Harvard i-lab | Startup Secrets Part 3: Business Model - Michael Skok

okay I think we'll get started um so we can have time to get through all of Michael's material tonight on it then timely manner for all of you who have been here before you know Michael Scott he's running a five session series on startup secrets how to give yourself an unfair competitive advantage tonight's discussion is going to be around business model analysis and I know he's brought a number of his portfolio companies to present as well so it's going to be a lively session I'm really looking forward to it without further ado I'm going to hand you over to Michael and his team of people well welcome everybody we should have a lot of fun this evening we're going to talk about one of a journey sense of these multiple things that we put on the original topic and that being business for those of you being at the other sessions this will feel like it's in context those of you who haven't been I just want to get a show of hands who's new here therefore I can try to tell us on the background ok quite a number of you people actually ok so I will get this right before I get going in which case the value proposition session which is up on the website called catalyst comm provides the background to what is it that you do and how do you do it uniquely well for who that's the simplification of very long one-hour monologue by me so there you go you skip the one hour you've got the essence of it and based on the value proposition the business model is all about figuring out how you take that to market as a viable financial sales marketing it and even service in support model so even though you've missed that just think about whatever idea it is you've got we're going to figure out a business model around it today if you miss the company formation piece that was really around building the team and obviously hiring the people to make that successful basis to take your enterprise and execute and next session is very much the other side of the coin to the business model because business model is so closely aligned to go to market strategy so that gives you a little bit of context for those you haven't been here all right first of all I just like to make some introductions we've got a number of the portfolio companies being kind enough to come in as case studies this evening and also to help out in the workshop so you've got real executives who have real dangers real entrepreneurs who have real ideas that can help you as you try to take yours and figure out what your business model is so first of all like to introduce the active endpoints to representative same October and Eric Atkinson if you just like Stella marks our CEO and Eric heads up sales thank you guys for coming and then aquiline we have David McFarlane and Orion staff the CEO and Founder respectively and then from demag Webb who is represented by James Driscoll I've just say before he says anything they are on the roadshow and so he's basically been told not to say me so I don't exist I was never here so unfortunately we can't use this case study because it showed we will use one when they get through the rotation such a thank you for coming he'll be part of at least the workshop so you can engage with you and then I'm lucky to have two of my pockets here tonight too I'm quite sure why that here except to check that I don't say something out of order but Jim arrived from North Bridge and then we also have Carmichael Roberts who's also brought some special guests with they're coming Oh Michael no okay well we have don't worry we'll introduce him when he comes in he's brought up another of his companies actually because Jim and I mostly work on software but we did want to make sure that people were not focused on software have a sense that business mall techniques is going to talk about tonight actually do apply many different kinds of ventures and so in fact he's going to talk about one of his companies called MC 10 which is the material space very good so let's jump in with our agenda as I said this is all about building a business model and I'm particularly going to focus on just all things first of all finding a disruptive business model you can all go and discuss what a business model is you can read about it many different ways but if your startup the really important thing you're going to try to do is bring disruptive innovation into the marketplace and that shouldn't just be about technology the business model is a fundamental piece of it but how do you find that or I'm going to show you three key things first of all finding your core differentiation that is absolutely critical to building a business model secondly what are the multipliers that help you spread that value proposition in an effective way getting great market share great reach and ultimately great revenue and then third very importantly how do you take the cost out of the equation Alvin levers and the levels as you'll see are things that can be highly advantageous to companies that figure out how to use them in their business model and then last I'm going to give you a very quick insight into how that plays out in the life cycle of work with your customers and particularly important here is an example I'm going to bring to life for you how this plays out in the software world but again I would say it's applicable to many different areas I mentioned earlier that this is really one side of the point the other side of it is go to market so you will feel in some cases like I'm transgressing a little bit into what does it take to go to market but that's because there's clear linkages here and then the most important thing about tonight is of course the workshop and we can have a lot of fun with that we've got ten teams again tonight and ten hoppers and journeys organized for us to have the white walls you see around the room everybody can go write their business models up and come in and present them we'll have the usual voting at the end excellence over that in mind I'm going to get the boring stuff right out the way right away everybody can go read this on the web there are actually some great books on it the basics of business models are around creating the value so that's things like creating your product or service delivering it that's things like obviously how you take it to market and then how you harness or monetize or capture the value but we're here for a reason we want to talk about startups and if you're a startup I want you to stop thinking about business models creatively right away don't take somebody else's business was my first piece of advice to you there are plenty of business models around in fact it will be true to say that the best example of business models of a business model probably hasn't been invented yet and that's what I hope we'll get from you is the next generation of interesting business models because this is all about how can you make a breakthrough here it's not about picking somebody else's business model and just applying it to your situation the chances are at that point you're writing very little value in your startup and you're probably not making any major impact so I really want you to think about this literally as how do you change the game if you could come in for example to a market place and literally rewrite the rules on your own game and call somebody else to have an innovative style em'ly much more powerful empathy I would argue that that is at least as important as having a disruptive technology there are many examples like that what I encourage you to do is to think about whatever it is you're bringing to market in those kinds of ways don't let somebody else write the rules you write them who could attract to find the whole new game the way that you have so what's an example I'm really going to date myself I put an exclamation on here 20 years ago believe it or not there was this little company called Symantec it's a multi-billion dollar company today that's the good news but the bad news is at the time we were actually a struggling company in many ways and I will say that with tongue-in-cheek because you know it's become very successful but I think in more 20 products we had everything from add-ins for Lotus 1-2-3 if those of you remember back to that was the first spreadsheet to we had languages you know think si think Pascal on the Mac get all sorts of products we have database we have WordPress I mean it was just unbelievable and I'm particularly being brought this is all being brought back to me right now because we're about to have a 20-year reunion for the first 20 years of Symantec this weekend all these parts and so forth been coming to life and so this example just stuck in my mind it's really a business model example the product that was selling best on the Macintosh back then something called symantec antivirus for mac and believe it or not the Mac was plagued with viruses in those days system 6 or 7 or whatever it was at the time was was really an issue it was very successful product for us and we were selling it as a licensed product so you know whatever it was dollars perpetual license you bought it through at the time you know your local retailer and because it was a chart-topping product you'd have said at that point great we've got that business model Dell we now to produce that product package and distribute it sell it top of the charts what should we do when we introduced the PC version the answer is when you just copy to this one I just told you I think that's a really bad idea and so we also stopped and thought about that and initially we got it slightly right in that we decided it was important to introduce the PC model with more of a flavor of and upgrade service than an update service because there were many more viruses coming out for the PC and so in fact we were having to get people updates initially once a quarter now we rise