1

Applied Business Development II- 2009-11-24 -

Matti KaulioDept of Industrial Economics and Management

Royal Institute of Technology 100 44 Stockholm SwedenPhone +47 8 790 7607 Fax +46 8 20 35 41

E-mail mkauliokthse

20091124 - M Kaulio -

rdquoStarting-pointsrdquo

bull Coffee beans coffee brewing and coffee drinkingbull Eliminate - Reduce ndash Raise ndash Create

(4-action framework)bull Cross case analysis of disruptive innovators in the

TeleCom industry (Iphone Spotify and Skype)bull rdquoElevator pitchrdquo

bull What Would Google Do

20091124 - M Kaulio - 2

Similarities

bull rdquoNewrdquo entrantsbull Alternative businessrevenue modelbull QoS is lower in some dimensions but the total offer adds

large value for usersbull Focus on simplicity usability and rdquoself-managed servicesrdquobull Communitiesdirectories are one component in the offeringbull Utilize existing infrastructurebull The service can be seen as a rdquoplatformrdquo

rdquoThe Elevator Pitchrdquo

bull For (target customer)bull Who are dissatisfied with (the current market

alternative)bull our productservice is a (new product category)bull that provides (key problem-solving capability)bull Unlike (the productservice alternative)bull We have assembled (key whole productservice features

for your specific application)

Moore p 149

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Disruptive Techn Analysis (DTA)bull SWOTbull Process chartsbull Customer Interaction Mapsbull Value modelsbull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

New Entrants Enter

20091124 6- M Kaulio -

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

5-Forces amp Macro Environment

Source DeWitt amp Meyer 2004 Modified

Porterrsquos Value Chain

20091124 - M Kaulio - 9

Entrants from otherIndustriesbusinesses

Rivalry among operators Strength of buyersB2B amp B2CStrength of suppliers

Substitute productsNew technologies

Industry Structure ndash Telecommunications

bullTelecom manufacturerbullHome appliancemanufacturerbullPC manufacturer

bullBusinessbullHouseholds

bullElectric networksbullTelevison networksbullInter device communication

bullProcess synergiesbullDistribution synergiesbullBrand recognitionbullSpecialized solutionsbullhellip

Overview Evaluation of Threat

For each key segment evaluate substitutes vs key success factors (KSF)

Segment Corporate customers

Car retailers Leasing Renting C2C used cars

Cooperativeowning

Low upfront price

Low owning amp using costsAvailability amp reliabilityEase of service amprepairModel-changingcosts

End user appeal

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

Plummer mathematics

bull How many petrol stations are there in the USA

20091124 - M Kaulio - 13

New Entrants are Crossing the Chasm

20091124 14- M Kaulio -

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

rdquoStarting-pointsrdquo

bull Coffee beans coffee brewing and coffee drinkingbull Eliminate - Reduce ndash Raise ndash Create

(4-action framework)bull Cross case analysis of disruptive innovators in the

TeleCom industry (Iphone Spotify and Skype)bull rdquoElevator pitchrdquo

bull What Would Google Do

20091124 - M Kaulio - 2

Similarities

bull rdquoNewrdquo entrantsbull Alternative businessrevenue modelbull QoS is lower in some dimensions but the total offer adds

large value for usersbull Focus on simplicity usability and rdquoself-managed servicesrdquobull Communitiesdirectories are one component in the offeringbull Utilize existing infrastructurebull The service can be seen as a rdquoplatformrdquo

rdquoThe Elevator Pitchrdquo

bull For (target customer)bull Who are dissatisfied with (the current market

alternative)bull our productservice is a (new product category)bull that provides (key problem-solving capability)bull Unlike (the productservice alternative)bull We have assembled (key whole productservice features

for your specific application)

Moore p 149

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Disruptive Techn Analysis (DTA)bull SWOTbull Process chartsbull Customer Interaction Mapsbull Value modelsbull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

