5. A Framework for creating value
Infrastructure Partner Offer Customer Customer
{ {
Core
Network { Value
Relationship { Target
Capability Proposition Customer
Value Distribution
Configuration Channel
Direct Operations Working Revenue
Costs Cost Capital Finances Model
Personal Funding
Debt Equity
Investment
Model
How you make MONEY!
6. Offer
Value
Proposition
“For People who (problem) ,
we offer (solution) ,
and we’re different because .
10. 4. build out the value chain
Infrastructure Partner Offer Customer Customer
{ {
Core
Network { Value
Relationship { Target
Capability Proposition Customer
Value Distribution
Configuration Channel
11. “it’s fine to question your assumptions…
…not your strategy.”
Direct Operations Working Revenue
Costs Cost Capital Finances Model
5. the pro forma
12. 6. the strategy
Key hire of
Contract with
Finish consumer
5 beta facilities
Peer Reviewed Development of 2nd marketing
Article Publication Product executive
4th Qtr 4th Qtr 4th Qtr 4th Qtr 1st Qtr 2nd Qtr
2009 2009 2009 2009 2010 2010
Close Seed Round Partnership Attract 25,000
with Training visitors per
Company month to site
13. Personal Funding
Debt Equity
Investment
Model
7. how much?
money? equity?
22. Growth Business Model
The Stages
Idea Pre-revenue
23. Idea
technology identified
ip available
engaged researcher
market identified
24. champion identified
scaleable product idea
company formed
prototype development
Pre-revenue
market validation
seed funding
25. first customers
business model execution
funding plan execution
Business Model
company strategic plan in place
cash flow!
26. Growth
series A funding
cash flow break even
management team in place
predictable sales process
$2 - 3 million annual sales
Hinweis der Redaktion
Well, the name of this session is “Business Models” and we have yet to even talk about what a business model is. It is one of the questions you will get most often when promoting your company to investors and you will have to communicate your business model quickly and clearly. {click} Here’s the formal definition. A business model is a framework fro creating value. {click} It starts with your technology or service which represents your core capability. You have to develop that capability so that it can be priced and packaged for sale and you have to develop a network of service providers and manufacturing partners… {click} … which altogether, represents your value proposition. {click} From there you have to develop a relationship with your customers, sometimes directly but also through distribution channels which gets your product or service into the hands of the customer. {click} The foundation of the model is your financial infrastructure which insures your costs are less than your revenue stream which eventually leads to profits. {click} Another way of defining a business model is simply, how you make money. It’s very important that you learn to describe your business model in a way that people unfamiliar with your technology or service will understand quickly. If your business model is complicated, it will be judged to be risky and you will have to defend your ability to manage that risk. If you can’t describe clearly how you will make money, you will lose credibility. {click} Here are some tips to consider as you learn how to communicate your business model. Describe clearly how your company will do business. Your description should consider these elements: First, keep it simple. You should be able to describe it in a few words. If written, it should fit neatly on one page or slide, preferably on a simple diagram. You should clearly describe who the customer is And you should be able to identify your market segment. Then you should describe how you will generate revenue and finally, A view of how you will compete and win. {next slide}