UMSI Entrepreneurship UMSI 663 Fall /6/2015 Week #9 Nancy A. Benovich Gilby Ehrenberg Director of Entrepreneurship Clinical Associate Professor School of Information

Team Project Overview 1.Form your team, establish ground rules, Interviews round 1 2.Review Customer Development Round 1 and Potentially Pivot, Competition, Market size 3.Review Customer Development Round 2, Pivot? 4.Review Customer Development Round 3, Pivot? KJ Affinity Diagram, Test with Users 5.Design Thinking for initial brainstorming, wireframe test with users, Skeleton of App 6.Business Model Canvas, Front End Screens in Swift and optional, start prototype language 7.Skelton for prototype starting from Parse examples, Dummy Dataset, 8.Draft pitch, Final Dataset, backend, build app scaffolding, 9.All teams pitch and review, MVP prototype 10.Pitch and demo to VCs, Executives, Entrepreneurs Project Week:

Are you having fun yet….Wireframing? Did you include indicators in your wireframe of where you are addressing the 3 urgent problems/needs/meaningful items from the KJ?

Today Theory behind “Niche Market” Chasm Shareout – Wireframes & 3 meaningful items Business Model Canvas, Front end screens in Swift Walk through of Parse: Initial full-stack application template using Parse assignment

”Build Something for SOMEBODY Instead of Everything FOR NOBODY" - Geoffrey Moore in “Crossing the Chasm”

Minimal Viable Product

IDEATION: Customer Development Customer Search Customer Validation ProblemsSolutions Week

Minimal Viable Product

”Build Something for SOMEBODY Instead of Everything FOR NOBODY" - Geoffrey Moore in “Crossing the Chasm”

Who is the FIRST target, specifically

Chasm Model: The People The market waiting and watching…FUD!!

Marketing?

Market? Aggregate sales, both past and present for products or services

Marketing “taking actions to create, grow, maintain, or defend markets”

MARKET!!! A set of actual or potential customers For a given set of products or services Who have a common set of needs or wants, and Who reference each other when making a buying decision.

Market Segment? Natural market boundaries within an aggregate of current and potential sales (boundaries around customers or users who reference each other) A group of people you can wrap your arms around and count

Adoption of New Technologies

Classical Diffusion Theory When faced with discontinuous innovations, customers fall into five broad categories along an axis of risk-aversion. Innovators Early Adopters Early Majority Late Majority Laggards Everett Rogers (1962)

Technology Adoption Life cycle In high-tech, the categories have been given more specific names (Geoffrey Moore). Innovators Early Adopters Early Majority Late Majority Laggards = Technology Enthusiasts = Visionaries = Pragmatists = Conservatives = Skeptics Geofferey Moore 1991

Technology Adoption Life Cycle – Types of Consumers Discontinuous Innovation Pragmatists create the dynamics of market development. InnovatorsEarly Adopters Early MajorityLate MajorityLaggards Techies: Try it! Pragmatists: Stick with the herd! Conservatives: Hold on! Skeptics: No way! Visionaries: Get ahead of the herd!

Hockey Stick The VC Revenue Curve Expectation: What is Success?? Big Enough Idea That It’s not Just Another Mouse Trap Time (years) First batch of users Everything is going according to plan Go public, everyone makes millions Users/ Revenue In the Tornado, can barely keep up with customer growth $100M

Point of Peril Page 22 Time First batch of users Oh no, What’s wrong, I’m scared Users/ Revenue

Point of Peril – the Chasm Innovators Early Adopters Early MajorityLate MajorityLaggard s

Techie Innovators Primary Motivation: –Learn about new technologies for their own sake Key Characteristics: –Strong technical aptitude –Like to test new products –Can ignore any missing elements –Like to help –Want no-profit pricing (preferably free) Key Role: Gatekeeper to the Early Adopter

Early Adopters - Visionaries Primary Motivation: –Visionaries –Highly motivated, driven by a revolutionary breakthrough Key Characteristics: –Visionary executives going ahead of the herd –Driven by competitive advantage –Will help pay for new paradigm –Demand “what ever it takes” commitment –Rely on their own judgment –Strategic thinkers, not from technology itself Think project not product Key Role: Fund the development of the early market

Early Majority Primary Motivation: Pragmatists Gain sustainable productivity improvements via evolutionary change Key Characteristics: Astute managers of mission-critical applications Understand real-world issues and tradeoffs Focus on proven applications Like to go with the market leader Must have complete whole products Insist on good references from trusted colleagues Key Role: Bulwark of the mainstream market

Four Value Propositions Go ahead of the herd for competitive advantage. Go ahead of the herd to fix a broken business process. Go with the herd to create new infrastructure. Go after the herd to get better values. Early Majority

Why: Pragmatists Don’t Trust Visionaries as References!!! New & revolutionary Unique functionality Horizontal references Willing to take risk Want rich tech-support Revolutionary processes Tolerate bugs Standard Third party supporters Vertical references Little risk Great quality of support Enhance established processes Bug free

How do you Cross the Chasm? ????

