Urban Movement
Innovative Solutions for Urban Families
Course: MIT 11.529 Mobility Ventures: Driving Innovation in Transportation Systems
Instructor: Jinhua Zhao, John Moavenzadeh, Bill Aulet, Will Sanchez
Collaborator: Adriana Jacobsen, Anubhav Moondra, Avital Vainberg, Dakota Thurman, Kristen Vilcans
Date: Sep.-Dec., 2020
This course is designed for students who aspire to shape the future of mobility. The course explores technological, behavioral, policy and systems-wide frameworks for innovation in transportation systems, complemented with case studies across the mobility spectrum, from autonomous vehicles to urban air mobility to last-mile sidewalk robots.
Students will interact with a series of guest lecturers from CEOs and other business and government executives who are actively reshaping the future of mobility. Interdisciplinary teams of 5 students will work to deliver business plans for startups or action plans for solving “real world” challenges in established companies, governments or NGOs.
KEYWORDS:
Mobility Ventures, Transportation System, Business/Action Plans, Challenges/Solutions
OBJECTIVES
Lecture - Entrepreneur Dialogue - Workshop
​
- Global Mobility System and Leadership
- Innovation Strategy and Business Plans
- Behavior Science and Urban Mobility
- Data + Platforms
- Urban Mobility: The Unique Challenge of Getting Around in our Cities
- Mobility Technology #1: Autonomous, Electric, Shared Vehicles
- Mobility Technology #2: Aerial, Micro, and Supply Chain
- Financing Mobility Innovation: The Investors Perspective
- Mobility Policy
Milestone 01
- M1.1 Reflection Paper View
- M1.2 Idea Journal View
Milestone 02
- M 2.0 Team Norms View
- M 2.1 Market Segmentation & BHM
Step 1: Brainstorm Broadly Potential Market Segments for Your Idea/Technology/Product
Start with brainstorming within your team (and others who might be valuable in a brainstorming process)
and then use both your extensive “bottom-up” - primary market research as well as “top-down” sources –
the Internet, trade magazines, trade shows, Dewey library resources – to figure out the top 6-8 markets
segments for your product/service.
Step 2: Narrow Down This Broad List of Potential Market Segments to 6-8
​
• Personal Fit,
• Technology Fit,
• Competitive Strength (strength of value proposition, competitive advantage, unique assets),
• Market Attractiveness (size of market, presence of a capable and willing economic buyer),
• Odds of Success
• Strategic Value (if you win this market, will it position you for other markets)
• Others (please list)
​
Step 3: Drop These Market Segments Into a Matrix and Review/Update the Rows for Your Situation
​
After you have narrowed your market segments down to 6-8, drop them into a matrix below. At this
point, only fill in the first three rows. You should then review the rest of the rows to make sure they fit for
your situation.
- M 2.2 PMR Plan, DoE & Hypothesis Testing
Develop a list of up to five (5) testable hypotheses for key market segments.
​
• Hypothesis
• MVP
• Experiment
• Duration
• Currency
• Metrics/Threshold
​
- M 2.3 Update with PMR and BHM Selection
BHM Selection
​
At is point, we want you to make a decision on what you think your beach head market (BHM) will be.
This is likely to feel rushed but make some assumptions (and be sure to keep track of these!) and start the
process of de-selecting certain market segments and narrow your scope.
​
- M 2.4 End User, TAM & Persona
End User
​
Who is the individual who will use your product? The end user is usually a member of the
household or organization that purchases your product.
​
TAM
​
Use your primary market research (“bottom-up”) and “top-down” sources (Internet, trade
magazines, library resources), to estimate the current market for your product/service, and what
options customers have.
​
Persona
​
Put together a detailed profile of the persona from your beachhead market with a statement of why he/she
is representative of your target. This should be built around one real person (i.e. “Mary is 24 years
old…”), not a composite (“customer is female, between 21 and 28 years old”).
​
Milestone 03
- M 3.1 FLUC, HLPS, QVP
Full Use Life Cycle
Provide a visual representation of the Full Life Cycle Use Case that applies for your product/service and
persona. Review ALL the steps detailed in chapter 6 of DE, but pay particular attention to how your
customers determine they have a need, how they find out about your offering, how they use it, and how
they measure the value they receive from it. Think of what will trigger the process to start.
High-Level Specs & Quantified Value Prop
​
This information should be easily compiled using the customer interviews data that you collected last
week. Put yourself in the customer’s shoes – would you buy your own product over existing solutions?
