ENT 4322- Exam 2

Best tips from book slide

"Plans are of little importance, but planning is essential" - Winston Churchill "If you fail to plan, you are planning to fail"-Benjamin Franklin "A program fails - i.e., does not achieve (or exceed) the targeted results - not because it is conceptually unsound or tries to achieve unattainable goals, but because someone did a miserable job in the area of planning."- Richard Sloma, management expert

Three Pages for "Two Business Ideas"

(1) A lean canvas (2) Running the numbers (3) Supporting Document

table 10.6 5 plans

(1) Business Model Canvas/Lean Canvas (2) Business Brief (3) Feasibility Study (4) Pitch Deck (5) The Business Plan

Aulet's 3H model Hacker, Hustler, Hipster)

(1)Who on your team is your lead "hacker"? (Hacker is the one who will make the product) (2)Who on your team is your lead "hustler" (Hustler is the business person) (3)Who on your team is your lead "hipster"? (Hipster is the one concerned with the customer experience and design). I look at it as product, operations, sales

general pricing strategies

-Competition-led pricing: Copy the prices of other businesses. -A loss leader: Offering a product or service at a below-cost price. -Introductory offer: Encourage people to try your new product by offering it for free. Like Groupon.Essential IMO. -Skimming: For new products or services. -Penetration: Entrant taking established business on price -Psychological pricing: Encourage customers to buy based on their belief that product is cheaper than it really is (i.e. prices ending in 9, one-day only, employee pricing) -Bundled pricing: Packaging a set of goods or services together. -Second degree price discrimination (quantity discounts) -Third degree price discrimination (pricing according to segment)

Equity financing

-the 3 F's (family, friends and fools) -angel investors: fund young startups -venture capitalists (VCs): long term growth potential

3 strategies for idea generation

1) Analytical Strategies: generating ideas about how products can be improved. Mechanical analogies from nature are helpful here 2) Habit-breaking strategies: Think about the opposite of something you believe, in order to explore a new perspective. Take the viewpoint of someone else 3) Relationship-seeking strategies: consciously making links between concepts or ideas that are not normally associated with each other

Harvard Business Review: Value-Based Pricing

1)Focus on a single segment 2) Compare the next best alternative 3) Understand differentiated worth 4) Place a dollar amount on the differentiation

Advantages of bootstrapping

1. Bootstrapping is the best guarantee that you can run your business the way you want 2. Having limited resources means you wont survive unless you only focus on what brings the most value 3. Will spending this money help me acquire or keep a customer? if the answer is no, don't spend it 4. Bootstrapping forces you to relentlessly prioritize things that are actually going to move the needle

4 Types of Intellectual Property

1. Copyright- a form of protection provided to the creators of original works in the areas of literature, music, drama, choreography, art, motion pictures, sound recordings, and architecture. 2. Trademark: any word, name, symbol, or device used in business to identify and promote a product. Its counterpart for service industries is the service mark. 3. Trade secret: confidential information that provides companies with a competitive edge and is not in the public domain, such as formulas, patterns, compilations, programs, devices, methods, techniques, or processes. 4. Patent: a grant of exclusive property rights on inventions through the U.S. and other governments.

Lean Canvas Sequence

1. Customer Segments 2. Problem 3. Unique Value Proposition 4. Solution 5. Channels 6. Revenue Streams 7. Cost Structure 8. Key Metrics 9. Unfair Advantage

7 skills of designers

1. Observation: Curious through different lenses (mechanical) 2. Listening: "the best designers never assume they know what is best for the user" 9IDEO's medical device for nurses) 3. Desire change: the best want to "improve upon" 4. Context and integration: designers design in context, which helps create meaning and understanding. i love the chair/room, room/house, house/neighborhood (wright maps) 5. Solutions-driven: observe and identify first, then solve 6. Consideration: You want a reputation for being "other-centered" (book looks at impact on people, environment, etc) 7. Unbound: "How might we?" IDEO CEO Tim Brown says this is the one key phrase for sparking the design thinking process

Cialdini's 6 principles of influence

1. Reciprocity 2. Commitment and Consistency 3. Social Proof 4. Liking 5. Authority 6. Scarcity

Market sizing

1. TAM (Total Available Market): Total market demand for a product or service 2. SAM (Serviceable Available Market): Portion of the total available market that your product or service intends to target 3. SOM (Share of Market): Portion of serviceable available market that your company is realistically likely to reach

