Transcript Phase 1 - MVP - Market Value Proposition

OpenTTO.org - DILIGENT
Phase 2 – Market Value Proposition
MVP Objective
What is Value?
Benefits are Business Needs
A Day-In-The-Life
Building The VP Is Difficult
Confidence Index
©2004 OpenTTO.org
[email protected]
Slide 1
MVP
Objective
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P O
Transform
To develop a value proposition for the invention:
C
Templates
• What are the benefits?
• For which defined groups of customers?
• How to phrase that in business needs?
The process comprises three sub-steps:
• Firstly – understanding features and advantages
• Secondly – framing the business benefits.
• Thirdly – formulating the value proposition.
Only the existence of a market justifies commercialization!
©2004 OpenTTO.org
[email protected]
Slide 2
Market
Value Proposition
SUPPLIERS:
• Researchers
• Patent
Advisors
• IP Librarian
• Business Leads
• Partners
• Customers
INPUTS:
Mapping
Research
Patents
Markets
Customers
• Product Forecasts
• Government
• Executive
• Business Lead
START
Review Features
Advantages, Markets
PROCESS
Describe Customers
and Day-In-The-Life
Programs
Needs
Priorities
FINISH
Value Proposition
Elevator Pitch
©2004 OpenTTO.org
[email protected]
I
S
P O
Transform
OUTPUTS:
Value
Proposition
C
Templates
CUSTOMERS:
• Business Leads
• Governance Group
• Project Management
Customer
Description
• Researchers
• Partners
• Government
• Market Experts
Business
Need
• Business Leads
• Partners
• Market Experts
Priorities
• Researchers
• Patent advisors
• Funding
• Governance Group
Opportunity
Database
• Governance Group
• Business Leads
• Researchers
• IP Librarian
Slide 3
MVP SIPOC
1.0 CPA
Overview
2.1
Desc
ribe
Cust
omer
2.2
Feat
ures,
Adva
ntag
es,
Bene
fits
2.0
MVP
3.0 IDA
2.3
Draft
Busi
ness
Need
2.4
Live
DAY
IN
THE
LIFE
4.0 ADC
2.5
Valu
e
Prop
ositi
on
The end-customer need is examined from “living a day in the life”; the business
need and value proposition for potential users & licensees is developed.
Supplier
1.0 CPA
Process
2.1
Business Leads
Customers
2.2
Researchers
Product Development
Input
2.3
2.5
Customer meetings
Futurist Product Forecasts
©2004 OpenTTO.org
[email protected]
Describe ultimate customer for the IP
Value Proposition
or the results or outcomes of application of the IP
Business Needs Description
Work through features, advantages, benefits for
Customer Description
markets and then for customer segments
Elevator Pitch
Draft the business need addressed or
business opportunity created by the IP
2.4
IP Map
Sales briefings
Output
2.6
Live a “day in the life” of the end-user customer in
Customer
order to understand the business need/opportunity
3.O IDA
Develop a succinct value proposition statement
Business Leads
which portrays the economic value of the IP
Market Experts
Complete Confidence Index for MVP
Governance Group
Slide 4
MVP
Suppliers and Inputs
Typical questions for suppliers and inputs:
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Is the definition of what constitutes the “customer” clear?
Is the future customer distinct from the current customer?
Does the invention create a new market - disruptive?
Have the best technology and market sources been tapped?
Which potential partner’s views can shed light on the market value?
Is sufficient information known about?
– Primary customers for the technology?
– Secondary customers?
– Unexpected uses and customers?
• Is the market timing right?
©2004 OpenTTO.org
[email protected]
Slide 5
MVP
Process and Transformation
Analysing Market Value Proposition:
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Is this a compelling market value technology in terms of VP?
Is it an improvement or ancillary technology?
How would it be delivered to market to maximise the value?
Would an “owner” wish to own it exclusively?
Is is generic and would assist many firms to add value?
