Each customer consists of an end user and a Decision-Making Unit: .... As a
startup, you will have to exclude people in order to stay focused on a key group of
...
PRELIMINARYDRAFT–15.390/.366FALL2012ONLY–DONOTDISTRIBUTE–COMMENTS:15390Ͳ
[email protected]
Step3: BuildanEndUserProfile
Westartbybeginningtodefineourgeneralcustomerwithatargetcustomerprofile
Page|37
InnovationͲBasedEntrepreneurship101:AHandbookon24StepstoHelpMakeEntrepreneursMoreSuccessful
PRELIMINARYDRAFT–15.390/.366FALL2012ONLY–DONOTDISTRIBUTE–COMMENTS:15390Ͳ
[email protected]
Step3:BuildanEndUserProfile :::InThisChapter,YouWill: :::Useprimarymarketresearchtofleshoutadetaileddescriptionofthetypicalenduserwithinyour marketsegment Nowthatyouhaveidentifiedaspecificbeachheadmarket,youwillgettoknowyourtargetcustomer.It iscriticallyimportantthatyouadheretothementalitythatyoubuildyourbusinessbasedonthe customer,ratherthanpushingontothemarketwhatyouwanttosell. EachcustomerconsistsofanenduserandaDecisionͲMakingUnit: Ͳ
Enduser:Theindividual(arealperson!)whowilluseyourproduct.Theenduserisusuallya memberofthehouseholdororganizationthatisyourcustomer.
Ͳ
DecisionͲMakingUnit:Theindividual(s)whodecidewhetherthecustomerwillbuyyour product,consistingof: o
Advocate:Thepersonwhowantsthecustomertopurchasetheproduct;oftentheend user.
o
PrimaryEconomicBuyer:Thepersonwiththeauthoritytospendmoneytopurchase theproduct.Sometimes,theenduser.
o
Influencers,VetoPower,purchasingdepartment,etc.:Peoplewhohaveswayordirect controloverthedecisionsofthePrimaryEconomicBuyer.
Yourfocuswillbeontheenduser,becauseiftheenduserdoesnotwantyourproduct,youwillbe unabletoselltheproducttothecustomer.Inthisstep,youwillbuildaprofileoftheenduserthatis specificenoughtouseforcalculatingtheTotalAddressableMarketsizeofyourbeachheadmarket. Lateron,youwillidentifyoneenduserwhofitstheEndUserProfiletoserveasyourPersona. Whileyoucouldcalculatethesizeofthebeachheadmarketnow,youwillfindthateveninyournarrow beachhead,theendusersarenotallalike.Youwillfirstneedtonarrowfurtherbychoosingaspecific demographicofendusers.
WhyTargetaSpecificDemographic? Eventhoughyourbeachheadmarketisnarrow,youwillfindalotofvarietyamongtheendusersyou aretargeting.Theymaybeyoungorold,mayworkand/orliveinurban,suburbanorruralsettings,may beworldlyormayhavestayedinthesametowntheirwholelives.Mostimportantly,thenmayhave differentgoals,aspirationsorfears. Tryingtosellaproducttoawidevarietyofendusersisasunfocusedastryingtoselltomultiple markets.Yoursalesstrategymaynotbeequallyeffectivefor25ͲyearͲoldsand50ͲyearͲolds,andyour Page|38 InnovationͲBasedEntrepreneurship101:AHandbookon24StepstoHelpMakeEntrepreneursMoreSuccessful
PRELIMINARYDRAFT–15.390/.366FALL2012ONLY–DONOTDISTRIBUTE–COMMENTS:15390Ͳ
[email protected]
featuresetsmaydifferdependingontheprioritiesoftheenduser.Youdonotwanttospendyourtime andresourcestryingtobeeverythingtoeverybody. Therefore,youwillnottrytodescribeeveryenduser.Instead,describeanarrowlydefinedsubsetof enduserswithsimilarcharacteristicsandwithsimilarneeds.Lookforasubsetthesamewayyoulooked forabeachheadmarket. AsIwillnotethroughoutthisbook,continuallytalk,observeandinteractwithyourtargetcustomerto obtainthisinformation.Youwillnotbeabletosimplythinkthroughtheprofileonyourown.Primary marketresearchisfundamentaltoyoursuccessandinthisway,youwilllikelyuncoverinformationthat isnotonlynotavailableelsewherebutwillbeinaformthatisrelevanttoyou.Onceyouhavedonethis primarymarketresearch,itispuregoldanddonotgiveitaway.