Mapping Business Models

1. The Offering --> (1) Customer Value Proposition 2. Customers --> (2) Customer Segments (3) Channels (4) Customer Relationships 3. Infrastructure --> (5) Key Activities (6) Key Resources (7) Key Partners 4. Financial Viability --> (8) Revenue Streams (9) Cost Structure

10 Revenue Models

1. Unit sales revenue model 2. Advertising revenue model 3. Data revenue model 4. Intermediation revenue model (peer-to-peer): 5. Licensing revenue model: 6. Franchise revenue model 7. Subscription revenue model 8. Professional revenue model 9. Utility and usage revenue model 10. Freemium revenue model

Scientific method

1. ask lots of questions 2. carrying out background research 3. developing hypothesis 4. testing the hypothesis by running experiments 5. analyzing the data 6. assessing results Testing and Falsifiability

figure 11.1 Top 5 reasons startups fail

1. no market need 2. ran out of cash 3. not the right team 4. get outcompeted 5. pricing/cost issues

Advantages of networks

1. private information 2. access to diverse skillsets 3. access to power (people who can make decisions and control resources)

figure 9.5 sample income statement all components

1. revenue 2. gross profit 3. operating profit 4. net income

3 ways to grow revenue

1. sample income 2. basic break even calculation 3. calculate profit or loss below or above break even level

Questions for a Van Westendoro Pricing study

1. the price at which the product is so cheap that the respondent would question its quality 2. the price at which the product is inexpensive, but not so inexpensive that the respondent would question its quality 3. the price at which the product is expensive, but not so expensive that the respondent would consider it 4. the price at which the product is so expensive that the respondent would not consider it

Doug Hall's Work

Analyzed 4,000 new concept products and services and developed Three Laws of Marketing Physics to predict product success: 1. Overt benefit: I understand what the obvious benefit of this product is for the customer 2. Real Reason to Believe: Its clear why this product can deliver on what it promises to do 3. Dramatic Difference: The overt benefit and reason to believe represent something new or novel to the world When all three are strong, "Sales and Profits Explode"

key differences between angel investors and venture capitalists

Angel Investor: An individual who uses his or her own money to provide funds to a young start up that is run by neither friends nor family. Venture Capitalist: Professional investor who generally invests in early-stage companies because of perceived long-term growth potential. Usually formed as limited partnerships (LLP's - limited liability partnerships). Angels want their money back sooner, in 3-5 years, not 8-10 years like and R&D intensive startup that a venture capital group might fund.

Questioning for price elasticity (Shlomo Maital)

Ask a client two questions: (a)What do you currently pay for my product? Call this price P1. (b)At what price would yo stop buying my product altogether? Call this price P2. Price sensitivity is calculated as:P1/(P2 - P1) Suppose P1=$10 and P2=$10. $10/($10-10) = infinity very price sensitive Suppose P1=$10 and P2=$15; $10/($15-$10) = 2 less price sensitive Suppose P1=$10 and P2=$30; $10/($30-$10) = .5 not very price sensitive

figure 4.4 good/bad question reminders

Bad Question Reminders: 1. Too soon 2. Leading 3. Dead End 4. Poor Listener 5. Sales Pitch 6. Insulting Good Question Reminders: 1. Ask Permission 2. Customer Pain 3. Existing Alternatives 4. Prioritize Pain 5. Dig Deep 6. Get a Story

basics of valuation

Before entrepreneurs seek equity investment, they must know the value of their company. Fund raising: Investors will expect to see an approximate valuation of your business.

breakeven calculation

Breakeven units = Fixed costs / (sales price per unit - variable cost per unit).

Naming advice/logos

Choose a name: A successful brand all starts with a name. -Experts believe that a strong brand can be created by just using one word: a concept first introduced by marketing professional and author, Al Ries, who believed it made the brand easier for consumers to remember. Design a logo: Your logo is the gateway to you. a.When designing a logo, make sure it shows up well in different types of media, its design and message are clear, and it is instantly recognizable. b.Put your logo everywhere you can: on your company website, social media, packaging, email signature, and all written communication.

