sexta-feira, 2 de maio de 2014

Validation of Business Models - Strategies for Two-Sided Markets, Harvard Business Review

TIP: For two-sided markets, always validate the riskiest one first.



ABSTRACT:
If you listed the blockbuster products and services that have redefined the global business landscape, you’d find that many of them tie together two distinct groups of users in a network. Case in point: The most important innovation in financial services since World War II is almost certainly the credit card, which links consumers and merchants. The list would also include newspapers, HMOs, and computer operating systems—all of which serve what economists call two-sided markets or networks. Newspapers, for instance, bring together subscribers and advertisers; HMOs link patients to a web of health care providers and vice versa; operating systems connect computer users and application developers.
Two-sided networks differ from traditional value chains in a fundamental way. In the traditional system, value moves from left to right: To the left of the company is cost; to the right is revenue. In two-sided networks, cost and revenue are both to the left and to the right, because the “platform” has a distinct group of users on each side. The platform product or service incurs costs in serving both groups and can collect revenue from each, although one side is often subsidized.
Because of what economists call “network effects,” these platform products enjoy increasing returns to scale, which explains their extraordinary impact. Yet most firms still struggle to establish and sustain their platforms. Their failures are rooted in a common mistake: In creating strategies for two-sided networks, managers typically rely on assumptions and paradigms that apply to products without network effects. As a result, they make many decisions that are wholly inappropriate for the economics of their industries. In this article, the authors draw on recent theoretical work to guide executives negotiating the challenges of two-sided networks.
If you listed the blockbuster products and services that have redefined the global business landscape, you’d find that many of them tie together two distinct groups of users in a network. Case in point: What has been the most important innovation in financial services since World War II? Answer: almost certainly the credit card, which links consumers and merchants. Newspapers, HMOs, and computer operating systems also serve what economists call two-sided markets or two-sided networks. Newspapers, for instance, join subscribers and advertisers; HMOs link patients to a web of health care providers, and vice versa; operating systems connect computer users and application developers.
Products and services that bring together groups of users in two-sided networks are platforms. They provide infrastructure and rules that facilitate the two groups’ transactions and can take many guises. In some cases, platforms rely on physical products, as with consumers’ credit cards and merchants’ authorization terminals. In other cases, they are places providing services, like shopping malls or Web sites such as Monster and eBay.
Two-sided networks can be found in many industries, sharing the space with traditional product and service offerings. However, two-sided networks differ from other offerings in a fundamental way. In the traditional value chain, value moves from left to right: To the left of the company is cost; to the right is revenue. In two-sided networks, cost and revenue are both to the left and the right, because the platform has a distinct group of users on each side. The platform incurs costs in serving both groups and can collect revenue from each, although one side is often subsidized, as we’ll see.
The two groups are attracted to each other—a phenomenon that economists call the network effect. With two-sided network effects, the platform’s value to any given user largely depends on the number of users on the network’s other side. Value grows as the platform matches demand from both sides. For example, video game developers will create games only for platforms that have a critical mass of players, because developers need a large enough customer base to recover their upfront programming costs. In turn, players favor platforms with a greater variety of games.
Because of network effects, successful platforms enjoy increasing returns to scale. Users will pay more for access to a bigger network, so margins improve as user bases grow. This sets network platforms apart from most traditional manufacturing and service businesses. In traditional businesses, growth beyond some point usually leads to diminishing returns: Acquiring new customers becomes harder as fewer people, not more, find the firm’s value proposition appealing.
Fueled by the promise of increasing returns, competition in two-sided network industries can be fierce. Platform leaders can leverage their higher margins to invest more in R&D or lower their prices, driving out weaker rivals. As a result, mature two-sided network industries are usually dominated by a handful of large platforms, as is the case in the credit card industry. In extreme situations, such as PC operating systems, a single company emerges as the winner, taking almost all of the market.
Platforms serving two-sided networks are not a new phenomenon. Energy companies and automakers, for example, link drivers of gasoline-powered cars and refueling stations in a well-established network. However, thanks largely to technology, platforms have become more prevalent in recent years. New platforms have been created (Google, for example, links advertisers and Web searchers) and traditional businesses have been reconceived as platforms (for instance, retail electricity markets are evolving into platforms that match consumers with specific power producers, allowing them to express their preferences for cheaper coal or more costly renewable power). Yet for all the potential they’ve spotted, platform providers have struggled to establish and sustain their two-sided networks. Their failures are rooted in a common mistake. In creating strategies for two-sided networks, managers have typically relied on assumptions and paradigms that apply to productswithout network effects. As a result, they have made many decisions that are wholly inappropriate for the economics of their industries.
In the following article, we draw on recent theoretical work1 to guide executives in negotiating the challenges of two-sided networks. We begin by looking at the factors that senior managers must consider in designing their platforms’ business models. The key decision here is pricing. As we’ve noted, providers of platforms for two-sided networks are able to draw revenue from both sides. In most cases, though, it makes sense to subsidize certain users. The crucial strategy question is, Which side should you subsidize, and for how long?


