UMSI Entrepreneurship Nancy A. Benovich Gilby Ehrenberg Director of Entrepreneurship Clinical Associate Professor  School of Information 650-539-8376 nabgilby@umich.edu 2016 Winter UMSI 363 Class #9

Today 1:10 – 1:15 Preparing presentation and Demo 1:15 – 2:30 Lab/Standup/Organize for Shareout – Work on your presentation for the video, slides for the demo, demo code and QUIZ (BEFORE AND AFTER USER SCENARIO) 2:30 – 3:00 Good Pitching skills - Examples, Chasm 2, 3:00 – 4 Share out (closed computer, phone)

Team Project Overview Project Week: Form your team, establish ground rules, Interviews round 1 Review Customer Development Round 1 and Potentially Pivot, Competition, Market size Review Customer Development Round 2, Pivot? Review Customer Development Round 3, Pivot? Skeleton of Swift App KJ Affinity Diagram, Design Thinking for initial brainstorming, wireframe, xcode storyboard layout to wireframes, test with users Elevator Pitch, Business Model Canvas 3, backend, build app scaffolding, Pitch video, Revise MVP All teams pitch and review, MVP prototype Pitch and demo to VCs, Executives, Entrepreneurs

1:10 – 1:15 Preparing presentation and Demo (BEFORE AND AFTER USER SCENARIO)

Your VIDEO Presentation Format: 5 Minutes http://www.sequoiacap.com/grove/posts/6bzx/writing-a-business-plan We like business plans that present a lot of information in as few words as possible. The following business plan format, within 15–20 slides, is all that’s needed. Problem Describe the pain of the customer (or the customer’s customer), with an actual “user” tell a story Start a user scenario (STORY), use quotes Outline how the customer addresses the issue today. Solution Show your company’s value proposition to make the customer’s life SIGNIFICANTLY better Continue the scenario, have use cases. Why now Set-up the historical evolution of your category. Define recent trends that make your solution possible. Market size (SHORT) Identify/profile the customer you cater to. Calculate the TAM (top down), SAM (bottoms up) and SOM. Competition Matrix, Describe Landscape Show competition matrix List all your competitive advantages Why you as a team believe (or not) KJ, quotes, What you’ve learned What’s Next and Team. Company timeline with development roadmap Founders, why great team

Your LIVE DEMO Presentation Format: 4 Minutes Company Name, ELEVATOR PITCH Introduce the company with your elevator pitch KJ We did X # of interviews, processed and prioritized what we heard and shared this diagram back with our target users for feedback” SLIDE with LARGE picture of your KJ Walk through KJ, emphasizing top 3 problems DEMO REMEMBER: user scenario with problem from video Now we will show you how we addressed “KJ SUMMARY STATEMENT” Run through user scenario, POINT OUT WHERE YOU ADDRESS TOP 3 PROBLEMS Summary: You saw how we addressed “KJ SUMMARY STATEMENT” Sum up your product with a BANG the judges will remember (Why the time is now, why this is UNIQUE, why you are the only team who could possibly do this…) Presentation must be saved & uploaded as a PDF ONLY!!

1:15 – 2:30 Lab/Standup/Organize for Shareout – Work on your presentation for the video, slides for the demo, demo code and QUIZ (BEFORE AND AFTER USER SCENARIO)

2:30 – 3:00 Good Pitching skills - Examples, Chasm 2,

Pitching Mistakes https://www.udemy.com/body-language-for-entrepreneurs/learn/v4/t/lecture/577306 https://www.udemy.com/body-language-for-entrepreneurs/learn/v4/t/lecture/679066

EXTRA CREDIT: Selfies Attend Design Clinic Finals – Innovation Award FRIDAY April 8 4-6pm!!

”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 Week Problems Solutions

Minimal Viable Product

Who is the FIRST target, specifically

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

Marketing?

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

“taking actions to create, grow, maintain, or defend markets” 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. Everett Rogers (1962) Innovators Early Adopters Early Majority Late Majority Laggards

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

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

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

Point of Peril – the Chasm Innovators Early Adopters Early Majority Late Majority Laggards

Techie Innovators Key Role: Gatekeeper to the Early Adopter 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: Key Characteristics: 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 Market Chasm Bowling Alley Tornado Main Street Total Assimilation Go Bowling!!

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.

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

Assignment Summary Assignments: #22: 5 Year Top Line Revenue Model & Timeline #23: Slide Deck Pitch and 5 minute video of team giving pitch #24: Draft Slide Deck for Final Presentation (PDF) and Demo

3:00 – 4 Share out (closed computer, phone)

Assignment Summary Assignments: #22: 5 Year Top Line Revenue Model & Timeline #23: Slide Deck Pitch and 5 minute video of team giving pitch #24: Draft Slide Deck for Final Presentation(PDF) and Demo

Share Out Team name Target user description What is their urgent problem? What is your value hypothesis? Walk through your KJ Show User Scoring Walk through Front end screens Group discussion