More Related Content Similar to Ideas to income: An introduction to Marketing (Part 1) (20) More from MaRS Discovery District (20) Ideas to income: An introduction to Marketing (Part 1)1. Ideas to Income
An Introduction to Marketing (Lecture 1)
MaRS Entrepreneurship 101
January 13, 2010
Peter Evans
Advisor, MaRS Venture Group
pevans@marsdd.com
HP Garage, Silicon Valley
2. What We’ll Cover
Learning objectives for this session
What is Marketing?
Why it Matters
Technology is Just One Aspect of how Goals
the Game is Played
Learn some key marketing and
strategy concepts
The Innovators Paradox: Ideas are Be able to apply them to an
your first problem
invention or idea
Have an appreciation for
Connecting Ideas to Income (Levels)
marketing as a discipline that
builds value for customers
Best Practices to Build into your plan
Have Fun
© 2010 Peter M. Evans Slide 1
3. why
matters
HP Garage, Silicon Valley
© 2010 Peter M. Evans Slide 2
4. What is Marketing?
A general definition
American Marketing Association
“ The process of planning and executing the
conception, pricing, promotion, and
distribution of ideas, goods, and services to
create exchanges that satisfy individual and
organizational objectives.”
Prof. Phil Kotler (Northwestern U.)
“Activities directed at satisfying needs and
wants [in a market].”
© 2010 Peter M. Evans Slide 3
5. Benefits of Marketing
What’s in it for start-ups?
Customers
✔ Establishes your relevance/credibility with the right first customers
Product
✔ Clearly identifies problems and critical transition points and guides the
development of the right prototype and product
Markets
✔ Creates a more predictable and scalable go-to-market process and alignment
with the right segments
Investors
✔ Provide a common framework for understanding key areas of the business that
affect success. Shows how a company can grow and make money on a
sustainable basis
© 2010 Peter M. Evans Slide 4
6. How Marketing Fits
The 50,000 View of How your Product & Market Fit Together
CUSTOMERS COMPETITORS
Who BUYS What, Where, Who OFFERS What, Where,
When, How and Why When, How and Why
Determine Basis of Market Determine Basis of
Segmentation/Relevance Product Differentiation
COMPANY
Given your objectives and
resources...what can you
do, for whom, where and
when?
ASSESS MARKET- ASSESS
COMPANY FIT Define Quality PRODUCT-COMPANY FIT
and Identify Segments You Evaluate Relative Quality and
Can Serve Identify Competitors You Can
Beat
DEVELOP PRODUCT-MARKET FIT
Does a market exist for your intended price/quality level?
© 2010 Peter M. Evans Slide 5 KW-057
7. 4
How we will • How can we get there?
Get There • How will we move the plan
to action?
• How will we know what we
have achieved?
Drafting the Executing Maintaining • How will we create an
Plan the Plan Momentum environment that rewards
performance?
3
Our Desired
State
Planning
Execution
• How do we optimize our current
business?
Optimizing Reconstructing • Can we reshape our business
Market Market
along key dimensions of
Position Boundaries
customer value?
2
Our Business
Potential
• What do current/potential customers value?
• How competitive are we?
• What forces have the potential to change
Markets Customers Competitors Partners &
our business?
Suppliers
• How well are we synchronized with partners
across the supply/distribution chain?
1
Our Organization
Today
• Why do we exist?
• What do we want to be?
Definition Corporate Industry • How do we operate?
& Direction Assessment Assessment • What state is our business in today?
• What is the state of our industry?
© 2010 Peter M. Evans Slide 6
8. A Simpler View
Superior Marketing Focuses on the Top Quadrant
Who
_____ Cares?
High
Degree of
Market
Relevance
Why
Low You?
