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Promote.it engr 245 lean launchpad stanford 2019

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business model, customer development, e245, engr245, lean launchpad, lean startup, stanford, startup, steve blank

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Promote.it engr 245 lean launchpad stanford 2019

  1. Team Promote.It . 112 total interviews + 2trade shows Maria Rafael Noa Ashley Andrew Hustler MBA, pre-Series A team at Rappi (last- mile delivery) Picker MBA, Kraft Sales Analytics Hacker MS CS, Machine Learning Designer MBA, Gates Foundation Food & Beverage Partnerships Hustler MBA, PepsiCo E- commerce strategy
  2. B2B auction marketplace for retailers’ shelf space B2B marketplace for promotional deals Mobile app for B2B promotions TODAYDAY ONE Google Ads for Shelf Space
  3. Aisle 1: Fantasy Land - Where Everything is Possible
  4. Who are the players in the grocery value chain? Brand Retail Buyer
  5. But for small brands and retailers, there are intermediaries Brand Retail Buyer Distributor Broker 30% 12%
  6. • Retailers • Established CPGs • Ankle-biter CPGs - getting product on the shelf • Commercial: establish partnerships with brands and retailers • In-store execution audits • Engineering: Marketplace development & maintenance Problem: • CPG companies have a hard time negotiating with the long tail retailers • Medium-size retailers could be getting more for their shelf space, they leave money in the table • Low compliance in execution Solution: • Use marketplace to facilitate shelf space negotiation between CPG/ Retail • Fees from transactions that take place on the platform • Develop an intuitive and easy-to-use platform • Demonstrate in pilot that CPG brands can increase sales and retailers profits Reaching our customers: • Customer visits door 2 door • Establish relationships through conferences and associations • Customer relationship managers to ensure that retailers and CPG companies are benefiting from product • Engineers to develop platform • Personal relationships with key decision makers within retailers • Personal relationships with key decision makers within brands • Small and medium size retailers (1-300 stores) • CPG brands • Retail associations • Distributors Opus Week [1] Google Ads Auction for Shelf Space
  7. • Retailers • Established CPGs • Ankle-biter CPGs - getting product on the shelf • Commercial: establish partnerships with brands and retailers • In-store execution audits • Engineering: Marketplace development & maintenance Problem: • CPG companies have a hard time negotiating with the long tail retailers • Medium-size retailers could be getting more for their shelf space, they leave money in the table • Low compliance in execution Solution: • Use marketplace to facilitate shelf space negotiation between CPG/ Retail • Fees from transactions that take place on the platform • Develop an intuitive and easy-to-use platform • Demonstrate in pilot that CPG brands can increase sales and retailers profits Reaching our customers: • Customer visits door 2 door • Establish relationships through conferences and associations • Customer relationship managers to ensure that retailers and CPG companies are benefiting from product • Engineers to develop platform • Personal relationships with key decision makers within retailers • Personal relationships with key decision makers within brands • Small and medium size retailers (1-300 stores) • CPG brands • Retail associations • Distributors Opus Week [1] Google Ads Auction for Shelf Space
  8. We envisioned a multi-sided marketplace… An auction marketplace to help smaller retailers better monetize shelf space, and help brands get their desired placements Weeks 1-2 $ $$ $$$
  9. … but no one we spoke to was a willing user “You’re forgetting the shopper experience. Shoppers don’t care about how much brands are paying to be on good shelf locations.” - Jason Couriveau, Director of Merchandising at Big Y (77 stores) “I’m not a mercenary. I will organize my shelf in a way that makes sense to my customer.” - Jane Kimball, Store manager of an independent retailer Weeks 1-2
  10. Aisle 2: A few wrong turns
  11. What we did find: Retail buyers hold the most power in the value chain Brand BuyerDistributor Broker
