1. UMSI 363 Nancy A. Benovich Gilby
Busting Myths and Pursuing Information Innovations with Mobile Apps in SWIFT
Week 7
Nancy A. Benovich Gilby
Ehrenberg Director of Entrepreneurship
Clinical Associate Professor 
University of Michigan School of Information

2. Readings
From each of the readings share one meaningful quote, write it on the white board
Crossing the Chasm: Chpt 1 & 2
Inside the Tornado: Chpt 1-2
The Tipping Point: Chpts1, 4-5
Peopleware Chpt 18 & 23

3. Today The Adoption cycle of a product
Your Project has gone through 2 weeks:
You should have 12 interviews, 6 more to go, 18 total
Share out on your value hypothesis, quotes, decide if you will pivot on target user, problem and value hypothesis
Potentially revise Target User, Problem or Value Hypothesis
Start/continue prototyping your application, using the MyBanks code as scaffolding.
Competition Research, Matrix

4. Team Project Overview Project Week:
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 Draft pitch, MVP prototype 1
KJ Affinity Diagram, Business Model Canvas, final wireframe test with users
All teams pitch and review, MVP prototype 2
Pitch and demo to VCs, Executives, Entrepreneurs

5. MYTH #6
MYTH: The idea is more important than the execution

6. Share Out: Customer Development Round 1
Each team will huddle for 15 minutes to identify quotes from interviews to share with the group.
Each person should try to share one or two quotes with the group that reinforced or negated the target user or problem
If possible, each team should plan to play a recorded quote from their interviews.
Teams should identify a questions about the process so far they might want to ask Nancy, other teams, or lab assistants. They will capture these on sticky notes.
SECOND STANDUP: Tell me, show me your scrum board
What you did last week to get the interviews done
What you will do this week to get 3 each, 6 more done
What obstacles you have

7. Share Out target user description what is their urgent problem?
What is your value hypothesis?
Each partner shares (plays) ONE quote that either strongly support or negates their value hypothesis
Group discussion

8. What ARE we doing?

9. We are building a TEAM … Importance of “Team”

10. Minimal Viable Product

11. Value for Who?

12. Business Model Canvas
The Business Model Canvas, is a strategic management and entrepreneurial tool. It allows you to describe, design, challenge, invent, and pivot your business model.

13. Lean Model Canvas

14. What are we doing with these interviews?

15. KJ Method (Jiro Kawakita) and Questioning
Obtain a 360 degree perspective of the actual environment in which the product or service would be used. You explore through:
Open-ended inquiry
Process observation
Participant observation
Build a team united around what’s meaningful to the users from a variety of perspectives….. REMEMBER DIVERSITY IN TEAMS……THIS IS WHY IT IS VITAL FOR INNOVATION

16. KJ Method (Jiro Kawakita) and Questioning
Build an Affinity Diagram = KJ Diagram A “tool”, at some of my companies we fondly referred to it a “the bull's-eye”
structures detailed objective data into more general conclusions.
Used for providing initial structure in problem exploration.
Often structures answers to a “WHAT” question e.g. “What is the major problem users have right now with Obama Care”
EXAMPLE: Wildfire

17. Affect and Report Language
In DESIGN THINKING – trying to get to what is MEANINGFUL to the user…..emotion, pain or joy
Field of semantics distinguishes between two kinds of language Affective and Report
Affective language – emotional information = context = WHY
Report language – logical information = facts = 5 W 1H = WHO WHAT WHEN WHERE HOW

18. KJ Diagram

19. Simple Example

20. Reminders: Safe space and emotional ups and downs of entrepreneurship

21. Parse
What is it?
What will it do for you?

22. Building Blocks for a FULL App
For an information app, it needs to have CRUDS Create, Read, Update, Delete and Search!
You will bang your head, it will be frustrating but when you are done you will have a fully functioning app: Signup, Login, Password Recovery, Create/Update/Delete/Search (transactions), Search for Nearby Banks.

