Introduction to Entrepreneurship WS 2024/2025 PDF

Introduction to Entrepreneurship WS 2024/2025 Dr. Dinah Murad 1   Plan for the Semester Date Topic 15/10/24 Introduction and Business Ideas 29/10/24 Business Models and Value Propositio...

Introduction to Entrepreneurship WS 2024/2025 Dr. Dinah Murad 1   Plan for the Semester Date Topic 15/10/24 Introduction and Business Ideas 29/10/24 Business Models and Value Proposition 12/11/24 Customer: Market Research and Validation 26/11/24 Business Planning and Strategy 10/12/24 Financial Planning and Fundraising 7/1/25 Operations and Execution 21/1/25 Innovation, Risk Management, and Scaling cw 6 (2025) Exam (60 minutes, multiple choice) med2market – scientific marketing consulting 2 12/11/24 Customer: Market Research and Validation ¤ Recap ¤ All about the customer ¤ Target Group - customer segment ¤ Customer Journey ¤ Persona ¤ Your task for next time ¤ Key Learnings 3 12/11/24 Customer: Market Research and Validation ¤ Recap ¤ All about the customer ¤ Customer Journey ¤ Persona ¤ Target Group - customer segment ¤ Your task for next time ¤ Key Learnings 4 What do you remember? ¤ How to get to a business model: ¤Canvas bases: Business Model Canvas, Lean Canvas, Value Proposition Canvas ¤Porter’s five Forces, SWOT, Blue Ocean Strategy, Design Thinking, SAFe Lean Startup Cycle ¤ Business model explains where the money comes from: B2B, D2C, subscription, premium, on-demand, all kind of channels, Franchise,… ¤ Value proposition canvas ! 5 Your ideas… Carla, Jessica: Thermomix 6 Your ideas… Carla, Jessica: Vinted 7 Your ideas… Chrysi: Apple Watch 8 Your ideas… Nina, Thao: Mercedes-Benz Cars 9 12/11/24 Customer: Market Research and Validation ¤ Recap ¤ All about the customer ¤ Target Group - customer segment ¤ Customer Journey ¤ Persona ¤ Your task for next time ¤ Key Learnings 10 What is market research? https://es.fiverr.com/murtaxa17/make-excel-graphs- https://de.freepik.com/vektoren/innovation/2 spreadsheets-custom-dashboards-and-pivot-tables  Qualitative and quantitative Research Qualitative Research Quantitative Research Definition: Explores in-depth Definition: Collects numerical insights, opinions, and data from a large number of motivations of consumers participants to identify measurable trends and perform through open-ended questions statistical analyses. and observations. Example: An online survey with Example: A focus group of 10 1,000 respondents asks, "How smartphone users discusses satisfied are you with your current their experiences with different smartphone on a scale of 1-10?" brands, revealing hidden Results are statistically analyzed preferences through to determine average satisfaction comments and body language. levels for various brands. Two pairs of shoes https://medium.com/@raleighdesign/quant-ux-the-new-tool-for-data-driven-ux- dde34f8e2de6 What exactly is a customer insight? A customer insight is a deep understanding of what motivates customers' behavior, needs, or emotions in a way that helps a business serve them better. It's more than just facts about customers—it’s about understanding why they do what they do, what they want, and how they feel. For example, if a coffee shop notices that many customers come in during the late afternoon and seem stressed, a customer insight might reveal that these customers are seeking a place to relax and recharge. With this understanding, the shop could offer special promotions, create a calm ambiance, or introduce relaxing drinks to better serve those needs. In essence, customer insights give businesses a way to connect with their customers more effectively by truly understanding what drives their behavior. "Consumer Behavior: Buying, Having, and Being" by Michael R. Solomon Things you’ve probably heard of… ¤ Analysis of: ¤ Data ¤ Markets ¤ Trends ¤ Consumer Start with the customer, the ¤ Trends customer will get you to the market later ¤ Insights Customer is the center of your business Flexible Personalized Business Models Products and Services Customer Customer Tailored Feedback Integration Marketing and Communication 16 Key Aspects of a Customer-Centric Business Model ¤ Personalized Products and Services: ¤ Develop offerings that align with individual customer preferences, ensuring relevance and value. ¤ Tailored Marketing and Communication: ¤ Utilize customer data to craft targeted marketing campaigns and select appropriate communication channels that resonate with specific customer segments. ¤ Flexible Business Models: ¤ Adapt business operations to accommodate diverse customer needs, such as offering subscription services, customizable products, or various purchasing options. ¤ Customer Feedback Integration: ¤ Continuously gather and analyze customer feedback to refine products, services, and overall customer experience 17 Understanding Customer-Centricity ¤ Customer-focused strategy ¤ Holistic customer experience ¤ Needs, wants, behaviours alignment ¤ Beyond customer service ¤ Customer Journey is key 18 12/11/24 Customer: Market Research and Validation ¤ Recap ¤ All about the customer ¤ Target Group - customer segment ¤ Customer Journey ¤ Persona ¤ Your task for next time ¤ Key Learnings 19 Customer Segments ¤ Customer segments refer to the different groups of people or organizations that a business aims to reach and serve. A customer-centric approach requires businesses to understand their customers deeply, including their needs, preferences, and behaviors. This understanding can help businesses identify distinct customer segments and tailor their offerings to meet the specific needs of each segment. ¤ Example: A software company may identify as distinct customer segments ¤ small businesses, ¤ large corporations ¤ and individual consumers as distinct customer segments. Each of these segments has different needs and preferences, which the company can address through tailored software solutions. 