while it's happening sort of once a month then we realize hey this is happening regularly it's probably hard to believe this at the time there were probably a maximum about 100 viruses on the planet when this came out now there are tens of thousands and they regulate so of course what we did was we flipped it all on its head we actually decided the software was worth nothing because we needed to get that out there as a platform for people to be able to get the virus definitions downloaded to prevent the viruses and so the real value was not in the software at all the real value was in having the virus definition before it ever attacked anyways machine and so that literally was the Italian point if you would ask because Li I think you are pretty much anyway it's mad at the time on the fortunes of that company because we suddenly created a subscription model that was not a nice to hand it was essential for enterprises and they didn't care about the software they cared about the person who had that virus definition first and suddenly we had a very predictable business because every time a virus came out we knew people were gonna want to download there for you they were going to want a subscription fee off today therefore we knew them and pay monthly therefore we can see what our revenue was going to be and it was very very game-changing so that's an example from a price standpoint any questions on that before I go forward so did you after that tubes the Mac module yes yes we did and in fact I'll give credit to one of my sales guys here who was one of the first guys who actually even flipped the entire product line on its head and said you know what we're selling a bunch of things like backup for example and Norton utilities was another product we sold but people really don't want to pay for the software what they're really doing is trying to get deep security and prevent data loss and so forth so we came up with what he called and he really deserves a credit for a total solution today security and in the UK for example we took out full-page ads in the Financial Times and we went to an extraordinary lengths to get people to understanding what's the most important thing to them that they're actually producing with all the software is their data it's their information so they really shouldn't put that top in terms of creating data protection and suddenly as a result of that thinking we actually started selling a data protection service and we bundled all of our products together in what we call the total solution and sales just took off and if I would go into it even one more deep level of detail I tell you this which is we used to on average sell one to one and a half products per major enterprise per seat and by bundling five or six products together the actual natural average of that turned out to be 2.6 so in others we went from 1.5 to 2.6 the value just by bundling that correctly and by taking the game up to being a data security and information protection game extraordinarily successful and my investment the time we were quite concerned to say the least about us going and taking full-page ads out in major newspapers very quickly lost their concern saw tremendous results okay so next example this is not a technology example this is absolutely a pure-play business example at the time I was based in the UK and I was observing that every major product that came into the UK from a US publisher was largely failing failing because they didn't have that investment in management marketing distribution sales services for wine because we look at the US market is 10 times roughly bigger than the UK market so let's say you're a 10 million dollar company in the u.s. you may have some at that point relative critical maxing 20 million dollars going to the UK take the size and market you could be maybe a two million dollar company doesn't really give you much room to invest in marketing or management the distribution of translation localization all these other things so it's very tough for US companies to be successful and they typically went to just distributors and said here we go to great product you know put it in distribution well project that sell themselves and so without the marketing support or of translation in some cases it was very unsuccessful so I decided to come up with a business model that basically enabled US companies to bring them to bring their parts us as one entity Europeans ultra publishing and because we have multiple products we could get the critical mass in all the things I just put up on that management all the way through the distribution and as a result of that we were able to provide for example introductions to the top times 100 companies that's a fortune well positive and if we already got that connection on one product when we took on another product very easy to open the door and say okay here's the next product we do very selectively so it wasn't like a you know a long list it was very successful financially for the US companies too because we would get these companies to about twenty to thirty million dollars in other words highly scaled highly profitable at that point and then we would enable them to acquire them back but it was also acquired back on a basis that of something called pooling of interest in those days but just think of it as a tax efficient way to do it it was non-dilutive so it cost them nothing in terms of earnings per share if you will and it was ultimately acquiring something that had growing earnings so the minute they acquired it was adding to their top line as well as the bottom line is therefore to their overall stakeholder value so it was like incubating if you will these companies till they go to the point that they were successful and then acquiring them back on this anti diluted basis it's just highly profitable lists and as an example Symantec itself which is one of the companies that we brought over was a huge win I put this picture up there because I say it's a huge win but then my wife always reminds me that the two Bibles that it took us that they were huge thick things conclude that deal was the pain involved in it so it was a lot involved in doing that but the win-win here for investors for the early investors was a 97x and their money your sense of it and yet semantics themselves doubled the value on a accretive basis acquiring the company so the day of the acquisition was acquired that was announced the company's share price went up but also more importantly the continuing learning streams continued to contribute and Symantec in the UK was their most profitable business outside of us at the time so everybody want we make customers happy we obviously made our shareholders happy and the middle this thing we made Symantec as an entity most successful adam- technology absolutely nothing although by the way it was very passionate about Debrecen stayed on and continued to actually really enjoy working with them but my point is here this is an example of something that you should be thinking about even if you've got a breakthrough technology what are the things that will make a win-win for you so tonight I'm going to talk to you about that and hopefully give you enough examples about it I don't think I need to say more about this but I've hopefully made it clear to you that it is at least as important but now I want to give you a specific reason why the business model is as important technology so before I give you the answer and even tell me why in financial terms business model should be considered as important technology pain thoughts I've given you some examples but can anybody give me sorry go ahead technology doesn't matter yeah you're on exactly the right track products don't sell themselves people don't even know about them how they can even find them even if they are great so what does it cost to for people to find out about your product is that relatively the same as developing the product is it more is it less anybody somebody heard saying more I'm sure of hands who thinks it's more this is an easy way to okay well those of you who said more you're right the staggering thing is how much more it's usually doubled if you look at a software company for example PNL you'll see that on average companies will settle out and run 15 to 20 percent of their P&L being spent on R&D and 30 to 40% motors double on sales Mario so what I'm pointing out to you here is you need to go to a brilliant product how it'll end up playing out your business model is that double the amount that you're spending on your product is going to be spent just as we've all teared from the back then on taking the market and that's what this business wall is all about it's about how you get multipliers and levels to actually take the cost out and the revenue up and in fact I'll go one step further I will say that a perfect startup storm by the time you finish this session of the next session should be very easy for you to fine it should be a disruptive business model with a disruptive technology and then you obviously focusing on a new market opportunity or target segment with an innovative way to get back you get those things things you have my attention now I'm not saying by the way the great companies that have formed one or even two of those but again all three you really have the perfect startup store so let's get you started on thinking about some of these models give me why we attached my mic these models here are just a sampling of the ones that I want to pick out the wonderful thing about them the reason I picked the list many of these companies didn't exist you know five or ten years ago one of the fastest growing companies ever is Groupon and they came out with completely new as number one one of my favorites which I use for a while and didn't understand their business fall until I sort of thought about it was mint it's not a company that's actually trying