gec 2017: bob dorf

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GETTING YOUR STARTUP TO SCALE

Bob DorfCo-author “The Startup Owner’s Manual” and allegedly retired serial entrepreneur, educator, trainer

#GEC2017 | GEC.CO

Welcome…Great to be here!

Four things to do this afternoon:1. Focus on your future…it’s found in “Product/Market Fit”2. The basics of Customer Discovery3. How to drill deeper…and deeper…and learn from your customers

…regardless of how old your startup is…whether you’re for profit or a social venture…and “must do’s” unless you’re filing for your IPO

4. Whatever YOU want to ask or talk about

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The Key to Your Startup’s Future:Product/Market Fit

…THE CONSISTENT, REPEATABLE MATCH BETWEEN:A CUSTOMER SEGMENT

WITH A HIGH LEVEL OF BUYING INTEREST IN YOUR VALUE PROPOSITION

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This Old Guy from a NYC housing project has spent a TON of time “on the farm…”

… startup #1 grew to include USA’s #1 agrimarketing pr agency…how many hog auctions have YOU been to?…I’ve met the world’s largest pig and butter cow personally…Have promoted Roundup, Lasso, AvadexBW, Purina Hog/Cattle Chows………and done zillions of windshield surveys on major US/Canadian farms..

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enough about me…let’s get to work…WHAT DOES P/M FIT LOOK LIKE?

1. I KNOW WHO THE BUYER IS2. I KNOW TYPE OF COMPANY TO TARGET3. I KNOW WHO MUST BE “IN THE ROOM”4. AND I KNOW HOW TO PITCH TO THEM

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PRODUCT/MARKET FIT: WINNERS• THE FORD MODEL “T”• THE “EASTERN” SHUTTLE• MS OFFICE• QUICKBOOKS• VIAGARA• GOOGLE• SNAPCHAT

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PRODUCT/MARKET FIT: NOT SO HOT…• THE FORD EDSEL• NEW COKE• MYSPACE at AGE 3• BLACKBERRY at AGE ~12

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PRODUCT/MARKET FIT: NOT SO HOT…

So before you join the “not so hot” club…

find Product/Market Fit

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PRODUCT/MARKET FIT: LOW INTEREST

• CHANGE THE CUSTOMER SEGMENT• CONSIDER PRICING,“FREEMIUM”

MAYBE JUST FOR NOW

• DID ONE OR TWO FEATURES STAND OUT? • IS THE TEAM PITCHING WELL?• IS A SALES CHANNEL NEEDED?• HAVE MARKETING TESTS FAILED?

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PRODUCT/MARKET FIT MISMATCH

SMARTPHONE MANAGEMENT TOOLS FOR BODEGAS:• “MY P&L IS MY POCKET”• “I DON’T WANT THE GOVERNMENT TO SEE”•NOT FAMILIAR WITH PDA TECHNOLOGY•NOT INTERESTED IN EXTRA WORK

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PRODUCT/MARKET FIT: FIXING IT

SMARTPHONE MANAGEMENT FOR BODEGAS:• NARROW THE CUSTOMER SEGMENT• FOCUS CALLS ONLY ON THE SEGMENT

• …BIGGER BODEGAS/2 CASH REGISTERS• …NICELY STOCKED, REFLECTS INVESTMENT• ……NEEDS THE VALUE THE TOOL DELIVERS

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2 Roots of Most FAILURES

1. BAD OR WEAK VALUE PROPOSITION• DOESN’T SOLVE AN URGENT BIG NEED• NO CLEAR COMPETITIVE ADVANTAGE• PRICING SEEMS UNREASONABLE• SOLUTION NOT INNOVATIVE, IMPRESSIVE

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1. BAD OR WEAK VALUE PROPOSITION• DOESN’T SOLVE AN URGENT BIG NEED• NO CLEAR COMPETITIVE ADVANTAGE• PRICING SEEMS UNREASONABLE• SOLUTION NOT INNOVATIVE, IMPRESSIVEBUT Maybe:…you exposed it to the wrong people…you didn’t explain it to customers well…your pitch stressed wrong features/benefits