20 How to segment? ¤ Demographic (e.g. their age, gender, income or education). ¤ Geographic (e.g. their country, region or city). ¤ Psychographic (e.g. their interests and values). ¤ Technographic (e.g. the hardware and software customers use). ¤ Behavioral (e.g. their habits and favorite products). ¤ Needs-based (e.g. what different groups need from your product). ¤ Value-based (e.g. how much value different groups bring). https://www.corporatevision-news.com/5-customer- segmentation-analysis-methods-for-business-growth/ 21 Details of Customer Segments https://www.fullstory.com/blog/customer-segmentation/ The Market - 1st approach for quantification  Example from TAM to SAM to SOM Total available „Milck“ (later rebranded into „hemi“) by market Hempany was an actual startup. It‘s a vegan hemp seed-based alternative to milk. It is especially suitable for barista products and excellent when it comes to dealing with allergies. Imagine this startup is planning to venture out into the US market which is relevant for the SAM. Think of potential Serviceable approaches and the potential SOM. available market Serviceable obtainable market  Key questions to determine the TAM, SAM and SOM: 1. Describe the market in a few sentences. 2. How big is the market today? Use figures on turnover and size of the potential target group. 3. What was the market growth rate over the last 3-5 years and how will the market develop over the next 3-5 years? What are the market dynamics? med2market – scientific marketing consulting 25 12/11/24 Customer: Market Research and Validation ¤ Recap ¤ All about the customer ¤ Target Group - customer segment ¤ Customer Journey ¤ Persona ¤ Your task for next time ¤ Key Learnings 26 The AIDA marketing classic Customer Journey A Customer Journey is the complete experience a customer has when interacting with a company or brand, encompassing every step from initial awareness and engagement to the final purchase and post-purchase interactions. It maps the customer's touchpoints and emotional experiences throughout their relationship with a product or service. 28  Customer Journey my Time Select to instal & set-up (product old tablet is outdated, impression), review, share my I’ve seen an ad on insta about a on my needs, preferences experience, I engage with support fancy new tablet - I need a and budget. Where to and other customers. I’ll stay new tablet buy? with this brand I’ll My I follow the brand on options? Gather info go to the store / social media, subscribe to from Stores, Internet, Webshop / other and I newsletters, and become an friends, my bubble, etc. have now my product advocate by recommending in hands it to others Kotler, Philip; Keller, Kevin Lane (2016). Marketing Management (15th edition). Pearson. 29  Customer Journey Kotler, Philip; Keller, Kevin Lane (2016). Marketing Management (15th edition). Pearson. Pre-Purchase Touchpoints Purchase Touchpoints Post-Purchase Touchpoints Indirect Touchpoints Advertisements E-commerce Website or Onboarding Materials Public Relations (PR) Content Marketing App Customer Support Services Customer Support or Activities Word of Mouth/Referrals Follow-Up Communication Sales Representatives Reviews and Ratings on Search Engine Results Social Media Interaction Social Media Posts and Promotions or Discounts Third-Party Platforms Loyalty Programs and Engagements Product Packaging and Brand Reputation and Presentation Promotions Storefronts or Displays Word of Mouth 30 Digital Customer Journey https://www.commbox.io/12-ways-to-improve-your- customer-journey-the-easy-way/ How to understand the customer journey? ¤ helps you see the experience of ¤ purchasing your product through your customers’ eyes ¤ helps you structure your buying process to encourage people to purchase your product ¤ avoid issues that scare people away ¤ help you understand your existing customer’s touch-points with your company to understand ¤ how to keep customers ¤ get referrals to new potential customers ¤ Touch points refer to any time a customer comes into contact with your company—before, during, or after they buy your product. Touchpoints include all offline/online interactions through marketing, in person, or over the phone. 12/11/24 Customer: Market Research and Validation ¤ Recap ¤ All about the customer ¤ Customer Journey ¤ Persona ¤ Target Group - customer segment ¤ Your task for next time ¤ Key Learnings 33 Customer segment: Guess what a person this could be! ¤ Male ¤ Age 75-85 ¤ Children, grand children ¤ Retired, but occasionally working in his former profession ¤ very wealthy, doesn’t need to work, but likes to work occasionally ¤ Hobby and lifestyle: loving father and grandfather who spends time with his children and grandchildren, such as attending sports events ¤ Lives a quiet family life with his wife  ¤ Harry Smith ¤ 78 years ¤ 2 children, 7 grand children ¤ Retired pharmacist. Sold his pharmacy chain, but occasionally works in one of his pharmacies. Net worth approx. 