17/09/2015THE UNIVERSITY OF WAIKATO - TE WHARE WANANGA O WAIKATO1 Waikato Management School Research...

19/04/23THE UNIVERSITY OF WAIKATO - TE WHARE WANANGA O WAIKATO

1

Waikato Management School Research Seminar Series

Entrepreneurial Marketing

Learning from high-potential ventures

Professor Joe Lassiter

19 April 2023© THE UNIVERSITY OF WAIKATO • TE WHARE WANANGA O WAIKATO 2

Entrepreneurial Marketing -

by

Joseph B. Lassiter, III

Harvard Business School

Soldiers Field StationBoston, MA 02163

Learning from High Potential Ventures

Copyright @ 2005, President & Fellows of Harvard College

April 19, 2023© THE UNIVERSITY OF WAIKATO • TE WHARE WANANGA O WAIKATO 4

What is “EntrepreneurialMarketing”?

• What is “Marketing”?

• What is “Entrepreneurship”?

• What is “Entrepreneurial Marketing”?


Marketing

• HBS Working Definition:

The creation of value for a firm’s chosen customers with a firm’s scarce resources


Entrepreneurship

• HBS Working Definition:

The relentless pursuit of opportunity beyond the constraints of the tangible resources currently controlled

• A complete process for pursuing opportunity from identification to harvesting

• A way of managing

Howard Stevenson


Entrepreneurial Management Framework

• The critical elements

• The concept of FIT

• The concept of dynamic FIT management

– People

– Opportunity

– Context

– Deal

Bill Sahlman


Entrepreneurial Marketing—An Emerging Definition

• The RELENTLESS PURSUIT of the CUSTOMERS and PARTNERS necessary for the PEOPLE leading the firm :

• A process for gathering the information needed for DECISION MAKING over time

• A process for getting commitment to ACTION in the face of inadequate information

– to SELECT their BUSINESS opportunities

– to SELL their PRODUCTS and SERVICES

– to OBTAIN the FUTURE resources they desire

Lassiter


Lassiter

PARTNERSPARTNERS

PEOPLEPEOPLE

CUSTOMERS &END-USERS


PRODUCTS & SERVICES

PRODUCTS & SERVICES

The Core Framework for Entrepreneurial Marketing


A Dynamic Framework for Entrepreneurial Marketing

PRODUCTS & SERVICES

PRODUCTS & SERVICES

PARTNERSPARTNERS

PEOPLEPEOPLE

CHANGE (GOOD AND BAD NEWS)

ANTICIPATIONANTICIPATION RESPONSERESPONSEEXPERIMENTS

ITERATIONLEARNING



Lassiter building on Sahlman


Courtesy of

Teel Lassiter, age 9

Weston Country School, Grade 3


Entrepreneurial Marketing—The Bias in my Sample

• I have focused on high-potential ventures (defined as those that seek to add the greater of $50 million in new business or 2x current sales in five or fewer years. These tend to be start-ups and buy-outs.

• The companies tend to be technology or consumer oriented.

• We explore these through an Entrepreneurial Marketing Course Project. Then we write HBS cases. From late Sept. through mid-December, MBA teams of 2 to 3 students spend 80 to 120 hours on a sales/ marketing project defined with entrepreneurs pursuing high-potential ventures. Let me know by e-mail in mid-August ([email protected]) if you should qualify for the list. It seems to cost you $2K to $3K in out-of-pocket student expenses….though one team used $100K effectively! Be careful, these projects are fun--and seductive!


Projects Field Studies

Sponsors Cases


Cu

stom

ers

Products

High-Potential

Old

New

Old New

Yes

No

The Lessons in My Sample


Venture Capital and the Internet

VC Investments in Internet Companies

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

5,000

1993 1994 1995 1996 1997 1998 1999 2000

Num

ber of Rounds

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Am

ount ($

millions)

# Rounds Amount ($ mil.)


The Essential Challenge — Determining the Nature of Adoption

TIME

CUSTOMER ORDERS

TIME

CUSTOMER ORDERS

A Smooth, Flowing Glide or……. A Ragged, Bumpy Ride….How do customers become aware? Why do they buy? What drives the dynamics of the game?

?


Product Categories, Product Life Cycles andCustomer Adoption a la Moore

PRODUCT SALES (New &

Re-Orders)

TIME

Product 1 Product 2

• Who influences whom?

• Who references whom?

• Who buys for what reason?

• What is the “whole product”?

•What is the “minimum” product?

• Which partner helps bridge the gap?

