Most start-up companies begin with what they think is a brilliant idea and they immediately jump to building the product, and most of these products suck. Established companies sit around conference rooms staring at their navels, dreaming of the next great product and end up wondering why their products also suck. Creating innovative products that result in market breakthrough requires a process of multiple iterations of discovery that drive you deeper into understanding the market problems and how to solve them with a differentiated solution. Breakthrough products are based upon solving a significant Market Problem with a Product and Business Model that create a competitive advantage and a Market Strategy that motivates buyers to purchases your product. In this session, learn this iterative discovery process that leads to breakthrough products and how to apply it to your own products (in startups as well as big enterprises).

1. HOW TO CREATE PRODUCTS
THAT DON’T SUCK
© Copyright 2012 to 2014, The Lûcrum Group, Inc
Tom Evans
The Lûcrum Group
@napkintorevenue
www.napkintorevenue.com

3. High New Product Failure Rate
• Robert G Cooper: One out of four
development projects succeeds commercially.
(i.e., 75% failure rate)
• Jack Gordon: …somewhere between 80
percent and 95 percent of new product
introductions fail.
© Copyright 2012 to 2014, The Lûcrum Group, Inc

4. High New Product Failure Rate
• Robert G Cooper: One out of four
development projects succeeds commercially.
(i.e., 75% failure rate)
• Jack Gordon: In the world we live in,
somewhere between 80 percent and 95
percent of new product introductions fail.
© Copyright 2012 to 2014, The Lûcrum Group, Inc

5. Why Do So Many Products Suck?
1. Fallacy of the GREAT PRODUCT
© Copyright 2012 to 2014, The Lûcrum Group, Inc

6. Why Do So Many Products Suck?
2. Customers don’t know what they want
© Copyright 2012 to 2014, The Lûcrum Group, Inc
“If I had asked people
what they wanted, they
would have said faster
horses.”
“A lot of times, people don't
know what they want until
you show it to them.”

7. Why Do So Many Products Suck?
3. Build a better mousetrap and the world will
beat a path to your door."
© Copyright 2012 to 2014, The Lûcrum Group, Inc

8. Why Do So Many Products Suck?
4. Landgrab Economics – Profit Later
© Copyright 2012 to 2014, The Lûcrum Group, Inc

9. Why Do So Many Products Suck?
5. What is Product-Market Fit?
© Copyright 2012 to 2014, The Lûcrum Group, Inc

10. Keys to Products That Don’t Suck
• Compelling Market Opportunity
– Big painful issues
– That many in your target market
– Are willing to pay to solve
• Compelling Solution
– Differentiated Value Proposition
– Profitable business model
– Time to market
• Compelling Market Strategy
– Motivates target market
– To solve problem with your solution
Discovery
+
Validation

11. Model for Discovery
Four Key Steps of Discovery
Validate
Hypothesis
Validate
Opportunity
Validate Solution Validate Market
FourKeyPillars
Market Problem
Product
Business Model
Market Strategy
Validation Valid Hypothesis
Valid Market
Opportunity
Ready to Launch Market Growth
From Napkin to Revenue™ Discovery Model
© Copyright 2012 to 2014, The Lûcrum Group, Inc

12. Four Key Pillars
• Market Problem – if you’re not solving a
problem, there is no need for a product!
• Product – How do you solve the market problem
in a valuable and differentiated manner?
• Business Model – How do you deliver the
product and profitably capture the value?
• Market Strategy – How do you motivate your
target market to solve their problem with your
solution?
© Copyright 2012 to 2014, The Lûcrum Group, Inc

13. Model for Discovery
Four Key Steps of Discovery
Validate
Hypothesis
Validate
Opportunity
Validate Solution Validate Market
FourKeyPillars
Market Problem
Product
Business Model
Market Strategy
Validation Valid Hypothesis
Valid Market
Opportunity
Ready to Launch Market Growth
From Napkin to Revenue™ Discovery Model
© Copyright 2012 to 2014, The Lûcrum Group, Inc

