Program Objectives

“A fledgling business is far more likely to succeed when an idea, good business plan, and an entrepreneur are matched with mentors who have proven experience.” Founders, MIT Venture Mentoring Service. This captures the essence of what the Market Validation Program (MVP) is all about. MVP is modeled after the MIT service. If you delete the word fledgling, then you have any business that wishes to significantly improve revenue. If you replace entrepreneur with business person, then you have anybody who wants to enhance their revenue. If you replace mentors with Appleton Greene Consultants, then you have AGC’s MVP: “Any business is far more likely to succeed when an idea, good business plan, and a business person are matched with consultants who have proven track records.” Mr. Christie, Creator, AGC MVP.

The following list represents the Key Program Objectives (KPO) for the Appleton Greene Market Validation corporate training program.

Market Validation – Part 1- Year 1Appleton Greene

  1. Part 1 Month 1 Introduction & Overview – 1. Introduce all program participants, including Appleton Greene personnel & company representatives. 2. Review MVP content, principles, culture and process. 3. Discuss learning goals for the day. 4. Define “Market Validation”. 5. Discuss the four core principles of the MVP. 6. Review the three levels of Market Validation. 7. Encourage company participants to shift their thinking out of their comfort zone. 8. Capture some thought leader principles, including Paul Singh’s default state of a startup, Steve Blank’s definition of a startup, and Ralph Turfus’ thoughts on startups, where “startup” may include any new business initiative in a well-established business. 9. Overview of all 24 MVP modules. 10. Questions, discussion and active participation with in-class exercises.
  2. Part 1 Month 2 Market Type – to determine what type of market the business is operating in, based on the definitions of market type provided by Steve Blank, and the source of innovation the company intends to exploit. In The Four Steps to the Epiphany, Steve Blank states: “Market type changes everything. Each type of market has very different requirements for success.” We explore the five different market types, including notable examples, and each company then analyzes their market to determine which type fits best for their market. Innovation source looks at where each company’s innovation came from – the back story, the nature of the innovation. We address questions like: are you changing the way the market operates? Or are you bringing a new or repurposed technology to market to solve an unsolved problem? By providing a simple two-way matrix, with market innovation on the vertical axis and technology innovation on the horizontal axis, each company discovers where their innovation sits. For example, a patent pending technology that is highly innovative may have a corresponding high level of market innovation, perhaps in its pricing and channel strategies. Such an innovation typically takes a long time to get to market, costs a lot of money, and has a high degree of risk. In contrast, a “me too” innovation may not be well differentiated, either in terms of technology or market innovation. It may get to market quickly and cheaply, but it will have lower barriers to competitors who want to copy and compete head-on. By comparison, the highly innovative company has high barriers to competition. We explore actual examples that the participant companies bring to the workshop. At the end of day two, companies will have clearly defined their market type and innovation source.
  3. Part 1 Month 3 Positioning Statement – Positioning is the essence of how you enter the market. Despite this well-established business axiom, established businesses who participate in MVP are surprised to learn that they may have been in the market for a decade or more and never understood their positioning! In today’s workshop, we introduce you to positioning, your positioning statement and value chains. Positioning may be the most important thing we do to prepare your business for market entry, or to reestablish a market you have already entered. The outcome of the day is how you position your product or service in the market. To quote Geoffrey Moore from his seminal work, Crossing the Chasm, considered by many to be the bible of technology marketing, speaking on positioning. “Your business goal is to occupy a space in your customer’s head, so that they value your solution above all else, and they will pay you handsomely for your solution.” Moore then offers up the following on the positioning statement: “The positioning statement is short, sweet and memorable, so that you occupy a space in your prospective customer’s crowded head.” We then introduce company participants through the positioning statement three-step process: 1. Hypothesis creation; 2. Customer discovery; and 3. Minimum viable product testing. We also introduce the three key concepts of a positioning statement: 1. Pain; 2. Value; and 3. Differentiation. Before we create positioning statements, we need to know for whom each company is delivering value and that all depends on their value chain. We introduce a simple model, illustrated with the wheat in the field as the start of the value chain that results in a sandwich, with value generated at each step in the chain, including a commensurate price increase. For example, wheat may sell for pennies per bushel and sandwiches for $10 each. Companies analyze their value chain to determine which type and where they are in this chain. The five types of value chains are introduced and examples of each are provided: 1. Direct to customer or B2C; 2. Intermediary or two-sided; 3. Channel; 4. Product roll-up; and 5. Multi-faceted.
