Lean Launchpad Tucson - Customer Relationships
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Transcript of Lean Launchpad Tucson - Customer Relationships
Lean LaunchpadLecture 5: Customer Relationships
Aaron EdenCreated by Steve Blank
Weekly Topics
» 5/12 – What to Expect» 5/19 – First Pitches» 5/26 – Experiment Day» 6/2 –Value Propositions» 6/9 – Customers, Users, Payers» 6/16 – Distribution Channels » 6/23 – Customer Relationships » 6/30 – Revenue Models» 7/7 – Partners» 7/14 – Key Resources & Costs» 7/21 – Lessons Learned Presentations
Agenda
» Team Presentations» Customer Relationships» Mentoring
Presentations
» What were your hypotheses about who/what your channel would be? Did you learn anything different?
» Did anything change about Value Proposition? » Update your Google Group with Business Model
Canvas» Draw your channel diagram
Verb Club
WionTV
Appstore Analytics
Forward Intelligence
City Recess
Source: http://giffconstable.com/
key activities
value proposition
customer relationships
customer segments
key partners
revenue streams
channelskey
resources
cost structure
CUSTOMER RELATIONSHIPS
What relationships are you establishing with each segment? personal? automated? acquisitive?
Retentive??
We Call Customer Relationships
Demand Creation• Get, Keep and Grow• How will customers hear about your product?• How much will it cost to acquire a customer using these
strategies?• How does market type impact my demand creation
strategy?
Customer Relationship Definition
GetKeepGrow
Get Customers
Who needs to hear about you?
End User
Influencer / Recommender
Economic Buyer
Decision Maker
Suppliers
Channels
Government
Partners
Demand Creation Getting Free UsersDemand
Creation
• Search Engine Optimization (SEO)• Blogging / Sharable content• Social Media / Gaming Mechanics• Communities• Proven viral coefficient >1
Demand Creation Paying For Users
Demand
Creation
» Public Relations» Demand Capture
˃ SEM˃ “Free” products (e.g. widgets)˃ Biz Dev˃ Affiliate Marketing
» Market Education˃ Webinars˃ Email marketing˃ Trade Shows˃ Analyst Reports˃ Direct Sales˃ TV / Radio
Get Customers Funnel - Physical
“Get Customers” Funnel
Keep Customers
Keep Customers Funnel - Physical
Get Customers Loyalty Programsproduct updates
Keep Customers
Customer check-in calls
Customer satisfaction survey
Earned and Paid
Media
Grow Customers
Grow Customers Funnel - Physical
Earned and Paid Media
Get Customers
Keep Customers
Grow Customers
Awar
enes
s
Inte
rest
Cons
ider
ation
Purc
hase
Keep Customers
Loyalty Programsproduct updates
Grow CustomersU
n-Bundling
Up-Sell
Cross-sell
Referrals
Customer check-in calls
customer satisfaction survey
Get Customers
Get Customers Funnel – Web/Mobile
“Get Customers” Funnel
Acqu
ire
Activ
ate
Viral Loop
Demand Creation Feeds the Sales Funnel
Earned and Paid Media
SEO
PR
Viral Mktg
SEO
SEM/PPC
Blogs/Website
Affiliate Mktg
Advertising
Tradeshows
Viral Loop
“Get Customers” Funnel
Acqu
ire
Activ
ate
Keep Customers
Keep Customers Funnel – Web/Mobile
Earned and Paid
Media“Get Customers”
Acqu
ire
Activ
ate
Viral Loop
Keep Customers
Affiliate ProgramsProduct updates
Blogs, RSS, emails
Contests,events Loyalty
Programs
Grow Customers
Grow Customers Funnel – Web/Mobile
Keep Customers
Contests,events
Blogs, RSS, emails
product updates Affiliate Programs
Grow CustomersN
ext-Sell
Referrals
Up-Sell
Cross-sell
Loyalty Programs
Acqu
ire
Viral Loop
Earned and Paid
Media
Activ
ate
• How many come through the first step?
• How much does that cost?• What is the conversion between
each level?• How much in revenues can you
get out of each acquired customer?
Demand Creation by Market Type
Existing
Resegmented
New
Clone
• Create, drive demand into your sales channel
• Educate the market about what’s changed
• Drive demand into channel
• Educate the market• Identify/drive early adopters into your
sales channels
• Copy a business
Market TypeExisting Resegmented New
Customers Known Possibly Known Unknown
Customer Needs Performance Better fit Transformational improvement
Competitors Many Many if wrong, few if right
None
Risk Lack of branding, sales and distribution ecosystem
Market and product re-definition
Evangelism and education cycle
Examples Google Southwest Groupon
How does market type influence demand creation?
