Marketing for Entrepreneurs (Tue Nov 7, lecture 18)

Homework due for today

Legend: :Participation :Early :PDF

  1. Read: Reflect on your personal reactions and feelings on the Lean Startup technique. Please don’t simply parrot what’s in the book. Pause to think about what it has been like to apply it so far. What are some key learnings? How would you explain it to a friend? What parts of it don’t you think are valuable? Deliverable: Post with your personal reflection
  2. Read: Achieve product Market Fit. After reading it on your own, get together with your project team, spending 1-2 hours together. Based on the reading discuss and debate the “Value Proposition Canvas” and how it applies to your project. The purpose of this exercise is for you to better understand the value proposition your product is going after, as well as the customer segment that you are going after. Team Deliverable: Write up the results of the discussion about your overall value proposition and customer segment. Also include your ‘filled in’ vp canvas. Dont worry about making it fancy just include the info. Submit to Latte as a pdf.
  3. Teams: Meet for at least 2 hours per week! Continue working on Stage 2 of Term Project Outline. Continue refining your product, getting more feedback and supporting information and preparing your Term Project Final Deliverables

Discussion

Here’s an example elevator pitch. Please critique it:

"Do you know how when someone is new to a city or visiting it, it's hard to know the hotspots and the fun places to go? Or say you have 2 hours to kill while you wait for your flight? We're building a smartphone app which will give you a few focused recommendations based on where you are, what you want to do and how much time you have. We'll crowdsource recommendations, and have game mechanics to make it fun. We're not sure yet how we'll make money but we're thinking along the lines of coupons or sponsored recommendations. It will be designed as a platform so we can easily release it for other cities.
Tips for elevator pitches
  • You should have it at the tip of your tounge so when you run into the president you can answer the question: “So, what’s your business do?” in a clear, interesting, catchy, provocative manner.
  • Purpose of an elevator pitch is to sell. To get the listener to say, “hmm, let’s sit down so you can tell me more.”
  • An elevator pitch is meant to be spoken or read to a potential investor or board member
  • Put yourself in the listeners shoes, really!
  • Imagine that they say, “So What?” in response to each of your lines
  • If there’s a very obvious objection, respond to it right away.
  • Hook them with the first words out of your mouth.
  • Your goal is that they say, “Tell me more!”, or “Please show it to me!”, or best, “I need one of those, I will pay anything for it!”
Background
  • We are going to try our hand at designing an elevator pitch for a product or service that you know well. You can also referer to Elevator Pitch
  • Think about who the pitch is to, because the way the pitch goes is different depending on the audience
  • In general the elevator pitch should be short, and it has a goal of persuading a particular audience that they should be interested in your product and want to learn more about it
  • Remember This is not an ad on radio or tv, it’s a pitch between you and a person you are trying to influece.
Mission
  • Break into teams and discuss the problem. Come up with the best elevator pitch for one of these products would be. While you don’t want a fixed script you do want to make sure you write down all the key points or phrases to make sure you don’t leave anything out.
  • Meet with your sister team and compare what you came up with and then refine to produce one unified result. Prepare to deliver the pitch and also give an explanation of what you are trying to achieve with each piece of it.
Specific assignments
  • Team 1 and 2: Harley Davidson (Audience: Big Time Investor)
  • Team 3 and 4: Godiva Chocolates (Audience: National retail chain)
  • Team 5 and 6: Brandeis University (Audience: Big time donor)
  • Team 7 and 8: NEST Thermostat (Audience: Real estate moguls)
  • Team 9 and 10: Jet.com (Audience: Big time investor)

What is a ‘market’ in this context?

  • How do you think about the market size?
  • Look at segments, value proposition and market entry
  • Segments: For your market or customer hypothesis, you need to understand the market(s) and segment(s) you are serving.
  • Notice that these are not black and white, they can be continuums or multi-faceted.
  • Types
    • Mass Market: Huge and undifferentiated. Horizontal, e.g. consumers age 12 to 18.
    • Niche: Highly specific: Vertical, e.g. Bicyclists
    • Segmented: your product serves more than one segment. Apple serves the consumer and education market segments
    • Diversified: your product serves very different markets: Amazon serves consumers and software developer
    • Two or multi-sided markets: brings two or more segments together: dating services, newspapers
    • there are others…

Value Proposition:

  • For each segment you need to express what value your product or service is creating.
  • If you cannot express it than you probably should not be trying to address that market.
  • It’s not just that you are offering something ‘new’ to that segment. It could also be:
    • cheaper (to buy or to use)
    • faster
    • more convenient
    • better designed
    • more customized
    • brand
    • safer/less risky
    • more available (segment couldn’t get it, use it, access it before)

Market Entry

  • Existing market
    • Your customers (kind of) understand the problem and your solution
    • You have (kind of) competitors
    • Your customers will have to stop using another product
    • Sometimes your entry can grow the number of customers, sometimes you fight it out (e.g. Facebook for Seniors. Is that a new or existing market?)
    • So you can:
      • ENTER an existing market, e.g. Android joining iPhone and compete directly
      • RESEGMENT an existing market - with one of value propositions above, e.g. iPhone joining Blackberry
      • RESEGMENT a market - by going after a sub-component of it, e.g. Tesla entering automobile market
  • New Market
    • Your customers may not know they have the problem
    • You have to teach/explain them why your product/service exists
    • They will have to find budget (money) to pay for it.
    • This is a very expensive process for you
    • So you can:
      • CREATE a totally new market, e.g. Palm, creating the PDA market
  • Discussion: Let’s see what advantages and challenges each example has
  • Exercise:
    • Company and market
      • Barnes and Nobel Nook
      • Tesla Motors
      • Olin College
      • Apple iTunes
      • Raspberry Pi
      • Nest Thermostat
      • Microsoft X-Box
      • Makerbot Replicator
      • Google Android
      • Pocket Hose (google it)
    • 5 minutes: Team up in by classroom table, pick a different product, and answer:
      • what market(s) is this company and/or product in
      • what segment and kind of segment does it compete in
      • what is it’s value proposition is it offering that market
      • how did it attack or enter the market
      • additional observations and/or insights?
  • Report out by table

Summary

  • What is an Elevator Pitch
  • How do you design one?
  • Market Segments
  • Value proposition
  • Market Entry

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