  4. Part 1 Month 4 Market Segmentation – We explore how to segment each company’s target market and pull out of that their ideal customer profile. A market segment is defined, as is the process of market segmentation. Using the electric car as an illustrative example, we segment their market by geographical and demographic attributes. We then look at an example from an established and successful medical device company. By the end of this module, each company will know how to chart their market segmentation and they will have a word picture of their sweet spot customer. Furthermore, they will have insight on how to access that sweet spot.
  5. Part 1 Month 5 Positioning Details – Taking the learnings from the second month, we now build up the positioning statement line-by-line for each company, exploring the details of how they position themselves in the market place. Based on Geoffrey Moore’s prescribed and proven framework, we detail positioning in to a definitive six-line statement. This statement is considered a draft until it is proven in the market and the expectation is that it will require considerable revisioning over an extended period of time. Prior to getting in to the mechanics of building each statement, we review tips on how to create meaningful and memorable positioning statements. Revisiting Module 3, we expand on the three core elements of positioning: 1. Pain; 2. Value; and 3. Differentiation, by breaking this down further in to two detailed elements for each of the three core elements. Put simply, we follow this outline, modified from Moore’s: 1. For your specific customer in your primary target market segment. 2. Who need to resolve a clearly-defined pain or realize a clearly-defined gain. 3. Product XYZ fits in to this specific product category. 4. That provides a key value that directly addresses the pain point described in line 2. 5. Unlike key competitor ABC who is the current leader in this category. 6. Our product delivers this key sustainable competitive differentiated benefit. 7. Our Company also provides whatever else may be needed to complete the MVP as a whole product. Note that line 7 is optional and only applicable for products or services that have evolved from Minimum Viable Product to whole product, which we will discuss in a latter module.
  6. Part 1 Month 6 Value Propositions – Value propositions build off a well-constructed positioning statement. In other words, value propositions are relatively easy to generate from a good positioning statement and the converse is also true. Whereas one positioning statement is required for each core business opportunity, multiple value propositions are required to address the multiple buying influences, each with different needs. Three key buying influences are discussed: 1. User buyers; 2. Technical buyers; and 3. Economic buyers. User manager buyers will also be discussed, for those with more complex institutional sales opportunities. The concept of three different buying influence “hats” is discussed – how a consumer buyer puts on each of these three different buying hats depending on where they are at in their buying process. These three buying influences are then super-imposed on each company go-to-market approach. If the company is targeting multiple markets, then the number of value propositions increases commensurately. For example, if three markets are targeted, then a minimum of nine value propositions need to be created. Incidentally, this is why we recommend that each company only target one market at a time and leaves the others for later. The following value proposition framework is provided. It is derivative from the positioning statement: 1. We believe that our target market, as defined in line 1 of the positioning statement. 2. Should be able to address their key pain or gain point as defined in line 2 of the positioning statement. 3. By some specific measurable amount, which may be a qualitative key performance indicator or a quantifiable return on investment or a nerve that is hit. 4. Through our unique ability to deliver a specific benefit, as defined in line 4 of the positioning statement. 5. As a result of our unique differentiated capability as defined in line 6 of the positioning statement. 6. For an investment of approximately the target sales price for this product or service. An example from a successful medical device company is provided. The participating companies then draft their own value propositions, which are drafts until they have been validated in the market.
