Introduction to Business Model Design
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This presentation was given at Reload Greece Bootcamp 2017 at Athens, Greece on October 3rd 2017.
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Introduction to Business Model Design
- 2. Today • Design and communicate your idea using Business Model Canvas and Value Proposition Canvas • Define the customer problem you are trying to solve and your solution • Create a plan of how you will test your assumptions
- 3. What How Why The core idea of any business Value Proposition Product/Service Business Model Process/Method Mission Motives 1-5 years 10-20 years 100 years You need to revise every…
- 5. What is a Business Model?
- 6. Business model is the structure of how an enterprise creates value for a target group of people (customers) and makes profits from such activity
- 11. Apple, iPhone Control Integration Chips & components Suppliers (i.e. Samsung) Manufacturing Services (i.e. Foxconn) iTunes users OS.X BoM R&D Key Partnerships Key Activities Value Proposition Customer Relationships Customer Segments Key Resources Channels Revenue StreamsCost Structure Apps Store IT operation cost Stores CapEx & Opex
- 12. Samsung, Galaxy S R&D Capex Key Partnerships Key Activities Value Proposition Customer Relationships Customer Segments Key Resources Channels Revenue StreamsCost Structure Manufacturing Mobile Operators Partnerships
- 14. Business Model makes the difference and not the product Credit: Procsilas Moscas
- 15. What is Market-Product fit?
- 16. Key Partnerships Key Activities Value Proposition Customer Relationships Customer Segments Key Resources Channels Revenue StreamsCost Structure The two fundamental building blocks Who?What? Needs and Wants Value Proposition Market- Product fit
- 17. Key Partnerships Key Activities Value Proposition Customer Relationships Customer Segments Key Resources Channels Revenue StreamsCost Structure The two fundamental building blocks
- 18. Customer Segment Value Proposition Canvas – Alex Osterwalder Customer Jobs Gains Pains Value Proposition Gain Creators Pain Relievers Products & Services What are the needs/wants beyond your customer expectations? Gains How your product and services will set new expectations of needs/wants? Gain Creators How your product and services will reduce, or eliminate the pains which your customer experiences to meet his expectations? Pain Relievers What your customer needs/wants to accomplish and his expectations? Jobs to get done What are the products and services that your Value Proposition is built around Products & Services What are the challenges, constrains, limitations to meet his expectations? Pains
- 20. Founded in 1971, Seattle U.S.A 26,000+ stores 75 countries 330,000 employees $20.9B FY16
- 22. [Joe Fox] The whole purpose of places like Starbucks is for people with no decision-making ability whatsoever to make six decisions just to buy one cup of coffee. Short, tall, light, dark, caf, decaf, low-fat, non-fat, etc. So people who don't know what the hell they're doing or who on earth they are, can, for only $2.95, get not just a cup of coffee but an absolutely defining sense of self: Tall! Decaf! Cappuccino! Customer Segment Value Proposition
- 23. Credit: REUTERS/Lucas Jackson Starbucks’ target Customer Profile Relatively high social consciousness Work in organizations with limited autonomy Educated Urbanites Women & Men Professional careers Age 25-40
- 25. Key Partnerships Key Activities Value Proposition Customer Relationships Customer Segments Key Resources Channels Revenue StreamsCost Structure Starbucks’ Business Model in 1980’s-90’s Urbanites Women & Men Office Workers Age 25-40 Starbuck Coffee Shops Coffee Machine makers Factories & Logistic centers Store Operation (Rent etc.) Labor Coffee/Bev erage Food Goods (i.e. Cups) Coffee beans Raw materials (Coffee Beans, cups etc.)
- 26. Key Partnerships Key Activities Value Proposition Customer Relationships Customer Segments Key Resources Channels Revenue StreamsCost Structure Starbucks’ Business Model in 1980’s-90’s Urbanites Women & Men Office Workers Age 25-40 Starbuck Coffee Shops Coffee Machine makers Factories & Logistic centers Store Operation (Rent etc.) Labor Coffee/Bev erage Food Goods (i.e. Cups) Coffee beans Raw materials (Coffee Beans, cups etc.) Growing Market Economy of Scale
- 28. Starbucks VP Gain Creators Pain Relievers Products & Services Automated espresso machines Hip, contemporary atmosphere shops (& non-smoking!) Australia in 2000… Customer Segment Many, many, many shops (14,000+) No issue to wait 10 minutes for their coffee order Gloria Jeans, McCafe etc. competition (Late comer and value for money)
- 35. Focus on one major idea=need! Built your Value Proposition around it.
- 37. “Get out of the building! Get insights, turn your guesses into facts” Steve Blank, “The Startup Owner’s Manual”
- 38. Summary • Business Model Canvas and Value Proposition Canvas • Business Model makes the difference and not the product • Any business model will fail without a Market-Product fit • Focus on one major idea=need and built your VP around it • Get out of the building! Get insights, turn your guesses into facts
- 39. Questions?