to make money out of the software the way into it did to process your finances it's actually a legion business that's actually driving lead generation and many of the financial services providers in a neuro portfolio even though Jamis can't talk about it Demandware has a very innovative business model which written in the s-1 is all about revenue share and i can say no more than that with but it's an example of what I think I'm making a point over here that is every one of these companies is at least in part being successful because of it is drop you first of all and we will talk about some of these examples but there might be things that you've never even thought about associated technology pool such as for example how do you do crowdsourcing it's an innovative company in Boston but you test that's actually taking people from around the world to test mobile phones in all the different environments around the world you might say well why is that a big deal in a business model we'll think about the alternative there are so many different phone types and so many different carriers that can be used in so many different places there's no possible way you could recreate an environment so it would test all the different scenarios for mobile phones and mobile occasions but if you crowdsource it all around the world you can get a real sampling of what might be the way of testing so their business model actually not only solves that problem but actually applause and averages low-cost labor around the world as a lever to help them be very effective in that test so I would say any one of these examples is one of many I could pick two again hopefully get you thinking about what could you do to be this Roger so what are the sample questions I recommend you start with well amazingly people come in and they almost invariably say we have a product yes you may have a product but is it really a product or is there a process associated that product being used in which case is the process more valuable or the product do you really only have software or do you have to have services to actually make this successful which case is the service more important than the software in open-source you will find that software's free so unless you have services there's no value in is it open or proprietary and so on and so forth here's why I'll pick up for you which i think is rapidly emerging as an interesting business for as we get networks of people working around these products and services we're collecting tremendous amounts of data on people and in fact the best example of that is probably going to be one of the most interesting new IPOs this year that's Facebook Facebook's values not as software means great software it's impressive the PHP scale to be able to do you know to serve hundreds of millions of users but that's not going to be painful we're paying for ability to connect to people and guess what they're monetizing they're monetizing the fact that we've all connected and told them what we are doing all day so they can figure out what really is rather than the data behind that target us more effectively so their value is in that content or their data maybe they would say simply that data my point being here this is an example of where I would encourage you to question early what is the set of values that is at the core of your business so let's go to exactly that your first key question should be what is your core value those of you haven't heard me talk before I've said this many times I was one of those students who needed mnemonics to remember anything so you'll find I use mnemonics everywhere I translate corny but just forgive me this is a way that hopefully you'll remember these things the core of your capabilities should be literally what is it that you've got a really exceptional value at the center of your proposition that you could build around that you could create a model run and when you tell me it's cool nine times out of ten I'm sitting with an entrepreneur and I'm really questioning they haven't defined the core then define a bunch of stuff and what we really press are we can actually get even more focused so I'll open here or we've got a great software product okay let's talk about what that product doesn't for who and then when we really get down to it we'll find out that a small piece of what somebody's actually building is really the core innovation so in the case that we're going to talk about tonight with a given you'll find out that they actually are in the database business but the core of their innovation is actually a very critical new piece of how you process data and they didn't need to recreate the entire database infrastructure they're leveraging a lot of open source to do that so let's have a look at some examples from the ones we just talked about I already gave you a sense of how to think about core in the example of Facebook they're real innovation is probably the user network but if you went to the core I think it's data and what they do with that data obviously in terms of using it for advertising is really interesting now they may change that they may decide at some point there are the battery if they haven't got that cool right earlier I think we're being very difficult another one I think that's it's just gone public so it's topical would be yelled Yelp could have been thought about as community could have been monetized in many different ways but in the end the contents become really the core of the value that again if you look at what's going on now in the world of the net in particular a lot of times where people are building is some form of user-generated content around the network and there are many ways you can monetize that but I would say to you the most important thing you should do is again instead of just saying well how can i monetize it just say oh well advertise this always think before you do that say well who else might painting with and if everybody is advertising I started using advertising in the same way as you are people don't have a competitive advantage so try to flip it try to create an innovative Stiletto you think about what christian centers has talked about many years which is creating some way to do something that can't be followed as opposed to just falling what everybody else has done and so when you think about monetizing your core think about where others are most vulnerable where you could do something but again change the game go back to that bad bug and rewrote the rules and gave you somewhere monetizing there was really tough for others to follow I'm a huge proponent of open source if you haven't figured that out do a lot of investments in that space the reason I love it is that it's tough to compete with free which is really what open sources is at its core but it's very easy for open source companies therefore to attack existing market places with an offering that is delivering the same value at no cost and focused on making a custom successful with support because a customer loves that and the competitor can't compete with free so think of things in those ways whatever whatever it is that you're addressing and if open source helps you think about it and having to talk to you more about we love that as a business form okay so core is first point now I'm going to introduce you to the next two concepts multipliers and levers and they work around your core so these are not in a separate term once you know what your pull value is how can you multiply it meaning increase the revenue increase the reach of customers you get two or increase the coverage or market share that you get that's really what multipliers are all about and I'm going to bring this to life with some examples of that on the other side levers reduce the costs reduce the time and reduce the resources involved in producing a product or getting it to market or in capturing that value and if you get both of these things working for you as the diagram suggests they really can create extraordinary value on top of your business form and core or your value proposition so what are some examples as you all know my experience comes from software so let me pause the question I'm going to go to use resources above unit to have a lot of it great question so the question just so everybody heard it is what did I mean by reducing resources when we just said that for example taking products the market requires a lot of resources what I mean is how could you reduce the resources that are required still to the market so I'll give you a simple example just I'm going to preview what I'm about to talk about but if you could create viral marketing where your user was actually selling for you that's obviously going to reduce your cost does that make sense so that's an example of a level and by the way people talk about viral marketing all the time it's a very tough thing to define they're all sort of models people have and coefficients they create everything else I can be a really example about important example of viral marketing record selling if you really love something and you refer it to somebody else that's that's the beginning of viral marketing like that so making happy customers is the beginning of viral marketing and figuring out get a very happy customer armed with the right way to wrap itself just giving them the basics of you know what typically is in most people which is they want to justify the purchase they've already made if they like it anyway so give them the tools to do that and then of course you can do all sorts of offers and things to promote it anyway does that answer your question oh great any other questions before I move on okay so for examples as I said I'm in software so I'm going to use these as talking points but I think this apply to many different businesses so the first category that we're talking about is exactly what we just discussed which is sales marketing