REALITY MARKETING FOR THE STARTUP Stanford Technology Venture - PowerPoint PPT Presentation

REALITY MARKETING FOR THE STARTUP Stanford Technology Venture Program | MS&E 273 Technology Venture Formation Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Agenda  Where Startups Go Wrong  What are the 5 things that Really Matter Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

The Balance  You don’t yet know what you don’t know  The clock is ticking… Time-to-market Completeness Risks Risks • Foregone conclusions • Analysis paralysis • Kool-aid reality • Petri-dish reality The Right Balance Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

There are Things That Really Matter Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Market Validation – the 5 filters Unmet Need Big Opportunity Sustainable Competitive Positioning Scalable Business Why us? Why now? Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Unmet Need Unmet Need  Who has “hair-on-fire”?  Segment of market that absolutely needs your product Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Find A Big Opportunity  Is there an opportunity?  Will it be big? Big Opportunity Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Size The Market Build a tops down and bottoms-up model Total Market • Analyst data • Proxy modeling Total Addressable Market Your Projected Share • Empirical Your revenue and unit forecast • Qualitative research Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Billion Dollar Market? Stratio Total Address- Semiconductor able substrate material, Market $34.1B Optical Served semiconductor market substrates, $3.75B Initial Optical silicon Target photonics market, $1B Segment + growing at 75% Base-camp Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

What is the Category? Existing New Market Market A better, faster, cheaper A new invention for a alternative for today’s new category category Expanded Re-segment Market Market Niche Market A specialized solution for a niche category Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Sustainable Competitive Positioning  Who is the competition?  Why are you better?  What is your unfair advantage? Sustainable  Can you sustain this advantage? Competitive Positioning Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Be Different  Better, faster, cheaper.  Is there an existing context that needs to be smashed? Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Defendable Differentiated Position Clear, Concise, Consistent Executive Market Summary Definition For (target customer) Who (statement of the need Opportunity Corporate or opportunity) Need Presentation The (product name) is a (product category) Value/Compelling Elevator reason to buy Pitch That (statement of key benefit Web site, Competitive – the compelling reason to buy) collateral analysis Unlike ( competitive advantage) Our product (statement of Differentiated primary differentiation) Tagline position Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Scalable Business Model  Can you sell more with minimal additional resources?  Minimal customization for other market segments?  Where do you go next? Scalable Business Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Business Model – Draw a Diagram Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Why us? Why now?  Do you have the right team with the right domain knowledge?  Is there some discontinuity in the market for your business? Why us? Why now? Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Eco-System Alignment Behavioral changes Your Product Market Idea Innovation D iscontinuity Regulatory / other Changes Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Market Validation – the 5 filters Unmet Need Big Opportunity Sustainable Competitive Positioning Scalable Business Why us? Why now? Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Your Marketing Strategy is… The DNA of your company Stanford Technology Venture Program | MS&E 273 Technology Venture Formation

Product Market Fit  Geoffrey Moore: “Crossing the Chasm” CEE 246 Entrepreneurship in Civil & Environmental Engineering 20 Stanford University

Unmet Need  Who has “hair-on-fire”?  Segment of market that Burning Need absolutely needs your product Burning Need CEE 246 Entrepreneurship in Civil & Environmental Engineering 21 Stanford University

Customer Discovery – Overarching Principles  Identify most important items to demonstrate  Common pitfalls to overcome  Important success factors to deliver  “In companies such as this one….”  80/20 vs. 70/5  Develop a plan to prove to yourselves; you’ll then be able to prove to others  Use voice of the customer to answer difficult questions CEE 246 Entrepreneurship in Civil & Environmental Engineering 22 Stanford University

Types of Discovery Revenue/Orders Execution- LOI / MOU Users/Stats Referenceable Customers Proxies Quotations Industry reports Credibility Surveys Public research Anecdotes Traditional Public sources quantitative “We believe” research methods Statistical Significance CEE 246 Entrepreneurship in Civil & Environmental Engineering 23 Stanford University

“70-5” – Better Than “80-20” Assumption Important Risk to Common Belief Driver of Overcome Success √ √ TAM √ Target segment(s) √ Burning need? √ Customer behavior √ Willingness to pay / value prop √ Customer acquisition model √ Business model √ Partnerships Environment (dependencies) CEE 246 Entrepreneurship in Civil & Environmental Engineering 24 Stanford University

Make a Plan For Addressing Each Important Item Example: Customer behavior:  What behavioral pattern are you trying to change?  How will you determine whether you have demonstrated the possibility of change (metrics)?  What sources will you tap into (discuss)? Who will do what, when – Gantt chart with clear deliverables?  How well will you be able to answer the tough investor question? CEE 246 Entrepreneurship in Civil & Environmental Engineering 25 Stanford University

Execution Beats Hypotheses How will I respond to those difficult questions…  Google AdWords  Landing page  Analytics regarding customer behavior - users  Actual $ changing hands  MOU/LOI  Build your product or service and get reactions and statistics  Screen-shots, (fake) demos, make-a-little…. CEE 246 Entrepreneurship in Civil & Environmental Engineering 26 Stanford University

Hierarchy of Product Execution Product release User validation Beta Alpha Prototype Mock-up Screen shots CEE 246 Entrepreneurship in Civil & Environmental Engineering 27 Stanford University

Hierarchy of Sales Execution $ Users LOI / MOU for Beta customers Potential customers who can be contacted as references Written references from potential customers Names of customers CEE 246 Entrepreneurship in Civil & Environmental Engineering 28 Stanford University

How do I Get to Talk With Folks?  LinkedIn  Social networks  Alumni networks  Relentless pursuit – “name names”  Salesperson’s approach  Associations – Directory of Associations  Email lists CEE 246 Entrepreneurship in Civil & Environmental Engineering 29 Stanford University

Example Source of Information: Interviews – Overcome the Fear  Prepare  Target interviewees  Land meetings / phone calls  Develop interview guide  Execute  2-on-1 for important face-to-face meetings?  Good experience for interviewee  Achieve goals of interview – different for different stages  Follow Up  Thank you  Future meetings  Other targets CEE 246 Entrepreneurship in Civil & Environmental Engineering 30 Stanford University

Interviews – Pacing 1 st Stage: 2 nd Stage: 3 rd Stage: Open-ended React to product LOI / MOU Broad Validate specific need Intent to purchase Wide net Determine target market and value proposition Purchase order Listen to their motivations / needs Modify specs CEE 246 Entrepreneurship in Civil & Environmental Engineering 31 Stanford University

Interview Process Considerations  Target interviewees  Interview notes  How to “learn” and iterate  Combine insights with other data  Set stage for future discussions / business meetings / Board of Advisors CEE 246 Entrepreneurship in Civil & Environmental Engineering 32 Stanford University