Step 3: Target Customers

Here are three questions to consider when we think of a target customers:

-         who are they?

-         what problem does our product solve?

-         how does it solve it?

Last year I spent six months at Cambridge University in the UK while on sabbatical - its a hard life I know, but someone has to live it! I didn’t want to buy a radio or TV – I was after all there to work (and didn’t have a lot of spare cash – remember, we were renovating our house back in NZ). And then I came across the BBC iPlayer and I was able to both listen to the radio and watch Dr Who (and other TV programmes) whenever I wanted! Problem solved, it was fantastic. But obviously I am not the only one to think that. Up 10% of UK online traffic can be attributed to this wonderful little app. (http://www.wired.co.uk/magazine/archive/2009/05/features/the-man-who-saved-the-bbc/viewgallery/256434)

So who are the target market? Anthony Rose, the head of the iPlayer team said …

"It has to appeal to Mrs Smith, aged 65, who just wants to watch EastEnders, as well as the Twitterati". In other words, it had to be easy to use, by anyone that had previously watched TV or listened to the radio.  I know that there are now many other products that can do the same thing, but the BBC iPlayer has led the way in this regard. And Rose and his team were able to answer the key questions regarding the target market.

Back to Step 2 and value creation: was value created for the user? Well it certainly was for me and others have suggested that not only has the BBC iPlayer found its target market, but it has also helped redefine TV and how we use it.

And as I watch an early Dr Who episode my iPad, my partner watches the latest English Premier League game on their iPad, and our children watch a movie on a TV that was recorded a week ago, we now have to explain to our children that we can’t fast forward a “live” TV programme when the ads come on! 

Evaluating opportunities: Step 2. Value Creation - The Offer

While I believe that "repetition can make permanent", I also know that repetition can make for boring ... A key question when considering value creation and "the offer" is : what value are you creating for the customer or the user? In my blog post last week (Tuesday 8th) "What we are buying ..."  I certainly gave that question a bit of air space so in brief - consider what is the customer buying rather than what you are selling. The follow up question might then be - what product or service will deliver what they "want to buy". From a marketing perspective, a prompt question would "what are the benefits" from the point of view of the customer.  Enough said (or read my previous blog!)

I was thinking about this "value creation" challenge from a slightly different perspective last week ... what value do we create for the people that work for us? What am I "buying" when I go to work each day? I use a clip by Guy Kawasaki at the start of many of the courses I teach on. The clip comes from the Standford University Entrepreneurship Corner (http://ecorner.stanford.edu/) a great resource . In this he talks about the need to make meaning in a business (aligned to Step 1 Purpose). To make meaning he argues that we must do one of three things: 1. Increase the quality of life, 2. right a wrong (particularly relevant for social enterprises) or 3. Prevent the end of something good. (http://ecorner.stanford.edu/authorMaterialInfo.html?mid=1171). On reflection, "what I am buying" each day as I go to work, or sit at my desk at home  is the chance to increase the quality of life for both myself and the hopefully the students in my class.  Exactly how I might do this for my students, well that's the next post as Step 3 in the this framework is "the Customer".

Evaluating opportunities : Step 1 Purpose & Values

I finished my last post asking myself  "what are my students buying?". I have been giving that some thought over the past couple of days and would like to focus on answering that question for the undergraduate Entrepreneurship course that I am currently teaching. I know that students are "buying" a degree -  and that is part of what we "sell" as a University. But I like to think that as a university academic I am in the business of opportunity - providing students with opportunities to learn and be challenged so they can then work  in areas that fulfill their potential. So what part does this entrepreneurship course play in that? Well if starting their own business is part of why they decided to do the course, or  if they intend to work for a business that will be innovative and growing, then one of the things  they will need to do is evaluate opportunities. Indeed one of the key outcomes of this Entrepreneurship course is that students will be able to "assess and evaluate new venture opportunities, conceptually and through the preparation of an opportunity assessment".

Up until now the process for doing this in my course has been to come up with an idea and then to develop this into a Venture Summary - a short Business Plan. I have often  felt that the "evaluation" part has been a little bit short circuited in that process and have played around with better ways of doing this. What I am doing now in this course is to run through a 10 step process that I hope provides a more structured and useful process for evaluating opportunities. In the posts over the next few weeks I will run through each of these steps in a little more detail and use it as a way to reflect on what I am providing my students in this course. By the end of that time, I'll have explored what I am "selling" and can then check in with my students to see how far off the mark I am with what they have been "buying".

