1
00:00:02,180 --> 00:00:05,220
- [Instructor] This is the
video lecture for Products,

2
00:00:05,220 --> 00:00:06,293
and it's part two.

3
00:00:10,090 --> 00:00:13,530
Next, I'd like to talk to you about MVP,

4
00:00:13,530 --> 00:00:16,213
which stands for minimum viable product.

5
00:00:20,170 --> 00:00:24,240
So it is the version of a new product

6
00:00:24,240 --> 00:00:26,983
that will allow you to do two things,

7
00:00:28,160 --> 00:00:30,850
learn and measure what works,

8
00:00:30,850 --> 00:00:33,320
learn about your product,

9
00:00:33,320 --> 00:00:35,660
get feedback from your customers

10
00:00:37,640 --> 00:00:41,280
with the least amount of time and money

11
00:00:41,280 --> 00:00:43,990
and effort put forth.

12
00:00:43,990 --> 00:00:48,630
Here are two links to websites

13
00:00:48,630 --> 00:00:51,097
that tell you more about MVP.

14
00:00:55,945 --> 00:00:57,945
So as is suggested here,

15
00:00:59,110 --> 00:01:04,110
MVP should be an iterative cycle.

16
00:01:04,450 --> 00:01:07,423
So you try something out,

17
00:01:08,380 --> 00:01:09,520
you offer it,

18
00:01:09,520 --> 00:01:10,960
you measure it,

19
00:01:10,960 --> 00:01:12,950
you see how it does,

20
00:01:12,950 --> 00:01:14,560
you learn from that,

21
00:01:14,560 --> 00:01:16,410
and then you rebuild,

22
00:01:16,410 --> 00:01:17,900
you re-innovate,

23
00:01:17,900 --> 00:01:20,580
you put your learnings into account

24
00:01:20,580 --> 00:01:21,810
and re-offer

25
00:01:21,810 --> 00:01:23,693
and around and round that you go.

26
00:01:24,910 --> 00:01:27,203
So an example of this might be,

27
00:01:28,260 --> 00:01:31,710
if you have a food business,

28
00:01:31,710 --> 00:01:35,590
let's say that you want to make Thai food

29
00:01:35,590 --> 00:01:36,830
or something like that.

30
00:01:36,830 --> 00:01:41,280
So rather than invest in a huge

31
00:01:43,380 --> 00:01:46,960
paying rent and buying
an oven and a stove top

32
00:01:46,960 --> 00:01:48,510
and a hood,

33
00:01:48,510 --> 00:01:53,510
you might want at first to
just try to cater an event,

34
00:01:55,340 --> 00:01:57,110
maybe with some friends,

35
00:01:57,110 --> 00:01:58,887
make a few dishes,

36
00:02:03,540 --> 00:02:05,277
see how they like it and then measure.

37
00:02:05,277 --> 00:02:06,350
"What did you like?

38
00:02:06,350 --> 00:02:07,670
How spicy was it?

39
00:02:07,670 --> 00:02:08,760
Was it good?

40
00:02:08,760 --> 00:02:10,460
What was your favorite?

41
00:02:10,460 --> 00:02:12,160
Would you buy this?"

42
00:02:12,160 --> 00:02:14,410
And then take that feedback

43
00:02:14,410 --> 00:02:18,600
and then maybe once you've
sort of perfected that

44
00:02:18,600 --> 00:02:20,900
move to a food truck.

45
00:02:20,900 --> 00:02:23,720
So here, you're mobile,

46
00:02:23,720 --> 00:02:26,073
you have less overhead,

47
00:02:31,040 --> 00:02:32,517
continue to learn,

48
00:02:32,517 --> 00:02:33,490
"What did you like,

49
00:02:33,490 --> 00:02:35,050
what did you not like,"

50
00:02:35,050 --> 00:02:35,883
et cetera.

51
00:02:35,883 --> 00:02:37,220
And then finally,

52
00:02:37,220 --> 00:02:40,640
once you feel like you
really have a viable product

53
00:02:40,640 --> 00:02:42,390
that you can scale up with,

54
00:02:42,390 --> 00:02:46,530
then rent restaurant space.

