E Learning BSLC, by: Argyasiany

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2 Rangkuman Entrepreneurship 2 MARKET SEGMENTATION OF THE BUSINESS 1. Identifying key assumptions: the first part of the process to validate your primary market research by looking for customers to take specific actions. Identifying key assumptionsis done by breaking down assumptions into ccomponent parts. How? Review each step of the framework Make a list of the areas based on your primary market research. Question our assumptions about our gross margin. Taking a closer look at testable hypotheses Test the next 10 customers Test the decision making unit 1. Testing key assumptions: identify any cos targets that are out of whack. Design the cheapest, quickest, easiest tests you can think of to refute or validate your key assumptions. MAPPING THE SALES PROCESS 1. COCA (Cost of Customer Acqusition): Related costs in an effort to convince customers to purchase the products / services we provide. 2. Four Overlook Factor about COCA: a. The cost behind all of the sales and marketing efforts required to reach their prospects. b. Long sales cycles that cost a lot of money. Entrepreneurs tend to remember only the shortest sales cycles. c. All the customers who did not buy their product, and the sales and marketing costs associated with reaching those customers. d. Company decisions affecting the customer's decision-making unit. 3. The Sales Process a. Short Term Period: The primary focus of your sales process is to create demand for your product and to fulfill orders for the product. Customer-centric focus means you have created a product the customer wants, your product is still new to the world, so you will

3 need direct interaction with the customer to explain your value proposition and why your product is unique. The market will not be aware of your product otherwise. b. Medium Term Period: Focus shifts more from demand creation toward order fulfillment as word of mouth and distribution channels take on some of the demand creation burden. At this stage, you will also begin client management, which means ensuring you retain existing customers and creating additional sales opportunities for them.distributors or value-added resellers (VARS) are often used, especially to serve more remote markets, or smaller customers who have a lower LTV. This way, your direct salespeople (who are more costly to you) can focus on larger customer opportunities with a higher LTV. c. Long Term Period: Your sales group focuses on fulfilling customer orders. Your business will do very little demand creation, and will continue client management where appropriate. Internet and telemarketing avenues are commonly employed in a long-term strategy. There will have to be adjustments made as competitors come into the market, which will affect your ability to get to this stage and what you do once you get there. DESIGNING BUSINESS MODEL 1. Types of Business model: a. Unbundling Business Model b. The Long Tail Business Model c. Multi-sided Platforms

4 d. Free as a Business Model e. Open Business Model 2. Key factors to design business model: a. Customer : Entrepreneurs should be able to understand what the customer will be willing to do. b. Value creation and capture : Assess how much value your product provides to your customer and when. Then determine which ways of capturing value match up well. c. Competition : Identify what your competition is doing. d. Distribution : Make sure your distribution channel has the right incentives to sell your product. 2. General Categories of Business Model - One-time Up-Front Charge plus Maintenance: This is the most common business model, where a customer pays a large up-front charge to obtain the product, with the option to secure ongoing upgrades or maintenance of the product for a recurring fee. - Cost Plus: In this scenario, the customer pays a set percentage above the cost of producing the product. This is common in government contracts as well as situations where you and your customer want to share the risk of producing the product. - Hourly Rates: This model tends to reward activity as opposed to progress, which can be the wrong incentive, but when a project is poorly defined or very dynamic, this might well be the preferred model. A common business model for services firms, it is similar to scenario number 2, but the rates are set by the market demand rather than costs. - Subscription or Leasing Model: This is a set payment each month or another predetermined and agreed-upon time period. It is a great way to get a recurring revenue stream. - Annual or Multi-Year Commitment: It locks the customer in and provides them with predictable lower payments as opposed to a one-time up-front payment. - Month-to-Month Commitment: This method gives the user great flexibility and you can often extract a much higher monthly payment for this arrangement, compared to an annual or multiyear agreement. - Licensing: Licensing and then receiving a royalty can result in a very high gross margin. You are licensing your product, you do not have to make big investments in production and distribution capability for a whole product. - Consumables: It could e advantageous to both the customer and your business. - For the customer, the benefit is a low up-front cost, with ongoing costs based on usage, which the customer can usually control. - For your business, it could be used to reduce the friction to capture new customers and reduce the sales costs.

5 - Upsell with High-Margin Products: The central product is sold at a very low margin, but the overall margin is increased from the sale of very high-margin add-on products. This business model is often used in consumer electronics stores or websites and frequently in new car sales. - Advertising: The ability to attract and retain a desirable demographic can be monetized through third parties who want access to the customers you have attracted. When done properly and on a sufficient scale, this can be a very lucrative model, Example: Google - Reselling the Data Collected or Temporary Access to It: The reselling user data requires first attracting end users with a free product, then receiving money from third parties who pay for access to demographic and other information about your users. - Transaction Fee: Online retailers often pay or receive a commission for referrals that lead to sales. One obvious example is ebay, which receives a fee from each successful auction, paid by the seller. - Usage-Based: A usage-based model has been used across various other industries. Cloud computing products, such as Amazon s cloud service that hosts websites, charge by the amount used. The customers could control over their expenses and only pay for the amount of product used. - Cell Phone Plan: This is a predictable, fee charged for a certain amount of committed usage, with additional charges, often at much higher marginal rates, if the customer uses more amount. - Parking Meter or Penalty Charges:The customers would have to pay for some amount for some certain period for example, parking for 4 hours. If it was not paid until some certain period later, say 10 days, the penalty would be charged. - Microtransactions: The customer is asked to provide their credit card and then they make very small transactions for digital goods - Shared Savings: The customer pays only once they have realized savings or benefits from the product. It is generally not implemented because it is hard to determine how much savings to attribute to the product, especially over a multiyear time period. - Franchise: If an entrepreneur comes up with a good idea and is able to implement but does not have the desire, skills, or money to roll it out, they can use the franchise model and get paid a percentage of sales and/or receive a large initial startup fee in return for providing the knowledge and brand that has been developed. You can also make money by selling your brandname products to the franchises to be distributed. - Operating and Maintenance: A new business might not want to really sell a product but rather get paid for running a plant or other operation for a fee. While this is similar in some waysto a consulting agreement, the customer has more incentives to control or cut costs, as it will directly impact the customer s income. This model is common in the energy sector.

6 DEVELOP PRODUCT PLAN 1. TAM (Total Addressable Market): is a term that is typically used to reference the revenue opportunity available for a product or service. TAM helps to prioritize business opportunities by serving as a quick metric of the underlying potential of a given opportunity. The TAM for your beachhead market is the amount of annual revenue, expressed in dollars per year, your business would earn if you achieved 100 percent market share in that market. 2. MVBP(Minimum Viable Business Product): combines your most important key individual assumptions into one integrated product that can be sold. The MVBP sets you up to test the most important overarching assumption that integrates the rest that customers will pay for your product Conditions of MVBP: - The customer gets value out of use of the product. - The customer pays for the product. - The product is sufficient to start the customer feedback loop, where the customer can help you iterate toward an increasingly better product.