  7. Part 1 Month 7 Return on Investment Return on investment builds off the value proposition for the economic buyer. We explore this rigorously, with an established framework for the ROI calculator, using the same medical device company example. If quantification of ROI is not possible, then we ask participants to consider other ways to compare the before and after experience of their key customers. For example, what Net Promoter Index does the company’s product or service generate? Or what satisfaction level, on a scale of 1-10, did the customer experience in their before versus after state? By the end of this module, participants should know if they offer a good ROI or a compelling reason to buy. They also should gain insight on their pricing, since these calculations help to determine if the price may be too high or too low. Finally, how quickly do customers purchase and where in the sales process must ROI be established? All these questions and more are answered. Note that this module flows smoothly from a well-done economic value proposition, which in turn is relatively easy if the positioning statement was well done.
  8. Part 1 Month 8 MVP – Minimum viable product (MVP) is presented from the perspective of Eric Ries, summarized as follows: “Early adopters are looking for a solution that solves a core problem and no more. They are OK with incomplete products. A minimum viable product has just those features, and no more, that allows you to ship a product (or service) that resonates with early adopters, who will pay you something and/or give you meaningful feedback. You can get away with this because early adopters are forgiving of incomplete products.” MVP is the embodiment of your vision. Beta tests on the MVP are how you learn if your early adopters share your vision. The scientific method ensures these lessons are systematic and accurate. For example, an ethics-approved clinical trial protocol on beta prototyped medical devices, is designed to establish safety and efficacy. Given that we are now at the end of the first one third of the Program, we connect the dots on positioning, value propositions and MVP. We also summarize the one key learning for each of four major topics: positioning statement, value propositions, segmentation and minimum viable product. We review the homework that should by now be completed for each of the eight modules, which constitutes the first third of what will become the company go-to-market plan.
  9. Part 1 Month 9 Opportunity Size – Defining the size of your opportunity is crucial. Participants will learn how to size their total market, the portion of that which is addressable, and their realistic expectations for revenue in their first few years following market entry. A simple arithmetic formula is provided and various examples illustrate the concept and the associated mechanics. The financial implication of this analysis is discussed: when does the opportunity reach the break-even point? Is the opportunity worth pursuing, given the time, money and risk required to exploit it? What else can you learn?
  10. Part 1 Month 10 TALC – The Technology Adoption Lifecycle Curve (TALC) was first described by Geoffrey Moore in Crossing the Chasm. It is derived from a traditional product lifecycle curve and from Roger’s Law of Diffusion of Innovation, which recognizes a tipping point once 16.5% of the market opportunity is captured. Moore built on these concepts and added the important existence of a chasm, or a discontinuity in the demand curve. We talk about why this happens, tie it back to the level of innovation from month #2, and what participants can do to manage through the different stages of technology adoption. Diverse analogies are provided, to the physics of bowling pins to the tumult of the Second World War. By the end of this module, participants should have a good idea of where they are on the TALC, how to move themselves up and along the Curve, and an estimate on the size of their chasm.
  11. Part 1 Month 11 Customer Development – Referencing Steve Blank’s “The Path to Epiphany”, chapter 2 – The Customer Development Model, we look at the key role of customer development in the market validation process, and introduce the first step in this development process: customer discovery. The discovery process is tied into the early stages of the TALC, where innovator customers accept, test and debug incomplete products. We then push forward to customer validation, which provides an introduction to business modeling – essentially, is the offering profitable – will customers happily pay a price that generates a handsome profit? Product development is discussed as a companion to customer development and the differences are contrasted. By the end of this module, participants will have clearly described their Top Six hypotheses, which require discovery and validation with their prospective customers.
  12. Part 1 Month 12 Ideal Customer – The ideal customer is in the sweet spot – the proverbial low-hanging fruit who will embrace and adopt your new product. We provide an overview of demographics, sociographics and psychographics to describe these ideal customers. Participants generate a mind map of their ideal customer, using keywords to paint a picture and capture the various buyer personas. This work cycles back to month 4 and the segmentation exercise, as well as the value propositions drafted for various buyer types.

