Step 10 & 11 Core & Competitive Positioning MIT Global Startup Labs Peru 2018

Transcription

1 Peru 2018 Step 10 & 11 Core & Competitive Positioning MIT Global Startup Labs Peru 2018

2 Why now? You have been focusing exclusively on your customer needs Now time to focus on what about your company & product makes you special? What is your secret sauce?

3 Step 10: Define Core

4 What is the Core? The single thing that your product OR your company does that your competitors can NOT duplicate (easily) Could be a very small part of the overall solution, but without it you don t have nearly as valuable a solution Something that you do better than everyone else It is something you grow over time NOT just used as entry strategy - defined at the beginning & not change much INTERNALLY focused - your customers don t need to know this & don t share it with your competitors :)

5 Three Elements for a Strong Core 1. Unique: difficult for anyone else to replicate. 2. Important: ties directly to your ability to product something your customers values highly (quantified value proposition, Step 8). 3. Grows: should increase in strength over time relative to competition.

6 These are NOT a Core? Intellectual Property (IP) Only for Biotech or Hardware Too static (capability is better) Culture in fast innovation Difficult to sustain Every company should have this, but not as their core Competitive Position Customer look at your competitive position in buying your product Your core is HOW you re reaching that competitive position Core Competitive Position Customer s Purchase First Mover Advantage First in the market usually loses to later entrants who outperform Locking Suppliers

7 BUT they can be a MOAT AROUND YOUR CORE Moat: a competitive advantage that slows down competitors but can be overcome.

8 Exercise: What is Their Core? Company Value Proposition Core Walmart Honda Gillette Oracle Apple Low cost Reliable power products Availability with sufficient quality Safe choice Instant productivity

9 Exercise: What is Their Core? Company Value Proposition Core Walmart Low cost Vendor mgnt and logistics; worldwide sourcing and strong purchasing org that extracts lowest possible prices from vendors; culture of minimizing expenses Honda Reliable power products Motor technology and manufacturing Gillette Availability with sufficient quality Domination of distribution channels Oracle Safe choice Sales org; existing long-term relationships, sales processes, IT systems, training, compensation systems, culture Apple Instant productivity Tightly integrated products based on industrial design, hardware & software, development, manufacturing, frictionless UI

10 Examples Network effect - Facebook vs. Myspace (Myspace didn t recognize network effect as core) Customer service - Zappos, Nordstrom (no questions asked refunds), difficult to execute to make it uncopyable Lowest cost - Walmart, many chinese companies. Often used as entry strategy rather than core (Honda - great motors) User Experience - Apple Data - Google Long Term Contracts (Logistics Expertise & Relationships) Dominant Design - Microsoft, Honda Speed - Amazon IP - For biotech (others, not so much)

11 How to define your core? Customer wants & needs Assets you have What you re best at What you value most What others outside your company can do Your personal & financial goals This is an opportunity for your team to look inward and analyze - does not require PMR.

12 Example: SensAble Technologies Moats Intellectual Property -Built out IP portfolio Why not core? -Would take many years -Dependent on legal experts Hardware -Developed and protected robotics hardware Why not core? -Time-consuming and expensive -Not as attractive of industry to investors Key Component -Locked up key component that was difficult for competitors to obtain Why not core? -Eventually accessible to competition CORE: Software Why? -More scalable and valuable -Their software was complicated to create and unique - The physics of three-dimensional touch

13 It s hard to change your core without losing significant advantage over competition, so make sure you can explain WHY you chose it over other options.

14 Step 11: Competitive Position

15 Why is this important? Translating core to benefits to customer Blue Ocean Strategy - underserved customer solve their problems no need to worry about the competition People make decisions comparatively

16 Hardest Competitor?

17 Hardest Competitor? Customer s Status Quo Also known as do nothing

18 How to define a competitive position?

19 Exercise to Chart Your Competitive Position

20 Example: SensAble Technologies Target Customers Priorities: 1. Speed to Market (Product Design) 2. Ability to convey design intent SensAble Technologies CAD/CAM solutions Alias/Wavefront Speed of Product Design Fast Slow Clay Slow Fast Convey Design Intent of Designer