New Entrants Enter

20091124 6- M Kaulio -

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

5-Forces amp Macro Environment

Source DeWitt amp Meyer 2004 Modified

Porterrsquos Value Chain

20091124 - M Kaulio - 9

Entrants from otherIndustriesbusinesses

Rivalry among operators Strength of buyersB2B amp B2CStrength of suppliers

Substitute productsNew technologies

Industry Structure ndash Telecommunications

bullTelecom manufacturerbullHome appliancemanufacturerbullPC manufacturer

bullBusinessbullHouseholds

bullElectric networksbullTelevison networksbullInter device communication

bullProcess synergiesbullDistribution synergiesbullBrand recognitionbullSpecialized solutionsbullhellip

Overview Evaluation of Threat

For each key segment evaluate substitutes vs key success factors (KSF)

Segment Corporate customers

Car retailers Leasing Renting C2C used cars

Cooperativeowning

Low upfront price

Low owning amp using costsAvailability amp reliabilityEase of service amprepairModel-changingcosts

End user appeal

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

Plummer mathematics

bull How many petrol stations are there in the USA

20091124 - M Kaulio - 13

New Entrants are Crossing the Chasm

20091124 14- M Kaulio -

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Similarities

bull rdquoNewrdquo entrantsbull Alternative businessrevenue modelbull QoS is lower in some dimensions but the total offer adds

large value for usersbull Focus on simplicity usability and rdquoself-managed servicesrdquobull Communitiesdirectories are one component in the offeringbull Utilize existing infrastructurebull The service can be seen as a rdquoplatformrdquo

rdquoThe Elevator Pitchrdquo

bull For (target customer)bull Who are dissatisfied with (the current market

alternative)bull our productservice is a (new product category)bull that provides (key problem-solving capability)bull Unlike (the productservice alternative)bull We have assembled (key whole productservice features

for your specific application)

Moore p 149

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Disruptive Techn Analysis (DTA)bull SWOTbull Process chartsbull Customer Interaction Mapsbull Value modelsbull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

New Entrants Enter

20091124 6- M Kaulio -

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

5-Forces amp Macro Environment

Source DeWitt amp Meyer 2004 Modified

Porterrsquos Value Chain

20091124 - M Kaulio - 9

Entrants from otherIndustriesbusinesses

Rivalry among operators Strength of buyersB2B amp B2CStrength of suppliers

Substitute productsNew technologies

Industry Structure ndash Telecommunications

bullTelecom manufacturerbullHome appliancemanufacturerbullPC manufacturer

bullBusinessbullHouseholds

bullElectric networksbullTelevison networksbullInter device communication

bullProcess synergiesbullDistribution synergiesbullBrand recognitionbullSpecialized solutionsbullhellip

Overview Evaluation of Threat

For each key segment evaluate substitutes vs key success factors (KSF)

Segment Corporate customers

Car retailers Leasing Renting C2C used cars

Cooperativeowning

Low upfront price

Low owning amp using costsAvailability amp reliabilityEase of service amprepairModel-changingcosts

End user appeal

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

Plummer mathematics

bull How many petrol stations are there in the USA

20091124 - M Kaulio - 13

New Entrants are Crossing the Chasm

20091124 14- M Kaulio -

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

rdquoThe Elevator Pitchrdquo

bull For (target customer)bull Who are dissatisfied with (the current market

alternative)bull our productservice is a (new product category)bull that provides (key problem-solving capability)bull Unlike (the productservice alternative)bull We have assembled (key whole productservice features

for your specific application)

Moore p 149

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Disruptive Techn Analysis (DTA)bull SWOTbull Process chartsbull Customer Interaction Mapsbull Value modelsbull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

New Entrants Enter

20091124 6- M Kaulio -

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

5-Forces amp Macro Environment

Source DeWitt amp Meyer 2004 Modified

Porterrsquos Value Chain

20091124 - M Kaulio - 9

Entrants from otherIndustriesbusinesses

Rivalry among operators Strength of buyersB2B amp B2CStrength of suppliers

Substitute productsNew technologies

Industry Structure ndash Telecommunications

bullTelecom manufacturerbullHome appliancemanufacturerbullPC manufacturer

bullBusinessbullHouseholds

bullElectric networksbullTelevison networksbullInter device communication

bullProcess synergiesbullDistribution synergiesbullBrand recognitionbullSpecialized solutionsbullhellip

