MIT Enterprise Forum Satellite Broadcast Winning in the Marketplace Greg Erman MarketSoft Corporation June 5, 2002

Slide 2 Winning Is Seeing Opportunities “I Think There Is a World Market for About Five Computers” “I Think There Is a World Market for About Five Computers” Thomas J. Watson, IBM Chairman, 1943 Thomas J. Watson, IBM Chairman, 1943 “There Is No Reason for Any Individual to Have a Computer in Their Home” “There Is No Reason for Any Individual to Have a Computer in Their Home” Ken Olsen, Digital Equipment Corporation President & CEO, 1977 Ken Olsen, Digital Equipment Corporation President & CEO, 1977 “We Cannot Solve Problems With the Same Thinking We Used When We Created The Problems” “We Cannot Solve Problems With the Same Thinking We Used When We Created The Problems” Albert Einstein Albert Einstein

Slide 3 MarketSoft Background Our Mission Help Companies Drive New Revenue by Connecting Marketing Activity with Sales Results Funding : $70 Million High Tech Customers Financial Financial Customers

Slide 4 Business Problem Definition State the Obvious Problem State the Obvious Problem Value Proposition Value Proposition Market Size Market Size Customer Attractiveness Customer Attractiveness Sophistication? Sophistication? Technology Savvy? Technology Savvy? Early Adopters? Early Adopters? Power to Buy? Power to Buy? Business Model Business Model Revenue Potential? Revenue Potential? Profit Potential? Profit Potential? Can You Scale? Can You Scale? Examples: - Training Marketplace + MarketSoft Lead Management

Slide 5 Product Strategy Early Market Chasm Bowling Alley Tornado Main Street Total Assimilation Geoffrey Moore Market Development Model

Slide 6 Product Concept Definition Focus on the Voice of the Customer Focus on the Voice of the Customer Customer Requirements Gathering and Testing Customer Requirements Gathering and Testing Distilling & Crystallizing Distilling & Crystallizing Structured Customer Interviews Structured Customer Interviews Questionnaires Questionnaires Research Customer Programs Research Customer Programs User Groups User Groups Partners Partners Customers Great at Describing Existing Pain Not Next Generation: TV Dinner Demand Soared Post-Microwave Customers Great at Describing Existing Pain Not Next Generation: TV Dinner Demand Soared Post-Microwave

Slide 7 Get Buy-In from Your Team Language Processing (LP) Method* Language Processing (LP) Method* Tape Recording Customer Interviews Tape Recording Customer Interviews Transcribing to Web and Requirements Database Transcribing to Web and Requirements Database “KJ”* or “LP”* Diagrams (Affinity Flow Charts) “KJ”* or “LP”* Diagrams (Affinity Flow Charts) Product Requirements Document Product Requirements Document Establishes Common Understanding Establishes Common Understanding Recruiting New Team Members Recruiting New Team Members Research Customer Engagement Tool Research Customer Engagement Tool Business Plan Business Plan Financing and Investment Tool Financing and Investment Tool * Harvard Business School MarketSoft Case Study by Joe Lassiter

Slide 8 MarketSoft LP Example Began Planning Vertical Industry Solutions, 1/02 Began Planning Vertical Industry Solutions, 1/02 Interviewed 12 Customers to Create List of 20 Vertical Industry Solutions Interviewed 12 Customers to Create List of 20 Vertical Industry Solutions Prioritized Based on Business Value, Market Attractiveness, Differentiation, and Sales Lead Pipeline Analysis Prioritized Based on Business Value, Market Attractiveness, Differentiation, and Sales Lead Pipeline Analysis Selected “Cross Sell for Financial Services” to Test, 3/02 Selected “Cross Sell for Financial Services” to Test, 3/02 Did 30 Customer Interviews for Cross Sell Solution, 4/02 Did 30 Customer Interviews for Cross Sell Solution, 4/02 Industries Industries  72% Finance  20% Tech  8% Other (Pharmaceutical and Manufacturing) Target Audience Target Audience  85% Qualified Users  10% Current Customers  5% Prospects Companies: Companies:  Teradyne, TIAA-CREF, NY Life, Marsh Insurance, TD Waterhouse, Merck Pharmaceuticals, NY Life, Union Bank, Hunter-Douglas, AMEX, Wells Fargo, BC/BS Oklahoma, RCN, AIG, Fleet, Microsoft, Polaroid, ….

Slide 9 LP Interview Technique Methodology Create ‘the Question’ Create ‘the Question’ Define/Find Target Audience Define/Find Target Audience “Voice of the Customer” Interviews “Voice of the Customer” Interviews Generate Customer Quotations (300 Quotes) Generate Customer Quotations (300 Quotes) Synthesize the Information (30 Quotes) Synthesize the Information (30 Quotes) Cluster Quotes Using Objective Techniques Cluster Quotes Using Objective Techniques Build Labels, Cluster, Repeat Build Labels, Cluster, Repeat Create Hierarchy of Need Create Hierarchy of Need Generate the Answer to the Question! Generate the Answer to the Question!

Slide 10 Sample LP Diagram Section Proprietary

Slide 11 Develop Whole Product Solution Translate Customer Problem into Solution Translate Customer Problem into Solution “Customers Don’t Buy Nails, They Buy Holes in the Wall” – Theodore Levitt “Customers Don’t Buy Nails, They Buy Holes in the Wall” – Theodore Levitt Focused on One Vertical and One Business Problem Focused on One Vertical and One Business Problem Multiple Products, Services, and Partnerships Multiple Products, Services, and Partnerships Knock One Bowling Pin Down at a Time Knock One Bowling Pin Down at a Time Put All Your Wood Behind One Arrow Put All Your Wood Behind One Arrow MarketSoft Cross Sell Whole Product Solution Developed 5/02 MarketSoft Cross Sell Whole Product Solution Developed 5/02 3 Existing MarketSoft Products 3 Existing MarketSoft Products 2 Major Product Extensions 2 Major Product Extensions 3 Strategic Partnerships 3 Strategic Partnerships Benefits Benefits  Easier Penetration of C-Level Executives with More Relevant Messages  More Strategic Vendor  Bigger Average Selling Value  Deeper Solution More Differentiated Solution Public Launch 6/02: Process Took 5 Months from Beginning to End Solution Public Launch 6/02: Process Took 5 Months from Beginning to End

Slide 12 Build Unique Value Product Differentiation Product Differentiation “Better to be Different than to be Better” – Al Ries & Jack Trout “Better to be Different than to be Better” – Al Ries & Jack Trout First Mover Advantage First Mover Advantage Barriers to Competitive Entry Barriers to Competitive Entry Technology Barriers (Patents) Technology Barriers (Patents) Customer Barriers (References) Customer Barriers (References) Partner Barriers (Channels) Partner Barriers (Channels)

Slide 13 Marketing the Solution Message Platform Message Platform Launch Launch Lead Generation Lead Generation Sales Readiness Sales Readiness $$$$$$$$$$$$$$$ $$$$$$$$$$$$$$$ Tag Line Elevator Pitch Key Message Items Product Messages