it's usually such a huge part of the P&L that if you can start to get a multiplier working for you here it's very valuable and things that MIT may make the difference here are things like tiered pricing so in other words if you start a product at one price in all flavors that's possibly they're exactly the right thing to do for simplicity sake but wouldn't it be better if you could get people to get it free first of all so it was literally frictionless to start off with and then upgrade an upsell and add value and obviously add capabilities and so forth going forward because every time you acquire a customer song as you keep them the ability to upsell is obviously a lot less expensive than creating a whole new customer relationship so I know that sounds obvious but that's right they're an example of a multiplier and it's a reason why tiered pricing and models like freemium can be so helpful the other typical mod multiply you'll hear is channels this is definitely applicable to almost any business you could go I haven't create a sales force for every product I'm sure but wouldn't it be more effective to use somebody else's sales force do you somebody has already got the customer relationship who's already written the contracts with major part enterprises and just leverage those I can tell you that's one of the biggest challenges for startups is that just the contracting process alone in the Fortune 1000 is horrifying I sing a few smiles at the front here because constantly sit in boardrooms with you know the forecast and we know that the deal is closed but the contract is still to come and like okay is it emc we're dealing with or is it HP and you know everybody knows their stories that the point is the channel in many instances will already have the relationship with that end customer and so they were rewritten and contracts and angular to just add this an addendum or slide it in on an existing contract you just pull that fresh now reduced your cost of selling and obviously are able to get a multiplier in your business so next example will be in the product most people think about products in a very straightforward way as being you know it's obvious that this is going to be great value and therefore people should want to buy it that should be the case but you can get a lot smarter than that I'm going to introduce two concepts to you tonight Slippery products yes I said slippery another Vitamix which is another way of saying friction free and what I call Russian doll packaging and I think you'll have some fun with these tonight when you get to the workshop but the last of which is technology stacks and again example of it this is how you can insert yourself if somebody else's technology stack again a multiplier I'm going to market your room so consider the levels I would take the crosstab well the world has changed dramatically since that 20 year old example I was talking about the semantic will use that itself through two-tiered distribution and we used to have to spit salespeople at these ridiculously large distributors that sold thousands of products and so we have to get their attention and now you can get anybody's attention anytime you want on the web and focus on doing it in a very cost-effective way with inbound marketing using inside sales for example and creating things such as we were talking about like viral campaigns that dramatically takes down the cost of stock market that will need an emotion when I started this industry and so I would use it and I would spend time thinking right from the get-go about how would you get your awareness your interest your understanding up using web and low-cost techniques like that and that's why I said this is one side of the coin the other side bingo to market that we'll talk about in the next session the second example is less obvious and people typically think about this too late in the game so I'm encouraging you to think about it right up front which is how do you take the cost out of producing your product creating a product and supporting it and there are many ways you can do this you can do it through offshoring or outsourcing or crowdsourcing in that example we talked about or something called co-creation which I'm going to give you an example of tonight and again technology stacks so probably a lot of words up there all I'll say is every one of them can be thought of as a potential level I don't think I need to explain everyone but I will pick as I said co-creation to go into as a differentiation and then here's the last piece of this startup secret which is you really want to find examples of things that we work together you've got to kill a strategy on your hands if you can figure out how you can get focused on your core find a partner to work with who will give you a multiplier market and a lever in taking the cost out of either building or delivering or supporting a product and so two examples of that laughter ooh now first of all while I'm creating value then another and delivering and captioning so what is co-creating well the idea here is pretty simple and it's going to come to light in a software world I think fairly easily you could sit has a single organization and build your product with one development team or you could say what is that the core of our product and let's take an example that would make it easy for everybody to think of Linux it's an operating but at the absolute core of Linux is literally a car and Linus thought about that and realized that the problem of the existing operating systems was they've got huge and bloated why they got bloated because basically people had to have different versions that for every single different kind of laptop or PC or server and every kind of device driver and everything else that went associated along with it was yet another piece that had to be added onto it so he wrote a brilliant call superfast super efficient and he made it possible in a modular way for people to add on to it using open source created a community and got people thinking about how could they extend the product and as a result of that people liked idea it was literally the time nowhere any other existing business in fact because argue was really struggling with many different operating systems as 400 the Z series on mainframes etc were able to take learn Linux and unify their entire platform strategy with it and they themselves using open ap is add the open source nature of this were able to write all the drivers for all of our different products and get what they needed which is a unified operating system what that did till the next was unbelievable it literally accelerated actually I should have Carlos telling a story since he's been involved in first time but it literally accelerated the adoption of a single operating system that swept through the enterprise very quickly because it was free open source and instantly much more valuable to people and they were able to focus on their differentiation and people started building on phone so that's an example that's an open-source example but if I jump to the top and I give you just a little bit of thinking around extensibility this is a simple concept if you build something that everybody wants to add value to needless to say that's going to multiply your value I'm going to start at the most basic level that you can think of imagine you went to the kitchen you put on a pot of boiling water and you knew that everybody wanted soup the first thing they're going to need is the pot of boiling water if you're the only guy who's got the pot of boiling water people are going to come to you and put the ingredients in the good news is they can add the stock to start off with and if they decide oh they want to add vegetables to that they could add vegetables but maybe some people don't want that so they'll take a little out of it and they'll create their own version derivative of it and they'll add you know lot of vegetables but maybe need to because those where they are the next thing comes on wants to pasta to the point is somebody thought about that in a very basic way and it's exactly what I encourage you to do with the product they said what is the core thing at the base of soup boiling water think about your value prop in that same way and then think about how easy would it be for people to come in and take a ladle and take some out and create their own version of it or add to it if you can find ways to do that that's why I love extensible open api is for software for example which is just a fabulous way for people to do this and if you can do that really early on you'll be very successful here's the next little detail but a super important one if you do it in a way that internally you test that right away so in other words let's say you're building an application but the application requires certain core services like for example user input user why did you write those as capabilities in your platform that you had to build on internally so you had your team of apps builders you know what the app application logic should be but they have to internally build on the api's for user validation user input user experience etc immediately you're creating a customer internally that is testing your openness in your extensibility of those api's and when I see software companies to do that they build on themselves i watch product development go way way way quicker and I've seen it over and over again the Monro actually although James can't talk has done super probably well internally and exactly that very classification of disagree so it's a smooth tip but it's a good starting point figure out how even entirely you can build around your core and you can have customers from you know one part of your organization working on another piece of the capability that's where it's literally eating your own cooking being around customer summarizing this I would say as follows