Have a startup idea? What’s your beachhead market? What’s the total addressable market (TAM)? Have you created a customer persona? These are key concepts that you must address thoroughly before moving ahead with prototyping. Based on a rigorous and structured framework for entrepreneurship from Bill Aulet, the managing director of Martin Trust Center for MIT Entrepreneurship, this interactive workshop will provide you insights on how to conduct effective market research and identify target customers. It is the first part of MIT-CHIEF’s Disciplined Entrepreneurship Training Series - “Building bricks for the Great Wall”, which teaches you all you need to know about how to build an innovation-driven startup.
2. What we are going to do in this session
0. Talk amongst yourselves
1. Disciplined Entrepreneurship Overview
2. Who is your customer
3. Primary market research (PMR)
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3. 0. Talk amongst yourselves
• Pair up 1x1 with someone you don’t know
• Ask each other these 3 q’s (5 minutes)
– Name, affiliation, and what you are looking to get
out of this program
– Sector interest (e.g. Consumer electronics,
Wearables, Healthcare, Education, Food, Arts,
Industrial automation, Machine Learning, AR/VR
applications, Social networks… whatever you are
interested in)
– One embarrassing thing about yourself
• Do it again with someone new (5 minutes)
• Do it one more time with a third person (5
minutes)
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21. Step 1: Segmentation
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Chain Gyms
(Discount/Mains
tream)
Chain Gyms (High end) Varsity Athletic
Weight Rooms
(College)
Professional
Weight Rooms
Home Gyms Rehab Facilities Apartment/Hotel
/ Offices
Olympic
Training
Facilities
High End
Non Chain
Gyms
Examples • YMCA, Gold’s
Gym, Anytime
Fitness,
Planet
Fitness, etc
• Equinox, LA Fitness,
David Barton, New
York Sports Club
• School Facilities • Team Facilities
• Home Gyms
• Private Training
Facilities
• Home Gym • Joint Ventures
(etc), Brigham
Young Women’s
Hospital (etc)
• Finance/Consultin
g Offices
• High end
apartments/hotels
• Training
complex in CO,
NC, etc
• Velocity
sports
performanc
e, etc
Pros • Market size
• Expand to
other
locations
• Prioritize top of the
line
• Expand to other
locations
• More money
• Care about athlete
improvement,
health, and safety
• Easier to expand to
follow on markets
• Care about
athlete
improvement,
health, and
safety
• Easier to
expand to
follow on
markets
• Prioritize safety
• Wealthy
• Large market
• Expand to other
locations
• Prioritize safety
and patient
improvement
• Progress tracking
is huge
• Some not
supervised –
safety is important
• Expand to other
locations
• Care about
athlete
improvement,
health, and
safety
• Easier to expand
to other markets
• Care about
athlete
improveme
nt, health
and safety.
Cons • Value Proposition
• Limited funds
• Value Proposition
• Limited funds
• Contacts
• Difficult to expand
to other colleges
• Contacts
• Difficult to
expand to other
facilities
• Want things for
free
• Difficult to expand • Funds may be
limited
• Patients do not
typically lift heavy
weights
• Not a main part of
business
• More serious
athletes do not
frequent these
locations
• Contacts
• Market size
• Difficult to
expand to
other
locations
• Trainers
usually
there to
spot and
track
Motivations (for
economic
buyer)
• Money – bringing
in new
customers,
retaining old ones
• Money – bringing in new
customers, retaining old
ones
• Image
• Athlete
Improvement
• Recruiting athletes
• Athlete
Improvement
• Safety
• Athlete Improvement
• Money
• Athlete
improvement
• Less time spent
monitoring and
tracking patients
• Money –
Attracting
customers or
employees
• Happiness/well
being of
employees
• Athlete
Improvement
• Money –
Attracting
new
customers
• Athlete
Improveme
nt
Regulatory
Climate
• Regulated • Regulated • Regulated • Regulated • Regulated • Regulated • Regulated • Regulated • Regulated
Competitive
Environment
• Highly
Competitive
• Highly Competitive • Highly Competitive • Highly
Competitive
• Highly Competitive • Less competitive • Highly
Competitive
• Highly
Competitive
• Highly
Competitiv
e
Early Adopters • No • Yes • Yes • Yes • Varies • No • No • Yes • Yes
BHM
22. Step 2: Beachhead Market
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• High End Chain Gyms
– Pros
• Less concerned with equipment price
• More concerned with image
• Easier to expand into other locations
• Easier to expand into follow on markets
• Large Market Size
– Cons
• Current lack of contacts
• Equipment will have to be extremely good quality/high end
• Value proposition – improving athletes isn’t their main motivation
• Other Potential Markets
– Varsity Athletics Programs/Professional Programs
– Home Gyms
– Mainstream/Budget Gyms
23. Step 3: End user profile: Chris
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• Full-Time Structural Engineer
• 25 Years Old
• Previous High School Athlete
• Lifts at least 4 times per week
• Brings notepad to gym
26. Be careful who you interview and
what personas you build
• For B2C, the economic buyer is often the
same as the end user – 1 set of interviews
can yield tremendous data
• For B2B, you often have to interview multiple
personas before you can get a clear picture
of the needs and wants for the company and
for each persona. Embrace complexity.
• Either way: Recruit carefully! Qualitative
research requires laser-focused targeting.
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31. Technique cheat sheet
• Establish rapport before you
begin
• Ask short, open ended
questions
• Let the subject lead
• Use active listening techniques
• Talk less – listen well
• Pay attention to non-verbal
cues
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Remember: The
goal is to listen and
observe – not to
sell!
32. Simulation: Bluesmart PMR
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Imagine this is
your idea. Your
mom says she
likes it. You made
some progress,
and now you
have to decide
whether to quit
your day job and
raise $ to start
this company.
And these are some possible engineering
features. Questions:
• Is there a market need for this product?
• Who might buy this product?
• Are these good features?
• Which features are “more equal” than others?
33. Simulation
• Goal of the interview:
To validate market
interest in a smart
rollerboard for
frequent business
travelers.
– Figure out what are
the biggest pain points
experienced by your
interview partner
– See if any of your
proposed solutions
solve those pain points
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• Rules of engagement:
Stick to these words.
– “Tell me about the last
time you…”
– “Tell me about how
you…”
– “You said xxx. Tell me
more?”
– “Why?”
– “Why not?”
– Beware confirmation
bias!
35. PMR, Procter and Gamble style
• Expensive (hundreds of thousands of $ and up)
• Long (3-9 months)
• Often done in conjunction with an agency
=> High quality insights at a high price
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36. PMR, startup style
• Cheap
• Fast
• DIY. NOT rocket science. You can do it.
=> Scrappy, but helps you iterate in real time!
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37. Step by step guide to startup style PMR
• Articulate 3-5 hypotheses to be tested
• Define characteristics of research subjects
• Make a list of 10 people to call
• Ask for 10-15 minutes of their time
• Face to face if possible, video chat/phone if not
• Interpret results, adjust hypotheses
• Rinse and repeat