mit-chief training session 1: know your market and customers
TRANSCRIPT
DISCIPLINED ENTREPRENEURSHIP
TRAINING SERIES
Know your Market and Customers
April 2016
Elaine Chen
What we are going to do in this session
0. Talk amongst yourselves
1. Disciplined Entrepreneurship Overview
2. Who is your customer
3. Primary market research (PMR)
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0. Talk amongst yourselves
• Pair up 1x1 with someone you don’t know
• Ask each other these 3 q’s (5 minutes)– Name, affiliation, and what you are looking to get
out of this program
– Sector interest (e.g. Consumer electronics, Wearables, Healthcare, Education, Food, Arts, Industrial automation, Machine Learning, AR/VR applications, Social networks… whatever you are interested in)
– One embarrassing thing about yourself
• Do it again with someone new (5 minutes)
• Do it one more time with a third person (5 minutes)
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Sharing!
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1. Disciplined Entrepreneurship
Overview
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Being an entrepreneuris the new “cool” thing.
As a result,
demand for
entrepreneurship
is blowing up!
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But is there sufficient understanding of the topic?
Hmmm….
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Spirit + Skills
Successful Entrepreneurship
Successful entrepreneurshiprequires people willing to
work hard and work smart.
DISCIPLINED ENTREPRENEURSHIP
• Framework • Highly iterative • Toolbox
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Provides a common language:
Six themes / 24 steps
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Planningto launch a startup
Who said
disciplined entrepreneurship
was easy?
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Planningto launch a startup
Effort and resourcesneeded to launch a
successful new venture
Who said
disciplined entrepreneurship
was easy?
You could just build the product in secret
then unveil it with a BIG BANG!
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This cost over $100M R&D over 10 years.
Don’t make this mistake!
This is what we want to help you do.
A little thinking up front can save years and millions of $$
2. Who is your customer
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Example team: ProForm Fitness
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Step 1: Segmentation
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Chain Gyms (Discount/Mains
tream)
Chain Gyms (High end) Varsity Athletic Weight Rooms
(College)
ProfessionalWeight Rooms
Home Gyms Rehab Facilities Apartment/Hotel/ Offices
OlympicTraining Facilities
High End Non Chain
Gyms
Examples • YMCA, Gold’s Gym, Anytime Fitness, Planet Fitness, etc
• Equinox, LA Fitness, David Barton, New York Sports Club
• School Facilities • Team Facilities• Home Gyms• Private Training
Facilities
• Home Gym • Joint Ventures (etc), Brigham Young Women’s Hospital (etc)
• Finance/Consulting Offices
• High end apartments/hotels
• Training complex in CO,NC, etc
• Velocity sportsperformance, etc
Pros • Market size• Expand to
other locations
• Prioritize top of the line
• Expand to other locations
• More money
• Care about athleteimprovement, health, and safety
• Easier to expand to follow on markets
• Care about athleteimprovement, health, and safety
• Easier to expand to follow on markets
• Prioritize safety• Wealthy• Large market
• Expand to other locations
• Prioritize safety and patient improvement
• Progress tracking is huge
• Some not supervised –safety is important
• Expand to other locations
• Care about athlete improvement,health, and safety
• Easier to expand to other markets
• Care about athlete improvement, health and safety.