Self efficacy

Confidence in one's ability (to complete a task or achieve a goal)

Difference between crowdfunding and crowdsourcing

Crowdfunding: Raises cash for a new venture from a large online audience. Crowdsourcing: Uses inexpensive labor from enthusiastic like-minded people (e.g. Wikipedia) Some include Waze, Lego and designs, Airbnb)

Preparing for an Interview

David Hoffman: write down what YOU think, then set it aside Who you really want to learn from is the key to deciding whom to interview. - ask one broad question, listen, then probe - peeling the onion, i.e ask "why?" - parroting: repeating back what the person has said. You might have misunderstood it and/or they may revise upon hearing what they said

What are the 3 limitations of each vehicle?

Either it (1) has low message recall , like radio ads (2) limited ability to target specific groups, like some local cable station TV commercials, (3) cost. Regardless of which vehicle you choose, try to remember AIDA: Attention, Interest, Desire, Action

drill from p. 308

Entrepreneur: "We are asking for $150,000 for 10% of the company" Shark: "Your pre-money valuation is too high at $1.35 million. I'll give you$150,000 for 30% of the company." The entrepreneur is asking for $150,000 for 10% of the company, which meansThat post-money valuation is $1.5 million. ($150,000 /.10 = $1.5 million). The pre-money valuation is simply the post-money valuation less the investment.In this case, $1.5 million ($1.5 mm-$150,000 = $1.35 mm). The shark thinks that's too high and offers $150,000 for 30% of company,Which is a pre-money valuation of $150,000/.30 = $500,000 - $150,00 =$350,000.

Customer Journey Mapping Process

Focuses on the buyer's experience Benefits of customer journey mapping: - clear picture of customer interaction - clarifies what customers think - confirms the journey of the customer The risk of not doing customer journey mapping: Unsatisfied customers!

Crossing the Chasm

For many businesses, the chasm is YOU and Scalability: Can the business grow larger without you working harder?

Content Marketing

Goal is to reach potential customers through use of content. Content published on website and then promoted through social media, email marketing, SEO or even PPC campaigns.

indexing

Google describes its index like the back of a really big book. Crawling alone isn't enough to build a search engine, because the information has to be organized, sorted, and stored so that it can be processed by the search engine algorithms before it is made available to the end-user (i.e. the searcher). This process is called indexing

interviewing (hoffman, 5 whys)

Important part of the inspiration stage to understand user needs - feedback interviews: post-purchase - need finding interviews: Earlier pre-prototype

Building networks

Incubator: Helps early-stage entrepreneurs to refine an idea, usually through access to seasoned entrepreneurs (hence "incubation") Accelerator: Provides tailored support for existing startups they are already off the ground, hence "accelerate"). Networking events: -Relationships can be forged on mutual personal interests. -The skill of networking can be learned. -Good networkers will listen and show interest

funding rounds

Indico. Intelligent process automation solutions for unstructured content. Trust & Will. Modernizing the trust and estate planning industry with an easy, fast, and secure way to set up your estate plan online. Self Financial. Helps customers build credit and save money. DataRobot. Automated machine learning to unleash the AI-driven enterprise. [Valuations based on "term sheets," comps, etc.]

IPO

Initial Public Offering, the firm "goes public" by offering shares for purchase, usually through the help of one or more investment banks that help them through their institutional relationships (subscriptions).

IDEO's 3 phases

Inspiration: uncover a need Ideation: Potential solutions to meet need Implementation: Prototyping and testing solutions

cost led pricing

Involves calculating all the costs involved in manufacturing or delivering the product or service and adding expected profit margin most common in my experience

value based pricing

Involves pricing your product based on how it benefits the customer. It is customer-focused pricing based upon customer's perceived value. All pricing literature argues for this approach

Five Whys

Iterative Interrogative technique used to understand an underlying problem (from Toyoda) Ex: The vehicle will not start 1. why? - the battery is dead. (first why) 2. Why? - the alternator is not functioning. (second why) 3. Why? - The alternator belt has broken. (third why) 4. Why? - the alternator belt was well beyond its useful service life and not replaced (fourth why) 5. Why? - the vehicle was not maintained according to the recommended service schedule (fifth why, a root cause)

Email Marketing

Older now (because of social media) but still one of the most effective. Its not about hundreds of spam messages and hi-jacking people's in-box! You use digital marketing to add leads to your email list (people ask to be added-that's a "call to action" feature on your website") and then through email marketing create sales funnels to turn leads into customers. Email marketing is probably the best device for enabling "warm" instead of "cold" calls

