Module 3 Innovation and Value Proposition.pptx

The value proposition in research

1. Innovation and Value Proposition Module 3

2. The effective use of technological innovation is a pre-requisite for small business survival (Peckham, 2002)

3. “Where a new invention promises to be useful, it ought to be tried” -Thomas Jefferson (1762-1826)

4. Inputs and Outputs of Inventive Work

5. Distinction Between Invention and Innovation INVENTION An idea, a sketch, or a model for a new improved device, product, process, or system Often patented but not necessarily lead to technical innovations INNOVATION The decisive commercialization of an invention Strengthened by R&D Coupling of technical and market possibilities

6. Interrelationship between invention, innovation, and entrepreneurship (Thomas and Gornall , 2002) Activity Level Invention Innovation Entrepreneurship Micro Individual/lone inventor Innovator Entrepreneur Small and medium sized enterprise Company inventor Innovation champions Entrepreneur/ Intrapreneur Large company or organization Institutional/Corporate Inventor Project champions Intrapreneur

7. Types of entrepreneurship Small-medium enterprise Local , won’t become global. Grows linearly then saturates. For example, dry cleaning business, many restaurants. Innovation-driven enterprise Looks to be superregional or global. Innovation that is unique to address broad market. More risk, initial losses, but greater upside

8. What is innovation? Innovation: changes the way people do things, makes people happier “Innovation = invention * commercialization” ( multiply, not add – need both otherwise zero ) Can innovate without inventing - Apple didn’t invent mouse/windows/iPod– but commercialized - TV, radio didn’t have an impact before advertising model Innovation ≠ Invention

9. Types of innovation Product – better product or service Computer mouse Process – better way to produce or deliver product/service Amazon – same goods but order online rather than store Business model TV didn’t have an impact before advertising model Google with advertising

10. Outline of course Customers - needs - targets - markets Product/Service - benefits - competitive advantage - intellectual property Business Model - execution plan - financial analysis - raising capital Value Proposition

11. Benefits "People don't want to buy a quarter-inch drill. They want a quarter-inch hole!" Benefits – what customers receive by using product/service. Subjective, perceived by customer Features – built into the product. tangible and objective

12. Needs-Benefits How your approach will provide benefits to meet a need? What is the need (articulate specifically), customer “Pain Point” Describe the ‘as-is’ state, why other approaches not good enough. How does your product provide a benefit to meet that need Show specific evidence ( eg , anecdotes ) how benefits meet need “Use Case”, a specific example showing Need, acquisition and benefits of product Why customer would get it Barriers to adoption Interface points

13. Value Value = benefits/price Increase value by increasing benefits or decreasing price Only the customer defines your value Customer satisfaction is the ratio (Value)/(Expected Value)

14. Value Proposition Statement A clear, crisp, compelling statement that describes the value of your offering. Should include NABC: Needs Approach Benefits per cost Competition Example: I understand you are hungry (Need), so let’s go to the X Restaurant (Approach) instead of McDonalds (Competition) because it has better food and it is closer (Benefits/cost)

15. Assignment 2: Value Proposition • give top three priorities of target customer • describe “as-is state”, customer pain points, opportunities • potential solution – given in general terms • describe anticipated Use Case with solution • identify key metric measuring how solution meets the need • give a clear, compelling Value Proposition statement

16. Ideas can have two origins Organization driven, “tech push ” Have a solution, looking for market. Have competitive advantage Downside: might be no real need for your product Market driven, “ market pull ” Know the need, and have an idea to satisfy the need Downside: don’t have competitive advantage ( example: falafel truck)

17. Elevator pitches Have ~60 s with boss/investor to pitch idea Goal is to set up lengthier discussion at later time Don’t need to give all information, but entice them Components a. Start with a hook b. Address “NABC”: Needs Approach Benefits per cost Competition (why you’re better than them) c. Conclude with the “ask”

18. Assignment 3: Idea’s Elevator Pitch Individual project: Come up with an idea for a product/service, and develop a 60 second elevator pitch what is the problem your product or service is going to solve, and how critical is the problem? what types of people or companies suffer from this problem, and how widespread is it? what is the innovation behind your approach, and its advantage over competitors?

19. Value Proposition Canvas