SmarkIt Business Plan Pivots

While working on my group business plan project, I began to realize that one of the most valuable lessons learned this semester is the ability to pivot early and often. My group met twice per week, and each meeting resulted in numerous pivots based on new findings from our extensive market research. Had the class not ended, we likely would still be pivoting and perfecting our model. Here are some examples of our pivots and their impacts:

1. We changed our name from Smart Parking Grid to SmarkIt. We realized rather quickly that Smart Parking Grid was more of a philosophy than a business name. SmarkIt was derived from mashing the words "Smart" and "Park" together while adding "It" so we could be used a verb similar to when someone tells you to "Google it".
2. We added Quick Response Code (QR-code) scanning as a payment method and also as an alternative option to implementing the entire SmarkIt technology solution. There are some cities who for budgetary or infrastructure reasons would not want to replace all of their meters with Smart meters. Therefore, we thought we could leverage the QR-code scanning to still add those cities as customers.
3. We started off with a focus on Boston strictly and then expanded to all cities in the U.S. meeting certain population criteria for our target market. Of course, we narrowed down our wedge-in opportunities by removing all cities outside of New England based on our geographic location. We felt it was too risky going to investors with only one municipality as a potential customer, even though Boston wast he logical initial target.
4. Originally, we discussed convincing municipalities to give us a small % of Smart meter revenue, which in turn would convince them to slightly raise hourly rates. We decided to change this to the customer paying service and transaction fees so that the cities do not lose out on anything.

Leadership

For my leadership blog, I decided to go outside the box. Rather than address the specific questions in the assignment, I decided to complete a Myers-Briggs Type Indicator (MBTI). The MBTI is a well-known personality and leadership assessment. I had completed one a few years back during my time as an intern at the Pentagon but cannot remember the results. I thought it may be interesting to go through the exercise again and share the results.

My personality type was "ENTP". According to this, I am extroverted, prefer to deal with potential outcomes rather than analyzing tangible outcomes, prefer to make logical decisions rather than value-based decisions, and prefer to go with the flow rather than be structured. This personality profile matches up with the "change-oriented" leadership style. According to the indicator results, my leadership style can be defined as follows: "A change-oriented leader tries to promote exploration of new and better ways of doing things, or tries to uncover hidden potential in people, things, or situations. Change-oriented leaders work towards a better future by trying things that are new and experimental. Although some of their initiatives may fail, others will succeed."

I would say the MBTI gave a pretty accurate description of how I view my own personal leadership style. I constantly am challenging the status-quo and looking for ways to improve upon many things. I am never shy to provide positive or constructive feedback to those in a position of power (i.e. boss, professor, etc.). Sometimes I think that just because I am always looking for feedback (more constructive than positive since I would rather know things I need to improve on), others always are which has certainly gotten me in trouble a time or two in life!

SmarkIt Value Story

It's a cold Saturday afternoon in December in Boston. Jane Doe, single mother of a teenage daughter and six year old son, decided to get some last-minute holiday shopping done. Jane's daughter is at cheerleading practice and there is nobody around to watch her son.

Jane decided she would head over to Newbury Street first. Knowing that parking is usually a nightmare in Boston, particularly the Newbury Street area on a weekend day around the holidays, Jane reached for her iPhone and opened the SmarkIt app. Luckily for Jane, Newbury Street is one of the pilot areas for SmarkIt's smart parking meters. In other words, the parking meters on Newbury Street are wirelessly connected to SmarkIt's servers and allow for advanced reservations at a small premium. Because these meters are tied into SmarkIt's servers, Jane can also see which spots are open and determine when any spots will become open.

To Jane's dismay, she discovered that all spots on Newbury Street were taken. However, she noticed that one of the spots right by her daughter's favorite clothing store was available for reservation in 45 minutes. Seeing that Jane was in no particular rush and lived 30 minutes from Newbury Street, she decided to pay the small premium and reserve her spot. Jane arrived five minutes into her reservation and her spot was waiting for her. Instead of having to walk a few blocks in the cold with her six year old son, she only had to walk less than a block.

Of course the store was packed and the lines were long. Jane underestimated the time she would need in this store and only reserved her spot for 30 minutes. With only five minutes remaining, SmarkIt sent Jane a notification with an option to extend her reservation. Luckily for her, nobody had reserved the spot and she was able to add 15 minutes to her reservation while waiting in line to check out. For only a few extra dollars, Jane was able to find and reserve a parking spot, avoid a far walk in in the cold weather with her young child, and extend her reservation to avoid getting a parking ticket.

SmarkIt's Market Sizing Approach

My team faced a unique challenge in determining our market size. We debated, on more than one occasion, whether we should be determining the market size of the end users (those who would download our application and use it to find parking) or whether we should determine the market size of available parking spots to implement our technology.

Originally, we were focusing our wedge-in on the city of Boston. In that case, we knew there are approximately 7,300 metered parking spots. We were focusing our initial efforts on determining the market size of end users in this case. However, after a few deliberations, we pivoted and shifted our focus to cities that fit a particular description. In this case, we also shifted our market sizing focus to the municipalities that fit our criteria (cities on the east coast with a population between 100,000 and 750,000 that have metered on-street parking). We will also need to of course do some estimates on an end user market but this will be municipality-specific.

All of that being said, our market sizing approach weighs heavily on a combination of demand and targeted selection of winnable market opportunities. The competition will also of course come into play when municipalities decide whether to implement our technology or choose a different method of upgrading existing metered parking. Of course, residents of cities who do not own cars (think students and young professionals that use public transportation) would not be included, but just about anyone else who has a reason to drive into one of our targeted municipalities would be included in our market size.