Market Validation – Part 2- Year 2Appleton Greene

  1. Part 2 Month 1 Customer Discovery – Building off Module 11, Customer Development, we dig deeper in to Customer Discovery, applying the principles from Steve Blank. The overall premise of Market Validation is that we create hypotheses and then we test and refine them, through customer discovery, minimum viable product testing, and ultimately, with profitable sales in the market. Customer discovery is simply defined as follows: “Talk to customers to reduce risk and convert hypotheses to facts.” The hypotheses to test were defined through the customer development process in module 11. These provide the foundation for the discovery script. The goal of customer discovery is literally just that: to discover who your early adopter customers actually are, as described in module 12 – Ideal Customer. Participants learn the difference between customer discovery and sales, how customer discovery fits in to the continuum through minimum viable product, their “Who & Why” statement, how to get appointments, what a sample conversation looks like, and how to connect features, benefits and values. The goal of this module is to realize Efficient Customer Discovery, so that participants make the best decisions possible in the shortest amount of time. This is realized when each company’s positioning statement, value propositions, market segmentation, and minimum viable product hypotheses’ revision have reached a point of diminishing returns.
  2. Part 2 Month 2 Sales Process In this module, we get somewhat ambitious and provide a “Selling 101” course in just six hours. Of course, participants have their consultant to guide them and the following month to work the principles. Selling is described as a process, a process to manage opportunities, use a sales funnel and an online Customer Relationship Management (CRM tool) – like HubSpot for small companies and SalesForce for large companies. We help participants identify the stages in their sales cycle, the probability of success at each stage, how long it takes from prospect identification to closing the sale, and how to use their funnel and CRM to manage this. We then describe different funnels for “Direct or Human-to-human” selling versus “Virtual or Machine-to-machine” marketing, including a more detailed sales funnel graphic. Many sales process concepts are discussed, such as complimentary products, up-selling, product extensions, viral loops, gamification, loyalty programs and other elements of digital marketing strategies. All of this takes us to lead generation, where the funnel gets filled. How the funnel gets filled and the number of leads required are discussed, since this depends on the type of business. Sales activity levels, conversion rates, sales funnel exit criteria and sales cycle times are explored.
  3. Part 2 Month 3 Funnel Filling – Now that participants have some idea what their funnel looks like, they need to focus on filling it, generating leads and working their digital marketing strategy. We explore trends in buying and selling and summarize how dramatically the world is changing. For example, people today buy houses and cars online without any human-to-human interaction, effectively completing the entire commercial transaction dealing with robots. To further illustrate these phenomena, consider that in 1990 75% of sales processes were driven by a sales person – the superstar with relationships, skills and tenacity (as well as well-polished shoes). By 2000, this number dropped 15 percentage points to 60% and by 2013 it had dropped to just 25%. In its place are sales and marketing tools, systems, methodologies and processes. Virtually gone is luck, which was 20% in 1990 and only about 2% in 2013. We do not yet have data for 2020, but we know the trend continues in the direction it has been moving since the new millennium. This means that in the 2020s we should expect sales to become almost entirely marketing process driven. What this means for companies is that they need to have well-developed digital marketing strategies now and invest heavily in them for the near future. It also means that sales and marketing activities have to be well integrated and that opportunities will appear much later in their funnel. Key metrics will become, well, key, as stated succinctly by management guru Peter Drucker: “You cannot manage what you do not measure.”
    The relevance of how, why and when metrics is explained in some detail. Then the concept of “Buyer-Focused Content Marketing” is described, since this is foundational to web-based marketing and digital marketing strategies. This module then provides a clear example of an actual email campaign, including all five essential steps. Participants then brainstorm how to generate leads, as a group and then for their own companies. We then take a few breaths and review how all these concepts in the module tie together and how this module builds off the prior modules, especially segmentation, ideal customers, and target marketing.
