dermalytics stanford 2016
Post on 20-Jan-2017
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THEN
dermalytics™
data from your skin, trackable progress towards skin health 40% of people with skin care needs incorrectly describe their skin. introducing
state of the art technology to quantitatively analyze your skin, track progress and prevent damage before it occurs.
Brandon WilsonSoftwareSchool of
Engineering
Jennia N. RajaeiProduct School of Medicine
Siqi MouStrategy &
FinanceSchool of Business
Chloe JohnsonMarketingSchool of Business
NOWTotal Interviews:120
PORTRAY - personalized skincareOriginal idea
Understand customer’s skin with analysis machine
Use data to create a product formulation
1
2
Build custom skincare product based on analysis 3
DAY 1
We had lots of initial hypotheses about our customers
DAY 1
After talking to consumers, we realized many of our initial hypotheses were wrong.
IN RETROSPECT
DAY 1
Fundamentals
WRONG
DAY 1
Fundamentals
This is not an MVP Fundamentals
This is an MVP
This MVP enabled us to test multiple hypotheses rapidly and cheaply allowing us to quickly collect data and iterate if necessary.
Fundamentals
What do people want from their skincare products? HypothesisPeople prefer organic based products
ExperimentCustomer Interviews + A/B testing with product designs
Results
“I would put cow manure on my face if it worked”
Consumers generally don’t care what is in their products, as long as they see results!
“I don’t care if I’m putting shitloads of chemicals on my face as long as their effective”
% with strong preference
Value Proposition
Customer Segment Discoveries (29 interviews)
● Less likely to try new products● More skeptical that customized skincare
would work● Worried about undoing current progress
● More likely to try new products● Open to changing current regimen
Customer Segment
Product Development
Hydration Redness Pore size
????
How do you make a skincare product?ROADBLOCK
Product Development
Hydration Redness Pore size
????
How do you make a skincare product?ROADBLOCK
Core Value Proposition Learning After 300+ online respondents & 37 in person interviews
- 41% of respondents identified skin irritation as their most pressing skin concern
- 90% of interviewees stated that they did not believe that a customized skin care product would be effective in improving skin quality
- Coupling interview learnings with literature search on key measures of skin irritation
- The only skincare problem we know how to address via product formulation → HYDRATION
Value Proposition Learning
Major Pivot 1 - Core Value Proposition : Hydration + Customized Formula
-
Distributers: Direct to Consumer (through online platform), plan to grow with partnerships with traditional retailers to offer in person customization (Sephora, Peninsula beauty, Bloomingdales)
Magazines: InStyle, Women’s Health, Vogue, Porter
Suppliers: private label manufacturers, organic farms
What we can offer: revenue, branding, innovative offering
We use both facial analysis software (exists today) and interview to analyze what skin needs which generates an ingredient & product list customized. Activities: - Online platform management- Product recommendation and formulation -Manufacturing management through private labels-Inventory management
Funding to cover dev and manufacturing costs, skincare expertise to customize products, technology support, IP for custom formulations
Product sale• Individual orders • Subscription• Tiered pricing based on volume
ordered
• Fixed: salaries of permanent team members, private label contract fee, high-tech machine cost (imported from Korea), marketing cost
• R&D costs • Variable: unit cost for each product including
ingredients and mixing process
Pain point: Lack of customized hydration No over the counter skincare products are custom build, and working with dermatologists to develop a skin care routine is very expensive.
Value: Skincare products built to meet customers’ individualized needs, based on recommendations and our expertise. Meets skin sensitivities and helps balance treatments to their specific needs.
50% skincare purchases are made based on friends’ recs-Initial customers acquired through marketing and networks- Incentive programs for customers to post and share their skincare offerings (super-user and skincare celebrities)- Partnerships with retailers, eventually own brick and mortar stores
1. Skincare enthusiasts that are first adopters, love to try new trends. Allocate significant personal expenditures to try and be up-to-date on customers.
Customers want targeted interactions - Online - Directly with experts in
brick and mortar locations
Shifted to hydration with a much more
limited offering
People weren’t
Hydration device
23
Hydration MVP1Hypothesis
People want customized hydration productsExperiment26 customer interviews. “hydration” vs. “skin health”Results
● People do not care about “hydration”● “Skin health” had much better reception● What people WERE interested in, was the skin
health data
“My skin is dehydrated?? I’ll just drink more water!”
People weren’t
Hydration device
23
Hydration MVP1Hypothesis
People want customized hydration productsExperiment26 customer interviews. “hydration” vs. “skin health”Results
● People do not care about “hydration”● “Skin health” had much better reception● What people WERE interested in, was the skin
health data
“My skin is dehydrated?? I’ll just drink more water!”After talking to our mentors
and conducting 40 customer interviews, we decided to ditch product formulation all together.
-
Distributers: Direct to Consumer (through online platform), plan to grow with partnerships with traditional retailers to offer in person customization (Sephora, Peninsula beauty, Bloomingdales)
Magazines: InStyle, Women’s Health, Vogue, Porter
Suppliers: private label manufacturers, organic farms
What we can offer: revenue, branding, innovative offering
We use both facial analysis software (exists today) and interview to analyze what skin needs which generates an ingredient & product list customized. Activities: - Online platform management- Product recommendation and formulation -Manufacturing management through private labels-Inventory management
Funding to cover dev and manufacturing costs, skincare expertise to customize products, technology support, IP for custom formulations
Product sale• Individual orders • Subscription• Tiered pricing based on volume
ordered
• Fixed: salaries of permanent team members, private label contract fee, high-tech machine cost (imported from Korea), marketing cost
• R&D costs • Variable: unit cost for each product including
ingredients and mixing process
Pain point: No over the counter skincare products are custom build, and working with dermatologists to develop a skin care routine is very expensive.
