1.
Business Models
Ross Chayka
linkedin.com/in/rchayka

2.
Agenda
● Value propositions
● Benefit trees
● Buyer's journey
● Business Models Canvas
● Lean Model Canvas
● Pricing
● 3C's of pricing
● Q&A
● HomeWork

3.
Online master-class code of conduct
● Duration - 2 hours
● Video ON, Audio OFF
● Registration with NAME
● One person speaking
● Sounds
● Short break if needed
● Questions

4.
Reading Questions

5.
Home Work

6.
Business Models Generation

7.
A business model describes
the rationale of how an
organization creates, delivers,
and capture value

8.
Business Model Canvas
● 2005
● Alexander Osterwalder
● Business Model Generation: A Handbook for Visionaries, Game Changers,
and Challengers

9.
9 building blocks
1. Customer Segments
2. Value Propositions
3. Channels
4. Customer Relationships
5. Revenue Streams
6. Key Resources
7. Key Activities
8. Key Partnerships
9. Cost Structure

10.
#1. Customer Segments
Who are consumers of our Value?
Who are our most important customers?
● Require and justify separate offer
● Reached through different Distribution Channels
● Different type of relationships
● Different profitabilities
● Paying for different aspects of the offer

11.
#1. Customer Segments
● Mass Market
● Niche Market
● Segmented
● Diversified
● Multi-sided Platform

12.
#2. Value Proposition
● What value do we deliver to the customer?
● Which one of our customer’s problems are we helping to solve?
● Which customer needs are we satisfying?
● What bundles of products and services are we offering to each Customer
Segment?

13.
#2. Value Proposition
● Newness
● Performance
● Customization
● Getting The Job Done
● Design
● Brand / Status
● Price
● Cost Reduction
● Risk Reduction
● Accessibility
● Convenience / Usability

14.
#3. Channels
● Through which Channels do our Customer Segments want to be reached?
● How are we reaching them now?
● How are our Channels integrated?
● Which ones work best?
● Which ones are most cost-efficient?
● How are we integrating them with customer routines?

15.
#3. Channels
● Raising awareness among customers about a company’s products and
services
● Helping customers evaluate a company’s Value Proposition
● Allowing customers to purchase specifi c products and services
● Delivering a Value Proposition to customers
● Providing post-purchase customer support

16.
#3. Channel phases
1. Awareness: How do we raise awareness about our company’s products and
services?
2. Evaluation: How do we help customers evaluate our organization’s Value
Proposition?
3. Purchase: How do we allow customers to purchase specific products and
services?
4. Delivery: How do we deliver a Value Proposition to customers?
5. After sales: How do we provide post-purchase customer support ?

17.
#4. Customer Relationships
● What type of relationship does each of our Customer Segments expect us to
establish and maintain with them?
● Which ones have we established?
● How costly are they?
● How are they integrated with the rest of our business model?
● What is your motivation?
○ Customer acquisition
○ Customer retention
○ Upselling

18.
#4. Customer Relationships
● Personal assistance
● Dedicated personal assistance
● Self-service
● Automated services
● Communities
● Co-creation

19.
#5. Revenue Streams
● For what value are our customers really willing to pay?
● For what do they currently pay?
● How are they currently paying?
● How would they prefer to pay?
● How much does each Revenue Stream contribute to overall revenues?
● Which type of Revenue Streams:
○ Transaction revenues resulting from one-time customer payments
○ Recurring revenues resulting from ongoing payments to either deliver a Value Proposition to
customers or provide post-purchase customer support

20.
#5. Revenue Streams
● Asset sale
● Usage fee
● Subscription fees
● Lending/Renting/Leasing
● Licensing
● Brokerage fees
● Advertising

21.
#5. Revenue Streams - Pricing
● Fixed Menu Pricing
○ List Price
○ Product Feature Dependent
○ Customer Segment Dependent
○ Volume Dependent
● Dynamic Pricing
○ Negotiation
○ Yeld management - Price depends on inventory and time of purchase (airlines, hotels)
○ Real-time-market
○ Auctions

22.
#5. Revenue Streams - Pricing Tips
● Coupons
● A / B Tests
● Competitor Analysis
● Alternatives decomposition

23.
#6. Key Resources
● What Key Resources do our Value Propositions require?
● Our Distribution Channels?
● Customer Relationships?
● Revenue Streams?