15 million $ ¤ wealthy after selling his successful pharmacy chain, doesn’t need to work ¤ Hobby and lifestyle: maintaining a healthy lifestyle. He loves music. Harry is known as a loving father and grandfather who spends quality time with his children and grandchildren, such as attending sports events with his youngest children and grand children ¤ Lives a relatively private family life with his wife created by DALL-E Whom I really had in mind… Target group vs Persona ¤ Male ¤ Male ¤ Age 75-85 ¤ Age 81 ¤ 8 Children (with 5 different mothers), 7 grand children ¤ Children, grand children (one on the way), 1 great grand child ¤ Retired, but occasionally working in ¤ Retired international superstar, but occasionally works his former profession and performs on stage in front of thousands of people ¤ wealthy, doesn’t need to work, but ¤ approx 425 million € net worth, probably growing likes to work occasionally ¤ Hobby and lifestyle: Enjoys spending time with family, staying fit with dance and fitness routines, and ¤ Hobby and lifestyle: loving father maintaining a healthy lifestyle. Known as a loving father and grandfather who spends time and grandfather who spends quality time with his with his children and grandchildren, children and grandchildren, such as attending events such as attending sports events like the 2024 Paris Olympics with his youngest son. ¤ Lives a quiet family life with his wife ¤ Lives a relatively private family life with his wife Let’s consider… If you were a real estate agent, would you treat these two customers differently? And if so, how? The user Persona ¤ The User Persona is a representation of your typical customer. ¤ The persona (originally according to Cooper) makes the target group tangible and enables the development of user-oriented products and solutions. Collect your insights and observations from the interviews and break them down to a persona that you believe to be your typical customer. This does not limit your target group, but you focus on the persona who will really use your idea. ¤ Only if you understand your customer(s) you can create the product that is really in demand. ¤ It might be necessary to start with several personae in order to get to a definition of your customer segment or even segments! Alan Cooper: The Inmates are Running the Asylum. Why High-Tech Products Drive Us Crazy and How to Restore the Sanity. SAMS, Indianapolis, Indiana 1999, Kapitel 9 More than ONE persona ¤ Note that depending on the product or service, several stakeholders are involved in the purchase decision process and have different interests. ¤ For example, when buying a school backpack: who makes the decision?? ¤ The parents may put more emphasis on ergonomics and quality, while the kid wants a cool and stylish backpack. Both must be addressed. ¤ It also shows that the buyer does not necessarily have to be a user. User Persona Insights Especially in the B2B sector there is often a whole Decision Making Unit (DMU), which can consist of several departments and hierarchy levels. For example, when deciding on new software or plattform for the participant management of events, the IT, event, marketing and finance departments may be involved and a senionr manager - not the actual user - often makes the financial purchasasing decision. While the eventpeople look for ease of use his concern may be data security. Thus she/he must be included as a user persona Example: MyCabin ¤ MyCabin participated in area of lake Constance and is a digital mediation platform for (private) campgrounds typically on farms and ranches. Out of their own interest in hiking, the founders of MyCabin have dedicated themselves to the problem of setting up their tent for a night in nature in a simple and yet legal way. ¤ Different very simplified user personas can be defined for MyCabin: ¤ The platform has a host who provides his meadow, forest, parking space, barn or hut and earns money with it. ¤ And the persons or guests who want to stay overnight in nature safely and want to rent a space for a tent or van Host Persona Joe has inherited his family's farm close to a National Park and tries to run it ecologically sustainable. He loves his home and is proud of his farm. He himself finds it is important that other people know where their food comes from and how it is produced. Guest Persona Jenna lives and works in the city and uses every opportunity to escape the hustle and bustle and recharge her batteries in nature. She loves the simple things and likes to set off spontaneously while travelling, discover new hiking routes and relax in the evening by the campfire. She has her own camping equipment and her dream is to own her own van. When creating a Persona ¤ The more tangible the persona, the better. ¤ Visualize it, use real pictures to represent your persona. ¤ Focus on details that are relevant for your idea. ¤ Always remember: This is just the starting point. Your user persona may change as you go through the challenges! Customer Validation - Customer Validation Interview ¤ serves as a guideline and template for the structure of an interview. ¤ Your assumptions can only be validated by interviewing your potential customers face-to-face. To conduct an interview successfully, a lot of experience is needed and it requires a learning process. ¤ Jaime Pabon has