Customer Development/Lean Startup 092609 class 7 and 8
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Transcript of Customer Development/Lean Startup 092609 class 7 and 8
9/25/09 1
Customer Development in theHigh Tech Enterprise
Customer ValidationParts 1 & 2
September 26 2009
Steve [email protected]
Customer Development in the High-Tech Enterprise Fall 2009
Agenda
! Logistics/Questions! Review! Cases: HP Kittyhawk, Wildfire! Customer Validation
3
HP Kittyhawk
Customer Development in the High-Tech Enterprise Fall 2009
HP Kittyhawk Questions
! How well do they execute product development?! How competent was the development team?
! What Market Type could they chosen?Which did they choose?
! What revenue curve did that choice result in?
! What revenue curve did they commit to?
! What were the consequences?
Customer Development in the High-Tech Enterprise Fall 2009
Kittyhawk Case
! Classic “Innovators Dilemma”
" New Market innovation in a large corporation
" Needs large forecasts to justify developmentbudget
" Unrealistic because its unpredictable and alwaysslower growth
" May steal resources from mainstream products
Customer Development in the High-Tech Enterprise Fall 2009
Today: Customer Validation
CustomerDiscovery
CustomerValidation
CustomerCreation
ScaleCompany
• Develop a repeatable and scalable sales process
• Only earlyvangelists are crazy enough to buy
Customer Development in the High-Tech Enterprise Fall 2009
Customer Validation:
Phase 1Get
Readyto Sell
Phase 2Sell to
EarlyVangelists
Phase 4Business
ModelVerified
Phase 3Positioning
From DiscoveryTo Creation
CustomerValidation
Customer Development in the High-Tech Enterprise Fall 2009
Customer Validation
ProductPositioning
CompanyPositioning
Present toAnalysts &Influencers
Develop Positioning
Sell to “EarlyVangelists”Sell to
ChannelPartners
ContactVisionary
Customers
Sell to Early
Customers
Refine SalesRoadmap
Refine Channel
Roadmap
Prelim SalesRoadmap
Hire a “Sales Closer”
Articulatea Value
Proposition
Prelim Sales& Collateral
Materials
Prelim Distribution
Channel Plan
Align YourExecutives
Get Ready to Sell
FormalizeAdvisory
Board
Verify
Verify theBusiness
Model
Verify the Product
Verify theSales
Roadmap
Verify theChannel
Roadmap
Iterate or Exit
Customer Development in the High-Tech Enterprise Fall 2009
Sell to “EarlyVangelists”
Customer Validation
Prelim SalesRoadmap
Hire a “Sales Closer”
Articulatea Value
Proposition
Prelim Sales& Collateral
Materials
Prelim Distribution
Channel Plan
Align YourExecutives
Get Ready to Sell
Sell to ChannelPartners
ContactVisionary
Customers
Sell to Early
Customers
Refine SalesRoadmap
ProductPositioning
CompanyPositioning
Present toAnalysts &Influencers
Develop Positioning
Verify theBusiness
Model
Verify the Product
Verify theSales
Roadmap
Verify theChannel
Roadmap
Verify
FormalizeAdvisory
Board
Refine Channel
Roadmap
Iterate or Exit
Inside the Building
Outside the Building
Customer Development in the High-Tech Enterprise Fall 2009
Phase 1:Get Ready to Sell
! Serious preparationbefore 1st sales" Another writing exercise" Aligning Executives
Phase 1Get
Readyto Sell
Phase 2Sell to
EarlyVangelists
Phase 4Business
ModelVerified
Phase 3Positioning
Customer Development in the High-Tech Enterprise Fall 2009
Get Ready to Sell! Value Proposition! Sales Collateral! Distribution Plan! Sales Roadmap! Sales Closer! Synchronize Execs! Advisory Board
Prelim SalesRoadmap
Hire a “Sales Closer”
Articulatea Value
Proposition
Prelim Sales& Collateral
Materials
Prelim Distribution
Channel Plan
Align YourExecutives
FormalizeAdvisory
Board
Customer Development in the High-Tech Enterprise Fall 2009
Get Ready to Sell:Articulate a Value Proposition
! Create Value Proposition" Is it emotionally compelling?" Does it make or reinforce an economic case?" Does the it pass the reality test?
! Varies by Market Type
Customer Development in the High-Tech Enterprise Fall 2009
Get Ready to Sell:Preliminary Sales Collateral
! Create collateral roadmap" What you need and when you need it" Supports the sales roadmap" Ensure the collateral matches the internal audiences
! Create all selling materials" Presentations" Data sheets" White Papers
! How would collateral differ by Market Type?
Customer Development in the High-Tech Enterprise Fall 2009
Get Ready to Sell:Preliminary Channel Road Map
! Channel Food Chain and responsibility! Channel discount and financials! Channel Management! How would channel plan differ by Market Type?