Four types of crowdfunding

Patronage Model- funding given without the expectation of a return or investment (patreon gives patrons the option to fund illustrators, authors, musicians, etc.) Lending Model- funding given by backers in the form of a loan (funds are looked at as a long to be repaid. backers may waive off loans also in some instances. lending club (debt crowdfunding)) Reward-Based Model- gifts or experiences given to backers as thanks for their funding support (kickstarter, indiegogo, pre-orders, recognition on website) Investor Model- equity stake in the business given to backers for their support (gives backers an equity stake in the business. backers can buy shares in the company or get a share of future profits. AngelList (equity crowdfunding))

Stanford Design School Five Phases Of Design Thinking

Phase 1: Empathy is getting out and talking to your customers directly Phase 2: Define is defining a problem statement from that empathy work Phase 3: Ideate is brainstorming lots of ideas that could help solve the problem you identified Phase 4: Prototype is building a crude version of the solution that you want to test with users Phase 5: Test is getting out and testing with users

table 4.2 design thinking as a social technology

Problem Design Thinking Improved Outcome

4 quadrant storyboard framework

Problem: students not engaged Organize: students organize their businesses Solution: Create teams and fund them with $3,000 Outcome: students pay back money to college and donate surplus to charity

4 P's

Product, Price, Promotion, and Place. 1.The product is tangible: The product describes anything tangible or intangible (such as a service) offered by the company. 2.The price is what the customer is expected to pay: The price covers the amount that the customer is expected to pay for the product, its perceived value, and the degree to which the price can be raised or lowered depending on market demand and how competitors price rival products. 3.The third element of the marketing mix is promotion: All the ways in which companies tell their customers about their offering. 4.Place is where the product is distributed to your target market: Trade fairs, retail stores, catalogs, mail order, online, and so forth.

Mobile Marketing

Reaching customers in the different mobile app stores like Google Play, Apple App Store, Amazon Marketplace, etc. They have thousands of apps and millions of users per day. "Download our app!"

Empathy Map

Say- What sort of things did people say? Think- What might the person be thinking? Do- What were the persons actions and behavior? Feel- What were the person's emotions?

Pay-per-click Advertising

Set up PPC campaigns on Google, Bing, LinkedIn, Twitter, Pinterest, Facebook. Can segment based on demographics (age, gender, interests, location). Most popular PPC platforms are Google Ads and Facebook.

SMILE/SCRATCH

Simple Meaningful Imagery Legs Emotional SCRATCH OFF LIST IF: Spelling Copycat Random Annoying Tame Curse of knowledge Hard to pronounce

S.A.V.E

Solution Access Education Value

Sample Digital Marketing Strategy

Step 1: Website. Create a website that is fast and mobile-friendly Step 2: Perform SEO Audit and identify which areas need to be optimized for SEO. Step 3: Content Marketing: A) What kind of content to create for the website? (text and videos) B) When to publish it (publishing calendar) Note: Really worth thinking about. Regular? Occasional? C) How to promote it (social media channels, email, and PPC campaigns) Step 4: Social Media Marketing: Identify which social media channels are suitable for marketing your business (based on customer/compet profiling!) and create a schedule for publishing content on those networks. Step 5: Email Marketing: Start building an email list using several CTA ("call to action") areas on your website and social media channels. Step 6: Pay-Per-Click Advertising: In parallel to the above activities set up a Google Ads campaign to target people searching for product-related keywords on Google and "REMARKETING" campaigns on Facebook to go after users that visited your website but did not convert (buy). Step 7: Video Marketing: (based on step 3) Publish videos on a dedicated YouTube channel, Facebook, Instagram, TicTok or any other platforms you are targeting. Step 8: Mobile Marketing: Consider creating a mobile app that can be downloaded from the App stores. Step 9: Measure and analyze results using Google analytics (installed and configured correctly ). Learn and pivot.

4 emotional vampires to avoid

The controller the drama queen (or king) the constant talker negative nancy

ranking

To appear in the top 5 positions of the SERP (search engine results pages), your website has to optimize for search engines using a process called Search Engine Optimization or SEO. The search engine matches the query words to the index pages.

