We have been researching the feasibility of our venture since we first decided to go with this model. Two important questions to ask are "How big is our market" and "How do we make enough money".
How big is our market?
It would be easy to say that our market is anyone we drive past. However, we know that not all potential customers in our market will value to product enough to request our services. Determining the true market size allows us to identify a reasonable and attainable number, whether it be customers served or number of visits, or total reimbursements from insurers, so that we can make subsequent decisions about the venture on a sound, logical foundation. Frost & Sullivan offers lots of information on determining market size, providing several questions and examples that are helping us better quantify our market.
How do we make enough money?
Once we know who out best customers are, we have to figure out a way to make enough money to kept the business running and possibly make a profit so that we may expand our footprint or the number of services provided as time goes on. I read an article this weekend which allowed me to look at the profitability of our venture by answers several simple but important questions.
1. How much cash do you have to start your business?
We plan to use the Community Health Center Fund created by the Affordable Care Act to initially start our business, providing us with the resources to purchase all necessary equipment and hire all necessary staff to begin our endeavor. We are not sure if we can apply directly as a Community Health Center, or if we shoul partner with local community health centers and make them aware, if they aren't already, of the additional funding source and an opportunity for further outreach to their patient population.
2. How will your business make money?
We plan to bill insurers, including the government (Medicare & Medicaid), for the services provided to fund our operating costs and the salaries for the medical professionals. We would need to speak with a someone more familiar with health care finances to better understand how to go about this.
3. How will your business spend money?
Our largest expenses, besides employees, will likely be fuel and maintenance of the medical equipment in the mobile clinic. We have a list of 13 counties in Western Pennsylvania we are looking to serve, and traveling to these areas will use up a great deal of fuel. Upgrading and maintaining equipment will also require regular funds. We are planning to speak with a representative from the Mobile Health Clinics Association to answer some questions for us.
4. How will your business make up cash shortages during months with negative cash flow?
We are looking for other funding resources, which may allow us to create a safety net for difficult months, or be act as avenues to request additional funding as needed. If we partner with local community health centers, we may be able to borrow their staff to treat patients in the communities they already reach, which would allow us to save money on hiring some medical professionals and would also build relationships in the community and build our customer base.
Tuesday, February 25, 2014
Monday, February 24, 2014
The Market Ambiguity
On Wednesday's class we were asked to figure out who our market with respect to our ideas and I said it was the people without clean water in India. Well, this is a huge market of about 20-30 million people but these are also the people who cannot afford a clean drinking water solution in the first place. This led to a sort of ambiguity in my mind. Are these people really the market or are the people who can really afford this solution our market? The people in India are definitely those we want the solution to reach to but may not be the ones purchasing our product. A way to tackle this problem is to market it to hikers, trekkers and people who travel to developing countries from the US often. This way when they buy a bottle here in the US they will essentially donate one to someone in need in India or Kenya.
I think you always have to think about this trade off when you are trying to figure out a social venture. How is your product going to reach the people you actually want it to? For example, looking at the Tom's shoes model which is basically donating a show to those in need upon buying one in a store in the US. They knew they wanted to put shoes on people who cannot afford them and then came up with this business model. Sort of a "means to the end" kind of business plan where you are very focussed about your end goal and finding out a way to achieve it is just part of the process.
Thinking about it from another angle is thinking that the product dictates your market. If we build a portable single serve bottle (750ml capacity) we will have to sell it to people in the US in stores to individual hikers and trekkers. Also they get to donate a bottle to a family in need which they will feel very happy about and have a sense of satisfaction. I want to build a system where they get to track their donation and know where they are making a difference in the world. On the other hand if we build a more community oriented solution i.e. a system which purifies about 5-10 gallons at a time it would be a totally different approach of marketing and pricing and selling. Of course it would be portable too but in a different way to the 750ml bottle. You can ship this version easily to different places but cant take it with you in your bag. This option will have to be have to be sold to government agencies, charities, organisations that have employees working in places with lack of clean water for a short time and sold directly to the customer (the rural people in India). for the customer approach we will have to sell it to an entire community of families where each family contributes a bit and pays up the total cost.
A lot of thought has to be put into which direction we take finally and what solves the problem we are addressing the quickest. Till we can figure that out have a look at this TED speech by Dan Pallota about how we think about charities is totally wrong.
I think you always have to think about this trade off when you are trying to figure out a social venture. How is your product going to reach the people you actually want it to? For example, looking at the Tom's shoes model which is basically donating a show to those in need upon buying one in a store in the US. They knew they wanted to put shoes on people who cannot afford them and then came up with this business model. Sort of a "means to the end" kind of business plan where you are very focussed about your end goal and finding out a way to achieve it is just part of the process.