Customer Development in the High-Tech Enterprise Fall 2009
Channel AlternativesPick One
YourCompany
YourCustomers
SystemIntegrators
DirectSales Force
Value-AddedResellers (VARs)
Dealers
Distributors
Retail/MassMerchants/Online
OEMs
Customer Development in the High-Tech Enterprise Fall 2009
Channel DiagramBook Publishing Company
AcknowledgeReturns
Sell BooksDeliver Orders
DetermineAllocations
-Establish Identity-Create Demand
NationalWholesaler Distributor Retailer
MerchandiseTitles
Dispose ofReturns
Stock BooksDeliver Books(from printer)
Publisher
Ship Books
Customer Development in the High-Tech Enterprise Fall 2009
Channel MarginsBook Publishing Company
35% 15% 10% 40%
$7.00 $3.00 $2.00 $8.00 $20.00
% ofRetail
$s
CustomerNationalWholesaler
Publisher Distributor Retailer
Customer Development in the High-Tech Enterprise Fall 2009
Get Ready to Sell:Preliminary Sales Road Map
! Built around key insights about the selling process! Answers
" Who decides the sale?" Influencers, recommender, decision makers Where is the
budget? How many sales call to the sale? To who? What isthe script for each?
! Consists of:" Organization Map" Influence Map" Customer Access Map" Sales Strategy" Implementation Plan
Customer Development in the High-Tech Enterprise Fall 2009
Early Sales
Has Has / Or can Acquire / Or can Acquire a a BudgetBudget
Has Has Put TogetherPut Together a Solution a Solutionout of Piece Partsout of Piece Parts
Has Been Has Been Actively LookingActively Looking For a Solution For a Solution
Has A Has A ProblemProblem
KnowKnow They Have a They Have a ProblemProblem
EarlyVangelistEarlyVangelist
Customer Development in the High-Tech Enterprise Fall 2009
Get Ready to Sell:Hire a “Sales Closer”
! Identify need for a “Sales Closer" Founders have experience “closing” business?" Do they have a “world-class” set of contacts?" Bet the company on their ability to close sales?
! If not, hire a “Sales Closer”" Do NOT hire a VP of Sales" Typical background would be a regional manager
! How does Market Type effect this hire?
Customer Development in the High-Tech Enterprise Fall 2009
Get Ready to Sell:Synchronize Your Execs
! Product Development" Schedule" Deliverables" “Good-enough” Philosophy
! Engineering’s role in sales, installation, post-sales support! Sales Collateral review
Customer Development in the High-Tech Enterprise Fall 2009
Get Ready to Sell:Formalize Advisory Boards
! Advisory boards are critical in nascent stages of a startup! To sell to industry specific customers requires an industry
advisory board! Multiple Advisory Boards
" Use at different times" Different purposes
Customer Development in the High-Tech Enterprise Fall 2009
Phase 2: Sell
! First sales! First channel sales! Scalable and Repeatable
Phase 1Get
Readyto Sell
Phase 2Sell to
EarlyVangelists
Phase 4Business
ModelVerified
Phase 3Positioning
Customer Development in the High-Tech Enterprise Fall 2009
Sell to EarlyVangelists! Contact Visionaries! Sell! Refine Sales Roadmap! Sell to Channel Partners! Refine Channel Roadmap
Sell to ChannelPartners
ContactVisionary
Customers
Sell to Early
Customers
Refine SalesRoadmap
Refine Channel
Roadmap
Customer Development in the High-Tech Enterprise Fall 2009
Sell:Contact Visionaries
! Looking for people with problems! They are few are far between! They need to become your
cheerleaders…while paying you to do so
Customer Development in the High-Tech Enterprise Fall 2009
Sell: Turn Visionaries intoEarlyVangelists
! Very few are early customers! Visionaries will emerge to buy an unfinished
product if it truly solves a painful problem! A lack of these early purchasers is a red-flag! Market Type effects ease of execution
Customer Development in the High-Tech Enterprise Fall 2009
Build the Organization Map
Our PotentialCustomer
Neil GarrettVP Database
Marketing
Suzanne KelloggVP Merchandizing
Karen RogersVP Marketing
Dave JonesCEO
Customer Development in the High-Tech Enterprise Fall 2009
One Step at A Time
Our PotentialCustomer
= in house competition
Leslie EldersFinancial Modeling
Joe BlackDir. Sales Operations
Ben WhiteVP Sales
Neil GarrettVP Database
Marketing
Suzanne KelloggVP Merchandizing
Karen RogersVP Marketing
Dave JonesCEO
Customer Development in the High-Tech Enterprise Fall 2009
Organization Map
Geoff SmithFinancial ToolsDevelopment
Phil WhitryDirector IT
Roger SmithCIO
Our PotentialCustomer
= in house competition = issues to be addressed before a sale
Leslie EldersFinancial Modeling
Joe BlackDir. Sales Operations
Ben WhiteVP Sales
Neil GarrettVP Database
Marketing
Suzanne KelloggVP Merchandizing
Karen RogersVP Marketing
Dave JonesCEO
Customer Development in the High-Tech Enterprise Fall 2009
The Influence Map
Functional Technical
High Executive 1
Low