Degree of
Competitive
Differentiation
© 2010 Peter M. Evans Slide 7
9. Why Marketing Matters
Its in the numbers…
More than
If there are 14
Slides
in an Investor Pitch Deck
50%
are marketing related
© 2010 Peter M. Evans Slide 8
10. How an Investor Sees Marketing
Investor Presentation: Table of Contents
1. Company Overview & Vision
8. Competitive Advantage/
Intellectual Property
2. Management & Advisors
9. Category Map -
3. Customer Problem
Where our Solution Fits
10. Competitive Advantage
4. Market Opportunity/Size
(Value Matrix/Value Curve)
5. Solution
11. Business Model
6. Benefits/Value Proposition
12. Marketing & Sales
(Customer Acquisition/Sales Cycle)
7. Success to Date (Customers/ 13. Financial Projections (3-5 Yr.)
Partners/Patents)
14. Financing Requirements
© 2010 Peter M. Evans Slide 9
11. How an Investor Sees Marketing
Marketing is threaded across the venture
1. Company Overview & Vision
8. Competitive Advantage/
Intellectual Property
2. Management & Advisors
9. Category Map
3. Customer Problem
Where our Solution Fits
10. Competitive Advantage
4. Market Opportunity/Size
(Value Matrix/Value Curve)
5. Solution
11. Business Model
6. Benefits/Value Proposition
12. Marketing & Sales
(Customer Acquisition/Sales Cycle)
7. Success to Date
13. Financial Projections (3-5 Yr.)
(Customers/Partners/Patents)
14. Financing Requirements
© 2010 Peter M. Evans Slide 10
13. Ideas Don’t Have Market Context
Even Webster is pessimistic
idea (n.) i·de·a*
a form, look or appearance of a
thing as opposed to its reality.
a conception existing in the mind
a thought, a mental image, a
notion
an opinion, view, or belief
a groundless supposition; a
fantasy
a hazy perception
a vague impression, fanciful
notion, inkling
Source: Random House Webster's Unabridged Dictionary
© 2010 Peter M. Evans Slide 12
14. The Innovator’s Paradox
Not all technologies can spark the creation of a business
Technology Product Company Business
Source: Neoset Ventures
15. The Market is Not your Customer
People or organizations with needs and budgets are…
Market Problem Buyer Budget
Source: Neoset Ventures
16. Connecting Ideas to Income
Aligning Capability with Opportunity
Capability
Technology Product Company Business
1
Opportunity 2
Value 3
Proposition Distribution 4
Strategy Financial
Model
Market Problem Buyer Budget
Opportunity Source: Neoset Ventures
17. the
startup
HP Garage, Silicon Valley
19. Maslow’s Hierarchy of Needs
morality,
creativity,
spontaneity,
problem solving,
lack of prejudice,
Self-Actualization acceptance of facts
self-esteem, confidence,
achievement, respect of others,
Esteem respect by others
friendship, family, sexual intimacy
Love/Belonging
security of body, of employment, of resources, of morality,
of the family, of health, of property
Safety
breathing, food, water, sex, sleep, homeostasis, excretion
Physiological
20. The Startup Hierarchy of Needs
What’s required for market success?
Sustainable
Engaged
Synchronized
Differentiated
Relevant
On-Trend
© 2010 Peter M. Evans Slide 19
21. The Startup Hierarchy of Needs
What’s required for market success?
Sustainable
Engaged
Synchronized
Differentiated
Relevant
Market: “On-Trend”
© 2010 Peter M. Evans Slide 20
22. TREND IS YOUR FRIEND
WHEN YOU LOOK AT THE MARKET IS THERE A WIND AT YOUR BACK ?
BE CAREFUL…EVEN TURKEYS CAN FLY IN A TORNADO…
© 2009 PETER EVANS
34. $1,000,000,000
$100,000,000 10x reduction
every 7.5 years
$10,000,000
$1,000,000
$100,000
10x reduction every
Dollars per MIP
$10,000 4.25 years
$1,000
$100
$10.00
$1.00
$0.10
$0.01
1959 1969 1979 1989 1999 2009
Source: Hans P. Moravec 1998-2003]
40. Total economic value
created by VCs.
Total amount of
money raised
by VCs.
SOURCE: NVCA / Thompson Reuters Exit Poll
SOURCE: NVCA / Thompson Reuters VC Fundraising Q3
41. Trendspotting Techniques
P-E-S-T-L-E-C
1. Political: Identify key developments including areas such as tax policy, employment laws,
environmental regulations, trade restrictions and reform, tariffs and political stability.
2. Economic: Economic growth/ decline; interest rates; exchange rates and inflation rates; wage
rates; minimum wage; working hours; unemployment (local and national); credit availability; cost
of living.
3. Sociological: Cultural norms and expectations; health consciousness; population growth rate;
age distribution; career attitudes; attitudes and habits regarding family, career, entertainment;
emphasis on safety and global warming.