Overview Evaluation of Threat

For each key segment evaluate substitutes vs key success factors (KSF)

Segment Corporate customers

Car retailers Leasing Renting C2C used cars

Cooperativeowning

Low upfront price

Low owning amp using costsAvailability amp reliabilityEase of service amprepairModel-changingcosts

End user appeal

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

Plummer mathematics

bull How many petrol stations are there in the USA

20091124 - M Kaulio - 13

New Entrants are Crossing the Chasm

20091124 14- M Kaulio -

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Disruptive Techn Analysis (DTA)bull SWOTbull Process chartsbull Customer Interaction Mapsbull Value modelsbull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

New Entrants Enter

20091124 6- M Kaulio -

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

5-Forces amp Macro Environment

Source DeWitt amp Meyer 2004 Modified

Porterrsquos Value Chain

20091124 - M Kaulio - 9

Entrants from otherIndustriesbusinesses

Rivalry among operators Strength of buyersB2B amp B2CStrength of suppliers

Substitute productsNew technologies

Industry Structure ndash Telecommunications

bullTelecom manufacturerbullHome appliancemanufacturerbullPC manufacturer

bullBusinessbullHouseholds

bullElectric networksbullTelevison networksbullInter device communication

bullProcess synergiesbullDistribution synergiesbullBrand recognitionbullSpecialized solutionsbullhellip

Overview Evaluation of Threat

For each key segment evaluate substitutes vs key success factors (KSF)

Segment Corporate customers

Car retailers Leasing Renting C2C used cars

Cooperativeowning

Low upfront price

Low owning amp using costsAvailability amp reliabilityEase of service amprepairModel-changingcosts

End user appeal

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

Plummer mathematics

bull How many petrol stations are there in the USA

20091124 - M Kaulio - 13

New Entrants are Crossing the Chasm

20091124 14- M Kaulio -

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

New Entrants Enter

20091124 6- M Kaulio -

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

5-Forces amp Macro Environment

Source DeWitt amp Meyer 2004 Modified

Porterrsquos Value Chain

20091124 - M Kaulio - 9

Entrants from otherIndustriesbusinesses

Rivalry among operators Strength of buyersB2B amp B2CStrength of suppliers

Substitute productsNew technologies

Industry Structure ndash Telecommunications

bullTelecom manufacturerbullHome appliancemanufacturerbullPC manufacturer

bullBusinessbullHouseholds

bullElectric networksbullTelevison networksbullInter device communication

bullProcess synergiesbullDistribution synergiesbullBrand recognitionbullSpecialized solutionsbullhellip

Overview Evaluation of Threat

For each key segment evaluate substitutes vs key success factors (KSF)

Segment Corporate customers

Car retailers Leasing Renting C2C used cars

Cooperativeowning

Low upfront price

Low owning amp using costsAvailability amp reliabilityEase of service amprepairModel-changingcosts

End user appeal

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

Plummer mathematics

bull How many petrol stations are there in the USA

20091124 - M Kaulio - 13

New Entrants are Crossing the Chasm

20091124 14- M Kaulio -

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

5-Forces amp Macro Environment

Source DeWitt amp Meyer 2004 Modified

Porterrsquos Value Chain

20091124 - M Kaulio - 9

Entrants from otherIndustriesbusinesses

Rivalry among operators Strength of buyersB2B amp B2CStrength of suppliers

Substitute productsNew technologies

Industry Structure ndash Telecommunications

bullTelecom manufacturerbullHome appliancemanufacturerbullPC manufacturer

bullBusinessbullHouseholds

bullElectric networksbullTelevison networksbullInter device communication

bullProcess synergiesbullDistribution synergiesbullBrand recognitionbullSpecialized solutionsbullhellip

Overview Evaluation of Threat

For each key segment evaluate substitutes vs key success factors (KSF)

