Recomendados
Más contenido relacionado
La actualidad más candente
La actualidad más candente (12)
Similar a Validating Your Opportunity: Product, Solution, Customer by Rick Gibson
Similar a Validating Your Opportunity: Product, Solution, Customer by Rick Gibson (20)
Más de AnitaBell
Más de AnitaBell (14)
Último
Último (20)
Validating Your Opportunity: Product, Solution, Customer by Rick Gibson
- 1. Problem – Customer – Solution Presented by Rick Gibson
- 2. Rick Gibson has had a 37-year career, immersed in building fast growth technology companies, as an investor, board member, advisor, teacher, judge, screener, public speaker and writer. He has invested in several companies, participated in dozens, advised a few hundred and played a key role in a few successful exits. Rick’s been actively involved in several incubators including Silicon Valley’s Catalyst Technologies (1980’s), Idealab (late 1990’s) and currently serves on the boards of UA’s AZCI and NAU’s NACET. He's active in several Arizona angel groups, and has served on the board of the Desert Angels. He has taught entrepreneurship at UA and ASU. Rick has worked alongside several entrepreneurial icons, including Nolan Bushnell (founder of Atari), and Bill Gross (founder of Idealab) with whom Rick was a co-founder of Knowledge Adventure. www.hotventures.com
- 3. © 2011 Arizona Center for Innovation 3 Workshop Objectives This workshop will help you: • Define and validate the problem you’re trying to solve • Understand whether or not it presents an opportunity • Refine and describe your solution and value proposition • Understand and identify your first customers
- 4. © 2011 Arizona Center for Innovation 4 • Define problem • True or false – All problems require solutions – All solutions become opportunities The Problem
- 5. © 2011 Arizona Center for Innovation 5 • Describe the problem • Does this problem cause discomfort, difficulty or pain? • Collect multiple perspectives, look for common ideas Formulate the Problem
- 6. © 2011 Arizona Center for Innovation 6 • Underlying cause of the problem? • How is the problem solved today? • Long-lasting or temporary? • How BIG is it? • Is it a growing? • How urgent is the need for a better solution? Understand Cause and Impact
- 7. © 2011 Arizona Center for Innovation 7 • Can you identify with the problem? • Do you have this problem, anyone you know? • Why do you need a new solution? • How is the problem perceived by others? • Can you connect this to your audience? Personalize It
- 8. © 2011 Arizona Center for Innovation 8 • Examples of problems … Interactive Discussion
- 9. © 2011 Arizona Center for Innovation 9 Validate the Problem • Who’s affected by this problem and how big is that market? • Is this a growing population, trend, problem? • What are problem costs – time, money, health, other? Can you quantify those costs? • Why does this problem exist? • Will social, economic, political, or technological trends affect the importance of the problem? • What else should you be asking?
- 10. © 2011 Arizona Center for Innovation 10 • 1, 2, 3x removed from the source • Published: online, library, University, etc • Industry associations, events, trade shows • Publications • Trend watch – social listening • Alternative, competitor, complementary solutions Secondary Research
- 11. © 2011 Arizona Center for Innovation 11 • Surveys and questionnaires • Interviews • Focus groups • Prospective customers • Suppliers, partners, sales channels Primary Research TIP: Engage with your customers PERSONALLY and get permission to use their testimonials!
- 12. © 2011 Arizona Center for Innovation 12 Strengths Assets, IP protection, team, partners, expertise, competitive advantages, etc. Internal: capitalize, promote and manage your strengths. Weaknesses Liabilities, lack of assets, no IP protection, missing team players or partners, etc. Internal: address weaknesses as quickly as possible, fill the gaps. Opportunities New distribution channels, complementary products/services, new applications and markets, etc. External: watch for new openings and capture Threats Risks, change in regulation, technology obsolescence, change in market interest, distribution, etc. External: create contingency plans Assess your Company & your Competitors
- 13. © 2011 Arizona Center for Innovation 13 • DO… – Use reliable sources for information and corroborate – Stick to facts: be accurate, realistic – Focus on the strengths of your product/service – Build credibility by focusing on credible third-party facts • DON’T … – Take only the first data point – Use opinion – Say negative things about your competition, partners, market, etc. Research Tips TIP: Keep your notes and resources together in a binder and create a summary of your research. This supplemental data will be important as you pull your business plan together.
- 14. © 2011 Arizona Center for Innovation 14 Create a simple problem statement: • What is the problem? • How many people are affected? • What are the trends – is this a growing problem, industry? • Personalize. • Keep it simple! State the Problem
- 15. © 2011 Arizona Center for Innovation 15 • Consider http://angelsoft.net, (210 characters) Pitch on AngelSoft Assignment: Define the problem in 25 words or less TIP: “If you can't explain it simply, you don't understand it well enough.” – Albert Einstein
- 16. © 2011 Arizona Center for Innovation 16 The Validation Loop Problem SolutionCustomer Continuous validation
- 17. © 2011 Arizona Center for Innovation 17 Solving the Problem • How is the problem being handled today? • How will you address the problem? • Who else is addressing this problem … and if the answer is no one; why not?