Thinking about it from another angle is thinking that the product dictates your market. If we build a portable single serve bottle (750ml capacity) we will have to sell it to people in the US in stores to individual hikers and trekkers. Also they get to donate a bottle to a family in need which they will feel very happy about and have a sense of satisfaction. I want to build a system where they get to track their donation and know where they are making a difference in the world. On the other hand if we build a more community oriented solution i.e. a system which purifies about 5-10 gallons at a time it would be a totally different approach of marketing and pricing and selling. Of course it would be portable too but in a different way to the 750ml bottle. You can ship this version easily to different places but cant take it with you in your bag. This option will have to be have to be sold to government agencies, charities, organisations that have employees working in places with lack of clean water for a short time and sold directly to the customer (the rural people in India). for the customer approach we will have to sell it to an entire community of families where each family contributes a bit and pays up the total cost.
A lot of thought has to be put into which direction we take finally and what solves the problem we are addressing the quickest. Till we can figure that out have a look at this TED speech by Dan Pallota about how we think about charities is totally wrong.
7 Ps
The classic marketing mix includes the 4Ps - product, price, place, and promotion. What your product has that meets needs, what pricing strategy you are seeking, how you will reach your customers, and how your product will be promoted to your customers.
Arts management students learn about the 7Ps, which is an extension of the 4Ps, adding 3 more to the marketing mix: people, process, and packaging.
People are the parties required in association with the product: this can be your product developers, the sales force, the receptionist at the company who is the first line in customer experience, and the culture of the company surrounding the project.
Process is the full delivery of the project and the complete customer service that comes with it. This can be the original implementation of the venture, the replacement of (say) filters, communication with the customers and other involved parties like vendors and response when/if there is an issue.
Packaging - the title for this one changes. We learned it as packaging, but online sources also call it physical evidence, physical packaging, physical environment, or just physical. It's the marketing of the product itself, the visual elements and the first impressions of the product or service and the first thing the customer experiences. This could be a website, or a physical building and offices, how the involved people and employees look.
Here's an article from Entrepreneur further elaborating on the 7Ps, except process has been replaced with positioning, which we learned about last week.
Arts management students learn about the 7Ps, which is an extension of the 4Ps, adding 3 more to the marketing mix: people, process, and packaging.
People are the parties required in association with the product: this can be your product developers, the sales force, the receptionist at the company who is the first line in customer experience, and the culture of the company surrounding the project.
Process is the full delivery of the project and the complete customer service that comes with it. This can be the original implementation of the venture, the replacement of (say) filters, communication with the customers and other involved parties like vendors and response when/if there is an issue.
Packaging - the title for this one changes. We learned it as packaging, but online sources also call it physical evidence, physical packaging, physical environment, or just physical. It's the marketing of the product itself, the visual elements and the first impressions of the product or service and the first thing the customer experiences. This could be a website, or a physical building and offices, how the involved people and employees look.
Here's an article from Entrepreneur further elaborating on the 7Ps, except process has been replaced with positioning, which we learned about last week.
Busy week running numbers.
We've gotten our initial survey results in and we are trying to turn them into visually informative charts. I had a meeting with our 3rd partner in this process, Ross; He is a Tepper student and helped us out by setting a schedule and putting down a few development deadlines. Everything is a bit nuts this week. Quantitative data is not my forte and I'm struggling with running regression models and bass model analyses. In the end I'm not sure its going to be supported by our small sample.
Our qualitative data was incredibly helpful. It appears that our market isn't exactly the die hard cyclist, but the casual commuter. The pain points of cycling need to be overcome most in this area, and the success of the project will have the most social influence within this market. Its exciting doing the research, and I ran into a lot more tinkerers than I anticipated when out and about gathering surveys in the street.
I Look forward to sharing the results in next weeks post.
Our qualitative data was incredibly helpful. It appears that our market isn't exactly the die hard cyclist, but the casual commuter. The pain points of cycling need to be overcome most in this area, and the success of the project will have the most social influence within this market. Its exciting doing the research, and I ran into a lot more tinkerers than I anticipated when out and about gathering surveys in the street.
I Look forward to sharing the results in next weeks post.