55
00:02:51,820 --> 00:02:53,880
So again, these are other words.

56
00:02:53,880 --> 00:02:57,560
So a minimum viable product

57
00:02:57,560 --> 00:03:02,560
is the smallest thing that you can deliver

58
00:03:02,700 --> 00:03:05,290
that will create value,

59
00:03:05,290 --> 00:03:08,220
and it also gets some of the bonus back.

60
00:03:08,220 --> 00:03:11,760
So you not only get information back,

61
00:03:11,760 --> 00:03:15,270
hopefully, you're getting a
little bit of money back too.

62
00:03:15,270 --> 00:03:18,140
And it's basically, the
idea of start small,

63
00:03:18,140 --> 00:03:22,913
start lean, and then build
from there as you learn more.

64
00:03:25,860 --> 00:03:30,230
So MVP maximizes revenue,

65
00:03:30,230 --> 00:03:32,550
at least for that small item,

66
00:03:32,550 --> 00:03:35,730
as well as really maximizing information

67
00:03:35,730 --> 00:03:39,320
while minimizing cost, effort and time.

68
00:03:39,320 --> 00:03:43,043
And it should also very
much minimize your risk.

69
00:03:48,770 --> 00:03:53,770
The next topic I would like to
cover is the diffusion model.

70
00:03:54,900 --> 00:03:56,470
So this is the idea.

71
00:03:56,470 --> 00:04:01,470
This was developed by Everett
Rogers in the early 1960s.

72
00:04:06,500 --> 00:04:09,950
And he noticed that there was a pattern

73
00:04:09,950 --> 00:04:14,520
of how farmers adopt new technologies.

74
00:04:14,520 --> 00:04:17,590
And here in this graph,

75
00:04:17,590 --> 00:04:22,400
you can think about
time being on the X axis

76
00:04:22,400 --> 00:04:25,930
and Y being the

77
00:04:25,930 --> 00:04:27,390
when folks adopt,

78
00:04:27,390 --> 00:04:31,010
how many people are adopting

79
00:04:31,010 --> 00:04:32,570
or sort of who adopts when.

80
00:04:32,570 --> 00:04:35,850
So you can see at the very far left

81
00:04:35,850 --> 00:04:39,610
that there's a few innovators who try it,

82
00:04:39,610 --> 00:04:43,210
then you get early adopters.

83
00:04:43,210 --> 00:04:46,890
And then in the middle of this bell curve

84
00:04:46,890 --> 00:04:49,750
are the early and late majority

85
00:04:49,750 --> 00:04:53,600
and then at the end are the laggards,

86
00:04:53,600 --> 00:04:56,910
those who are the very last who adopt it.

87
00:04:56,910 --> 00:05:01,910
Now he developed it for
adoption of new technologies,

88
00:05:04,700 --> 00:05:08,330
but it's also been found
to be very effective

89
00:05:08,330 --> 00:05:13,330
in modeling how consumers
adopt and buy new products.

90
00:05:17,990 --> 00:05:19,940
So in this model,

91
00:05:19,940 --> 00:05:23,770
the innovation are those that
really like to take risks.

92
00:05:23,770 --> 00:05:24,860
They like new things.

93
00:05:24,860 --> 00:05:26,540
They wanna try new things.

94
00:05:26,540 --> 00:05:30,210
They will also sometimes ignore norms.

95
00:05:30,210 --> 00:05:31,230
So in fashion,

96
00:05:31,230 --> 00:05:33,880
they'll sort of be a trendsetter,

97
00:05:33,880 --> 00:05:37,253
try things that really
haven't been tried yet,

98
00:05:38,370 --> 00:05:42,820
ignore the fashion norms of the time

99
00:05:42,820 --> 00:05:47,223
and do something that might be
seen as more outrageous, say.

100
00:05:49,440 --> 00:05:52,680
The early adopters then are the ones

101
00:05:52,680 --> 00:05:55,460
that once the innovators did,

102
00:05:55,460 --> 00:05:56,717
they see it, they say,

103
00:05:56,717 --> 00:05:58,240
"This seems cool,"

104
00:05:58,240 --> 00:06:02,660
and are among the next wave to do it.