Market Type determines: Rate of customer adoption
Sales and Marketing strategies Cash requirements
Homework - Web• Get a working web site and analytics up and running
+ Track where your visitors are coming from (marketing campaign, search engine, etc.) and how their behavior differs
+ What were your hypotheses about your web site results?• Actually engage in “search engine marketing” (SEM)• Spend $20 as a team to test customer acquisition
cost.• Ask your users to take action, such as signing up for a newsletter.• Use Google Analytics to measure the success of your campaigning.• Change messaging on site during the block to get costs lower, team
that gets the lowest delta costs wins.• If you assume virality
• Show viral propagation of your product and the improvement of your viral coefficient over several experiments
• What is your assumed customer lifetime value? • Are there any proxy companies that would suggest
that this is a reasonable number?
Homework – Non-Web• For non-web teams:
• Get prototype demo working.• Build demand creation budget and forecast.• What is your customer acquisition cost?• Did anything change about Value Proposition or Customers/Users?• What is your customer lifetime value? Channel incentives – does your
product or proposition extend or replace existing revenue for the channel?• What is the “cost” of your channel, and it’s efficiency vs. your selling price?
• Everyone: Update Google Group• What kind of initial feedback did you receive from your users?• What are the entry barriers?• Present and explain your marketing campaign. What worked best and
why?• Read:
• The Startup Owners Manual, pages 277-331 • Watch: Mark Pincus, “Quick and Frequent Product Testing and Assessment”,
http://ecorner.stanford.edu/authorMaterialInfo.html?mid=2313
Examples
“insero” = to plant ”gen” = gene
Manufacturing platform for rapid, cost-effective, and scalable
production of therapeutics in tobacco
Lucas Arzola (EL)Karen McDonald (PI)
Vasilis Voudouris (Mentor)
What We Know
» We have a novel technology platform with numerous market opportunities» Our working hypothesis – that we can scale up and commercialize our
platform for production of life-saving therapeutics» Jon Feiber – “Since you are a platform technology, it makes sense to
engage in ‘market discovery’ and ‘customer discovery’ at the same time during the next weeks”
» Challenging this hypothesis by speaking with as many experts and customers as we can
» This week: explored decision making and distribution channels in the case of a pandemic
The Business Model Canvas
Tobacco SuppliersGene Synthesis CompaniesCMOs - Purification - Fill & Finish- Packaging- QA/QCCROs- Clinical TrialsFDA
Capital InvestmentsManufacturing CostsLicensing CostsMarketing
Contract Manufacturing Fully Integrated Manufacturing (Sales) Licensing (Royalties)
Distribution through Government and Pharma Companies
Long-Term Contracts with Government and Vaccine Manufacturers
U.S. Government- CDC - HHS BARDA- DOD DARPAForeign GovernmentsNGOsVaccine Manufacturers-Established and Emerging Biotech
SpeedCost-EffectivenessRobustnessScalabilitySafetyEase of CustomizationU.S. Supply
R&DManufacturingRegulatory ApprovalLicensingMarketing
IP – Patents, Trade SecretManufacturing Facility
Target Product – seasonal & pandemic flu vaccines
Getting Out of the Lab!Cast a broad net by talking to many different experts and customers:
(1) Executives from large companies
Name Title Institution
Michael Girard Sustainability Manager Aerojet
Michael Jacobson Director of Corporate Responsibility Intel
Joseph Kieren Director of Corporate Real Estate AT&T
(2) Entrepreneurs and angel investors from SacramentoName Title Institution
Andrew Hargadon Professor of Management UC Davis
Wil Agatstein Professor of Management UC Davis
Larry Palley Former General Manager Intel
John Selep Operations Manager HP
Thomas Alberts Consultant SBDC
Cary Adams Head of MedStart Program SARTA
Getting Out of the Lab!
