Support presentation to the SPIN-UP Training Programme on Entrepreneurial Skills for University Spin-Offs.
SPIN-UP is a cooperation project supported by the European Commission that aims to create an Entrepreneurship Training and Coaching Programme that contributes to the development of Key Entrepreneurial Skills, both technical and behavioural, essential to enable and leverage University Spin-Offs growth.
Download and have access to other training materials in www.spin-up.eu
2. TRAINING OBJECTIVES AND CONTENTS
The SPIN-UP training in
Innovation, Marketing and Sales
for Growth will help University
Spin-Off’s managers to improve
their abilities to innovate and
adequately manage the
marketing effort to support
business growth.
Know the basics
about
innovation,
marketing and
sales
Identify future
innovation, mar
keting and sales
needs for the
business
3. TRAINING OBJECTIVES AND CONTENTS
Understand the basic terms and principles related to successful
innovation management over time
Understand some basic mechanisms of marketing planning
Recognize the importance of having a specialized sales force
Recognize that sales goes through a number of phases before closing
and in order to build long-term customer loyalty
Interpret the signs given, by consumers and business clients alike, that
business services and products are on the right track for continued
demand by major customer segments
Know the basics about innovation, marketing and sales
4. TRAINING OBJECTIVES AND CONTENTS
Discover the “chasm that separates the early adopters from the early majority… the
most formidable and unforgiving transition…all the more dangerous because it
typically goes unrecognized” (Moore, 1999, p.18).
Recognize the impact of management decisions concerning key areas, especially as
regards growth, so that businesses may grow into multi-million Euro enterprises
that contribute to the creation of jobs both locally as well as internationally
Transform businesses into what Venture Capitalists want to see
Having built a business plan with solid thinking in regard to all the key success
factors, the inhibitors to success, and the advantages of the proposed product or
service
Identify future innovation, marketing and sales needs for the business
5. TRAINING OBJECTIVES AND CONTENTS
Aiming for a potential market that is very large, so that even a small market share
will produce a big sales volume
Being able to gain a foothold in the market that will inhibit competitors
Building a distinct competitive advantage over all the alternatives that customers
have or might have in the future
Possessing a compelling new technology (product or service) that is difficult for
potential competitors to copy, circumvent, or make obsolete
Potentially growing to a valuation at least 10 times beyond the valuation at which
the investors purchased their shares within a reasonable timeframe, typically three
to seven years
Identify future innovation, marketing and sales needs for the business
6. TRAINING OBJECTIVES AND CONTENTS
This module is not intended to prepare trainees to
be experts in innovation, marketing and sales.
Instead, it appeals to the trainee common sense and
experience to deliver the basics on these topics
7. Technology Mapping
A Technology Map defines the stream of new
products/processes or concepts that the company is
committed to develop over some future time period
Advantages of using a Technology Map:
• Helps your company anticipate technology trends
• Defines a stream of new products (breakthrough or
incremental) your company plans to develop over time
• Forces decisions (commitment) about new projects amid
technological and market uncertainty
• Supports the allocation of resources (mainly finance)
8. Developing a Technology Map
Technology Identification
1
Decide on Needed
Technology Additions
2
Decide on
‘What-to-Sell’ Strategy:
License vs. Commercialization
3
Ongoing Product Management
4 •Internal development
(make)
•External acquisition (buy)
•Partner to co-create
. Killing ‘wrong’ projects
•Developing services
•Intellectual property
•etc.
9. Step 1: Technology Identification
Includes:
• Monitor technology and market developments
• Take inventory of your company‟s strongest know-
how that may be a source of competitive advantage
- Products, e.g. superior ones (e.g., hybrid cars)
- Processes, e.g. superior manufacturing skills (e.g.
just-in-time) and customer services; superior processes
- Management practices, e.g. smart knowledge management
in exclusive collaboration (open innovation)
10. Step 2: Decide on Technology Additions
• What emerging technology trends will affect your business?
Which areas of weakness in your company‟s technology
portfolio?
• Are additional technologies necessary to continue to
compete effectively?
• „Make or buy‟ decision (dealing with development risk)
- Internal development (within your company: make)
- External acquisition (buy)
- Partnering to co-develop
11. Step 3: Decide on ‘What-to-Sell Strategy’
• The new technology itself is a product or it gives rise to a
(new) product, e.g. a way to prepare a new medicine
• Basic question: How to transform know-how into revenue?
Critical issue: technology and market uncertainty
• Options – the Continuum of selling options:
- Sell or license know-how only
- Sell „proof-of concept‟ (pilot plant or prototype)
- Sell components to OEMs
- Sell ready-to-use final products or entire systems
- Sell a complete end-to-end solution (including services)
13. Which customers? Market segmentation
• Step 1: Divide the market into groups, based on
criteria that meaningfully distinguish between
customers‟ needs, choices and habits.
• Step 2: Describe customer‟s profiles in each
segment.
• Step 3: Evaluate the attractiveness of these segments,
and select target segments.
• Step 4: Position the product within selected
segments.
