machine sales

1. Production2. Distribution

Page 53: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

Target Market

• Who am I going to sell to?• Airports

• How large is the market be (in $’s)?• $100 M

• How many units would that be?• 200 M units

TotalAvailableMarket$4.8 B

ServedAvailableMarket

$1 B

Target Market$100 M

Page 54: The Lean  LaunchPad Lecture 3: Customers/Users/Payers

From Canvas version 1 to version 2• What we thought: Government entities get to need

landmine clearance techniques.• What we did: contacted with the major demining

organizations and the UN.• What we found: Government entities too slow for

landmine clearance program.• What we have done: modified our business model.• Here’s what are going to do: Contact with airports and

Smith Detection.