1. Business Models ADM3313 Session 3

2. Innovators DNA

4. Opportunity Assessment

5. Business Models

6. A sketch/summary of what the business will do and how it will make money. Includes strategic components of the business idea and how it operates. Often established based on trial and error. Forms the basis for success or failure.

7. Why are Business Models Important?

8. Business Plans Assume full knowledge of the market, solution and customers Don’t require a lot of external interaction Are a useful implementation tool, focusing much on operationalizing strategies Usually written too soon; often not written at all Business Models Assume evolution: discovery and iteration Force “getting out of the building” to talk with clients Forms foundation for success or failure

9. Two Week’s Ago 12 34 Idea Validation Production/delivery Viable Business Business Plan 5

10. Idea to Viable Business 123 4 Idea Validation (incl. early sales?) Production/delivery Viable Business 6 Business Plan Business Model Hypotheses 5

11. Business Model Canvas http://ecorner.stanford.edu/authorMaterialInfo.html?mid=28 77

13. Value Proposition What Are You Building and For Who?

15. Customer Segments Who Are They? Why Would They Buy?

17. Multiple Customer Segments Might have multiple segments of users Might have users and payers Might have 5 or 6 different customers Medical devices have doctors, hospitals, patient, insurance company, FDA, etc. For every customer segment you need: Value proposition Revenue model And may have unique channels, cust relationships, etc.

18. Product/Market Fit Does the Value Proposition MVP match the Customer Segment Archetype?

19. Channels How does your Product Get to Customers?

21. Customer Relationships How do you Get, Keep and Grow Customers?

23. Revenue Streams How do you Make Money?

25. Key Resources What are your most important Assets?

27. Key Partners Who are your Partners and Suppliers?

29. Key Activities What’s Most Important for the Business?

31. Cost Structure What are the Costs and Expenses

33. BUT…

34. They are all Guesses Guess

35. How Do We Test? Test the Problem, Then the Solution

37. What Do Tests Look Like? Customer conversations – lots of them Validate the problem not the solution yet Industry expert conversations Surveys – in person and/or online Focus Groups Test ads: Facebook, LinkedIn, Google Adwords Test webpage collecting sign-ups Minimum viable product Crowd Funding campaign: http://www.indiegogo.com/projects/piper- smart-elegant-security-and-home-automationhttp://www.indiegogo.com/projects/piper- smart-elegant-security-and-home-automation Example: WipeBookWipeBook

38. Examples

39. Amazon Business Model Canvas https://www.youtube.com/watch?v=4Uda1VOrBSI&app= desktop#action=share https://www.youtube.com/watch?v=4Uda1VOrBSI&app= desktop#action=share

40. Kiva Business Model Example http://www.kiva.org/home https://m.youtube.com/watch?v=gLi8yIdHYbI

41. Lemonade Stand in City Park

42. http://www.slideshare.net/esaife/business-model-canvas-101

43. FaceBook

44. Canvas: Multiple Segments

45. Business Models In groups: - You will be assigned a business to consider. - Study key components of their business model. - Determine is which is most important or unique. - Be prepared to present: Which component of the Business Model is most important or unique for this business, and why?

46. 1. NFL (Green Bay Packers).. 2. Luxe Box (Loose Button) 3. iPhone 4. Elance

48. Key Resources Validation Board - http://www.youtube.com/watch?v=HhoducyStMw&feature=player_e mbedded#t=157 http://www.youtube.com/watch?v=HhoducyStMw&feature=player_e mbedded#t=157 Case Study: http://www.youtube.com/watch?v=G8Rk0c3axtIhttp://www.youtube.com/watch?v=G8Rk0c3axtI http://learni.st/users/trevor.owens/boards/6470-learn-how-to-use- the-validation-board-test-your-startup-idea-without-wasting-time-or- money?tb=026e8657ead82f28371a1cca25ae13b3 http://learni.st/users/trevor.owens/boards/6470-learn-how-to-use- the-validation-board-test-your-startup-idea-without-wasting-time-or- money?tb=026e8657ead82f28371a1cca25ae13b3 Customer Development – http://www.youtube.com/watch?v=6t0t- CXPpyMhttp://www.youtube.com/watch?v=6t0t- CXPpyM http://steveblank.com/2013/09/05/why-real-learning-is-outside-the- building-not-demo- day/?goback=%2Egde_5037848_member_271423445#%21 http://steveblank.com/2013/09/05/why-real-learning-is-outside-the- building-not-demo- day/?goback=%2Egde_5037848_member_271423445#%21