Cons • Value Proposition• Limited funds
• Value Proposition• Limited funds
• Contacts• Difficult to expand
to other colleges
• Contacts• Difficult to
expand to other facilities
• Want things for free
• Difficult to expand • Funds may be limited
• Patients do not typically lift heavy weights
• Not a main part of business
• More serious athletes do not frequent these locations
• Contacts• Market size
• Difficult to expand to other locations
• Trainersusually there to spot and track
Motivations (for economicbuyer)
• Money – bringing in new customers,retaining old ones
• Money – bringing in new customers, retaining old ones
• Image
• Athlete Improvement
• Recruiting athletes
• Athlete Improvement
• Safety• Athlete Improvement• Money
• Athlete improvement
• Less time spent monitoring and tracking patients
• Money –Attractingcustomers or employees
• Happiness/well being of employees
• Athlete Improvement
• Money –Attracting new customers
• AthleteImprovement
Regulatory Climate
• Regulated • Regulated • Regulated • Regulated • Regulated • Regulated • Regulated • Regulated • Regulated
Competitive Environment
• Highly Competitive
• Highly Competitive • Highly Competitive • Highly Competitive
• Highly Competitive • Less competitive • Highly Competitive
• Highly Competitive
• HighlyCompetitive
Early Adopters • No • Yes • Yes • Yes • Varies • No • No • Yes • Yes
BHM
Step 2: Beachhead Market
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• High End Chain Gyms
– Pros
• Less concerned with equipment price
• More concerned with image
• Easier to expand into other locations
• Easier to expand into follow on markets
• Large Market Size
– Cons
• Current lack of contacts
• Equipment will have to be extremely good quality/high end
• Value proposition – improving athletes isn’t their main motivation
• Other Potential Markets
– Varsity Athletics Programs/Professional Programs
– Home Gyms
– Mainstream/Budget Gyms
Step 3: End user profile: Chris
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• Full-Time Structural Engineer
• 25 Years Old
• Previous High School Athlete
• Lifts at least 4 times per week
• Brings notepad to gym
Step 4: TAM
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Step 5: Primary Market Research / Persona
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Be careful who you interview and
what personas you build
• For B2C, the economic buyer is often the same as the end user – 1 set of interviews can yield tremendous data
• For B2B, you often have to interview multiple personas before you can get a clear picture of the needs and wants for the company and for each persona. Embrace complexity.
• Either way: Recruit carefully! Qualitative research requires laser-focused targeting.
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3. PMR / Interviews
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versus
Qualitative Quantitative
Primary Market Research:
A Bird’s Eye View
4 go-to PMR techniques
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Detailed Interviews Observation
Immersion Digital Experimentation
Sausage making: The actual interview
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Technique cheat sheet
• Establish rapport before you
begin
• Ask short, open ended
questions
• Let the subject lead
• Use active listening techniques
• Talk less – listen well
• Pay attention to non-verbal
cues
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Remember: The
goal is to listen and
observe – not to
sell!
Simulation: Bluesmart PMR
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Imagine this is your idea. Your mom says she likes it. You made some progress, and now you have to decide whether to quit your day job and raise $ to start this company.
And these are some possible engineering features. Questions:• Is there a market need for this product?• Who might buy this product?• Are these good features?• Which features are “more equal” than others?
Simulation
• Goal of the interview: To validate market interest in a smart rollerboard for frequent business travelers.
– Figure out what are the biggest pain points experienced by your interview partner
– See if any of your proposed solutions solve those pain points
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• Rules of engagement: Stick to these words.
– “Tell me about the last time you…”
– “Tell me about how you…”
– “You said xxx. Tell me more?”
– “Why?”
– “Why not?”
– Beware confirmation bias!
Sharing!
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PMR, Procter and Gamble style
• Expensive (hundreds of thousands of $ and up)
• Long (3-9 months)
• Often done in conjunction with an agency
=> High quality insights at a high price
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PMR, startup style
• Cheap
• Fast
• DIY. NOT rocket science. You can do it.
=> Scrappy, but helps you iterate in real time!
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Step by step guide to startup style PMR
• Articulate 3-5 hypotheses to be tested
• Define characteristics of research subjects
• Make a list of 10 people to call
• Ask for 10-15 minutes of their time
• Face to face if possible, video chat/phone if not
• Interpret results, adjust hypotheses
• Rinse and repeat
Summary
• Not rocket science
• Practice makes perfect
• Do it!
Handouts
• “Talking to Humans” E-book - Giff Constable
• PMR Primer - Elaine Chen
• Templates and samples – Elaine Chen– Research protocol template
– Sample discussion guide
– Sample recruitment questionnaire
– Sample photo release form
– Interview notes template
– Persona template
– Example persona project – “The Science of Clean” (15.S16, 2H 2012)
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End
Questions?
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