105
00:06:02,660 --> 00:06:06,370
And they very often become
the opinion leaders.

106
00:06:06,370 --> 00:06:11,370
And they sort of help to set
the stage for further adoption.

107
00:06:13,250 --> 00:06:17,440
So we talked about opinion
leaders like like food critics,

108
00:06:17,440 --> 00:06:20,850
technology critics, bloggers,

109
00:06:20,850 --> 00:06:24,190
or just friends of yours
who are the first ones

110
00:06:24,190 --> 00:06:26,183
to try new things.

111
00:06:27,440 --> 00:06:31,523
So they will often like
help to promote it.

112
00:06:33,950 --> 00:06:38,950
The majority then, the next two,

113
00:06:39,100 --> 00:06:42,143
the two biggest parts of the bell curve,

114
00:06:43,910 --> 00:06:48,700
sort of are the ones that
only start to adopt it

115
00:06:48,700 --> 00:06:51,630
as it becomes more mainstream.

116
00:06:51,630 --> 00:06:55,930
And especially the early majority

117
00:06:55,930 --> 00:06:58,750
tend to be a little bit cautious,

118
00:06:58,750 --> 00:07:01,530
but they can really help to legitimize it,

119
00:07:01,530 --> 00:07:06,530
that once it starts to
be seen, norms change

120
00:07:07,280 --> 00:07:08,870
It becomes the norm

121
00:07:08,870 --> 00:07:13,203
and they help to really
help it go mainstream.

122
00:07:15,890 --> 00:07:20,890
The late majority are those
who tend to be skeptical.

123
00:07:22,520 --> 00:07:25,170
They're on that sort of
the downside of the curve.

124
00:07:25,170 --> 00:07:28,920
They really wait until it
becomes like truly established.

125
00:07:28,920 --> 00:07:32,520
like most people are doing this

126
00:07:32,520 --> 00:07:35,400
and in many cases sort of do it

127
00:07:35,400 --> 00:07:38,683
only as social pressure dictates.

128
00:07:39,660 --> 00:07:40,500
And finally,

129
00:07:40,500 --> 00:07:45,420
there's the laggards who are
much like the late majority,

130
00:07:45,420 --> 00:07:46,710
only even more so.

131
00:07:46,710 --> 00:07:48,513
They're very suspicious of new things.

132
00:07:48,513 --> 00:07:51,500
They're sort of set in their ways.

133
00:07:51,500 --> 00:07:56,220
In many cases, they are
sort of forced to adopt.

134
00:07:56,220 --> 00:07:59,230
So I can think of a case.

135
00:07:59,230 --> 00:08:03,510
I was a laggard with smartphones

136
00:08:03,510 --> 00:08:06,890
and still had a flip phone until just,

137
00:08:06,890 --> 00:08:11,630
I don't know, four years ago or so.

138
00:08:11,630 --> 00:08:15,540
And basically, like so many
of my friends had iPhones

139
00:08:15,540 --> 00:08:17,383
and they worked so much better,

140
00:08:18,370 --> 00:08:21,610
I still had to ask for directions

141
00:08:21,610 --> 00:08:23,470
and like print those out.

142
00:08:23,470 --> 00:08:28,470
And finally, I felt like
I'm so far behind the curve,

143
00:08:29,490 --> 00:08:31,330
I can't hold out anymore,

144
00:08:31,330 --> 00:08:33,060
and I got a smartphone.

145
00:08:33,060 --> 00:08:34,710
And in many cases as well,

146
00:08:34,710 --> 00:08:39,710
these are folks from the
lowest socioeconomic status.

147
00:08:39,710 --> 00:08:44,710
So they can't afford maybe
to have the newest things.

148
00:08:50,240 --> 00:08:55,240
Finally, I wanna talk to you
about the product life cycle.