Step One: Purpose & Values
With any enterprise it is important to reflect on two simple question: First, what is the purpose of your enterprise? The answers are as varied as the people providing the answer. For a purely commercial venture, it could be: to make a profit, provide a living, be my own boss, gain world domination! For a social enterprise it could be:  to provide employment for my community, enable our not for profit venture to be financially sustainable, or to achieve world peace.  For many enterprises the challenge is not in stating what their purpose is, but in remembering that purpose as the enterprise grows. Purpose is like a compass, pointing the direction in which we hope to travel.  It is also an answer to the "why" question ...

So my purpose in teaching Entrepreneurship? To provide students with the opportunity to learn and be challenged, so that they can pursue opportunities to be awesome at whatever fulfills their potential.

The second question then is : what values will guide how you operate your enterprise? These values also enable you to figure out what you say yes and no to - it's not about who is right, rather what is right, according to the values that you have set in place. They give you a place to stand. If  purpose provides the compass, then values are the anchor.

The key values that guide my teaching:
- curiosity, the need to keep questioning, challenging and pushing both my students and myself
- innovation, trying new things so that the learning is relevant and real
- opportunity cost (the next best alternative) - we could all be doing something else, so this course needs to be as good as it can be so that the opportunity cost just doesn't get a look in ! (Well I am an economist after all so opportunity cost had to come in somewhere!!)

So that's Step 1: Purpose and values that set the foundation for the rest of the evaluation framework.

Next post,  Step 2: Value Creation - what value are you creating for the customer or user?

What we are buying ...

Things aren't going well for the company putting in a new heating system in our home. We have nearly finished renovating and well, the heating is just not working - and the service from the company is anything but remarkable!! They do not appear to follow  "it's the putting right that counts" approach. 

Entrepreneurship at its most basic involves having a product or service, customers who want to buy this service or product and a way for you, as the entrepreneur, to get paid. Key to doing this successfully is to remember what the customer is buying, not what you are selling. The company we are dealing with is selling radiators, a hot water cylinder,  a heat pump and installation. I am really not that interested in any of these - how they work, what their spec is, where they are made ... What I am interested in is what I am buying - a warm home. That is all we want and when my children wake up in a very cold room - I am not a happy Mum!! And so when that is happening, the part about 'getting paid' is just not happening. 

Another example - a couple of years ago we got a brand new BBQ. We were at a Home show, saw the BBQ and decided that we would splash out and  get one with a few more 'frills' than our previous one. We paid a bit more than we had intended but were happy with the purchase. Until it arrived - in a box!!! ready to be put together - by me!!! My family laughed and shook their heads. DIY is not my favourite TLA (three letter acronym).  But took their "laughter" as a challenge and spend a whole Saturday morning cursing my way through the (hopeless) instructions. They may as well have been in Chichewa!!  I did manage to build the thing with only three left over pieces  and it does still work. But it was not what I had paid for - I was buying friends round for dinner, glass of wine, steak on the BBQ - you get the picture (or maybe there is a beer in it). Anyway a missed opportunity by the guys selling to ask if perhaps I wanted to pay extra for it to be put together - something that I would have said yes to, provided the extra wasn't too outrageous - and then if it had been, well I would have been saving money that Saturday morning ! 

So just a reminder - buying the heat not the radiator, the steak not the BBQ, the hole not the drill ! 

And if I now turn the tables - what are the students I am teaching 'buying'?  Will have to come back to you on that one ...

Continuing to be relevant

I have continued to think about the concept of remarkable - what we encounter by way of products or services in our day to day lives that causes us to think "wow". And it's not always the "newest" that is remarkable. Take the RSA or the Royal Society for the Encouragement of Arts, Manufactures and Commerce (www.thersa.org). This society is over 250 years old and is perhaps even more relevant today than when it was founded by William Shipley in a coffee house in Covent Garden. He believed that social progress could be achieved through excellence and innovation across the sciences, arts, manufacturing and commerce. Today it's purpose is " 21st Century enlightenment: enriching society through ideas and action". It does this through a number of initiatives; I particularly like the RSA animates (one of which I talked about in a previous post, 19th August: Where do good ideas come from?). The RSA Animate series is a way of sharing innovative and challenging ideas through thought provoking illustrations and commentary. A wonderful example of this is on 21st Century Enlightenment that beautifully connects the original intent of the society with its purpose today: https://www.thersa.org/discover/videos/rsa-animate/2010/09/rsa-animate---21st-century-enlightenment/.

It finishes with a quote from Margaret Mead: " Never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it's the only thing that ever has". I wonder what those small group of citizens meeting together at Rawthmell’s Coffee House in 1754 to found the RSA would think today if they could sit down and watch this video, in an office or home half way around the world, in a country that as yet, did not appear on their globe? Now that's when you need the Dr and his Tardis, to enjoy a bit of time travel ...

The "remarkable" Tardis and the 10th Dr (my favourite)