Bioengineering Innovation and Business Creation

Introduction to Innovation and Creation of Businesses in Bioengineering

• The presentation is about innovation and business creation in bioengineering.
• It's presented by Débora Ferreira & Salomé Duarte, from the Department of Biological Engineering, University of Minho, Braga.
• Contact information for the presenters is provided.

Program Outline

• The presentation outlines a program schedule with weekly topics and activities.
• Topics include introductions and ideas presentation, innovation and entrepreneurship, intellectual property, market analysis, business models and funding, and financial analysis.
• Weekly practical classes and preparations are detailed.

Conceptual Framework: Seeing the World

• The presentation visually illustrates the importance of customer-centric thinking.
• It contrasts seeing the world through the customer's perspective with seeing it from a company’s perspective.
• This is a key element in successful entrepreneurship.

Market Segmentation

• The slides present a visual representation of the process.
• A path design emphasizes the stages involved in market segmentation.

What is the Single Necessary and Sufficient Condition for a Business?

• A business isn't defined by a product, technology, or plan.
• The core element is a paying customer.
• A business exists only when someone pays for its product or service.

Create a New Market

• Entrepreneurial focus is a critical skill.
• Identifying and understanding customers through primary market research is key.
• Creating new markets requires primary market research, not assumptions or third-party analysis.
• Expanding to an adjacent market is possible once a profitable foothold in a primary market has been found.

When Paying Customers Lead You Astray

• Common pitfalls include selling products to everyone instead of targeting a specific need.
• An example of a bad idea is a new waterproof fabric when the existing market is already saturated.
• It's essential to focus on creating a new market, not simply trying to sell to anyone.

When Paying Customers Lead You Astray

• The "India Syndrome" warns against aiming for a fraction of a huge, existing market without validating customer demand.
• It's more sensible to focus on a smaller, carefully defined market that can be dominated.

Primary Versus Secondary Customers & Two-Sided Markets

• Customers are the entities (e.g., individuals, households, organizations) who utilize the product.
• End-users are customers who ultimately utilize the product.
• The economic buyer is the customer who makes the final purchase decision.
• Some business models depend on both primary and secondary customers.

How to Do Market Segmentation

• A brainstorming session is a useful starting point.
• Focus on end-users, specifically those with a committed interest in using your product.
• Early-stage, customer-driven interaction (e.g., trade shows) is essential.

How to Do Market Segmentation

• The ideal scenario is to personally understand the customer pain point.
• If you already have an idea, thoroughly validate whether your assumptions about the market are correct.
• Be open-minded and creative to consider potentially better markets for your idea.

How to Do Market Segmentation: Example & Additional Criteria

• Illustrative examples suggest exploring how to apply technology to broaden market segmentation.
• It's crucial to consider different factors, such as various levels of schooling, countries, regions, and types of schools, when identifying potential end users.

How to Do Market Segmentation: Questions

• The presented criteria address the following:
• Is there a compelling reason for customers to buy your product instead of an existing solution?
• Is the target customer financially sound?
• Is the target customer easily accessible?

How to Do Market Segmentation : Criteria

• Market viability is crucial; you likely need partners to successfully launch and develop a whole product.
• Understanding competitive landscape is integral.
• Competitors’ strengths, weaknesses, and customer viewpoint should be reviewed.

How to Do Market Segmentation - Narrowing Criteria

• Evaluate the market's potential for expansion: If your initial segment is successful, can you expand?
• Ensure your market vision aligns with your team's values and goals.

How to Do Market Segmentation: Summary

• Market segmentation is an iterative process.
• Start by identifying markets at an industry level, then narrow your focus to specific end-user segments.
• Careful consideration and thorough research are paramount.

Market Segmentation Overview

• Market segmentation is essential in a business strategy. It defines the prospective buyers and classifies the segments according to the common needs. These groups typically respond similarly to the marketing actions.

How to Do Market Segmentation

• Carefully identify target users and applications for your product or technology.

Market Segmentation; Next Step

• The next task is to list the top 6-12 attractive market potential opportunities.

Market Segmentation and Team; Co-founders

• Ideally, the idea should satisfy a need or offer a solution.
• Create a diversified array of potential customers that could use your innovation.

Primary Market Research; Talking to Customers

• The goal of primary market research is to understand customer pain points.
• Talk to potential customers in an open-ended, exploratory way, not a sales pitch.

Primary Market Research; Caveats

• Be careful not to project or presume answers.
• Potential customers don't know how to solve problems better than you.

Primary Market Research: Question Examples

• The presentation offers sample questions for gathering customer data (e.g., age, gender, occupation, income).

Step 2: Select a Beachhead Market

• A beachhead market is a small, focused market niche that will form the initial core of your market venture.

Key Characteristics of a Beachhead Market

• The idea is to choose a smaller, defined market first (beachhead), where you develop a strong business presence and, from there, expand to other markets.

How to Choose Your Beachhead Market

• Select a market that includes customers with defined values, passions, and goals.

Calculating the Total Addressable Market (TAM)

• Assessing the TAM requires both top-down and bottom-up approaches.
• Top-down entails using overall industry market figures, while bottom-up requires estimations from surveys and customer data.
• The goal is to estimate the full potential market size (i.e., every person who needs a product, region)

TAM, SAM, And SOM

• TAM represents the entire possible market for a product.
• SAM represents the portion of the market your business can serve, based on geographic limitations, resources, and expertise or specialization.
• SOM is the realistically attainable segment of the SAM that can be captured.

Common Mistakes in Assessing TAM, SAM, and SOM

• The presentation lists common pitfalls in assessing market potential: relying solely on secondary data, neglecting market segmentation, static evaluations, unrealistic projections, and miscommunications among teams.

What Should My TAM Be?

• A good TAM target is typically between $20M and $100 million.
• Larger TAM figures are a warning sign warranting careful consideration.
• The exact amount depends on product and market specifics.

Key Takeaways on Market Size

• Critical metrics (TAM, SAM, SOM) are essential tools to understand market potential and strategy.
• Market sizing helps guide business decisions, investor appeals, and realistic growth expectations.
• Applying both top-down and bottom-up approaches for data collection offers a useful framework.
• Ongoing updates to market data are vital to maintain strategy relevance.

Porter's Five Forces

• Porter's Five Forces (suppliers' power, buyers' power, threat of new entrants, threat of substitutes, industry rivalry) are tools to assess market competitiveness.

Taking Home Message; Market Data Analysis

• Understanding the number of potential customers and their value is critical.
• Identifying core segments and opportunities is key.
• A thorough market analysis ensures business success.

Key Takeaways (continued)

• This section provides a review of the importance of the analyses and conclusions.

This quiz explores the integration of innovation and business development in the field of bioengineering. Participants will engage with weekly topics covering entrepreneurship, market analysis, and customer-centric thinking. It aims to enhance understanding of the essential elements for creating successful ventures in bioengineering.