customer discovery and market intelligence - mars entrepreneurship 101

MaRS Discovery DistrictMarket & Customer Discovery

Usha Srinivasan Ph.D, VP – Learning and Insights

Story of two 10-year-old boys who became accidental entrepreneurs

One just loved to draw and the other was such a good storyteller so they

decided to create comics for fun

“Necessity is the mother of Invention or Innovation”

The comics seem to get the attention of other kids in the

playground and a comic business was born!!!

“Customer discovery” for the comic business

Understand the “problem” -Why do their school mates like their comic?

Understand the customers buying power -Will the school mates pay for this one page of giggles

and how much?

Understand the competition -What other comics were they reading?

Understand customer preferences - Did girls also like their jokes and comics as much as

the boys?

What is the ONE thing you really need to know?

Market and Customer DiscoveryWhat does it all mean ?

It’s a Journey….

…with unclear directions

Market and customer intelligence can help

you de-risk and translate your

assumptions to facts!!!

Clear Pathways

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PrimarySecondary

What type of information are we talking about?

60% 40%

Quantitative Qualitative

Sourcing the Data: Secondary

Type of data Example of source

Statistics Economic statisticsCustoms databasesGovernment statistics

Industry data Industry associationsMarket research reports Investor reports

Product data Product brochuresProduct reviews

News Free public aggregators (incl. Google)Fee-based news aggregators

Patent Literature Delphion (International)USPTO – Patents (US)CIPO – Patents (Canada)Espacenet (Europe)

Company & Financial data

Public company directoriesSecurities exchanges (S.E.C., SEDAR)Global company financials databasesLocal company financials databases

Adapted from Global Intelligence Alliance, 2012

Sourcing the Data: Resources

UofT Librarieshttp://guides.library.utoronto.ca/techentrepreneurship

Startup Library

http://marsdd.it/1khP6hs

MaRS Market Intelligence

http://www.marsdd.com/market-intelligence

Sourcing the Data: Primary

Data

Own Employees

Own supply-chain

Own customers

Industry experts

Analysts

Associations

Academia

Adapted from Global Intelligence Alliance, 2012

Step 1- How BIG is my Market?

Is this journey worth it? a.k.aIs this Market BIG enough?

FIND OUT by – Effectively extracting information from

Secondary published sources

Markets: Total, Sales, Target

S

Total Addressable

Perfect World Scenario

No competitors

All the financing available to grow

Adapted from Blank & Dorf, 2012

Markets: Total, Sales, Target

S

Total Addressable

Sales Addressable

Real World Constraints

Geography

Competition

Sales channels

Adapted from Blank & Dorf, 2012

Markets: Total, Sales, Target

S

Total Addressable

Sales Addressable

Target

Priority Scenario

Most desirable

Most feasible

Adapted from Blank & Dorf, 2012

Two Approaches

Top-down

Top-down estimates approach the true value from above, by starting with broad indicators which are narrowed down using assumptions.

Pro Often a quicker and easier way to size a market

Con Tends to give too high estimates

Bottom-up

Bottom-up estimates approach the true value from below, by summing up known supply data from market participants.

Pro Often considered more conservative (accounts for capacity limitations of the industry).

Con Usually requires primary research, therefore often expensive to do.

Statistic

Data point

Total market size

Assumption

Statistic

Data point

Assumption

Supplier 1

Segment total

Total market size

Supplier 2 Supplier 3

Segment total

Supplier 4

Source: Global Intelligence Alliance, 2012

Step 2- Where am I selling?Market Type

Has someone already been on this journey? a.k.a

Which Market Type do I fit into?

ExistingRe-segmented (low cost/specific need)

New Clone

Step 3 – Who am I Competing with?

Who else am I going to bump into – a.k.a

Who am I competing with?

Knowing your market type is key to understand your competitors

Resources to find - Competing technologies, products & companies

1. Consider patent or prior art searches – Public databases like USPTO or WIPO, or paid databases like Delphion or Total Patents

2. Compare product/technology capability/claims: use product brochures from trade shows or product claims from websites

3. Identify and monitor relevant news sources (e.g., MobiHealth News) – search keywords, set up alerts

4. MaRS Startup Library’s “How do I identify competitors?” – CrunchBase, Techvibes, Startup North, Industry Canada etc.

5. Syndicated research by Frost & Sullivan, Gartner, BCC research etc. that publish competitor information

Steve Blank’s Petal Diagram

Steve Blank’s Petal Diagram

Step 4 – Understanding your customers

Is the roadmap you have enough to get to point B? i.e.,

To get to a place to understand your customers needs?

You need to GET OUT OF THE CAR!!!

Customer types – who are they in your market?

Decision Maker $$$$$

Economic Buyer $$$

Recommenders

Influencers

End Users

Resources to understand customersPeople, Place and Industry (B2C & B2B)

-Geographic information (Regulations, Partners, Political)-Demographic information (age, income, occupation, etc.)-Psychographic information (personality, values, interests, lifestyle, etc.)-Industry information (Regulations, investments, needs)

1. Use already published primary research data by marketing research firms - Omnibus studies – Forrester, ComScore, IMSHealth, JD Power, ACNeilsen, Frost & Sullivan

2. Industry Associations are a great source

3. Tap into Canadian Trade Commissioners office (DFATD) in other countries – understanding local dynamics/connections

4. In house primary research – Online and direct interviews

Primary Research Sources for Start Ups

• Mock website – Google site/Weebly• Surveys - Beware of respondent

quality - Examples sites – Survey Monkey, Google consumer survey, Addpoll, Fluidsurveys etc.

• Listservs & Specific interest groups• Social media• Crowdfunding platforms

Onlinetools

• Leverage Friends and Family• Low cost Focus groups – your sport

team, association members• Telephone interviews• Face to Face interviews

Direct Interviews

Customer Persona – B2C

Customer Persona – B2B

Face to Face Interviews

Nothing is better than a face to face interview to get the best customer insight.

Top 10 things to remember:

1. Understand your customer persona2. Always ask for a referral3. Set up a time and expectation for the interview4. Prepare your questions & use a template to record5. PAUSE after every question. LISTEN to your customers6. Record the answers right after the interview7. Respect their time8. Ask for other referrals9. Score your qualitative responses to quantify & evaluate the

insights10. Refine your questions and try again!!

Step 5 – Channels and Business Model

Understand customer needsSolution to solve it

Channel to reach themBusiness model to make money

CONGRATULATIONS!!! You used Market & Customer

Intelligence to find a viable business opportunity

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Usha Srinivasan PhDVice PresidentLearning and InsightsMaRS Discovery DistrictT 416-673-8144E usrinivasan@marsdd.comW www.marsdd.com