- 18. © 2011 Arizona Center for Innovation 18 • Is it practical? • Do you have the skills to develop? • Do you have the resources to bring to market? • What are the risks for your business? • Is the potential reward worth the risk? • Can you compete against alternative solutions? • How your solution is better? Is There a Solution?
- 19. © 2011 Arizona Center for Innovation 19 • Sizeable, reachable, niche market? • Does that market have wants/needs your solution solves? • What benefits does your solution offer? • Options for expansion, diversification, integration? Growth? • What is your value proposition? Value = Benefits – Price Is There a Business Opportunity?
- 20. © 2011 Arizona Center for Innovation 20 Is the Business Model Sustainable? Will your solution make money? • Profit = Revenue – Expenses • Profit margin should be durable regardless of changing technology, customer preferences, personnel or company change, partner or distributor changes, etc.
- 21. © 2011 Arizona Center for Innovation 21 What About the Competition? • How do they address this problem? • Will your solution displace theirs? • How will they respond? • What are their strengths and weaknesses? TIP: Understanding your competitors may help you better understand the market, identify trends and changes, spark new ideas, and better define your OWN company strengths. These competitors may become a benchmark for your growth, and how you choose to position your company in the market. Keep these notes in your research binder, and this should be an ongoing review … even after your company dominates the market!
- 22. © 2011 Arizona Center for Innovation 22 • Primary and secondary research • SWOT analysis • Keep notes • Do: use reliable sources and stick to facts • Don’t: take only one data point or use opinion Validate…again TIP: Engage with your customers PERSONALLY and get permission to use their testimonials!
- 23. © 2011 Arizona Center for Innovation 23 Differentiation is Important • Have a unique selling proposition • Have a competitive advantage • Do something that no other business does, and in a way that no other business can easily duplicate
- 24. © 2011 Arizona Center for Innovation 24 Restate the problem • Describe how YOU solve the problem • Describe how you solve the problem BETTER • Keep it simple • Keep it personal Present your Solution Tip: as you create your problem and solution statement, think about how this will fit into your company pitch. You’ll want to describe the problem and who is affected, the size of the opportunity, and how you solve it (better).
- 25. © 2011 Arizona Center for Innovation 25 • Less is more, but harder! • You need more to have less • Consider http://angelsoft.net, 450 characters State the Problem/Solution in 50 Words Assignment: Restate the problem and define your solution. Can you do both in under 50 words?
- 26. © 2011 Arizona Center for Innovation 26 Customer Problem SolutionCustomer
- 27. © 2011 Arizona Center for Innovation 27 • Who has this problem? • What are they doing now? • Is the problem considered urgent? • Why would someone switch from the current solution to your solution? Identify your Potential Customer
- 28. © 2011 Arizona Center for Innovation 28 • Who uses the solution? • Who chooses the solution? • Who pays for the solution? • Who benefits from the solution? • They may be different, but all have a stake. Identify your Target Customer
- 29. © 2011 Arizona Center for Innovation 29 • Who uses the solution? Lab technician • Who chooses the solution? Doctor • Who pays for the solution? Insurer (sometimes patient) • Who benefits from the solution? All of the above Example: Medical Diagnostic Tests
- 30. © 2011 Arizona Center for Innovation 30 • Who uses the solution? The home owner • Who chooses the solution? Installer • Who pays for the solution? Home builder • Who benefits from the solution? All of the above Example: Home Automation Hardware
- 31. © 2011 Arizona Center for Innovation 31 Identify your Customer For your business … • Who uses the solution? • Who chooses the solution? • Who pays for the solution? • Who benefits from the solution? • Understanding the WHO helps you identify your first customers and how they may actually buy your product. You’ll also want to go to each partner to identify different issues and/or needs.
- 32. © 2011 Arizona Center for Innovation 32 Does your solution: • Solve the problem? • Improve quality of life through time saving or other perceived issues? • Provide financial benefits: is it affordable, can your customer afford to switch, are there hidden or long- term ownership costs? The Buying Decision
- 33. © 2011 Arizona Center for Innovation 33 Does your solution: • Offer convenience: easy to adopt, easy to use? • Provide emotional benefits: fill a need, affect self- image, social significance? Not Selling…it’s Buying! TIP: People do not like to be sold anything. They like to buy. The difference between the two is CHOICE. Remember that this is a WIN-WIN situation; you are helping them solve their problem in a new/better way. Understanding WHO the decision maker is, and HOW they are motivated to buy, can make all the difference.