Homophily and Customer Influence
Teri Gibbs
During Wednesday's class, Professor Zak introduced the idea of "homophily," to emphasize the idea that it is beneficial to have a customer base that is similar to you in preference, race, or gender. For my social venture, I want to provide services to low income neighborhoods, which mostly include Blacks and Hispanics like myself. I wanted to delve deeper into the concept of homophily in order to maximize my customer reach, so I searched for articles that elaborated on growing businesses through strategic customer influence. As a result of my search, I found an article written by CMU's Dean of the Heinz College, Ramayya Krishnan, and two of his colleagues from the Tepper School of Business, Liye Ma and Alan Montgomery. The article titled, "Homophily or Influence? An Empirical Analysis of Purchase within a Social Network," describes how company's profitability can improve by 4-21% by manipulation social networks. The growth in profitability resulted from customers within a social network influencing another member's product choice and the length of that member's decision to buy a product. Below I have included the abstract from the article:
Abstract
Consumers that are close to one another in a social network are known to have
similar behaviors. The focus of this study is the extent to which such observed
similarity is driven by homophily or social influence. Homophily refers to the
similarity in product preferences between individuals who are connected. Social
influence is the dependence of consumers’ purchase decisions on their
communication with others. We construct a hierarchical Bayesian model to study
both the timing and choice of consumer purchases within a social network. Our
model is estimated using a unique social network dataset obtained from a large
Indian telecom operator for the purchase of caller ringer-back tones. We find
strong social influence effects in both the purchase-timing and product-choice
decisions of consumers. In the purchase-timing decision, we find that consumers
are three times more likely to be influenced by network neighbors than by other
people. In the product-choice decision we find a strong homophily effect. We show
that ignoring either homophily or social influence will result in overestimated
effects of the other factor. Furthermore, we show that detailed communication data
is crucial for measuring influence effect, and influence effect can be either over- or
underestimated when such data is not available. Finally, we conduct policy
simulations on a variety of target marketing schemes to show that promotions
targeted using network information is superior. For example, we find a 4-21%
improvement on purchase probability, and an 11-35% improvement for promoting
a specific product.
Here is the link to the research study: http://community.mis.temple.edu/seminars/files/2011/02/krishnan-homophily-influence.pdf
Question: In what ways can you relate to your customer base? How will you use those qualities to more effectively market your service or product?
During Wednesday's class, Professor Zak introduced the idea of "homophily," to emphasize the idea that it is beneficial to have a customer base that is similar to you in preference, race, or gender. For my social venture, I want to provide services to low income neighborhoods, which mostly include Blacks and Hispanics like myself. I wanted to delve deeper into the concept of homophily in order to maximize my customer reach, so I searched for articles that elaborated on growing businesses through strategic customer influence. As a result of my search, I found an article written by CMU's Dean of the Heinz College, Ramayya Krishnan, and two of his colleagues from the Tepper School of Business, Liye Ma and Alan Montgomery. The article titled, "Homophily or Influence? An Empirical Analysis of Purchase within a Social Network," describes how company's profitability can improve by 4-21% by manipulation social networks. The growth in profitability resulted from customers within a social network influencing another member's product choice and the length of that member's decision to buy a product. Below I have included the abstract from the article:
Abstract
Consumers that are close to one another in a social network are known to have
similar behaviors. The focus of this study is the extent to which such observed
similarity is driven by homophily or social influence. Homophily refers to the
similarity in product preferences between individuals who are connected. Social
influence is the dependence of consumers’ purchase decisions on their
communication with others. We construct a hierarchical Bayesian model to study
both the timing and choice of consumer purchases within a social network. Our
model is estimated using a unique social network dataset obtained from a large
Indian telecom operator for the purchase of caller ringer-back tones. We find
strong social influence effects in both the purchase-timing and product-choice
decisions of consumers. In the purchase-timing decision, we find that consumers
are three times more likely to be influenced by network neighbors than by other
people. In the product-choice decision we find a strong homophily effect. We show
that ignoring either homophily or social influence will result in overestimated
effects of the other factor. Furthermore, we show that detailed communication data
is crucial for measuring influence effect, and influence effect can be either over- or
underestimated when such data is not available. Finally, we conduct policy
simulations on a variety of target marketing schemes to show that promotions
targeted using network information is superior. For example, we find a 4-21%
improvement on purchase probability, and an 11-35% improvement for promoting
a specific product.
Here is the link to the research study: http://community.mis.temple.edu/seminars/files/2011/02/krishnan-homophily-influence.pdf
Question: In what ways can you relate to your customer base? How will you use those qualities to more effectively market your service or product?
Baby U
Thinking about
competitive advantage may come as a foreign concept to those in the non-profit
field. They feel that their objective is
to help and serve those in their communities.
However, having an ill-defined goal will leave organizations at a
disadvantage. An organization will
achieve greater success if it identifies and Leverages a specific advantage
over the competition. Molly West &
Andy Posner wrote an article outlining the different ways
that an organization can stand out from their competition, including developing
advantages in cost, leadership, differentiation, innovation, operational
effectiveness, or customer-orientation.
The article then
goes on to describe Baby U, an organization that helps parents develop the
skills necessary to raise and bond with their children, which was modeled after
another successful program. At face
value, Baby would not appear to have much in the way of competition. There are few established non-profit or
structured programs that offer the same services. However, there are a multitude of
alternatives that are in de facto competition with Baby U. Probably their largest competition is the
status quo, and overcoming the inertia of centuries of parental tactics. There are few actual competitors in the field
because the status quo is forbidding.
Baby U must cultivate a distinctive advantage to make headway against
the competition. Baby U forged success
based on their advantage of providing a proven model for good parenting, but
they also cultivated a sense of sustained community. These two advantages were lacking for their
competitors, churches and other social organizations, even though they provided
them for free.