Value: Skincare products built to meet customers’ individualized needs, based on recommendations and our expertise. Meets skin sensitivities and helps balance treatments to their specific needs.
50% skincare purchases are made based on friends’ recs-Initial customers acquired through marketing and networks- Incentive programs for customers to post and share their skincare offerings (super-user and skincare celebrities)- Partnerships with retailers, eventually own brick and mortar stores
1. Skincare enthusiasts that are first adopters, love to try new trends. Allocate significant personal expenditures to try and be up-to-date on customers.
2. Individuals with skin sensitivities and allergies to common skincare compounds (PEG) which often require personalization. Customers want targeted
interactions - Online - Directly with experts in
brick and mortar locations
We scrapped almost everything, but had
learned something very important!
Customers didn’t understand their skin or what products to
buy
Actually it looked more like this
We decided to turn to the data
And when customers were like…
Our path was clear...
Major Pivot 2 - Core Value Proposition : Skin Data Device & Analysis
MVP Testing (In Person Product Demos)
Test Test Test - Experiments - cheap and fast
- Most were done in powerpoint or with little coding
- Talk to people and analyze their reactions and comments
A/B Testing GaloreSingle sensor Bluetooth connectivity In-app purchasing
vs. vs
.
A/B Testing GaloreSingle sensor Bluetooth connectivity In-app purchasing
vs. vs
.
A/B Testing GaloreSingle sensor Bluetooth connectivity In-app purchasing
vs. vs
.
A/B Testing GaloreSingle sensor Bluetooth connectivity In-app purchasing
vs. vs
.
A/B Testing GaloreSingle sensor Bluetooth connectivity In-app purchasing
vs. vs
.
After 90+ customer interviews, we have finally identified what people want in our product
Demographics + Behavioral- Female - Ages 18-35- College educated - $75k+ income- Active on social
media - Online shopping - $100+/mo on
products- Subscription services
Attitudinal - Cares about appearance; watches
diet and exercise - Generally OK skin with occasional
blemish - Tries new products to balance out
minor issues (dry patches, blemish) - Interested in taking control of skin to
counter patchwork approach she has today
Hi I’m Lyla! I’m 28 and work for a marketing firm in LA. My appearance is important for work so I try to be careful. I try lots of skincare products but still have random zits and dry patches now and again. I’m still not sure what works for my skin.
Customer Archetype (after 120 interviews)
Key Partners : Decreasing CACName Media
PlatformFollowing Cost Purchase
rateCAC
BB1 YouTubeInstagramTwitterFacebookSnapchat
10-20k2.5k1k1k1.5k
867,879158,00030,90024,987N/A
BB2 YouTubeInstagramTwitterFacebook
1,487,625
72,600605,000
1,606,291
5.5%, 188k
$1.94
7.2%, 302k
35k $1.61
2.1%, 6.8k $31.694.5k
3.6%, 8.4k0.9%1.4%
1.3%1.8%
$8.28
Metrics That Matter
After 100+ interviews, we had 20 beta sign-ups!
$$$$
-
- Manufacturers (based in Shenzhen)
- Fulfillment center
- Brands / wholesalers
- YouTube channels and Beauty Bloggers
- Earned media, customer relationships
What we offer them - Payment for the
manufacturing and scale
- Access to innovative products
Offer a skincare device
Activities: - Device design and
design patent - Online platform- Data analysis - Product
recommendation
Funding to cover dev and manufacturing costs, skincare expertise to customize products, technology support
- Affiliate marketing 10-15% revenue from product sale
- Device sale for $150- Premium subscription for APP for $10 /
month
• Developer team for application (Front-end, UI, back-end engineer) ~ 160K per month
• BOM costs of 10-15 / device with 1000+ minimum • Office space and servers • CAC - $5 • Fulfillment costs of $5-6/product
Pain point: Many women can’t accurately describe their skin (40% out of those interviewed) and struggle to identify which products will work best for you
Value: Give you data on your skin’s health, enable you to track progress of your skin routine, provide recommendations and routine advice, allow you to purchase products that will best fit your skin
- Youtube advertising - Earned media with
expected CAC of $5 - Mix of online
advertising - Partnerships with
brands and retailers
Skincare enthusiasts that are first adopters, love to try new trends. Allocate significant personal expenditures to try and be up-to-date on customers.
→Transition point in life where they are starting to identify skin issues (35+)
→Middle to upper income
→Female →Well educated
professional - Direct to consumer - Partner in store
We’ve learned a
lot
But what does this really all mean?
Get OUT of the building!
If we had stuck with our BMC
- Women will buy bespoke skincare products for a 200% mark-up
- It will be cost effective to custom develop a product for each person based off of our own formulations
- Women want another skincare solution
Experiment ALL the time
Test Test Test
- Experiments should be cheap and fast
- Most were done in powerpoint or with little coding
- Talk to people and see how they react
Product market fit feels like this…
Oil + hydration
Wow!!!
We speak different languages!?❖ We are from different backgrounds (science vs business) and
therefore have different short and long term visions❖ It is important to be aware of them to manage difference and
create synergy
When we argue … We should have gone straight to customer interviews to validate one thought process vs. another
When we got yelled at… This is what we call… “Tough L ve”
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