ENTP 3001 Final
What are ways that competitors might be discovered.
Google key words, trade organizations and publications, surveying the target market.
Guy Kawasaki's 10/20/30 Rule
10 Slides 20 Minutes 30 Point Font
What is our competition
A "sea" of Business Model Canvasses as they relate to our own.
What is minute one.
The part of a pitch that matters a ton.
Elements of a Great Pitch Deck
"Branded" look Avoid colors that are hard to see. When in doubt, white on dark One slide per minute, maybe an extra during a transition Infographics, not copy! If you must have copy, 30pt minimum Anticipate questions and answer with slides from a deep appendix
What are brainstorming techniques designed to help entrepreneurs with solution ideation.
"Infinite money solutions", "no money solutions", "impossible solutions" and "built by genius" solutions.
What are ways of determining a venture's Total Addressable Market (TAM)
"Top Down" and "Bottom Up"
No Competition
"What is bad is to say that your business has '____ ____'. It shows a lack of understanding about your market and/or no market may actually exist for the product."
Success Metric
A ____ ____ is a number that determines whether an experiment is a success or failure
What is Guy Kawasaki's 10 20 30 rule.
10 slides, 20 Minutes, 30 pt (minimum) font
5 Creativity Techniques
1. Explicitly state the goal -->Aligns everyone's objectives, provides clarity when picking best ideas. 2. Start brainstorming individually -->Gives everyone time to think on their own without distraction and without someone dominating the conversation 3. Only share their best ideas -->Provides safety so everyone can focus on "quantity over quality", knowing they don't have to share their "low quality" ideas. 4. Combining group and individual work -->Ensures everyone has an equal voice (introverts and extroverts) in contributing ideas 5. Restrictions provide inspiration -->: Great ideas are inspired by limitations. Limiting your choices can make it easier to come up with ideas because there's less opportunity to become overwhelmed.
Pitch Deck
A brief presentation created in PowerPoint or another type of presentation software used during in person or online meetings to provide potential investors, customers, partners, potential key employees or co-founders with a brief overview of your business model.
What is a startup accelerator.
A place to get funding, mentoring and connections.
The "Elevator" Pitch
A short (20-30 second), conversational summary used to quickly and simply define your organizations differentiated value proposition. It is usually a segue that takes place during a casual conversation and often begins with a question such as, "So, what do you do for a living?" and ends with a follow up question that leads to more conversation at a future date. Requires these components: The Company The People The Idea The Customer Segment The (differentiated) need The Ask
What did the tennis ball exercise teach us about entrepreneurship.
Building a great venture requires determined people and a process that requires creative thinking, testing and pivoting.
Debrief on child's toothbrush exercise
After 3 minutes, ask teams whether their child's toothbrush was larger or smaller than an adult's. Most teams will end up making a smaller toothbrush. This is a very natural and logical assumption based on the hand size data we presented them. It is the assumption very experienced product designers at toothbrush manufacturers made, so your students are in good company! Your students likely designed a child's toothbrush that would fail in the market based on hidden assumptions. IDEO partner Tom Kelley drives home the importance of acknowledging and testing hidden assumptions.
Are there any products that would conflict with the traditional pricing curve, selling more units at a higher price than a lower one?
All of them. Food, gasoline, legal advice, wine, clothes, electronics, hair salon, mechanic, etc. If something is too cheap, we question its quality.
What is a Concierge MVP?
An experience where the value proposition is delivered almost, if not entirely, manually by one of the company founders. Automating a process is expensive and time-consuming, especially if you haven't tested all of the assumptions embedded in a process. After pre-selling a product, you are much better off manually providing the Value Proposition offered to your customers, to validate the most efficient way to deliver that value. Once you understand how to best deliver value to your customers, then is the ideal time to start building fully automated and finalized products.
What is a concierge MVP.
An experience where the value proposition is delivered almost, if not entirely, manually by one on the company's founders.