First, create a high-level product specification. It is a visual representation of what your product will be
when it is finally developed based on what you know at this point of the process. It is something you draw
without understanding all of the underlying details, but which gains consensus within your team on where
you are going.
​​
- M 3.2 Core and Competitive Position
Identify your Core
This is defined as what allows your venture “to deliver the benefits your customers value with much
greater effectiveness than any other competitor.” Explain and demonstrate why potential competitors
would have great difficulties in recreating your Core. Explain and demonstrate how your core will grow
over time and how the gap between you and your competitors which increase over time.
Competitive Positioning Chart
​
Finally, provide a Competitive Positioning Chart to visually illustrate your company’s ability to serve
your persona’s top two priorities versus your competition’s ability. Ensure that you make clear why
customers will forgo the “status quo option” and switch to your company’s offering.
​
Milestone 04
- M 4.1 DMU/DMP
Decision Making Unit (DMU)
For your first slide, define the Decision Making Unit (DMU) for your target customer (the people who
will be involved when your product or service is acquired). Carefully define each party and the nature of
power in the acquisition process (e.g., economic buyer, influencer, veto power, user, primary, secondary).
Decision Making Process (DMP)
​
In second slide, define the general Decision Making Process (DMP) that you must follow in order for the
DMU to make a decision. Map out the various steps with the different players and note the roles and
various approval/authority levels for each person. Provide a realistic time frame for each step. Be sure to
account for the budgeting process if your product/service so requires.
​
Windows of Opportunity
​
In third slide, focus on windows of opportunity where the decision making unit will be possible and/or
much more efficient. Discuss “triggers” to start the acquisition process as we discussed in the full life
cycle use case (DE 6) remembering the physics of business and entrepreneurship – that standing bodies
stay still unless there is some significant to get them moving.
- M 4.2 Follow on TAM
Potential Follow-on Markets
In your slide deck, identify potential follow-on markets (segments to which you can extend your venture
if you are successful with your beachhead). Explain why you have chosen that sequence and how the
success in one segment helps create a domino effect to enter the next. Provide a refined analysis of your
original beachhead TAM and a high-level estimate of the value of the follow-on TAMs (at least two
additional segments should be considered).
​
- M 4.3 Business Model, Pricing and LTV
Design a Business Model
First, identify what value you are creating and for who (this is where revisiting your quantified value
proposition is important). If you are working on a two-sided market, make sure that all parties that are
receiving value are mapped out and that the value creation is quantified. To the extent that you have
focused your work on one side of your market, be clear about the assumptions and estimates you are
making for the other side of the market that may not have received as much attention.
​
Second, describe your business model or “value extraction framework.” Provide concise answers to the
following questions:
• Who gets the value that is created first?
• Who can pay for your product?
• Of those options to monetize the value you have created, how would you prioritize them by most likely
to succeed?
• Which option will you choose and how will you test that it will work? What is your plan B if it does
not?
​
Set Your Pricing Framework
Provide an overview of your pricing framework. If your business model has separate components (such as
initial purchase + maintenance), or if there are separate parties being charged (such as in two-sided
markets), make sure you include each of them in your overview. The values may be expressed in ranges.
Justify your overview by providing concise answers to the following questions:
• How much do customers pay for existing solutions or comparable options?
• Alternatively, how much value do non-customers forego by NOT having such a
solution?
• How did you decide to establish your prices (or upper/lower bounds of your price range)? What data
supports potential customers’ willingness to pay those values?
• Have you considered differentiated prices or incentive programs to address the distinct segments of
adopters?
​
Calculate the LTV
Based on your business model and pricing framework, build a table to calculate your LTV and include it
on one slide. As the example in DE textbook, you should base your LTV on a 5-year projection. On your
second slide, point out the assumptions you are making to support the key variables in your table (such as,
but not limited to, gross margin, retention rate, and cost of capital). To the extent that you may have
multiple different types of customers (such as in two-sided markets in which both sides are paying), you
may increase the number of slides in your deliverable. Understand that your LTV is not an exact number
so don’t worry about the final digits but do understand the general magnitude (is it $10 or $100 or $1K or
$10K or $100K or $1M+?) and what drives it. Understand the key assumptions and leverage items that
will increase or decrease your LTV.
​
- M 4.4 Sales Process and COCA
Sales Process
Now that you have estimated your customers’ LTV, it is time to estimate your cost of acquisition, and in
the process gain an understanding of the key drivers, and then adjust accordingly. In order to do so, you
must first map out in detail the sales process you will follow, which you will do using the classic model of
the sales funnel:
• Start: broad population of potential customers (suspects) – may be at the level of end user profile /
specific market segment.