PotentialCharacteristicstoIncludeinYourEndUserProfile x
Gender
x
Agerange
x
Incomerange
x
Geographiclocation
x
Whatmotivatesthem?
x
Whatdotheyfearmost?
x
Whoistheirhero?
x
Wheredotheygoforvacation?Fordinner?Beforework?
x
Whatnewspapersdotheyread?Websites?WhatTVshowsdotheywatch?
x
Whatisthegeneralreasontheyarebuyingthisproduct?Savings?Image?Peerpressure?
x
Whatmakesthemspecialandidentifiable?
x
Telltheirstory
DoesYourFoundingTeamIncludeSomeoneintheEndUserProfile? ItisahugeadvantageifsomeonewhofitstheEndUserProfileisonyourteamfromthebeginning,as thedepthofunderstandingyouhaveaboutyourcustomerisacriticalfactortoyoursuccess.Itwillalso facilitatehonestandopendiscussionswithinyourteambecauseyourenduserisrightintheroom, ratherthanmakingassumptionsabouttheenduserthatturnouttobenottruewhenyougoandtalk
Page|39 InnovationͲBasedEntrepreneurship101:AHandbookon24StepstoHelpMakeEntrepreneursMoreSuccessful
PRELIMINARYDRAFT–15.390/.366FALL2012ONLY–DONOTDISTRIBUTE–COMMENTS:15390Ͳ
[email protected]
withendusers.Ifyoudon’thavesomeonefromthedemographicalreadyonyourfoundingteam,you shouldhireatargetenduserforyourexecutiveteamrelativelysoon.
Examples SensAbleTechnologies InthebelowdescriptionoftheenduserforSensAble,youcanseethepictureoftheenduserstartingto emerge.Wearestartingtounderstandourtargetcustomerinamuchmorespecificway.Yes,thereisa demographiccohorttohelpusbuildamarketsizeinthenextstep(whichisimportant),butthereisalso therichcontextwhichwillbesoimportantaswemoveforwardtomakethisrealandwillprobablybe thedefiningfactortooursuccess.
Page|40 InnovationͲBasedEntrepreneurship101:AHandbookon24StepstoHelpMakeEntrepreneursMoreSuccessful
PRELIMINARYDRAFT–15.390/.366FALL2012ONLY–DONOTDISTRIBUTE–COMMENTS:15390Ͳ
[email protected]
SensAbleEndUserProfile:IndustrialDesignerinToyandFootwearCompanies Gender Male(90%),Female(10%) Age 24Ͳ35estimatingthattheaverageiscloseto31 LevelatCompany Isanindividualcontributorandnotamanager Income $40KͲ$50Kperyeardependingontheregion Education RhodeIslandSchoolofDesign/PasadenaSchooloftheArtsorother highͲendartsschool History Thisisnottheirfirstjobinindustrysotheyhavesomeexperience. However,thisisnottheirendjobeither.Thisissomethingtheywilldo forawhileaslongasitisinterestingandfulfillingandtheyhaveajob. Theindustryistoughandtheyrealizetheycanbelaidoffifthings don’tgowell.Thisalsoleadstoalackofstrongattachmenttotheir job,soifanotherjobcomesup,theywillmoveonwithoutreservation. Context Thedesignersseethemselvesasartists,notbusinesspeople.While theymightwanttobedoinggreatartoutsideofthecommercial world,theyhaverealizedthattheyneedapaychecktosurviveand havemadethatcompromise.Theymaydosomeartonthesidebut theyalsoareseriousaboutwantingtocreateproductsthatshowoff theirartisticskills,andtheyarefrustratedwithproductsthatdon’t properlyconveytheirveryspecificdesignintent.Hencetheyhavenot givenupusingclaystudios,whichconveydesignintentmuchbetter thanthenewdigitaltoolsthatarebeingforcedonthem.Thenew toolsareengineeringtoolsthathavebeenmodifiedfordesignersand theymakeitverydifficulttoconveydesignintent.Whilethedesigners aretechͲcompetentandevensavvywhenitcomestocreativetools, thatisnotattheircore.Itisameanstoanend.Theymighthavean Applecomputerathomeandoneintheirdepartmentbutattheoffice, theyareprimarilyworkingontheirWindowsͲbasedPC. Personality Thedesignersliketosocializebutwouldneverbeconfusedwith fraternityboys.Theydonothavemuchmoneyandarecarefultonot wasteit.Theydrinkcarefullyand/ordolightrecreationaldrugswhen theygoout.Theyliketositaroundandlistentotechnopopmusic(like ThomasDolby)andtalkaboutthearts.Theygenerallywearallblack andagoodnumberofthemhavebodypiercingsandmaybeeven artfullydonetattoos.Whiletheydoliketosocialize,theycanalsobe quietandintrovertedmuchofthetime.