Baby U demonstrates
that providing an excellent product or service can beat the competition, even
if the costs are not competitive. It is
unlikely that a new organization would find their competitive advantage in
costs, unless a breakthrough technology is developed. Social ventures must be aware of their
competition, among established competitors, but also the status quo or the
negation of action. They must identify
their advantage, what makes them unique, and press hard to leverage it. Merely having the goal to help or address a
particular problem is insufficient, especially in an environment of limited
resources.
Mass or Niche Market? Or Both?
One of the things that I have always struggled with while making a pitch is defining the market, specifically the dilemma between a mass and niche market. Should you be selling your product at a low margin to a large number of people, or a very high profit margin to a niche crowd? Most companies go one way or the other.
Looking that the benefits of going for a mass market, there is much more potential to generate higher revenues due to sheer numbers. Its like casting a fishing net and trying to get as many fish as possible, without a focussed effort towards anyone in specific. However there are a lot of downsides to this kind of an approach. Firstly, a lot of investment and capital required get into mass production, and mostly companies lose out because their competitors are already established and operating in this setting. Moreover, to create a product or service that is suited to a large number of people is relatively difficult.
On the other side, it is much easier to create a product for a focussed group of people, and at the same time it is easier to understand the needs and aspirations of a small number of people. It is also relatively simpler to get into production fast, test the product, and make changes. (similar to what is stated in the HBS article we read this week). But all these benefits are overridden by the fact that a company needs to have higher profit margins to compensate for lower numbers.
After looking at the pros and cons of both, I reflected a bit about which direction I would be taking with my furniture, and as I looked deeper into it, I realized I will be doing a bit of both. Since I have two market segments; (graduate students in the US for home furniture and school children in villages in India), I will have to practice both the models, the niche market for the former and the mass market for the latter. I feel this will make it easier for me to enter the market in the US, and once the company has some gained some traction and it would be possible to mass produce for the rural market.
My next step would be to look for companies that have a similar model, what problems they have faced while doing it and what they have done to tackle them.
Looking that the benefits of going for a mass market, there is much more potential to generate higher revenues due to sheer numbers. Its like casting a fishing net and trying to get as many fish as possible, without a focussed effort towards anyone in specific. However there are a lot of downsides to this kind of an approach. Firstly, a lot of investment and capital required get into mass production, and mostly companies lose out because their competitors are already established and operating in this setting. Moreover, to create a product or service that is suited to a large number of people is relatively difficult.
On the other side, it is much easier to create a product for a focussed group of people, and at the same time it is easier to understand the needs and aspirations of a small number of people. It is also relatively simpler to get into production fast, test the product, and make changes. (similar to what is stated in the HBS article we read this week). But all these benefits are overridden by the fact that a company needs to have higher profit margins to compensate for lower numbers.
 |
| Image Courtesy: Mark Smiciklas |
My next step would be to look for companies that have a similar model, what problems they have faced while doing it and what they have done to tackle them.
Sunday, February 23, 2014
Marketing and Positioning in the Health Care Market
Last week’s discussion was about understanding the desired
market and positioning your social venture within the targeted market. The
article “10 steps to a successful health care marketing plan” provides details
on what to look at in a health care market in order to position your service to
be successful. The standard steps for establishing a marketing plan is to
assess the market, study your competitors, target the desire segment, build
support for the organization and measure and evaluate the organization’s performance
in the market.
An interesting rule that the article discussed was the 80/20
rule, which states that 80 percent of you volume will most likely come form 20
percent of your customers. When providing a health care service, you want to
make sure that you are serving the needs of the community. If you are providing
services for an unmet market, your social venture will make the most impact, as
patients will continue to come back for your services when needed. In order to
keep up with the demands of the market, the organization has to make sure to
keep track of certain metrics such as volume data to see what are the actual
demands of the community and if they are changing. Maintaining information on
patient preference will give your organization an edge as it will help you
target the customers in the market. My question is though, how much should you
spend on marketing if the organization is a not-for-profit health care organization?
Would that money be better spent improving the services provided?
Source: http://www.healthcarecommunication.com/Main/Articles/10_steps_to_a_successful_health_care_marketing_pla_9450.aspx
Is It Better to Differentiate Products or Customers for Social ventures?
Whether
it is a social venture or not, the products or the services it delivers must
have a certain kind of customers. One product can hardly satisfy the whole
population. Therefore, products will be designed based on the needs of target
customers. For example, McDonald serves a limited kinds of food. It focuses
only on those who needs food fast. On the other hand, there are also
corporations producing a range of products to meet the demand of different
groups of customers. For instance, L’Oreal Co., Ltd, which is a cosmetic group
consists of four divisions. Each division focus on one kind of products,
including luxury, consumer products, active cosmetics and professional
products. It seems that anyone who needs cosmetic products can go to L’Oreal. Both
kinds of corporations can achieve success. For social ventures, it seems that
differentiating customers is much easier. There are products designed by
different ventures to solve similar social issues, such as water clean. Due to
geography and demography factors, one water cleansing system may not be
universally applicable. However, is it possible that one Group can solve a
social problem in every district?