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2. MIS-TARGET CUSTOMER SEGMENT• TALKING TO USERS INSTEAD OF PAYERS• OVERLOOKING REGULATORS, BUYING GROUPS, CROP CYCLES• MISUNDERSTANDING SALES CHANNEL• FAILING TO RECOGNIZE IMPORTANCE OF LOCAL REFERENCES• CONFUSING INTEREST WITH ENTHUSIASM

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2. MIS-TARGET CUSTOMER SEGMENT• TALKING TO USERS INSTEAD OF PAYERS• TALKING TO KIDS…NOT THEIR PARENTS• MISUNDERSTANDING CHANNEL or ROLE• CONFUSING INTEREST WITH ENTHUSIASMBUT Maybe……they think it should be free(i.e. content)…”not my problem” or “not my authority”…the company should pay, or “I have this already”…yawn

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VALUE PROPOSITION: FIXING IT

1. RESTACK BENEFITS/CHANGE THE PITCH2. A/B TEST DIFFERENT COPY APPROACHES3. A/B TEST DIFFERENT REVENUE MODELS

• RENT VS BUY• FREEMIUM WITH IN-APP PURCHASES• FREE TRIAL BEFORE PURCHASE

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VALUE PROPOSITION: FIXING IT

1. RESTACK BENEFITS/CHANGE THE PITCH2. A/B TEST DIFFERENT COPY APPROACHES3. A/B TEST DIFFERENT REVENUE MODELS

• RENT VS BUY• FREEMIUM WITH IN-APP PURCHASES• FREE TRIAL BEFORE PURCHASE

4. ADD OR SUBTRACT FEATURES,FUNCTIONS5. TRY AIMING AT A DIFFERENT TARGET…

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CUSTOMER SEGMENTS: FIXING IT

1. AIM AT DIFFERENT AUDIENCE PAYERS VS USERS, MEN VS WOMEN, PARENTS VS KIDS, SMALL TOWN VS BIG CITY

2. NARROW(OR EXPAND) YOUR TARGET: Regulators, NGO’s, Community Leaders, Educators

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CUSTOMER SEGMENTS: FIXING IT

1. AIM AT DIFFERENT AUDIENCE PAYERS VS USERS, MEN VS WOMEN, PARENTS VS KIDS, SMALL TOWN VS BIG CITY

2. NARROW YOUR TARGET3. SELECT TARGETS BY DEMOGRAPHICS

ONLINE OR OFF, RICH OR POOR, MANAGER OR STAFF, AGE, GENDER, CITY VS COUNTRY

4. FIND THE SMALLEST POSSIBLE UNIVERSE!

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PRODUCT/MARKET FIT: DID YOU FIND IT?

1. A PREDICTABLE % SAY YES!2. IF SO, TEST IT A SECOND TIME3. CAN YOU BE PROFITABLE AT THAT %?4. IF SO, MOVE FORWARD!

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PRODUCT/MARKET FIT: WHAT IF I HAVE IT?

1. TEST IT AGAIN TO REVALIDATE2. TEST MARKET FOR FLANKER SEGMENTS3. A/B TEST A BETTER/DIFFERENT VALUE PROP

OR…4. MOVE ON TO CUSTOMER DISCOVERY

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DISCOVERY starts with a Bunch of Hypotheses

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3 key Discovery phases1: Does anybody care?

…are we solving a serious problem?…are we filling a “big” need?…(is there a big market opportunity?)




2: Who Else solves the Problem Today?




2: Who Else solves the Problem Today? 3: Is Solution better/cheaper/faster?

…are the scores 4’s and 5’s or worse?…are they eager to tell others or buy?


Customer Discovery: MUCH more than “do you like it?”• How big is the market? Not today…eventually!• Who’s the customer?• What’s the product/service/need?• Does the product solve the problem? Fill the need?• Who else solves it? Cheaper? Better? Faster?• How do you create demand?• How do you deliver the product?• Will the customer let you make money?


