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Business Plan

Entrepreneurship 4543

Module leader: Dr Shehryar Shahid Office: 418-C Email: mshehryar@ucp.edu.pk

VALUE PROPOSITIONS

what are you offering them? what is that getting done for them? do they care?
images by JAM

Agenda
Customers Customers Customers

CUSTOMER SEGMENTS

which customers and users are you serving? which jobs do they really want to get done?
images by JAM

Test Hypotheses: Problem you assume to fix Buyer User Payer

Mind You
Be Focused & Diligent Start-ups are ONLY meant for NICHES, so always find one You are SO SO SO full of constraints Learn to say NO!

Market Type
Existing Customers Customer Needs Competitors Risk Known Performance Many Lack of branding, sales and distribution ecosystem Google Resegmented Possibly Known Better fit Few Market and product redefinition Southwest New Unknown Transformational improvement None Evangelism and education cycle

Examples

Groupon

Market Type determines: Rate of customer adoption Sales and Marketing strategies Cash requirements

Existing Market
Characteristics: Customers are always hungry for better performance Incumbents exist Usually technology driven

Positioning driven by product and how much value customers place on its features Risks: Incumbents will defend their turf Network effects of incumbent Continuing innovation

Resegmented Market
Low cost provider (Southwest) Unique niche via positioning (Whole Foods)
What factors can you eliminate that your industry has long competed on? Which factors should be reduced well below the industry standard? Which factors should be raised well above the industrys standard? Which factors should be created that the industry has never offered? (blue ocean)

New Market
Customers dont exist today How will they find out about you? How will they become aware of their need? How do you know the market size is compelling? Which factors should be created that the industry has never offered? (blue ocean) High rewards

The Ecosystem (Customers)


End User

Day to day users May actually have zero influence in buying process

Influencer / Recommender

Preferences and decisions influence or impact buying decisions

Economic Buyer

The person who controls the purse strings or is in charge of the budget

Decision Maker

The buck stops here

Customer Types

Corporate? Consumer?
Business to Business (B to B)
Use or buy inside a company

Business to Consumer (B to C)
Use or buy for themselves

Business to Business to Consumer (B to B to C)


Sell a business to get to a consumer Other Multi-sided Markets with multiple customers

Corporate Customers
Business to Business (B to B)

What do they want you to do?


Increase revenue? Decrease costs? Get them new customers? Keep up with or pass competitors? How important is it?

Corporate Market Type


Existing Market? Resegmenting an Existing Market?
niche or low cost

New Market?

Whos the Customer in a Company?


User? Influencer? Recommender? Decision Maker? Economic Buyer?

Consumer Customers
Business to Consumer (B to C)

What do they want you to do?


Does it entertain them? Does it connect them with others? Does it make their lives easier? Does it satisfy a basic need? How important is it? Can they afford it?

Market Type
Existing Market? Resegmenting an Existing Market?
niche or low cost

New Market?

Consumer Customers
Do they buy it by themselves? Do they need approval of others? Do they use it alone or with others?

Multi-Sided Markets
Business to Business to Consumer (B to B to C)

Whos The Customer?


Consumer End Users, Corporate Customers Pay Multiple Consumers

Multiple Customer Segments


You can always choose to serve more than 1 customer segment Each has its own Value Proposition Each has its own Revenue Stream One segment cannot exist without the other Which one do you start with?

Pass/Fail Signals & Experiments


How do you test interest?
Experimentation General observation Literature survey

What kind of experiments can you run?


Street testing Social networking sites, blogs etc. Offline surveys

Pass/Fail Signals & Experiments


Where do you test interest?
Who is most likely to buy? Who is most accessible?

How many do you test?


There is no magical number The more, the better DO NOT wait for absolute certainty

In Class Exercise
Draw the customer segment block for the given business concept What market type? Why?
Existing, resegmented and/or new?

What customer type? Why?


Corporate, consumer or both?