Segment Corporate customers

Car retailers Leasing Renting C2C used cars

Cooperativeowning

Low upfront price

Low owning amp using costsAvailability amp reliabilityEase of service amprepairModel-changingcosts

End user appeal

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

Plummer mathematics

bull How many petrol stations are there in the USA

20091124 - M Kaulio - 13

New Entrants are Crossing the Chasm

20091124 14- M Kaulio -

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

5-Forces amp Macro Environment

Source DeWitt amp Meyer 2004 Modified

Porterrsquos Value Chain

20091124 - M Kaulio - 9

Entrants from otherIndustriesbusinesses

Rivalry among operators Strength of buyersB2B amp B2CStrength of suppliers

Substitute productsNew technologies

Industry Structure ndash Telecommunications

bullTelecom manufacturerbullHome appliancemanufacturerbullPC manufacturer

bullBusinessbullHouseholds

bullElectric networksbullTelevison networksbullInter device communication

bullProcess synergiesbullDistribution synergiesbullBrand recognitionbullSpecialized solutionsbullhellip

Overview Evaluation of Threat

For each key segment evaluate substitutes vs key success factors (KSF)

Segment Corporate customers

Car retailers Leasing Renting C2C used cars

Cooperativeowning

Low upfront price

Low owning amp using costsAvailability amp reliabilityEase of service amprepairModel-changingcosts

End user appeal

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

Plummer mathematics

bull How many petrol stations are there in the USA

20091124 - M Kaulio - 13

New Entrants are Crossing the Chasm

20091124 14- M Kaulio -

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Porterrsquos Value Chain

20091124 - M Kaulio - 9

Entrants from otherIndustriesbusinesses

Rivalry among operators Strength of buyersB2B amp B2CStrength of suppliers

Substitute productsNew technologies

Industry Structure ndash Telecommunications

bullTelecom manufacturerbullHome appliancemanufacturerbullPC manufacturer

bullBusinessbullHouseholds

bullElectric networksbullTelevison networksbullInter device communication

bullProcess synergiesbullDistribution synergiesbullBrand recognitionbullSpecialized solutionsbullhellip

Overview Evaluation of Threat

For each key segment evaluate substitutes vs key success factors (KSF)

Segment Corporate customers

Car retailers Leasing Renting C2C used cars

Cooperativeowning

Low upfront price

Low owning amp using costsAvailability amp reliabilityEase of service amprepairModel-changingcosts

End user appeal

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

Plummer mathematics

bull How many petrol stations are there in the USA

20091124 - M Kaulio - 13

New Entrants are Crossing the Chasm

20091124 14- M Kaulio -

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Entrants from otherIndustriesbusinesses

Rivalry among operators Strength of buyersB2B amp B2CStrength of suppliers

Substitute productsNew technologies

Industry Structure ndash Telecommunications

bullTelecom manufacturerbullHome appliancemanufacturerbullPC manufacturer

bullBusinessbullHouseholds

bullElectric networksbullTelevison networksbullInter device communication

bullProcess synergiesbullDistribution synergiesbullBrand recognitionbullSpecialized solutionsbullhellip

Overview Evaluation of Threat

For each key segment evaluate substitutes vs key success factors (KSF)

Segment Corporate customers

Car retailers Leasing Renting C2C used cars

Cooperativeowning

Low upfront price

Low owning amp using costsAvailability amp reliabilityEase of service amprepairModel-changingcosts

End user appeal

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

Plummer mathematics

bull How many petrol stations are there in the USA

20091124 - M Kaulio - 13

New Entrants are Crossing the Chasm

20091124 14- M Kaulio -

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Overview Evaluation of Threat

For each key segment evaluate substitutes vs key success factors (KSF)

Segment Corporate customers

Car retailers Leasing Renting C2C used cars

Cooperativeowning

Low upfront price

Low owning amp using costsAvailability amp reliabilityEase of service amprepairModel-changingcosts