149
00:08:55,930 --> 00:08:57,460
And this is the idea

150
00:08:57,460 --> 00:09:00,940
that just as humans go through life cycles

151
00:09:00,940 --> 00:09:04,210
and all biological organisms,

152
00:09:04,210 --> 00:09:05,910
that products do too,

153
00:09:05,910 --> 00:09:09,323
and they tend to follow a
fairly predictable pattern,

154
00:09:10,690 --> 00:09:13,920
where they're introduced,

155
00:09:13,920 --> 00:09:15,960
they go through some growth,

156
00:09:15,960 --> 00:09:20,110
they have maturity
where they're well known

157
00:09:20,110 --> 00:09:21,690
and kind of mainstream,

158
00:09:21,690 --> 00:09:26,690
and then a decline when they
sort of go out of fashion

159
00:09:27,390 --> 00:09:31,210
and are replaced by a more innovative,

160
00:09:31,210 --> 00:09:36,210
a newer product that then
starts at the introduction phase

161
00:09:36,850 --> 00:09:40,133
and the sale start to decline.

162
00:09:42,730 --> 00:09:45,300
So I'll just let you read these.

163
00:09:45,300 --> 00:09:48,210
Please take some time to read these,

164
00:09:48,210 --> 00:09:51,190
but this is how the four P's,

165
00:09:51,190 --> 00:09:55,780
they're calling it
distribution instead of place,

166
00:09:55,780 --> 00:09:58,093
but I'll go through each of these slides.

167
00:09:59,170 --> 00:10:03,240
I'll leave them here
and let you read them.

168
00:10:03,240 --> 00:10:06,990
And this is what you do
for each of the four P's

169
00:10:06,990 --> 00:10:10,773
for each stage of the product life cycle.

170
00:10:14,810 --> 00:10:16,483
Here's the one for growth.

171
00:10:21,180 --> 00:10:23,290
Here's the one for maturity.

172
00:10:23,290 --> 00:10:25,513
Feel free to pause and read these.

173
00:10:28,600 --> 00:10:32,320
And finally, here's the one for decline.

174
00:10:32,320 --> 00:10:36,250
So here is really where
you have to re-innovate.

175
00:10:36,250 --> 00:10:39,010
So you have to add new features.

176
00:10:39,010 --> 00:10:44,010
You may wish to just
sell it to a loyal niche,

177
00:10:44,410 --> 00:10:48,720
or it may be a case
where you stop making it,

178
00:10:48,720 --> 00:10:53,720
you liquidate inventory
or find another firm

179
00:10:53,840 --> 00:10:56,853
that are willing to sell it.

180
00:10:59,290 --> 00:11:03,290
So here's a link to a video

181
00:11:05,630 --> 00:11:08,240
that tells more about this.

182
00:11:08,240 --> 00:11:13,240
The guy in this video has
a very sexy, British accent

183
00:11:14,160 --> 00:11:18,520
and much better hair than me.

184
00:11:18,520 --> 00:11:23,520
So hopefully, you'll
enjoy watching him more

185
00:11:23,730 --> 00:11:28,223
than you've enjoyed this video.

186
00:11:31,980 --> 00:11:36,980
And here, you can see the last two graphs

187
00:11:37,050 --> 00:11:39,800
sort of laid on top of each other,

188
00:11:39,800 --> 00:11:44,800
and it's sort of talks
about the product life cycle

189
00:11:45,060 --> 00:11:49,110
laid over the diffusion of innovation.

190
00:11:49,110 --> 00:11:52,170
So you can see that these
sort of mirror each other.

191
00:11:52,170 --> 00:11:55,830
The top is sort of from the supply side

192
00:11:55,830 --> 00:12:00,143
and the bottom is more
from the demand side.

193
00:12:03,840 --> 00:12:07,520
So this is what we did.

194
00:12:07,520 --> 00:12:09,713
Hopefully, these all make sense.

195
00:12:12,390 --> 00:12:13,980
Here is your homework,

196
00:12:13,980 --> 00:12:16,470
and hopefully, that makes sense.

197
00:12:16,470 --> 00:12:17,810
Feel free to pause it.

198
00:12:17,810 --> 00:12:21,283
And I will introduce
this when we discuss it.

199
00:12:24,120 --> 00:12:25,733
This is the end of part two.

200
00:12:26,600 --> 00:12:27,650
This is the last part.

201
00:12:27,650 --> 00:12:29,630
So please do the assessment,

202
00:12:29,630 --> 00:12:32,140
and post it before class.

203
00:12:32,140 --> 00:12:32,973
Thanks.