Advertising: measuring results

Traceable (direct mail, mail order, salespeople, website promo, radio) Non-traceable (mass media, some billboards, etc) Traceable/Immediate: try it and record results (easiest) Traceable/Lagged: Try it and net out effect of prior advertising (2nd easiest) Non-traceable/Immediate: Estimate what response (sales) would have been without ad and compare with what happened with ad (3rd easiest) Non-traceable/Lagged: Estimate what response (sales) would have been without ad after netting out effects of prior advertising and compare with what happened with ad (most difficult)

Chapter advice

Try to do things like this: -Use a product and offer concise, vivid, and helpful feedback -Introduce two people with a well-written email, citing mutual interest -Read a summary and offer crisp and concrete feedback Less effective because it appears self-serving(why? Its too easy): -Share a comment on something on Facebook, Twitter, LinkedIn, etc.

Search engine optimization

Used to help a website rank higher on search results and get organic (i.e. not paid traffic) online traffic.

Website Marketing (of the 10 mistakes, 5 highlighted in class)

Website is the focal point of all digital marketing campaigns. You should present your brand and product/service in the best possible way. Your website should be: (1)Fast (2)Mobile Friendly (3)Easy to navigate

Advertising vehicles

Website, social media, local/regional newspapers and bulletins, radio ads, local cable television, handbills (my business broker friend), magazines, trade publications, direct mail, point-of-purchase displays in stores, bill-boards and signs, etc.

Benefits of Segmentation

Whole Product Solution: Having a clear idea of who wants to buy your product and what they need it for will help you differentiate your company as the best solution that fits their needs (lower full price) Focusing your marketing message: In conjunction with above, customer segmenting drills help you develop more focused marketing messages customized to those segments (higher quality inbound interest too) Increased sales productivity: Allows sales organization to pursue higher percentage opportunities Higher quality revenues: Better customer fit means less churning, less bad press/reviews

Affiliate Marketing

You promote other people's products and get a commission when you sell or introduce a lead (e.g. insurance companies getting paid a commission for putting clients in other companies' mutual funds). That's a conflict of interest, by the way!

End User Profiles

a "profile" of the person most likely to use your product or service - demographics - psychographics (aspirations, who they admire, what they believe) - proxy product (what else buyer is likely to buy ex: Rolex, Louis Vuitton, Mercedes) - watering holes (bars, fitness classes, conferences, social media, soccer fields, etc) word of mouth - day in the life (walk in their shoes for a day, ex: Toyrs R Us story) - biggest fears and motivators (typically via interview)

convertible debt

a form of short-term debt that converts into equity, typically in conjunction with a future financing round; in effect, the investor would be loaning money to a startup and instead of a return in the form of principal plus interest, the investor would receive equity in the company.

Giff Constable's Truth Curve (all notes on advertising, low vs high believability experiment)

believability of information vs level of effort Types of Experiment: Interviewing Paper Testing Advertising Button to Nowhere Landing Page Task Completion Prototype Pre-selliing Concierge Wizard of Oz Live Product and Business

equity vs debt financing

debt financing: borrowing money you promise to pay back with interest equity financing: i'll give you part of the business debt financing is cheaper

Empathy

defined as "the feeling that you understand and share another person's experiences and emotions; and the ability to share someone else's feelings

crawling

find information that is publicly available on the internet (also known as search engine spiders). They visit each website and try to find out how many pages they have (text, images, videos).

Customer Journey Mapping Process ctd.

identify three or four aspects or problems of the customer journey think about how you can resolve these problems

Intellectual Property

is intangible personal property created by human intelligence, such as ideas, inventions, slogans, logos, and processes.

MVP's

just enough features to provide feedback/proof of concept "working prototype"

Idea Classification Matrix

key question for inventor: can you monetize or "commercialize" it? The myth of the isolated inventor caveat (irrelevant)

social capital

personal brand/reputation and network of relationships

Human capital

personal talent, intellect, charm/charisma, but mostly character

Customer Personas

this describes a representative (but fictional) individual best done through real interviews with perspective customers Key points for building a persona: demographics, goals, challenges, values, fears, hobbies, pain points, etc

Advertising

this involves spreading the word about your business using brochures or social media directed toward target market and assessing the level of response

Beachhead Markets

this is where once you gain a dominant market share, you will have the strength to attack adjacent markets with different offerings, building a larger company with each new following