What is important when pitching your business.
Being confident, conversational and using "powerful" words.
What are characteristics of having a differentiated value proposition.
Being faster, local, responsive, or otherwise unique.
Throwing & Catching Exercise: Key Takeaways
Beware of "titles" No planning, just get started! Experiment and iterate Learn from failure Always be aware of the "hidden assumptions" Customers demand continuous improvement Watch and learn from your competition Robust processes are usually faster and incur less defects (dropped balls) Get advice from experts There is always a way!
What is having a great team.
By far, the most important part of building any great venture.
What does a good landing page do.
Capture attention, describe product/service benefits and identify problems
What should a good landing page do?
Capture the attention of your target market Identify the problems, symptoms, issues, needs and wants of your target market Provide a description of the product or service Describe the benefit and the value that the customer will derive Be credible Have a specific "call to action"
Takeaways from Price as an Indicator of Quality
Charging lower price doesn't always increase sales. -->Sometimes it lowers sales Cost to produce/deliver product/service determines minimum price, not optimal price.
Revenue Model Components
Commission (Intermediation) Usage-based Fee Freemium Subscription Fee Donation/Grant Data Reselling Advertising Fee One-time Payment (Asset Sale) Renting Licensing
Indirect Competition
Competition that supplies alternate products and services to yours. (buying new clothes) What are the alternatives including the current solution (which may be doing nothing) and why is this so awful?
Direct Competition
Competition that supplies similar products and services as you (MU Laundry vs. Martinizing) Who else is doing this? How are you solving the problem differently?
Traction and Projections
Current revenue Growth in users Top clients/partnerships/beta testing Well researched and intelligent hypothesis
Competition
Direct ____: Who else is doing this? How are you solving the problem differently? Don't talk poorly of the competition Compare and contrast your solution and why it is better Indirect ____: What are the alternatives including the current solution (which may be doing nothing) and why is this so awful?
Present Like a Boss
Don't be arrogant, but don't be too polite and don't show weaknesses! Use powerful words and avoid weak words -->Do use: Will, shall, currently, have, are -->Don't use: could, might, may, startup, new, students, once we graduate Memorize but sound conversational Have a backup plan (expect the unexpected)
Dress for Success
Dress to look young and innovative [but age appropriate yet comfortable] and if possible, wear something that represents your brand. Don't overdress!
General Skills Learned from ENTP 3001
Empathy Interviewing Identifying assumptions Testing assumptions Iteration Pricing techniques MVPs - (fast, inexpensive testing) Soliciting feedback Presenting
Slide Sequence
Exceptions to the 10 slide rule -->Cover Slide -->Conclusion/Contact Slide -->"Rapid Fire" slides demonstrating the problem -->Demo Slides -->Appendices Slides prepared in anticipation of questions
What is the fastest path to success?
Experimentation! By completing Experiment Design Template: You're leveraging experiments to iterate your way to success You're documenting the experiments, and how you're going to measure success You're determining what steps you're going to take next whether the experiment succeeds, fails, or falls somewhere in-between
What is solution interviewing.
Find a customer experiencing the problem that you have the solution for, conduct a stream of consciousness (SOC) usability test, determine if your potential customer is ready to "progress" towards your problem solution.
What are infographics
Graphical visual representations of information, data or knowledge intended to present complex information quickly and clearly.
"How to Win" Strategy
Here are the steps to succeed in this environment: Understand the Judging Criteria Dress for Success Get Mentally Prepared Present Like A Boss Divide and Conquer "Minute One Matters A Ton" The "Pitch" The "Wrap Up" Q&A The Poster Session
What are the #1 reason that businesses fail?
Hidden Assumptions
Revenue Model/Streams
How are you going to make money? Asset sales?, Usage fees?, Subscription fees?, Renting?, Licensing? Intermediation fee?, Advertising? Focus on the big one Don't forget about performance drivers such as recurring revenues if they exist
Finding Competition
How do you find competitors? Google key words Trade organizations and publications Survey your target market
Solution
How does your product/service improve the world by fixing this problem and how does the world look after your solution is implemented?
