How to make products that don't suck - RISE Austin - Mar 30 2012

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Most start-up companies begin with what they think is a brilliant idea and they immediately jump to building the product, and most of these products suck. Creating innovative products that result in market breakthrough requires a process of multiple iterations of discovery that drive you deeper into understanding the market problems and how to solve them with a differentiated solution. Breakthrough products are based upon solving a significant Market Problem with a Product and Business Model that create a competitive advantage and a Market Strategy that motivates buyers to purchases your product. In this session, learn this iterative discovery process that leads to breakthrough products and how to apply it to your own products.

Transcript

Welcome to RISE WEEK 2012 How to Create Products That Dont Suck A Discovery Process for Creating Breakthrough Products (For Start-ups through Big Enterprises) Hosted by Tom Evans Principal, Lcrum Marketing @compellingmktr High New Product Failure Rate Only one product concept out of seven becomes a new product winner; and 44% of businesses product development projects fail to achieve their profit targets. One out of four development projects succeeds commercially. (75% failure rate) Robert G Cooper Copyright 2012 - LCRUM MARKETING High New Product Failure Rate Only one product concept out of seven becomes a new product winner; and 44% of businesses product development projects fail to achieve their profit targets. One out of four development projects succeeds commercially. (75% failure rate) Robert G Cooper Copyright 2012 - LCRUM MARKETING Why Do So Many Products Suck? 1. Idea to Product Why Do So Many Products Suck? 1. Idea to Product 2. One point of market evidence to idea to product Why Do So Many Products Suck? 1. Idea to Product 2. One point of market evidence to idea to product 3. Market evidence & validation to product Why Do So Many Products Suck? 1. Idea to Product 2. One point of market evidence to idea to product 3. Market evidence & validation to product 4. Market evidence & validation, product validation, no clear market strategy Why Do So Many Products Suck? 1. Idea to Product 2. One point of market evidence to idea to product 3. Market evidence & validation to product 4. Market evidence & validation, product validation, no clear market strategy 5. Market evidence & validation, product validation, no profitable business model Keys to Products That Dont Suck Compelling Market Opportunity Big painful issues That many in your target market Are willing to pay to solve Compelling Solution Differentiated Value Proposition Profitable business model Time to market Compelling Market Strategy Motivates target market To solve problem with your solution Discovery + Validation Model for Discovery Four Key Steps Validate Hypothesis Plan Strategy Build Solution To Market Four Key Pillars Market Problem Product Business Model Market Strategy Validation Valid Hypothesis Valid Market Opportunity Ready to Launch Market Growth Product-to-Market Model Product-to-Market is a trademark of Lcrum Marketing Four Key Pillars Market Problem if youre not solving a problem, there is no need for a product! Product How do you solve the market problem in a valuable and differentiated manner? Business Model How do you deliver the product and profitably capture the value? Market Strategy Who is going to buy it and why? Example Model for Discovery Four Key Steps Validate Hypothesis Plan Strategy Build Solution To Market Four Key Pillars Market Problem Product Business Model Market Strategy Validation Valid Hypothesis Valid Market Opportunity Ready to Launch Market Growth Product-to-Market Model Product-to-Market is a trademark of Lcrum Marketing Market Evidence (of Market Problem) Sources of Market Evidence Customers Non-customers Market trends/shifts Unexpected occurrences New technologies Competitors Personal experience Etc. Market Evidence (of Market Problem) Sources of Market Evidence Customers Non-customers Market trends/shifts Unexpected occurrences New technologies Competitors Personal experience Etc. Start With Hypothesis Buyer/User W In Market Segment X Has problem Y That happens when Z occurs We can solve it by creating/delivering solution A E.g.: Owners of small manufacturing operations that use hot water & steam are unable to manage manufacturing costs due to the volatility of fuel prices. We can solve this by providing a high temperature solar heating system under a lease agreement. Exercise 1 Create