14. Step 1a: Divide the consumer market into groups
Segmentation criteria for the consumer market (B2C):
• Geographic (country, city/countryside, area)
• Demographic (age/stage in family formation)
• Psychographic (values and lifestyles)
• Behavioral criteria related to the new product
- Benefits desired in a product
- Ease of use and usage occasion (home versus work)
- Frequency of usage of a product (heavy versus light users)
- Adoption speed
- Buying behavior (moment of buying, place of buying)
- Brand loyalty
15. Step 1b: Divide the business market into groups
Segmentation criteria for business market (B2B):
• Industry sector referring to type of product/market
• Firm size
• Corporate culture
• Use within one industry only, or cutting across different
industries (e.g. banking software versus HRM software
and accounting software)
16. Step 2: Describe the customer‟s profile in each segment
Descriptions are given in the next slides on:
a) Attitude and behavior of user segments in the
US information and communication technology
market.
b) User segments according to „technographics‟,
taking into account: pessimism/optimism,
income (richness) and type of use (business,
home, entertainment)
17. Example: Market segmentation for GIS (B2B)
Industry/sector
Foresty Oil and gas
exploration
and
exploitation
Fishery Telecommu-
nications
Transport Military
defence
18. Step 3: Compare and evaluate market segments, and select
–Size of segment in terms of sales volume
–Growth rate of the segment and potential access
to other, adjacent market segments (crossing
the chasm?)
–Competition within the segment
–Capabilities of your firm to serve segment needs
19. Positioning Tools
How to learn about positioning of the new
product within the segment/which supporting
tools in positioning?
•Multi-Attribute Model: this reveals the
relative importance of attributes of your
product
21. Exercise - 1
• Groups of 2
• Main goal is to develop a concept for a new product that combines the
technology of both companies in the group
• It will be based on the TCP methodology (see manual): Technology
(capabilities) => Product (features) => Market (Needs)
• Part 1 (T): Map the technologies of both companies (core
strengths, limitations, ownership, etc.)
• Part 2 (P): Conceive a possible product with those technologies (use a
value curve or the multi-attribute model)
• Part 3 (M): Link the product to the needs of specific market segments
(see segmentation part)
27. 24
EMI vs i-tunes: questions
• Why did EMI not come up with the i- tunes business model?
• What is the added value that i- tunes brings? To who?
28. 24
EMI vs i-tunes: questions• Why did EMI not come up with the i- tunes business model?
– Companies often think within the boundaries of their industry... double loop learning
is critical. Re-assess the assumptions of your industry. The "these are the rules of the
game syndrome"
– Success often blinds our ability to look at things differently... the "we have always been
successful syndrome"
– New technologies can bring new variables into the system that open up new
possibilities.
• What is the added value that i- tunes brings? To who?
– To the music industry: fight music piracy
– To the consumers: ease of use, buy only the songs you like, cheap
– To the ipod platform: extensive technology adoption
29. Exercise - 2
• Same Groups of 2
• Develop a possible Business Model for your new product based on the
Business Model Canvas of Osterwalder and Pigneur.
• Starting point depends on your initial mindset: technology (resources),
customer, a value concept, a partner you have, etc…
30.
31.
32. Exercise – 3 (optional)
• Same Groups of 2
• Have a discussion of what could be a pricing strategy for your new
product
33. Exercise – 4 (optional)
Discuss and give examples of how your company has implemented:
a) Guerrilla Marketing;
b) Buzz Marketing;
c) Viral Marketing.
Discuss moves by major competitors in your industry as concerns:
a) Guerrilla Marketing;
b) Buzz Marketing;
c) Viral Marketing.
34. The Chasm
• Pragmatists want
reliable and
complete solutions
to their problems.
They are weary of
risk and rely on past
success… very
different from early
adopters.
35. Crossing The Chasm
• To cross the chasm Moore suggests a “D-Day/Entry
Beach” or “Big Fish, Small Pond” strategy
• Identify a single pragmatist customer
• Goal is to win a niche foothold in the mainstream as
quickly as possible and then expand into adjacent
segments
• Reference: Geoffrey Moore, Crossing the Chasm
36. Example of crossing the Cham - Documentum
• Documentation management spin-off company from Xerox
• In the chasm between 1990 and 1993 (flat sales of 2M$)
• Target market between 1990 e 1993: “all personnel who touch complex
documents in all large eterprises”
• Strategy to leave the chasm (with a new CEO) :
– Defined a beach-head = Pharma Regulatory affairs departments in
Fortune 500 companies (40)
– Why: It is a small market (in number of customers), but the problem
was immense (250.000 to 500.000 pages per patent)
– Result: In one year Documentum demonstrated that it could solve the
problem of one company. It captured 30 of the total 40 companies
and sales went to 8M$ and 25M$ in just two years.
37. Documentum’s Five Criteria
1. Is the target customer well funded and are they readily
accessible to our sales force?
2. Do they have a compelling reason to buy?
3. Can we today, with the help of partners, deliver a whole
product to fulfill that reason to buy?
4. Is there no entrenched competition that could prevent
us from getting a fair shot at this business?
5. If we win this segment, can we leverage it to enter
additional segments?
38. Exercise – 5 (optional)
• Groups of 3
• Main goal is to understand whether you are in the chasm and how you
could cross it
• Discuss whether you are in the chasm or not
• Develop a D-Day strategy for you to reach the early majority (crossing
the chasm) OR how you managed to cross the chasm