Which current products/services point to similar value creation?
How would firms capture the value this invention creates?
Does it require a capital intensive development?
When and how could prototypes be tested?
Which specific customers would have the greatest need.
©2004 OpenTTO.org
[email protected]
Slide 6
MVP
What is Value?
Value is in the mind of a client:
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It is not features
It is not advantages
It is not for a market
But it is for a client with a business need.
Value = Benefits - Cost
©2004 OpenTTO.org
[email protected]
Slide 7
MVP
Building Understanding of Value
Value = Benefits - Cost
Generate insights by:
• Understanding the key “features”
– Features are an objective characteristic of the invention
• Moving from features to “advantages”
– Advantages indicate how the invention’s features might help
someone in general e.g. a market segment (not a specific
client)
• Then moving from advantages to “benefits”
©2004 OpenTTO.org
[email protected]
Slide 8
MVP
Benefits are Business Needs
Benefits exist only with a particular business:
• “Business needs” require a business, a market
segment is an approximation
• “Benefits” for a market segment are only “features”
or “advantages” speculating on the needs of a
particular business
• That is one reason why product-oriented companies
struggle to become service-oriented e.g. HP
Be as specific as possible in defining a business or a tight market
segment in order to test the invention in relation to the business
needs
©2004 OpenTTO.org
[email protected]
Slide 9
MVP
Generate New Views of the “Market”
• Build on the research and other disclosures
– Lessons learned
– Be sure the ideas are not out of date
• Start in a related but new topical area
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GO to meetings and conferences in new fields
Link up with a Senior faculty member
Read books, journals, magazines, the paper
Collaborate in interdisciplinary teams
• Talk with companies & partners of interest
• Assess the “Market” with an open mind
©2004 OpenTTO.org
[email protected]
Slide 10
MVP
A Day-In-The-Life 1
The most powerful tool is a “Day in the Life”:
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Take a real day in the life of the customer
Ideally work with industry customer
Understand business needs and tensions
Capture potential licensee’s mindset and foresight
The assess importance and role of invention from
their perspective
Caveat: But don’t get locked in the day-to-day.
©2004 OpenTTO.org
[email protected]
Slide 11
MVP
A Day-In-The-Life 2
Joint formulation of value proposition:
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Build the story step-by-step
Understand the key drivers for the licensee
Engage in positive inquiry
Analyze how the purchasing decisions will be made
Understand the channel to market
Map the value chain and the “margin motivation”
Revisit the IP Map and the Technology Roadmap
©2004 OpenTTO.org
[email protected]
Slide 12
MVP
A Day-In-The-Life 3
Style of a value proposition:
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Business value
Why should anyone want to use the system?
What genuine value does it return?
Examples of things to consider
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What problem does it solve for potential customers?
Does it open a new market?
Does it better exploit an existing market?
Does it eliminate or reduce inefficiencies?
Does it solve the same problem as competing systems but at
less cost?
©2004 OpenTTO.org
[email protected]
Slide 13
MVP
A Day-In-The-Life 4
Bring back clear picture of the business value:
• Refine the value proposition or propositions
• Build a value-focused “elevator conversation”
• This is the first “market pitch” to answer:
– What is the essence of the business solution?
– Why is this a business problem needing solving?
– How big is the market?
– What is the competitive edge?
• Different pitches for different audiences
• Try to make one sentence as a clarifying exercise
• Note priority areas where clarity is lacking
©2004 OpenTTO.org
[email protected]
Slide 14
MVP
Elevator Pitch
Examples:
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1989 - Our system uses $300 hand-held scanners to capture and store
voter signatures so that you no longer have to distribute pollbooks to
your precincts on election day. The signatures appear on screen with
each voter’s record so that you can electronically verify absentee voter
signatures and signatures on petitions without going to the affidavits.