• Filters/triggers: subset of suspects become qualified prospects – typically based on validating match
with profile through first level of active engagement.
• Additional filtering: subset of prospects become potential customers – the DMU is active in evaluating
the product.
• Additional filtering: subset of potential customers become likely customers – the DMU has expressed
explicit interest and/or is actively negotiating a deal with you.
• Final result: a subset of likely customers become paying customers.
​
Deliverable should consist of a diagram of your sales funnel in which you address:
• How incoming volume in each stage is maximized (for the top of the funnel, marketing considerations
may be most relevant; for subsequent stages, it’s all about how you will maximize conversion rates)
• Relevant components of the value chain in each stage (this applies if you are selling through channel
partners)
• Expected time a given customer/prospect will take to pass through each stage.
​
COCA
Now that you have clearly mapped out your sales process, you can now focus on calculating your COCA.
Carefully review DE 19 and map out the costs associated with your value chain and sales funnel. On a
single slide, provide a table covering three periods (year 1, years 2 & 3, years 4 & 5), with a budget with
the relevant line items, including sales, advertising, and service expenses. Include what you expect the
volume of each salesperson/distributor to be and how that will grow. This schedule will help you
calculate COCA. You can use the table provided in DE textbook as a guideline. Make sure to do short,
medium, and long term estimates of COCA.
​
Milestone 05
- M 5.1 Final Team Deck
​
A horrified Amira watches the stroller with her child in it tumble down the stairs of the subway entrance as a stranger knocks it out of her hands while rushing to catch the train. Darnell notifies the pediatrician that his 3 year old son will be late to his appointment as yet another bus driver tells him that there’s no room for the stroller during rush hour.
These are only two stories of the challenges that thousands of parents of young children face when using public transit...
​
​
Our company, UrbanMovement aims to solve these problems by producing safe, comfortable, and highly mobile products for parents in cities across the world.
Our first focus is to help parents with toddlers who mainly use public transit to move through urban areas efficiently and safely. Though in the future we will extend our product line to address the problems of other parents in urban areas.
​
Through primary market research we found 3 major pain points for our target customer segment:
1.Public transit is often inaccessible and attitudes can be counter-intuitive. One mother that we interviewed frustratingly asked, “Why does a bus driver tell a mother with three young kids to wait in the rain, but allows the healthy, young man on to the bus?”
2.Strollers take up a lot of space on public transit which often makes parents feel like a nuisance to other transit riders.
3.Kids often view public transit as an attraction - they enjoy holding the pole or looking out the window. So often a parent not only needs space for the stroller but also an additional seat for their child.
​
The solution we developed is a lightweight toddler stroller designed to easily fold into a compact backpack. This stroller backpack is perfect for any parent on-the-go who doesn’t want to deal with finding the nearest elevator or annoying another transit passenger by taking up too much space. Now, instead of needing space for the parent, stroller, and toddler who refuses be constrained to the stroller during the ride - they can tuck the backpack under the seat and enjoy the ride together with only 2 seats.
​
Our product is competitively positioned in the market as a lightweight and easily foldable stroller, with the highest safety features and hands-free carrying capabilities. This combination of priorities and features is perfect for our target customer and their toddler.
​
​
Well now that we’ve gained insight into our customers and seen our product, let’s talk business.
Our primary source of revenue, at least initially, is our strollers for toddlers, which we will sell directly to our customers through online channels since they don’t have access to personal vehicles to access brick and mortar stores. However, this will not be our only source of revenue.
We will sell add-on products such as weather shields and cup holders that will extend the functionality of the strollers, providing us with additional streams of revenue and providing our customers with additional value.
From there, we will expand our product line to serve more urban customer segments, such as parents with infants, and families who primarily use ridesharing and rentals for their mobility needs
These new product lines can enable us to increase the lifetime value of our customers through trade-in and bundling programs. For example, parents could trade in an infant stroller for a toddler stroller when their child grows older and their stroller needs change.
So in summary, we see a path to sustainable business growth through various product lines and innovative methods to attract and retain customers.
​
​
Our goals as a venture are ambitious, but we are confident that we can achieve them because we have a passionate team that is dedicated to solving the problems for urban families.
We come from a diverse range of backgrounds such as urban planning, business, and design, you name it, but the one area of expertise we are lacking is in engineering, which we need to design and produce our prototypes and products!
​
And so, we are looking for engineers who are motivated to improve people’s lives to join our team!
We are solving a real problem with a novel solution, we have great business potential, and we have a diverse and passionate team that is eager to collaborate with you to provide innovative solutions for urban families.
​