sábado, 5 de abril de 2014

Know and profile your customer - Personnas, Empathy Map and the Eneagram system

1. Introduction: Psycographics Vs Demographics

Psychographics describes customers; values, opinions, lifestyle… 

Think of psychographics as the kind of data a psychologist or anthropologist would use to profile someone, as opposed to the demographic data that a census surveyor wants to collect… Psychographics are generally expressed as– activities, interests, opinions (AIO), and its customer research that blends demographics and psychology to give a more penetrating understanding of customer behavior. 

It analyzes the values, beliefs, and underlying motivations of target groups so that you can tailor your products and services to each group… 

According to Anthony K. Tjan; customer research tends to be demographically-biased, and it’s time to go a little ‘psycho’ on customers– psychographics, that is… 

While there’s no standard psychographic profile, we can borrow some ideas from psychology: A psychographics profile should tell us about how a person interacts with the world, e.g., extrovert or introvert, analytical or emotional, what they value most– security, family, environment… 

Psychographics offer an ability to understand current and potential customers in terms of the beliefs and values that drive their purchasing behavior… 

It’s been said demographics help you understand who buys your product or service, while psychographics helps you understand why they buy. 

Another way to put it is that demographics are things that can be observed from the outside, such as; age, race… while psychographics are internal attributes or attitudes… 

According to Eric A Mann; in simplest of terms, psychographics helps you to identify your perfect customers within the pool of potential customers… perfect customers are the ones responsible for driving the bottom line – knowing who they are and why they’re your customers helps you improve your business… 

According to Drew Palmer; the more you know about the customer target, the better job you can do of building and delivering your message!

source: link1.

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2. Personnas and Empathy Maps

To dig deep into your customer you should apply the Personna e Empathy Map tools advocated in Design Thinking.

There are many ways to identify the needs of users, such as interviewing users, discussions with business stakeholders, usability testing, focus groups ,etc. 

However one technique that has grown in popularity and acceptance is the use of personas: the development of archetypal users to direct the vision and design of a product or service.

What are personas?
Empathy Map1
Personas are archetypal users that represent the needs of larger groups of users, in terms of their goals and personal characteristics. They act as ‘stand-ins’ for real users and help guide decisions about functionality and design.

Empathy Map2
Personas identify the user motivations, expectations and goals responsible for driving behaviour, and bring users to life by giving them names, personalities and often a photo.
Although personas are fictitious, they are based on knowledge of real users. Some form of user research is conducted before they are written to ensure they represent end users rather than the opinion of the person writing the personas (read more here).

Empathy Map, a tool for Customer Profiling was developed by XPlane (more tools available here).



3. The Eneagram System 
The Eneagram system is (in my opinion) the most comprehensive system for understanding our underlying motivations:

The Enneagram is a powerful system for understanding Human Nature. 
Like other personality type systems, the Enneagram describes nine different groups of behavours and characteristic tendencies of people. However, the Enneagram goes deeper, describing the unconscous motivations underlying our behaviour. 
These motivations describe why we think, feel, and act the way we do (read more here).

Eneagranma e Inteligência Emocional

Cada tipo caracteriza-se  por três "estados":
dominante - estado fundamental,
regressão - estado de desintegração,
exaltação - estado de integração.

Building a strong, compelling Value Proposition

“Silicon Valley entrepreneur and author Eric Ries calls startups “human institutions designed to create a new product or service under conditions of extreme uncertainty.”

With that apt description, he captures some of the challenges early-stage companies face:

Besides inadequate understanding of markets, competitors and customer preferences, startups often struggle to define what value their innovation brings to the market.
 Acknowledging and addressing this challenge is a critical first step in helping startups commercialize successfully; after all, how can you sell a product or service if you can’t articulate its value?
 It is an important tool in ultimately capturing your first customer. The point is to make use of that tool to engage potential customers and remove some of the uncertainty under which startups operate.