Customer Discovery: FIRST, Some Ground Rules• START ANYWHERE…focus on unknowns first• You don’t have to be an early stage startup to use it well• You’re never selling, always asking, probing• Let the customer steer the interaction


Customer Discovery: FIRST, Some Ground Rules• You’re never selling, always asking, probing• Let the customer steer the interaction• No customer can answer every question• Never fear refining and testing again


Customer Discovery: FIRST, Some Ground Rules• You’re never selling, always asking, probing• Let the customer steer the interaction• No customer can answer every question• Never fear refining and testing again• DON’T STOP asking til you’re celebrating!


You’re Always Hypothesis Testing!


From the beginning:6 Core Discovery Steps

1. Problem Discovery…”Does anybody care?”2. User Discovery…”Who uses it, how often?”3. Value Prop: Clarity, Refinement, Excitement4. Competitive Set and Stature5. Will Anybody Buy it?6. How do I find them?…p.s. I will NOT go thru them all today!


Cautions about the 6 Steps1. You don’t need to do them all/do in order2. Start with your biggest questions, whether they’re in or out of order3. Ask the same question again..and again:

1. Reduce the number of choices2. Probe different segments, sub-segments3. Just pick up the phone…answers are on the way!

…I PROMISE NOT TO GO THROUGH ALL SIX…JUST ENUF TO GIVE YOU A SENSE!


Discovery: STEP ONE!• PRIMARY MISSION is “test the problem”• Anything else is gravy…get what you can• Avoid details on product wherever possible• …how do you solve it now• …anyone solve it well for you• …problems with current solutions

…but mostly: do customers jump up’n’down?


Step 1: Problem Discovery“Does Anybody Care??”

• Most b-to-b sales solve serious, costly problems• More b-to-c sales fill needs• Are Hermes scarves and Facebook “needs?”• Is a user’s problem a boss’s problem too?


Step 1: Problem Discovery“Does Anybody Care??”

• Most b-to-b sales solve serious, costly problems• More b-to-c sales fill needs• Are Hermes scarves and Facebook “needs?”• Is a user’s problem a boss’s problem too?Our job:1. Validate the robust, hungry market opportunity2. Identify the neediest customer segment3. Narrow the segment(for now) best you can4. Keep asking til you get an overwhelming response


Step 1: Problem DiscoveryQUESTIONS to ask

1. How serious/urgent is the problem(top 5?)2. How important is solution to company/boss?3. Are you solving/satisfied w/solution today?4. What solutions have you tried? Seen?• Explore strengths/weaknesses of each• Encourage enthusiasm for competitive features

5. “If money were no object…”6. Availability of Budget to Solve Problem


Step 1: Problem DiscoveryTESTS to Launch

1. How serious/urgent is the problem(top 5?)2. How important is solution to company/boss?TESTS:3. Stack Rank Set of Relevant Business Problems4. Check vs. key segments: user/manager/payer5. Describe problem/severity as you see it


Step 1: Problem DiscoveryTESTS to Launch

3. What solutions have you tried? Seen?• Explore strengths/weaknesses of each• Encourage enthusiasm for competitive features

4. Are you solving/satisfied w/solution today?TESTS:1. List/rank packaged, homegrown solutions today2. Describe experience solving problem today3. What’s Missing in Current Solution to Problem4. Identify features/functions of favorite4a. If using “key” solution, tell us experience


Step 1: Problem DiscoveryWays to Drill Deeper

• Put a monetary or time cost on the problem• Identify budget availability to solve problem• Zero in on “problem owner” in corporation• Segment key competitor users, dig deeper• Segment non-solvers, probe reasons why not


Step 2: User DiscoveryWho Uses it…How Often

• Seasonal Use or Year Round(how much is a customer worth?)• Is the purchase regulated(gov’t) or managed(lender)?• Define User Base inside the Organization• How Much Time Users Spend Solving Problem• Is this problem somebody’s fulltime job?• Management Prioritization of Solution