24.
#6. Key Resources
● Physical (manufacturing facilities, buildings, vehicles, machines, systems,
point-of-sales systems, and distribution networks)
● Intellectual (brands, proprietary knowledge, patents and copyrights,
partnerships, and customer databases)
● Human (experienced scientists, skilled sales force)
● Financial (cash, lines of credit, stock option pool)

25.
#7. Key Activities
● What Key Activities do our Value Propositions require?
● Our Distribution Channels?
● Customer Relationships?
● Revenue streams?

26.
#7. Key Activities
● Production
● Problem solving
● Platform/network

27.
#8. Key Partnerships
● Who are our Key Partners? Who are our key suppliers?
● Which Key Resources are we acquiring from partners?
● Which Key Activities do partners perform?
● Strategic alliances between non-competitors
● Coopetition: strategic partnerships between competitors
● Joint ventures to develop new businesses
● Buyer-supplier relationships to assure reliable supplies

28.
#8. Key Partnerships
● Optimization and economy of scale
○ Outsourcing
○ Sharing infrastructure
● Reduction of risk and uncertainty
○ Standards
○ Government lobbying
● Acquisition of particular resources and activities
○ Knowledge
○ Licences
○ Customers

29.
#9. Cost Structure
● What are the most important costs inherent in our business model?
● Which Key Resources are most expensive?
● Which Key Activities are most expensive?
● Cost-driven
● Value-driven

30.
#9. Cost Structure
● Fixed costs
● Variable costs
● Economies of scale
● Economies of scope

31.
Lean Canvas
● 2010
● Ash Muraya
● Business Model Canvas for Startups

32.
9 building blocks
1. Customer Segments
2. Problem
3. Solution
4. Unique Value Propositions
5. Revenue Streams
6. Channels
7. Key Metrics
8. Cost Structure
9. Unfair Advantages

33.
#1. Customer Segments

34.
#2. Problem
● Which one of our customer’s problems are we helping to solve?
● Which customer needs are we satisfying?
● Existing Alternatives - how customers satisfy these needs now?

35.
#3. Solution

36.
#4. Unique Value Proposition

37.
#5. Revenue Streams

38.
#6. Channels

39.
#7. Key Metrics
● Traction
● Customer Churn
● Customer Activity

40.
#8. Cost Structure

41.
#9. Unfair Advantage
● Insider information
● The right “expert” endorsements
● A dream team
● Personal authority
● Large network effects
● Community
● Existing customers
● SEO ranking

42.
Mistakes
● One business model
● Take less money
● Take money from wrong people
● Give for free, when sales are bad

43.
● Subscription
● Aggregator
● Online Marketplace
● Advertisement
● Data Licencing/Selling
● Affiliate Marketing
● Dropshipping
● Network Marketing
● Crowdsourcing
● Bundling
● SelfService
List of all known business models
● Manufacturer
● Distributor
● Retailer
● Franchise
● Brick-and-Mortar
● eCommerce
● Nickel-and-Dime
● Freemium
● API licensing
● Brokerage
● White Label
● Peer 2 Peer Catalyst
● Auction-Based
● Reverse-Auction-Based
● Razor And Blades
● Reverse Razor And
Blades
● On-Demand
● User Community
● Standardization
● RobinHood
● Product as Service

44.
Home Work

45.
Questions ?

46.
Contacts
linkedin.com/in/rchayka
fb.com/rostyslav.chayka
rchayka@gmail.com