  12. So we needed to understand the retail buyer’s workflow process better Weeks 1-2 20% Negotiate Discuss order terms, promotional campaigns Discover Find & sample new products Verify Ensure negotiated terms are executed, manage audits Analyze best total portfolio 50% Optimize 20% 10% % of time spent
  13. There was white space in technology solutions to support retailer workflow... Weeks 1-2 20% Negotiate Discover Verify 50% Optimize 20% 10% email
  14. To negotiate promotional deals, retail buyers spent a lot of time dealing with brokers “Brokers are a necessary evil to the value chain, they are expensive and you never know if they are properly representing your brand” - Salsa Brand Founder “I don’t even meet with 50% of my brokers because I don’t trust them” - 20-Store Retail Buyer Weeks 3-4
  15. “We’re in the paperwork business. We need to manually input in our systems all deals we are executing with vendors.” - Rich Gilmore, Category Manager at 24-store chain (Gelson’s) If we wanted to disrupt the broker, what would be the first step? Weeks 3-4 “I spend 12 hours a week managing the promotional calendar…” - Lorna Parton, Buyer at 16-store chain (Nugget)
  16. Weeks 5-8 So we made a pivot Software for retail buyers to auto-consolidate their promotional calendars across vendors Tripcase for retail buyers B2B auction marketplace for retailers’ shelf space Google Ads for Shelf Space
  17. To disrupt the broker, the promo calendar seemed like a perfect “foot in the door” 1 Organize & digitize the promo calendar Weeks 5-8
  18. To disrupt the broker, the promo calendar seemed like a perfect “foot in the door” 1 2 Organize & digitize the promo calendar Create a marketplace for new promo deals direct from brand to retailer Weeks 5-8
  19. To disrupt the broker, the promo calendar seemed like a perfect “foot in the door” 1 2 3 Organize & digitize the promo calendar Create a marketplace for new promo deals direct from brand to retailer Sell other digital services - shelf analytics, product discovery Weeks 5-8
  20. To disrupt the broker, the promo calendar seemed like a perfect “foot in the door” 1 2 3 Organize & digitize the promo calendar Create a marketplace for new promo deals direct from brand to retailer Completely disrupt the broker!!! Sell other digital services - shelf analytics, product discovery Weeks 5-8
  21. And we had a willing first partner! Weeks 5-8
  22. But we started building the MVP before asking the tough questions Weeks 5-8
  23. Three weeks later we were getting not so exciting answers: “Its an interesting product and it will add value but can you get the brands to pay for it?” Jason Couriveau, Director of Merchandising at Big Y (77 stores) Was anyone going to pay for this? Weeks 5-8 “You know, is a good product and it will save us a ton of time, but we already have our processes in place and don’t need to pay for a software solution” Daniel Cadena, Buyer at 4-store retailer
  24. Was anyone going to pay for this? Weeks 5-8 The promotional calendar wasn’t monetizable - and maybe not scalable
  25. Aisle 3: Return to the Shopping List Weeks 9-10
  26. We may have over-complicated things 1 2 3 Create a marketplace for new promo deals direct from brand to retailer !! Sell other digital services - shelf analytics, product discovery Maybe someday Completely disrupt the broker! Maybe someday… a long way off Organize & digitize the promo calendar Was this actually a necessary first step? Weeks 9-10 The true MVP
  27. Weeks 9-10 A pivot that solves a need for both sides of the marketplace! Software for retail buyers to auto-consolidate their promotional calendars across vendors Tripcase for retail buyers B2B marketplace for promotional deals Mobile app for B2B promotions
  28. Promote.It is a mobile app for B2B promotions Weeks 9-10
  29. Much more visual and easy-to-use than current solutions Weeks 9-10 vs.
  30. Promotions can be shown in an Amazon-like display Weeks 9-10 ● Retail buyers can see all available promos visually (vs. Excel today) ● Brands can offer smaller retailers creative campaigns such as innovation trials or endcap displays
  31. Orders and rebates will be routed through Promote.It Weeks 9-10 ● Orders can be placed directly through the Promote.It portal ● Customization requests can be handled through AI / bots
  32. 5 daysResponse time to emails with Opus promotional calendar software People weren’t that excited to talk to us with the previous idea...