Step 2: User DiscoveryWho Uses it…How Often• Define User Base inside the Organization• How Much Time Users Spend Solving Problem• Is this problem somebody’s fulltime job?• Management Prioritization of Solution Our job:• Quantify users @ enterprise? How big is it?• Quantify pain, urgency of need for solution• Understand buyer v recommender v user• Understand obstacles to making a sale


Step 2: User DiscoveryQUESTIONS to ask

1. Size of Company, Number or % With Problem2. Potential Economic Value of Solving the Problem3. Quantify time devoted to solving problem4. Bolster with frequency, urgency/timing5. Define job title of user, manager6. Define professional level of user


Step 2: User DiscoveryTESTS to Launch

1. Size of Company, Number or % With Problem2. Potential Economic Value of Solving the Problem3. Quantify time devoted to solving problem4. Bolster with frequency, urgency/timingTESTS:5. Size of Company, Number with Problem (Q)6. Estimate #users, hours spent solving (Q)7. Management Focus on Solving Problem (N/Q)8. Frequency/Recurrence/Timing of Problem(N)9. Why isn’t the Problem Solved at Copmany(V/N)


Step 2: User DiscoveryTESTS to Launch

5. Define job title of user, manager6. Define professional level of userTESTS:1. Tell me about your experience and role2. How well are you solving problem today?3. How long searching for solution4. How often is boss involved with problem


Step 2: User DiscoveryWays to Drill Deeper

• Dive deeper with largest user segment• Get referred to boss; probe priority with her• How often does boss come “down the hall…”• Is budget available, obtainable for solution• Ask user to suggest price/range


Step 3: Value Proposition Clarity“Understand Value and Benefit?”• Do customers understand our “FAB” proposition?• Which features, benefits are most valued?• Is it compelling vs. other (or no) Solution?


Step 3: Value Proposition Clarity“Understand Value and Benefit?”• Do customers understand our “FAB” proposition?• Which features, benefits are most valued?• Is it compelling vs. other (or no) Solution?Our job:1. Be sure customers understand our Value Prop2. Learn how Value Prop differs from User to Buyer3. Assure proper prioritization of FAB sell points4. Identify attributes that make us stand out


Step 3: Value Prop ValidationQUESTIONS to ask

1. Enthusiasm for Value Prop as Stated2. Prioritize Features, then Benefits, for User3. Prioritize Value Prop in Boss’s Eyes4. Potential for Improving Results vs status quo5. If available today at fair price, want to buy?6. Probe Ideas for most valuable, missing features


Step 3: Value Prop ValidationTESTS to Launch

1. Enthusiasm for Value Prop as Stated2. If available today at fair price, want to buy?TESTS:3. Prioritize Features, then Benefits for You(Q)4. How helpful in solving problem(Q)5. Could solution make you “hero” at company(Q)6. Buying enthusiasm(Q); Ease of Approval(Q)



3. Prioritize Value Prop in Boss’s Eyes4. Potential for Improving Results vs status quo5. If available today at fair price, want to buy?TESTS:1. How Would Your Boss Evaluate Product2. Value Prop Improvements vs. Status Quo3. Willingness to recommend or purchase 4. Could solution make you “hero” at company



6. Missing or Desired FeaturesTESTS:1. Estimate time using each key feature2. What other features/functions would you like?3. “If money were no object, what else?”4. Select from List of Potential Features 5. Talk about how your personal use case 6. Talk about business improvements/results sought


Step 3: Value Prop ValidationWays to Drill Deeper

• Dive deeper with largest user segment• Get referred to boss; probe priority with her• Solicit mass reaction to suggested features(Q)• Split users based on experience, education(Q)• Drill down based on purchase enthusiasm/lack• Drill into unenthusiastic with restacked VP• Drill into enthusiasts for feature prioritization• WHAT ELSE?


Step 4: Competitive Set/Stature“Who Else Solves This Problem?”