14. Market Evidence (of Market Problem)
• Sources of Market Evidence
– Customers
– Non-customers
– Market trends/shifts
– Unexpected occurrences
– New technologies
– Competitors
– Personal experience
– Etc.
© Copyright 2012 to 2014, The Lûcrum Group, Inc

15. Market Evidence (of Market Problem)
• Sources of Market Evidence
– Customers
– Non-customers
– Market trends/shifts
– Unexpected occurrences
– New technologies
– Competitors
– Personal experience
– Etc.
© Copyright 2012 to 2014, The Lûcrum Group, Inc

16. Market Evidence (of Market Problem)
• Sources of Market Evidence
– Customers
– Non-customers
– Market trends/shifts
– Unexpected occurrences
– New technologies
– Competitors
– Personal experience
– Etc.
© Copyright 2012 to 2014, The Lûcrum Group, Inc

17. Start With Hypothesis
– Buyer/User ‘W’
– In Market Segment “X”
– Has problem “Y”
– That happens when “Z” occurs
– We can solve it by creating/delivering solution “A”
E.g.: Owners of small manufacturing operations that use
hot water & steam are unable to manage manufacturing
costs due to the volatility of fuel prices.
We can solve this by providing a high temperature solar
heating system under a lease agreement.
© Copyright 2012 to 2014, The Lûcrum Group, Inc

18. Validate the Hypothesis (1)
• Market problem and market segment(s)
• Speaking to potential customers (buyers & users)
– Most companies don’t and won’t do this
• Significant time investment
– Requires many conversations (cold calling)
• Minimum: 20 conversations
• May take over 100 conversations
• Iterate until validated or rejected
© Copyright 2012 to 2014, The Lûcrum Group, Inc

19. Validate Hypothesis (2)
• Create product & business model concept
– Low cost way of presenting product concept
– Mockup, prototype, wire frame, story board, presentation,
product description
• Validate product & business model concept
– Present concept and receive feedback
• Does the problem still resonate?
• Does the approach solve the problem?
• What is the Minimum Viable Product (MVP)
• Iterate until validated or rejected
© Copyright 2012 to 2014, The Lûcrum Group, Inc

20. Validate Opportunity
• Define & discover at greater depth
• Competitive research (strategy, position,
strength)
• Validate the market opportunity
– Business Case - Can it be profitable?
• Detailed design of product & business model
– Market requirements, product requirements, user
stories, etc.
– Pricing model, delivery mechanism, costs to deliver,
etc.
• Iterate until validated or rejected
© Copyright 2012 to 2014, The Lûcrum Group, Inc

21. Validate Solution
• Define Minimum Viable Product (MVP)
– Just enough functionality to solve the most
important market problems
– For small segment of market (early adopters, etc.)
– Willing to pay for this functionality
– Fast to market
– Learning
• Continue to discover, validate, refine!
© Copyright 2012 to 2014, The Lûcrum Group, Inc

22. Validate Market
• Sell your first customers
• Based upon market validation work
• Targeted Market Development Plan
– Well defined target market
– Clear understanding of buyer roles and their
challenges/goals/needs
– Compelling reason to buy from you
• Value Proposition – what we do for you
• Positioning & Differentiation – why buy our solution
• Continue to discover, validate, refine!
© Copyright 2012 to 2014, The Lûcrum Group, Inc

23. Model for Discovery
Four Key Steps of Discovery
Validate
Hypothesis
Validate
Opportunity
Validate Solution Validate Market
FourKeyPillars
Market Problem
Product
Business Model
Market Strategy
Validation Valid Hypothesis
Valid Market
Opportunity
Ready to Launch Market Growth
From Napkin to Revenue™ Discovery Model
© Copyright 2012 to 2014, The Lûcrum Group, Inc

24. Key Principles
• Hypothesis – Discovery – Validate
• Continuous engagement with target
market
–Validate important decisions
• Planning is good, but learning is better
• Fail fast – discover fast!
© Copyright 2012 to 2014, The Lûcrum Group, Inc

25. Thank You!
Tom Evans
The Lûcrum Group
tevans@napkintorevenue.com
@napkintorevenue
www.napkintorevenue.com
+1.512.961.5267
© Copyright 2012 to 2014, The Lûcrum Group, Inc