4. Technological: What new technologies affecting the rate of change in your market and also
impact changes to barriers to entry in given markets, and changes to buyers financial decisions.
5. Legal: What is happening with respect to cases being settled in the courts and the overall
business climate in the context of how companies are interacting? Do these developments have
a bearing on areas such as intellectual property rights?
6. Environmental: What is happening with respect to ecological and environmental aspects? Many
of these factors will be economic or social in nature.
7. Capital: Attitude and actions of investors (Venture Capitalists, Angels) and their propensity to
invest in certain sectors (as measured by deals done)
© 2010 Peter M. Evans Slide 40
42. ✔ Political
Economic
✔ Sociological
✔ Technology
Legal
Capital
© 2010 Peter M. Evans Slide 41
43. Political
Economic
✔ Sociological
✔ Technology
Legal
✔ Capital
© 2010 Peter M. Evans Slide 42
46. Size
Can the market category support another entrant?
The Advertising Industry (U.S.)
Source: Universal/McCann
© 2010 Peter M. Evans Slide 45
48. Landscape
Example: Who’s who in personal digital health
Personal Health Innovations
(Care Enhancement Coordination)
Physiological Pedometer/
Measurement BodyBugg/ Calorie Intake/
Nike+iPod Vital-Sign
& Tracking Weight Control
Monitor
Wellness/ Fitness Club/ Worksite
Personal Senior Fitness
Fitness Exercise/
Programs
Trainer Coaching
Education Online Health Risk Nurse
Engagement Assessment Coaching
Web Care Corporate Chronic Care
Wellness Management
© 2010 Peter M. Evans Slide 47
49. Interactions
Do you know how key sub-categories interact within the market?
Source: IBM Institute for Business Value
© 2010 Peter M. Evans Slide 48
50. Scope
How do competitors service the category?
Apache
Alyeska
Lyondell
Koch
Union Pacific
GATX
Common carriers
Tosco
QuickTrip
Integrated major
Petroleum Industry Value Chain
Source: Booze Allen Hamilton
© 2010 Peter M. Evans Slide 49
51. Share
Is there a payoff associated with the area you serve?
UPSTREAM
DOWNSTREAM
TAXES
1965
32.5¢
56.6¢
45,2¢
Exploration
Refining & Marketing
Development
& Production
3.0¢
1.8¢
2.0¢
1995
11.0¢
10.8¢
13.0¢
6.2¢
13.0¢
18.3¢
40.4¢
Petroleum Industry Value Chain
Source: Booze Allen Hamilton
© 2010 Peter M. Evans Slide 50
52. What we Can Learn from Hollywood
The power of convergent categories
Emerging Technology
Emerging Category
Who Cares?
Visual Recognition Digital Signage
Systems
GPS Location-Based Pay as You Drive
Services Technologies
Insurance
Social media (blogger) Reputation Management
performance monitoring)
for UGC
Mobile Smart Phone Personalized Digital
Applications
Health Programs
Gesture Based
“Edutainment Software”
User Interfaces
© 2010 Peter M. Evans Slide 51
53. Sustainable
Credible
Engaged
Synchronized
Differentiated
Customers: “Relevant”
On-Trend
© 2010 Peter M. Evans Slide 52
54. LESS COWBELL
IT’S TIME TO STOP ADDING “UNRECOVERABLE COSTS” TO MAKE PRODUCT
PERFORMANCE IMPROVEMENTS THAT CUSTOMERS WON’T PAY FOR…
© 2009 PETER EVANS
55. Innovation: Thinking Strategically
10 ways to break from the herd
Finance Process. Offering Delivery
Business Networking Enabling Core Product Product Service Channel Brand Customer
model process process performance system experience
Core competence planning: A lot of the competition at the center
Offering &
process
Innovation planning: Many big breakthroughs found at the edges
Business Customer
model experience
Source: Doblin Analysis (Division of Monitor Group)
56. Innovation Payoff
A herd of companies clustered in the centre
Finance Process. Offering Delivery
Business Networking Enabling Core Product Product Service Channel Brand Customer
model process process performance system experience
Hi Volume of innovation efforts
Last 10 years
Lo
Source: Doblin Analysis (Division of Monitor Group)
57. Innovation Payoff
Value Creation opportunities are found at the edges
Finance Process. Offering Delivery
Business Networking Enabling Core Product Product Service Channel Brand Customer
model process process performance system experience
Relative Value Created
last 10 years
Hi Less than 2% of projects produce
More than 90% of value…
There is a fundamental shift in value
creation as a result of innovation at the
edges
Lo
Source: Doblin Analysis (Division of Monitor Group)
58. 10 Types of Innovation
Examples Mapped to the Doblin Framework
1. Business model 5. Product performance
how the enterprise makes money basic features, performance and functionality
2. Networking 6. Product system
enterprise’s structure/ extended system that surrounds an offering
value chain
7. Service
how you service your customers
Finance Process. Offering Delivery
Business Networking Enabling Core Product Product Service Channel Brand Customer
model process process performance system experience
8. Channel
how you connect your offerings
3. Enabling process to your customers
assembled capabilities
9. Brand
how you express your offering’s
4. Core process benefit to customers
proprietary processes that add value
10. Customer experience
how you create an overall
experience for customers
© 2010 Peter M. Evans Slide 57
59. Developing a Value Driven Strategy
The Most Important Equation You Should Remember
© 2010 Peter M. Evans Slide 58
60. Minding your P’s & Q’s
What’s YOUR Strategy for Adding Value for Customers?
