Use the Business Model Canvas to Test Your Idea and Win!

Hello! I am Jennifer Simon. I’m the Director Ohio University Innovation Center

Why the Business Model Canvas? Why I am here talking about the Business Model Canvas when you’re talking about Innovation? Innovation has three basic purposes: 1. Identify a problem 2. Discover if it really is a problem for someone and 3. Solve the problem. WHY? Visually identify the relationships of various elements are your model – which will be discussed in a moment. Establish: Hypothesis, assumptions and risks Planning to test each assumption See how you can add value or reduce costs Brainstorm!

New Idea Template Before I start the video associated with the canvas, how many of you have heard of the Business Model Canvas? What do you think it is?

Value Proposition Who can tell me what a value proposition is?? THIS IS THE MOST IMPORTANT PART OF ANY PLAN whether you are a non-profit, student group, startup, small business or corporate giant. You have to know whether you are either providing a gain or relieving a pain. Written by Alex Ostenwalder Ives Pigneur Greg Bernarda Alan Smith Asks the very important question: How to create products and services customers want. As I read the challenges that have been identified for this year, I noticed that some already have the roadmap or parts of the business model canvas available for you in the descriptions. So, place close attention to how you can win this competition by using the business model canvas and value proposition design.

How do you find a winning Value Proposition? Product Perspective + Market Perspective = Product/Market Fit! Slide Provided by Bethany George

FIND a winning Value Proposition! Gain Creators Newness/Something fun Performance Customization “Getting the Job Done” Design Brand/Status Pain Relievers Price Cost Reduction Risk Reduction Accessibility Convenience Usability

Customer Segments – For Whom Are You Creating Value Everyone (WRONG) Customer Segments – For Whom Are You Creating Value Who are your most important customers? Determine who they are? Sex, Age, Race, B2C, B2B Mass Market – Everyone? Yea, right? Who did Facebook target in the beginning? Nice Market – People who live in Kentucky, who own thoroughbred horses and are looking for new ways to make their horses faster Segmented – banks – distinct product delivery for people with a net worth of $100,000 (basic services) or less and then $500,000 or more (investments) Diversified – As they grew, they found that it was appealing to different customers. Amazon.com began offering its IT infrastructure through cloud services to business customers. Not they have taken on individual customesrs Multi-sided platform – Most difficult as you are building up different sides of the equation. Not to give it away, but the first challenge is dealing with multi-sided. You have people who you need to convince to do podcasts and then others who you have to convince to consume. AirBNB is another example.

Customer Relationships Dedicated Service Automated Quarterly Meetings Annual Parties

Channels Physical Store Front Virtual Home Delivery Mixture of all How do you get your product to the customer This has changed from Just physical to virtual over the last two decades.

Revenue Streams Usage Fees Asset Sale Subscription Fees Lending, Renting, Leasing Licensing Advertising Two basic types 1. Transactional Revenue These revenues are earned from the customer making a one-time payment for the product or a rendering of a service. Which of the revenue streams on the screen would fit this model: Licenscing, asset sale 2. Recurring Revenue The recurring revenues are earned from consistent ongoing payments rendered to the company for either the delivery of the value proposition of after sales care for the customer. Which fit this model: usage fees, subscription fees, lending, advertising

Key Activities Platforms Marketing Production Sales/Customer Sales Delivery Platform – LinkedIn Delivery – Plated.Com

Key Resources Physical Financial Human Intellectual

Key Partnerships Which partnerships are critical to our business Who are our critical suppliers Which of our suppliers and partners are sourcing key resources What types of partnerships would suite our needs What is the best cluster/supply chain where I should be located Which partnerships are critical to our business? – FedEx / Biotech company with shelf life of 24-hours Who are our critical suppliers? – Automotive – who makes our seats Which of our suppliers and partners are sourcing our key resources? What type of partnerships would suit our needs? What is the best cluster/ supply chain where I should be located?

Cost Structure Fixed Costs Variable Economies of Scale Economies of Scope What are the most important costs inherent in our business model Why key resources are most expensive Which key activites are most expensive

Test Every Assumption Until You Get It Right!!

GET OUT OF THE BUILDING! TALK TO PEOPLE!

The only way to win is to learn faster than anyone else. --Eric Ries

Thanks! Any questions? You can find me at simonj@ohio.edu