Step 10: Define your Core

Core is Different than Competitive Position Moat vs. Core Workshop Outline Overview Examples of Core How to Define Your Core Core is Different than Competitive Position Moat vs. Core Workshop December 1, 2018

What makes your business special? Much more introspective Overview Core- something that allows you to deliver the benefits your customer values with more effectiveness than your competitors Your “secret sauce” What makes your business special? Much more introspective December 1, 2018

What is it that you do better than anyone else? Overview What is it that you do better than anyone else? What is it that your product does that your competitors cannot duplicate? (Or can’t easily duplicate) December 1, 2018

Core provides a higher level of protection Overview Core provides a higher level of protection Don’t want to work hard then allow someone else to come in and reap the rewards December 1, 2018

Core is Different than Competitive Position Moat vs. Core Workshop Outline Overview Examples of Core How to Define Your Core Core is Different than Competitive Position Moat vs. Core Workshop December 1, 2018

Requires great thought There may be multiple options Examples of Core Core is situational Requires great thought There may be multiple options December 1, 2018

=> Company with the most users are the most valuable Examples of Core Network Effect Company because the “standard” by achieving such a high level of critical mass in market that it does not make sense for customers to use another product (Metcalfe’s law) => Company with the most users are the most valuable Ebay, Linkedin, Facebook (not MySpace) December 1, 2018

Have processes and culture focused on excellent customer service Examples of Core Customer Service Have processes and culture focused on excellent customer service Allows you to retain customers (less churn) Customers become the salespeople via word of mouth Examples: Zappos, Costco, Nordstroms December 1, 2018

Examples of Core Lowest Cost Skills, relationships, processes, volumes, overhead, and culture to outcompete anyone else in market on cost E.g., Walmart, Honda December 1, 2018

Become the best at developing and improve UX E.g., Apple Examples of Core User Experience Become the best at developing and improve UX E.g., Apple December 1, 2018

This is NOT an exhaustive list Key: your Core is clearly defined Examples of Core Many, many others… This is NOT an exhaustive list Key: your Core is clearly defined Founding team aligned Always put core first Last line of defense against competition December 1, 2018

Core is Different than Competitive Position Moat vs. Core Workshop Outline Overview Examples of Core How to Define Your Core Core is Different than Competitive Position Moat vs. Core Workshop December 1, 2018

Defining your Core is NOT easy. Requires introspection How to Define your Core? Defining your Core is NOT easy. Requires introspection Cannot be an abstract intellectual exercise Should integrate many factors: What customer wants What assets you have What you like to do What competitors can do Financial goals December 1, 2018

Once you define your Core, do not change it! Would result in time lost How to Define your Core? Once you define your Core, do not change it! Would result in time lost Unlike other steps… December 1, 2018

Three fundamentals of a strong Core: Unique Important Grows How to Define your Core? Three fundamentals of a strong Core: Unique Important Grows December 1, 2018

Three fundamentals of a strong Core: How to Define your Core? Three fundamentals of a strong Core: Unique – difficult for anyone else to replicate Important Grows December 1, 2018

Three fundamentals of a strong Core: Unique How to Define your Core? Three fundamentals of a strong Core: Unique Important – ties directly to your ability to produce something that your target customers value highly Grows December 1, 2018

Three fundamentals of a strong Core: Unique Important How to Define your Core? Three fundamentals of a strong Core: Unique Important Grows – should increase in strength over time relative to competitors December 1, 2018

Core is Different than Competitive Position Moat vs. Core Workshop Outline Overview Examples of Core How to Define Your Core Core is Different than Competitive Position Moat vs. Core Workshop December 1, 2018

Core != Competitive Position Customers will NOT see your Core as the reason why they buy from you. Instead- they will look at competitive position (step 11) Core is how you differentiate yourself from competitors Cannot be easily replicated December 1, 2018

Core != Competitive Position Intellectual property is NOT a Core (generally) Patents are slow, static Markets are dynamic Important for biomedical startups (but not much else) December 1, 2018

Core != Competitive Position First-mover advantage is NOT a Core Company is successful from being first to market Most companies who are first to market end up losing to later entrant Helps find talent Helps w/ networking .. But is NOT a Core December 1, 2018

Core != Competitive Position Locking up suppliers is NOT a Core If you lock in exclusive deals with vendors.. Helps with competition .. But is NOT a Core (more of a moat) December 1, 2018

Core is Different than Competitive Position Moat vs. Core Workshop Outline Overview Examples of Core How to Define Your Core Core is Different than Competitive Position Moat vs. Core Workshop December 1, 2018

A “moat” is a competitive advantage Moat vs. Core A “moat” is a competitive advantage May slow down competitors, but can be overcome Moats are good, Core is better December 1, 2018

Core is Different than Competitive Position Moat vs. Core Workshop Outline Overview Examples of Core How to Define Your Core Core is Different than Competitive Position Moat vs. Core Workshop December 1, 2018

Worksheet: Defining Your Core This is hard! Workshop Worksheet: Defining Your Core This is hard! Keep in mind: Core is NOT a benefit Something internal, a key asset or capability E.g., benefit => lower time to market Core => technology that creates this benefit December 1, 2018