you can get smart about creation by thinking about who will the other people can contribute and if you can find a way to actually incent them to get value out of co-creating with you you're in a great starting point it's going to be both the lever in terms of taking your cost down it's going to be a multiplier terms of those people obviously spreading the word okay now it's sort of another example of levers and multipliers in delivering and capturing by delivering and capturing value here is one which is pulled from a list of 20 I could have talked about which again is a favorite for me it's as simple as a strategic partnership and yet it's a significant as to be a major level multiplier here again every software company I work with figuring this out and I'm going to give you a specific example of what what might make a great strategic function we're both levers and multipliers around the core connectivity so if you are a software company you'll notice without me telling you you have to figure out what the key capabilities the available drive and it always involves basic things when computing network and storage database I'm going to added 20 things you probably don't have those as distinctions unless you're a security company or David's home and you want to go to ultimately exposure applications and services at the top of them if your core capability can fit into somebody else's stack right in the middle and fill a gap for that for example if you are able to be a load bouncer that enables people to scale out and you do that on top of people's database storage capabilities then why not fit into that stack why not go build for their capabilities so that you literally neatly can integrate and create a much more fulfilled product experience anybody is trying to build applications at scale and each load box or obviously that's what the opportunity is in a hole provide strategic partnership and whole product is in jeopardy more term as you know I'm a student of his he'll be here at the end of the series and it really describes how you deliver a complete solution to your customer so if you're going to got a piece of it you can find partners you've got the rest of it I would say this is a great example of a lot of I remember they can work for me what happens when you do this is best discovered and subscribe to an example in one of the companies I started in the analytics world we had a capability to do what we call real time inline analytics but how did that mean it meant that before that point everybody who was doing analytics was typically getting reports you know week after things happened or maybe a laughter in some cases and we said guess what before you even transact with a customer wouldn't be helpful to find out if they're a profitable customer to deal with what their preferences are what the things are that they might also want to buy from you and that required real-time inline analytics for the trouble that is analytics is a tiny piece of the challenge of getting that data putting in a database cleaning it with what's called ETL systems and then getting into a place where you could actually do what we did which was the real-time inline analytics and then on top of that you had all things people want to do with them like present them and you know even allies them further in Excel etc so we rise the big giant in this space was idea so guess what we did an unbelievably obvious thing which was we worked right into the core of IBM stack and make sure we work better than anybody else did with IBM's db2 product settles so that WebSphere products and the middleware and also with that tooling even and the result was not terribly surprising we ended up getting huge revenue out there not just because people were able to sell our product in IBM but because it brought credibility to us that IBM was actually partnering with us and was taking our products to market it opened all the doors and on the other side of things of course it dramatically reduced our time to market because we weren't waiting all their technology around us and reduced our development costs excuse me and ultimately resulted in them acquiring the company which in many instances by the way even though it wasn't our intention is a great backstop for a small company to have had that strategic partnership be so successful that you know that if nothing else plays out in your own you know ultimate success somebody's going to have you so integrated in to apply so I think strategic partnerships and example getting a whole product strategic partnership on great levels great multiplies and great back scoffs for for small companies one little detail and the devil often is in the details and certainly it's true with startup companies I hear people all the time so it's fantastic I've got this new big company very interested in me and they're going to co sell everything okay who's in sense because if they don't have that Salesforce incentive to do it they might be getting more advantage out of you than you are of them there are always details like that it's really worth paying attention to if you get them to reset it might be great but if they suddenly bring you a thousand customers and you've got all the support cost you might actually find you're losing money likewise I often see small companies make this mistake too they go and write om deals and they think they've got tremendous distribution reach but they've got no upsell capabilities they basically just get away the golden goose huge mistake so here are some things you can do first is actually strategy not just om but also from in general helping you with your products and how you get multiplies another each other it's what I call building a Russian doll it's going to be very obvious I hope where you might do this and then I'm going to get one of our companies come and talk about how they do this come up with a version that's free then find some way to give limited access to it for a different price some upsell give a personal addition err once it gets reused by lots of people make a work repetition if lots of work groups start using make a corporate Edition once it goes global make an Enterprise Edition it isn't that hard but you'd be amazed how many times this is the difference between for example I am deal working or not if you know you've got all those editions and you just do an OEM Edition for example on the personal edition or the workgroup Edition you know you can go back itself all the capabilities that corporate the Enterprise Edition and therefore getting the reach from area may tremendous sense because you can do the upsell but don't go in there without that in your back pocket know upfront what you're going in there with know exactly upfront what you're going to do is it upsell and then to the point about going to market in general this strategy works out for lots of other reasons you'll find that it's a great way of giving an adjustable starting on to people it's a great way of allowing people in the center taste the school piece of the value and if they do that free that's a great strategy in many instances and then it gives you all these upsell options and it gives you tremendous channel flexibility not just for their EMS but you can go to for example different channels for a personal addition then you would for example for an Enterprise Edition or you can go to VARs you want to build around for example or systems integrators you want to build around a very small piece of your core functionality because they want to differentiate though all the capabilities they might bring in a vertical market let's say they you go to a bar for example that takes just the core and takes it to a medical market and yet another one who takes the core and goes after the financial market that's a great strategy that can play out if you do rush it all packaging others if you figure out how to get these capabilities before you come out with this one galactic Edition which has everything for everybody in every market it's going to be really hard for people to deal with you and you'll be again amazed how many times the biggest problem when we see startups is they try to put every feature for every person in the first product and you'll know that the result of that is it using classes under design way since I will be able to read very recent book on Minimum Viable Product Minimum Viable Product is one example what I'm talking about I'm really talking about the business model associated with it that's the technology piece this is how do you create the business flexibility around it by packaging it in a way that you can go to mock in a different okay I'd like to introduce a keeper now they've fallen to give his example of how he's created somewhat of a good example not just in open source but also we're packaging different options and giving himself this this capability of David practical joint so just an opportunity to maybe walk you through how we've actually taken several of these capabilities and combined them in this in this I've got a market strategy just to reminder some of you might open the prime minis but at the very core of what Keaton does well I'll keep our secret sauce isn't it was this man in the middle here who invented it is something we call table grouping simply put we understand how an application uses data and then we group that data together and the net result is that transactions and queries run 10 to 100 times faster it's a huge breakthrough in terms of capability so what we've done is that we've taken that core capability and we've released that as an open source product the idea is to drive as much viral business as possible its developers who drive these technology decisions it's the developers that is the ten thousand 100,000 strong sales force that we can use to compete with the likes of Oracle's what we've also done is allowed those developer communities to extend our