The true demand of our product is based on the usage rates of the metered parking spots. Cities without a true "parking problem" will not truly have a demand for our product. On the other hand, cities like Boston would present great demand for SmarkIt.

I should let it be known that our market sizing is based on our initial target market. If steady growth and successful implementations are achieved, then there is no reason to not branch out to all cities with metered parking and a true "parking problem".  

Can a Company Survive on Inbound Marketing?

You may likely already know my stance on this from the numerous comments I have made on inbound marketing during Saturday classes and my comments on the HubSport discussion board. While I think it is necessary for a company to implement inbound marketing, I find it difficult for a company to thrive on inbound marketing alone. Notice I said "thrive" and not "survive". 

In my opinion, inbound marketing is great for lean startup. Even for those not adept with social media or blogging, it is fairly easy to setup a Facebook and Twitter account and there are plenty of articles and tutorials on how to effectively use these kinds of tools for marketing purposes. Of course, things like Search Engine Optimization (SEO) likely require a hired consultant and will present a decent upfront cost. Maintaining a social media presence and blogging however should not require much more than a part-time college student. It blows my mind to see companies paying upwards of $75,000 a year to hire someone to manage social media. 

Some mature companies can scale back on outbound and rely more on inbound marketing, but that is due mostly in part to their reputation. Apple is a good example. While they still spend a considerable amount on outbound marketing, Apple has the benefit of an army of unpaid sales staff who dedicate their free times to blogging about Apple's products. Without Apple's reputation however, I would bet they focused more on an outbound strategy. 

One issue I see with inbound marketing is the reliance on people actually looking for your product. The absence of outbound marketing significantly reduces the market size because one can no longer reach those not specifically looking for their product. Losing this customer base results in a loss of impulse purchases that occur due to a successful outbound campaign.

Why Big Companies Can't Innovate

Before I add some commentary on big companies in general, I would like to provide a little discussion on Gerber. I do not think it is the size of Gerber that prevented it from successfully innovating. There are plenty of massive companies who are the on the forefront of innovation (see Google and Apple). I think it is more of the public perception of a company that can stifle its ability to innovate. Gerber has become a proprietary eponym for baby food (similar to Kleenex for tissue). The brand name "Gerber" is so entrenched in consumers' minds with being baby food that penetrating the adult food industry seemed unfeasible. Gerber tried to be innovative, but their own reputation prevented their attempts. Perhaps they should go back to the drawing board.

That being said, I think large companies in general do struggle to innovate. The problem, in my opinion, is that they have a "maintaining the status quo" mindset. A company has been doing things one way for years and it has been very successful and gotten a lot of people rich. They are used to working in a world of certainty. Being innovative would put them in a world of uncertainty. For executives who are feeling the pressure of meeting the demands of board members (and in many cases stockholders), entering a world of uncertainty is certainly not easy or comfortable. These companies that struggle to leave the "maintaining the status quo" mindset will never become ambidextrous in that they will only be able to build on the past and not create the future.

I am not making an excuse for big companies, but rather pointing to a common flaw. The size of a company does not prevent a company from being able to innovate. However, it does potentially make it more difficult. In order for a company to reach proprietary eponym status or get into the status quo mindset, the company must be a certain degree of large. However, this is a classic case of correlation not implying causation!

Smart Parking Grid Persona Pain/Gain

Following up on my earlier post related to the pains and gains the end user may face using the Smart Parking Grid Application, here is an actual persona pain/gain map.

What does a bad day look like?
A bad day could consist of a few different scenarios. For a businessperson, a bad day could start with being late to a meeting due to being unable to find a parking spot nearby. For a vacationer, it could be a woman looking to go shopping on a rainy day and unable to find a spot near the shops. In both cases, neither may even have any spare change in their rental cars to pay the meter!

What are they afraid of?
I think both the businessperson and the vacationer are afraid of not knowing their way around a new city. Parking is only one part of the picture. It may be difficult enough to find a destination, imagine not being able to find parking as well. Now imagine you find that parking spot but it is a few blocks over and it is snowing or raining and you need to find your way back to your destination?

What keeps them awake at night?
I am going to skip over the vacationer for this since there shouldn't be much causing that kind of stress while on vacation. For the businessperson, they could be stressed out trying to meet deadlines, preparing for a big presentation, or stressed over a heavy workload.

What are they responsible for?
The businessperson could be responsible for a number things while on the road. They could be there to convert a sale, or to maintain a customer relationship, or just to attend an important meeting. The vacationer is likely only responsible for ensuring their family is enjoying themselves.

What obstacles stand in their way?
Both face the same obstacles: traffic, lack of familiarity with the area, parking issues, and the weather.

What do these people want and aspire to?
The businessperson likely wants this to be as efficient and smooth as possible. Contrary to popular belief, business travel is not all fun and games. It can be a very stressful experience. The vacationer just wants to enjoy themselves without having to deal with the stress they face at home. If they live in a city, they already spend enough of their lives dealing with the typical city problem.

How does these people measure success?
The businessperson measures success by how trip went. Do they make the sale? Did they lock up an account? Did they get a good deal? The vacationer measures success by the level of enjoyment they experience during the vacation.

What can we offer these people?
Peace of mind. More enjoyable experiences navigating the city. One less thing to worry about. The Smart Parking Grid Application allows each to find and reserve a metered parking spot and pay using a direct debit from a bank account using their mobile devices.