The Lean LaunchPad Lecture 3: Customers/Users/Payers

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

2. Agenda • Team Bus Model Presentations • Customer Segments

3. CUSTOMER SEGMENTS which customers and users are you serving? which jobs do they really want to get done? images by JAM

4. CUSTOMER SEGMENTS which customers and users are you serving? which jobs do they really want to get done? images by JAM

5. 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

6. Customer Types Saboteurs Intermediaries (OEM’s and resellers)

7. Market Type & Ignoring Customers • Clone Market? • Existing Market? • Resegmenting an Existing Market? • niche or low cost • New Market? • When do I ignore customer feedback?

8. 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

9. Corporate Customers Business to Business (B to B)

10. 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?

11. Customer Problem

12. Customer Problem

13. Customer Problem

14. Customer Problem

15. Customer Problem

16. Customer Problem

17. Who’s the Customer in a Company? • User? • Influencer? • Recommender? • Decision Maker? • Economic Buyer? • Saboteur? • Archetypes for each?

18. How Do They Interact to Buy? • Organization Chart • Influence Map • Sales Road Map

19. 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?

20. How Do They Hear About You? • Demand Creation • Network effect • Sales

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

22. MammOptics Hospital purchasing decision tree

24. MammOptics Private practice purchasing decision tree

25. buzz group

26. Consumer Customers Business to Consumer (B to C)

27. 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?

28. Archetypes

29. buzz group

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

31. How Do They Decide to Buy? • Demand Creation • Viral? • SEO/SEM • Network effect? • AARRR (Dave McClure)

32. 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?

33. 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

34. Multi-Sided Markets Business to Business to Consumer (B to B to C)

35. Who’s The Customer? • Consumer End Users, Corporate Customers Pay • Multiple Consumers • Etc.

36. 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?

37. Market Type

38. 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

39. Market Type Market Type determines: • Rate of customer adoption • Sales and Marketing strategies • Cash requirements

40. 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

41. 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)

42. 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)

43. 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

44. Examples

45. Landmine Clearance NSF / ICORP Program Ying Wang (Lead) Yu Lei (PI) Mike Wisniewski (Mentor)

46. Technology Application Surveying, mapping and marking of hazardous areas Sensing Materials Removal of landmines and Unexploded Ordnance (UXO)

47. 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 (bradyj@un.org) 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.

48. Landmine Clearance Customer Discovery Customer Validation Customer Creation Pivot

49. Landmine Clearance Customer Discovery Customer Validation Customer Creation Pivot 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

50. Landmine Clearance Explosive Detection for Transportation Hubs Customer Discovery Customer Validation Customer Creation Pivot 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