Emerging Markets
If your business is in one of these, you: May not have as many direct competitors in which case you need to focus even more on alternative products and services (Indirect Competition). Is there a real need for your product or service? Anticipate and describe what competitors (direct and indirect) might emerge as the market matures and stabilizes. Failure to do this is a big reason why businesses fail. Describe what businesses with similar capabilities might jump into this space as the market emerges. What will be their "barriers to entry"?
Understanding Your Competition: How does your product/service stack up (positioned) relative to the competition?
In order to answer this question, you must know the market, its players, and your differentiation well. Zafar, Naeem (2010-08-13). Market Research on a Shoestring: Get A Reality Check On Your Big Idea For Less Than $100 (Kindle Locations 924-926). Five Mountain Press. Kindle Edition.
"Minute One Matters A Ton"
Introduce yourself and your partners (early) Tell a story (preferably yours) and describe what problem are you solving and what need are you fulfilling and for whom? Establish credibility Next speaker "Hand off"
What Unit Contribution Margin can help us to understand.
Is the "juice" worth the "squeeze"?
Understand the Judging Criteria
Know what you're getting into and how you'll be graded.
Get Mentally Prepared
Live Presentation General Strategy -->Get ____ ____"backstage" and walk out confidently and with a smile on your face! -->Being nervous is ok especially beforehand! Expect it and channel it -->Once you are onstage though, speak slowly, ooze confidence, smile and use your hands in a natural way. -->Look at the audience, not the powerpoint and never turn your back!
Determining Your Riskiest Assumtions
Now that you validated some Early Adopters are seeking a solution to a specific problem, you're ready to start generating, and testing, more business model hypotheses. Solution: The best way to solve the problem your Early Adopters are struggling with. Channels: The best way to deliver your value proposition to a large enough number of Early Adopters for you to reach your business objectives. Customer Relationships: How you'll interact with your customers in terms of introducing them to your product, on-boarding them, and supporting them throughout the use of your product. Revenue: How you will generate money and how much you'll generate solving this problem for your customers. Costs: How much money you'll spend solving this problem for your customers.
Problem Interview vs Solution Interview
The biggest difference between ____ ____ and ____ ____ is the focal point. In problem interviews, the interview centers around the customers' problems. In solution interviews, the interview centers around the entrepreneur's solution. A Concierge MVP allows you to do that and more
The "Wrap Up"
Present the team Present the "ask" -->Ask for less than you need normally but not this time -->Tell what you will do with the money and make it important! Strong reiteration and conclusion Contact information
Professor Min Ding: Price is an Indicator of Quality
Ran tests at Penn. State demonstrating that even starving college students are wary of food that is priced too inexpensively. He tested eggrolls and three kinds of pizza. No matter what the food was, he saw demand increase as he raised the price.
What are various types of revenue models.
Rental, usage-based, data reselling.