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

24. Chasm Terms
The book: puts a vocabulary to the market development problem
Customer Development
Product Development
Market Development
Discontinuous Innovation
Market/Marketing
FUD
Technology Adoption Lifecycle
Whole Product Solutions
Psychographic profile
Innovators
Early Adopters
Early Majority
Late Majority & Laggards

25. Discontinuous Innovations
Electric car
Facebook
Better mileage cars
Diesel cars
SMS Messaging
Entrepreneurial Marketing Specializes in Discontinuous Innovations

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

27. Marketing?

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

29. “taking actions to create, grow, maintain, or defend markets”
Marketing
“taking actions to create, grow, maintain, or defend markets”

30. 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.

31. 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

32. Classical diffusion theory
Everett Rogers (1962)
Synthesized research on adoption of innovation from several fields: Anthropology, Early sociology, Rural sociology, Education, Industrial sociology, Medical sociology
Found that for most members of a social system, the adoption-decision depends heavily on the adoption-decisions of the other members of the system.
The more people adopt an innovation, the lower the perceived risk.
The result is an S-curve shaped pattern of innovation diffusion.

33. Example: Dynamics of Riots
Consider a hypothetical mob.
Each person's decision to riot or not is dependent on what everyone else is doing.
Instigators will begin rioting even if no one else is, while others need to see a critical number of trouble makers before they riot, too (reduces risk of getting caught).
This threshold for rioting is assumed to follow some (e.g. normal) distribution.
Result: S-curve.

34. Adoption of New Technologies

35. Classical Diffusion Theory
When faced with discontinuous innovations, customers fall into five broad categories along an axis of risk-aversion.
Innovators Early Adopters Early Majority Late Majority Laggards

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

37. 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.

38. 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)

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

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

41. Techie Innovators Primary Motivation: Key Characteristics:
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

42. 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

43. 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

44. Main Street – Late Majority
Primary Motivation:
Conservatives
Against discontinuous innovations
Stay even with the competition
Key Characteristics:
Want better values, no disruption
If it works, they stay
Risk averse
Highly reliant on a single, trusted advisor
Need assembled solutions
Key Role: Extend Product life cycles

45. Laggards Primary Motivation: Skeptics Maintain status-quo
Key Characteristics:
Disbelieve productivity-improvement arguments
Seek to block purchases of new technology
Good at debunking marketing hype
Can be formidable opposition to early adoption
Key Role: Retard the development of new markets

46. 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

47. Problem: First Crack, then The Chasm
Early Market
Chasm
Bowling Alley
Tornado
Main Street
Total
Assimilation

48. 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

49. How do you Cross the Chasm?
????

50. How Do You Cross the Chasm?
Early Market
Chasm
Bowling Alley
Tornado
Main Street
Total
Assimilation
Go Bowling!!

51. Where Do You Think These Are?
Oculus Rift
Nest
Mongo DB
Oracle
iPhone
Android

52. Assignments (POUNDING PAVEMENT 3: Last round)
Team, Based on strength of quotes, refine your target user and customer hypothesis.
Find and interview 6 additional target users (3 for each team member) for your refined niched: Validate Niche, Problem (add details of interview structure, recording, ). Team update Trello, track progress over the week, mark interview completion on cards.
Assignment #17 Submit your
REVISED:          - target user description (at least 3 bullet points)          - what is their urgent problem?          - What is your value hypothesis?          - 3 ADDITIONAL audio quotes from this week's interviews, one each from your target user interviews          (you and your partner will pick one to play for the class)
Each person submits this separately.  Partners will pick one each of the 6 quotes to play in class.
#18 Update your trello board for standup
#19 Each students selects top 3-5 quotes, ensures they are written properly on a sticky. Every team should have stickies total for class next week (reviewed at standup)
Assignment #14 Competition matrix part 1
Assignment #15 Team Wireframe prototype sketch draft 1 – hits top 3 problems you’ve identified so far

54. Readings The Second Machine Age: Chpt 1, Chpt 4 & 6
Business Model Generation Chpt 1
The Lean Startup: Chpts 1-4
Coffee Break EP33: Design Thinking with Tim Brown
Value Proposition: Chpt 1
The Four Steps to the Epiphany Chpts 1-4, Appendix A-B
Business Model Generation Chpt 2
The Entrepreneur's Guide to Customer Development: 1-5
Peopleware Chpt 1-6 The Entrepreneur's Guide to Customer Development: Chpt 8
The Lean Startup: Chpt 5-8
Peopleware Chpt 14-17