Page|41 InnovationͲBasedEntrepreneurship101:AHandbookon24StepstoHelpMakeEntrepreneursMoreSuccessful
PRELIMINARYDRAFT–15.390/.366FALL2012ONLY–DONOTDISTRIBUTE–COMMENTS:15390Ͳ
[email protected]
RideSharingCompany,Russia Note:Throughoutthebook,IwillsupplementSensAbleexampleswithexamplesfromMITstudentteams whotook15.390NewEnterpriseswhileintheirdegreeprograms.Theseexamplesarenotalwaysfully fleshedoutbecauseofthestudents’timelimitations.Iprovidetheminthisbookasexamplesthat illustratethebasicconceptsofthesteps. ThisstudentteamlookedatcreatinganewrideͲsharingserviceforagroupofcustomersinMoscow whodonothavesuchaservicetoday.TheyarefocusedonyoungertechͲsavvydriverswhotheythink willbemorelikelytousetheservice,andtheyareinterestedinusingthenewinfrastructureofmobile phonesandsocialmediatodothisinacapitalͲefficientwaythathasnotbeenpossiblebefore. AlessͲdetailedversionoftheirenduserprofileisbelow.Asyouwillsee,theteamisnotnearlyspecific enoughinitsdemographics.Thecompanyistryingtobeinclusivewithitsprofile,buttheresultislost focus.Asastartup,youwillhavetoexcludepeopleinordertostayfocusedonakeygroupofcustomers whowillprovidemuchͲneededinitialcashflow. EndUserProfileforRussianRideͲSharingCompany
Comments
Gender
Male,female
Toogeneral.
Age
17Ͳ40yearsold
Largeagerange,especiallysinceyou can’tgetadriver’slicenseuntil17.
Region
Moscow(duringinitialgrowthstage)
Noneedtoqualifywithstatements like“duringinitialgrowthstage”– thatisassumed.Stayfocused.
Occupation
Student,youngprofessional,internal migrant,middlemanagement
Fourverydifferenttypesof occupations. Also,needtodefine“internal migrant”forthosewhomaynotbeas familiarwiththeterm
Sociallevel
Medium,high
“Notlow”isstillaverywiderangeof sociallevels.
Characteristics
Hasasmartphone
Usercategory
Earlyadopters,technologicallyadvanced
Other
Activeusersofsocialnetworks,outgoing personalities
Page|42 InnovationͲBasedEntrepreneurship101:AHandbookon24StepstoHelpMakeEntrepreneursMoreSuccessful
PRELIMINARYDRAFT–15.390/.366FALL2012ONLY–DONOTDISTRIBUTE–COMMENTS:15390Ͳ
[email protected]
BaseballWebsite ThisteamwaslookingtomakeaoneͲstopsiteforsportsfans(baseballtostart)wheretheycouldgoto getinformationabouttheirfavoriteteamandinteractwithotherlikeͲmindedfans.Itwouldbeacaseof anuncensoredESPNmeetsSportsTalkRadiobutmuchmoreinteractiveandmultiͲdimensionalthan either.ThesitecouldalsointegratethethenͲexplodingfieldoffantasysports. Theteamdecidedtofocusitsproductononeveryspecificpartofthesportsfanbase–youngonline malesbetweentheagesof18and34.Thissegmentwasaveryattractivegrouptocapturebecause liquor,automotiveandelectronicscompanieswereanxioustoadvertisetothisdemographicasthe demographicstartedtoearnincomesandformbuyinghabitsthatmightlastalifetime.Theteamdidits primarymarketresearchandfoundtherewasreceptivityandtheninthiscasealsousedsome secondaryresearchtolearnmoreabouttheirdemographic. Hereisakeycomponentoftheircustomerprofile:
Thegrayboxontheprofileindicatesthattheydecidedtosharpentheirfocuson25Ͳto34ͲyearͲold malesmakingover$75Kperyear.Implicitinthischoiceisthattheteamwillbedeselectingtheother demographics,onlypursuingonedemographictostart.Thetargetaudienceinterestsisagoodcasein needingtoconfrontthebrutallyhonestfactsaboutourdemographic,ratherthanlookingattheend userthroughroseͲcoloredglasses.Fromthesecondaryresearchpresentedhere,thetwotopwebsite choicesforthebroader18Ͳ34agedemographicaresitestolookatgirls(wehopenicesites–butwewill havetofindouttherealitytotrulyunderstandtheenduser)andsportssites.
Page|43 InnovationͲBasedEntrepreneurship101:AHandbookon24StepstoHelpMakeEntrepreneursMoreSuccessful
PRELIMINARYDRAFT–15.390/.366FALL2012ONLY–DONOTDISTRIBUTE–COMMENTS:15390Ͳ
[email protected]
Summary Youranalysisofyourtargetcustomerisnowherenearcomplete,buttheenduserprofilepointsyouin therightdirectionforfuturesteps.Thejourneyisonlybeginningbutyouarestartingoffwiththeright focus–awellͲdefinedtargetcustomer.
Page|44 InnovationͲBasedEntrepreneurship101:AHandbookon24StepstoHelpMakeEntrepreneursMoreSuccessful