Designing Experiments To Test Riskiest Assumptions
STEP BY STEP GUIDE 1 BEFORE YOU START Arrange for a comfortable environment. Definitely not a meeting room. CHECKLIST PRINT OR DRAW THE CANVAS ON A BIG SHEET OF PAPER HAVE PLENTY OF STICKY NOTES AND MARKERS READY ALLOW YOURSELF 45 MINUTES OF UNDISTURBED TIME BRING IN THE OTHER FILLED CANVASES YOU HAVE AS SOURCES OF ASSUMPTIONS 2 FINDING THE RISKIEST ASSUMPTIONS Finding the riskiest assumption is not always easy. Discussing assumptions with your team will help to identify the ones to go after. Do this visually so it's to the point and provides you with the outcome you need! This tool makes it easy for your team to have meaningful discussions on what the riskiest assumption really is, and provides a way to come back to the discussion after validating. Jenga® is a game where players in turn try to remove blocks from a wooden tower. Each block that's pulled out may make the tower collapse, but the blocks on the bottom are critical to keeping the tower upright. Think of your idea as a big tower, where all of the bricks are assumptions. When one of the assumptions on the bottom of the stack is invalidated, and the brick is removed, the entire tower may fall. When you remove one from the top, not much will happen. To make our idea succeed, we need to make sure that the base of the tower is safe. We need to start at the bottom, with what we call the riskiest assumptions. At the moment, All the other assumptions are not as important. After all, if the riskiest assumption is incorrect, it may be totally irrelevant to think about any of the others: maybe your idea needs to change completely in the light of the new knowledge! The goal is to try to make the tower fail fast! So check the bottom-most assumption first, which is the riskiest one. That's what you'll want to know more about. If it is right, you can move to the next riskiest assumption. But if it fails, your Jenga® tower falls, and you'll need to go back to the drawing board to find another approach that works better. 3 IDENTIFY ASSUMPTIONS What are your assumptions? What are the things you're not sure about? With your team, start by just writing all your assumptions on sticky notes, but don't stick them on yet. Refer to the war room and your point of view for inspiration. 4 MAP YOUR ASSUMPTIONS Then, put the assumptions onto the template, each team member placing them in the middle 3 boxes, where they think it's best. Don't discuss yet! 5 ARRANGE THE ASSUMPTIONS Once all of the post-its are on the wall, each team member quickly goes over his or her post-its, and explains why they think they should be in the place they are. Now, with your team, take turns moving sticky notes around. Try to find out which assumption is the riskiest one. Go over each post it, and see if everyone agrees that it is in the right spot. Remember: the assumptions that absolutely must be true for your idea to work go on the bottom of the stack. The ones that are less important or depend on other assumptions go higher up. Compare pairs of post-its to see which one has priority. When sticky notes move back and forth between boxes, put them halfway between. 6 FUNDAMENTAL ASSUMPTIONS Finally, go over each box and see if there are any assumptions in there that really depend on others (move them up) or that are fundamental (move them down). After about 15 minutes, you should have only a few left in the lowest box. Vote with your team as to which one you think is the most fundamental one. 7 DESCRIBE YOUR RISKIEST ASSUMPTION Now that you have identified a riskiest assumption, try to describe what it means with your team. When is the assumption true? Does it depend on something else? How can you make it s.m.a.r.t.? 8 NEXT STEPS CHECKLIST YOU CLEARLY IDENTIFIED ONE RISKIEST ASSUMPTION YOU HAVE DESCRIBED YOUR RISKIEST ASSUMPTION NEXT, DESIGN AN EXPERIMENT USING THE EXPERIMENT CANVAS
"TAM" and "Beachhead" Market
Show that the market is sizable Make certain that you are taken seriously by presenting with valid research and citing your sources
The "Secret Sauce"
Show, don't tell Don't get technical Don't get lost in the features Demo's are great if they actually work! Demonstrate that your product/service solves the problem far better than anything else out there
Creativity is a ____ and can be developed by using techniques
Skill
Student Laundry Business Example
Some previous students looked at starting a student laundry business here on the Marquette campus. After extensive testing, they determined that certain students would be willing to pay $300 per semester to have their laundry done once per week. The service included pick up and delivery service. Unit Cost of Sales would be the direct costs of doing a customer's laundry over the period of an entire semester Direct material such as soap and water Direct labor for pickup, delivery, loading, unloading and folding Overhead such as electricity, water and depreciation of the washers and dryers. Customer Acquisition Costs The Unit Cost of Sales is a little trickier to calculate. Remember that all of this should be on a per unit basis $300 per semester 15 loads. Unit Cost of Sales in Dollars * Soap $7.50 * Water $.60 * Labor $125 * Depreciation $5.26 * Electricity $2.15 * CAC $7.15 TOTAL $147.66 UCM=$300-$147=$152.34
Solution Interviewing Using a Concierge MVP
Step 1: Find a customer experiencing the that you have the solution for. There's no point in asking someone for feedback on a solution when they don't have the problem - their input will only lead to distraction Step 2: Conduct a Stream of Consciousness (SOC) usability test by letting the potential customer interact with the Concierge MVP and observe (taking notes) while they reflect exactly what they are: -->Seeing -->Thinking -->Feeling -->Doing Step 3: Determine if your potential customer is ready to "progress" toward your problem solution. You do this by asking the following question: "Our goal is for people to buy/use the product/service (concierge MVP) that you just experienced. Will you buy/use it"? Follow up (if necessary with) "If not, why not"?