  33. 5 hoursResponse time to emails with Promote.It deals marketplace … but that’s changed with Promote.It
  34. Know anyone we should talk to? Let us know at info@gopromote.it Brands and retailers are signing on (up to $100k pilot funding) Nugget Markets (16) Vallarta Supermarkets (50) Draegers (4) 4 store independent Retailers (5+ stores) BRANDS RETAILERS +70 partner stores
  35. And the market for promo deals is sizeable Number of Stores (retailers with less <100 stores)+15,000 Total revenue for long-tail grocery retailers$152.6 B Total Addressable Market 15% of sales reinvested in trade dollars $22.8 B Potential Revenue 5% Commissions on promoted dollars $1.2 B Year: 2025 Est. Revenues: $ 33 M Est. Profits: $14 M
  36. A look back: From Google Ads for shelf space to mobile app for B2B promotions
  37. Jordan Segall Fantastic mentor Whiteboard sessions Critical feedback Connections in the industry Thanks to everyone who helped us along the way! Our classmates and TAs for their amazing feedback
  38. Follow our progress this summer and beyond at gopromote.it Reach us at info@gopromote.it
  39. Appendix
  40. And the market for promo deals is sizeable Total Addressable Market: $1.5 B Total Addressable Market per Retail Partner: $750k+
  41. And the market for promo deals is sizeable Total Addressable Market: $1.5 B Total Addressable Market per Retail Partner: $750k+ Can the marketplace expand into different segments? Apparel Home & Living Foodservice Jewelry Beauty
  42. How is the grocery industry set up? Brand Retailer
  43. How is the grocery industry set up? Brand RetailerDistributor Broker
  44. How is the grocery industry set up? Brand RetailerDistributor
  45. Weeks 1-2 … so we made our first pivot CRM for vendors and retail buyers Auction marketplace for retailers’ shelf space Retail buyer and vendor- specific Salesforce Google Ads for Shelf Space
  46. We started by asking if this solution would be valuable Would a digital CRM system between you and your vendors be valuable? “Umm… Not really” - Everyone Weeks 3-4 Look for other quotes from Jet - already have Salesforce but never use it; it’s very high touch
  47. Looking back, we heard what we wanted to hear What are the pains you will solve for the customer? o Will it save costs? o Does it fix solutions they already have but are underperforming? o Does it help them get things done? o How intense is the pain? Intense - Most dreaded job function by buyers and category managers o How frequently does it happen? - 8+ hours a week Weeks 3-4
  48. We may have over-complicated things 1 2 3 Create a marketplace for new promo deals direct from brand to retailer !! Sell other digital services - shelf analytics, product discovery Maybe someday Completely disrupt the broker! Maybe someday… a long way off Organize & digitize the promo calendar Was this actually a necessary first step? Weeks 9-10 The true MVP
  49. Long tail retailers really want a way to get more promotional dollars “I feel ignored by the big guys
  50. Our vision is to reach 18,000 point of sales in the 5 years Year Year 5 # of Partner Stores 18,000 Est. Revenue $35 M Est. Profit $13,665k
  51. Brands are hungry for a way to reach independents From: Promote.It Feb 28, 11:23 am To: KHC VP of Sales Finance / former CFO KHC Asia “We are working on solution to help brands activating and tracking promotions on long tail retailers” From: KHC VP of Sales Finance Feb 28, 11:49 am To: Promote.It “That’s so awesome!” Let’s talk in two days.
  52. And the market for promo deals is sizeable Number of Stores (retailers with less <100 stores)+15,000 Total revenue for long-tail grocery retailers$152.6 B Total Addressable Market 15% of sales reinvested in trade dollars $22.8 B Potential Revenue 5% Commissions on promoted dollars $1.2 B
  53. Promote.It has major geographic and sector expansion opportunities Apparel Home & Electronics Foodservice Pharmaceuticals Beauty & Wellness Travel Additional sectorsAdditional geographies
  54. Execution compliance can be done in the same portal Weeks 9-10 Incentive bonuses or payment conditions can be placed on receiving photo verification

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