First,
it requires flexibility in products. For L’Oreal, new products can be developed
by changing one or two ingredients. As to water cleansing system, it may need
to change several things before it can be applied to another area. Water pollution,
road conditions and local norms may all be different. Therefore, the question
becomes that is there a product that can be easily transferred and whose filter
can be adjusted to adapt to water conditions? Even if the answer is YES, will
the costs be covered?
Secondly,
it needs flexibility in business models. Full Court Peace is an organization
dedicated to strengthening local communities through basketball. It has already
carried out two programs in Belfast and Cuba respectively. Now, it plans to
roll out in Juarez, Mexico. The childcare problem in these areas are expected
to be relieved through basketball. In Belfast, kids from different communities
start to talk to each other through basketball playing. Now in Mexico, the
organization starts the program with the goal of keeping children from drug
cartels. Programs in both areas go through similar procedures and the factors
need to be considered are almost the same. The main difference is the way, the
place and the time to hold activities.
Fisker and Tesla, Two Different Ways to Define Yourself
Blog #4
This past week we examined how one defines themselves in
comparison to their competitors. How you do this will determine much about your
success. This is because a part of how you define yourself against your
competitors is how you define your customer. How you define both the needs and
wants of your customer will determine how you attempt to differentiate yourself
from the competition. I think a pertinent example of this would be the
electronic car companies Fisker and Tesla.
Overview
Comparison
|
|
Tesla
|
Fisker
Automotive
|
|
Founded
|
2003
|
August 7, 2007
|
|
Founders
|
Elon Musk
Martin Eberhard
Marc Tarpenning
JB Straubel
Ian Wright
|
Henrik Fisker,
Bernhard Koehler
|
|
Management Team
|
Elon Musk
(Chairman and CEO)
JB Straubel (CTO)
|
Tony Posawatz, (CEO)
Bernhard Koehler, (COO)
|
|
Car Models
|
Roadster, Model S, Model X
|
Fisker Karma
|
On a first pass evaluation, one might draw the conclusion
that both are two similar electronic vehicles manufacturers seeking to take the
common user electronics strategy of breaching the upstream market first, and
then attempting to go broader as they achieve economies of scale hoping to
reduce cost of production, and therefore reduce overall cost, allowing them to
market to a larger market segment.
While the above is true they both went about it incredibly
different ways that have ultimately determined their fate. In the car industry
there are many substitutes. While these number dwindle when one is looking only
at electronic cars, that simply is not the sole product someone looking at an
electronic vehicle would be interested in. They could go for a hybrid, ULEV
gasoline, or possibly clean diesel engines to meet their demand for a
environmentally conscious vehicle.
So with all these viable substitutes, how does one differentiate themselves
in the car industry?
One was is to focus on your core technology. Tesla is
essentially a battery company masquerading as a car manufacturing. They have chosen to focus on a key
resource for an electronic vehicle; the battery and engine. This is the soul of
every car model they produce. Control and optimization of this key resource
have also allowed them to expand into areas such as energy storage for the
grid.[ii]
This additional area of expansion endows them with a supplemental revenue
stream to survive off of when automobile sales don’t match expectations. So
while Tesla is a car manufacturing company, I would argue that they see
themselves more as a battery company. Their focus on batteries for their cars
has allowed them to succeed against the odds because they understand that
pushing the boundaries of battery usage is the next big step for all of
technology. With this comes an understanding that their customers are not just
drivers but rather anyone seeking a better battery.
On the other hand you have Fisker. Fisker is the brainchild
of renowned car designer Henrik Fisker. Their first model, the Karma, is a
strikingly beautiful car, which simply isn’t very good. The car focused to much
on exterior beauty, something that many other car brands can match, and didn’t pay
enough attention to the soul of the car; battery and engine. Fisker chose to
define themselves as car manufacturer, this was going to be their core focus. They
would rely on outside suppliers for many of the parts needed for their cars,
including the batteries and engine. This lack of control of this key resource
doomed them. The battery supplier they worked with eventually went bankrupt,
the cars they were able to put together ended up being prone to malfunctions,
and their core focus of design was not enough to keep the company afloat.
With Tesla doing splendidly and Fisker failing I think these
two companies side-by-side paint an interesting picture of how you can compete
in the same market but define yourself in incredibly different ways. This is
something all entrepreneurs should consider.
http://gigaom.com/2013/04/02/tesla-fisker-and-what-could-have-been-a-tale-of-two-electric-car-startups/
Monday, February 17, 2014
The 3 P's
This week was all about great ideas and pitches. People pitched all through Monday's class and a few on Wednesday too. The ideas that everyone had were great ranging from services for hospitals to products for people who need clean water (no harm promoting my own idea so early in the post). There were a lot of things I learnt from everyones pitches. Obviously everyone isn't born with great orating skills but anyone can become a good orator to sell an idea. An important thing is directing your pitch to the right audience and knowing what to tell them that will grab their attention. For example a pitch to an investor could be very different from a pitch to a customer. One needs to rehearse and be very confident of the material they have to deliver effectively to the targeted audience.