A value proposition is a short statement that clearly communicates the benefits that your potential client gets by using your product, service or idea. It "boils down" all the complexity of your sales pitch into something that your client can easily grasp and remember.
 It needs to be very specific: Simply describing the features or capabilities of your offer is not enough. Your value proposition must focus closely on what your customer really wants and values. 
Your customer wants to solve problems, to improve on existing solutions, to have a better life, build a better business or do more, better, faster.
Step 1: Know your customer: 
Who is he or she? 
What does s/he do and need? 
What problems does s/he need to solve? 
What improvements does s/he look for? 
What does s/he value? 
Tip: If you don't know, ask!
It's easy to try to second guess what your customers want. And very easy to get it wrong. So do some market research: This could be a simple matter of asking customers directly, or organizing a focus group or surveys. 'Market research' is not just for external customers, it works for other 'markets' too: Depending on your product or idea, your 'market' could be employees, colleagues, or even your spouse.

Step 2: Know your product, service or idea (more below). 
From your customer view point
How does the product, service or idea solve the problem or offer improvement? 
What value and hard results does it offer the customer? 
Tip: Include numbers and percentages.
To grab your customer's attention even faster in this financially-oriented world, your value proposition should also speak percentages and numbers: How much will your customer gain, save or improve? How much more efficient will he or she become? How much safer, smarter, faster, brighter will the solution be? And so on.

Step 3: Know your competitors. Keep on thinking from the perspective of your customer, and ask: How does your product or idea create more value than competing ones?

Step 4: Distill the customer-oriented proposition. The final step is to pull it all together and answer, in 2 or 3 sentence:
 "Why should I buy this specific product or idea?" Try writing from the customer viewpoint by completing the following, (and don't forget to include the numbers and percentages that matter!):
 "I want to buy this product or idea because it will...";
"The things I value most about the offer are...";
"It is better than competing products or ideas because..."


Step 5: Pull it all together: Now, turn around your customers 'answer' from step 4 into a value proposition statement. The final step is writing the value proposition statement. It should address what market you are targeting, what product or service you are delivering, how you are delivering it and why.

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Step 2 - Identifying customer benefits:
Brainstorming the benefits you believe your product or service offers to customers is as simple as making a list.
The leap for many entrepreneurs is to be able to distinguish between what excites them about the technology and what value the product actually brings to the customer.
Keep in mind that your customer and the end-user of your product or service might not be the same. Differentiating between what your customer and the end-user perceive as value can help you communicate your value proposition more effectively.
Broadly speaking, all businesses deliver value in one or a combination of three categories of differentiation: 1) cost, 2) technology and 3) service. 
These bases for differentiation include many value delivery mechanisms such as warranty, performance and accessibility. 
Identifying which of these categories your product benefits fall into allows you to effectively differentiate yourself from your competition.
You can map your company’s value proposition on a chart with three axes for each of the bases of differentiation. 
You can then identify where your strengths are.

Sources: link1, link2

sexta-feira, 17 de janeiro de 2014

Curso Gratuito de Criatividade e Empreendedorismo - StartGlobalXXI@ESTSP.IPP (Gaia)

Se queres aprender-fazendo (Start Global XXI - Lean by Doing), gerando e validando ideias de negócio, reinventando-te no processo, então não hesites.

Inscrições até 24 de Março (leanlabmn@gmail.com).
O curso inicia a 4 de Abril, na ESTSP.IPP, Gaia, 6ª feiras 17h-20h.



Se não tiveres uma ideia de negócio não faz mal. Nós ajudamos-te no processo de geração de ideias, ou poderás integrar uma das equipas existentes.
Uma alternativa será desenvolveres um projeto que podes apresentar a uma empresa existente e assim criando oportunidades de emprego.
Pelo menos um membro da equipa deve estar inscrito no centro de emprego, beneficiando de subsídios de transporte e alimentação segundo as regras do POPH.

Mais informações: 912422751


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Tópicos:

1.Capacitação para a Mudança desenvolvendo o Quociente de Inteligência Emocional 
QE = {auto-conhecimento + auto-estima + auto-confiança}

2. Criatividade: criação de pitch e CVs criativos utilizando diferentes técnicas criativas - brainstorming e brainwriting, visual concept board, storyboard.

3. Empreendedorismo - Lean Start-Ups e Design Thinking: ideação e validação de modelos de negócio utilizando principalmente as seguintes técnicas - Lean Canvas, Personas e Mapas de Empatia, Focus Groups


JOIN / SHARE here.