Building Data-Rich Market Validation Plans for University Technologies Francis Moran Peter Hanschke March 29, 2012 © Francis Moran and Associates Inc.,

Building Data-RichMarket Validation Plans

for University Technologies

Francis MoranPeter HanschkeMarch 29, 2012

© Francis Moran and Associates Inc., 2012 All rights reserved

Agenda

• Intros• Validation assessment• Why?• How?

• Examples• Q&A


Introductions

• Francis Moran• I bring technology to market• I work with technology-driven ventures to build and

implement the strategies that will identify customers, develop the right product, differentiate effectively and hit revenue objectives

• Peter Hanschke• 20+ years of hi-tech product management and

marketing experience• Specialize in helping companies align their product strategy with

their business strategy• Frequent blogger and speaker


Why a market validation plan?


Must be worth it

• Costly to bring technology to market• Can the technology be monetized? At some

point?• Mobile space is full of free; monetization must

occur at some point

• Extremely difficult to shed products• What do you do with existing customers?


Avoid surprises

• We brought it to market and…• “the customer really wants this…instead.”• “the market is much smaller than we thought”• “we can’t reach the customer because…”

• “Carriers don’t buy from startups”• “Cisco owns the market”

• “our product is too late or too early”• “our price is too high”• “the pricing has collapsed in the market”


Framework


Value assessment questions

1. What is the need?2. Why is the need unmet?3. How is the Industry attempting to satisfy the

need and by when?4. How large is the market, in dollar terms, if

the need is satisfied?


1. What is the need?

• Truly a need or a nice-to-have? Pull or push?• Drivers creating this need?• Universal across the industry or only for certain

market segments? • What does the market look like right now?• Segments• Key stakeholders and value chain• Business model• Pricing model


2. Why is the need unmet?

• What are the barriers preventing the need from being satisfied?• Technology• Government or legal• Industry standards• Key stakeholder control• Macroeconomic, microeconomic• Timing of adjacent adoption curves


3. How is the industry attempting to satisfy the need and by when?

• Many ways of satisfying the need at different levels in the value chain

• Do not underestimate the incumbent solution or technology

• Do not ignore indirect solutions• Consider all potential barriers• Review strengths and weakness of each

current solution


4. How large is the market?

• What is the financial value that this need meets in the market place?

• How much could I charge for this product?• Can we construct a business case for target

clients showing attractive ROI?


Market segment evaluationFactors Description Weight

(%)Score(0 – 1)

1 Accessible, well-funded target customer

20

2 Painfully compelling reason to buy 30

3 Feasible whole product 10

4 Known partners & allies 5

5 Effective whole product distribution 5

6 Attractive whole product pricing 5

7 Opportunity not preempted by competition

10

8 Consistency with current position 5

9 Good follow-on segment potential 10

Critical factors that need to discussed, described in detail,

and scored.

Critical factors that need to discussed, described in detail,

and scored.


Market segment evaluationFactors Description Weight

(%)Score(0 – 1)


20







10



Weighting defines the relative importance

of each factor.

Weighting defines the relative importance

of each factor.


Factor: Accessible targetFactors Description Weight

(%)Score(0 – 1)


20







10



Can I get to this customer?

Do they have budget in place?

Are they willing to spend money?

Can I get to this customer?

Do they have budget in place?

Are they willing to spend money?


Factor: Compelling reasonFactors Description Weight

(%)Score(0 – 1)


20







10



Is this an Urgent Need?

Is their current method of addressing

the need painful?

Is this an Urgent Need?

Is their current method of addressing

the need painful?


Factor: Whole productFactors Description Weight

(%)Score(0 – 1)


20







10



Do customers need more than a point

solution?Does your product provide everything

they need?

Do customers need more than a point

solution?Does your product provide everything

they need?


Factor: Partners and alliesFactors Description Weight

(%)Score(0 – 1)


20







10



Are there partners and/or allies that you

can leverage?

Are there partners and/or allies that you

can leverage?