So Wednesdays class was when I pitched the idea of Luvwater and frankly I feel I could have done way better because I missed out on some key details that would definitely help me to gain investor attention. For example, I had skipped out on the fact that we have already filed two provisional patents which is a pretty important detail (didn't feel great when Tim asked me later why didn't I mention it in the pitch). Also, I really need a better way to explain the product which people get instantaneously(eg: Chipotle is like the McDonalds for mexican food). Also I need to focus a lot more on making a building the product and making sure it works rather than participating in the various business plan competitions.
Also on Wednesday Tim spoke about the 3 P's, Pitching, Positioning and Presenting. Loads of cars have failed due to poor positioning of their product. That's why I was thinking about how to position Luvwater. But one thing that Tim said in class intrigued me. Currently our business plan is to approach disaster management agencies like Red Cross, Global Dirt etc. Tim said that getting these huge organisations to endorse a product like this could take many years as it takes a long time to approve. This got me thinking and we thought that would it be more beneficial to have this product be sold to customers first and get it endorsed by them and then eventually because of that customer feedback pitch it to these big organisations which will lead to faster adoption by them.
One more thought came to me as to how should a social product be priced and how much of a margin should a company take out of the product. This is a question I would like to ask later when most of the product details are decided upon.
To make this a little more insightful have a look at this pretty old article on fastcompany.com (I feel it still holds true today) that talks about what great brands do right.
http://www.fastcompany.com/29056/what-great-brands-do
So Wednesdays class was when I pitched the idea of Luvwater and frankly I feel I could have done way better because I missed out on some key details that would definitely help me to gain investor attention. For example, I had skipped out on the fact that we have already filed two provisional patents which is a pretty important detail (didn't feel great when Tim asked me later why didn't I mention it in the pitch). Also, I really need a better way to explain the product which people get instantaneously(eg: Chipotle is like the McDonalds for mexican food). Also I need to focus a lot more on making a building the product and making sure it works rather than participating in the various business plan competitions.
Also on Wednesday Tim spoke about the 3 P's, Pitching, Positioning and Presenting. Loads of cars have failed due to poor positioning of their product. That's why I was thinking about how to position Luvwater. But one thing that Tim said in class intrigued me. Currently our business plan is to approach disaster management agencies like Red Cross, Global Dirt etc. Tim said that getting these huge organisations to endorse a product like this could take many years as it takes a long time to approve. This got me thinking and we thought that would it be more beneficial to have this product be sold to customers first and get it endorsed by them and then eventually because of that customer feedback pitch it to these big organisations which will lead to faster adoption by them.
One more thought came to me as to how should a social product be priced and how much of a margin should a company take out of the product. This is a question I would like to ask later when most of the product details are decided upon.
To make this a little more insightful have a look at this pretty old article on fastcompany.com (I feel it still holds true today) that talks about what great brands do right.
http://www.fastcompany.com/29056/what-great-brands-do
Communication Ideas: Perceiving, Understanding and Rememebering
One of the biggest challenges in sharing your idea with someone else is communicating it in a way that it is correctly perceived, understood and remembered.
What I learn't for last week's classes was a balance between the art and science of doing the same. Knowing and believing in your idea is one thing, but how does you ensure that the people listening to your pitch are understanding exactly what you want them to.
I feel one of the first step is to get people to perceive your idea. Amongst the pitches presented in class, a lot of them began with talking about the problem they were trying to solve, and I feel that is a good way to put the listener in the same perspective. It makes them relate to what you are talking about, and look the problem on the same page. This gets the listener hooked on, wanting to hear more about what you have to say next.
The next step is to make sure they understand what you are talking about, and what your solution to the problem is. This can be done by explaining the idea in a structured manner, from who the customers are to what value they can derive. If done in a clear, concise manner (like a lot of people did in class), the idea can be easily understood by the listener in a very short time.
One of the most difficult and important steps is to make the idea stick; make sure they remember and go over an think about it. A good way that I noticed people doing this in our class was weaving a story around their pitch. People mostly remember stories over facts, and a personal story is one of the most effective ways to get people to remember a pitch.
Moving further, I would like to observe more such pitches and collect more insights as to what makes an business idea be well perceived, understood and remembered by all involved.
What I learn't for last week's classes was a balance between the art and science of doing the same. Knowing and believing in your idea is one thing, but how does you ensure that the people listening to your pitch are understanding exactly what you want them to.
I feel one of the first step is to get people to perceive your idea. Amongst the pitches presented in class, a lot of them began with talking about the problem they were trying to solve, and I feel that is a good way to put the listener in the same perspective. It makes them relate to what you are talking about, and look the problem on the same page. This gets the listener hooked on, wanting to hear more about what you have to say next.