  4. Part 2 Month 4 Business Model – The business model has a place of great importance in any company. By way of analogy, if your business rested on a three-leg stool, then the three legs are strategy, organization and technology. The seat of the stool is the business model. Business models have been shown to dramatically outpace product or marketplace innovations or operations innovations, achieving compound annual growth rates over five years of 5+% versus just -1 to +1% for these other types of innovations. Business model is defined simply as to how all parts of the company contribute to making money. The model is then broken down in to the nine building blocks in the business model canvas described by Osterwalder and Pigneur in their seminal book: “Business Model – Visualizing your Business”. An example of the Apple iPod business model is reviewed. Then each building block is described and the participants create their own canvas, block by block: Customer Segments, Value Propositions, Channels, Customer Relationships, Revenue Streams, Key Resources, Key Activities, Key Partners, and Cost Structure. Participants are asked to prepare their 11 x 17-inch BMC (Business Model Canvas) for presentation in two months at the next BMC session. To introduce this idea of pitching, they are given a grab-bag item and asked to pitch it in what is known as the “Fun Pitch”. This also prepares them for their five-minute corporate pitch, to be delivered at the next session in one month.
  5. Part 2 Month 5 Company Pitch – Participants are encouraged to think about how to deliver a passionate pitch clearly communicating their business opportunity to any audience. By taking the combined output of the program materials and distilling it down in to a clear and cogent five-minute pitch, they create the opportunity to get others on board, inspiring employees, customers, contractors, partners and investors to get involved. The five-minute pitch is positioned on a conversation continuum that begins with customer discovery, continues through their 17-second elevator pitch (also known as their positioning statement), and finally their five-minute pitch, which is intended to earn the right to a 20-minute presentation. By presenting to their peers and getting peer-reviewed feedback, everyone quickly learns how to improve their pitch, which they do immediately. They then get a second chance to pitch, with feedback from everyone in their break-out group. This feedback is then incorporated into the final pitch to everyone. Evaluations are based on delivery, content, the team and why should we believe they will succeed, and quality – the passion they deliver with.
  6. Part 2 Month 6 BMC Presentations – Following through on the work done in year 2, module 4, participants have the opportunity to present their business model canvas and get feedback from their peers. This is in many ways the essence of the Program, since it pulls together many or most of the core Program concepts: target customer, value propositions, revenues versus costs, key partners, activities and resources, customer relationships, and channels. The BMC presentations are not evaluated but each peer and consultant get to ask questions of the presenter and offer an opinion as to whether they understand how this model will deliver profitable returns to each company.
  7. Part 2 Month 7 BMC Testing – We assume that the draft Business Model Canvases are actually at this stage just an elaborate set of hypotheses. The challenge now is to determine who factual or presumptive each building block is and then set out to increase the probability that it is actually factual. Ultimately, customers will decide if the model is valid, by buying the product or service, and happily paying the profit-generating price. The process for converting BMC hypothesis to fact is based on Steve Blank’s concept that all startups are in search mode. The same can be said for new opportunities in established companies. Therefore, we revisit the customer development process, looking at how the Canvas is posted on the wall, key people get involved in creating the Canvas, which is thoroughly vetted through the customer discovery process, and key assumptions are then revised to more closely resemble facts. Over time, many canvases will be created, because the nature of the customer development process is that it is iterative and may need to be done many, many times. A complex example from the life sciences industry is reviewed, so that participants can learn from their mistakes, including how their Stanford-based team did not understand the role of Congress regarding FDA-regulated diagnostic cancer screening products. By the end of this module, participants will have identified the percent probability that each BMC building block assumption is factual and will understand the process to convert guesses to facts (or increase their probabilities of factuality).
