In this presentation, Poornima covers positioning a product, and the three phases of market research: competitive analysis, differentiation, and user segmentation. You can watch the lecture here: http://youtu.be/ifLONSVWnws

1. Duke ECE 490L: How to Start New Ventures in
Electrical and Computer Engineering
Poornima Vijayashanker
poornima@femgineer.com
Jeff Glass
jeff.glass@duke.edu
Akshay Raut
ar118@duke.edu
1

2. Review
Duke ECE 490L
• Why do we need a team
• When to assemble a team
• How to assemble a team
• How to manage a team and keep them motivated
• Dealing with departures
2

3. Announcements
• Lab 2 - Prep Work
Duke ECE 490L
3

4. Idea Summary
4

5. Agenda
• Risk
• Positioning
• Competitive Analysis
• Differentiation Techniques
• Goal: Identify and Attract Early Adopters
Duke ECE 490L
5

6. Duke ECE 490L
Still no building...
6

7. Duke ECE 490L
Motivation is to bring idea to product
phase. We begin validating our idea by
exploring ways to productize it.
7

8. Storytime: mistakes.
Duke ECE 490L
8

9. RISK.
Duke ECE 490L
9

10. Mitigating Personal Risk
• Market Awareness
• Past, Present, Future
• Domain Expertise
• Experienced pain
• Deep understanding
• Networking
• Market Readiness
• Invention v. Re-Invention
• Capital Requirements
• Indicators: first mover, existing solutions
Duke ECE 490L
10

11. Case Study: Gilt Groupe
• Market Awareness & Domain Expertise
• Enjoyed NYC sample sales
• Understood designer fashion and high end brands
• eBay, Bvlgari
• Market Readiness
• Re-Invention: online sample sals
• Vente Privee
Duke ECE 490L
11

12. Positioning.
Duke ECE 490L
Supplemental Reading: Positioning
12

13. Duke ECE 490L
Create an image or identity in the minds of
the target market.
Occupy a position in a prospective
customer’s mind - one that reflects
company’s strengths and weaknesses as
well as those of the competitor.
13

14. Duke ECE 490L
Re-positioning: changing identity of a
product, relative to competitor. e.g. luxury
line
De-positioning: changing identity of a
competing product, relative to the identity of
own product. e.g. Apple - Design
14

15. Duke ECE 490L
Product/Market Fit.
15

16. Duke ECE 490L
Why is this important?
16

17. Additional Factors that affect Positioning
Duke ECE 490L
• Price
• Promotion
• Distribution
• Packaging aka design
• Competition
17

18. Duke ECE 490L
VS
18

19. Case Study: Flip Cam
• Market: consumer electronics
• Camcorders
• Competitors building for professionals and amateurs
• Position
• User segment: amateurs, short clips
• Price: $200-$300
• Design: not multi-functional, ease-of-use: 1-button, HD
• Size, simplicity, affordability.
• Technical specs
• Touch screen
• Used flash storage
Duke ECE 490L
19

20. Case Study: Flip Cam
• Understanding the user segment
• amateurs want something simple and affordable
• amateurs record short amounts of time
• features designed around user segment use cases
• positioning around simplicity and affordability
Duke ECE 490L
20

21. Duke ECE 490L
How do we develop a position?
21

22. Duke ECE 490L
Goal is to identify early adopters for next
phase product development: customer
development.
22

23. Duke ECE 490L
User Segmentation
Differentiation
Techniques
Competitive Analysis
23

24. Duke ECE 490L
User Segmentation
Differentiation
Techniques
Competitive Analysis
24

25. Competitive Analysis
Duke ECE 490L
• Define Industry
• Competitors
• Customers and benefits they expect
• Key success factors in industry
• e.g. Social network and Search - land grab!
Don’t rely on
intuition!
Supplemental Reading: Competitor Analysis
25

26. 3 More Steps
Duke ECE 490L
Supplemental Reading: Competitor Analysis
1. Understand history of key competitors.
2. Product - not a feature list! Adoption and rate of
innovation.
3. Distribution - customer reach. Who do they not have?
Why?
26

27. Market Sizing
Duke ECE 490L
• TAM: Total Addressable Market
• How big is the universe?
• SAM: Served Available Market
• How many can I reach with my distribution channels?
• Target Market
• Who will be the most likely early adopters?
Supplemental Reading: Market Size Hypothesis
27

28. Market Sizing
Duke ECE 490L
Supplemental Reading: Market Size Hypothesis
TAM SAM
Target
Market
28

29. Things to Keep in Mind
Duke ECE 490L
Supplemental Reading: Market Size Hypothesis
• Data from market research firms is from the past!
• Need to spot trends and piece together different sources of data.
• Primary demand for a product based on particular
brand e.g. Tablets - Apple iPad
• First mover advantage or leader
• Bottoms up approach
• e.g. 2M girls born in US, 1/2 cannot afford $90 doll. Targeting 6-8 year old, leaves
at most 3M.
29