The next step is to make sure they understand what you are talking about, and what your solution to the problem is. This can be done by explaining the idea in a structured manner, from who the customers are to what value they can derive. If done in a clear, concise manner (like a lot of people did in class), the idea can be easily understood by the listener in a very short time.
One of the most difficult and important steps is to make the idea stick; make sure they remember and go over an think about it. A good way that I noticed people doing this in our class was weaving a story around their pitch. People mostly remember stories over facts, and a personal story is one of the most effective ways to get people to remember a pitch.
Moving further, I would like to observe more such pitches and collect more insights as to what makes an business idea be well perceived, understood and remembered by all involved.
Tips for Business Plans & Social Entrepreneurship Fellowships
Teri Gibbs
I have included a Forbes article titled, “Business
Plan Outline – 23 Point Checklist for Success,” that details how to deliver an
appealing business plan to lenders and investors. The article explains that
within each necessary section of the business plan, such as, the executive
summary, company overview, and customer and industry analyses, there must be
subsections that differentiate your business plan from others. As we are beginning
to develop our business plans, I think it is crucial to emphasize some of the
key subsections that start-ups may overlook. As start-up social ventures, I
believe that we must convey confidence and future sustainability to investors
by demonstrating well-developed and calculated business plans. According to
Forbes, a thorough, attention-grabbing business plan includes the following:
(1) Past
accomplishments;
(2) A
market overview;
(3) Target
customers and customer needs;
(4) Direct
and indirect customers;
(5) Competitive
advantages;
(6) A
promotion and distribution plan;
(7) Key
operational processes;
(8) Planned
milestones;
(9) A
revenue model;
(10) And
prospective management team and Board members.
Another Forbes article titled, “5 Business Plan
Myths You Shouldn’t Fall For,” states that companies should continue to do the
following, despite popular myths that argue otherwise:
( a) Create
an executive summary that spurs readers to want to further explore your business
plan.
( b) Organize
your business plan in a way that focuses on the goals and strategies that you
want to achieve, and not in a manner that hints on your need for funding.
( c) Include
15 to 25 pages in your business plan. A plan that is too short is not convincing
and infers that you did not put effort into the endeavor, and a plan that is
too long is likely to be ignored or not thoroughly read.
( d) Be
prepared to revise and rewrite your business plan as your idea and company
evolve.
Article:
http://www.forbes.com/sites/davelavinsky/2014/01/07/5-business-plan-myths-you-shouldnt-fall-for/
The below is a list of prestigious social
entrepreneurship fellowships that I found to be worth
exploring:
NYU Fellowship in Entrepreneurship, Social
Entrepreneurship and Innovation
Reynolds
Fellowships Harvard University
Echoing
Green Fellowship
Stanford
NBC News Fellowship in Media and Global Health
Checking The Market
While we're in between brilliant ideas and marketing research, here is an article about a company called GutCheck that blends the two together. GutCheck "hopes to save you from your own bad company ideas before you get too deep in debt trying to market your" [insert good/bad idea here] by providing you with community-sourced market research. The claim is that solutions are provided in 24-72 hours with 3-5x the value depending on market research budgets. They've already got some big brands who have utilized their services (Home Depot, Pfizer, Noodles & Company).
http://venturebeat.com/2014/01/28/gutcheck-funding/
http://venturebeat.com/2013/06/14/gutcheck-raises-4m-to-prevent-epic-product-fails/
While I'm not sure how well this would work for social ventures, particularly those that are not product-based or those not based in GutCheck's research area (I'm thinking outside the US), ventures with a physical product may be interested in seeing what GutCheck can provide them in terms of market research.
For those interested, here is their website: http://gutcheckit.com/
http://venturebeat.com/2014/01/28/gutcheck-funding/
http://venturebeat.com/2013/06/14/gutcheck-raises-4m-to-prevent-epic-product-fails/
While I'm not sure how well this would work for social ventures, particularly those that are not product-based or those not based in GutCheck's research area (I'm thinking outside the US), ventures with a physical product may be interested in seeing what GutCheck can provide them in terms of market research.
For those interested, here is their website: http://gutcheckit.com/
5 Worst Mistakes Entrepreneurs Make When Pitching Angel Investors
This article really fits in with our week of elevator pitches last week. One of the most interesting suggestions from this article is one that I think many of the pitches in class failed to touch on: tell a story. Telling stories has the power to convey the message in a clear way to the listener. It can add realism to the situation, by giving concrete examples of the way the product would help. The ability to make a pitch personal by invoking family, friends, and emotion with a real example can be very persuasive and make the listener ask to hear more.