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2002 – Our system updates voter history and your signature database
by scanning an entire pollbook into a document database. It
automatically detects voter signatures, reads the voter barcode, and
updates voter records without user intervention. A task that until now
took weeks to complete is finished in less than a day.
©2004 OpenTTO.org
[email protected]
Slide 15
MVP
Building the VP is Difficult
Potential customer benefits are often unclear:
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Core technology inventions have long lead-time to market
End customer value may be unclear
Potential of the invention unknown to potential licensees
solution is to:
Focus on categories and segments of the market
Categories and segments should have common business needs
Extrapolate segments to individual customers
Get the “day in the life” customer excited about the future
The more specific the segmentation the better.
©2004 OpenTTO.org
[email protected]
Slide 16
MVP
Business Feel
Generating the VP is not a clear process:
• The people involved have to have “business feel”
• Requires inquiring minds and exploring customer needs
• Also requires “authenticity” and integrity
An innovation begins in the eye#:
• Be able to express the idea appropriately
• Use language and examples from the customer’s domain
• Try to find the “eye” of one of the participants
• Have them describe their version of the benefits & value
• Accept negativity with good grace
©2004 OpenTTO.org
[email protected]
Slide 17
MVP
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P O
Outputs and CustomersTransform
Present the Market Value Proposition:
C
Templates
• What is the most compelling proposition?
• Is there a layered set of VPs
– Short “elevator” pitch – one paragraph – four sentences
– Four paragraph version
– One page version plus quantitative data and justification.
• What further testing of the VP is needed?
Document and quantify the core value proposition and the
segmented and focused customer groups to which the value
proposition applies.
©2004 OpenTTO.org
[email protected]
Slide 18
MVP
Business Case 1
Not a business plan but “making the case”:
• Clarify the problem
• Certify domain expertise
• Outline key technical and business provisions
• Point of departure for additional documents
What is it not:
• Not a business plan
• No a marketing plan
• Not a design document
Awakening interest in the idea and the potential
©2004 OpenTTO.org
[email protected]
Slide 19
MVP
Business Case 2
Suggested sections:
• Introduction and elevator pitch – ½ to 1 page
• Discussion of value proposition – 1 page
• Discussion of feasibility of idea/technology – 1 to 2 pages
• Overview of the resources needed – 1 to 2 pages
• Risk overview of commercialization – ½ to 1 page
Plus conclusion:
• Summarize the benefits for an investor or collaborator
• Mention the timing of inputs and exits
• Back up with the funds or key first resources required
©2004 OpenTTO.org
[email protected]
Slide 20
MVP
Risk Assessment
Preliminary risk issues:
• Failure of the value proposition – too weak to attract partners
• Failure to complete the development
• Ability to establish measurable milestones
• Insufficient resources – will adding resources later work?
• Failure to deliver required quality
• Delivering the wrong system – market awareness,
communication
Outline the consequences and mitigation
– avoid, transfer, reduce, accept, decline
Describe how the benefits justify taking the risks
©2004 OpenTTO.org
[email protected]
Slide 21
MVP
Templates
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P O
C
Transform
Phase documents:
Templates
• Business Case
• Phase Summary report:
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Objective
Conclusion
Summary
Actions
Notes and carry-forward handover matters
• Actions for further work may precede or run in
parallel with the next Phase - IDA
©2004 OpenTTO.org
[email protected]
Slide 22
MVP Confidence Index
How confident are you that:
1. The market has been sufficiently focused and well-defined?
2. The invention has been well understood in the context of the
market?
3. The business need of potential licensing customers has been
well understood?
4. The key features and advantages were defined adequately?
5. The advantages were adequately distinguished from benefits?
6. The Value Proposition is compelling for partners?
7. The market timing is or will be optimum?
8. The Elevator Pitch is compelling and tight?
9. The potential benefits exceed costs by 3+ times?
10. The time-to-market is expeditious and achievable?
©2004 OpenTTO.org
[email protected]
Slide 23