30. Duke ECE 490L
Why are there so many products?
30

31. Duke ECE 490L
Why aren’t there more products?
31

32. Duke ECE 490L
MEKKO CHART
0
50
100
150
200
$10M-$50M $50M-$100M $100M-$500M $1B
Apple
Samsung
Acer
Toshiba
Market Size of One Product: Tablet
Sales
of
Tablets
* Fake data!
32

33. Duke ECE 490L
0
50
100
150
200
$10M-$50M $50M-$100M $100M-$500M $1B
Apple
Samsung
Acer
Toshiba
Moving Across Market Caps
What does each market segment look like?
* Fake data!
Sales
of
Tablets
Market Size of One Product: Tablet
What does it take to move across segments?
33

34. Purpose of Mekko Chart
• Understand size and competitors.
• Where to start?
• Identify holes in market.
• Mobility in market.
• Where you can go next, and what it’s going to take to get there.
Duke ECE 490L
34

35. Duke ECE 490L
User Segmentation
Differentiation
Techniques
Competitive Analysis
35

36. Differentiation Techniques
• Really need to understand competition!
• But this does NOT mean a feature checkbox comparison.
• Holistic brand building strategy.
• Heart v. Head
• Price
• Distribution
• Promotion: sell v. buy attitude
• Packaging aka Design
Duke ECE 490L
36

37. Duke ECE 490L
User Segmentation
Differentiation
Techniques
Competitive Analysis
37

38. Duke ECE 490L
38

39. User Segmentation
Duke ECE 490L
• High Level Segmentation
• Within market what are the various customer demographics
• Take 3 competitors
• Dig into what customers love/hate
• Understand substitutes
• Easy to displace? Customer’s comfort with change or being ready for it.
39

40. Duke ECE 490L
Start by focusing on needs
of neglected segment
- what doesn’t competitor
‘get’?
- what will make this group
loyal?
Willing to switch?
What will it take?
- price
- features
- credibility
- comfort
40

41. Duke ECE 490L
Goals of market research?
41

42. Goals
Duke ECE 490L
• Look at #s and market trends
• Have #s lead to questions
• Who is currently servicing the market? And how much of it?
• Who can we service? (Positioning)
• How can we service them? (Productizing Idea)
• Answers lead to identifying early adopters
42

43. Duke ECE 490L
Case Study: Mint
Finance
Business MarketsPersonal
Finance
People who care but
don’t want to spend
time:
People who care and
spend time:
40+
Affluent20-30 somethings
$75k
43

44. Duke ECE 490L
Resist the urge to build.
44

45. Duke ECE 490L
1. Come up with a hypothesis.
2. Figure out what you want to measure
3. Run an experiment.
4. Measure results from experiment.
5. Learn.
6. Move on to next hypothesis.
45

46. Duke ECE 490L
Let’s form a hypothesis and set some goals.
46

47. Duke ECE 490L
Let’s test our hypothesis!
47

48. Case Study: Mint
Duke ECE 490L
• User Segment: Americans 20-30
• Budget conscious but want more money to enjoy life
• Don’t want to spend time managing their money
• May have some credit card debt
48

49. Duke ECE 490L
Value propositions.
Supplemental Reading: Original Mint.com Landing Pages
49

50. Duke ECE 490L
50

51. Duke ECE 490L
51

52. Duke ECE 490L
How did we perform these tests?
52

53. Duke ECE 490L
Created ads and tested across a few channels.
53

54. Duke ECE 490L
Customer Channel
54

55. Duke ECE 490L
Started with search.
55

56. Duke ECE 490L
Because it’s the fastest.
56

57. Duke ECE 490L
Landing page test.
57

58. Duke ECE 490L
Goal: we want to see if there is an interest in
our product or service to a particular user
segment.
58

59. Landing Page Test
Duke ECE 490L
• Headline
• Core value proposition that describes what you are offering to the point
• Picture
• Benefit statement
• How your potential customers will benefit from the product or service
• Call to action
• What do you want the potential customer to do?
• Trust indicators
59

60. Landing Page Test
Duke ECE 490L
• Landing Page Design: in house or use Unbounce
• Measure: Google Analytics
• Drove Traffic: Google AdWords
60

61. Review
Duke ECE 490L
• Risk
• Positioning
• Competitive Analysis
• Differentiation Techniques
• Goal: Identify and Attract Early Adopters
61