- 34. © 2011 Arizona Center for Innovation 34 DO “Our first 5 target customers are: Best Buy, Radio Shack, Ace Hardware, Home Depot and Lowes. We have a letter of intent from Mr X at the new Ace Hardware on Houghton Road to buy 500 of our units by next month.” DON’T “We plan to capture just 1% of a $100 billion market.” Do’s/Don’ts
- 35. © 2011 Arizona Center for Innovation 35 Invest in building close customer relationships from the start. • Bringing customers in early (where appropriate) leads to great feedback, testimonials, partnerships, promotions, and possibly sales! And of course, credibility. • The further along you are in this process, the stronger your traction, the more value you build, and the more likely you are to attract partners and investors. Market vs. Customer
- 36. © 2011 Arizona Center for Innovation 36 Focus on your First Customers Assignment: Identify your top 10 customers. When ready, invite each to participate in a brainstorm session to learn more about their needs and solicit feedback on your ideas.
- 37. © 2011 Arizona Center for Innovation 37 Again … validate Problem SolutionCustomer
- 38. © 2011 Arizona Center for Innovation 38 Recap • Define and validate the problem you are trying to solve and understand whether or not it presents an opportunity • Refine and describe your solution and value proposition • Understand and identify your first customers
- 39. © 2011 Arizona Center for Innovation 39 1. What factors create the opportunity potential of your problem? 2. How important is the problem to you and why? 3. Who are the users, customers, and payers for your solution? 4. What is the value proposition of your solution? 5. How does your solution create a viable business? 6. What are the buying influences of your customers? 7. Why would customers want your solution? 8. Articulate the problem and your solution. For Discussion
- 40. © 2011 Arizona Center for Innovation 40 Take the next steps: • Talk with your incubator staff and mentors to get inspired and ask for help. • Work on the assignment. • Think about your pitch, this assignment is the start of something big! Congratulations! Moving Forward Assignment: Simply state the problem and define your solution (and how it’s better) in 50 words or less. Practice makes perfect; get others to repeat. Identify and talk with your top 10 customers.
Notas del editor
- Discuss the term “problem” and how it applies to your product/service/solution. Ask yourself the true/false questions as they relate to your business. The goal is not to challenge your solution, but to get you thinking about what you may be trying to accomplish. The trick for most technologist, is that we LOVE technology. But the application of it is more important to our customers. We are never selling a product or service, but instead a solution or experience that somehow makes their life better. In most cases if a problem requires a solution and you can find a way to do that better, and people will benefit, it can become a great opportunity.
- Write out what you think the problem is. Cross reference that with multiple perspectives and find common ground. You need to start somewhere if you want to gain traction for your business. Although you may need to start with an assumption in the beginning, try to eliminate those if you can. Focus on facts and experience.
- If you can connect with the problem – either through personal experience or through people you know, it gives you immediate knowledge that your customers, partners, investors, others, will identify with. Think of this as a story; you will always need to share this story with new partners and you need a compelling way to share the data. If you can personalize this in a way THEY can understand and identify with, you’re on the right track.
- This is an interactive discussion during the workshop. As you look at these slides through the workbook or at home, think about simple, common problems that exist today. Kids carrying a heavy load of books to school every day. Battery life of a phone. Something you encountered in the last hour. Can you describe the problem in 25 words or less? Can you think of a simple solution to the problem? Now translate this to your business. Think of the problem you are solving and try to put that in the same kind of simple language. It’s not so easy!
- These are some great questions to start with. Pull out a blank sheet of paper and add to this – are there specific industry issues or technology challenges specific to the problem you are trying to address? The more you ask, the more you’ll learn. This will help as you describe the problem and your solution to potential partners, investors, and your customers.
- It’s easy to find secondary research, although don’t just jump on the first article your search engine finds. Pull relevant articles, publications, review blogs and social communication, watch your competitors and/or complementary products/solutions, and visit your library. You may be surprised at how friendly and supportive you’ll find the library staff! Here’s another tip. Although more companies are now investing in social media and online marketing, most companies still tend to participate in event marketing – tradeshows, conferences, etc. If you can find one in your industry, the value of face-face conversation still outweighs everything else. You can accomplish more in a 24-hour period than you might elsewhere, it’s a great investment for researching your industry. Just don’t forget to bring business cards and be prepared to let everyone know how they can help your business!
- Primary research often presents the biggest challenge for new entrepreneurs and inventors. You may find it scary to approach your prospective customers, but remember that what you offer could really make a difference for them! It’s not a sales strategy, this is a win-win opportunity for you to learn more about what they need, and for them to get involved in your company earlier, and in some cases even have the opportunity to influence product features, development, etc. Many customers may be willing to invest in your company (through first orders for example), to beta test your products, and to give you testimonials. Getting their positive feedback – and permission to use that – is the best PR you can get for your business. Period. People tend to believe other people who tell them how great you are, more than when you tell them how great you are!
