Chris Burry on StartSmart event Models4Business 02.2012.pdf

Models4Business
16 th -17th February 2012 in Tallinn.
<strong>Chris</strong> <strong>Burry</strong> (US Market Access Center)
The Voice of the Customer
www.start-smart.me/models4business

The Voice of the Customer:
Lessons from the Field
<strong>Chris</strong> <strong>Burry</strong>, SVP Strategy
US Market Access Center

The Voice of the Customer: Where does it fit?
Leveraging the Business Model Canvas
• Value Proposition
What value do we deliver to the customer?
Which one of our customer’s problems are we helping to
solve?
What bundles of products and services are we offering to
each Customer Segment?
Which customer needs are we satisfying?
• Customer Segments / Channels
It seems so obvious… but it is HARD to do right

A quick introduction: Who is <strong>Chris</strong> <strong>Burry</strong>?
Serial Entrepreneur
1st Company founded when I was 13 years old. Sold when I
was 18 for $1,000 USD (which seemed like a lot…)
2nd Company founded in 1982 – Application development
for the Apple IIe and IBM PC. Sold in 1984
3rd Company co-founded in 1991 – Early CRM company.
Sold in 1993 to EDS
4th Company co-founded in 1999 – Today has 10,000+
people; $1B+ in annual revenue
5th Company co-founded in 2010 – Stay tuned….

A quick introduction: Who is <strong>Chris</strong> <strong>Burry</strong>?
A Consultant
10 years in national politics working for Al Gore and others
(political campaigns are the ultimate startup)
5 years at EDS
4 years at Andersen Consulting (now Accenture)
9 years at Avanade (1 st on the ground in multiple countries)
2 years with the US Market Access Center
Global Citizen
Lived in the US, UK, France and Finland
Projects in more than 20 countries

A quick introduction: What is the USMAC?
The US Market Access Center
Founded in 1995 by San Jose State University
Non-profit that helps non-US companies expand globally
with a focus on Silicon Valley
800+ companies helped in the last 17 years
60+ current resident entrepreneurs
40+ non-resident clients
90+ mentors in ICT/Web/Cleantech
Active programs in Asia, Europe and Latin America

The Voice of the Customer: Why?
A long time ago in a galaxy far, far way….
• When I was “the new kid” with Andersen Consulting, I was
assigned to a customer with Vic Riden, one of the most
successful partners in the firm. He became my coach, my
teacher, my mentor, my sensei.
• I learned an amazing amount of things from Vic.
Lesson # 1 – If you don’t already have
a mentor, get one right now

A side note on Mentors: They really matter
In 2011, researchers at Stanford and
UC Berkeley released the Startup
Genome Report
• Data from 650+ startups was analyzed,
including 160 funded companies
• Fundraising across the four stages of
development in their model was
examined
• The role of mentors was one factor examined and the message is
clear…
No mentors = no money raised when needed to scale

The Voice of the Customer: Why?
Learning from the master
• I worked with Vic as he convinced a major bank that they
needed to undertake a $100m project (which we won). At a
dinner, I asked Vic to share with me the secret of his success.
• Vic’s response surprised me with its total simplicity.
Lesson # 2 – Just remember, they
have lots of money and we want it…
Entrepreneurs need to be about making money!

The Voice of the Customer: Why?
Vic went on to add…
Lesson #3: … but just because we want it
doesn’t mean they have to give it to us.
Lesson # 4: Our job is to make them want to give
it to us…
Lesson #5: … and be really happy they did…
Lesson # 6: … because we let them define value,
not us.

The Voice of the Customer: Reality Check
• Entrepreneurs have a unique
ability to create their own
reality
• I like to call this a “Reality
Distortion Field” (RDF)
• There is a real risk that
your personal RDF makes
you believe that your
customers value what you
are selling more than they do

The Voice of the Customer: Reality Check
• We have all seen the Reality Distortion Field in Action
We are going to be bigger than Google in 2 years
The size of the market is HUGE… we will only capture .05%
of the market and make $1B
And my all time favorite…. We are losing $.02 on every
transaction but we will make it up on volume
Lesson #7: Your Business Model, won’t work if it is
not grounded in reality

The Voice of the Customer: Beating the RDF
• Russ Fraden, CEO of Social Shield ($2m seed round and $10m ‘A’
round) says “You don’t have a business unless”
There are real people
With real money
Who have a real problem (need, or want)
And they are willing to pay you to make their problem go
away
Lesson # 8: The Customer, not you
decides if you have a business

The Voice of the Customer: Beating the RDF
• How do YOU know? For your product or service?
Are there are real people?
With real money?
Who have a real problem (need, or want)?
Are they are willing to pay you to make their problem go
away?
Lesson # 9: If customers won’t pay
to make their problem go away,
you don’t have a business

The Voice of the Customer: Beating the RDF
• But wait! What about advertising supported applications,
websites and the like?
You CUSTOMER is not the end-user, your customers are
buying the advertising.
You are finding ways to get people to watch the advertising
If you have a “freemium” model, then you have two
customers, the advertisers and the end-users
Lesson #10: Be clear on who is your customer and
Lesson #11: how they define value (not you)

The Voice of the Customer: Going Lean
• Applying the principles
of the Lean Startup, you
can bring the voice of
the customer into the
process
• The “Measure” and
“Learn” phases of the
cycle create natural
points for inclusion of
input from the customer
But be careful you don’t bring in your own RDF

The Voice of the Customer: A Great Example
• Mobile Gaming Company Business Model
Attract very larger number of users
Relatively low Average Revenue per User and lower lifetime
value of user
Requires them to capture and hold the user’s attention to
keep them in the app
• What was needed
Needed to find a way to limit investment in games that
won’t hold attention
Focus resources on the ones that will

The Voice of the Customer: A Great Example
• Finding a new way of thinking about mobile gaming
Pattern analysis shows that games go viral in the first 14
days, or they don’t go viral at all
“Fast to Die” – if a game doesn’t show signs that it is going
viral during the beta… pull the plug. Don’t waste any more
time on the product.
The customer is telling you that they don’t like it
• Does it work?
$5m+ raised
50m+ downloads since in less than 3 years

The Voice of the Customer: Our Results
• In 2011 we piloted a new program that creates opportunity for
direct feedback from customers and partners in Silicon Valley
54 startups from Singapore, Korea, Spain & Russia
participated went through education and qualification
Total of 16 moved on go through a structured process of
aligning to customer defined value
The 13 startups are doing business with, or have terms
sheets with:

The Voice of the Customer: Our Results
• Questions?
• Comments?
• Care to share your own experiences? (Good and bad)
• Happy to talk one-on-one with anyone

San Francisco
Palo Alto
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US Market Access Center
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San Jose, CA 95113
Contact for the Nordic Region
Adiba Cremonini
Vice President International Relations
Phone
+1 (917) 767 0077
Email
adiba@usmarketaccess.com