product by integrating it into their own development environments so for Ruby and hibernate we integrate into their environment so it becomes a value add to their stack and again they drive it through their own distribution and they own that value and they drive that value but what we did is we created a pluggable architecture and as a pluggable architecture it means that we can add critical additional components that will add unique value to the product so the first is something we call my sequel replication it just means that you can take this and now plug it into a pre-existing my sequel application if you build something on the lamp stack it's not scaling well it's running slowly you can take this akedan stack plug it in redirect the queries and we'll run those queries really quickly for you and that's just one example but the key point here is to have a whole series of these capabilities that you can add and extend the product with which is what we've done and you can also use that in terms of a multi-tiered pricing strategy and then finally as you build community out there in the market we've added a series of electronic services that you can add things that you can deliver as a SAS capability back out to that market it makes it easy for them to a dog but it also kind of locks them in to your service and your brand and even within those editions there are certain community aspects like the grouping algorithms you get lots of people to combine together to contribute to different grouping strategies that then can be shared across the community so those are just so many examples of how we extend it okay thank you David now to leave that up for one second I think is use pretty much every example that I've already said tonight there's effectively a calling very clearly defined and actually made a difference also people get extended and these also say look we can have several additions in that Russian bowl model so we can sell this through many different channels and sell different capabilities and he's also said we're going to have upsell and cross-sell capabilities from that and in effect he's got cost being taken out through open source and co-creation he's got multiplies being created on his thing through the community and he's got obviously multiple options through the Rushville packaging so it's a great example and I can tell you that what we fencing well you tell me I shouldn't leave the witness have how much time have you spent on the business model than the CEO relative to other things in your business like building product well one thing I would say is like you know from the very inception of the product we had these ideas in mind so one of the things that was very important I would say to people is that you really want to think about how you're going to package this value up and deliver it to the market it isn't necessarily that it was hugely time-consuming for us to do that but it was really important that you think about it right up front you don't wait to the end of the development cycle to apply it it's a terrific point what David's saying just underline it is if you develop the product in a monolithic fashion then always going to be very hard if you lean to decide you want to slice it up sell it in different ways so thinking about the business model as early as you're starting your product development is actually not your own it's exactly right so thank you Dave great Monday okay I've made the launch today know Steve Jobs so I'm going to have to do is the poor substitute one more thing and actually I think it's a really fundamental thing there is actually a tendency for people to think about these things ie business models as snapshots but in fact what you do is think about on an ongoing basis how is it referring to services sold and so I'm going to take you through a series of things that will give you a sense of the product life cycle and it starts with something that I've always really enjoyed watching companies who get it right do and that is creating what I call slippery products but I told my daughter she said that was that was got to do with price kind of miss the point because if I can get it at golf tonight okay the first thing is creating a product that is simple to use obviously the simpler it is the more likely it is for people to instantly get the second is low to no initial cost that takes more friction out of it the third is installs easily you'd be shocked how many times even if something's free as an app on your iPhone think about it it takes a while for you to install it and it actually isn't immediately functional it doesn't have some component or fill in too much data or whatever it is to get it going you're not going to use it and then how does it prove its value really quickly if it instantly delivers something back to you before you have to put a lot of stuff into it you're going to start using it next on the list is obviously does it play well with others in the enterprise this is incredibly important because it disrupts everything even if it's free and it's incredibly easy to use and you're getting value from it a chapter a place everything before you can use that it's going to be really tough next is obviously ease of use but I say this and yet it's amazing how many people spend zero time upfront thinking about user experience the user experience is everything it's usually what the president describes obviously defined excuse me how often you get used gets circulated and so forth and so pay attention that up front from a business standpoint we've been talking about this the customer is going to look at payback and ROI and so make it obvious make it obvious right up front why this pays for itself why justifies itself in the end my favorite one is the why why not why customers can't live without this should be they should be thinking not why might they try it but why can they literally not live without it that's back to that game pain equation for those of you here if you give them so much gain and there's no pain is it's so slippery friction free to adopt this product diet so I would actually say well the most important elements of the business model is in fact creating slippery products it's creating friction free products and often times people say well are these go back to you in business model I'd say it's got a ton to do with it we just talked about one example which David gave which is about how you chuck it up but actually if you right from the get-go figure out what your business model is and you decide to create a slippery product you can take a ton of the friction in other words the cost of marketing distribution sales service and support so it's worth taking that thought really early on into your thinking as you define your business plan and to help bring this to life I'm going to introduce Mark Taper our CEO from active endpoint and his mom comes up I'm going to tell you a little bit of story to set him up because I actually inherited this investment and that's never an easy thing but you're a partner at a venture firm now I didn't inherit mark I was lucky enough to get her a present but it was a middleware product it was a tiny piece before that she definitely would be blended yeah doesn't need to know what that is all just tended to feature and so building a whole product and Mark came on and the first thing he said to me when we were going through recruiting is I don't want to talked about the product I'm talking about the business ball I've got a vision for how I could take this thing to market in them and you can use the little slippery although I think I've coached him into using it now way and it's not up and he's figured out how to sell complex very difficult stuff to sell anyway well in an exciting way typically sigh you know something out of the order of tens of hundreds of thousand dollar value over time this is a company that's doing millions of dollars of Revenue and there's literally being growing at phenomenal rates every year without having a single outside salesperson sort of tamaak how did you do yeah so in actuality we we did structure the whole company out of this concept of making it simple and how we bring it to market process automation which is what we do it's been around for a long time business process management the corporate IT people have been you know able to accomplish things for their users for a long time but it's it's way too hard and so the concept of active endpoints has been how can we enable the business user to make their life simpler by doing these things themselves and so the example that I that I've shown here is hopefully make the life of a salesperson easier they interact with an application most of them use something called Salesforce comm which is really just a database to collect information but sales people don't want to write reports they don't want to gather the information because of that they frequently miss common things that they that they know they should do but they just forget and and they don't do it consistently over time so what we did was we invented some technology to allow a business user to do their own automation so in fact you could use a mobile phone and the text-to-speech capability speech-to-text capability that is for example in an iPhone using Siri you can talk into the phone and say show me my meetings today a guide will come up and you can just speak into it what happened at the meeting you can hit a button if you want to thank you email to go out or whatever whatever it is you normally do after a meeting you want to set up a follow-up or something like that it will automatically happen in the background and so this this is it's great in the fact that we've done the real innovation is the fact that we allow the business user to do it themselves and so we took that concept and really our entire go to market really everything about the technology and what we do