- Take a few minutes to conduct an assessment of your venture. Schedule a time to meet with your incubator team or your mentor for review. By understanding your competitors’ strengths and weaknesses; you may uncover gaps in the market and spark new ideas!
- Angelsoft is an online service provided to many local angel investing groups. It creates a simple executive summary of your business based on a series of questions, and the Arizona Center for Innovation uses Angelsoft as a tool during the admissions process. If you haven’t yet tried the service, take a look.
- Problem … solution … customer … requires continuous validation. Once you have a strong sense of the problem, shift gears to think about the solution, and whether or not that presents an opportunity for you.
- It’s always a red flag to say there is no competition. There are alternatives to the problem – even if it means taking no action. So think about how the problem is handled currently and how you may address it differently. If no one is addressing the problem, why not? Are there barriers (like regulation, technology, customer adoption) that may prevent your solution from reaching the intended audience? If so, understanding those complications now may help you formulate a stronger go-to-market strategy down the road.
- This is a starter list of questions only. Pull out a sheet of paper and think about other questions as they apply to your solution and industry. Are there specific regulations or certifications? What other challenges will you face in creating the solution?
- If your goal is to create a successful company, you need to find a way to translate your great solution into a viable opportunity. Think about these questions and try to identify the value proposition your solution provides to your customer. Take a minute and think about what you are actually selling – don’t focus on the technology. Instead think about what your customer gets: experience, relief, an alternative solution. What are the benefits to them? How much will it cost to buy or adopt or transition to, and what are the risks? Combining these together will help you identify your value proposition.
- In order to answer this question you also need to have an idea of how to price your product or service. There are a number of ways to approach this, which will be covered in more detail in the marketing workshop. But here are a few questions to consider: how much does it costs to produce and deliver your solution? What do your competitors charge? What are your customers willing to pay? What is the value perception of your solution? To build a successful business, you need to deliver value, cover costs, and generate profit.
- Here’s another tip: identify your top 2-3 competitors and gather as much information about them as you can. Create a grid and compare them to your solution: price, location, target audience, solution features, partnerships, etc. Use this to identify gaps in service or feature that you might address.
- Use the same validation tips as earlier – focus on conducting primary and secondary research; do a SWOT analysis, use reliable sources and keep notes. You’re looking for independent validation of your solution. And remember, if you talk with potential customers who are interested in your product/solution, get permission to share their feedback. Those letters of validation and support go a long way towards building value in your company, and can help your efforts to raise funds, build partnerships, etc.
- Find a way to differentiate your solution and start with features and functionality. But it may not be enough for your solution to be cheaper, faster, smaller. You may need to look for something truly unique that sets your product apart, and that excites your customers so much they’ll want to tell everyone.
- Participants in the workshop may be invited to share their problem/solution statement for discussion and feedback. If you haven’t done so, meet with your mentor or advisor team and work to distill the problem/solution down to under 100 words. And PRACTICE! This is the beginning of your business “story” and your pitch. It will help lay the foundation for describing your business and what you do. Practice on your family, your neighbors, your dog, the waiter, everyone you come in contact with. Don’t disclose anything confidential, but the more you practice the more clarity you’ll find. Listen to your audience (except maybe the dog) and use their questions to help refine your story. And you never know, your neighbor may represent a potential partner!
- Again … continuous validation! Now let’s think about the customer perspective.
- Describe your customer. Start to think about what your ideal customer profile might be; can you identify companies or people who fit this profile? If you were asked to list your top 5 customers, who would they be and why?
- Put on your detective hat and follow the trail. The person using your product/solution may not be the one who made the decision to buy, and so on. You may be selling through a channel with multiple partners. The following slides show a few examples.
- This is only a start. Answering these questions can help you understand how your product/solution helps your customers, so you can put those benefits in terms your prospective customers will identify with.
- Which of these statements demonstrates credibility and market traction?
- Don’t be nervous about talking with your prospective customers. Remember, you have a great solution for their problem – this is a win-win solution and they will be excited to talk with you. Engage them in conversation but most importantly, LISTEN to what they tell you about your solution. And if you don’t know where to begin or how to put together a customer workshop, ask your mentor or any of the staff at AzCI for help!
- You may begin to see patterns emerge. In the early stages of your venture (as it should be always), validation is a continuous process. Once you understand the problem and fine-tune you solution, you may need to adjust again once you get customer feedback and so on.
- Here are some great follow-up questions that get to the heart of the content of this workshop. If you haven’t, schedule a time to meet with your advisor team and use these questions to help you brainstorm!
- Everything you learn should be foundational and applicable. This is the start of your elevator pitch – congratulations!