Read more: http://www.entrepreneur.com/article/220141#ixzz2tbNdVY8N
Read more: http://www.entrepreneur.com/article/220141#ixzz2tbNdVY8N
Finding the right Market Segment
To spread a
particular social innovation to new markets, entrepreneurs may feel an urge to
reduce the cost of the innovation by as much as possible. There are huge markets in developing
countries like India and elsewhere, but as these countries develop further,
they become richer. Product segmentation
along markets would be best conceptualized as a spectrum, and not between the
dipoles of “developed” vs “undeveloped” markets. There are billions of people that have a
global middle income, and their needs for products and services would not be
met by high-end expensive products, but may also not be meant by products that
cut costs to the bare minimum.
Joel Segrè in his blog post for PATH
argues that targeting those people who have higher income than the poorest may
often be the most cost effective strategy.
Urban populations continue to rise, and a smaller proportion of the poor
now live in rural areas. Concentrating
services and distributional networks in cities would be cheaper and more
effective than doing the same over a wider geographical area that includes the
rural poor.
He also argues that
targeting the most cost effective markets would allow innovations to gain a
toehold, which would then allow them to grow and gain in economies of
scale. As the venture becomes more
effective, it would gain the financial and logistical ability to reach the
hardest market to operate in, the poorest of the poor. Rather than focusing on just the poorest,
ventures should look to succeed in a market where they are capable of
flourishing, and then look to expand their reach to those most in need when
they are capable of doing so.
This blog post
naturally poses some tensions that are implicit in the field of social entrepreneurship. The poorest people in the world would benefit
most from an innovation or product, so ignoring them as a venture develops
would carry significant sacrifices.
However, social ventures need to be sustainable, and slashing costs (and
revenues) to their minimum would challenge any start-up looking to achieve solvency
and effectiveness. I believe that Mr. Segrè’s
model would work well for innovations that already require some basic
infrastructure, such as mobile phones (which require electricity and a
telecommunications network). However,
very basic needs like clean water should be focused on the poorest because of
the urgency of the problem.
Using social media to understand Customer Needs
We discussed the Building Block Questions at the end of last class. This led me to investigate some more ways to identify customer needs. I came across several articles that discussed using social media. There were a few that described the typical use of social meda: data mining user posts. This task had more nuance than I expected. One would need to have several related keyword searches to capture as many similar posts as possible. The results would need to be analyzed and categorized so that the most value possible could be extracted. For example, one article looked at identifying the "jobs to be done" for those who were saving money for college tuition in an attempt to find new "products" for a financial services company. The author searched Twitter for "college savings", "saving for college", and "pay for college." He collected 150 tweets for each term tried to answer three questions:
Another article, introduced an interesting idea that I've seen in practice during an internship experience. The author discusses applying social media technologies to employees within an organization. The article reviews insights revealed from a Deloitte Insights report. According to the article, "the report says that enterprises that apply social strategies to their operating models can react more quickly to shifting customer needs, and adapt more fluidly to technological change."
What have your experiences been with social media and product marketing?
- How many contained usable insight?
- What were the common words?
- What was the collective sentiment?
Another article, introduced an interesting idea that I've seen in practice during an internship experience. The author discusses applying social media technologies to employees within an organization. The article reviews insights revealed from a Deloitte Insights report. According to the article, "the report says that enterprises that apply social strategies to their operating models can react more quickly to shifting customer needs, and adapt more fluidly to technological change."
What have your experiences been with social media and product marketing?
Pricing Services in the Healthcare Market
Last week’s discussion was about developing your social
venture. In order to launch your idea, you have to know if customers are even
interested in your product or service. Concurrently with identifying the market
you wish to target, a business plan must be establish in order to determine the
feasibility of rolling out your product or service in the area. Additionally,
the pricing of the product or service is an important factor as well, to capture
a large customer base.
I believe that launching a social venture in the healthcare
industry can be more difficult compared to other ventures because the healthcare
market does not function like a normal competitive market. Supply and demand
does not impact pricing of services since there is a third party payor, which are
the health insurance companies. Health insurance companies and healthcare
organizations are negotiating on the behalf of the patient, determining ahead
of time the price of each service provided. With that being said, the prices negotiated are kept confidential where only the insurer and the provider knows the price for the services.
The article, “How to Make the Health-Care Market Work Better,”
discusses how health service organizations should make their prices transparent
in order to make services more efficient and be able to reduce healthcare costs.
One of the solutions we would like to implement when launching the mobile
health clinic would be to have our prices transparent for patients who are
uninsured or have decided to opt- out of the health exchange. Pricing for preventative
services can be easier to determine since there is a set standard of care, as
opposed to providing emergency care, where services can vary. Pricing for a
mobile healthcare clinic can be tricky, as we would need to choose a price
point that is affordable to the underserved population while still maintaining
a margin so that our operations can grow.
I’m wondering though, how efficient is a clinic that has two
price points where one is visible and the other is not transparent?
Source: http://www.bloomberg.com/news/2013-03-28/how-to-make-the-health-care-market-work-better.html
Subscribe to:
Posts (Atom)