How Do You Cross the Chasm? Early Marke t Chasm Bowling Alley Tornado Main Street Total Assimilation Go Bowling!!

Facebook Bowling Alley Example Adoption happens by groups who reference each other College Students Twenty Some things Twenty Some things First Time Workers Middle Age Workers Middle Age Workers High School Students High School Students Mom’s and Dads Middle School Students Middle School Students Grand Mas and Pas Grand Mas and Pas Aunts and Uncles Company Where does the Early Majority begin here? How hard did Facebook need to work to get the Early Majority?

To WIN the Niche Market Pick on someone your own size, pick carefully What “features” do we need to build? Product Development’s role is to help determine and execute the whole product For a TARGET CUSTOMER MUST HAVE, COMPELLING Reason to Buy

Where does the MVP fit in?

Page 34 If I could leave you with the most important things I’ve learned over 20+ years: 1.Strategy & plan must be based on the REALITIES of where you are in the adoption cycle of your product in the market 2.Development’s role is to help determine and execute the whole product (Development = Product Management + Engineering) 3.Engineering is responsible to find a solution, within a given time window, determine how much the solution costs 4.Once a plan is agreed, engineering must ship on time, every time. GET 3 Referenceable Customers

Try the Elevator Pitch (Positioning: Create and Occupy a Space in the Target Customer’s Head) For (target customers— beachhead segment only) Who are dissatisfied with (the current market alternative) Our product is a (new product category) That provides (key problem- solving capability). Unlike (the product alternative), We have assembled (key whole product features for your specific application). For For the bill-paying member of the family who also uses a home PC Who are dissatisfied with Who is tired of filling out the same old checks month after month Our product is a Quicken is a PC home finance program That automatically creates and tracks all your check-writing Unlike Unlike Managing Your Money, a financial analysis package We have assembled Our system is optimized specifically for home bill-paying. Format Example Intuit Bill Pay

”Build Something for SOMEBODY Instead of Everything FOR NOBODY" - Geoffrey Moore in “Crossing the Chasm”

Shareout - Wireframes & How you plan to address the 3 meaningful items form the KJ Target User Chasm Elevator Pitch Walk through Wireframes: –Start with User Scenario and include top 3 items –Now everything is peachy…as you walk through addressing these top 3 items

Assignment #16: 3 of either Business Model Or Lean Model Canvas

Business Model Canvas: 3

leanstack.com

Assignment #17: Front End Screens From your wireframes, layout all the screens, put draft design. Make sure we can click through multiple screens and see the full design as we will make sure you cover at least what is in the wireframes. You do not need to get all the constraints correct. You can hardcode to a specific screen size. SUBMIT AS A TEAM: 1.zipped file of your code, it should "run" in the simulator so we can click through it but obviously there is no functionality, data etc, we are just looking at the screens 2.You will share this with the 3 users you will meet with this week 3.You will have each user score your screens running on the simulator with the following score sheet

Full Stack – Parse! mBaaS

Assignment#18 Parse Sign Up, Login, Data Management

Jason Blessing Talk: PLEASE RSVP Everyone is welcome to attend pm Wednesday, Nov. 11 Ehrlicher Room, 3100 North Quad 105 S State St, Ann Arbor How to get to North Quad You're invited to hear Jason Blessing, chief executive officer of Plex Systems, when he discusses "Lessons from the Trenches: How the CEO of a Thriving Start-up Went from Michigan to Silicon Valley … and What He Learned Along the Way." Jason is the CEO of high-flying software company, Plex Systems, and also serves as a member of the company’s Board of Directors. Jason joined Plex from Oracle, where he was senior vice president of Talent Management Cloud Applications. He joined Oracle in 2011 through the acquisition of Taleo, a pioneer in cloud software. Jason founded Taleo’s small and medium-sized business unit, where he had global responsibility for sales, marketing, product development and services. Jason holds a bachelor’s degree from the University of Michigan and currently resides in the San Francisco Bay Area. Light refreshments will be provided. | RSVPs appreciated to help with food count.