•What is the “minimum” customer base?

NO. OF NEW CUSTOMERS

TIME

Innovators & Early Adopters

Early Majority

Late Majority

Laggards

Moore’s Chasm

Sources: Moore (1991), Crossing the Chasm and Moore (1995), Inside the Tornado

Visionaries Pragmatists

Total Sales


Customer Adoption Models Visionaries and Pragmatists are Individuals.. not Firms.. not Segments

NO. OF NEW

CUSTOMERS

TIME

Moore’s Chasm



Lassiter building on Moore

Pragmatists Endure Pain, Demand Proof, Only Buy

“Whole Products” and Calculate Economic Payback

Visionaries Crave Advantage ,Accept Promises, Buy Prototypes

and Demand Development Control


Launch with the Visionaries…Then Invade a Single “Beachhead” of Pragmatist Customers in a Mainstream Segment, Meet 100% of their “Whole Product” Requirements….and Then Cross

PRODUCT SALES (New &

Re-Orders)

TIME

Product 1 Product 2

• Who influences whom?

• Who references whom?

• Who buys for what reason?

• What is the “whole product”?

•What is the “minimum” product?

• Which partner helps bridge the gap?

•What is the “minimum” customer base?

NO. OF NEW

CUSTOMERS

TIME

Innovators & Early Adopters

Early Majority

Late Majority

Laggards

Moore’s Chasm



Total Sales



Applying Lessons from Moore


High-Potential Ventures Narrow the Chasm By Betting on the Future and Then “Reverse Engineering” to the Present

NO. OF NEW

CUSTOMERS

TIME

Moore’s Chasm





Narrow the Chasm By Anticipating Where “Panic Will Breakout” Among the “Desirable” Pragmatists

NO. OF NEW

CUSTOMERS

TIME

Moore’s Chasm



1 Which events will cause “mission-critical systems” to break?2. Regulatory/Trade Shifts? 3. Capital Markets?4. Mergers & Acquisitions?5. Customer Requirements?6. Assembling the Specific “Proof” and “Whole Product” Partners?7. Hyper-competition?8. Which Visionaries are the “Desirable” Pragmatists watching?



Narrow the Chasm By Knowing How to Bring “Dreams” to the “Relevant” Visionaries

NO. OF NEW

CUSTOMERS

TIME

Moore’s Chasm



1. Understanding our Unique Value2. Capital Markets?3. Staging the Investment?4. Assembling the Specific “Proof” and “Whole Product” Partners?5. Knowing where the Visionaries are located TODAY!6. Knowing what the Visionaries are seeking TODAY!7. Crafting and Packaging the Dream



Crossing the Chasm at This “Narrowest” Point By Portfolio Selection or Placing Your Bet

Pressure to Cost of “Whole Ability Total Adopt Product” to Execute

Segm

ent/

Ap

plic

atio

nC

har

acte

rist

ics

Lassiter

A

B

C

D


High-Performance Ventures Cross this “Narrowest” Chasm By “Reverse Engineering” the Product Roadmaps, Assembling the Needed People and Partners, and Filling Any Remaining Gap with Cash….Then Cross

NO. OF NEW

CUSTOMERS

TIME

Moore’s Chasm



1. Who watches Who?2. What have they done in the past??3. Who do they “Know”?4. Who do we “Know”?5. Assembling the Needed “ Proof”?6. Assembling the “Whole Product”?7 Raising the Cash…….Filling the

Chasm with $$$$$$



High-Potential Ventures Become High-Performance Ventures By Linking Specific Visionaries, Pragmatists, and Segments

NO. OF NEW

CUSTOMERS

TIME

Moore’s Chasm



1. Who are the “Known” Visionaries2. Who are the “Known” Pragmatists 3. Where are they NOW?4. Who “Knows” who?5. Who do we “Know”?6. Which Industries are

attracting/recruiting Visionaries?7. Who are the Partners used to assemble

“Whole Products” for the Pragmatists in that Industry ?


Segments, Applications & Even Individual Firms Are Usually “Horizontals” in the World of Adoption


Where Did You Get Them Shells?


Customer Adoption in Evolving Markets


Time

PerfectEarly Adopter

PerfectPragmatist

Mainstay Buyer

Laggard or Underserved

Buyers

MarketSoftHelicosSycamoreWebSpectiveOrange Imagineering?

