Company Situation

Angel funded electronic design automation (EDA) startup actively engaged in developing new products.

Key Problem

Is the company developing the right products and pricing them correctly?

In the words of founder Dr. John Sanguinetti:

“The problem that I was facing was I wasn’t sure that there was a real market for the product that I was contemplating building. I had an idea that I could make a product, but I wasn’t sure that it would really sell. I wasn’t sure what the perceived value would be to the customers. The motivation for doing this project was to determine just what the value proposition was that is perceived by the customers.”

Tactics Solution

Peer Research – a professional “peer” with a background in both chip design (at Motorola) and supporting electronic design automation tools (at Daisy Systems (NASDAQ: DAZY) Cadence (NASDAQ: CDNS) Synopsys (NASDAQ: SNPS))

Tactics identified and interviewed designers at a variety of leading integrated circuit vendors, to understand their Pain, their product requirements and their valuation of the solution.

Business Results

C2 Design discovered that their product strategy was correct, and that they could sell the product for as much as ten times what they originally felt was a fair price.

As described by Dr. Sanguinetti

” What we found was that the people who were interviewed felt that there was enough value to justify a higher price than what we thought. We can’t quantify that exactly, but we got a pretty good feel for it being a $10,000 product rather than a $1,000 product. That was an important result.

In the past, at the first company that I started, I was the prototype user. As a user, I knew exactly what was wanted. I didn’t really need market research. Now, it’s seven years later and I can no longer rely on my own experience and market knowledge. Without a project like this, I wouldn’t have had the confidence that I was in tune with current design practice and the current market needs.

I think that TACTICS helped me understand what was important to the customers and what they would respond to. We got a lot of benefit from simply reading the transcripts of the interviews and getting a sense of what was important to the engineers and what was maybe less important. The most interesting unexpected result was the depth of the demand in the market. I think we found out that it was more wide spread than we had thought. “