End user appeal

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

Plummer mathematics

bull How many petrol stations are there in the USA

20091124 - M Kaulio - 13

New Entrants are Crossing the Chasm

20091124 14- M Kaulio -

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Industry Analysis 5-forces

Source DeWitt amp Meyer 2004

Plummer mathematics

bull How many petrol stations are there in the USA

20091124 - M Kaulio - 13

New Entrants are Crossing the Chasm

20091124 14- M Kaulio -

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Plummer mathematics

bull How many petrol stations are there in the USA

20091124 - M Kaulio - 13

New Entrants are Crossing the Chasm

20091124 14- M Kaulio -

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

New Entrants are Crossing the Chasm

20091124 14- M Kaulio -

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Rogers (1984) rdquoDiffusion of Innovationrdquo

bull The Innovation process is a communication process

bull Criteria for fast diffusionndash Relative advantagendash Compatibilityndash Complexityndash Trailabilityndash Observability

20091124 15- M Kaulio -

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Five Key Segments

bull Techiesbull Visionariesbull Pragmatistsbull Conservativesbull SkepticsLaggards

Moore 199116

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Diffusion of Innovations

Time

Volume

17

Moore 1991

The product life-cycle

Late MajorityEarly MajorityEarly AdoptersInnovators Laggards

ConservativesPragmatistsVisionariesTechies SkepticsLaggards

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Who communicates with who

18

Moore 1991

The mainstream market doesnt act on references from the early market

ConservativesPragmatistsVisionariesTechies Skeptics

Mainstream MarketEarly Market

Try it

Can it give us advantage

Stick with the herd

Hold on

No way

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Crossing the Chasm

Product vendorrsquos problem

Most common vendor mistake

Solution

Moore 199119

80 of many solutions ndash 100 of nonePragmatists wonrsquot buy 80 solutions

Committing to the most common enhancement requestsNever finishing any one customerrsquos wish-list

Focus on a single beachheadAccelerate formation of that segmentrsquos ldquowhole productrdquo

The ldquochasmrdquo

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Question

bull rdquoThe Chasmsrdquo is about High-tech Products - but are there High-tech products in Tele Communications or are they rdquoHigh-tech services

20091124 20- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

The Business Model

C

ORRevenue

model

BS

Costs Costs

Costs

Value Propositions

Business Concept

Customers

Offering

BusinessSystem

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Two Sides of Offering Example

Business Concept

Value PropositionTime ReliabilityAccess

flexibility SecurityQuick amp Easy

BandWidth 247 HelpdeskFixed IP FireWallInstallation

service

Pricing

Pricing

Total for 3 PassengersFare Price 600 SEKInfant Fee 18200 SEKAirport Check-in Fee 17400 SEKSEK Web Baggage Fe 11200 SEKCredit card fee 17400 SEKSEK Priority Board 16800 SEKSEK Web Baggage Fe 56000 SEKTaxes Fees amp Charges 52800 SEK InsuranceTotal Price 190400 SEK

20091124 24- M Kaulio -

Revenue Models

bull Producer modelbull Broker modelbull Consultancy modelbull Performance-based modelbull The TelCom modelcombination model (fixed cost + opening cost +

variable cost opening fee + downloaded data)bull The TechTrade model Licenciering + royaltybull The rdquoGiletterdquo modelbull The rdquoDrug Dealerrdquo modelbull The rdquoGore-Tex modelrdquobull The rdquoAdoberdquo modelbull The rdquoSingerrdquo modelbull Internet Advertisment modelbull The Construction Industry model

20091124 25- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

Group Assignement II

bull rdquoThreats from Substitutesrdquobull Hand in by e-mail to mkauliokthse and

kentthorenedabkthsebull Latest on the 4th of December

20091124 - M Kaulio - 27

Revenue Models

bull Producer modelbull Broker modelbull Consultancy modelbull Performance-based modelbull The TelCom modelcombination model (fixed cost + opening cost +

variable cost opening fee + downloaded data)bull The TechTrade model Licenciering + royaltybull The rdquoGiletterdquo modelbull The rdquoDrug Dealerrdquo modelbull The rdquoGore-Tex modelrdquobull The rdquoAdoberdquo modelbull The rdquoSingerrdquo modelbull Internet Advertisment modelbull The Construction Industry model

