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Finding Customers and Forecasting Markets for New and Disruptive Technologies. James F. Fee, Adhva Adhva.com. Basic Concepts. Where do products come from? What do I mean by competition? How groups of customers become markets Finding parallel universes Modeling markets that don’t exist

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finding customers and forecasting markets for new and disruptive technologies

Finding Customers and Forecasting Markets for New and Disruptive Technologies

James F. Fee,

Adhva

Adhva.com

Adhva

basic concepts
Basic Concepts
  • Where do products come from?
  • What do I mean by competition?
  • How groups of customers become markets
  • Finding parallel universes
  • Modeling markets that don’t exist
  • Disruptive vs. new products/markets

Adhva

where do products come from
Where do products come from?
  • Knock-off – copy an existing product or service –sell at a lower price to existing customers
  • Incrementally improve an existing product – this is what engineers are hired to do
  • Develop a product to address your own need – how many of you are there?
  • Develop or utilize a new material, compound or service that has unique characteristics – find a market & develop a product

Adhva

slide4

The World of your New Product

New Product or Service (A)

Existing Product or Service (B)

Customers

New

Corp

Competitors

Customers

Customers

Money

Money

Adhva

comparing a with b
Comparing A with B
  • A and B could be equivalent
    • Laptop Dell or HP
  • A and B are different but with same function
    • Transportation to work Car or Bicycle
  • A and B could be totally different
    • Entertainment Trip to Europe or Home Theater
  • However money is money
    • Competition is not for the product – it’s for the money

Adhva

key takeaway
Key Takeaway
  • Your product and it’s benefits may be unique but there is always competition for the money
  • Please never say that there is no competition

Adhva

slide7

The World of your New Product

Product or Service A

Product or Service B

Customers

New

Corp

Competitors

Customers

Customers

Money

Money

Market

Adhva

customers and markets
Customers and markets
  • Customers purchase products and services
  • Markets are collections of customers that have similar purchasing patterns
  • The same product may serve several very different markets

Adhva

markets are societies cultures
Markets are societies / cultures
  • Made up of companies and individuals
    • There are leaders, followers and experts
    • They have their own dress and jargon
    • Annual gathering rituals
      • Detroit Auto Show – NY Toy Fair
      • American Heart Association – CES @ Las Vegas
    • Distribution channels
    • Business practices (typical business models)
    • Trade associations

Adhva

simple example
Simple example
  • As part of a project for a local company they wanted to know how big was the commercial market for their SNO PRO product
  • Main customers were new car dealerships

Adhva

modeling the market
Days supply of vehicles- 60

Average time to clean a vehicle* 5 to 6 / hr

Average time to clean all of the vehicles* 3hr

* My guess

Modeling the market

Adhva

what do we need to know
What do we need to know
  • How many SNO PROs customers?
  • How many are in snow areas?
  • How many SNO PROs per customer?
    • How many cars are on the lot
    • How long does it take to clean a car
    • How quick are all of the cars cleaned

Adhva

most important step test your model
Most important stepTEST your Model
  • I went to several dealerships
  • Talked to sales people
    • Who cleans the cars – they do
    • How long does it take them to do it
    • Estimate cars on the lot -etc.
  • Refine the model
  • Random data points improve your model

Adhva

conclusion
Conclusion
  • Model was reasonably close to the actual sales data.
  • Current channels were reaching the available market

Adhva

find the best fit customer market product
Find the best fit customer / market / product
  • A business idea is like a jigsaw puzzle
  • You don’t know what you have until you put all of the pieces together
    • Customers
    • Markets
    • Competition

Adhva

where do products come from18
Where do products come from?
  • Knock-off – copy an existing product or service –sell at a lower price to existing customers
  • Incrementally improve an existing product – this is what engineers are hired to do
  • Develop a product to address your own need – how many of you are there?
  • Develop or utilize a new material, compound or service that has unique characteristics – find a market & develop a product

Adhva

do your homework
Do Your Homework
  • Learn about your
    • Customer
    • Market
    • Competition
  • Google is important but you must talk to people
  • The hardest part is not to sell but to listen

Adhva

which comes first the customer or the market
Which comes first?The customer or the market
  • You need both
  • If you have customers talk to them
    • Ask them what related products do the buy?
    • From whom?
    • What publications, trade shows etc.?
  • If you don’t have customers then learn about the market
  • Create a customer profile

Adhva

creating a customer profile for your new product
Creating a customer profile for your new product
  • Who needs it?
  • Why do they need it?
  • Who purchases it?
  • What does it take to close the sale?
  • Where do customers buy it?

Adhva

who needs it
Who needs it?
  • Everybody is not an answer
  • Bottoms up profile
    • You need to know your target customers better than your best friend.
    • Where do they live, how do they spend their money, what do they like and not like
  • Top down demographic info
    • X , Y generation
    • Dr., Lawyer, Banker – what kind of Dr.

Adhva

what does it take to close the first sale
What does it take to close the first sale?
  • A laptop, cell phone and internet connection
  • Or $1M for product development and a $100K to launch a commercial product
  • Or $10M for product development, $10M for inventory and $10M national media launch of a consumer product

Adhva

another takeaway
Another Takeaway
  • Ideas are cheap and easy
  • The secret is to develop a mental screening process to quickly sort through ideas to find the good ones
  • The danger is that once you become emotionally involved in an idea, it is very hard to be rational

Adhva

disruptive vs new markets
Disruptive vs. new markets

Mainframe

Computers

$100Ks

60% margins

Direct sales

Mini

Computers

$10K - $20K

40% margins

OEM

PCs

$1K-$5K

20% margins

Retail

LCD Displays

$200-$1000

Computer

Channel

CRTs

$100-$500

Computer

Channel

Adhva

finding customers and forecasting markets for new and disruptive technologies27

Finding Customers and Forecasting Markets for New and Disruptive Technologies

James F. Fee,

Adhva

Adhva.com

Adhva

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