Higher
Average Value
Inferior Customer Value
for
(Over-priced or Over-specified)
Quality Buyers
Relative Average Value - Superior Value
Parity
Price “Stuck in the via
Middle” Higher Quality
Average Value Superior Value Maximum
Lower for via Buyer
Price Buyers Lower Prices Value
Lower Parity Higher
Relative Quality
© 2010 Peter M. Evans Slide 59
61. Creating Buyer Utility
Stages & Utility Levers
Stages of the Buyer Experience Cycle
(1) (2) (3) (4) (5) (6) (7)
Eval./Trial/Reco.* Purchase Delivery Use Supplements Maintenance Disposal
Customer
Productivity
Simplicity
Utility Levers
Convenience
Safety/Risk
Fun and
Image
Environmental
Friendliness
Social
Responsibility*
Source: Blue Ocean Strategy – Kim & Maubourgne * Indicates revision to model
© 2010 Peter M. Evans Slide 60
62. The Buyer Experience Step by Step
Are We Creating Barriers for Customers?
(1) Eval/Trial/
Reco * (2) Purchase (3) Delivery (4) Use (5) Supplements (6) Maintenance (7) Disposal
Can you How long does How long does Does the product Do you need Does the Does use of the
experience the it take to find it take to get require training or other products product product create
product/service the product the product expert assistance? and services require waste items?
before you need? delivered? to make this external
purchase? product work? maintenance? How easy is it to
Is the product easy
Is the place of How difficult is to store when not in dispose of the
What are the purchase it to unpack use? If so, how How easy is it product?
perceived risks attractive and and install the costly are to maintain
associated with accessible? new product? they? and upgrade Are there legal
How effective are
purchase? the product? or environmental
the product’s
How secure is Do buyers features and How much issues in
Are the the transaction have to functions? time do they How costly is disposing of the
evaluation environment? arrange take? maintenance? product safely?
criteria clearly delivery Does the product or
understood by How rapidly themselves? If service deliver far How much How costly is
buyers? can you make yes, how costly more power or pain do they disposal?
a purchase? and difficult is options than cause?
this? required by the
average user? Is it How easy are
overcharged with they to obtain?
bells and whistles?
Source: Blue Ocean Strategy – Kim & Maubourgne * Indicates revision to model
© 2010 Peter M. Evans Slide 61
63. Creating Buyer Utility
Stages & Utility Levers
Stages of the Buyer Experience Cycle
(1) (2) (3) (4) (5) (6) (7)
Eval./Trial/Reco. Purchase Delivery Use Supplements Maintenance Disposal
*
Customer
Productivity
Simplicity
Utility Levers
Convenience
Safety/Risk
Enterprise Server
Fun and
Image
Environmental
Friendliness
Social*
Responsibility
Source: Blue Ocean Strategy – Kim & Maubourgne * Indicates revision to model
© 2010 Peter M. Evans Slide 62
65. Thank You
Peter Evans,
Advisor, MaRS Venture Group
Email: pevans@marsdd.com
Twitter: @TechMarketer