Why there is always a problem slide
Tell a story and draw from personal experience The audience must "feel the pain" Engage the audience if appropriate Keep it visual Communicate the perspective of the end user No one is addressing the problem in an effective manner
The Ten Slides That Anyone Would Care About
The "Problem" to be solved or "Need" fulfilled Your solution Revenue Model (Streams) Underlying technology or "Secret Sauce" TAM Size and the "Beachhead" market Go-To-Market Strategy (Sales/Marketing Plan) Competition Team Traction, Projections and Milestones Summary and The "Ask" or "Call to Action"
What are Key Performance Indicators (KPI's)
The 5-15 most important "metrics that matter" for our business.
Total Addressable Market (TAM) is the same as what group of customers?
The Beachhead Market Customers
Divide and Conquer
The First Minute The Pitch Wrap Up Divide into 3 parts and script it out. -->A 3 minute presentation is equivalent to a typed, double-spaced, 12 point font script document that is a little over a page in length. -->Practice this in front of a mirror for hours on end! ---->>The First Minute ---->>The Pitch ---->>Wrap Up
Collateral Material
The collection of media that conveys key information about your business that you wish to convey to others. This media might include brochures, sell sheets, slide shows or "pitch decks", websites or videos that are consistent with the brand image that the company wishes to convey through the right balance of information, promotional content and entertainment.
What are good elements of an elevator pitch.
The company, the people, the idea, the customer segment, the need and the ask.
Estimating Total Addressable Market (TAM) Market Size
The company: A laundry service for Marquette University students -->Overall market-11,689 students -->The "low hanging fruit" live in dorms Abbottsford 218 students McCormick 726 students Straz 376 students Schroeder 650 students Mashuda 383 students O'Donnell 296 students Carpenter 306 students Cobeen 387 students McCabe 213 students TOTAL 3,555 Based on customer "perceived need" interviews of 67 students representing all 9 dorms -->"Out of state" students may be interested but most "in state" students live close enough to home and visit frequently enough that they would not be interested in the service Based on customer validation interviews of 67 students representing all 9 dorms -->65% of residents in McCormick are from out of state -->Can we assume that other dorm residents are same percentage? A value proposition refinement survey of the remaining 2,310 students living in the dormitories who live out-of-state indicated that 61% would be willing to buy the plan if it were priced right. When presented with pricing information in a focus group, 55% would be willing to pay $300 per semester for the "basic" plan. A "trial" run on 4 randomly selected survey participants indicated a 50% "actual" conversion rate. We can now estimate "basic" plan revenue within our "beachhead" market. -->2,310x.61x.55x.5=388x$300=$116,400/semester
Revenue Model
The mechanism an organization uses to generate revenue. Along with pricing, and other factors, are what make up the "Revenue Streams" section of their Business Model Canvas.
What is a success metric
The number that determines whether an experiment confirms a particular hypothesis.
Q&A
The whole team participates Anticipate questions so that you can answer questions confidently The lead presenter answers or delegates the questions ____ is your chance to shine. You are not being grilled! If no one asks a question, give them an answer! Do not make up information that you don't know or feel comfortable about discussing. -->Simply say, "That is a great question. I'd like to think about that (or research that further) and/or discuss that with you offline".