  8. Part 2 Month 8 Goals & Plans – Six-month planning is introduced, accompanied by three-month goal setting – essentially a quarterly review process – what did you do the last three months and what will you do the next three months? Time is a business executive’s most precious resource and greatest constraint if not well managed. Steve Covey’s “Seven Habits” “Urgent versus Important Chart” is illustrated, with the suggestion that moving out of the fire-fighting quadrant and in to the thinking/planning/then doing quadrant, is highly desirable. Alignment is highlighted as a key outcome from good planning – perspectives are aligned for all stakeholders – staff, investors, board members and the executive team. This ultimately takes considerable pressure off the CEO and other executives. The six-month plan is characterized with a current situation assessment at the beginning and SMART – specific, measurable, accountable, realistic and time-framed – goals to strive for 3 – 6 months out. An illustrative triangle shows how time, work and resources need to be balanced or something has to give. Most startups and many companies never have enough resources or time, so work is over-allocated and often does not get done. The whole group brainstorms critical activities over the next six months and then each participant does the same exercise. A rigorous self-assessment establishes where each participant is in the TALC, milestones completed in the Customer Development Process, which milestones may be ticked off for enterprise or digital medial companies, assesses company status on half-a-dozen key parameters, and assesses the CEO on ten key parameters. By the end of this module, participants have defined their top SMART goals, their prioritized Top Three List, and how best to move their company forward.
  9. Part 2 Month 9 Critical Path – Critical path is defined simply as the fastest way to positive cash flow. While many companies use critical path processes to define when their new product will launch in their market, they fail to pursue the complimentary process, which is how long will it take to generate profits. A simple hand-drawn example is shown and software tools like Microsoft Project Plan are mentioned. Participants then take their priorities established in module 8 and apply milestone principles to define their critical path. This process considers interdependencies, resource requirements, interim deliverables, constraints, metrics and accountabilities. Examples are provided that are universal, such as “first paying customer” or “hire inside sales person.” By the end of this module, participants can easily see what must get done, who is responsible, what the deliverables are along the way, when each milestone will get done, and what the process will be for checking in and updating regularly.
  10. Part 2 Month 10 OPP – One-page plan by Verne Harnish, described in his book “Mastering the Rockefeller Habits” is explained and applied to the exercises over the previous two months. Harnish defines the Rockefeller Habits: Priorities: Top Five for the quarter and the year for each person and the company. Data: Per person daily and weekly key metrics. Rhythm: Daily, weekly, monthly, quarterly and annual meetings. A simple planning maxim is provided: “in planning, the middle is gone”. Know what you must do in the current quarter and have a clear vision where you want to be in a decade. Further, alignment beats vision. In other words, no matter how compelling your vision may be, if everyone is not easily aligned to it, then the vision is essentially worthless. To make this happen, a tool is provided, known as the planning pyramid and the one-page plan (OPP). The foundation of the pyramid is core values, with purpose on top of that, followed by 3-5 year targets, then annual goals, quarterly actions, weekly schedules and finally, daily to do lists with individual accountability. Each of these levels in the pyramid is then described in more detail and an easy to understand example is provided from the life sciences manufacturing industry. As a “bonus”, a generic milestone chart is provided for any startup, broken down by past epochs (idea, incorporation, prototype), current epoch (Market Validation, first sale, $1M in revenue), and future epoch (market segment domination, $5M in revenue, liquidity event).
  11. Part 2 Month 11 MV Journey – The market validation journey is reviewed, module by module, highlighting the core concepts, including market type and level of innovation, positioning statement (aka 17-second elevator pitch), value propositions, minimum viable product, market segmentation, market or opportunity size, technology adoption life cycle curve, customer discovery, sales funnel, go-to-market plan, five-minute pitch, business model canvas, six-month goals and finally, the one-page plan. The instructor connects the dots from each of the 23 modules and ties them all together in a shared language, used universally around the world. Action items for the coming months and years are outlined for participants, including the role(s) for the Appleton Greene consultant. The Go-To-Market (GTM) Plan is outlined and a well-developed example is reviewed. Participants are challenged to review and finalize their GTM Plan for presentation, discussion and submission at the upcoming month 12 closing session, since this is the final deliverable for the Program.
  12. Part 2 Month 12 GTM Plan – Each participant presents their Go-To-Market (GTM) Plan for peer input and discussion. They are expected to come to this final session with a close-to-final version, that will be fully finalized within two weeks of this close-out session. The instructor and consulting mentors will provide constructive critiques. To be considered complete, each GTM Plan must include all requisite elements, as summarized in this document. If any of the 24 modules and their key sub-modules is missing, then the participant must complete this in order to graduate as an Appleton Greene Market Validator.