Customer Development in the High-Tech Enterprise Fall 2009
The Influence Map
Functional Technical
High Executive 1 2 CIO or Division IT executive
Low
Customer Development in the High-Tech Enterprise Fall 2009
The Influence Map
Functional Technical
High Executive 1 2 CIO or Division IT executive
Low End Users 3
Customer Development in the High-Tech Enterprise Fall 2009
The Influence Map
Functional Technical
High Executive 1 2 CIO or Division IT executive
Low End Users 3 4 Corp. IT staff or Division IT
Customer Development in the High-Tech Enterprise Fall 2009
The Sales Roadmap:Starts with Influence Map
Execs
EndUsers
Operational
High
Low
Educate & PresentSolution
Technical
CIO
ITStaff
Customer Development in the High-Tech Enterprise Fall 2009
The Sales RoadMap:Adds Access, Assessment & Strategy
Finance
ProductMgmt
Support
Corp.Mktg
Sales
IT
IntroMeetings
Execs
EndUsers
Operational
AccountStrategy
High
Low
Access AssessNeeds
Strategy Educate & PresentSolution
Technical
CIO
ITStaff
Customer Development in the High-Tech Enterprise Fall 2009
The Sales RoadMap
Finance
ProductMgmt
Support
Corp.Mktg
Sales
IT
IntroMeetings
Execs
EndUsers
Operational
ImplementPlan
ProposalAccountStrategy
High
Low
Access AssessNeeds
Strategy Educate & PresentSolution
Technical
CIO
ITStaff
Sell, Sell, Sell, Sell
Customer Development in the High-Tech Enterprise Fall 2009
RoadMap becomes The Sales Pipeline
13. Close!
2. Initial Meeting• Ask tough questions• Do Buy- In Demo 3. Qualify?
4. Understand Existing Situationa) Technologyb) Organizationc) Competition
5. Custom Pitch• Prepare!• Get NDA signed
6. Win Over IT• Tech deep dive
7. Define Problem• Develop Action Plan
8. ROI Pitch• Prove the Value!
11. Formal Pricing Proposal
• No surprises!
12. Negotiate• Sales• Finance• Support
10. SolutionSession
•• Detailed Tech discovery
1. Prepare• Hoovers, One Source, Web
9. Exec Session• Set expectations for this meeting early on.
Customer Development in the High-Tech Enterprise Fall 2009
Sell: Sell/Refine Channel Roadmap
! Early channel partners need to be “Visionaries”! Indirect channels/integrators have $ minimum! Indirect channels/integrators just fulfill! Market Type affects channel adoption
Customer Development in the High-Tech Enterprise Fall 2009
Phase 3:Company & Product Positioning
! Market Type driven! Company & Product! Based on real-world facts
Phase 1Get
Readyto Sell
Phase 2Sell to
EarlyVangelists
Phase 4Business
ModelVerified
Phase 3Positioning
Customer Development in the High-Tech Enterprise Fall 2009
Develop Positioning
! Product Positioning! Company Positioning! Present to Analysts &
Influencers! Builds briefs for demand
creation activities
ProductPositioning
CompanyPositioning
Present toAnalysts &Influencers
Customer Development in the High-Tech Enterprise Fall 2009
Positioning:Product Positioning
! Market Type affects positioning
Existing Market New Market Resegmented Market Product Positioning Statements
Compare your product to your competitors. Describe how some feature or attribute of the product is better, faster, cheaper, easier.
It’s too earlier fo r customers to understand what your products features will do for them. Instead, describe the problem your product will solve and the benefits that the customers will get from solving it.
Compare your product to your competitors Describe how some feature o r attribute of the product solves the problem your customer has in a way comparable products do not. Describe the benefits that the customers will get from solving their problem this new way.
Customer Development in the High-Tech Enterprise Fall 2009
Positioning:Company Positioning
! Market Type affectspositioning
Existing Market New Market Resegmented Market Company Positioning Statements
Compare your company to your competitors. Describe how your company is both different and credible.
It’s too earlier for customers to understand how different your company is, since in a new market there are no other companies to compare it to. Therefore, company posi tioning is about communicating a vision and passion of what could be.
Company positioning for this type of market communicates the value of the market segment you’ve chosen and the innovation your company brings to it. What is it that customers value and want and need now.
Customer Development in the High-Tech Enterprise Fall 2009
Phase 4:Verify, Iterate or Exit
! Market Type driven! Company & Product
Phase 1Get
Readyto Sell
Phase 2Sell to
EarlyVangelists
Phase 4Business
ModelVerified
Phase 3Positioning
Customer Development in the High-Tech Enterprise Fall 2009
Verify
! Product! Sales Roadmap! Channel Roadmap! Business Model
Verify theBusiness
Model
Verify the Product
Verify theSales
Roadmap
Verify theChannel
Roadmap
Iterate or Exit