UMSI 363 Nancy A. Benovich Gilby Busting Myths and Pursuing Information Innovations with Mobile Apps in SWIFT Week 11 Nancy A. Benovich Gilby Ehrenberg Director of Entrepreneurship Clinical Associate Professor  University of Michigan School of Information 650-539-8376 nabgilby@umich.edu

Today Re-iterate Changes MVP 1/Final pitch demo Agree final project code in Interface builder/Swfit for finals week Chasm 2 with Elevator Pitch Your Project has gone through 7 weeks: You should have 18 interviews, KJ affinity diagram, Competition matrix, Wireframe, a start on your project app code, feedback on the above from your target users MVP 1 as either high fidelity prototype or swift/interface builder Share out: Present Pitch, Demo Revenue Model

Team Project Overview Form your team, establish ground rules, Interviews round 1, build app scaffolding, interview 6 target users Review Customer Development Round 1 and Potentially Pivot, Competition, sketch/wireframe, interview 6 target users complete a full SWIFT/PARSE scaffolding to use in developing your apps MVP1 Review Customer Development Round 2, Pivot, Competition 2, sketch/wireframe,, interview final 6 target users (18 total) Review Customer Development Round 3, Build and test KJ Affinity Diagram, wireframe, competition matrix test with users, for feedback Draft pitch, MVP prototype 1 (high fidelity prototype or Interface builder/Swfit) Top Line Revenue Model All teams pitch and review, MVP prototype 2, Business Model Canvas, Pitch and demo to VCs, Executives, Entrepreneurs

KJ of Note: The main difference is that Affinity Diagram focus on ideas whereas KJ Analysis is focusing on “facts”. MIT Rule of “7” If you have a crisp target user definition, you only need to interview 7 people and you will start hearing the same things. Set out to interview 15 or 20 with the end goal you will cull down to 7

Prepare for Share Out: KJ and Code Remind everyone” State your target user, top 3 problems, value hypothesis Each team will huddle for 15 minutes to review their score sheets and prepare to present the KJ and SUMMARY scores. STANDUP: Tell me, show your scrum board What do you propose for your demo MVP and your code MVP? What you did the week before to get the interviews, competition, wireframe done (if you weren’t in class last Friday) What you will do this week, What obstacles you have

Share Out target user description what is their urgent top 3 problems? What is your value hypothesis? Present your KJ: Problem Solution KJ Flow Top 3 items Repeat Solution Present your average scores Group discussion

Chasm 2

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

Hockey Stick The VC Revenue Curve Expectation: What is Success?? Big Enough Idea That It’s not Just Another Mouse Trap Users/ Revenue Go public, everyone makes millions $100M In the Tornado, can barely keep up with customer growth Everything is going according to plan First batch of users 1 3 5 Time (years)

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

Marketing?

Marketing Taking actions to create, grow, maintain, or defend markets … Shape something that is REAL. 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. Aggregate sales, both past and present

Why: Pragmatists Don’t Trust Visionaries as References!!! Order of Magnitude ROI MUST HAVE AN APPLICATION Measurable, Predictable Progress SERVICE!! Leading Bleeding Edge Technology 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? Early Market Chasm Bowling Alley Tornado Main Street Total Assimilation Go Bowling!!

"BUILD SOMETHING FOR SOMEBODY INSTEAD OF EVERYTHING FOR NOBODY" - Geoffrey Moore in Crossing the Chasm

How? Niche Territory Cross the chasm by targeting a very specific niche market where you can dominate from the outset, Create competition then dominate your competitors, and then use it as a base for broader operations. Concentrate an overwhelmingly superior force on a highly focused area

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

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?

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

Who is Adding How Much Value? How much value do developers add with just developing the core product in the early market? Compensating Developers :the pioneer technologist These divide into two camps— true company founders - bet their lives on the equity gamble -hope that in reading this book they learn to conserve a large portion of that equity to fund crossing the chasm very early employees - pose a real problem. They can point with accuracy to the notion that they created a large part of the core product. Thus, should that product become a mainstream market hit, they feel they should get a major share of the gains . The fact is, they don’t, and the truth is, bluntly, they don’t deserve it either. Mainstream success, as we have argued at length, is a function of the whole product, not the core product, and that is a very large team effort indeed. What the pioneer technologist does have a right to is a large share of the early market returns, because here it truly is the core product that drives success 1% Equity post Series A (institutional round)

Hockey Stick Revenue Model The VC Revenue Curve Expectation: What is Success?? Big Enough Idea That It’s not Just Another Mouse Trap Users/ Revenue Go public, everyone makes millions $100M In the Tornado, can barely keep up with customer growth Everything is going according to plan First batch of users 1 3 5 Time (years)

How do I get North of $60M in 5 years? Platform with multiple apps Multiple products Multiple geographies All of the above

MYTH: Once an entrepreneur, always an entrepreneur

Try the Elevator Pitch (Positioning: Create and Occupy a Space in the Target Customer’s Head) Format Example Intuit Bill Pay 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.

"BUILD SOMETHING FOR SOMEBODY INSTEAD OF EVERYTHING FOR NOBODY" - Geoffrey Moore in Crossing the Chasm

KJ Review

Sample Wildfire KJ Diagram

Sample Wildfire KJ Diagram: top 1 sections

Sample Wildfire KJ Diagram: top 3rd

KJ How To 1: Have one quote per black level post-it written in black, all caps, initals of speaker right hand corner JL-1 (for Joyce Lee quote #1) Red level post-its should be just a small step up in abstraction but should not be blackpostit1 AND blackpostit2 AND blackpostit3. Red, blue and green only have at most 3 post-it/post-it groups of (Red or blue) All teams must get to blue level Extra credit for a team if they get one section to Green level When you’ve abstracted your post-it’s as far as you can go, you finish putting putting the diagram on the paper MINUS the final ANSWER to the what question and the top 3 votes (see next slide)

KJ How To 2: Make the diagram like the coloring on the example Wildfire diagram. Add the FLOW arrows from your top most sections -> this leads to this <-> these both affect each other |-| these are counter to each other Each person gets 3 votes of 3,2,1 point. You vote on the read level of what most strongly answers your KJ WHAT question. Color (like the wildfire example) your top most points ( 1. RED X marks, 2. Blue \ marks, 3 green dots) Abstracting from your Red, Blue, Green red-level labels, write your final statement in RED in the upper right of the KJ diagram in all caps (yes the wildfire one is wrong) When the diagram is done, date and each of you sign the diagram in black at the bottom right THEN your teams all swing their arms in a circle while saying Yooooo then both clap and say ONE (yes goofy but it’s part of the ritual so give it a try).

KJ Diagram

Assignments Reading High Stakes, No Prisoners: A Winner’s Tale of Greed and Glory in the Internet Wars pgs 69-83 Ice Cream Social: The Struggle for the Soul of Ben and Jerry’s Chpts 3, Epilogue #26 Elevator pitch, project name, logo #27 Develop a revenue model and a timeline slide that shows you will reach $100M with your idea in 5 years (start with template) #28 Team: Test Elevator Pitch, Pitch Deck, Prototype, with 3 users, revise, score