The "Pitch"
This is where you discuss the solution Show, don't tell. Use mockups or a MVP Don't get technical, don't use acronyms and don't go into process detail. No one cares! Tell how you make money! Emphasize Traction Tell about the market potential
Unit Contribution Margin (Expressed in Dollars)
Unit of Sales in Dollars -Unit Cost of Sales in Dollars Unit Contribution Margin Subtracting Unit Cost of Sales from Unit Sales results in the Unit Contribution Margin or the amount of money that can be used to pay the rent, the entrepreneur and all of the other fixed costs.
What do you do after analyzing your customer interviews and identifying customer jobs, pains and gains including those that are social and emotional?
Use this information to identify the best solution to your customers problems and learn techniques to be more creative.
What is taking little risks.
What being lucky requires.
Summary and The "Ask"
What do you need to be able to realize your business's full potential? What do you need that you don't currently have and why? Consider Pitbull's suggestion (Ask for money, and get advice Ask for advice, get money twice)...yes, this was in class... If you are asking for money, explain in detail how the funds will be used
Go-To-Market Strategy (Marketing Plan)
What is your plan to get, keep and grow customers? How will this evolve over time? What does it cost to acquire a customer? What marketing (distribution) channels will you use?
What the artist Pitbull says about how to get money.
What is, "ask for money, get advice. Ask for advice, get money twice".
Is the "juice" worth the "squeeze"? Conclusions:
What major "fixed" costs would we have with this business? How could we produce a MVP or "prototype" this business? What would the Unit Contribution Margin be under that scenario (higher or lower)? Average Annual 1st Year Cash Flow Projections: $116,400-$57,292=$59,108=$57,292x2=$114,582 Less: Rent, Delivery Vehicle Depreciation and operation cost, Insurance
What is quality.
What pricing implies as evidenced by the Science of Pricing Exercise.
Team
What relevant experience and skill sets does your team bring to the table? Use "powerful" words, not "weak" words. Leverage the experience that you have and make it sound great (while always telling the truth) A picture is (usually) worth 1,000 words
What we learned about designing a tooth brush for kids.
When developing a product or a service for a particular market, we need to do testing even though the solution appears to be obvious.
Theoretical Pricing Curve Exercise: How does price affect # of units a business sells?
When prices are low, a business sells a large number of units. As the price of a product increases, the number of units sold decreases.
What are our riskiest assumptions
When validating a venture, we want to test these first.
How Competition is Represented by the Business Model Canvas (BMC)
Who else is out there? What are they doing? How am I different? Am I faster? Less expensive (rarely good)? Local? More responsive? Providing a need that isn't being addressed by the competition (a key aspect of competitive analysis).
Why is Describing our Business So Important?
You need a clear, concise and compelling message so that you can tell others about your value proposition. New and Potential Customers Vendors New employees Channel Partners Investors
Key Performance Indicators: "Metrics That Matter"
You need to focus on knowing and understanding the 5-15 most important "metrics that matter" for your business. Product Cost Market Size/Market Type Competition and what they charge Customer Acquisition Costs Operating Costs Channel Costs How long it takes to close a sale What is your monthly "burn" rate
The Poster Session
You will be giving your 30 second elevator pitch over and over as people come by to talk with you. Make certain that you have this down!
Infographics
____ (AKA information graphics) are graphical visual representations of information, data or knowledge intended to present complex information quickly and clearly. They can improve cognition by utilizing graphics to enhance the human visual system's ability to see patterns and trends.
Price implies ____, and ____ increases ____
quality, quality, sales. The theoretical pricing curve intuitively makes sense, but is largely a myth in the real world. There are several factors customers take into consideration when assessing the quality of a potential purchase (e.g. design, social proof, brand reputation, etc.). The price of the product is one of those factors. Cheap products appear cheap. Higher price implies higher quality. Higher quality increases sales.