• What Competitors Has the Customer Seen?• Most remarkable competitor or brand• Experience with Competitive Solutions• Have they tried home-grown solution? Result?• Any brand/other preference in the category?


Step 4: Competitive Set/Stature“Who Else Solves This Problem?”

• What Competitors Has the Customer Seen?• Most remarkable competitor or brand• Experience with Competitive Solutions• Have they tried home-grown solution? Result?• Any brand/other preference in the category?Our job:• Determine key competitors,their advantages• Identify unique core of our value proposition• Find segments who like our solution best


MORE QUESTIONS to Ask

• Why would anybody buy yours?• Will anybody else pay/subsidize/finance the purchase?• Can the product/service be leased, not sold?• How do I find the customer? Media, personal contact, drone?• Are personal recommendations/field trials/academic proof needed?• Are application services or tools, approvals or licenses essential to sale?

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KEEP ASKING QUESTIONS!

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KEEP ASKING QUESTIONS…YOUR CUSTOMERS HAVE THE ANSWERS!


How do you know when Discovery is “done?”Key PartnersWho are our key partners/ suppliers

Key ActivitiesWhich key activities does the biz model require

Value PropositionWhat value do we deliver to the customer

Customer RelationshipsWhat type of relationship does each segment require of us

Customer SegmentsFor whom are we creating value

ChannelsThrough which channel does each segment want to be reached

Revenue StreamsHow much is each segment willing to pay and how would they like to pay us this amount

Cost StructureWhat are our cost drivers

Key ResourcesWhich key resources does the biz model require

identify key market segments (geography/application) and customer segments (e.g. operator versus owner)

how many customers in each segment and estimated potential volume for each customer

how do customers make money … key customer pain/gain points in each segment

how are buying decisions made in each segment - id process, hurdles, decision makers

what does an Earlyvangelist look like in each segment

who influences purchases in each segment (trade groups, key resellers, trend watchers)

key distinctive product features & benefits for the target customer segment

total cost of ownership for segment versus alternatives

why will segment buy Durathon versus alternatives (i.e. value proposition)

minimum feature set (i.e. our launch configuration) and ultimate feature set

opportunities to claim IP or trademark / is there freedom to practice

what regulatory/ certification/ transportation/ customs requirements should be met or could be differentiator

which segments can only or best be reached through a channel partner

which channel partners are important to optimize sales in each segment

what are channel partners' requirements and cost to become a proactive sales channel

initial channel partner response to value proposition & customer segments

What are price /performance characteristics of competing technology What is the 2013 price target for 1 MM cells What is the 2015 price target for 10 MM cells what is optimum sales method for each segment (asset sale, lease, pay for performance, etc.)

product positioning/elevator pitch for each segment

Prospect roadmap: how to get face-to-face with right person at prospects in each segment

key competitors in each segment and their market share

key competitors' characteristics & dynamics What outbound marketing/ advertising/

promotion activities are needed support tools required by segment (white

papers, TCO calc., tradeshow) pipeline of leads

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x

x

X = number of in depth customer data points / data sources used to validate hypothesis

red = low hypothesis confidence yellow = medium hypothesis confidence green = high hypothesis confidence

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4 50

3

Complete regional overview

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Populate life cycle data for performance guarantees

Educate market on metric: $/kWh-day delivered over life of asset

Establish strong partnerships with channel partners

Integrated power system engineering – compatibility for retrofit and optimized system solutions

Financing options for Power services operators

Launch reliability

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05/02/2023


3 Questions to “DONE:”

05/02/2023

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When It Doesn’t Work(that’s most of the time…)

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do it again!

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this is howGREAT

companiesare born!!!


remember:GET OUT OFTHE BUILDING!

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QUESTIONS??

@bobdorfwww.bobdorf.nyc

tools/more: www.steveblank.comonline canvas: www.canvanizer.com

http://www.steveblank.com/

gec 2017: bob dorf

Small Business & Entrepreneurship