a Hypothesis for a New Opportunity Buyer/User Market Segment Market Problem When it happens Screening Alignment with company Strategy Target markets Core competencies Potential Competition Does someone already do this? Are there other ways to address this problem? Validate the Hypothesis (1) Market problem and market segment(s) Speaking to potential customers (buyers & users) Most companies dont and wont do this Significant time investment Requires many conversations (cold calling) Minimum: 20 conversations May take over 100 conversations Iterate until validated or rejected Copyright 2012 - LCRUM MARKETING Exercise 2 How are we going to get someone to talk to us? Henry Fords Quote If I had asked people what they wanted, they would have said faster horses. Copyright 2011 - LCRUM MARKETING What Do They Need (To Do)? People don't want to buy a quarter-inch drill. They want a quarter-inch hole! Theodore Levitt Copyright 2011 - LCRUM MARKETING What We Want to Identify Problems, Goals, Needs What do they want to do that they cant do? What do they want to improve (decrease/increase)? Why is this P/G/N important? When does this happen (usage scenarios) How do you currently do this? What is your current satisfaction? What is the impact? Who are they (Personas)? Copyright 2011 - LCRUM MARKETING Whom to Ask? Strategic/Financial (Executives) Operational (Managers) Task Performers (Front-line) Copyright 2011 - LCRUM MARKETING Discover Personal Needs Copyright 2011 - LCRUM MARKETING Source: http://www.teach-nology.com/tutorials/teaching/whatareneeds.html Exercise 3 Conduct a short interview to validate hypothesis Groups of 3 (potential customer, interviewer, observer) Validate Hypothesis (2) Create product & business model concept Low cost way of presenting product concept Mockup, prototype, wire frame, story board, presentation, product description Validate product & business model concept Present concept and receive feedback Does the problem still resonate? Does the approach solve the problem? What is the Minimum Viable Product (MVP) Iterate until validated or rejected Plan Strategy Define & discover at greater depth Competitive research (strategy, position, strength) Validate the market opportunity Business Case - Can it be profitable? Detailed design of product & business model Market requirements, product requirements, user stories, etc. Pricing model, delivery mechanism, costs to deliver, etc. Iterate until validated or rejected Build Solution Define Minimum Viable Product (MVP) Just enough functionality to solve the most important market problems For small segment of market (early adopters, etc.) Willing to pay for this functionality Fast to market Learning Continue to discover, validate, refine! To Market Sell your first customers Based upon market validation work Targeted Market Development Plan Well defined target market Clear understanding of buyer roles and their challenges/goals/needs Compelling reason to buy from you Value Proposition what we do for you Positioning & Differentiation why buy our solution Continue to discover, validate, refine! Positioning Statement For (target customer) Who (statement of need or opportunity) The (product name) is a (product category) That (statement of key benefit that is compelling reason to buy) Unlike (primary competitive alternative) Our product (statement of primary differentiation) Geoffrey Moore: Crossing the Chasm Exercise 4 Write a positioning statement Model for Discovery Four Key Steps Validate Hypothesis Plan Strategy Build Solution To Market Four Key Pillars Market Problem Product Business Model Market Strategy Validation Valid Hypothesis Valid Market Opportunity Ready to Launch Market Growth Product-to-Market Model Product-to-Market is a trademark of Lcrum Marketing Key Principles Hypothesis Discovery Validate Continuous engagement with target market Validate important decisions Planning is good, but learning is better Fail fast discover fast! Additional References Copyright 2012 - LCRUM MARKETING Thank You! Tom Evans Lcrum Marketing tevans@lucrum-marketing.com +1.512.961.5267 @compellingmktr COMMUNITY SUPPORT Did you enjoy this session? Please support your local entrepreneurs and help us to keep this conference free. RISE Global is a non-profit organization, and your contributions help us continue delivering the value of a high-dollar conference with an unbeatable price tag. Please donate at www.riseglobal.org/donate Be sure to check out our other sessions and special events during RISE Week 2012 at www.riseglobal.org/austin! The mission of RISE is to inspire and empower entrepreneurs at all stages.