encompasses this company you know this concept of slippery though I didn't know the acronym until yesterday Michael but you know it was but it but it's exactly what it's exactly what we do we try to make this this product is easy to use as possible we try to make it as frictionless as possible so in fact you could just go to our website you can just enable yourself you can try it you can use it you can interact it you interact with it you can get a free version of it to use I have Eric Erickson our head of sales maybe you want to share like a you know how some of our customers are doing that sure sure mark I'll just I've mentioned one customer on Plymouth Rock energy down in New York City area traditionally it in an old-line supply or a coal and oil to large facilities that business isn't such a great business anymore so they transform themselves into a broker of energy including electricity and natural gas and they use salesforce.com for all of their new customer sign ups so they had to customize salesforce.com tremendously when you sign up a new customer as an energy broker you have to specify the supplier who the distribution channel is going to be whether they're going to pay a premium for energy sources and it turned out for the salesforce.com users the sales rep signed up a new customer is a very complex process they had to go through the Salesforce screen so we met a gentleman down at a Salesforce calm event in New York City on Wednesday the following Monday we gave him a demo via GoToMeeting via a web meeting he was able to get on our cloud hosted product started building his little process wizard the next day that his sales reps could use to go through this complex process of onboarding a new customer by the end of the week he had it working and the following money plus the order little so going back to some of the points you can probably map what happened there into these points but installs easily he's able to sign up on the web your crew value in just a couple of days by creating a wizard that walked their users through these complex processes and what else do I want to pay plays well with others having the a salesforce.com integrations been tremendously valuable to us Mike I would call those believer because it reduces our marketing cost tremendously we know who our market is and we're able to get to them through Salesforce and its multiplied because we're able to increase revenue by seven users last one was we sell it per user per month the guy was concerned he's only have 15 users to start out we said that's fine you can buy a 15 user license when we had 10 more next year we just fight some more lessons Duncan guys going on and I think you know you could pick lots of companies that the reason I chose active end points is it could be a horribly complex saleable maybe they'll sell it away all their competitors by the way people like IBM are going it with three legged sales sorry three person sales calls six legged salesman's ugly and they're spending a lot of money and they're having as a result to charge orders of magnitude in some cases more for their products and services and this company is taking market share away on a consistent doubling your own urine in some cases in in the product sells through the slippery co-op concept and thanks to the team for being so innovative approach in that way but we're at the technology at the core of it it's interesting but very highly competitive market so let's put it all together I want to give you a very clear metric which you've probably seen if you haven't you certainly should know about and that is this notion of coming up with an understanding of if your business model is working or not and for startups the metric that people now are getting used to is lifetime value that is how can you how much can you get from a customer of the lifetime of working with them divided by the cost of acquiring that customer and in general if your lifetime value from a customer isn't around three or greater the time times the cost of acquiring that customer you probably don't have a palpable desktop and unfortunately in startups most times people don't really spend time to think about this upfront either but all the multipliers and others that I talk to you about should be factored into what is it that you're doing to obviously increase on the one hand the lifetime value how can you get more out of customers over time with for example that Russian doll packaging we're talking about more and more questions or additions or in reducing the cost of acquiring customer in the ways we just talked about the things like strategic partnerships and there are many examples that I didn't go through like channels and so forth that can give you reach and take cost up to in the end though when you boil it all down you should find that this ratio plays out as I said to roughly three or more x value the value you're capturing than the cost you're implying that happens example now that models being a I'd say pretty successfully adopted by many my customers but I noticed something over the last few years as it's become accepted that's been missing and so I want to introduce this because what we found is almost every startup just as you heard Eric described gets in at one and that has a relationship to maintain the customer to get the full value and I find most people ignore that latter set of engagement of the customer so I'm going to give you a sense of what you really need to think through this refinement to me keep it interesting is a matter of life and death I'm going to talk about a customer lifecycle a very simple methodology start with C try buy fly diet think about it for a second that's basically what happens when you look for products you see it you try it you buy it you run it flying and ultimately it does somehow death and that cycle is typically described by people in this kind of a bell curve and the problem with it at least in the software business and many b2b businesses is if it really looks like this you have a long costly customer acquisition cost a slow payback period and very short lifetime value and if that's really what your business model looks like in my opinion you're in trouble and I'm fortunate it's what a lot of startups I see exactly has a business model and so I'm going to try to help you think about ways that you can get beyond that we'll talk about this more in the go-to-market session next week but one of the first things I always see when I do post mortems with companies is that they haven't broken these stages down from the sophistic see try buy fly model I talked about into much more granular stages and granule stages just to give you an example this would be awareness how do you even discover somebody interest how do you get their interest how do you get them to understand what your capabilities are then engage with you then try it then purchase it and I can go I can probably pick 30 or 40 more if I really want to we'll talk about more of this as I said next week but just but now think about this as follows once I bought the product how do I stay engaged with you what is it that I do intervene Duchess so I'm going to introduce an obvious constant of an obvious idea here and that is how do you reengage the customer after they've bought how do you actually get them to retry the next capability that you introduce either the upgrade or the update or the whole new version that you just came out with so in this cycle of reengagement and repurchasing it there are a lot of steps that are basically the same as you did when you first use the product or connect to the customer and if you get them right it turns out you really dramatically change the cycle fact what you really want to do is of course have the cycle of caring over and over again the customer keeps coming back to you as your preferred supplier or as your trusted source or as a person where they'll buy the next set of capabilities and if you can do that successfully what you'll find you can do is dramatically extend the life cycle of the customer and if you use things like slippery products just go to that you'll have a much more simple experience upfront and take a reproach nap you'll have a much rapid more rapid adoption with that Russian gold packaging as things are how you might do that and then very importantly you'll have a much extended life cycle because you'll find ways to re-engage the customer over and over again so it's a lot to take in and what I felt like I should do is give you an example of how actually you can avoid the death that happens here in the software world with an example executive so how you're going to have a long happy life is really the question in the Zocalo well when I started out as I said I'm dating myself ah IT was the only person who installed stuff they were the only people have customized it they were in frequent upgrades most of the stuff actually sat a shelf where as we called it it was all proprietary and people licenses on perpetual basis the poster child for this probably would have been Oracle quite frankly but it's all changed and in fact you use all the techniques we've just said what you can use is the web to make it easy for people to trial stuff you can then make it easily self-service as you just heard you know Eric give that example their customers enough to come in for training or figure out how to configure or install the thing they were just using it on their way of life trying it in their own situation it can be on-demand so there's absolutely nothing for them to actually buy initially can be available literally over the cloud and software as a service is very much the poster child for that and now see if you make it open source or extensible somewhere they can extend it right to those capabilities themselves and ultimately through a subscription model they can buy as they need it and pay for it as they use it the result of