Where are we in the “process?” Initial Idea Customer Value Development Strategy Development Product Development Resources Development Validating need and market Working on strategy and business model Working on developing pro- duct Assessing re- source needs; making pre-BP

What’s next? Customer Value Development Strategy Development Product Development Resources Development First-cut dev of value proposition and positioning First-cut business model and strategy; Ask whether you can maintain your advantage. Prototype Raise $ for development; FFF or angel

Sustainable Advantage Proprietary elements, or Superior processes, capabilities, or resources And, the business model is economically viable –Define the business model – it should make sense at a first cut level –Refined assessment later – after business plan

Map out the Business Model Start with target customers What’s the offering? How is the offering made and provided? How are customers contacted? What is the revenue flow? What is the cost flow? Map into Value Chain Model

Porter’s Value Chain Support Activities Direct Activities Offering Target Customers Product Service Image Comm. Channl Utils. Price

INBOUND LOGISTIC OPERATIONS OUTBOUND LOGISTICS SALES & MARKETING SERVICE INFRASTRUCTURE HUMAN RESOURCES & DEVELOPMENT TECHNOLOGY & DEVELOPMENT PROCUREMENT SUPPORT ACTIVITIES DIRECT ACTIVITIES PORTER’S VALUE CHAIN

Positioning Perceived Position (in the mind of the Prospect): For a product/market Relative to competition On important benefit or attribute dimensions

Relationship to Brand Image Associations emphasized for a target segment Temporary Becomes part of the overall set of associations

Simple Concept; Difficult to Execute Only partly influenced by vendor, since it is in the mind of the prospect Multiple audiences see the same message Other parties involved: competitors, channels, media, luminaries all doing their own thing

Criteria for Good Positioning Based on good products or services Distinctive from competitors Benefit based

Early Positioning Considerations – Characteristics for Investors and First Customers to See Selling the company as well as the product idea – Ryan’s 5 rules of differentiation have to be met: –Distinctive characteristics sufficient to stand out –Right questions lead to compelling product –10X or better on performance –One year or longer head start –Improving with age

Marketing’s Role in Obtaining Funding

Key ideas from Ryan Targeted search for VCs: –Right industry –Right round Don’t present before you’re ready Don’t send out BP’s without “entrepreneurs attached” Tight presentation that shows –You know the market –You know your product –You know how you’ll make money

More Ryan Presentation, continued –You can scale –You can compete Get a commitment or feedback in the presentation (get a referral?) How much to ask for? –1 yr’s cash flow % Get the right investor – business sense + contacts

How does this compare to common wisdom? Send out business plans? Go early and often? Presentation that shows that you know the technology? Only one year of financing? If you get a good $$ offer, take it?