developed the template. It takes several interviews before the right information can be worked out. Validation of the customer and the market ¤ iterative process (get out of the house and out of your comfort zone) ¤ markets and consumers can change over the years - thus, it’s good to check and validate even in established business. Do you know the Kodak story? The Kodak story Customer Validation methods Customer validation is a crucial process to ensure that a product or service aligns with the needs and expectations of its target audience. This involves systematically testing assumptions about the market and customers. Common methods of customer validation include: ¤ Customer Interviews: Direct conversations to understand needs, problems, and gather feedback. ¤ Surveys: Collect broader customer insights through structured questions. ¤ Landing Page Tests: Gauge interest via a page prompting actions like sign-ups or pre-orders. ¤ Prototypes/MVP Tests: Early product versions for feedback on usability and value. ¤ Pre-Order Campaigns: Test market interest and willingness to pay through pre-sales. ¤ A/B Testing: Compare two versions to see what resonates more with customers. ¤ Focus Groups: Small group discussions and product testing for detailed insights. https://www.honestly.de/blog/ kundenbeduerfnisse-erkennen/ ¤ Pilot Launches: Small-scale releases to test market response. https://aloa.co/blog/what-is- customer-validation https://www.shopify.com/blog/ ¤ Observational Studies: Watch customers use the product to learn about behavior. customer-validation ¤ KPI Measurement: Track metrics like conversion or retention rates to validate demand. Market validation methods Market validation is the process of determining whether there is a demand for a product or service in a target market. This involves gathering feedback from potential customers to ensure that the product or service meets their needs and that they are willing to pay for it. ¤ Surveys: Collecting quantitative data from a large sample of your target audience to understand their needs and preferences. ¤ Interviews: Conducting one-on-one conversations to gain in-depth qualitative insights into customer attitudes and behaviors. ¤ Focus Groups: Facilitating group discussions to gather diverse opinions on your product or service concept. ¤ Prototyping: Developing a prototype or mock-up of your product to collect hands-on feedback from potential users. ¤ Minimum Viable Product (MVP): Launching a simplified version of your product or service to a limited audience to gather real-world feedback and iterate based on the findings. https://www.growthmentor.com/glossary/market-validation/ https://trymata.com/blog/what-is-market-validation/ 12/11/24 Customer: Market Research and Validation ¤ Recap ¤ All about the customer ¤ Target Group - customer segment ¤ Customer Journey ¤ Persona ¤ Your task for next time ¤ Key Learnings 51  Your task for 18/11/2024 ¤ Develop ONE Persona for one of your value proposition canvas, be as specific as possible, and yes, be creative! Give the persona a name, profession, family life, hobbies, attitude, etc. ¤ draw a customer journey based on the value proposition and the persona covering all stages and aspects of the different stages https:// www.strategyze r.com/library/ the-value- proposition- canvas 52 12/11/24 Customer: Market Research and Validation ¤ Recap ¤ All about the customer ¤ Target Group - customer segment ¤ Customer Journey ¤ Persona ¤ Your task for next time ¤ Key Learnings 53  Take Home Messages ¤ Customer-Centric Approach: Focus on understanding customer needs, preferences, and behaviors to tailor products, services, and marketing efforts effectively. ¤ Qualitative vs. Quantitative Research: Both methods are essential for comprehensive market research, with qualitative providing in-depth insights and quantitative offering statistical analysis. ¤ Customer Segmentation: Identifying distinct customer segments (demographic, geographic, psychographic, technographic, behavioral, needs-based, and value-based) helps create targeted solutions and strategies. ¤ Customer Journey Mapping: Understanding and optimizing touchpoints throughout the customer journey—from pre-purchase to post-purchase— enhances customer experience and loyalty. ¤ User Personas: Creating detailed and tangible personas enables the development of user-oriented solutions. Personas may evolve as more insights are gathered. ¤ Customer Validation: An iterative process involving direct engagement with potential customers to validate assumptions, refine offerings, and adapt to changing market needs. ¤ Flexible Business Models: Adapting models to suit diverse customer needs, such as offering subscriptions or customizable options, ensures long-term relevance and competitiveness. ¤ Tailored Communication and Marketing: Leveraging customer data to create resonant marketing messages and selecting appropriate communication channels boosts customer engagement. ¤ Decision-Making Units (DMUs): Especially relevant in B2B, understanding all stakeholders involved in purchase decisions ensures comprehensive solutions that meet diverse needs. ¤ Continuous Adaptation and Validation: Regularly revisiting customer and market needs, even for established businesses, helps maintain market fit and prevent obsolescence (e.g., Kodak story). 54 Next time - 26.11.2024 ¤ Business Planning & Strategy 55