lecture 3 customer segments
TRANSCRIPT
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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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Agenda
• Team Bus Model Presentations
• Customer Segments
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CUSTOMER SEGMENTS
images by JAM
which customers and users are you serving? which
jobs do they really want to get done?
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CUSTOMER SEGMENTS
images by JAM
which customers and users are you serving? which
jobs do they really want to get done?
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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
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Customer Types
• Saboteurs
• Intermediaries (OEM’s and resellers)
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Market Type & Ignoring Customers
• Clone Market?
• Existing Market?
• Resegmenting an Existing Market?
– niche or low cost
• New Market?
• When do I ignore customer feedback?
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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
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Corporate Customers
Business to Business (B to B)
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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?
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Customer Problem
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Customer Problem
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Customer Problem
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Customer Problem
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Customer Problem
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Customer Problem
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Who’s the Customer in a Company?
• User?
• Influencer?
• Recommender?
• Decision Maker?
• Economic Buyer?
• Saboteur?
• Archetypes for each?
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How Do They Interact to Buy?
• Organization Chart
• Influence Map
• Sales Road Map
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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?
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How Do They Hear About You?
• Demand Creation
• Network effect
• Sales
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If It’s a Multi-sided Market
Diagram It!!
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buzzgroup
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Consumer Customers
Business to Consumer (B to C)
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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?
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Archetypes
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buzzgroup
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Consumer Customers
• Do they buy it by themselves?
• Do they need approval of others?
• Do they use it alone or with others?
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How Do They Decide to Buy?
• Demand Creation
• Viral?
• SEO/SEM
• Network effect?
• AARRR (Dave McClure)
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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?
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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
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Multi-Sided Markets
Business to Business to Consumer
(B to B to C)
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Who’s The Customer?
• Consumer End Users, Corporate Customers
Pay
• Multiple Consumers
• Etc.
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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?
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Market Type
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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
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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
Competitor
s
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
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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
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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)
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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
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Examples
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Ying Wang (Lead)
Yu Lei (PI)
Mike Wisniewski (Mentor)
Landmine Clearance
NSF / ICORP Program
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Technology Application
Sensing
Materials
Surveying, mapping
and marking of
hazardous areas
Removal of
landmines and
Unexploded
Ordnance (UXO)
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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.
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Landmine Clearance
Customer
Discovery
Customer
Validation
Pivot
Customer
Creation
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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
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Explosive Detection for Transportation Hubs
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
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The Business Model Canvas 1
1.US Army
2. Other Gov. Entities
3. UN1. Reliable
2. Cheap
3. Easy to use
4. Rapid
5. Large scale
1. Dedicate Personal
Assistance
2. Demo
3. Training
1. IP
2. Chemicals
3. Facilities
1. Production
2. Distribution
1. Manufacture of
machine
Production Sensing materials
Direct sales.
Distribution
1 Machine sales
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The Business Model Canvas 2
1.US Army
2. Other Gov. Entities
3. UN
Airports
1. Reliable
2. Cheap
3. Easy to use
4. Rapid
5. Large scale
1. Dedicate Personal
Assistance
2. Demo
3. Training
Partner’s distribution
channels
1. IP
2. Chemicals
3. Facilities
1. Manufacture of
machine
2. Existing
companies: Smiths
Detection.
Production Sensing materials
4. Wider spectrum
Direct sales.
Distribution
1 Machine sales
1. Production
2. Distribution
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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
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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.