Factor: Product distributionFactors Description Weight

(%)Score(0 – 1)


20







10



Are there viable channels of

distribution?

Are there viable channels of

distribution?


Factor: Product pricingFactors Description Weight

(%)Score(0 – 1)


20







10



Can you price your product so that the

market buys it?

Can you price your product so that the

market buys it?


Factor: CompetitionFactors Description Weight

(%)Score(0 – 1)


20







10



Is the competitive landscape too formidable?

Is there an angle to exploit?

Is the competitive landscape too formidable?

Is there an angle to exploit?


Factor: Current positionFactors Description Weight

(%)Score(0 – 1)


20







10



Is this consistent with your current

position? Or is it new?

Is this consistent with your current

position? Or is it new?


Factor: Segment potentialFactors Description Weight

(%)Score(0 – 1)


20







10



Can success in this segment easily lead to other segments?

Can success in this segment easily lead to other segments?


Applying the assessment matrix

• Be honest. Be critical. Be truthful. Challenge assumptions. Avoid group think.

• Apply to every potential segment, start with:• Accessible, well-funded target• Painfully compelling reason to buy• Feasible whole product• Competition• Good follow-on potential

• Select top segments worth going after© Francis Moran and Associates Inc., 2012

All rights reserved

Market segment assessment exampleFactors Score

(0 – 1)Weight

(%)Weighted Score

(%)


1 20 20

2 Painfully compelling reason to buy .4 30 12

3 Feasible whole product .8 10 8

4 Known partners & allies 1 5 5

5 Effective whole product distribution .7 5 3.5

6 Attractive whole product pricing .3 5 1.5


.7 10 7

8 Consistency with current position 1 5 5

9 Good follow-on segment potential .5 10 5

Total Weighted Score 67© Francis Moran and Associates Inc., 2012

All rights reserved

Validation


Variety of sources

• Important to gather info from a variety of sources• Avoids group think

• Sources include• Target market(s)• Non-buying experts• Ex-employees

• Ensure NDAs are in place or use interview techniques that are nondescript


Target market(s)

• These are the potential buyers• Search LinkedIn, Facebook for potential

companies• LinkedIn has good search tools

• Use your rolodex• Caution: May jeopardize early sales


Non-buying experts

• Wouldn’t buy, but are regarded as industry experts• Analysts, consultants, educators, writers

• They have a broad view of the market; know what is going on and who is doing what

• Search the internet, based on applicable keywords• Blogs, tweets, Facebook• Comments usually have good nuggets

• Google Alerts is a good tool to get info as it happens


Employees: Ex and current

• Ex-employees are those who have moved on to other segments

• Current employees are in companies that do not compete with yours

• Find out whatever you can about the industry and market

• Don’t assume they have a non-communicate clause; just reach out

• Search LinkedIn for employees© Francis Moran and Associates Inc., 2012

All rights reserved

Examples


Online, interactive mapping

• Started with a preconceived notion of the target market

• Performed this evaluation and decided on other segments

• Defined the whole product and pricing• Got independent validation from potential

customers and industry expert


Touch Bionics

• First product was marketed throughclinics. Go-to-market strategy was abusiness development function.

• Second product required a clinical capability.Key question: Where to establish?• Certain industries are more likely to have the

sorts of injuries the product treated. Where arethey clustered?

• Jurisdictions vary on compensation, reimbursement. Where are the favorable ones?


Summary

• Critical to have a validation plan• Determines whether it’s worth it• Helps to avoid surprises

• Perform assessment on each segment• Scores determine highest potential segment• Honesty, critical thinking and knowledge are vital

• Validate with a variety of sources• Potential customers; segment experts; employees

within the segment


Utilize the chat box to the bottom left of your screen to submit a question to the panel. Please address

your question to a specific presenter.

Or

Press * 1 on your touchtone phone and this will place you into the phone queue.


Building Data-Rich Market Validation Plans for University Technologies Francis Moran Peter Hanschke March 29, 2012 © Francis Moran and Associates Inc.,

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