(3) Experts in the commercialization of biotech platform technologies
Name Title Institution
Greg McParland Consultant DSM Ventures
Fernando Garcia Senior Director Amyris
(4) Experts in vaccine manufacturing
Name Title Institution
Ann Arvin PCAST Vaccinology Working Group (Key Opinion Leader on Vaccines)
Stanford
Misa Sugui Associate Scientist MedImmune
Floro Cataniag Laboratory Manager MedImmune
Channels and Distribution
Conversation with Dr. Ann Arvin – Key Opinion Leader on vaccinesIn the case of a pandemic: Vaccine manufacturers have to be producing vaccines for seasonal flu –
regulatory approval, QA, and validation need to be in place When a pandemic occurs, the government (BARDA) negotiates a manufacturing
contract with vaccine companies – number of doses, formulation, price, and time are agreed upon
CDC provides the elucidated strain to the manufacturer FDA considers the pandemic flu vaccine to be a variation of the seasonal flu
vaccine – new regulatory approval is not necessary Vaccine manufacturers work with the new strain to ramp up production as
quickly as they can – takes 4-6 months Sterility and quality testing is performed for the produced vaccines – some tests
are done in-house and some are done by outside laboratories Vaccine is released
Channels and DistributionGetting the vaccines to the patients Vaccine manufacturers have contracts with wholesalers (i.e. McKesson Corp.)
to distribute the vaccines – distribution is not a cost for the manufacturers, they hand over the product
In the case of a pandemic, vaccines are also distributed through local contracts with the state health departments
They distribute the vaccines to hospitals and clinics, where they can be administered to the patients
Organizational StrategyConversation with Greg McParland – Former CEO of biotech platform company:
the virtual biotechnology company model» “Starting out and for as long as you can, you should be a virtual company. You can
have contracts to outsource the downstream part of the process (purification, fill and finish, packaging, etc.) ”
» “Keep your core technology and focus on using your manufacturing platform for protein production”.
» Common practice in biotechnology – almost every company has contracts with CROs, CMOs, marketing and distribution arrangements, etc.
» More flexibility – move quickly from failed avenues of research to more promising projects
» Startups partner with big pharma companies to complete clinical trials and take product to market
“If you build it, they will come” – but only build the essential core that lets you control your technology platform
More FeedbackConversation with Dr. Ann Arvin – Key Opinion Leader on vaccines Pain point: Reliability issues with traditional egg platform - willingness to move
away to a different manufacturing platform Pain point: Current platforms are not fast enough, cannot have an impact in case
of a pandemic - sense of urgency in finding a manufacturing platform that can produce vaccines faster and at a large scale
Given this landscape, we still believe our technology can solve a significant problem in the vaccine market
Conversation with Dr. Misa Sugui & Dr. Floro Cataniag – MedImmune Pain point: attenuated virus platform is harder to work with, safety measures are
more stringent – would prefer recombinant subunit vaccines Wish: a faster process for vaccine production (our technology can help with this) Wish: a faster process for clinical trials and for approval of new drugs (this we
can’t do anything about) MedImmune is a possible partner - always looking for new vaccine production
technologies and new products to incorporate in their pipeline
More FeedbackConversation with Fernando Garcia – Amyris Biotech platform technology company First target product: drug for malaria, partnered with Sanofi to commercialize Change in strategy: they have transitioned into making biofuels Why have they made this transition? We will follow up with one of the founders
of the company to find out
Next StepsWe believe we have a good feel for our value proposition
We need to better understand how we can sell to customers and how to establish these relationships, how partners’ decisions are made – meeting with Sanofi Head of External R&D
Keep searching for a business model that will allow us to commercialize our technology – looking for meetings with companies that distribute/sell flu vaccine antigens for research and diagnostic use, trying to determine market size
We need to talk to many more experts and customers…
Business Canvas
Interviews
Action MotionCustomer Interaction Meetings:1. Director of R&D of C/A partner2. NETL Methane Hydrate RG3. Ed Faust, Global Marketing, Siemens4. Former GE Employee5. Berkeley sensors group6. Tim Fogarty, Director of IW Energy
Hypothesis Testing:1. Ed Faust, Global Marketing, Siemens
Planned Hypothesis Testing:1. Dr. Gilad Kusne, NIST2. Ann Truschel, Corporate Insurance
Broker3. Tim Fogarty, Director of IW Energy
Planned Customer Interaction Meetings:1. Jeff Farbacher, CEO Accutran2. Ed Faust, Global Marketing, Siemens3. Charles Noll, Marcellus Shale Coalition
ClusteredC
lu s
te
red
nu
Direct Marketing
Possible
Not Possible[Too expensive]
Marketing AgencyChemical
Chemical,Physical,Thermal….
- Every significant market segment has specific marketing agencies directed towards selling them goods
Direct sales to plants typically is a very hard way to generate scalable business in the sensors market.
Typically much better to bundle product into offerings from larger sensors businesses
Agrees with current approach to this first market!