20091124 25- M Kaulio -

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

Group Assignement II

bull rdquoThreats from Substitutesrdquobull Hand in by e-mail to mkauliokthse and

kentthorenedabkthsebull Latest on the 4th of December

20091124 - M Kaulio - 27

rdquoToolsrdquo For Business Development

bull rdquoElevator Pitchrdquobull rdquoPSO-modelrdquobull rdquoRevenue modelsrdquobull rdquoStrategic canvasrdquobull rdquoFour action frameworkrdquobull rdquoParadoxesrdquobull rdquoPorters 5-forcesrdquobull rdquoPESTrdquobull rdquoPlummer mathematicsrdquobull rdquoTechnology adaption cyclerdquo

bull Discontinous Techn Analysis(DTA)

bull SWOTbull Process chartsbull Customer Interaction Mapsbull rdquoTeam-based appraochrdquobull Risk analysisbull Cashflow projectionsbull Modularizationbull Segmentation

Group Assignement II

bull rdquoThreats from Substitutesrdquobull Hand in by e-mail to mkauliokthse and

kentthorenedabkthsebull Latest on the 4th of December

20091124 - M Kaulio - 27

Group Assignement II

bull rdquoThreats from Substitutesrdquobull Hand in by e-mail to mkauliokthse and

kentthorenedabkthsebull Latest on the 4th of December

20091124 - M Kaulio - 27

20091124 - M Kaulio - 28

Different Kinds of Substitutes

Source Kim amp Mauborgne 2005

Form

(sol

utio

n)

FunctionUtility

Different

SameSame

Different

Substitute products

Rival products

Alternative products

NA

For products with the same purpose or underlying need there are 3 types of competition

• Applied Business Development II- 2009-11-24 -
• rdquoStarting-pointsrdquo
• Similarities
• rdquoThe Elevator Pitchrdquo
• rdquoToolsrdquo For Business Development
• New Entrants Enter
• Industry Analysis 5-forces
• 5-Forces amp Macro Environment
• Porterrsquos Value Chain
• Industry Structure ndash Telecommunications
• Overview Evaluation of Threat
• Industry Analysis 5-forces
• Plummer mathematics
• New Entrants are Crossing the Chasm
• Rogers (1984) rdquoDiffusion of Innovationrdquo
• Five Key Segments
• Diffusion of Innovations
• Who communicates with who
• Crossing the Chasm
• Question
• rdquoToolsrdquo For Business Development
• The Business Model
• Two Sides of Offering Example
• Slide Number 24
• Revenue Models
• rdquoToolsrdquo For Business Development
• Group Assignement II
• Slide Number 28
• Different Kinds of Substitutes

Different Kinds of Substitutes

Source Kim amp Mauborgne 2005

Form

(sol

utio

n)

FunctionUtility

Different

SameSame

Different

Substitute products

Rival products

Alternative products

NA

For products with the same purpose or underlying need there are 3 types of competition

• Applied Business Development II- 2009-11-24 -
• rdquoStarting-pointsrdquo
• Similarities
• rdquoThe Elevator Pitchrdquo
• rdquoToolsrdquo For Business Development
• New Entrants Enter
• Industry Analysis 5-forces
• 5-Forces amp Macro Environment
• Porterrsquos Value Chain
• Industry Structure ndash Telecommunications
• Overview Evaluation of Threat
• Industry Analysis 5-forces
• Plummer mathematics
• New Entrants are Crossing the Chasm
• Rogers (1984) rdquoDiffusion of Innovationrdquo
• Five Key Segments
• Diffusion of Innovations
• Who communicates with who
• Crossing the Chasm
• Question
• rdquoToolsrdquo For Business Development
• The Business Model
• Two Sides of Offering Example
• Slide Number 24
• Revenue Models
• rdquoToolsrdquo For Business Development
• Group Assignement II
• Slide Number 28
• Different Kinds of Substitutes