Bluefin RoboticsMyTeamSurface LogixEntropiaMillennial Net

• End-user habits tend to be fluid/evolving

• Company’s habits tend to be fluid/evolving

• The Product-Customer link is dominated by either the product or the customer

• The Channel is secondary, but important

• Guerilla vs. Gorilla marketing -- you can’t outspend them

• The venture that can and does recruit the best People can will

• The venture that recruits really powerful Partners can win.

When in Evolving Markets ...No.of New Customers


Customer Adoption in Established Markets


No. of New Customers

Time

Perfect Early Adopter

PerfectPragmatist

Mainstay Buyer

Laggard or Underserved

Buyer

DiscoverWhyJuice GuysOrange Imagineering

Boston BeerSteinwayRelayHealth

• End-user habits tend to be entrenched

• Company’s habits tend to be entrenched

• The Product-Customer link is dominated by the Channel

• The Channel is the customer - satisfy them and they will satisfy the end-user

• Guerilla vs. Gorilla marketing -- you still can’t outspend them

• The ventures with powerful networks have a chance to win

• The ventures that recruit powerful Partners have a chance to win.

When in Established Markets ...

Boston BeerSteinway

19 April 2023© THE UNIVERSITY OF WAIKATO • TE WHARE WANANGA O WAIKATO 32Lassiter

PARTNERSPARTNERS

PEOPLEPEOPLE



PRODUCTS & SERVICES

PRODUCTS & SERVICES

The Questions Asked in Entrepreneurial Marketing

Who has specific, relevant expertise?Who works in the venture?Who advises the venture?Who invests in the venture?

Who has sold to who in the past?Who knows and is known in the channel?Who knows and is known in the industry?

Who knows and is known by end-users?Who knows and is known by buyers?Who can supply specific “whole product” expertise?Which partners have the most to gain or lose?

Who has specific, relevant expertise?Who has the leading position in the industry?Who can supply specific “whole product” advantages?Who has the most to add to you or a competitor?

What exactly is our product benefit relative to the customer’s alternative?Which customers will buy it now?

Have our people worked with the the necessary partners in the past ?What have the potential partners done in the past?


The Essential Judgment — Anticipating the Pattern of Adoption

TIME

ORDERS

TIME

ORDERS

Never a Smooth, Flowing Glide ….Always a Jagged, Uncertain Ride even on a Trail Cautiously Scouted by an Experienced and Proven Guide!

?

Lassiter


So, What is “EntrepreneurialMarketing”?

• It is “Reverse Engineering” with Your Goal Matched to Your Model of Adoption yielding:

Product Roadmap

Customer Roadmap

Partner Roadmap

People Roadmap

• Moving in Anticipation and Evolving Against the Realities of Your Venture & Your Rolodex

Lassiter


$6.8 $9.9 $13.1$17.7

$49.0

$93.8

$34.6

$19.4

2056

3034

6100

4510

250921741896

1313

$0

$25

$50

$75

$100

1995 1996 1997 1998 1999 2000 2001 2002

0

1,000

2,000

3,000

4,000

5,000

6,000

Amount Invested ($B) Number of Deals

Am

oun

t In

vest

ed (

$Bil

lion

s) Nu

mb

er of Deals

Venture Investing Returns to Earth…But It is Still CrazyVenture Investing Returns to Earth…But It is Still Crazy Venture Investing Returns to Earth…But It is Still CrazyVenture Investing Returns to Earth…But It is Still Crazy

Source: VentureOne


Remember

• There has never been a time in recorded history when the supply of capital did not overwhelm the supply of opportunity

• Musical chairs -B2X, Infra, Optics, Biotech….

• Smart money, dumb money and lots of money

• Divergence from the mean, mean goes negative

• Technology, deregulation, globalization ..and demographic change


On Who Has the Power:

“In the end, it all comes back to consumers.”

Bill Gates


On What Is the Reward:

“I don’t make pictures just to make money. I make money to make more pictures.”

Walt Disney


A Word of Caution and a Warrantee:

“We don’t know where all this is going to lead, but we will have fun finding out-- together. Call if we can help.”

Joe Lassiter


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1. Wealth Creation for New Zealand √• 18 May 2005

2. Social & Sustainable Development√• 21 September 2005

3. Entrepreneurial Marketing √• TONIGHT - Learning from high-potential ventures

Waikato Management School 2005 Research Seminar Series


44

Waikato Management School Research Seminar Series

Entrepreneurial Marketing

Learning from high-potential ventures

Professor Joe [email protected]

17/09/2015THE UNIVERSITY OF WAIKATO - TE WHARE WANANGA O WAIKATO1 Waikato Management School Research...

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