all of that is what is extended lifecycle he praises incredibly easy basically people try things about them and I'll say again startups is they think they've got the customer and they think that just continuing to introduce new innovations is the answer maybe you might have that kind of customer but how many times have you downloaded an iPhone app recently for example and then never used it again sure has okay Laurie that's exactly lining by this blue circle I will tell you that's a big problem for mobile app developers and it's just a bigger problem or than every example result great in b2b or other worlds too so you really got to think about this blue circles I put up there this notion of acquiring I'll just go inquire I'm going to reengage your customers so let's bring that back to the model I said earlier and just add that extra layer what this is about is not just the levers and multipliers around your core but also thinking about how you're not just acquire the customer but re-engage them and continuously stay in touch with them so that you don't get that iPhone app dying but in fact you find some way to reconnect them it might be a new map if you send them out of the GPS or it might be some new set of content movie set about it's a recommendation service or might be some new data that you send them out that makes it obvious for them how they can connect if it's a dating application those things turn out to be the difference between products that have long life cycles that engage the customers they get more lifetime value either than anything else and so I reinvented that acronym and pull it across multiple customer acquisition and we engage the author and instead of it being lifetime value its lifecycle value that's the L a C in there and it really is important to think about LCV the lifecycle value of your customer what can you get out of them over and over again not just once and also was it cost you to re-engage so when I describe this to startups I find that most people have initially getting all right Dean by those kinds of things so here's an example reengagement costs are typically things like support support should absolutely be factored into it it's not just sales and marketing keeping up customers often involves customer service and if you're in a b2b environment that you're selling anything like a complex product it often involves professional services so all those costs should be factored in to the CA RC and cost of acquiring and reengagement customers any questions before I move on we nearly be able to get you to your workshop okay so now you have a model which i think is really quite compelling to be able to work with things and for those of you who were here when we talked through the value proposition on game pane it also is exactly the same concept and principle as we talked about in game pane they're just two views of the same problem those of you worked with therefore this workshop we talked about how could you take the pain out of a customer getting to grips with your product and give them all visibility of the game well think about it for a second that is how the customer view what you're going to view on the other side is the measurement of how much cost is it taking for you to actually get the customer to describe that's the C AR C and how much can you get from that customer as they get those gains over time throughout that lifecycle that's the LCB so they're just two sides of the same principle and they work around this whole notion of the core of your value proposition so good business models you're constantly going back I can make this single template a basis for discussion in every startup what we does to take the pain out how is that reducing our cost to acquiring the customer what are we going to make obviously cuspidor game right upfront and how can you make that work overtime will be a very large lifetime value I psychological company so with that I'm going to summarize and get us onto a workshop I have a question I guess I I was it wasn't clear to me the concept around in Russian trolls yeah it's a message that if you're recommending to have various versions of a probably the single you hear a small enterprise I guess the counter for that is what happens if your product is only geared towards enterprise large company I no you actually got a great example for challenging so in your product new super heat question does the Russian gold strategy work for example if you've got a part is only valuable for such an entire front the answer is yes I believe it does because very ready will you be able to get an entire encrusted of product in Monga it's just an adjustment I mean I made this mistake as Jelena I've tried to go sell people like wiser an entire Salesforce package for analytics and say hey why'd you buy this whole thing is your car sales because we're getting value out of it people please see in the data or robots or so Oh kind of work because it's so difficult to get up again price to adult any change the huge pain doing that and it's going to take you months of a sales cycle and because my lot of my dreams but even though the value might be the whole sales force if you gave them something right off your back itches look here is some data on the benchmark or chosen one of your sales teams maybe not yes a small region for example of how they're well to be a point in terms of that sale effectiveness that's an injury valuable craft and a small team kabocha very quickly about team see success rate they'll recommend where every single gap of groups divisions of campuses that so the reason why most excited is that it's all down to the same paying game equation good take the upfront cost daebak come and you make me suggestible easy for the custom so if you don't go to Russian doll you are --court and chunky alpha the point is find adjustable ways to get that first interest with any introduction to your customer as painlessly as possible and then obviously if it's if it's a great product that you can keep me engaging and that's why this piece is separate or you can keep me engaging in adding more value opening up more more of a adult if you will be sizable by then you will get more more lifetime value of that customer that awesome and it sounds like it's a way those who graduated absolute absolutely the biggest how much dollars have it's amazing how many times struggle this is just that one word is credibility I think I mentioned it up on my slides oftentimes the strategic culture is at the top of the list providing a company credibility an example from artful failures to give people another real-world case study was we had a great entrepreneur in fact him again actually Ashutosh in a storage world came up with a concept the company called have IQ to make it possible people to store there's an independently underlying infrastructure so those storage from the application above we use out like to store em across the track of time so brilliant idea compromise applications on mission critical storage is sold by big companies that I fight over the world is on that marketplace and how the heck was a little company that can the middle of those two very you know the genius thing had found a way to make it possible for that to become effectively very simple for people hang-ups between petroi and then he went to the deal with Wanda major vendors and then it made it obvious that all the other four needed to play otherwise that would be compared increasing he owned that marketplace had a great accident ended up being CEO storage and HP and now we're back years later start articulating it all over again but he really understands this very very well maybe I'll get up to one of the workshops so that answer your question maybe any other questions from people before we summarize here okay so as you go off your workshop what I want to try to get you being about is what is your disruptive model going to be how can you make it as significant as your technology can you focus on a core differentiation not twenty things that you do but hopefully one and what will be the multipliers and leverage that you will get it with innovations like you talked about seem like co-creation or strategic partners Russian doll packaging or slippery products and then how would you measure that not just once but over the extended customer lifecycle with LCD and CA RC so I hope everybody had some fun this evening I must say I continue to be blown away by what a great group this is because if you look at some of the things we were trying to do and we were trying to figure out you know could you come up with a core value problem number of you took some pretty bold moves and not declare it as the obvious thing that technology but focused on things like data or data analytics or content in one case you were quick to figure out what your multipliers and your levers were some of you found some really great ways to make partnerships that win-win that would work on both sides of that so multipliers and levers and that a lot of you were talking very clearly about just as you heard how important the slippery product concept is to make it easy for people to get instant value out of this and and instantly they're obviously start spinning the wheel a few people definitely picked up all this lifecycle concept in this notion of keeping people engaged and I heard some good examples of that and overall although we didn't try to get you down to you know actually calculating your lifecycle value and your customer acquisition and reengagement cost I felt that order you've crossed us so well that you can have no problem doing those kinds of things so I want to take my hats off to you

Channel: Harvard Innovation Labs

Views: 258,977

Rating: 4.9098144 out of 5

Keywords: Harvard Innovation Lab, harvard i-lab, Michael Skok, Startup Secrets

Id: nZndv4HLVIg

Length: 76min 40sec (4600 seconds)

Published: Mon May 07 2012