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BUSI 701 Artistic Entrepreneurship

BUSI 701 Artistic Entrepreneurship. Class 9 Customer Pain. Videos. Verma: “Passion and Customer ” Levinson “Talk to Customers ”. Vernon’s Razor. Go or No-Go?. Go or No-Go?. Vernon’s Razor. Value Proposition Market Potential Return Team Competitive Advantage Business Model

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BUSI 701 Artistic Entrepreneurship

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  1. BUSI 701Artistic Entrepreneurship Class 9 Customer Pain

  2. Videos • Verma: “Passion and Customer” • Levinson “Talk to Customers”

  3. Vernon’s Razor Go or No-Go?

  4. Go or No-Go?

  5. Vernon’s Razor • Value Proposition • Market Potential • Return • Team • Competitive Advantage • Business Model • Customer Pain Defining Opportunity Minimizing Risk

  6. Customer Pain • Will the dogs eat the dog food? • Will the fish bite? • Keyword: validation

  7. Brook Byers, KPCB • If you don’t have any customers yet, you need to show that you know who your customer is going to be and that you have gone out and talked to them.” • “Acid test” for early entrepreneurs: resonance with customers Byers: know your customers

  8. Value Proposition • Recap: the reason to create a new venture is to create value • “Customer Pain” is a validation that somebody will directly benefit from that value

  9. Ways to Validate Customer Pain • #1 – paying customers • Beta testing • Competition • Surveys and focus groups • Letters of Intent (LOIs) • Eyeballs

  10. Validating Customer Pain #1 – Paying Customers • Like Team is #1 for lowering risk, paying customers validate pain • Understanding this is #1, strategize to make it happen • Consider rolling out early imperfect product to start customer relationships Validating Pain Paying customers Beta testing Competition Surveys/focus groups (LOIs) Eyeballs

  11. Validating Customer Pain Beta Testing • Concept test • Non-paying customers • Small or scaled down product • Customer feedback is key Validating Pain Paying customers Beta testing Competition Surveys/focus groups (LOIs) Eyeballs

  12. Validating Customer Pain Competition • The existance of competition validates the customer pain • May create other problems • You still must validate that your venture is differentiated to capture x% of that market Validating Pain Paying customers Beta testing Competition Surveys/focus groups (LOIs) Eyeballs

  13. Surveys and Focus Groups • Moving from qualitative assertions (gut feelings) to quantitative data points • From “This seems like it would work” to “95 out of 100 software engineers were likely to buy” • 1st step towards excellent customer feedback skill sets Validating Pain Paying customers Beta testing Competition Surveys/focus groups LOIs Eyeballs

  14. Survey Article • What is the purpose of the survey? • Title the survey • Do not make the survey any longer than it needs to be • Use plain English • Avoid long questions • Ask one question at a time • Avoid influencing the answer • Ensure that the answer format allows meaningful answer • Consider how the compiled data is going be analyzed • Ensure that the questionnaire flows • Target your respondents

  15. Survey Article • Allow the respondent to expand or make comments • Be confidential if needed • Consider anonymity • Give careful consideration to the best response format • Give the respondent an idea of how much time the survey will take. • Inform the respondents of the survey end date • Pilot the survey • Before publishing the survey proof read the survey several times • Remember to say thank you

  16. Validating Customer Pain Letters of Intent (LOIs) • Shows a commitment from potential customers • Particularly relevant with: • Very high price points • Long-term contracts • Long sales cycle products/services Validating Pain Paying customers Beta testing Competition Surveys/focus groups LOIs Eyeballs

  17. Validating Customer Pain Eyeballs • Website traffic • Showing any interest is more compelling than none • If your business model is advertising, this moves to #1 Validating Pain Paying customers Beta testing Competition Surveys/focus groups LOIs Eyeballs

  18. Business Model & Customer Pain • Specific target segment • Roadmap to future segments • Verticals and horizontals • Decision makers (do you solve pain for the wrong people?) Kawasaki: create something great

  19. Segmentation • Target Addressable Market • 1st Pin • Influencers (Tipping Point) • Crossing the Chasm(Geoffrey Moore) Chasm Early Market Mainstream Market

  20. Product Attributes Atribute A Atribute B Kawasaki nitch thyself high right

  21. “Marketing Mix” 4 Ps • Price • Product • Promotion • Place

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